Snap and Perplexity have officially walked away from their planned $400 million deal to bring the AI search engine into Snapchat. According to Snap’s latest earnings report, the companies mutually decided to end the partnership earlier this year.
The two companies announced the partnership last November and planned to integrate Perplexity’s AI search features into Snapchat. Snap previously said it expected to see revenue from the agreement starting in early 2026.
According to a help page, the feature was tested in Snapchat but was never released widely. Earlier this year, Snap also noted that the two companies had not yet agreed on plans for a broader rollout.
In a statement, a Perplexity spokesperson said the planned feature ultimately “was not the right fit” for either company.
“After working together, Snap and Perplexity determined that the original implementation was not the right fit for each company’s product goals and have resolved the matter amicably on confidential terms,” the spokesperson said. “Perplexity continues to value Snapchat as a platform for reaching key audiences, remains active on the Snap platform, and expects to continue using Snap’s advertising products.”
Snap has continued exploring other AI features designed to generate revenue within Snapchat’s chat platform. Recently, the company launched “AI Sponsored Snaps,” which enables brands to introduce AI agents into conversations with users.
Speaking during a call with analysts, CEO Evan Spiegel said the feature demonstrated that chat could be monetized in a way that feels natural within Snapchat.
Spiegel also shared details about the company’s upcoming AR glasses, which are expected to become the first consumer-ready edition of Specs.
“The way that people are using their computers is changing really dramatically, and I think that that’s going to be evident in the adoption of wearables and the adoption of Specs over time,” he said. “Because people are going to spend less time hunched over their computers or their phones typing away on keyboards, and spend more time supervising agents who are doing that work on their behalf.”
More information about Specs is expected to be announced next month at the Augmented World Expo (AWE) in Long Beach, California.
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