Snap ends its $400 million deal with Perplexity

In short: Snap says it ended its $400 million partnership with Perplexity, so Perplexity’s AI search was not added to Snapchat.

What happened

Snap said in its quarterly earnings report that it no longer has a deal with Perplexity. Snap said the two companies “amicably ended the relationship in Q1,” meaning the first quarter of the year.

The partnership was announced in November. Under the deal, Perplexity was set to pay Snap $400 million over one year, using a mix of cash and equity (equity means ownership shares, like getting a small piece of the company).

The plan was to build Perplexity’s AI search engine into Snapchat’s Chat section. An AI search engine is a search tool that answers in full sentences, more like a conversation (like asking a helpful librarian a question instead of typing keywords into a search box).

Snap also said its sales forecast assumes “no contribution from Perplexity.” When Snap first announced the partnership, it expected the deal to start affecting its revenue in 2026.

Perplexity did not immediately respond to a request for comment, according to TechCrunch.

Snap shared other business updates in the same report. Snapchat’s daily users rose 5% year over year to 483 million, and monthly users grew 5% to 965 million. Snap also recently said it was laying off about 16% of its workforce, around 1,000 employees, and pointed to advances in AI as part of the reason.

Why it matters

For Snapchat users, this likely means they will not get Perplexity-style question answering built directly into Chat, at least not from this partner. For Snap, it also means investors should not expect the planned $400 million in partnership payments to show up in Snap’s 2026 results.

Source: TechCrunch AI