Perplexity AI Proposes Merger with TikTok, Offering U.S. Government 50% Stake

Perplexity AI proposes TikTok merger with 50% U.S. government ownership stake

Perplexity AI has presented a new proposal to TikTok's parent company that would allow the U.S. government to own up to 50% of a new entity that merges Perplexity with TikTok's U.S. business, according to a person familiar with the matter. The proposal, submitted last week, is a revision of a prior plan the artificial intelligence startup had presented to TikTok's parent ByteDance on Jan. 18, a day before the law that bans TikTok went into effect. The first proposal, which ByteDance hasn't responded to, sought to create a new structure that would merge San Francisco-based Perplexity with TikTok's U.S. business and include investments from other investors. The new proposal would allow the U.S. government to own up to half of that new structure once it makes an initial public offering of at least $300 billion, said the person, who was not authorized to speak about the proposal. The person said Perplexity's proposal was revised based off of feedback from the Trump administration. If the plan is successful, the shares owned by the government would not have voting power, the person said. The government also would not get a seat on the new company's board. ByteDance and TikTok did not immediately respond to a request for comment. Under the plan, ByteDance would not have to completely cut ties with TikTok, a favorable outcome for its investors. But it would have to allow a "full U.S. board control," the person said. Under the proposal, the China-based tech company would contribute TikTok's U.S. business without the proprietary algorithm that fuels what users see on the app, according to a document seen by the Associated Press. The proposal seems to mirror a strategy Steven Mnuchin, treasury secretary during President Donald Trump's first term, discussed Sunday on Fox News' Sunday Morning Futures -- that a new investor in TikTok could simply "dilute down" the Chinese ownership and satisfy the law. Mnuchin has previously expressed interest in investing in the company. "But the technology needs to be disconnected from China," he added. "It needs to be disconnected from ByteDance. There's absolutely no way that China would ever let us have something like that in China." The Perplexity proposal comes as several investors are expressing interest in TikTok. Mr. Trump said late Saturday that he expects a deal will be made in as soon as 30 days. On a flight from Las Vegas to Miami on Air Force One, Mr. Trump also said he hadn't discussed a deal with Larry Ellison, CEO of software maker Oracle, despite a report that Oracle, along with outside investors, was considering taking over TikTok's global operation. "Numerous people are talking to me. Very substantial people," Mr. Trump said. "We have a lot of interest in it, and the United States will be a big beneficiary. ... I'd only do it if the United States benefits." Under a bipartisan law passed last year, TikTok was to be banned in the United States by Jan. 19 if it did not cut ties with ByteDance. The Supreme Court upheld the law, but Mr. Trump then issued an executive order to halt enforcement of the law for 75 days. Mr. Trump, on Air Force One, noted that Ellison lives "right down the road" from his Mar-a-Lago estate, but added, "I never spoke to Larry about TikTok. I've spoken to many people about TikTok and there's great interest in TikTok." TikTok briefly shut down in the U.S. a week ago, but went back online after Mr. Trump said he would postpone the ban. Mr. Trump had unsuccessfully attempted a U.S. ban of the platform during his first term. But he has since reversed his position and has credited the platform with helping him win more young voters during last year's presidential election. TikTok CEO Shou Chew attended Mr. Trump's inauguration Jan. 20, along with some other tech leaders who've been forging friendlier ties with the new administration. Congress voted to ban TikTok in the U.S. out of concern that TikTok's ownership structure represented a security risk. The Biden administration argued in court for months that it was too much of a risk to allow a Chinese company to control the algorithm that fuels what people see on the app. Officials also raised concerns about user data collected on the platform. However, to date, the U.S. hasn't provided public evidence of TikTok handing user data to Chinese authorities or allowing them to tinker with its algorithm.

