👀 Google's AI competition

What’s going on here?

Perplexity made sure there was no confusion about its position as a Google challenger, completing a funding round that tripled its valuation.

What does this mean?

Perplexity’s search engine – which pulls information from the web in real time to answer queries – is one of the world’s fastest-growing generative AI applications. It answered roughly 250 million questions last month, compared to 500 million queries for the whole of last year. And the startup’s monthly revenue, made from subscriptions to its more powerful Pro model, has swollen sevenfold since the start of the year. The inner circles are clearly impressed: Perplexity just raised $250 million from investors – including SoftBank’s Vision Fund 2 – in a deal that valued the startup at $3 billion, triple the figure it secured only four months ago.

Why should I care?

The bigger picture: Hold onto your search bars.

Google’s hold over the $300 billion search advertising industry is under threat. And not just from Perplexity: OpenAI recently launched its own AI-powered search tool, SearchGPT. But Google can’t count on its usual tricks anymore. A US federal judge ruled on Monday that the firm acted illegally to maintain its monopoly on online search and related advertising. Now, the court hasn’t given Google its orders yet, but it’s safe to say that none of the solutions will help the leader hang onto pole position.

For markets: What goes down might come up.

Investors have become wary of the amount of money being funneled into AI, concerned that the tech’s real-world uses won’t be as lucrative as expected. Yet, as Perplexity’s success shows, there’s still plenty of demand for super-smart services. So when global markets tumbled on Monday, big-money investors seized the rare opportunity to buy tech stocks while they were less eye-wateringly expensive than usual. They won’t have any regrets yet: the S&P 500 has been steadily recovering since then.

What’s going on here?

Major multinational brands like PepsiCo and Unilever have shifted their focus to India, eager to fill an appetite somewhere now that China’s on a slimming diet.

What does this mean?

India boasts the biggest population in the world, and the country’s shoppers aren’t afraid to propel the economy by spending big. So global brands are determined to create some loyal customers in the country’s largely untapped rural areas: PepsiCo’s rolling out KurKure Chaat Fills, inspired by Indian street food, Coca-Cola is upgrading packaging to extend product shelf life, and Nestlé plans to bring its premium coffee brand Nespresso to the Indian market this year.

Why should I care?

For markets: Watch out, America.

Investors are laser-focused on the Indian market, too. The Nifty 50, which tracks India’s 50 biggest companies by market value, has climbed 12% this year, right in step with the S&P 500. Two main factors are keeping India’s stocks at the head of the pack. First, the country’s economy doesn’t rely on the US as much as peers like Taiwan and China. Second, foreign investors are piling in, attracted by the country’s stable currency, strong corporate earnings, and hardy returns – compared to China at least.

The bigger picture: Talk about an Indian summer.

India sizzled under near-record temperatures this summer, with a brutal heatwave keeping shoppers indoors. The disruptive scorcher was mentioned a record-breaking 80 times in the earnings reports of companies in India’s Nifty 500 index, according to Bloomberg. That’s a serious increase from seven mentions this time last year. And that might partly explain why out of the 46 Nifty 50 index members that have reported results so far, about half have missed the average analyst estimate – notably worse than the previous quarter’s 39%. So companies might want to work on their ice cream brands: the G20’s Climate Risk Atlas says India’s heatwaves are set to get 25 times longer over the next three decades.