Perplexity AI was voted the startup “most likely to fail” at the Cerebral Valley AI Conference in San Francisco last week.
More than 300 founders, investors and operators ranked the fast-growing answer-engine company at the top of a list of high-valuation AI firms facing the highest perceived risk. The company was followed by OpenAI.
The survey was led by organiser and independent journalist Eric Newcomer. The poll, conducted during a closed-door session, immediately became the most discussed outcome of the event.
Attendees said the scepticism is driven by Perplexity’s soaring valuation and its rapid push into new markets without demonstrating a clear, defensible business model.
Perplexity AI’s most recent valuation stands at $20 billion, achieved after its latest funding round in September 2025, where it raised $200 million from top-tier investors.
Despite positioning itself as a challenger to traditional search, several investors argued the company has yet to show sustainable monetisation or meaningful differentiation from larger AI players.
The company recently rolled out upgrades to its Comet Assistant to deliver faster and more accurate answers, along with enhanced privacy controls such as a new Snapshot feature.
Notably, Amazon recently accused Perplexity and issued a legal threat to prevent users from using its AI assistant, Comet, to make purchases on Amazon’s platform.
Meanwhile, the vote also reflected broader concerns about a potential AI investment bubble. Many participants warned that valuations across the sector have outpaced financial fundamentals, leaving companies that scale aggressively like Perplexity increasingly vulnerable to market correction.
Some founders described the sentiment as a “reality check” for startups relying on hype rather than proven revenue paths.
While the result is not a forecast of immediate collapse, it signals a shift in investor expectations as the industry moves from experimentation to financial accountability.
For now, Perplexity maintains strong brand visibility and significant funding, but insiders say the next year will determine whether the company becomes a breakout success or an early casualty of the overheated AI race.
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