The first two years of AI were defined by general purpose systems written for the broad market. ChatGPT, CoPilot, and Gemini are designed to stake out the biggest possible positions on the board of the future.
But that era is ending, for two good reasons. One is it’s not profitable. Microsoft is hiding its CoPilot software behind its successful Office applications, rebranding it as Microsoft 365 CoPilot. Microsoft can spin this any way it wants. The fact is the software isn’t profitable and must be tied into something larger to appear bigger, and better, than it is.
The second reason the era is ending is because it must. Every past era in technology started with mass market plays, but quickly turned into niche market plays, as small companies sought narrow channels where competition might not be as fierce.
That’s what the launch of Perplexity for Finance represents. Perplexity, the AI search startup, isn’t going to outshine Google or even Bing. It’s essential that the company find niches if it’s to succeed.
It’s also vital that Perplexity get some cash in the door, and that’s what the Finance AI is designed to do. It costs $20/month, but compare it to the cost of Marketwatch, Business Insider, Fortune, or dozens of other online finance sites that are now going behind paywalls.
Inside Perplexity Finance
Perplexity Finance is based on a limited data set, that of Financial Modeling Prep, which offers its data through an Application Programming Interface (API). Static data is free, but the ever-changing firehose of data costs just what Perplexity Finance does, $20/month. The source also sells an “ultimate” package at $100/month.
Figure Perplexity is getting one of the lower tiers at a discount. That’s not a lot of margin, but enough cash may come in, and enough of a market toehold may be had, for this to make sense.
Everyone’s complaining about Garbage In, Garbage Out. That is, when they’re not demanding developers’ cash for using data. All this adds to the central reality of AI today.
AI Won’t Be Free
The Internet was designed as a free resource. It never really was. You paid for it with your data or your attention, which was resold to advertisers.
But the AI Internet will charge you, for everything you do. This is the reason CoPilot is floundering. This is why Perplexity is seeking niches.
We know what happens when newspapers and magazines go behind paywalls. They lose most of their audience. The same is going to happen with AI. It’s bound to make high-end Internet use an elite activity. It’s raising the data drawbridge on everyone without the ability AND willingness to pay.
I asked Perplexity just this question. The answer I got looked interesting, but when you look inside it’s word salad. Policy initiatives? Partnerships? And the question is twisted in the answer to focus only on universities, not the larger question of society.
As the “Cloud Czars” pour out their billions for Nvidia gear and prepare to pour out more billions for the electricity to run it, we need to have this conversation about Internet Classes, of information haves and have nots.
We’re running headlong into a world of two Internets, one for the elites and one for everyone else.
It’s a very dangerous world for democracy to live in.
