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Snap says its $400M deal with Perplexity ‘amicably ended’
Snap announced the amicable end of its $400M deal with Perplexity to integrate AI search into Snapchat. The decision was made within Q1 2026, with Snap adjusting its sales guidance accordingly. Despite this setback, Snap reported growth in daily and monthly active users, attributing success to app improvements and a focus on innovation, including future developments in AR and intelligent eyewear.
Key points
- Snap and Perplexity ended their $400M integration deal that began last November.
- The partnership aimed to integrate Perplexity's AI search into Snapchat's Chat interface.
- Snap confirmed the decision in its Q1 earnings report and assumed no financial contribution from Perplexity moving forward.
- Snap experienced a 5% rise in daily and monthly active users due to new app features.
- The CEO emphasized a return to growth and future investments in intelligent eyewear and AR technologies.
Why it matters
- Snap's shift away from partnerships reflects broader industry trends where tech firms reassess AI collaborations amidst evolving market conditions.
- The termination aligns with a growing trend in 2025 where integration of AI in social media platforms faces scrutiny due to changing user preferences and cost structures.
- Increased focus on efficient technology deployment indicates competitive pressure from other platforms leveraging AI.
The amicable termination of Snap's deal with Perplexity underscores the challenges of tech partnerships while highlighting Snap's ongoing commitment to user growth and innovation in AR and eyewear domains.