Snap has confirmed that it is no longer moving forward with its partnership with AI company Perplexity. The deal, which was announced in November, would have integrated Perplexity’s AI search tool directly into Snapchat’s chat feature. It was also expected to generate $400 million in payments from Perplexity to Snap over one year, including both cash and equity.
Snap said the partnership was “amicably ended” in the first quarter of the year and confirmed that it is no longer included in its revenue outlook. When the deal was first announced, Snap had expected it to contribute to earnings starting in 2026.
The integration was designed to let Snapchat users ask questions and receive AI-generated answers directly inside the app. A limited test had already begun, but Snap later said both companies had not agreed on a full rollout plan. Snap CEO Evan Spiegel previously said the partnership was part of a broader plan to use AI to improve discovery and user experience across Snapchat.
Perplexity has not yet commented on the cancellation.
Alongside the announcement, Snap also reported growth in its user base. Daily active users rose 5% year over year to 483 million, while monthly active users reached 965 million. The company said growth was driven by features like Snap Map and AR Lenses.
Snap CEO Evan Spiegel said the company is focused on improving performance, investing in new technology, and expanding into areas like smart glasses. He also noted that Snap is continuing to explore long-term opportunities in artificial intelligence and wearable tech.
Earlier in the year, Snap laid off about 1,000 employees, or roughly 16% of its workforce, as part of a restructuring linked to its AI strategy.
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