Artificial Intelligence
Perplexity AI Strikes $400 Million Deal with Snapchat to Power In-App Search
In one of the most striking tech partnerships of 2025, Snap Inc. has signed a $400 million deal with Perplexity AI to integrate the startup’s cutting-edge search engine directly into Snapchat. The collaboration marks a significant milestone for both companies — one that could reshape how users interact with AI within social platforms.
Announced alongside Snap’s Q3 2025 earnings report, the partnership will bring Perplexity’s conversational AI directly to Snapchat’s “My AI” chatbot, giving users verifiable, AI-generated answers to their questions without leaving the app.
Under the agreement, Perplexity will pay Snap $400 million in cash and equity, with Snap set to start recording revenue from the deal in 2026.
How the Partnership Works
According to Snap, Perplexity will control the responses provided through the chatbot, while Snap will not run ads alongside AI-generated answers. The integration is designed to enhance user engagement while maintaining Snapchat’s signature user-first experience.
“Perplexity will control the responses from their chatbot inside of Snapchat. So, we won’t be selling advertising against the Perplexity responses,” said Snap CEO Evan Spiegel, underscoring a strategic shift toward utility-driven features over traditional ad revenue.
For Perplexity — an emerging rival to OpenAI’s ChatGPT and Google’s Gemini — the deal provides an unprecedented audience. With Snapchat’s reach exceeding 940 million users, the AI startup gains exposure to one of the youngest and most engaged demographics in tech.
Why It Matters
The collaboration comes at a pivotal time for both companies. Snapchat has been seeking ways to diversify its revenue streams and stay competitive with Meta and TikTok, both of which have made major pushes into AI-driven personalization and discovery.
“Perplexity needs a way to build its profile among young consumers, and Snap needs an AI chat partner that keeps users engaged without leaving its app,” said Max Willens, principal analyst at Emarketer.
Meanwhile, Perplexity’s integration aligns with its mission to make AI search more conversational and transparent, offering verifiable answers instead of opaque chatbot responses — a key differentiator in an increasingly crowded AI landscape.
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Snap’s Strong Quarter
Snap’s Q3 2025 results revealed a 10% revenue increase to $1.51 billion, surpassing analyst expectations. The company also reported a narrower net loss of $104 million, down from $153 million a year ago, and a global daily active user (DAU) base up 8% to 477 million.
The company’s premium tier, Snapchat+, now boasts more than 17 million subscribers, further demonstrating its growing monetization strategy. However, Snap cautioned that regulatory changes — including Australia’s upcoming Social Media Minimum Age Bill — could affect user growth in Q4.
The Perplexity AI integration is set to roll out in early 2026, signaling a new era for Snapchat as it evolves from a social media platform into a hybrid AI-powered discovery tool.
If successful, the partnership could redefine how young audiences engage with AI — turning everyday chat interactions into powerful, searchable experiences.
As the tech world watches, one thing is clear: Snap’s $400 million bet on Perplexity could be its smartest play yet.
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