David Bridges
Key Insights
- Partnership: Snap and Perplexity AI have formed a $400 million deal to integrate AI search into Snapchat by early 2026.
- Revenue Impact: The deal is expected to start contributing to Snap’s earnings in 2026.
- AI Features: Snapchat will soon feature AI-powered updates, including a video generation tool known as “AI Clips.”
- AR Glasses: Snap plans to release a new version of its AR glasses, called Specs, next year.
Snap and Perplexity AI have struck a $400 million deal that will bring the AI search engine directly to Snapchat sometime in “early 2026,” the two companies announced. With the partnership, Perplexity’s AI search engine will be a prominent part of Snapchat’s “chat” interface so users can “ask questions and get clear, conversational answers drawn from verifiable sources, all within Snapchat.”
What is the expected impact of the Snap and Perplexity AI partnership?
The partnership is expected to enhance user experience on Snapchat by integrating AI-driven search capabilities. This collaboration aims to create a more personalized and interactive environment for users.
This integration positions Snap as a leading distribution channel for AI-powered discovery.
The news was announced alongside the company’s third-quarter earnings. The company said that revenue from the deal — Perplexity is paying Snap $400 million for the integration — is “expected to begin contributing” to the company’s bottom line in 2026. In a letter to shareholders, CEO Evan Spiegel also hinted that Snap could pursue similar partnerships with other AI companies. “This collaboration makes AI-powered discovery native to Snapchat, enhances personalization, and positions Snap as a leading distribution channel for intelligent agents, laying the groundwork for a broader ecosystem of AI partners to reach our global community,” he wrote.
How is Snap leveraging generative AI?
Snap has been actively incorporating generative AI into its platform, including the launch of its own LLM-powered chatbot, MyAI. This chatbot utilizes models from various AI firms, including OpenAI and Google.
Snap’s engagement with generative AI showcases its commitment to enhancing user interaction through innovative technologies.
Snap, like its peers, has been leaning into generative AI in recent years. The company has its own LLM-powered chatbot, called MyAI, which uses models from OpenAI, Google and, soon, Perplexity AI. Snap has also introduced AI-powered lenses and creation tools, which have helped boost its Snapchat+ subscription service.
What new features is Snap introducing?
Snap is working on a feature called “AI Clips,” which will enable creators to produce short videos from simple prompts. This feature aims to enhance content creation on the platform.
The introduction of “AI Clips” reflects Snap’s strategy to keep its platform engaging and relevant for creators.
Spiegel also teased other AI-powered updates coming to Snapchat. He said the company is working on a new AI video generation feature called “AI Clips” that “will allow creators to generate short, shareable videos from simple prompts.” He didn’t say when the feature might launch.
What are Snap’s plans for AR glasses?
Snap intends to release a new version of its AR glasses, named Specs, next year. This new version is expected to be lighter than its predecessor.
The development of Specs indicates Snap’s ongoing investment in augmented reality technologies.
Outside of Snapchat, Snap is also planning on launching a new version of its AR glasses, called Specs, sometime next year. Spiegel didn’t offer any new details about the device, which he has previously promised will be lighter-weight than the current version. He did, however, suggest the company was considering working with potential hardware partners. He said Snap would be “putting Specs into their own standalone, 100% owned subsidiary” to give the company more flexibility to pursue such arrangements.
Update, November 5, 2025, 3:08PM PT: Added more details from Snap’s earnings call.
Brandon Fletcher
Daniel Mercer
