Perplexity AI Seeks Merger with TikTok, US Government Could Take 50% Stake
Perplexity AI, the developer of the AI chatbot
Perplexity Tiktok revised merger proposal
https://www.cnbc.com/2025/01/26/perplexity-tiktok-revised-merger-proposal.html
Perplexity AI's bid for TikTok could give US government 50% stake | AP News
https://apnews.com/article/tiktok-bytedance-trump-perplexity-87988733973760927bb5681f7de9b9af
Perplexity submits a new bid for TikTok | TechCrunch
https://techcrunch.com/2025/01/26/perplexity-submits-a-new-bid-for-tiktok/
In the United States, the 'Protecting Americans from Foreign Adversary Controlled Applications Act,' commonly known as the TikTok Ban Act, makes it impossible to install apps such as TikTok, developed by ByteDance, from the App Store or Google Play.
TikTok, CapCut, Lemon8, MARVEL SNAP, etc. will be suspended in the United States as the 'TikTok Ban Law' comes into effect - GIGAZINE
To save TikTok from this situation, Perplexity AI proposed a merger with TikTok's parent company, ByteDance, on January 18, 2025. On January 26, Perplexity AI revised the merger proposal, according to multiple media reports.
In Perplexity AI's new merger proposal, it plans to set up a new holding company to operate TikTok. It also proposes that ByteDance give its existing investors shares in the new company, and instead asks them to donate all of TikTok's business except for its recommendation algorithm to the new company. Perplexity AI plans to donate its own shares to its own investors instead of giving them equity in the new company.
Funding for the merger will come from 'mutually agreed-upon third-party capital providers' that will support the new company by providing capital to 'pay a one-time dividend to ByteDance investors in exchange for simplified governance.'
According to people familiar with the matter, the new merger proposal would allow most ByteDance investors to retain their stakes, and Perplexity AI would gain access to a vast amount of video that can be used to train its AI. Some people believe that Perplexity AI's merger proposal is the only way TikTok could survive, as ByteDance has publicly indicated that it has no intention of selling TikTok US, the US business of TikTok.
Perplexity AI's new merger proposal allows the U.S. government to own up to half of the new company after an IPO of at least $300 billion. Sources say the fair price for the merger is 'well over $50 billion,' but that could vary depending on which ByteDance shareholders want to own shares in the new company and which want to cash out.
The Associated Press reported that Perplexity AI revised its merger proposal because it received feedback from the Trump administration. In Perplexity AI's merger proposal, the shares held by the U.S. government will no longer have voting rights, and the government will not serve on the new company's board of directors. According to the Associated Press, the new merger proposal does not require ByteDance to completely give up TikTok's U.S. business, but it does require that it allow 'full control by the U.S. board of directors.' The Associated Press reports that Perplexity AI's merger proposal reflects a strategy to 'dilute China's ownership of TikTok,' as stated by Steven Mnuchin, who served as Secretary of the Treasury in the first Trump administration.
While it could take months for a deal to close between ByteDance and Perplexity AI, President Donald Trump has been working to keep TikTok alive since before he took office, and immediately signed an executive order to halt the ban on TikTok.
President Trump signs executive order to suspend TikTok ban for 75 days - GIGAZINE
TikTok CEO Shaw Chiu also released a video in support of President Trump, saying, 'We are grateful and pleased to have the support of the President, who truly understands our platform. The President has used TikTok to express his ideas and perspectives and connect with the world, generating more than 60 billion views of his content in the process.'
In addition to Perplexity AI, many other companies have shown interest in acquiring and merging with TikTok, and it has been reported that Oracle is in negotiations to acquire TikTok.
Oracle and Microsoft reportedly in talks to acquire TikTok - GIGAZINE
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