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There is considerable evidence that SN1 mechanism is followed in diazo aromatic compounds' nucleophilic substitution. I would like to know the reason for this and why is it preferred to SNAr mechanism even when the $\ce{N2+}$ could stabilize the carbanion-type intermediate through -I effect.

Does it have to do with the excellent leaving tendency of $\ce{N2+}$ but at the cost of formation of unstable phenyl cation?

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    $\begingroup$ Generally, you describe the leaving group as it would be it had left, in this case, dinitrogen ($\ce{N2}$). So, then you're looking at a heterolytic bond cleavage that is highly favorable against a bimolecular $S_{\mathrm{N}}Ar$ mechanism. Under concentrated conditions, the bimolecular mechanism might be competitive. $\endgroup$ – Zhe Apr 26 '18 at 19:31

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