(Reuters) -Perplexity AI is in talks to raise funds at an $18 billion valuation, a person familiar with the matter told Reuters on Thursday, as the Nvidia-backed startup looks to grow and capture soaring demand for its search tools.

The jump in valuation doubles the previous $9 billion figure, reported by Reuters in November.

Perplexity is an AI startup that provides information by searching the internet, just like ChatGPT and Google's Gemini, and is backed by Amazon.com founder Jeff Bezos and Japan's SoftBank Group.

The company has discussed raising between $500 million and $1 billion in the round, the source added.

The growing adoption of chatbots and rise of AI agents, which can take actions for users, have increased investor enthusiasm in such startups.

The AI startup has been upgrading features on its platform to better compete with Google's Gemini and Microsoft ( MSFT )-backed OpenAI's ChatGPT.

Last month, the company teased a new web browser, Comet, which can use AI to not only retrieve information but also understand complex queries, execute tasks and make decisions.

Its Deep Research feature can undertake extensive research by conducting dozens of searches and reading hundreds of sources to deliver a comprehensive report.

Bloomberg News was first to report the increased valuation.

Perplexity is among the leading firms attempting to challenge incumbents in the search engine market such as Alphabet's Google.

Perplexity has faced accusations from media organizations, such as News Corp-owned outlets, Forbes and Wired, that the startup engages in plagiarism and copying of its content. The company has a publisher partnership program to work with news firms.

OpenAI closed a $6.6 billion funding round in October, which could value the company at $157 billion and cement its position as one of the most valuable private companies in the world.