I've been working on a small personal project similar to this and agree that replicating the overall experience provided by Perplexity.ai, or even improving it for personal use, isn't that challenging. (The concerns of scale or cost are less significant in personal projects. Perplexity doesn't do too much planning or query expansion, nor does it dig super deep into the sources afaik)

I must say, though, that they are doing a commendable job integrating sources like YouTube and Reddit. These platforms benefit from special preprocessing and indeed add value.

How did they secure funds in that case?

That is probably exactly why they got funding. You can sell it as focus on adding new features and leveraging the best available tools before reinventing the wheel.

They do train their own models now, but for about a year they just forwarded calls to models like gpt3.5T. You still have the option to use models not trained by perplexity.

which is why their engagement and model responses suck. the other competitors are far better

C.ai and Pi comes to mind

Wait, are you directly comparing Perplexity and C.ai or Pi? Perplexity is a search engine, Pi is a chatbot, and C.ai is roleplay? Their value propositions are very different

I still don't get it. What was the USP here? What is the allure in it for the investors?

Simple, looking at the mirror and saying "Google-killer" firmly 3 times everyday.

Pretraining and even finetuning (to a good extent) is overrated and you can create plenty of value without it.

I assume the same, feels like their product is just summarizing the top n results? I wouldn't need the whole vector db thing, if local models (or hardware) would be able to run with a context of this size.