Snapchat's $65M Settlement: AI Risks, Ad Revenue Surge, and a Strategic Pivot

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Snapchat has been making headlines in the past few days, with its business and legal developments grabbing attention. WARC Media reports that Snapchat is forecasted to see a 13.7 percent increase in advertising revenue for 2024, a significant jump from the previous year’s flat growth. The platform is pivoting its strategy, moving away from augmented reality and focusing more on artificial intelligence for ad optimization and user growth. Business and industrial sectors are expected to be the biggest spenders, and political ad spending is projected to rise by 85 percent, partly due to the upcoming US presidential election. Snapchat’s global daily active users have reached 414 million, with notable growth outside North America, especially in India, Pakistan, France, and the UK. Australia is also a fast-growing market, with users reportedly opening the app up to 40 times a day.

On the legal front, Snapchat is finalizing a $65 million settlement with investors over a securities class action lawsuit. The case, which was filed in 2021, alleged that Snapchat made misleading statements about the impact of privacy-related platform changes on its revenue. The settlement, which is slightly above the average for similar cases in the first half of 2025, is seen as a benchmark for AI-related risk and disclosure issues. The lawsuit claimed that Snapchat’s assurances about its preparedness for privacy changes led to a surge in its stock price, but when the company missed revenue guidance, the stock dropped sharply. The settlement highlights the growing scrutiny on companies deploying AI and the potential for increased litigation risk.

Snapchat’s business activities continue to expand, with new ad products and creator collaborations. The platform is actively launching products to help brands partner with its creator community, including Creator Collab Campaigns. Snapchat’s focus on brand-safe content and its efforts to tap into cultural moments are helping it stand out in a crowded social media landscape. The platform’s change in strategy signals a move toward a more literal “social” element, emphasizing real connection and community.

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This content was created in partnership and with the help of Artificial Intelligence AI