Perplexity AI's new bid for TikTok could give U.S. 50% stake

Under the plan, ByteDance would not be required to divest from TikTok. Perplexity AI has presented a new proposal to TikTok's parent company that would allow the U.S. government to own up to 50% of a new entity that merges Perplexity with TikTok's U.S. business, according to a person familiar with the matter. The proposal, submitted last week, is a revision of a prior plan the artificial intelligence startup had presented to TikTok's parent ByteDance on Jan. 18, a day before the law that bans TikTok went into effect. The first proposal, which ByteDance hasn't responded to, sought to create a new structure that would merge San Francisco-based Perplexity with TikTok's U.S. business and include investments from other investors. The new proposal would allow the U.S. government to own up to half of that new structure once it makes an initial public offering of at least $300 billion, said the person, who was not authorized to speak about the proposal. The person said Perplexity's proposal was revised based off of feedback from the Trump administration. If the plan is successful, the shares owned by the government would not have voting power, the person said. The government also would not get a seat on the new company's board. ByteDance and TikTok did not immediately responded to a request for comment. Under the plan, ByteDance would not have to completely cut ties with TikTok, a favorable outcome for its investors. But it would have to allow a "full U.S. board control," the person said. Under the proposal, the China-based tech company would contribute TikTok's U.S. business without the proprietary algorithm that fuels what users see on the app, according to a document seen by the Associated Press. In exchange, ByteDance's existing investors will get equity in the new structure that emerges. The proposal seems to mirror a strategy Steven Mnuchin, treasury secretary during Trump's first term, discussed Sunday on Fox News' Sunday Morning Futures -- that a new investor in TikTok could simply "dilute down" the Chinese ownership and satisfy the law. Mnuchin has previously expressed interest in investing in the company. "But the technology needs to be disconnected from China," he added. "It needs to be disconnected from ByteDance. There's absolutely no way that China would ever let us have something like that in China." The Perplexity proposal comes as several investors are expressing interest in TikTok. President Donald Trump said late Saturday that he expects a deal will be made in as soon as 30 days. On a flight from Las Vegas to Miami on Air Force One, Trump also said he hadn't discussed a deal with Larry Ellison, CEO of software maker Oracle, despite a report that Oracle, along with outside investors, was considering taking over TikTok's global operation. "Numerous people are talking to me. Very substantial people," Trump said. "We have a lot of interest in it, and the United States will be a big beneficiary. ... I'd only do it if the United States benefits." Under a bipartisan law passed last year, TikTok was to be banned in the United States by Jan. 19 if it did not cut ties with ByteDance. The Supreme Court upheld the law, but Trump then issued an executive order to halt enforcement of the law for 75 days. Trump, on Air Force One, noted that Ellison lives "right down the road" from his Mar-a-Lago estate, but added, "I never spoke to Larry about TikTok. I've spoken to many people about TikTok and there's great interest in TikTok." TikTok briefly shut down in the U.S. a week ago, but went back online after Trump said he would postpone the ban. Trump had unsuccessfully attempted a U.S. ban of the platform during his first term. But he has since reversed his position and has credited the platform with helping him win more young voters during last year's presidential election. TikTok CEO Shou Chew attended Trump's inauguration Jan. 20, along with some other tech leaders who've been forging friendlier ties with the new administration. Congress voted to ban TikTok in the U.S. out of concern that TikTok's ownership structure represented a security risk. The Biden administration argued in court for months that it was too much of a risk to allow a Chinese company to control the algorithm that fuels what people see on the app. Officials also raised concerns about user data collected on the platform. However, to date, the U.S. hasn't provided public evidence of TikTok handing user data to Chinese authorities or allowing them to tinker with its algorithm.

New bid for TikTok from Perplexity AI could give US government 50% stake

WASHINGTON -- Perplexity AI has presented a new proposal to TikTok's parent company that would allow the U.S. government to own up to 50% of a new entity that merges Perplexity with TikTok's U.S. business, according to a person familiar with the matter. The proposal, submitted last week, is a revision of a prior plan the artificial intelligence startup had presented to TikTok's parent ByteDance on Jan. 18, a day before the law that bans TikTok went into effect. The first proposal, which ByteDance hasn't responded to, sought to create a new structure that would merge San Francisco-based Perplexity with TikTok's U.S. business and include investments from other investors. The new proposal would allow the U.S. government to own up to half of that new structure once it makes an initial public offering of at least $300 billion, said the person, who was not authorized to speak about the proposal. The person said Perplexity's proposal was revised based off of feedback from the Trump administration. If the plan is successful, the shares owned by the government would not have voting power, the person said. The government also would not get a seat on the new company's board. ByteDance and TikTok did not immediately responded to a request for comment. Under the plan, ByteDance would not have to completely cut ties with TikTok, a favorable outcome for its investors. But it would have to allow a "full U.S. board control," the person said. Under the proposal, the China-based tech company would contribute TikTok's U.S. business without the proprietary algorithm that fuels what users see on the app, according to a document seen by the Associated Press. In exchange, ByteDance's existing investors will get equity in the new structure that emerges. The proposal seems to mirror a strategy Steven Mnuchin, treasury secretary during Trump's first term, discussed Sunday on Fox News' Sunday Morning Futures -- that a new investor in TikTok could simply "dilute down" the Chinese ownership and satisfy the law. Mnuchin has previously expressed interest in investing in the company. "But the technology needs to be disconnected from China," he added. "It needs to be disconnected from ByteDance. There's absolutely no way that China would ever let us have something like that in China." The Perplexity proposal comes as several investors are expressing interest in TikTok. President Donald Trump said late Saturday that he expects a deal will be made in as soon as 30 days. On a flight from Las Vegas to Miami on Air Force One, Trump also said he hadn't discussed a deal with Larry Ellison, CEO of software maker Oracle, despite a report that Oracle, along with outside investors, was considering taking over TikTok's global operation. "Numerous people are talking to me. Very substantial people," Trump said. "We have a lot of interest in it, and the United States will be a big beneficiary. ... I'd only do it if the United States benefits." Under a bipartisan law passed last year, TikTok was to be banned in the United States by Jan. 19 if it did not cut ties with ByteDance. The Supreme Court upheld the law, but Trump then issued an executive order to halt enforcement of the law for 75 days. Trump, on Air Force One, noted that Ellison lives "right down the road" from his Mar-a-Lago estate, but added, "I never spoke to Larry about TikTok. I've spoken to many people about TikTok and there's great interest in TikTok." TikTok briefly shut down in the U.S. a week ago, but went back online after Trump said he would postpone the ban. Trump had unsuccessfully attempted a U.S. ban of the platform during his first term. But he has since reversed his position and has credited the platform with helping him win more young voters during last year's presidential election. TikTok CEO Shou Chew attended Trump's inauguration Jan. 20, along with some other tech leaders who've been forging friendlier ties with the new administration. Congress voted to ban TikTok in the U.S. out of concern that TikTok's ownership structure represented a security risk. The Biden administration argued in court for months that it was too much of a risk to allow a Chinese company to control the algorithm that fuels what people see on the app. Officials also raised concerns about user data collected on the platform. However, to date, the U.S. hasn't provided public evidence of TikTok handing user data to Chinese authorities or allowing them to tinker with its algorithm.

