Snap and Perplexity cancel $400M AI search deal, ending Snapchat integration plans

Snap says its $400M deal with Perplexity 'amicably ended' | TechCrunch

Snap no longer has a deal with Perplexity, the company revealed on Wednesday as part of its quarterly earnings report. The deal, announced last November, would have seen Perplexity's AI search engine integrated directly into Snapchat. Perplexity was set to pay Snap $400 million in cash and equity over one year as part of the deal. Snap said that the companies "amicably ended the relationship in Q1'' and that its sales guidance "assumes no contribution from Perplexity." When Snap announced the deal as part of its third-quarter earnings last year, it said it expected revenue from the partnership to begin contributing to its financials in 2026. The deal would have seen Perplexity integrated into Snapchat's "Chat" interface, allowing users to ask questions and receive conversational answers directly within the app. Snap CEO Evan Spiegel said at the time of the announcement that the deal reflected the company's vision to use AI to enhance discovery on Snapchat, and that Snap was looking forward to "collaborating with more innovative partners in the future." Perplexity did not immediately respond to TechCrunch's request for comment. Snap revealed on Wednesday that Snapchat's global daily active users (DAU) rose 5% year-over-year to 483 million, while monthly active users (MAU) also grew 5% to reach 965 million. The company attributed the growth to new features across the app, including Snap Map and its Lenses AR filters. "In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow," Spiegel said in a press release. "We remain focused on disciplined execution as we invest in Specs and our longterm opportunity in intelligent eyewear and look forward to sharing more at AWE on June 16th." Snap said in April that it was laying off roughly 16% of its global workforce, impacting around 1,000 full-time employees, citing advancements in AI for the cuts.

Perplexity's AI answering engine is not coming to Snapchat, after all

Snapchat's planned Perplexity integration is no longer happening. Snap revealed in its Q1 2026 investor letter that both companies "amicably ended the relationship in Q1," ending a $400 million cash-and-equity deal announced last November. The deal would have brought Perplexity's AI answering engine directly into Snapchat's Chat interface. Users would have been able to ask questions and get conversational, source-backed answers without leaving the app. Snap had earlier said the partnership would begin contributing to revenue in 2026, but its latest sales guidance now assumes no contribution from Perplexity. Do users need AI search inside every chat app? The cancellation comes at a time when tech companies are putting AI assistants across their apps. Meta has added Meta AI to WhatsApp, Instagram, Facebook, and Messenger. Google has been building Gemini into Search, Android, Gmail, and other products. Recommended Videos Snapchat seemed to be taking the same route with Perplexity. With hundreds of millions of daily users who use the app to talk, plan, and share content, putting in a chatbot might've looked like a good idea on paper. However, cracks in the plan began to show up back in February, when the company announced that it had not yet mutually agreed on a broader rollout plan with Perplexity. The deal also raised questions around how AI search would work inside private messaging, especially for younger users and sensitive topics. Is Snapchat still using AI? The end of the Perplexity deal does not mean Snapchat is stepping away from AI. The company recently introduced AI Sponsored Snaps, an ad format that lets brands place interactive AI chatbots inside Chat. So chatbot-style conversations may still appear in Snapchat, but through ads instead of Perplexity search. Snap is also adding more activity around Snap Map. Its new Place Loyalty feature ranks users based on how often they visit certain locations over the past year, with Gold, Silver, and Bronze status levels. Snap says rankings are private to the user, and location sharing remains off by default. The company is still growing. In Q1, Global daily active users rose 5% year-over-year to 483 million, while monthly active users increased 5% to 965 million. Snap credited growth to features across Snap Map, Lenses, and other parts of the app.

Snap ends $400 million AI search partnership with Perplexity

Snap announced the termination of its partnership with Perplexity during its quarterly earnings report, stating that the companies "amicably ended the relationship in Q1." This deal, initially announced in November, aimed to integrate Perplexity's AI search engine into Snapchat, with Perplexity set to pay Snap $400 million in cash and equity over one year. Snap confirmed that its sales guidance now assumes "no contribution from Perplexity." The initial plan had expected revenue from the partnership to start contributing in 2026. The integration was intended for Snapchat's "Chat" interface, allowing users to ask questions and receive conversational answers directly within the app. Although testing was conducted with select users, Snap indicated in February that a path for a broader rollout had not been mutually agreed upon between the companies. Snap CEO Evan Spiegel previously stated the deal reflected the company's vision to enhance discovery on Snapchat through AI and expressed a desire to collaborate with innovative partners in the future. Perplexity did not respond to a request for comment regarding the deal termination. In the same report, Snap also mentioned a 5% year-over-year increase in global daily active users (DAU) to 483 million, with monthly active users (MAU) rising 5% to 965 million, attributed to new features like Snap Map and Lenses AR filters. Spiegel highlighted Snap's return to growth in daily active users, along with accelerated revenue growth and expanded margins, stating, "In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow." The company remains focused on disciplined execution, particularly in investing in Specs and its long-term opportunity in intelligent eyewear, with plans to share more at the Augmented World Expo on June 16. In April, Snap announced it would lay off approximately 16% of its global workforce, affecting around 1,000 full-time employees. The company cited advancements in AI as the reason for the layoffs.

