Snapchat Bets Big on AI: $400 Million Deal with Perplexity to Redefine Chat Experience by 2026
Snapchat partners with Perplexity AI in a $400 million deal to bring conversational intelligence directly into chats, transforming user engagement globally.
Snapchat is preparing for a major artificial intelligence upgrade that could change how millions of users interact on its platform. In a landmark move, Snap Inc. has entered a $400 million cash-and-equity partnership with Perplexity AI — the rising search and answer engine known for its conversational approach to knowledge discovery. The collaboration aims to embed Perplexity’s advanced AI directly into Snapchat’s chat interface, with global rollout beginning in early 2026.
The announcement has already made waves in the market, sending Snap’s shares soaring by nearly 16 percent in after-hours trading. Analysts view the partnership as a strategic step toward strengthening Snapchat’s position against competitors like TikTok, Instagram, and Facebook — platforms that dominate in advertising but have yet to make a significant leap in conversational AI.
Through this alliance, Snapchat users will soon be able to interact with an AI assistant capable of delivering real-time, factual, and engaging responses — all without leaving the app. The feature is designed to feel like chatting with a knowledgeable friend rather than performing a traditional search.
“Perplexity’s mission is to support the world’s curiosity,” said Aravind Srinivas, CEO of Perplexity. “Millions of people connect and discover the world through Snapchat. By bringing Perplexity to Snapchat, we’re able to serve that curiosity directly where it occurs.”
Snap CEO Evan Spiegel mirrored that enthusiasm, describing the collaboration as part of Snap’s vision to make artificial intelligence “more personal, social, and fun — woven into the fabric of your friendships, Snaps, and conversations.”
The partnership offers mutual benefits. For Snap, it reinforces its identity as a privacy-conscious and innovative platform, especially appealing to its core demographic — younger users. With more than 943 million monthly active users, including 75 percent of people aged 13–34 across over 25 countries, Snapchat provides Perplexity with massive reach among mobile-first audiences.
Meanwhile, Perplexity gains access to a vast pool of potential users beyond the tech community, enhancing its brand visibility and credibility. “Perplexity needs a way to build its profile among young consumers, and Snap needs an AI chat partner that will allow its users to stay engaged without leaving its app,” noted Max Willens, principal analyst at Emarketer.
Interestingly, Snap clarified that it will not sell ads against the AI-generated responses. “We won’t be selling advertising against the Perplexity responses,” Spiegel said, emphasizing that the integration’s purpose is to enhance discovery and engagement, not monetization.
The deal follows a strong financial quarter for Snap, which reported a 10 percent revenue increase to $1.51 billion and narrower net losses of $104 million. Daily active users rose by 8 percent year-over-year to 477 million, signaling healthy growth despite intensifying competition.
Still, challenges remain. Snap anticipates a slight dip in Q4 daily active users due to regulatory shifts, including Australia’s forthcoming Social Media Minimum Age bill. The company projects revenue between $1.68 billion and $1.71 billion — aligning closely with market expectations.
With the Perplexity integration on the horizon, Snap’s latest move reflects a bold ambition — to blend curiosity, community, and conversation into the next era of social media.