New bid for TikTok from Perplexity AI could give US government 50% stake

WASHINGTON (AP) -- Perplexity AI has presented a new proposal to TikTok's parent company that would allow the U.S. government to own up to 50% of a new entity that merges Perplexity with TikTok's U.S. business, according to a person familiar with the matter. The proposal, submitted last week, is a revision of a prior plan the artificial intelligence startup had presented to TikTok's parent ByteDance on Jan. 18, a day before the law that bans TikTok went into effect. The first proposal, which ByteDance hasn't responded to, sought to create a new structure that would merge San Francisco-based Perplexity with TikTok's U.S. business and include investments from other investors. The new proposal would allow the U.S. government to own up to half of that new structure once it makes an initial public offering of at least $300 billion, said the person, who was not authorized to speak about the proposal. The person said Perplexity's proposal was revised based off of feedback from the Trump administration. If the plan is successful, the shares owned by the government would not have voting power, the person said. The government also would not get a seat on the new company's board. ByteDance and TikTok did not immediately responded to a request for comment. Under the plan, ByteDance would not have to completely cut ties with TikTok, a favorable outcome for its investors. But it would have to allow a "full U.S. board control," the person said. Under the proposal, the China-based tech company would contribute TikTok's U.S. business without the proprietary algorithm that fuels what users see on the app, according to a document seen by the Associated Press. The proposal seems to mirror a strategy Steven Mnuchin, treasury secretary during Trump's first term, discussed Sunday on Fox News' Sunday Morning Futures -- that a new investor in TikTok could simply "dilute down" the Chinese ownership and satisfy the law. Mnuchin has previously expressed interest in investing in the company. "But the technology needs to be disconnected from China," he added. "It needs to be disconnected from ByteDance. There's absolutely no way that China would ever let us have something like that in China." The Perplexity proposal comes as several investors are expressing interest in TikTok. President Donald Trump said late Saturday that he expects a deal will be made in as soon as 30 days. On a flight from Las Vegas to Miami on Air Force One, Trump also said he hadn't discussed a deal with Larry Ellison, CEO of software maker Oracle, despite a report that Oracle, along with outside investors, was considering taking over TikTok's global operation. "Numerous people are talking to me. Very substantial people," Trump said. "We have a lot of interest in it, and the United States will be a big beneficiary. ... I'd only do it if the United States benefits." Under a bipartisan law passed last year, TikTok was to be banned in the United States by Jan. 19 if it did not cut ties with ByteDance. The Supreme Court upheld the law, but Trump then issued an executive order to halt enforcement of the law for 75 days. Trump, on Air Force One, noted that Ellison lives "right down the road" from his Mar-a-Lago estate, but added, "I never spoke to Larry about TikTok. I've spoken to many people about TikTok and there's great interest in TikTok." TikTok briefly shut down in the U.S. a week ago, but went back online after Trump said he would postpone the ban. TikTok CEO Shou Chew attended Trump's inauguration Jan. 20, along with some other tech leaders who've been forging friendlier ties with the new administration. Congress voted to ban TikTok in the U.S. out of concern that TikTok's ownership structure represented a security risk. The Biden administration argued in court for months that it was too much of a risk to allow a Chinese company to control the algorithm that fuels what people see on the app. Officials also raised concerns about user data collected on the platform. However, to date, the U.S. hasn't provided public evidence of TikTok handing user data to Chinese authorities or allowing them to tinker with its algorithm.

