Snap saw its stock surge 25% after market close as it announced a partnership with Perplexity to integrate that firm’s AI-powered answer engine directly into Snapchat. Perplexity will pay Snap $400 million over one year, through a combination of cash and equity. Revenue from the partnership is expected to begin contributing in 2026.
The shares seem to have settled off their early high but up about 15% at $8.45.
The move gives Snapchat’s community of nearly 1 billion monthly active users a new way to ask questions, explore topics they care about, and learn about the world, the company said. Starting in early 2026, Perplexity will appear in the popular Chat interface for Snapchatters globally. Through this integration, Perplexity’s AI-powered answer engine will let Snapchatters ask questions and get clear, conversational answers drawn from verifiable sources, all within Snapchat.
“Our goal is to make AI more personal, social, and fun – woven into the fabric of your friendships, Snaps, and conversations,” said Snap CEO Evan Spiegel. “This partnership reflects our shared vision for the power of AI to enhance discovery and connection on Snapchat, and we look forward to collaborating with more innovative partners in the future.”
“Perplexity’s mission is to support the world’s curiosity,” said Aravind Srinivas, Perplexity CEO. “Millions of people connect and discover the world through Snapchat. By bringing Perplexity to Snapchat, we’re able to serve that curiosity directly where it occurs.”
Snap said the Perplexity integration marks a first step in Snap’s effort to make Snapchat a platform where leading AI companies can connect with its global community in creative and trusted ways. Snapchatters will still be able to chat with the existing My AI chatbot, with Perplexity joining as an answer engine that helps them find real-time answers from credible sources and explore new topics within the app. Similar to My AI, Snapchatter messages sent to Perplexity will help enhance personalization on Snapchat. Together, Snap and Perplexity aim to make conversational AI an even more seamless part of how people discover and learn on Snapchat.
The AI deal comes as Snapchat added 34 million daily active users in the third quarter to reach 477 million, posted revenue up 10% to $1.51 billion driven by improved advertising demand and ahead of Wall Street forecasts. Net losses narrowed.
“Our focus on performance, creativity, and simplicity is helping advertisers achieve stronger results while giving our community more ways to communicate,” said Evan Spiegel, CEO. “I’m proud of the team’s progress and confident that our discipline and innovation will support durable, long-term growth.”
Snap anticipated fourth-quarter sales will come in between $1.68 billion and $1.71 billion – the midpoint of $1.695 billion is slightly ahead of Wall Street expectations of $1.69 billion.
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