Snapchat Aims to Spend $1.5 Billion Per Year on AI

The CEO of Snap, developer of Snapchat, says the messaging platform is increasing its spending on artificial intelligence (AI) and machine learning.

“There was a recognition that we’d fallen behind the curve on the machine learning side, which, to some degree, was reflected in the business performance,” Evan Spiegel said in an interview with Bloomberg News published Sunday (May 19).

“We needed to improve there and bring together some of our most senior machine learning folks to just talk about what it would look like for us to get to state of the art and really invest.”

The report noted that Snapchat has been dealing with major shifts in both how people use social media and the types of ads marketers want to buy on them. There was a time when the platform revolved around messaging, with advertisers focused more on telling brands’ stories instead of trying to drive immediate purchases. Now, the company is spending money on machine learning, AI and augmented reality (AR) features that tap into Snap’s ads business and user feeds, Bloomberg said.

“We have never worked on anything as profound and meaningful as augmented reality,” Spiegel said during an earnings call last month. “AR enables us to surface digital experiences seamlessly in the world around us, transforming the way we use computing in our daily lives.”

As PYMNTS wrote at the time, the company’s AR tools are used by the platform’s advertisers, creators and users. More than 70% of the people who download Snapchat engage with AR during their first day using the app, according to the company’s earnings presentation.

“Our AR products and services are driving major impact at scale today,” Spiegel said during the call. “On average, over 300 million people engage with augmented reality every single day on Snapchat.

But rather than building their own AI tools in-house, the company is working with Amazon and Google on cloud partnerships, the Bloomberg report said.

This, the report said, lets Snap focus on product innovations and new Snapchat experiences, though the company still plans to spend 84 cents per daily user each quarter just on infrastructure, which Bloomberg said comes to around $1.5 billion annually.

Meanwhile, PYMNTS last month examined the way social media influencers are using AI to connect with and increase their audiences.

“AI can streamline what used to be a tedious influencer discovery and relationship-building process by creating instant filters, screening for influencer fraud, engagement metrics and the forecasting of campaign results based on past data,” Sara Saffari, a fitness influencer with more than 2 million followers on Instagram, told PYMNTS. “This means campaigns that can be better targeted, evaluated and eventually run at scale.”

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