Perplexity AI revises Tiktok merger proposal that could give the U.S. government a 50% stake

Perplexity AI on Sunday revised the merger proposal it had submitted to TikTok parent ByteDance. The proposal, which would create a new entity combining Perplexity and TikTok U.S., would now also allow for the U.S. government to own up to 50% of the new company upon a future IPO, CNBC has learned. A proposal document viewed by CNBC, which was shared with ByteDance and prospective new investors, detailed the creation of a new U.S. holding company, "NewCo." The document proposes ByteDance contribute TikTok U.S., minus its core recommendation algorithm, in exchange for the company's existing investors receiving equity in the new company. Perplexity AI would offer itself up in exchange for its own investors receiving a distribution of the NewCo equity. Money for the merger would come from "new third-party capital provider(s) (to be mutually agreed upon)," per the proposal document, which would provide capital for a "one-time dividend payment to ByteDance investors in exchange for simplified governance" and to help the new entity grow. Perplexity AI, the artificial intelligence search engine startup competing with OpenAI and Google, started 2024 with a roughly $500 million valuation and ended the year with a valuation of about $9 billion, after attracting increasing investor interest amid the generative AI boom -- as well as controversy over plagiarism accusations. Investors have viewed AI-assisted search as one of Google's key risks, as it potentially changes the way consumers access information online. Last year, OpenAI, which started the generative AI craze in late 2022 with ChatGPT, introduced a search engine called SearchGPT. Google later launched "AI Overviews" in search, allowing users to see a quick summary of answers at the top of results. The proposed new structure would allow for most of ByteDance's existing investors to retain their equity stakes and would bring more video to Perplexity, a source familiar with the situation told CNBC earlier this month. And although ByteDance has publicly implied it will not sell TikTok U.S., that's part of why Perplexity AI believes it has a shot with its bid -- since the deal would be a merger rather than a sale, the source added. Under the revised proposal, the U.S. government could own up to half of the new structure once it IPOs at least $300 billion, according to the source. A fair price is "well north of $50 billion" but the final number attached to the proposal will be decided, in part, by which of ByteDance's existing shareholders want to remain part of the new entity and which want to cash out, according to the source. Though any potential transaction between Perplexity AI and ByteDance would likely take months to complete, President Donald Trump has so far temporarily restored TikTok in the U.S. and suggested plans that would involve an American stakeholder purchasing the company and then selling a 50% stake to the U.S. government. In a video posted to TikTok earlier this month, CEO Shou Zi Chew said, "I want to thank President Trump for his commitment to work with us to find a solution that keeps TikTok available in the United States." Perplexity is one of multiple companies and individuals vying to be the one to purchase or merge with TikTok, which reportedly include Microsoft, Oracle and potentially Elon Musk. On Saturday, President Trump said he would likely have a decision on the app's future in the U.S. in the next 30 days.

Perplexity AI wants to buy TikTok -- and give the U.S. government a big stake

Perplexity AI has reportedly revised its initial offer to merge with TikTok -- this time with a carveout to give the U.S. government 50% control in a future initial public offering (IPO). CNBC (CMCSA+0.40%), citing a proposal document shared with TikTok-parent ByteDance and prospective advisors, reports that a new holding company would be created named "NewCo." It would see TikTok's U.S. division, minus its coveted algorithm, be contributed by ByteDance. In exchange, ByteDance's existing investments would create equity for the new company, CNBC reports. Perplexity AI's investors would receive a distribution of NewCo equity in exchange for the company giving itself up. According to the Associated Press, which also viewed the proposal, the U.S. government would own up to half of the new entity following an IPO valued at at least $300 billion. If successful, the government would not get a seat on NewCo's board, nor would its shares have voting power, the Associated Press reports, citing a person familiar with the matter. The structure is based on feedback from President Donald Trump's administration. "I would like the United States to have a 50% ownership position in a joint venture," Trump wrote on his Truth Social last week. "By doing this, we save TikTok, keep it in good hands and allow it to say up." TikTok briefly went dark on Jan. 18 before coming back the following day after both then-President Joe Biden and Trump signaled they had no intention of upholding the ban. On Jan. 20, Trump signed an executive order directing the attorney general not to enforce a ban on TikTok for 75 days nor impose penalties on entities for not complying with the ban. Perplexity AI -- a $9 billion artificial intelligence search engine startup competing with rivals, such as OpenAI and Google (GOOGL+1.13%) -- is just one of a handful of bids for TikTok's U.S. operations. The most overt rival is The People's Bid for TikTok, a group formed by billionaire Frank McCourt in partnership with his nonprofit organization Project Liberty; He's been joined by Shark Tank star Kevin O'Leary. Another is a consortium led by Employer.com Founder Jesse Tinsley, which also features the major YouTuber MrBeast.

