SNAP AND PERPLEXITY CALLED IT OFF — $400 MILLION DEAL DIES BEFORE IT EVER REALLY STARTED One of the most-anticipated AI integrations in consumer tech is dead. Snap and Perplexity announced they have mutually ended their $400 million partnership, a deal that was supposed to put Perplexity’s conversational search engine at the center of Snapchat’s chat interface. The two companies wrapped it up in Q1 2026, before the feature ever reached most users. The original deal, announced in November 2025, was simple in theory. Snapchat gets an AI-powered search experience that keeps users inside the app. Perplexity gets the distribution that every AI startup desperately needs. Snap’s massive user base would have given Perplexity the kind of access no advertising campaign could buy. Under the terms, Perplexity was paying Snap roughly $400 million in cash and equity across twelve months in exchange for being the default AI experience inside the app. It fell apart because the companies wanted different things from the same product. Snap needs AI that deepens engagement and creates new ad inventory. Perplexity needs users who will subscribe to its own platform and use its engine as a primary destination. Those goals pulled in opposite directions from the start. A limited test reached only a subset of Snapchat users before being quietly shelved. Snap’s investor letter confirms that second-quarter guidance includes zero revenue from the partnership. Perplexity is back to chasing distribution elsewhere. Both sides called it amicable. Four hundred million dollars in committed revenue walking away is hard to frame as anything but a failure. Keywords: Snap Perplexity deal canceled, Snapchat AI search ended, Perplexity distribution strategy, AI partnership failed