What's Happening?
Snap Inc. has announced a significant partnership with Perplexity AI to integrate an AI-powered search engine into Snapchat. This collaboration involves Perplexity paying Snap $400 million in cash and
equity. The integration aims to provide Snapchat's 940 million users with enhanced search capabilities through the My AI chatbot. The new feature is set to be incorporated into Snapchat's interface by early next year, with Snap planning to start recording revenue from this deal in 2026. This announcement coincided with Snap's Q3 2025 financial results, which showed a 10% increase in revenue to $1.51 billion and a reduction in losses from $153 million to $104 million compared to the previous year. Additionally, Snapchat+ has grown to over 17 million subscribers.
Why It's Important?
This partnership is a strategic move for Snap Inc. as it seeks to enhance user engagement and compete with larger social media platforms. By integrating Perplexity's AI search engine, Snapchat aims to offer a more interactive and informative user experience, potentially increasing user retention and attracting new subscribers. The deal also reflects investor confidence, as evidenced by a surge in Snap's shares following the announcement. For Perplexity, this partnership provides exposure to a vast user base, potentially boosting its market presence and credibility in the AI sector. The collaboration could set a precedent for future integrations of AI technology in social media platforms, influencing industry standards and user expectations.
What's Next?
The integration of Perplexity's AI search engine into Snapchat is expected to roll out globally in early 2026. As the feature becomes available, Snap will likely monitor user engagement and feedback to optimize the service. The success of this integration could lead to further collaborations between AI companies and social media platforms. Additionally, Snap's financial performance in the coming quarters will be closely watched to assess the impact of this partnership on its revenue and user growth. Competitors may also respond by enhancing their own AI capabilities to maintain market share.
