Perplexity Integrates ‘Answer Engine’ In $400M Deal With Snap

In a race to grab market share, Perplexity announced that it
will pay Snap $400 million over a period of one year to integrate its AI answer engine into Snapchat.

Exact terms of the Snap-Perplexity data-use agreement were not publicly detailed, but
Perplexity is facing a lawsuit from Reddit for allegedly scraping data from its platform for AI training without permission.

The move gives Perplexity access to Snapchat’s reported 943 million
monthly users. More than 75% of 13– to-34-year-olds in over 25 countries use Snapchat.

The integration, which will take effect in early 2026, includes cash and equity payments over one
year.

Snap said the deal is its first large-scale integration of an external AI partner directly in the app.

“The partnership underscores Snap’s growing role as a trusted
platform for AI partners to reach a large, engaged, mobile-native audience,” the company explained in a press release.

The integration will sit alongside Snapchat’s existing My AI
chatbot, which remains available as a separate assistant.

On Wednesday the company reported third-quarter revenue of $1.51 billion, up 10% compared with the same period last year. 

Perplexity processes more than 150 million questions weekly, but Snap’s age-verification process could put up a roadblock for meaningful growth.

BMO Capital analysts expect the
experience on Snapchat to improve, while also gaining “high-margin partnership revenue for Snap.”

Snap has age restrictions,…