(Reuters) -Snap beat third-quarter revenue estimates on Wednesday and said it has partnered with Perplexity AI to integrate its artificial intelligence-powered search engine into Snapchat.

AI startup Perplexity will pay Snap $400 million over one year in cash and equity, with revenue contributions expected from 2026.

Snap shares jumped around 21% in extended trading.

The deal positions Snap to better compete with larger rivals such as TikTok and Meta-owned Facebook and Instagram, which currently are the preferred destinations for advertisers thanks to their larger user base.

The integration of Perplexity AI will offer verifiable answers to questions within the Snapchat app, aiming to draw more users on the social media platform and boost customer retention.

Snapchat’s parent has been

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