Perplexity's 'Billion Dollar Build' to find AI unicorns has a catch

Perplexity AI has unveiled an exciting initiative called the Billion Dollar Build—a competition designed for entrepreneurs to leverage its advanced AI system, Perplexity Computer, in building startups targeting a valuation of $1 billion. Registration for this eight-week contest kicks off on April 14 and runs until early June, culminating in a live-streamed event where the top 10 finalists will pitch their innovations to a panel of experts. The competition boasts a substantial prize pool, promising 'up to $2 million for development and scaling.' This includes potentially $1 million in seed funding from the Perplexity Fund, shared among up to three winners, along with an additional $1 million in credits for using the Perplexity Computer. The structure of the competition consists of a build phase where teams create products and gather users, followed by a reveal phase featuring live pitches. Perplexity is banking on the capabilities of its multi-agent AI system, which was introduced earlier this year. The company asserts that this tool can handle various tasks such as reasoning, researching, coding, product development, and managing workflows with minimal human intervention. Within the first month of its implementation, Perplexity Computer purportedly saved over $1.6 million and achieved the equivalent of 3.25 years of work, as per internal assessments. However, participants must integrate Perplexity Computer as their primary AI tool, although they can utilize other AI solutions in tandem. The judging panel will assess entries based on criteria such as market potential, product quality, user traction, and the centrality of Perplexity Computer in the business model. Despite the promise of significant investment, a closer inspection of the competition’s rules reveals critical caveats. Notably, winning does not guarantee funding. The competition’s terms clearly state that the Perplexity Fund has no obligation to invest in any participant, with investment amounts decided solely at their discretion. Additionally, any financial backing is contingent upon thorough due diligence and several other conditions, including incorporation as a US Delaware C-Corp. Participants will also face a 'pay-to-play' scenario, as entry requires an active Perplexity Max or Pro subscription prior to the competition's start. The costs are substantial, with Pro subscriptions at $17 monthly and Max subscriptions at $167. Furthermore, participants will need to fund any additional computing credits separately, as the Perplexity Fund will not reimburse these expenses. Regarding ownership, while participants maintain rights to their submissions, the terms stipulate that Perplexity and its affiliates are free to pursue similar ideas independently. Contestants are also advised against submitting proprietary or confidential information, as their submissions are not treated as confidential. By entering, participants grant Perplexity Fund extensive rights to use their company names and related materials for promotional purposes without further compensation. Geographically, the competition is limited to legal residents of the United States, requiring winners to incorporate as a US Delaware C-Corp to qualify for potential investment. This restriction may alienate many international developers, particularly from burgeoning AI markets such as India.