Snap, the social media app owned by Evan Spiegel, has recently admitted that it has been lagging behind in terms of artificial intelligence (AI) technology. In an interview with Bloomberg, Spiegel revealed that the company plans to increase its investment in AI after years of focusing primarily on its advertising business.
Spiegel acknowledged that Snap had fallen behind in the machine learning domain, which had impacted the company’s overall performance. To address this issue, he announced that Snap intends to bring in senior machine learning experts to drive AI investment and development. The company is shifting its focus away from brand advertising and towards building more advanced AI capabilities.
Snap is actively investing in building machine learning, AI, and augmented reality capabilities to enhance its advertising business and content-sharing features. Instead of developing its own infrastructure, the company is working with major cloud providers like Google and Amazon. If successful, Snap could potentially allocate around $1.5 billion annually to enhance its technology stack and compete more effectively with competitors like Meta Platforms.
Following a successful Q1 2024 where Snap’s revenue grew by 21% year-on-year to $1.2 billion, Spiegel mentioned plans to further strengthen his position in the market by enhancing Snapchat’s recommendation algorithms and integrating short-form videos and Story features on the platform to improve user experience. Additionally, Snap has already introduced a virtual AI chatbot powered by a customized version of OpenAI’s ChatGPT model launched early 2023. Moreover, its premium service, Snapchat+ has garnered 7 million paying subscribers as of December 2023.
