Capacity. AI search wars: Can telco-backed Perplexity survive OpenAI challenge?

To challenge Google's dominance in search, telecom giants like Telefónica, SoftBank, and Deutsche Telekom have backed Perplexity, a conversational AI search startup. However, their investment now faces competition, as OpenAI has entered the arena.

After teasing an AI search feature for ChatGPT in July, OpenAI has launched SearchGPT, a tool that provides real-time web results with source links, which Perplexity has already been offering.

Telecom operators are asking: Did they pick the right AI search platform?

Speaking with Capacity, Vincalek, the founder of 555vCTO, urged telecom companies to evaluate their strategic goals carefully when choosing between Perplexity and OpenAI's SearchGPT 

Perplexity vs. SearchGPT: What’s the Difference?

Vincalek, a virtual CTO who advises clients on integrating technology into their business strategies, tells Capacity, “Despite all the press, both Perplexity and OpenAI are startups (although well-funded ones) and what they are showing is still far from being production-ready. Both organizations are lacking the depth and breadth of Google when it comes to content. They don’t have the experience of handling vast amounts of information.”

Perplexity uses large language models to answer conversational search queries. It operates on a freemium model: the free version lets users search using the startup’s base language model, while the premium version offers access to advanced models like Sonar Large 32k, Claude 3 Sonnet, and GPT-4. Premium users can also upload files to assist their searches and conduct more searches each day compared to the free version. 

SearchGPT entered the AI search competition in late October. Integrated directly into ChatGPT, it allows users to search the web within the app, providing real-time responses to queries like news updates or sports scores. While it was first teased in July as a "prototype," it is now available to OpenAI's subscription users, with free users expected to gain access in a few months.

Have Telecoms Backed the Right AI Search?

With major telecoms supporting Perplexity, the question remains: Did they pick the right AI search platform, especially with SearchGPT now in play?

Perplexity’s straightforward, fact-based responses might be ideal for telecoms seeking quick, accurate information delivery. However, SearchGPT might be a better long-term option if customer service trends toward more sophisticated, dialogue-based interactions, like troubleshooting or tailored solutions.

Vincalek argued that telecoms’ choice depends on their strategic goals. Perplexity is great for direct, factual answers, while SearchGPT offers more conversational depth, which could enhance user engagement with personalized interactions.

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