Snap's $400M AI Deal: Desperate Gamble or Genius Move?
Alright, let's get this straight. Snap... Snap is betting $400 million – that they apparently have lying around – on Perplexity. Perplexity! The AI-powered answer engine that nobody I know uses. Are they serious?
Snapchat's AI Hail Mary
So, the headline is: Snap and Perplexity are teaming up to bring "conversational AI search" to Snapchat. Starting in 2026, Perplexity will be baked right into the chat interface. The idea is that Snapchatters can ask questions and get answers drawn from "verifiable sources."
Verifiable sources? Last time I checked, the internet was mostly cat videos and conspiracy theories. What kind of "verifiable sources" are we talking about here? Wikipedia? Snopes? This whole thing smells fishier than a week-old tuna sandwich.
Here's the kicker: Perplexity is paying Snap $400 million over one year through a combination of cash and equity. Cash and equity? So, they're not even paying the whole thing in actual money? Sounds like someone's trying to cook the books.
Evan Spiegel, bless his heart, says the goal is to make AI "more personal, social, and fun." Personal, social, and fun? Last time I wanted something personal, social, and fun, I didn't ask an AI chatbot. I called a friend. Or, you know, went outside. Remember outside?
943 million monthly active users, they brag. 75% of 13–34-year-olds in over 25 countries are using Snapchat. Okay, great. So, a bunch of teenagers are going to be asking an AI-powered search engine questions instead of Googling it? Or, you know, asking each other? Give me a break.
And what happens to My AI, Snapchat's other chatbot? Oh, don't worry, they say. Snapchatters can still chat with My AI. Perplexity is just joining as an "answer engine." So, now we have two AI entities vying for the attention of Gen Z. This is going to end well. I can feel it.
The Real Reason Behind the Deal
Let's be real: Snap's stock took a beating for a while. I mean, they announced a $500 million share repurchase program. That's corporate speak for "we're trying to prop up our stock price." Smart move, offcourse.
Then Q3 earnings came out, and suddenly, things were looking up. Revenue beat expectations, losses were smaller than predicted, and the stock price soared. Snap shares rocket 15% on strong forecast, $400 million Perplexity deal Coincidence? I think not.
This Perplexity deal is all about optics. It's about convincing investors that Snap is still relevant, that it's still innovative, that it's still worth something. It's a desperate attempt to stay afloat in a sea of TikToks and Instagram Reels.
But here's the thing: Are people REALLY going to use Perplexity inside Snapchat? Or is this just a shiny new toy that will gather dust in the corner of the app? I'm betting on the latter.
Then again, maybe I'm the crazy one here. Maybe I'm just an old man yelling at a cloud. Maybe Gen Z really does want to have AI-powered conversations inside Snapchat. Maybe I should just get off their lawn...
So, What's the Catch?
This whole deal smells like desperation. Snap's trying to buy its way back into relevance with a flashy AI partnership that nobody asked for. I'll bet dollars to donuts this is a colossal waste of money.