Perplexity AI submits proposal to merge with TikTok, give half to US...

Perplexity AI submitted a revised merger proposal to TikTok's Chinese parent ByteDance as the popular video-sharing app stares down a national ban, according to multiple reports. Under the new proposal, the US government would own up to half of the company after a future initial public offering, a source familiar with the matter told CNBC. A Perplexity document shared with ByteDance and new investors proposed the creation of a new US holding company called "NewCo," the person said. As part of the deal, ByteDance would sell TikTok US to these new investors, according to the report. The parent company would keep TikTok's core recommendation algorithm for itself under the deal. After NewCo completes a public offering at a valuation of at least $300 billion, the US government would own up to half of the new structure. Perplexity AI - which started 2024 with a roughly $500 million valuation and ended the year at about $9 billion - would also offer itself to the holding company, if its own investors receive some of the NewCo equity. The Trump administration is reportedly working on a plan to save TikTok by tapping software giant Oracle to run the app's operations. ByteDance and Perplexity AI did not immediately respond to requests for comment. Perplexity AI's proposed merger could be more likely to succeed than other bids, since it is not a sale, a source told Reuters. The bidding war for TikTok started after the Biden administration passed a divest-or-sell law that went into effect Jan. 19, the day before Trump took office. TikTok briefly shut down before Trump signed an executive order last week that gives Bytedance an additional 75 days to make a deal. TikTok's owners had previously ruled not selling the app, which US officials claim poses a national security threat and because it could put US users' personal data at risk. On Saturday, Trump said he would likely have a decision on the app's future in the US within the next 30 days. Separately, billionaire Frank McCourt, "Shark Tank" star Kevin O'Leary and YouTube influencer Mr. Beast have made overtures about buying TikTok.

Your TikTok feed could soon be powered by Perplexity AI

Perplexity AI has submitted a revised proposal to merge with TikTok's U.S. operations, offering the U.S. government up to 50% ownership in a new entity that would combine the AI startup with TikTok's American business. The proposal, which follows feedback from the Trump administration, aims to address national security concerns while allowing ByteDance to retain partial ownership and avoid a complete divestiture. Under the revised plan, ByteDance would contribute TikTok's U.S. operations to a new holding company, dubbed "NewCo," without including its proprietary recommendation algorithm. In exchange, ByteDance's existing investors would receive equity in the new entity. Perplexity AI would also merge into NewCo, with its investors receiving a distribution of equity. The U.S. government would acquire up to 50% of NewCo following an initial public offering (IPO) valuing the company at a minimum of $300 billion, according to documents reviewed by CNBC and Reuters. The government's stake would be non-voting, meaning it would not have board representation or influence over operational decisions. This structure mirrors suggestions made by former Treasury Secretary Steven Mnuchin, who recently emphasized the need to disconnect TikTok's technology from Chinese control. "The technology needs to be disconnected from China," Mnuchin said on Fox News. "There's absolutely no way China would ever let us have something like that in China." The merger would be funded by third-party capital providers, who would contribute to a one-time dividend payment for ByteDance investors in exchange for simplified governance. The proposal also stipulates that NewCo would have "full U.S. board control," ensuring operational independence from ByteDance. A source familiar with the negotiations told CNBC that the deal's final valuation would depend on which ByteDance shareholders choose to retain their stakes versus cashing out, with estimates placing the price "well north of $50 billion." The proposal comes amid ongoing tensions between the U.S. and China over TikTok's ownership. A bipartisan law passed last year mandated that ByteDance divest TikTok's U.S. operations by January 19 or face a ban. While the Supreme Court upheld the law, President Trump issued an executive order delaying enforcement for 75 days to allow for negotiations. TikTok briefly shut down in the U.S. last week before resuming operations after Trump signaled his willingness to extend the deadline. Trump has expressed support for a deal that benefits the U.S., stating on Air Force One, "I'd only do it if the United States benefits." He also noted that multiple "substantial people" have approached him about TikTok, though he denied discussing the matter with Oracle CEO Larry Ellison, despite reports of Oracle's interest in acquiring TikTok's global operations. Could Musk or Ellison buy TikTok? Trump thinks so Perplexity AI, which saw its valuation soar from $500 million to $9 billion in 2024 amid the generative AI boom, is one of several parties vying for TikTok. Other potential buyers include Microsoft, Oracle, and Elon Musk. Perplexity's bid stands out due to its merger structure, which ByteDance may find more palatable than an outright sale. A source told Reuters that Perplexity believes its proposal has a higher chance of success because it allows ByteDance to retain some ownership and avoids the political backlash of a full divestiture. If accepted, the deal would allow ByteDance to maintain a financial stake in TikTok's U.S. operations while addressing U.S. national security concerns. However, the exclusion of TikTok's core algorithm -- a key driver of its user engagement -- raises questions about the new entity's competitiveness. ByteDance has not publicly responded to the proposal, and TikTok CEO Shou Zi Chew has only thanked President Trump for his commitment to finding a solution that keeps TikTok available in the U.S. Perplexity, which competes with OpenAI and Google in AI-powered search, would gain access to TikTok's vast user base and video content capabilities. Meanwhile, TikTok's U.S. operations would benefit from Perplexity's AI expertise, potentially enhancing its content recommendation systems without relying on ByteDance's algorithm. Bernstein analysts noted that the deal raises "existential questions" about the viability of proprietary AI models versus open-source alternatives, as Perplexity's approach contrasts with OpenAI's closed ecosystem. President Trump has indicated that a decision on TikTok's future could come within 30 days.

