Snap Ends Amicable Relationship with AI Search Engine Perplexity

Snap has put an end to its deal with Perplexity, a company that was set to integrate its AI search engine directly into Snapchat. The companies had "amicably ended the relationship" in Q1, according to Snap's quarterly earnings report.

Snap announced the deal in November, which would have seen Perplexity's AI search engine integrated directly into Snapchat's "Chat" interface. The partnership was expected to contribute to Snap's revenue in 2026, with Perplexity set to pay Snap $400 million in cash and equity over one year. However, the companies had yet to mutually agree on a path to a broader rollout, and the deal was ultimately ended in Q1.

"We returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow," Snap CEO Evan Spiegel said in a press release. "We remain focused on disciplined execution as we invest in Specs and our long-term opportunity in intelligent eyewear and look forward to sharing more at AWE on June 16th."

Snap's decision to end the deal comes as the company is laying off around 16% of its global workforce, citing advancements in AI as the reason for the cuts. The company said that it was impacting around 1,000 full-time employees.

Key Takeaways:

• Snap has ended its deal with Perplexity, a company that was set to integrate its AI search engine directly into Snapchat.
• The companies had yet to mutually agree on a path to a broader rollout of the partnership.
• Snap is laying off around 16% of its global workforce, citing advancements in AI as the reason for the cuts.