According to Mashable, Snap has inked a massive $400 million deal with Perplexity to power AI search within Snapchat. The agreement involves Perplexity paying Snap a combination of cash and equity for access to Snapchat’s 900+ million monthly active users. Snap’s existing My AI chatbot will remain available, but the Perplexity-powered search will get a more prominent “default” placement inside the app starting next year. CEO Evan Spiegel confirmed they see “opportunity to open up Snapchat to more AI partners over time.” The deal comes just one day after Apple reportedly signed its own agreement with Google Gemini to power a smarter Siri.
The money game
Here’s what’s fascinating about this deal structure. Perplexity is actually paying Snap – not the other way around. That’s right, the smaller AI company is shelling out cash and equity for access to Snapchat’s massive user base. It’s basically an admission that distribution is everything in today’s AI wars. Snap gets both immediate revenue and a stake in Perplexity’s future success. Meanwhile, Perplexity gets instant scale from zero to 900 million potential users. That’s a pretty smart trade for both sides, honestly.
Perplexity’s approach
Perplexity isn’t your typical single-model AI company. They use multiple large language models to create what they call a “search-focused AI system.” They’ve got about 20 million active users across their various products, including search, a finance hub, and an AI browser called Comet. But here’s the thing – they’re also facing multiple lawsuits from companies like Dow Jones, the New York Post, Nikkei, and Reddit over alleged copyright infringement and data scraping. Those legal challenges could become Snap’s problem too once this integration goes live.
Timing is everything
This announcement coming right after Apple’s reported Gemini deal is no coincidence. The entire tech industry is scrambling to position themselves in the AI ecosystem. Snap’s move shows they’re not just building their own AI but actively partnering to bring the best technology to their users. It’s a hedge against being left behind. And with 900 million monthly active users at stake, they can’t afford to miss this wave.
What this means for users
Starting next year, Snapchat users will find Perplexity’s AI search front and center in the app. It’ll be more prominent than the existing My AI chatbot, which suggests Snap sees search as the bigger opportunity. Think about it – Snapchat has always been about quick, ephemeral communication. Adding robust AI search could transform it into a genuine information hub. That’s a pretty significant evolution for an app that started with disappearing photos. The question is whether users will actually want to search for information in Snapchat, or if they’ll stick with their existing habits.
