According to Business Insider, Snap just inked a massive $400 million deal with Perplexity AI to integrate their search technology directly into Snapchat. The partnership involves both cash and equity payments to Snap over the next year, with plans to launch the AI-powered search engine in early 2026. Snap CEO Evan Spiegel says the goal is to make AI “more personal, social, and fun” within conversations and friendships on the platform. The announcement came alongside Snap’s Q3 earnings showing $1.51 billion in revenue, a 10% year-over-year increase, with monthly active users hitting 943 million. Snap’s stock immediately surged more than 17% in after-hours trading, though shares remain down over 35% for the year. A Perplexity spokesperson confirmed that Snapchat user data won’t be used for training their AI models.
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Snap’s big AI bet
Here’s the thing about this deal – it’s not just about adding another AI feature. Snap is essentially outsourcing its search future to a third party while getting paid handsomely for it. Perplexity is paying Snap $400 million for the privilege of reaching nearly a billion users. That’s an interesting reversal from the usual platform dynamics where apps pay for AI integrations.
But why would Perplexity make that kind of investment? Basically, they’re buying distribution at scale. Getting embedded into an app with 943 million monthly active users is worth the price tag, especially when you’re competing against giants like Google and OpenAI. For Snap, it’s free money and a way to quickly catch up in the AI race without building the technology themselves.
The social AI landscape
Snap isn’t exactly breaking new ground here. Meta already rolled out its AI chatbot across Instagram, WhatsApp, and Facebook back in April, though user reception has been… mixed. People complained about it popping up unexpectedly and interfering with their app experience. Then there’s X with Grok, which Elon Musk proudly calls “politically incorrect.”
So what makes Perplexity different? They’re positioning themselves as more of an answer engine than a chatbot, focusing on verified sources and clear responses. The question is whether Snapchat users actually want to search for information within an app they primarily use for messaging and entertainment. I’m skeptical, but maybe the younger demographic sees it differently.
Snap’s engagement shift
This deal comes at a crucial moment for Snap. Spiegel mentioned on the earnings call that there’s been an “engagement shift from things like friend stories to content posted on Spotlight.” That’s corporate-speak for “people are watching more TikTok-like videos and sharing less personal content.”
Spotlight is basically Snap’s version of TikTok’s For You Page or Instagram Reels. And it’s becoming more central to the experience. The company plans to add games and conversation starters to rebuild those personal connections. But honestly, once users shift from sharing their lives to consuming content, it’s hard to reverse that trend.
What this means for users
Come 2026, you’ll theoretically be able to ask Perplexity questions right within your Snapchat conversations. Need to settle a debate about movie trivia or find restaurant recommendations? The AI will supposedly provide sourced answers without leaving the app.
The privacy angle is interesting though. Perplexity says they won’t use Snapchat data for training, but what about the queries themselves? And will this actually feel natural within an app known for disappearing messages and silly filters? We’ll find out in about a year and a half, but color me cautiously optimistic that this might actually be useful rather than just another annoying AI feature shoved into an app.
