Snap's $400M Perplexity deal to put AI search in Snapchat ended in six months

Snap runs Snapchat, a visual messaging app with 483 million daily users; Perplexity sells an AI answer engine.

That Snapchat's hundreds of millions of users would ask Perplexity's AI questions inside Chat — worth $400M to the AI company for the distribution.

Perplexity was set to pay Snap $400 million in cash and equity over one year.

In November 2025, Snap announced that Perplexity would integrate into Snapchat's Chat interface, paying $400 million in cash and equity over one year, with financial contribution expected from 2026.

The integration was tested with select users, but by February 2026 Snap said the companies had 'yet to mutually agree on a path to a broader roll out'. In Q1 2026 the relationship ended and Snap's sales guidance assumes no Perplexity contribution. The same quarter Snap laid off roughly 16% of its global workforce (about 1,000 employees), citing AI advancements, and reported DAU up 5% to 483 million.

Ended 'amicably' in Q1 2026, per Snap's earnings disclosure; no broad integration shipped.

The $400M price — cash plus equity over a single year — bought distribution, but the integration never got past testing.

The public sticking point in February was that no path to broader rollout had been agreed.

Snap severed cleanly: guidance excludes Perplexity entirely rather than promising future upside.

The same quarter's 16% layoff, framed around AI, signalled a wider strategic reset.

Distribution deals die between the term sheet and the rollout: agreeing on price is not agreeing on product, and 'yet to agree on a path to broader rollout' is the sound of a deal dying.

As of the report, Snap was pointing investors to returning DAU growth and its Specs eyewear roadmap ahead of the June 16 AWE event; Perplexity stayed silent.