Artificial Intelligence Company's Bid for TikTok Could Give American Government a 50 Percent Stake in New Company

Congress voted to ban TikTok out of concern that TikTok's ownership structure represents a security risk, a ban upheld by the Supreme Court but rejected by the Trump administration. Perplexity AI has presented a new proposal to TikTok's parent company that would allow the American government to own up to 50 percent of a new entity that merges Perplexity with TikTok's American business, according to a person familiar with the matter. The proposal, submitted last week, is a revision of a prior plan the artificial intelligence startup had presented to TikTok's parent ByteDance on January 18, a day before the law that bans TikTok went into effect. The first proposal, which ByteDance hasn't responded to, sought to create a new structure that would merge San Francisco-based Perplexity with TikTok's American business and include investments from other investors. The new proposal would allow the American government to own up to half of that new structure once it makes an initial public offering of at least $300 billion, said the person, who was not authorized to speak about the proposal. The person said Perplexity's proposal was revised based on feedback from the Trump administration. If the plan is successful, the shares owned by the government would not have voting power, the person said. The government also would not get a seat on the new company's board. ByteDance and TikTok did not immediately respond to a request for comment. Under the plan, ByteDance would not have to completely cut ties with TikTok, a favorable outcome for its investors. But it would have to allow a "full U.S. board control," the person said. Under the proposal, the China-based tech company would contribute TikTok's American business without the proprietary algorithm that fuels what users see on the app, according to a document seen by the Associated Press. The proposal seems to mirror a strategy Steven Mnuchin, treasury secretary during President Trump's first term, discussed Sunday on Fox News' Sunday Morning Futures -- that a new investor in TikTok could simply "dilute down" the Chinese ownership and satisfy the law. Mr. Mnuchin has previously expressed interest in investing in the company. "But the technology needs to be disconnected from China," he added. "It needs to be disconnected from ByteDance. There's absolutely no way that China would ever let us have something like that in China." The Perplexity proposal comes as several investors are expressing interest in TikTok. Mr. Trump said late Saturday that he expects a deal will be made in as soon as 30 days. On a flight from Las Vegas to Miami on Air Force One, Mr. Trump also said he hadn't discussed a deal with Larry Ellison, CEO of software maker Oracle, despite a report that Oracle, along with outside investors, was considering taking over TikTok's global operation. "Numerous people are talking to me. Very substantial people," Mr. Trump said. "We have a lot of interest in it, and the United States will be a big beneficiary. ... I'd only do it if the United States benefits." Under a bipartisan law passed last year, TikTok was to be banned in the United States by January 19 if it did not cut ties with ByteDance. The Supreme Court upheld the law, but Mr. Trump then issued an executive order to halt enforcement of the law for 75 days. Mr. Trump, on Air Force One, noted that Mr. Ellison lives "right down the road" from his Mar-a-Lago estate, but added, "I never spoke to Larry about TikTok. I've spoken to many people about TikTok and there's great interest in TikTok." TikTok briefly shut down in the United States a week ago, but went back online after Mr. Trump said he would postpone the ban. TikTok CEO Shou Chew attended Mr. Trump's inauguration Jan. 20, along with some other tech leaders who've been forging friendlier ties with the new administration. Congress voted to ban TikTok out of concern that TikTok's ownership structure represented a security risk. The Biden administration argued in court for months that it was too much of a risk to allow a Chinese company to control the algorithm that fuels what people see on the app. Officials also raised concerns about user data collected on the platform.

