Snap Inc. announced on Thursday that it has entered into a landmark $400 million cash-and-equity deal with Perplexity, the fast-growing AI search startup, to integrate Perplexity’s AI-powered search engine directly into Snapchat.
The partnership will give Perplexity access to Snapchat’s vast user base of over 940 million people, embedding its AI search capabilities into the app’s popular My AI chatbot. Starting early next year, Snapchat users will be able to ask questions and receive real-time answers directly powered by Perplexity’s AI engine.
Snap said it expects to begin recording revenue from the deal in 2026, marking one of the company’s most significant AI-related partnerships to date.
A Major Boost for Both Snap and Perplexity
For Snap, the deal represents a strategic move to enhance user engagement through deeper AI integration. The company has been steadily expanding My AI since its launch, adding new personalization and content discovery features. With Perplexity’s search technology, Snapchat’s chatbot will be able to deliver more accurate and conversational responses, positioning it as a smarter daily assistant for users.
For Perplexity, the partnership offers massive distribution. The company, which competes with the likes of OpenAI’s ChatGPT and Google’s Gemini, will gain exposure to hundreds of millions of active users — a major leap for an AI startup still in its early growth phase.
Financial Results: Revenue Up, Losses Narrow
The announcement came alongside Snap’s Q3 2025 earnings report, which showed $1.51 billion in revenue, a 10% increase year-over-year. The company also narrowed its net loss to $104 million, down from $153 million in the same period last year — signaling improved cost discipline and monetization efforts.
Snap also reported that Snapchat+, its premium subscription tier, has now surpassed 17 million subscribers, underscoring growing user appetite for exclusive and AI-enhanced features.
Looking Ahead
With the Perplexity partnership set to roll out in early 2026, Snap is betting big on AI to transform how users interact with its platform. By combining Snapchat’s massive reach and social engagement with Perplexity’s advanced AI search capabilities, both companies stand to benefit — Snap through richer user experiences and new revenue streams, and Perplexity through unprecedented visibility in the consumer space.
If successful, this collaboration could redefine Snapchat’s role from a social messaging app into a more intelligent, search-driven platform powered by conversational AI.