What's Happening?
Nathan Barksdale, General Counsel and Vice President of Operations at Perplexity, an AI answer engine valued at over $20 billion, discussed the challenges and strategies of establishing a legal function within a rapidly scaling AI startup. Perplexity, founded
in 2022, pioneered an AI answer engine that provides sourced and cited answers to user queries, expanding its offerings to include an AI-native browser, Comet, and an orchestration layer, Computer, utilizing over 20 AI models. Barksdale explained that his initial hiring was driven by the need to accelerate business operations and facilitate deals, moving away from reliance on external counsel. He emphasized building a legal team focused on commercial growth and then expanding into areas like product counseling, which became crucial given Perplexity's rapid product development cycle, sometimes releasing a new feature or product daily.
Why It's Important?
This insight into Perplexity's legal and operational strategy highlights the unique challenges faced by high-growth AI startups in the U.S. The need for an in-house legal function that can keep pace with 'startup speed' underscores the dynamic and often uncharted legal territory of AI development. For the U.S. tech industry, this demonstrates a growing demand for legal professionals who are not only adept in traditional law but also possess a deep understanding of technology, business strategy, and the ability to navigate complex regulatory and ethical issues specific to AI. Barksdale's dual role as General Counsel and VP of Operations also signifies a trend towards integrated leadership, where legal expertise is directly tied to operational efficiency and business growth, rather than being a separate, reactive department. This approach is crucial for maintaining agility and competitiveness in the fast-evolving AI market.
What's Next?
The continued evolution of Perplexity's legal and operational framework will likely set precedents for other AI startups in the U.S. As AI technologies become more sophisticated and integrated into daily life, the legal questions surrounding their development and deployment will intensify. This includes issues related to intellectual property, data governance, user liability, and algorithmic transparency. Perplexity's proactive approach to building an in-house legal team focused on commercial and product growth suggests a future where legal strategy is an intrinsic part of product development and business expansion in the AI sector. This could lead to increased demand for specialized legal talent and the development of new legal frameworks tailored to the unique characteristics of AI technologies.
Beyond the Headlines
Barksdale's discussion reveals a deeper philosophical shift in how legal functions are perceived within innovative tech companies. The emphasis on legal as a 'service of the business' and an integral part of the 'one unified team' challenges traditional notions of legal departments as separate entities. This integrated approach can foster greater collaboration and efficiency, but it also raises questions about the independence and objectivity of legal counsel when deeply embedded in operational roles. Furthermore, the rapid pace of AI innovation, as exemplified by Perplexity's daily product releases, constantly outstrips existing legal and ethical guidelines, creating a continuous need for adaptive legal strategies and potentially influencing the development of new laws and regulations governing AI in the U.S. and globally.