Perplexity AI Wants to Merge With TikTok, Give Government Half of the Company

TikTok, which faces the ticking clock of a ban enforcement, is being pursued by several suitors for a US merger or sale. The 75-day reprieve the video app TikTok received to operate in the US has taken another turn. An American AI company wants to merge with TikTok and give half ownership to the government. Perplexity AI, which has an artificial-intelligence-based search engine, has thrown its hat in with a marriage proposal of sorts that would, in concept, allow TikTok to continue operating after enforcement of a federal ban was temporarily by a president Donald Trump executive order. Read more: Perplexity AI Review: Imagine ChatGPT with an Internet Connection Perplexity, based in San Francisco and with offices in New York and Austin, previously made an offer to merge with TikTok to its parent company ByteDance earlier this month, but the offer has been updated. Under the new terms, a holding company called NewCo would be formed to guide the merged company toward a $300 billion initial public offering in which the US government would have 50-percent ownership. According to a report from the Associated Press, the government would not have voting power or a seat on the company's board. Read more: If TikTok Gets Banned Again, Here Are 8 Alternatives Perplexity and TikTok did not immediately respond to a request for comment. ByteDance has not publicly responded to the idea of a Perplexity merger. Read more: Trump Says He Won't Enforce TikTok Ban Until Spring Trump previously stated that TikTok could continue operating in the US if it had 50-percent American ownership and the proposal appears structured to conform to that ideal. TikTok shut down briefly in the US in anticipation of the ban's enforcement, but was restored just ahead of Trump's inauguration after he made assurances that he would intervene. The US Supreme Court upheld the ban in a decision earlier this month. TikTok is owned by Chinese company ByteDance, which has been reluctant to cede ownership, even in the face of losing its entire US audience. Perplexity is not the only player vying to be part of TikTok's future. A group called The People's Bid for TikTok, led by billionaire Frank McCourt and nonprofit Project Liberty, is seeking public endorsements in an effort to create a "reimagined" TikTok. A consortium of investors led by Employer.com's CEO Jesse Tinsley, has also announced a bid for TIkTok.

US-owned Perplexity AI offers new plan to take a half-share in TikTok

The proposal, submitted last week, is a revision of an earlier plan the artificial intelligence startup presented to TikTok's parent ByteDance on 18 January, a day before the law that bans TikTok went into effect. The first proposal, which ByteDance has not responded to, sought to create a new structure that would merge San Francisco-based Perplexity with TikTok's US business and include investments from other investors, according to unofficial sources. The new proposal would allow the US government to own up to half of that new structure once it makes an initial public offering of at least $300 billion (€286 billion), said the person, who was not authorised to speak about the proposal. The person said Perplexity's proposal was revised based off of feedback from the Trump administration. If the plan is successful, the shares owned by the government would not have voting power, the person said. The government also would not get a seat on the new company's board. ByteDance and TikTok have not commented so far. Under the plan, ByteDance would not have to completely cut ties with TikTok, a favourable outcome for its investors. But it would have to allow a "full US board control", the person said. Under the proposal, the China-based tech company would contribute TikTok's US business without the proprietary algorithm that fuels what users see on the app, according to a document seen by the Associated Press. In exchange, ByteDance's existing investors will get equity in the new structure that emerges. The proposal seems to mirror a strategy Steven Mnuchin, treasury secretary during Trump's first term, discussed Sunday on Fox News' Sunday Morning Futures - that a new investor in TikTok could simply "dilute down" the Chinese ownership and satisfy the law. Mnuchin has previously expressed interest in investing in the company. "But the technology needs to be disconnected from China", he added. "It needs to be disconnected from ByteDance. There's absolutely no way that China would ever let us have something like that in China." The Perplexity proposal comes as several investors are expressing interest in TikTok. President Donald Trump said late Saturday that he expects a deal will be made in as soon as 30 days. On a flight from Las Vegas to Miami on Air Force One, Trump also said he hadn't discussed a deal with Larry Ellison, CEO of software maker Oracle, despite a report that Oracle, along with outside investors, was considering taking over TikTok's global operation. "Numerous people are talking to me. Very substantial people," Trump said. "We have a lot of interest in it, and the United States will be a big beneficiary. ... I'd only do it if the United States benefits." Under a bipartisan law passed last year, TikTok was to be banned in the United States by 19 January if it did not cut ties with ByteDance. The Supreme Court upheld the law, but Trump then issued an executive order to halt enforcement of the law for 75 days. Trump, on Air Force One, noted that Ellison lives "right down the road" from his Mar-a-Lago estate. He added: "I never spoke to Larry about TikTok. I've spoken to many people about TikTok and there's great interest in TikTok." TikTok briefly shut down in the US a week ago, but went back online after Trump said he would postpone the ban. Trump had unsuccessfully attempted a US ban of the platform during his first term. But he has since reversed his position and has credited the platform with helping him win more young voters during last year's presidential election. TikTok CEO Shou Chew attended Trump's inauguration on 20 January, along with some other tech leaders who've been forging friendlier ties with the new administration. Congress voted to ban TikTok in the US out of concern that TikTok's ownership structure represented a security risk. The Biden administration argued in court for months that it was too much of a risk to allow a Chinese company to control the algorithm that fuels what people see on the app. Officials also raised concerns about user data collected on the platform. However, to date, the US hasn't provided public evidence of TikTok handing user data to Chinese authorities or allowing them to tinker with its algorithm.

