Snap Stock Surges After $400 Million AI Partnership With Perplexity
The partnership, expected to begin in early 2026, marks Snap’s latest effort to diversify its business beyond digital advertising.
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Snap Inc. shares rose more than 16% in premarket trading on Thursday after the company announced a $400 million partnership with Perplexity AI Inc. to bring the startup’s conversational search engine to Snapchat.
The deal, disclosed alongside Snap’s third-quarter earnings, will allow users to access Perplexity’s AI-powered answer engine directly within Snapchat’s chat feature starting in early 2026. Snap said its existing My AI chatbot will continue to operate separately.
“We see a lot of opportunity to open up Snapchat to more AI partners over time,” CEO Evan Spiegel said in an interview. “The conversational interface has become a lot more valuable with the advent of conversational AI.”
Perplexity will pay Snap partly in cash and partly in equity, and the company expects the deal to begin contributing to revenue next year. The agreement gives Snap a new source of income as it works to reduce its reliance on advertising, which remains its main business.
In a letter to shareholders, Spiegel noted, “This collaboration makes AI-powered discovery native to Snapchat, enhances personalization, and positions it as a leading distribution channel for intelligent agents, laying the groundwork for a broader ecosystem of AI partners to reach our global community.”
Snap has been expanding its use of artificial intelligence through features such as its My AI chatbot, creative tools, and augmented reality filters. These features have supported growth in its paid Snapchat+ subscription service.
Spiegel also said the company is developing “AI Clips,” a new tool that “will allow creators to generate short, shareable videos from simple prompts.” He did not provide a launch timeline.
Separately, Snap plans to release a new version of its augmented reality glasses, called Specs, next year. Spiegel explained that the company will move the product into a standalone, wholly owned subsidiary to allow more flexibility for potential hardware partnerships.
