"Snap revealed in its Q1 2026 investor letter that both companies "amicably ended the relationship in Q1," ending a $400 million cash-and-equity deal announced last November. The deal would have brought Perplexity's AI answering engine directly into Snapchat's Chat interface. Users would have been able to ask questions and get conversational, source-backed answers without leaving the app. Snap had earlier said the partnership would begin contributing to revenue in 2026, but its latest sales guidance now assumes no contribution from Perplexity."
"The cancellation comes at a time when tech companies are putting AI assistants across their apps. Meta has added Meta AI to WhatsApp, Instagram, Facebook, and Messenger. Google has been building Gemini into Search, Android, Gmail, and other products. Snapchat seemed to be taking the same route with Perplexity. With hundreds of millions of daily users who use the app to talk, plan, and share content, putting in a chatbot might've looked like a good idea on paper."
"However, cracks in the plan began to show up back in February, when the company announced that it had not yet mutually agreed on a broader rollout plan with Perplexity. The deal also raised questions around how AI search would work inside private messaging, especially for younger users and sensitive topics. Is Snapchat still using AI? The end of the Perplexity deal does not mean Snapchat is stepping away from AI."
"The company recently introduced AI Sponsored Snaps, an ad format that lets brands place interactive AI chatbots inside Chat. So chatbot-style conversations may still appear in Snapchat, but through ads instead of Perplexity search. Snap is also adding more activity around Snap Map. Its new Place Loyalty feature ranks users based on how often they visit certain locations over the past year, with Gold, Silver, and Bronze status levels."
Snapchat’s planned Perplexity integration ended in Q1 2026, ending a $400 million cash-and-equity deal announced the prior November. The partnership would have added Perplexity’s AI answering engine to Snapchat’s Chat interface, letting users ask questions and receive conversational, source-backed answers without leaving the app. Snap previously expected the partnership to contribute to revenue in 2026, but updated sales guidance assumes no contribution. The cancellation comes as major tech companies embed AI assistants across apps, including Meta and Google. Snap is still using AI through AI Sponsored Snaps, which place interactive AI chatbots inside Chat via ads. Snap is also expanding Snap Map with Place Loyalty status tiers based on visit frequency.
Read at Digital Trends
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