Snap’s $400 Million Deal With Perplexity Is Dead

Snap’s $400 million deal with Perplexity to put the AI search engine directly in Snapchat is dead. The two companies “amicably ended the relationship” earlier this year, Snap disclosed in its latest earnings report.

The two companies first announced the partnership last November, with plans to make Perplexity’s AI search technology a prominent part of the Snapchat app. Snap said at the time that it expected to start seeing revenue from the partnership in “early 2026.” The feature began testing in Snapchat, but was never fully rolled out, according to a help page. The deal has been on shaky ground for some time, with the Snapchat maker saying earlier this year that the two sides had “yet to mutually agree on a path to a broader roll out.”

In a statement, a spokesperson for Perplexity said that the planned feature was “not the right fit” for either company. “After working together, Snap and Perplexity determined that the original implementation was not the right fit for each company’s product goals and have resolved the matter amicably on confidential terms,” the spokesperson said. “Perplexity continues to value Snapchat as a platform for reaching key audiences, remains active on the Snap platform, and expects to continue using Snap’s advertising products.”

Elsewhere, Snap has explored other ways of bringing revenue-generating AI features to Snapchat’s chat feature.The company recently rolled out “AI Sponsored Snaps,” which allows brands to surface AI agents in users’ conversations. During a call with analysts, CEO Evan Spiegel said that the feature was proof “that chat can be monetized in a way that’s really native to Snapchat.”

Spiegel also spoke about the company’s upcoming plans to show off its new AR glasses, which will be the first consumer-ready version of Specs. “The way that people are using their computers is changing really dramatically, and I think that that’s going to be evident in the adoption of wearables and the adoption of Specs over time,” he said. “Because people are going to spend less time hunched over their computers or their phones typing away on keyboards, and spend more time supervising agents who are doing that work on their behalf.” The company is expected to share more about Specs next month at the Augmented World Expo (AWE) event in Long Beach, California.