Perplexity Wants a $30 Billion Valuation Before Its 2028 IPO. Nvidia May Help It Get There

Omor Ibne Ehsan

Thu, August 27, 2026 at 6:05 PM GMT+3 4 min read

Quick Read

Nvidia (NVDA) is reportedly investing in Perplexity at a $30 billion valuation, targeting a 2028 IPO for the fast-growing AI search startup.
Jensen Huang's investment is strategically circular: Nvidia funds Perplexity, which buys Nvidia compute, deepening a key customer relationship worth billions.
Perplexity's annualized revenue tripled to $750 million in a year, but the 40x multiple only holds if growth compounds ahead of its 2028 IPO.
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Nvidia (NASDAQ:NVDA) is reportedly in talks to invest in Perplexity at a valuation above $30 billion, up from roughly $20 billion in September 2025. Perplexity CEO Aravind Srinivas has discussed a 2028 IPO.

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Annualized revenue has climbed above $750 million from less than $250 million at the start of 2026, helped by demand for the Perplexity Computer AI agent. Investors would be paying roughly 40 times annualized revenue, and a separate $750 million Microsoft Azure agreement shows how quickly that growth consumes compute.

Nvidia closed at $209.66 with a market capitalization of roughly $5.16 trillion. The question is whether Nvidia is backing a credible AI search challenger or paying a lavish price to feed the ecosystem that buys its chips. The answer is both, and the second reason matters more than Nvidia bulls tend to admit.

A Round That Doubles as Demand Creation

Jensen Huang has already named Perplexity as a customer. On the Q1 call, he grouped it with "Anthropic, OpenAI, Gemini, SpaceX XAI, Meta, Microsoft AI, TML, Reflection, Perplexity, Cursor" as frontier labs building on Nvidia. That list is also a customer roster. Every one of these companies buys or rents Nvidia silicon.

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Huang is candid about why the setup works. "Compute is revenue," he said this quarter, after Nvidia posted $96.22 billion in revenue and $89.02 billion in Data Center sales. Writing a check to Perplexity at a premium is a small line in that machine. Nvidia returned roughly $26 billion to shareholders last quarter alone. A minority stake valued at $30 billion is immaterial to the P&L, while deepening a relationship that will consume Blackwell and Rubin's capacity for years.

That is the circular part. Nvidia funds a customer, the customer buys Nvidia compute, and the accounting geography of that spending sits inside a broader partnership network that mobilizes over $500 billion in third-party capital for AI infrastructure. The chipmakers get the headlines, but the power, cooling, and networking suppliers behind the data centers are the quieter beneficiaries, and we pulled seven of them into a free report on the AI buildout.

Why Perplexity Earns Its Premium

The revenue trajectory is real. Going from under a quarter-billion in annualized sales to more than three-quarters of a billion inside a single year is a substantive move, especially with paying enterprise seats behind it. Perplexity Computer, the agentic browser layer, is accelerating spending. Agents run more inference than chat, and Huang put the point bluntly: "The world is going to have billions of agents."

Search is also the one consumer surface where Google looks beatable at the margins. If Perplexity holds even a modest share of high-intent queries, the compute bill scales with usage rather than seat count. Forty times annualized revenue is steep. It only works if the 2028 IPO arrives with revenue several turns higher and durable gross margins, both of which depend on compute costs that Perplexity does not control.

What Nvidia Shareholders Should Actually Watch

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Nvidia stock is up 12.55% year-to-date and 15.49% over the past year. It trades at roughly 24 times forward earnings, with an analyst target of $304.73. The bull case does not need the Perplexity stake to work. Q3 guidance of $108 billion and supply commitments of $279 billion for Vera Rubin memory are the load-bearing numbers.

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What the deal signals is that Nvidia will keep using its balance sheet to seed the customers who consume that supply. That is defensible when the customer is genuinely growing, and Perplexity qualifies. It becomes a problem if Nvidia has to keep writing bigger checks to keep the flywheel spinning. Read the round as a real investment with a strategic subsidy built in.