Snap's new AI search engine will be powered by Perplexity

Snap has signed a $400 million deal with Perplexity to use its AI search engine in Snapchat, Bloomberg reported on Wednesday.

Under the terms of the agreement, Perplexity will reportedly pay Snap a combination of cash and equity to get access to Snapchat's 900+ million monthly active users.

Snap already has an AI chatbot called My AI, and that one will stay available to users. The new, Perplexity-powered AI search will get a more prominent, "default" placement inside the Snapchat app starting next year, according to Bloomberg.

"We certainly see a lot of opportunity to open up Snapchat to more AI partners over time," chief executive officer Evan Spiegel said in an interview with the publisher.

Perplexity is an AI company that doesn't use one LLM, instead relying on several LLMs to create a search-focused AI system. With more than 20 million active users, if offers a variety of products, including search, a finance hub, and an AI browser called Comet. The company has been the subject of multiple lawsuits, with companies including Dow Jones, the New York Post, and Nikkei alleging copyright infringement, and Reddit alleging Perplexity has been unlawfully scraping its data.

The deal comes just one day after Apple reportedly inked its own agreement to have Google Gemini power its next-gen, smarter Siri.