The puzzle over paying Snap $400 million to power search in Snapchat

Snap said Thursday it has signed a deal to integrate Perplexity’s AI search engine directly within Snapchat. As part of the deal, Perplexity will pay Snap $400 million in cash and stock.

The deal allows Perplexity to be offered to more than 940 million Snapchat users, who will get answers from its AI engine when they ask questions of the company’s employees. My chatbot.

The new feature will be integrated into the application interface early next year. Snap said it will begin recording revenue from the deal starting in 2026.

The deal was announced alongside Snap’s results for the third quarter of 2025. The company reported revenue of $1.51 billion, up 10% from the previous year, though it narrowed its loss to $104 million from $153 million last year. The company said that its subscription level, snapchat+It now has more than 17 million users.