Snap and Perplexity's $400M AI Deal Collapses

Snap has ended its $400 million partnership with AI search startup Perplexity, the company disclosed during its Q1 earnings report. The deal, announced last November, would have integrated Perplexity's AI search engine into Snapchat's Chat interface, with Perplexity paying Snap in cash and equity over one year. Snap said the two companies amicably parted ways in Q1, with its sales guidance now excluding any Perplexity contribution. Despite the collapsed deal, Snap reported positive growth, with daily active users rising 5% year-over-year to 483 million and monthly active users reaching 965 million.