In a move that's equal parts audacious and emoji-worthy, AI search startup Perplexity has inked a $400 million deal with Snap Inc. to embed its conversational engine directly into Snapchat starting in 2026.
The announcement, dropped alongside Snap's Q3 earnings, sent the company's shares skyrocketing 18% in a single day – a much-needed jolt after a 32% YTD tumble amid ad market woes and trade war jitters.
For Perplexity, it's a golden ticket to Snapchat's 477 million daily active users – a Gen Z-heavy horde that's as fluent in fire emojis as they are in fleeting Stories. But here's the twist: Telegram, with its billion-strong messaging empire, reportedly turned down a similar $350 million olive branch, opting instead for a half-baked bot rollout that crashed and burned.
Snapchat: From Ephemeral Snaps to Enduring AI Chats
Snapchat isn't just the OG of disappearing photos; it's a chat-first powerhouse where conversations hum with stickers, GIFs, and yes, the occasional profound life query squeezed between selfies. Back in 2023, as ChatGPT fever swept the globe, Snap wasted no time rolling out "My AI" – a watered-down OpenAI-powered bot initially gated behind its Snapchat+ subscription.
It exploded: 150 million users in year one, 50% growth in year two, and billions of messages exchanged. Teens aren't just asking "What's the vibe for Paris Insta spots?" – they're venting about crushes, seeking outfit advice, or debating midnight snack ethics with an always-on digital confidant.
Enter Perplexity: Its AI won't replace My AI but will slot in as a seamless search sidekick within the chat interface, delivering cited, conversational answers without forcing users to swipe away from their friend threads.
Snap CEO Evan Spiegel nailed it in his shareholder letter: "The conversational interface has become a lot more valuable with the advent of conversational AI." No more tab-switching to Google; just tap, ask, and emoji-react to real-time intel on everything from viral trends to vegan recipes.
This isn't charity – Perplexity's ponying up $400 million in cash and equity over one year, with revenue hitting Snap's books in 2026. For a company that's 90% ad-dependent (Q3 revenue clocked in at $1.51 billion, up 10% YoY but still razor-thin margins), it's a diversification lifeline. Snapchat+ already boasts 17 million paid users (up from 16 million last quarter), proving this crowd will shell out for premium perks – why not supercharged search?
Perplexity's Play: Hacking Growth in a Crowded AI Arena
Perplexity's got just 20 million monthly actives – impressive for a 2022 upstart, but peanuts next to Snapchat's near-billion MAUs. Organic scaling? Tough when you're duking it out with Google, OpenAI, and a lawsuit-happy duo like Amazon and Reddit over data scraping.
Embedding in Snapchat flips the script: It turns passive scrollers into active queriers, all while leveraging Snap's youth-skewed demo – the same digitally native crowd Perplexity needs to convert into loyal subscribers.
Spiegel hinted this is just the opener: "We see a lot of opportunity to open up Snapchat to more AI partners over time." Imagine a marketplace of AI agents vying for inbox real estate, each paying Snap to whisper sweet nothings (or search results) into users' ears. For Perplexity, it's less about owning the app and more about owning the moment – that split-second curiosity spark in a chat bubble.
Will it stick? Snapchat's crowd skews young and impulsive: They're there for AR filters and group roasts, not deep-dive research. But as Spiegel noted, this integration could "help Perplexity drive additional subscribers." If it feels as natural as firing off a to a friend's Story, adoption could skyrocket. After all, this is the generation that turned TikTok into a PhD-level advice engine.
Telegram's Fumble: $350 Million on the Table, Bot on the Floor
Now, the real head-scratcher: Why didn't Telegram snag this? Sources whisper that Perplexity dangled up to $350 million annually – cash plus equity (now worth double since May) – for a year-long integration into Telegram's chat ecosystem this spring. With 1 billion users hooked on text-heavy group chats and channels, it would've been a no-brainer. Telegram's already a bot haven (think GigaChat's 2.6 million users or Alice's 33,000), and aggressive AI search could've supercharged its text-centric culture.
Instead, Telegram CEO Pavel Durov went DIY. Days before the Snap news, he hyped an "official" Perplexity bot (@askplexbot) on his channel, promising seamless web searches.
The influx? A modest 486,000 monthly users – but the launch imploded. Servers buckled under the load, and Durov quietly deleted the post, leaving screenshots as the only proof of the fiasco. No deep integration, no nine-figure payday – just a viral whoopsie that added insult to missed opportunity.
It's unclear why talks fizzled – perhaps Durov's aversion to external dependencies, or a strategic pivot toward in-house tools. But passing on Perplexity (and rumored Elon Musk tie-ups) feels like leaving money on the table in an AI arms race where distribution is king.
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The Bigger Picture: AI's Chatroom Conquest
This Snap-Perplexity pact isn't just a cash grab; it's a bet on AI's evolution from siloed apps to ambient companions.
Snapchat's turning its chat folder into an AI playground, where queries blend with banter as effortlessly as emojis.
Perplexity gets scale; Snap gets stability. And Telegram? It might rue the day it chose a freewheeling bot over a blockbuster embed.
As ad dollars ebb (thanks, tariffs and tech glitches), expect more platforms to auction off their interfaces to AI interlopers. In a world where kids "talk" via thumbs and icons, whoever cracks conversational search first wins the engagement war. For now, Snap's laughing to the bank – with a side of
Author: Slava Vasipenok
