As AI continues to revolutionize the tech industry, the maker of Snapchat isn’t planning to be left behind. Snap Inc. has announced a $400 million deal with Perplexity AI, under which Perplexity will integrate its AI-powered “answer engine” directly into Snapchat’s chat interface.
The rollout is slated for early 2026, and the payment from Perplexity to Snap will be a combination of cash and equity. That means Snap is getting paid to let Perplexity integrate its AI search technology directly into Snapchat.
The integration will allows you to ask questions within the Snapchat app and get conversational answers from Perplexity, drawn from verifiable sources. The main purpose is to have the built-in AI search in the app rather than redirecting users outside the app.
On the other hand, this deal will open a new stream of engagement (and potentially revenue) for Snapchat in the sense that integrating an external AI partner will increase users engagement in the app rather than redirecting users outside the app and relying solely on its own solutions.
For the market: Snap’s stock surged significantly after the announcement, signalling investor enthusiasm for AI tie-ups in the social media space. The Snapchat announcement came alongside the company's third-quarter earnings.
The company said the revenue from the integration is expected to start contributing in 2026, so this is more of a forward-looking play than an immediate gains driver.
In his letter to shareholders, CEO Evan Spiegel suggested that Snap may explore additional collaborations with other AI firms in the future. He explained that the partnership with Perplexity brings AI-driven discovery directly into Snapchat, improves personalization, and establishes Snap as a key platform for distributing intelligent agents.
