Nov 5 (Reuters) - Perplexity is raising new investment

that would value the search startup at $9 billion, a source

familiar with the matter said on Tuesday, a sign of heightened

investor enthusiasm around artificial intelligence companies.

California-based Perplexity is set to raise $500 million in

the new funding round led by venture capital firm Institutional

Venture Partners (IVP), which also holds a board seat in the

startup, the source said.

The company had raised $73.6 million in Series B funding in

January. The funding round, led by IVP, had valued the company

at about $520 million.

The meteoric success of OpenAI's ChatGPT has attracted

investors to AI startups as businesses are racing to adopt the

technology. Building large language models (LLMs) also requires

billions in funding.

OpenAI closed a $6.6 billion funding round last month, which

could value the company at $157 billion and cement its position

as one of the most valuable private companies in the world.

Since the release of ChatGPT, publishers have been raising

the alarm on chatbots that can comb the internet to find

information and create paragraph summaries for the users.

Media conglomerate News Corp ( NWSA )-owned publishers sued

Perplexity in October, claiming that the startup engages in a

"massive amount of illegal copying" of their copyrighted work.

New York Times ( NYT ) also sent Perplexity a "cease and

desist" notice last month, demanding it stop using the

newspaper's content for generative AI purposes.

Perplexity, which provides information by searching the

internet, is also backed by Amazon.com ( AMZN ) founder Jeff

Bezos and chip designer Nvidia ( NVDA ).

The AI company is among the leading firms attempting to

uproot the search engine market dominated by Alphabet's

Google.

The Wall Street Journal first reported on the funding being

finalized by Perplexity.