Snap CEO looks to boost AI investment

Evan Spiegel, CEO at Snap, acknowledged social media app Snapchat has fallen behind on AI, telling Bloomberg it plans to increase investment on the technology following years of focusing on its advertising business.

In an interview with the outlet, Spiegel noted “there was a recognition that we’d fallen behind the curve on the machine learning side”, which he said was reflected in Snap’s business performance.

The CEO outlined plans to bring together senior machine learning experts to explore AI investment and development, in a bid to improve its position on the technology, shifting its focus from the app’s brand advertising strategy.

Bloomberg reported the company is pumping money into building machine learning, AI and augmented reality to enhance its ads business and content-sharing features, working with cloud giants including Google and Amazon instead of developing in-house infrastructure.

Snap could invest roughly $1.5 billion a year in order to compete with rivals such as Meta Platforms, which has moved to revamp its computing infrastructure.

In Q1 2024, Snap’s revenue was up 21 per cent year-on-year to $1.2 billion, marking positive growth after it struggled with financial headwinds linked to an advertising slump in recent years.

As its ad revenues improved, Spiegel told Bloomberg it also plans to boost Snapchat’s recommendation algorithms and combine the platform’s short-form videos and Story features.

The app already offers a virtual AI chatbot, powered by a customised version of OpenAI’s ChatGPT model, launched in early 2023. Its premium service, Snapchat+, had 7 million paying subscribers as of December 2023.