Snap and Perplexity End $400M AI Search Deal
Snap announced on Wednesday that its $400 million partnership with Perplexity has been terminated. The deal, announced in November, would have integrated Perplexity's AI search engine into Snapchat's Chat interface, with Perplexity paying Snap $400 million in cash and equity over one year. Snap stated the relationship ended amicably in Q1 and its sales guidance assumes no contribution from Perplexity. The integration was tested with select users but never rolled out broadly. Snap CEO Evan Spiegel had previously highlighted the deal as part of the company's AI vision. Separately, Snap reported 483 million daily active users (up 5% year-over-year) and 965 million monthly active users. Spiegel noted growth in Q1 and mentioned upcoming announcements at AWE on June 16th. The company also laid off roughly 16% of its workforce in April, citing AI advancements.
Key facts
- Snap and Perplexity ended their $400 million deal in Q1 2026.
- The deal was announced in November 2025.
- Perplexity was to pay $400 million in cash and equity over one year.
- Integration would have placed Perplexity's AI search in Snapchat's Chat interface.
- Snap's sales guidance assumes no contribution from Perplexity.
- Snapchat has 483 million daily active users (up 5% YoY).
- Monthly active users reached 965 million (up 5% YoY).
- Snap laid off about 1,000 employees in April 2026 due to AI advancements.
Entities
Institutions
- Snap
- Perplexity
- TechCrunch