Snap, the parent company of the Snapchat app, said on Thursday that it has signed a deal with Perplexity AI to integrate its AI “answer engine” into the social media app starting in early 2026. Under the agreement, the AI company will pay Snap $400 million over a year in a mix of cash and equity, an amount that represents about 7 per cent of the social media company’s 2024 sales.

The partnership represents “a first step in Snap’s effort to make Snapchat a platform where leading AI companies can connect with its global community in creative and trusted ways,” the two companies said in their announcement.

Wall Street reacted positively to the announcement, as Snap’s shares climbed 25 per cent after the company released its third-quarter earnings. Perplexity will pay 0 million to put its

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