Snap Amicably Ends $400 Million Perplexity AI Partnership

Snap Inc. has terminated its partnership with AI search company Perplexity, per Snap’s first-quarter earnings report. The deal, originally announced in November 2025, intended to integrate Perplexity’s conversational AI directly into Snapchat’s Chat interface and was valued at $400 million in cash and equity over one year.

The partnership ended amicably during Q1, according to Snap. The company noted that its Q2 sales guidance assumes no revenue contribution from Perplexity. The integration had been in limited testing with select users, but Snap said in February that the two companies had not reached an agreement on a wider rollout.

The planned collaboration aimed to let Snapchat users ask questions and receive AI-powered answers within the app, aligning with Snap’s broader push to incorporate more artificial intelligence features. Snap CEO Evan Spiegel had previously described the deal as part of the company’s strategy to improve discovery and enhance user experiences through AI partnerships.

Despite the ended deal, Snap reported positive user growth in Q1. Global daily active users (DAU) increased 5% year-over-year to 483 million, while monthly active users (MAU) also rose 5% to 965 million. The company attributed the gains to improvements in Snap Map, AR Lenses, and other features.

The termination comes shortly after Snap laid off approximately 16% of its global workforce (around 1,000 employees) in April, citing advancements in AI as one of the reasons for the restructuring. Snap is continuing to invest in its AR hardware efforts, including next-generation Spectacles, with more details expected at the Augmented World Expo (AWE) on June 16.