According to engadget, Snap and Perplexity AI have signed a $400 million deal that will bring the AI search engine directly into Snapchat’s chat interface starting in “early 2026.” Perplexity is paying Snap the full amount for the integration, with revenue expected to begin contributing to Snap’s bottom line in 2026. The partnership was announced alongside Snap’s third-quarter earnings, with CEO Evan Spiegel suggesting similar deals with other AI companies could follow. Perplexity’s search will appear prominently in Snapchat’s chat, allowing users to ask questions and get conversational answers from verifiable sources. Spiegel positioned this as making “AI-powered discovery native to Snapchat” and establishing Snap as a “leading distribution channel for intelligent agents.”
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Snap’s desperate cash grab
Here’s the thing – this feels like Snap chasing revenue wherever it can find it. $400 million is an absolutely massive payment from a relatively young AI company to a social platform. Perplexity must be betting that Snapchat’s user base, particularly younger demographics, will become heavy users of their search product. But let’s be real – how many teens are really going to use an AI search engine within Snapchat when they already have Google, ChatGPT, and their phone’s native search? It seems like a stretch.
Perplexity’s gamble
For Perplexity, this is essentially buying distribution at an incredible premium. They’re paying $400 million just for the privilege of being inside Snapchat. That’s an enormous bet on user adoption and retention. Basically, they need enough Snapchat users to actually use their search feature – and keep using it – to justify that massive upfront cost. The pressure on Perplexity to monetize this effectively is going to be intense from day one.
Snap’s AI identity crisis
So Snap already has its own AI chatbot called MyAI, which uses models from OpenAI and Google. Now they’re bringing in a direct competitor? That creates a confusing user experience and suggests Snap doesn’t have a coherent AI strategy. Are they building their own AI capabilities or just becoming a marketplace for other companies’ AI products? The investor letter mentions creating a “broader ecosystem of AI partners,” which sounds nice but could end up being a messy jumble of competing services.
The real play
Look, this isn’t really about search – it’s about Snap trying to become an AI distribution platform. They’re essentially renting out their user base to AI companies who are desperate for reach. The partnership announcement makes this pretty clear when Spiegel talks about positioning Snap as a “leading distribution channel.” But I’m skeptical about whether social media users actually want their apps to become AI marketplaces. Sometimes simpler is better.
Timing and execution risks
Early 2026 is still pretty far out in tech terms. That’s plenty of time for user behavior to shift or for other platforms to launch competing features. And let’s not forget Snap’s history of rolling out features that don’t stick. Remember when they were going to revolutionize hardware with Spectacles? How many people are actually using Snapchat for anything beyond messaging and stories today? This feels like another “throw everything at the wall” moment for a company that’s been struggling to find its next big thing.
