Snap Stock Surges 20% Following $400 Million AI Partnership

Snap Inc. experienced a substantial stock increase of 20% on Thursday, following the announcement of a significant partnership with the AI startup Perplexity AI. The deal, valued at $400 million, will see Perplexity integrating its innovative features into the Snapchat platform, enhancing user experience and engagement.

This announcement came alongside Snap’s release of its third-quarter earnings, detailing ongoing challenges as the company navigates a competitive social media landscape. As of the close on Wednesday, Snap’s shares had declined by 32% year-to-date. The partnership with Perplexity represents a strategic move aimed at revitalizing user interest and improving overall performance.

Evan Spiegel, CEO of Snap, expressed enthusiasm about the collaboration, stating, “Our goal is to make AI more personal, social, and fun — woven into the fabric of your friendships, Snaps, and conversations.” He emphasized the shared vision between the two companies, highlighting the potential of AI to enrich discovery and connection within the Snapchat ecosystem.

The integration of Perplexity’s features into Snapchat is set to begin in early 2026. This move positions Snap to better compete with larger social media platforms such as Instagram and TikTok, which have effectively adapted to an AI-driven environment. By leveraging Perplexity’s technology, Snap hopes to attract users back to its platform and regain market momentum.

Aravind Srinivas, CEO of Perplexity, commented on the partnership, noting, “Perplexity’s mission is to support the world’s curiosity. Millions of people connect and discover the world through Snapchat. By bringing Perplexity to Snapchat, we’re able to serve that curiosity directly where it occurs.”

As Snap seeks to enhance its offerings and re-establish its relevance in the rapidly evolving digital landscape, this partnership with Perplexity AI could be pivotal. The collaboration not only signifies a commitment to innovation but also reflects a broader trend in the tech industry toward integrating AI capabilities into social media experiences.

With this significant deal, Snap aims to reposition itself as a leader in the integration of AI, potentially paving the way for future partnerships that can further enhance user interactions and engagement within the platform.