Activist investor Elliott has taken a $1 billion stake in Pinterest, betting on AI-driven growth

Elliott Investment Management, an activist investor known for its keen involvement in company decisions, has taken a $1 billion stake in Pinterest. The company first invested in the social platform in 2022.

Pinterest announced the financial backing on Tuesday, and CEO Bill Ready said he viewed it as a major vote of confidence underscoring the company’s ambitious efforts in artificial intelligence.

“We achieved record revenue in 2025, with users reaching all-time highs for ten consecutive quarters and over 80 billion monthly searches on our platform, while continuing to deliver strong innovation in visual search using AI. We are excited to continue our partnership with Elliott for the next phase of Pinterest’s growth. Elliott’s investment is a strong vote of confidence in the work we have done to build our business and the great opportunities that lie ahead for Pinterest,” Reddy said in a statement.

As part of this investment, Pinterest will repurchase shares of its Class A common stock through a $1 billion accelerated repurchase agreement. The new capital will also help fund a broader $3.5 billion stock buyback program.

Pinterest stock jumped 6% in pre-market trading after announcing the $1 billion investment.

This news comes as Pinterest faces serious headwinds. Shares have fallen over the past year, with disappointing earnings, layoffs affecting 15% of the workforce, a decline in advertising business, and increased competition from AI-powered chatbots.

However, Elliott’s increased investment indicates faith in Pinterest’s turnaround strategy. Specifically, its aggressive bet on artificial intelligence. Recent initiatives include AI-powered visual search that allows users to take a photo or select one and instantly receive recommendations for similar items, home decor ideas, and fashion inspiration. The company also leverages artificial intelligence to provide personalized recommendations, improve content moderation, as well as creative tools for advertisers.

However, on the other hand, Elliott’s track record suggests that her continued involvement with Pinterest will likely mean increased scrutiny.

The company has a long history of pushing cost cuts and frequently pushes for strategic overhauls and leadership changes at companies in which it has a significant stake. For example, at eBay, Elliott pushed the company to reduce expenses and refocus on its core market, which led to eBay selling its StubHub and classifieds businesses.