Great product, quick to innovate: Snowflake CEO Sridhar Ramaswamy praises Aravind Srinivas for Perplexity's success

Snowflake CEO Sridhar Ramaswamy

AI data cloud firm Snowflake’s Chief Executive Officer Sridhar Ramaswamy believes Perplexity’s strategy of Application Programming Interface (API)-driven approach allowed it to innovate quickly and build a successful product, while Neeva’s focus on creating a search engine from scratch proved unsustainable.

“At Neeva, we spent three years creating a search engine from scratch, where we did the crawl, we did the indexing, we did a lot of heavy work. Perplexity came quite a bit later, and they simply relied on APIs and produced a great product. That really was what drove the positive momentum for the company. All startups have limited shelf lives in terms of how much you can keep going. My team in the last year sort of was tired of the uncertainty of being a startup and the relentless number of fundraising rounds that you must do. Perplexity created a great product, and they've been very quick to innovate. I give Aravind (Aravind Srinivas, founder)—also an IIT-Madras graduate, a lot of credit. What they have done is truly remarkable,” Ramaswamy told Moneycontrol in an interview.

While both Perplexity and Neeva used artificial intelligence (AI) to build advanced ad-free search engines, later acquired by Snowflake in 2023.

Neeva was conceptualised by Ramaswamy and his former Google colleague Vivek Raghunathan to provide an alternative to Google and prioritising user experience. Founded in 2019, Neeva raised over $70 million in funding before being acquired by Snowflake.

The Perplexity team spent three years creating a search engine from scratch, including crawling, and indexing, involving a lot of “heavy work”. Crawling refers to browsing the internet to gather data, while indexing means organising and storing that particular data in a way that makes it easily retrievable for AI models.

Perplexity is not just competing with “big sharks” like Google, it is also generating $20 million in annual recurring revenue.

The leaders of both companies – Perplexity’s CEO Aravind Srinivas and Ramaswamy – are alumni of IIT-Madras.

In the interview with Moneycontrol during his India visit, the CEO of NYSE-listed Snowflake talked about why he is operating with urgency, how AI will disrupt Software-as-a-service (SaaS), and his ties with IIT-Madras.

Also read: Snowflake and I faced a trial by fire but we're stronger now, says CEO Sridhar Ramaswamy

Ramaswamy also said that Global Capability Centres (GCCs) in India are driving decision-making for global firms and are no longer just back offices. Snowflake will soon staff a huge team in India that will work with GCCs.