The AI application wave is being driven by the rapid integration of these intelligent systems into products people already use, from messaging and search to productivity, entertainment, commerce, and even transportation. The latest example: Snap’s $400 million partnership with Perplexity to integrate its AI-powered answer engine directly into Snapchat, signaling how conversational AI is becoming a core layer directly within some apps.
This new collaboration gives Perplexity access to nearly 1 billion monthly active users, mainly Gen Z and millennial audiences. Perplexity plans to compensate Snap through a mix of cash and equity, with revenue recognition starting in 2026.
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,” Perplexity CEO Aravind Srinivas wrote in a statement.
Snap CEO Evan Spiegel noted, “Our goal is to make AI more personal, social, and fun – woven into the fabric of your friendships, Snaps, and conversations,” adding, “This partnership reflects our shared vision for the power of AI to enhance discovery and connection on Snapchat, and we look forward to collaborating with more innovative partners in the future.”
Snap-Perplexity partnership came alongside Snap’s third-quarter earnings: revenue rose 5% year-on-year to $1.51 billion (slightly above Bloomberg Consensus estimates), and daily active users climbed 8% to 477 million. For Q4, Snap guided sales of $1.68 billion to $1.71 billion, mostly in line with analysts’ expectations.
In markets, the partnership sent Snap shares up more than 20% to around $8.77 each. Shares are hovering at pre-Covid levels.
More importantly, the consumer layer of AI integration is gaining momentum, with yesterday’s news that Apple’s Siri will soon be powered by Google’s AI, alongside recent announcements about Spotify’s AI features and other apps rapidly embedding models. Meanwhile, Tesla vehicles can now operate in Full Self-Driving mode with the Grok chatbot integrated directly into the system. We expect this flood of app-layer AI innovation to expand even further in 2026.
Loading recommendations…
