Prime Highlight
Snap Inc. has announced a $400 million partnership with Perplexity AI to bring advanced AI capabilities directly into the Snapchat app. The collaboration is designed to boost user engagement and discovery by enabling users to ask questions and explore topics within Snapchat itself.
Key Facts
- Snap’s stock surged 19% in pre-market trading, jumping from $7.30 to $8.69 after the announcement.
- Perplexity AI will pay $400 million to Snap over one year through a mix of cash and equity.
- Revenue generation from the partnership is expected to begin in 2026.
Background
Snap Inc.’s shares climbed more than 19% in pre-market trading on Thursday, November 6, 2025, after the company revealed a major partnership with Perplexity AI worth $400 million. The move marks a significant step for Snapchat as it integrates deeper AI functionality into its platform to enhance user discovery and interaction.
Under the agreement, Perplexity AI will pay Snap $400 million over the course of a year, combining both cash and equity. The AI firm expects to begin earning revenue from the collaboration in 2026.
The integration will give Snapchat’s 1 billion monthly active users access to AI-powered tools that allow them to ask questions, explore topics, and discover information seamlessly inside the app.
“Millions rely on Snapchat to connect and explore daily. Integrating Perplexity lets us satisfy users’ curiosity the moment it arises,” said Aravind Srinivas, CEO of Perplexity AI. Snap CEO Evan Spiegel added that the partnership reflects their shared vision to elevate discovery and connection through AI.
Following the news, Snap’s share price rose to $8.69 from $7.30, despite closing 2.28% lower the previous day. However, the company’s long-term performance remains weak: Snap’s stock is down 83% over five years, 38% in the past year, and 35% year-to-date. The company’s market capitalization was $12.62 billion before markets opened on Thursday.