Snap says $400 million AI search deal with Perplexity was called off "amicably" - The Economic Times

Snap has amicably ended its partnership with AI startup Perplexity, canceling plans to integrate Perplexity's AI search into Snapchat. The deal, valued at $400 million, would have brought conversational AI search to the app. Despite this, Snap reported stronger first-quarter results with a 12% revenue increase and narrowed net loss.Snap and AI startup Perplexity "amicably ended" their partnership, the social media company revealed on Wednesday in its quarterly earnings report, scrapping plans to integrate Perplexity's AI-powered search engine into Snapchat, its messaging app. The agreement, announced last November, would have seen Perplexity pay Snap $400 million in cash and equity over a one-year period. Snap said its current sales guidance now "assumes no contribution from Perplexity." Earlier, the company had expected the partnership to begin contributing to revenue from 2026 onwards. The proposed integration aimed to bring Perplexity's conversational AI search into Snapchat's "Chat" interface, allowing users to ask questions and receive AI-generated answers directly within the app. The feature had entered testing with a small group of users, but Snap said in February that the two companies had "yet to mutually agree on a path to a broader rollout." The partnership was also expected to support Snap's advertising business. The company has been pushing deeper into direct-response advertising products such as "App Purchase". A search-led AI experience inside Snapchat could have created stronger monetisation opportunities by tapping into user intent and engagement. Alongside the update on Perplexity, Snap reported stronger first-quarter results. Revenue rose 12%, supported by resilient advertising spending and growth in daily active users, especially in markets outside North America and Europe. The company's net loss narrowed to $89 million from $140 million a year earlier. Snap expects second-quarter revenue to come in between $1.52 billion and $1.55 billion, with the midpoint close to analyst estimates of $1.54 billion. Daily active users rose to 483 million in the first quarter, up by 9 million from the previous quarter. Monthly active users increased 5% to 965 million. Snap said growth was driven by newer features across the platform, including Snap Map and its Lenses augmented reality filters. However, North America, the company's largest market, remained weaker, with a decline in daily active users and revenue growth slowing to 2% during the quarter. "In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow," said Evan Spiegel, CEO, in a press release. "We remain focused on disciplined execution as we invest in Specs and our long-term opportunity in intelligent eyewear and look forward to sharing more at AWE on June 16th." The development comes nearly a month after Snap announced plans to cut 1,000 jobs, around 16% of its full-time workforce, and close more than 300 vacant positions.

Snap and Perplexity Cancel AI Integration Plans | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. Perplexity told WSJ that the two companies determined that the collaboration didn't fit their product goals, according to the report. "Perplexity continues to value Snapchat as a platform for reaching key audiences, remains active on the Snap platform, and expects to continue using Snap's advertising products," Perplexity said, per the report. Snap said in a first quarter investor letter released Wednesday: "Our revenue guidance range assumes no contribution from Perplexity as we amicably ended the relationship in Q1." The company said in its previous, fourth quarter investor letter released Feb. 4: "Our Q1 revenue guidance range excludes any potential revenue from the Perplexity integration as we have yet to mutually agree on a path to a broader roll out." Snap announced the partnership in November, saying Perplexity would pay it $400 million over one year to integrate its AI-powered answer engine into Snapchat. The company said this would mark the first integration of an external AI partner directly into Snapchat as well as the first step in Snap's effort to make the app a platform where AI companies can connect with its 943 million monthly active users. At the time, Snap said Perplexity would begin appearing in Snapchat in early 2026. Perplexity CEO Aravind Srinivas said in a Nov. 5 post on X that Perplexity would become the default AI for all Snapchat users in the Snapchat app, starting in January 2026, and that the two companies planned to work on many more projects. Meanwhile, Snap announced in a Wednesday earnings release that the company's first quarter revenue increased 12% year over year to reach $1.5 billion. The company said Snapchat's global monthly active users increased 5% year over year to reach 956 million, while its global daily active users rose 5% to reach 483 million. During the quarter, Snapchat launched a format called AI Sponsored Snaps that lets brands engage Snapchat users through interactive, AI-powered conversations.