Artificial intelligence search engine company Perplexity has bought retrieval augmented generation (RAG) startup Carbon.ai, Dzambhala has learned.

Carbon founder Derek Tu in an email to customers, seen by Dzambhala, informed of the acquisition, while Perplexity hasn’t publicly issued any statement.

The terms of the deal are not yet known.

Tu said Carbon wasn’t actively looking to sell but were instead approach by the AI search company led by Aravind Srinivas, who made a compelling case about integrating its data connectors with their search engine.

The Carbon service would be shut down as a result of this acquisition, a decision that would impact many generative AI software-as-a-service (SaaS) builders, who relied on Carbon’s data connectors as essential parts of their own products.

SaaS products that relied on Carbon would have a three month deadline to find an alternative.

Carbon provided builders a more straightfoward way to enable RAG in their large-language model (LLM) apps and had announced raising $1.3 million in seed round a year ago. Using the service, LLMs could more easily access unstructured data from platforms like Google Drive or Dropbox.

Perplexity, meanwhile, is seeing its valuation skyrocket this year, amid the surge in AI utility. The AI search engine, which got an early backing from Amazon founder Jeff Bezos, started the year with a $600 million valuation and is now said to be raising that much amount in just a single funding round that would value it at $9 billion.

Follow-up: Roughly five hours after Dzambhala published this article, Perplexity and Srinivas confirmed the acquisition with public statements.

Srininvas noted Perplexity would be able to let users connect their Notion, Docs, Slack etc. accounts to the AI search engine to be used for RAG, which makes intuitive sense in line with the data connectors Carbon had been providing.

All of Carbon team would move to Perplexity as part of the acquisition, he confirmed.

The two companies involved in the merger haven’t disclosed the terms of the deal.

Keep reading: Free Perplexity Pro AI Access To India Students And Faculty? CEO Interested In Chalking Things Out With PM Modi