By Shubhangi Chowdhury
Publication Date: 2025-11-06 20:30:00
Snap exceeded Wall Street expectations for its third-quarter revenue on Wednesday, buoyed by strong advertising demand and new AI-driven features. The company also announced a partnership with Perplexity AI to bring the startup’s advanced search technology to Snapchat, a move that sent Snap shares soaring 16% in after-hours trading.
As part of the deal, AI startup Perplexity will pay Snap $400 million over the next year through a mix of cash and equity. The partnership is expected to start contributing to Snap’s revenue in 2026, with the integration designed to provide users with verified, AI-generated answers directly within the Snapchat app.
“Perplexity will control the responses from their chatbot inside of Snapchat. So, we won’t be selling advertising against the Perplexity responses,” said Snap CEO Evan Spiegel.
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The partnership with Perplexity marks a strategic move for Snap as it looks to strengthen its foothold in a social media landscape dominated by giants like TikTok and Meta’s Facebook and Instagram. By integrating advanced AI-powered search features, Snap aims to boost user engagement and attract more advertisers, an area where its competitors have long held an advantage due to their massive global audiences and sophisticated ad targeting systems. The collaboration could help Snap redefine its appeal to both users and brands, positioning it as a more…
