What the $400 million Snapchat and Perplexity deal means for users

AI For Business


Snapchat users will soon be able to use the app as an AI search tool.

On Wednesday, the social media platform announced a deal to integrate Perplexity AI into Snap’s search engine. Perplexity is paying Snap $400 million in cash and stock over the course of the year.

“Perplexity’s AI-powered answer engine allows Snapchatters to ask questions and get clear, conversational answers from verifiable sources within Snapchat,” Snap said in a press release Wednesday.

The companies plan to roll out the Perplexity search engine in early 2026, according to the release.

A Perplexity spokesperson told Business Insider that user data from Snapchat will not be used to train the AI.

“Our goal is to make AI more personal, social, and fun, woven into the fabric of friendships, snaps, and conversations,” Snap CEO Evan Spiegel said in a release.

On Wednesday, Snap reported third-quarter revenue of $1.51 billion, a 10% increase compared to the same period last year. The number of monthly active users increased 7% year-on-year to 943 million.

Snap stock rose more than 17% in after-hours trading Wednesday. The stock price has fallen more than 35% this year.

Perplexity’s partnership with Snapchat follows other social media platforms such as Meta and X, which have integrated AI chatbots into their apps’ interfaces.

In April 2024, Meta introduced the Meta AI chatbot to its applications such as Instagram, WhatsApp, and Facebook. The chatbot received mixed reviews from users, with some complaining that the chatbot was activated unnecessarily and interfered with the app experience.

In December, Elon Musk’s X introduced the Grok chatbot on its app for all free users, which he called a “politically incorrect” alternative to other chatbots.

The partnership with Perplexity comes as Snap sees a shift in the way users interact. Spiegel said in an earnings call Wednesday that there was a “change in engagement from things like stories from friends to content posted on Spotlight.”

Spotlight is Snapchat’s public discovery page where users can view short, funny videos, similar to TikTok’s “For You Page” or Instagram’s Reels.

The company plans to introduce features such as games and conversation starters to rekindle connections between users.





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