Facing a looming U.S. ban, TikTok receives a merger bid from search engine startup Perplexity AI.
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| Perplexity AI submits a merger bid to TikTok US, aiming to prevent a U.S. ban on the popular platform. Image/ Illustration: ChicHue |
Washington, DC, USA — January 19, 2025:
Perplexity AI, a U.S.-based search engine startup, has submitted a bid to merge with TikTok’s U.S. operations, according to a source familiar with the matter. The proposal, sent to TikTok’s Chinese parent ByteDance on Saturday, aims to resolve the looming U.S. ban on the popular short-video platform.
TikTok faces a ban starting Sunday unless it severs ties with ByteDance. However, President-elect Donald Trump indicated on Saturday that he is likely to grant TikTok a 90-day extension starting Monday. CNBC first reported Perplexity AI’s offer.
Under the proposed plan, Perplexity AI would merge with TikTok’s U.S. operations and form a new entity involving New Capital Partners. This structure would allow ByteDance’s current investors to retain their equity stakes while integrating TikTok’s video capabilities into Perplexity’s platform, the source said. Perplexity AI believes its proposal, framed as a merger rather than a sale, improves its chances of success.
TikTok has yet to comment on the offer, and New Capital Partners could not be reached. The source requested anonymity, citing the confidentiality of the matter.
Perplexity AI, known for its search tools powered by large language models like OpenAI and Meta Platforms’ Llama, delivers fast, citation-backed answers to user queries. A merger with TikTok could enhance its capabilities by incorporating video content.
TikTok, which boasts nearly half of all Americans as users, has played a critical role in shaping online culture and supporting small businesses. On Friday, TikTok said it would go dark in the U.S. on Sunday unless the Biden administration assured companies like Apple and Google that they would not face penalties for hosting the app.
The outcome of Perplexity AI’s bid remains uncertain as the clock ticks down on TikTok’s U.S. operations.