Snap strikes $400 million deal with perplexity AI – shares surge 18%
U.S. social media company Snap Inc., the parent of Snapchat, has announced a $400 million partnership with AI startup Perplexity AI, sending its shares up 18% in premarket trading – the company’s biggest single-day jump in nearly two years.
Under the deal, Perplexity’s AI-powered search engine – a rival to ChatGPT – will be integrated into Snapchat, adding advanced chatbot and smart search features. The startup will pay Snap $400 million over one year, in a mix of cash and equity. The company emphasized that user data will not be used for advertising purposes.
The integration aims to help Snap catch up with AI-driven rivals like Meta and TikTok, which have rapidly advanced their artificial intelligence capabilities. RBC analysts said the move shows “Snap trying to deliver something close to Meta AI – but on a relative shoestring budget.”
Revenue from the partnership is expected to start appearing in 2026, but the announcement has already revived investor optimism after Snap’s stock lost 32% this year. Analysts see the deal as a potential turning point for the company’s comeback in the competitive digital advertising market.
UCapital Asset Management LLP or group companies may have commercial relationships with the companies mentioned. This content is not financial advice.
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