President Donald Trump said he was in talks with multiple people over buying TikTok and would likely have a decision on the popular app’s future in the next 30 days
By Nileena Sunil
AI company Perplexity revises its TikTok merger proposal in order to give the government up to a 50% stake in the U.S. operations. This proposal was submitted the previous week as revision of a prior plan. Perplexity presented to ByteDance, TikTok’s parent company, before the law banning TikTok came to effect on Jan. 19.
The initial proposal sought to create a new structure, which would merge San Francisco-based Perplexity with TikTok’s U.S. business and include investments from other investors. The new proposal, revised based on feedback from the Trump administration, would allow the U.S. government to own up to half of that new structure once it makes an initial public offering (IPO) of at least $300 billion.
READ: Perplexity AI acquires Carbon, hits $9 billion valuation before year-end (December 19, 2024)
Perplexity AI was founded to challenge search giants like Google and OpenAI. It saw its valuation soar from $500 million at the start of 2024 to a staggering $9 billion by the end of the year. Despite controversies over plagiarism, there has been a significant amount of investor enthusiasm towards the startup.
The potential merger comes following the looming ban, which put pressure on ByteDance to divest from its U.S. operations due to security concerns. ByteDance has resisted the idea of selling TikTok, instead exploring alternate options. Perplexity, thus, sees its proposal as viable, since it is a merger rather than a sale.
While ByteDance would not have to completely cut ties with TikTok, it would have to allow “a full U.S. board control.” It would contribute to TikTok’s U.S. business without the proprietary algorithm that controls what users see on the app. ByteDance’s existing investors would, in turn, get equity in the structure that emerges.
READ: Aravind Srinivas unveils the secrets behind Perplexity AI’s meteoric rise (December 12, 2024)
Steve Mnuchin, treasury secretary during Trump’s first term had outlined a similar strategy on Fox News’ Sunday Morning–that a new investor in TikTok could simply “dilute down” the Chinese ownership and satisfy the law.
On Jan. 25, President Donald Trump said he was in talks with multiple people over buying TikTok and would likely have a decision on the popular app’s future in the next 30 days.