A step back in Snapchat’s artificial intelligence plans

Snap announced that its approximately $400 million collaboration with Perplexity, which it announced last year, has ended. According to the information shared within the scope of the company’s quarterly financial results, the parties terminated the agreement “by mutual consent” in the first quarter of 2025. Thus, plans to integrate Perplexity’s artificial intelligence-supported search technology into Snapchat were shelved. Snap also specifically stated that it does not foresee any revenue contribution from the Perplexity agreement in its future sales expectations.

Within the scope of the agreement announced in November 2024, Perplexity was planned to pay Snap a total of $ 400 million in cash and shares within one year. Thanks to this partnership, Perplexity’s chat-based AI search experience would be integrated directly into the “Chat” interface of the Snapchat application. The aim was for users to be able to ask questions and receive conversation-based answers from within the application. Snap announced that the integration in question was tested with a limited user group. However, in its assessment in February, the company stated that the parties had not yet agreed on a common road map regarding wider distribution.

Snap continues its investments in artificial intelligence as it continues to grow

Snap CEO Evan Spiegel emphasized the company’s vision of improving the discovery experience on Snapchat with artificial intelligence when the agreement was first announced. Spiegel said at the time that Snap aimed to work with different technology partners in the future. Despite this, the rapid termination of the Perplexity partnership once again reveals how rapidly collaborations in the field of productive artificial intelligence can change commercially and operationally.

There was no official statement on the issue from the Perplexity front. It was reported that the company did not respond to TechCrunch’s request for comment. Perplexity, which has recently attracted attention with its productive artificial intelligence-based search services, has become one of the prominent initiatives especially among Google alternatives. In addition, the company was conducting various negotiations regarding integration into different platforms.

On the other hand, Snap announced that user growth continues in its latest financial results. The company’s number of daily active users increased by 5 percent annually, reaching 483 million. The number of monthly active users increased by 5 percent to 965 million. Snap states that features such as Snap Map and augmented reality-supported Lenses filters are effective in this increase. It appears that AR-based experiences continue to support Snapchat usage, especially among younger users.

However, the company continues to feel the effects of the artificial intelligence-focused transformation process on the employee side. Snap announced in April that it would lay off approximately 16 percent of its global workforce. It was stated that developments in the field of artificial intelligence were behind this decision, which affected approximately 1000 full-time employees. Similarly, many companies in the technology sector are restructuring their organizational structures due to productive artificial intelligence investments.

Evan Spiegel said in his latest statement that the company returned to daily active user growth in the first quarter, accelerated revenue growth and generated strong free cash flow. In addition, it was stated that Snap continues its work on augmented reality glasses “Specs” and the company focuses on its long-term plans in the smart glasses category. Snap is expected to share new developments in this field at the AWE event to be held on June 16.