A young AI publishing partnership is gaining momentum

Gretchen A. Peck | for E&P Magazine

In the generative AI space, which is largely dominated by technology developers such as OpenAI, Microsoft and Google, Perplexity.ai is looking to differentiate itself from the competition. E&P spoke to the company’s Chief Business Officer, Dmitry Shevelenko, in late July, a day after the company unveiled its new Perplexity Publishers Program.

“The best way to think of Perplexity is that we are a kind of answer engine – a combination of a search engine that uses Large Language Models AI to synthesize real-time information from different sources to give users a precise answer to their specific question,” said Shevelenko.

“A big difference between us and OpenAI is that we don’t train our own base model. … We don’t crawl the web and then train AI on that. We have a web index that contains news articles and we only use that,” he explained.

While other generative AI technologies resist source transparency, Perplexity seems to be moving toward it.

“Highlighting sources was pioneered by Perplexity and has always been a core focus of our product,” he said. “We actually always list sources above the answers. In a kind of journalist-speak, we think your article is only as good as your sources, and that applies to an AI-generated answer as well.

“Also, instead of just listing the sources at the top, they actually include inline citations so you can see sentence by sentence where the information came from. Not only is citing the source fair and good business practice, it’s also important to the user because it determines how much weight to give the answer. If you don’t know the sources or have never heard of them, you’ll be more skeptical than if it’s a reputable publisher,” he suggested.

Perplexity was also not spared criticism and threats of legal action from publishers. Two well-known publishers, Forbes Media and Condé Nast, have sent the developer a cease-and-desist letter.

In June, Forbes accused Perplexity of reproducing its reporting “almost verbatim” without attribution. E&P subsequently published a Q&A with Forbes Media content director and Forbes Magazine editor-in-chief Randall Lane, in which he further explained the allegations and reflected on the dangers and opportunities of generative AI.

Shevelenko responded to the allegations: “Before her article – about ten days before that – we introduced an experimental new feature in Perplexity called Perplexity Pages, a more stylized version of an answer. It had a different interface. That was a prototype. Our main product answers questions. It was a way for people to create a collection of different answers and make it feel like a website. One of the pages created was based on reports from Forbes and others about Eric Schmidt’s drones. Within 24 hours of the initial criticism, we actually updated the interface to more clearly highlight sources on the page, as we do with every other Perplexity answer.

“We also changed Pages’ system prompt for text generation within a week, so when a single source is used as input, the article will say ‘As reported by Forbes’ — in the text itself — and follow that best practice. But it’s inaccurate to say this was a verbatim take on one language. It was another language, a synthesis of their reporting and the reporting of others on the subject. … The claim that this is plagiarism or anything other than accepted fair use of facts is unfounded.”

Ultimately, Perplexity removed the controversial article from its site.

Before Randall Lane’s Forbes column in June 2024, Perplexity made an offer to Forbes to join the then-prepared Publishers Program.

A Forbes spokesperson said in a statement to E&P: “Perplexity came to Forbes with an offer several months ago and we decided to decline it because it significantly undervalues ​​both our journalism and the Forbes brand. It is critical for AI companies to have fair contracts that respect and recognize the time and resources required to produce impactful journalism.”

The appeal to news publishers

Shevelenko said the genesis of the Perplexity Publisher Program began in January, “long before the criticism.” He said the management team recognized that news audiences were at risk and that their solution would wither without a healthy, sustainable ecosystem for publishing and journalism.

That’s an unexpected tone from a technology developer.

“This program is not a legal strategy. It is not a PR strategy. It was born out of the belief that close cooperation with publishers is important for our long-term success,” he said.

Shevelenko revealed that the company had planned to launch in June but hit the brakes due to criticism from Forbes and Condé Nast.

As program partners, news publishers gain access to Perplexity’s APIs, allowing them to integrate Q&A functionality natively into their websites and create answers to user questions based solely on their own reporting.

The most exciting part of the program, however, is the revenue share.

“It’s a very simple model,” he explained. “The atomic unit of revenue share is an article used as a source to generate an answer. … If we generate any kind of revenue from that page view, whether it’s through our sponsored questions, an ad unit, a video ad unit – and regardless of how someone interacts with that ad unit – if we make money, the publisher gets a fixed percentage.”

While he did not give a specific percentage, he said it was a “double-digit” percentage.

Shevelenko was open about Perplexity’s investors’ concerns about revenue sharing. They obviously would have preferred a more favorable profit margin, so the timing of the program – before ads are sold and the solution is monetized – was crucial. In other words, it would have been harder to “sell” them the revenue sharing model once investors got used to pure profit.

Another difference between the Perplexity program and OpenAI’s licensing agreements are the publishers themselves.

“They pay what appear to be handsome sums to the largest publishers, but as a one-time deal. And they assume that smaller and medium-sized publishers don’t have the legal means to sue them. What we’ve done is create a program for everyone,” he said. Asked to clarify on this, Shevelenko said they would welcome all news publishers to join their program, including digital media, independent publishers, nonprofits and local/hyperlocal publishers.

With the announcement of the launch came a list of publishers that have joined the program: TIME, Der Spiegel, Fortune, Entrepreneur, The Texas Tribune and WordPress.com. By the end of August, Perplexity expects to be able to announce additional domestic and international publishers.

Despite her long handshake with the publishers, Shevelenko expects cynicism.

“I understand why publishers are skeptical. They have been treated badly by tech platforms in the past, so their skepticism is justified and it is up to us to prove that we are acting in good faith,” he told E&P.

Gretchen A. Peck is an editor at Editor & Publisher. She has been reporting for E&P since 2010 and welcomes comments at [email protected].