Snapchat Strikes $400 Million Deal With Perplexity AI To Bring Chat-Based Search To Nearly 1 Billion Active Users - Snap (NYSE:SNAP)

Core Insights - Snap Inc. has entered a $400 million deal with Perplexity AI to integrate an AI search engine into Snapchat, expected to reach nearly 1 billion monthly active users by early 2026 [1][2] - Snap reported better-than-expected third-quarter results and announced a $500 million stock buyback [1] Financial Details - The deal involves Perplexity paying Snap $400 million over one year, combining cash and equity, with revenue expected to start contributing in 2026 [2] - Snap's shares surged over 23% in after-hours trading following the announcement, although they are down approximately 35% year-to-date [3] User Metrics - Daily active users (DAUs) of Snapchat rose 8% to 477 million globally in the third quarter, but a decline in DAUs is anticipated in the fourth quarter due to changing investment priorities and regulatory impacts [4] Strategic Outlook - CEO Evan Spiegel indicated potential for similar partnerships with other AI companies, emphasizing a shared vision for AI's role in enhancing user experience on Snapchat [3]