Perplexity AI revises Tiktok merger proposal allowing 50% stake to US govt- CNBC By Investing.com

Investing.com-- U.S. search engine startup Perplexity AI has updated its merger proposal to ByteDance, the Chinese parent of TikTok, aiming to form a new U.S.-controlled entity incorporating Perplexity and TikTok U.S., CNBC reported on Sunday citing a proposal document seen by it. Under the revised proposal, a new U.S. holding company called "NewCo" would be established, the report stated. ByteDance would sell TikTok's U.S. operations to NewCo investors, granting TikTok's existing shareholders equity in the newly formed entity. Perplexity has also suggested its own acquisition by NewCo, conditional on distributing equity to its investors, it added. The plan proposes that the U.S. government hold up to a 50% stake in NewCo following an initial public offering (IPO) valued at a minimum of $300 billion. However, ByteDance would retain ownership of TikTok's core recommendation algorithm, which is widely regarded as a key driver of its global popularity, according to the report. Reuters also reported the revised proposal citing a source familiar with the matter. TikTok's future in the U.S. has been clouded by national security concerns, leading to temporary shutdowns and ongoing discussions about potential restructuring. President Donald Trump recently indicated ongoing talks with multiple parties over TikTok's future, with a decision expected within 30 days. TikTok services were restored last week after Trump announced he would allow the app's continued operation in the country. Perplexity AI's proposal reflects an innovative approach, combining merger and investment strategies, which it believes could bypass political hurdles tied to outright sales. ByteDance and the White House have not commented on the revised proposal, the reports said. This development comes as TikTok and ByteDance navigate complex regulatory scrutiny, alongside efforts by other potential suitors to secure a stake in the widely-used video-sharing platform.

What has Perplexity AI proposed to the US government to buy TikTok?

Perplexity AI's proposal for a TikTok merger with partial US government ownership presents a novel solution to an ongoing geopolitical challenge.In a groundbreaking proposal, artificial intelligence startup Perplexity AI has suggested merging with TikTok's US operations, allowing the United States government to own up to 50% of the newly formed entity. The plan aims to address national security concerns while preserving TikTok's presence in the US, according to a source familiar with the matter mentioned in a report by CBS. Perplexity AI's proposal, submitted to ByteDance last week, revises an earlier plan to create a new structure for TikTok's U.S. operations. The updated proposal includes a provision for the U.S. government to own half of the entity once it goes public with an estimated valuation of at least $300 billion, as mentioned in the report by CBS. The proposed government stake, however, would lack voting rights and exclude a seat on the company's board. ByteDance, TikTok's parent company, would retain a minority stake but would need to cede full control of TikTok's U.S. board. The proprietary algorithm that powers TikTok's content recommendations would not be part of the merger, ensuring a separation of technology from ByteDance. The proposal mirrors strategies previously suggested by former U.S. Treasury Secretary Steven Mnuchin, who advocated for diluting Chinese ownership of TikTok to comply with U.S. law. Mnuchin emphasized the importance of disconnecting TikTok's technology and data from China, a sentiment echoed by bipartisan lawmakers concerned about potential risks tied to ByteDance's ownership. Perplexity AI's plan appears to balance these concerns by limiting Chinese influence while maintaining the app's operations in the US. The proposal also provides a path for ByteDance investors to retain some involvement, potentially making the deal more palatable to all parties. Perplexity AI is not the only entity eyeing a stake in TikTok. President Donald Trump recently stated that numerous "substantial" investors are in discussions about the platform. He expressed confidence that a deal could be finalized within 30 days. During a flight aboard Air Force One, Trump denied speaking to Oracle co-founder Larry Ellison about TikTok, despite reports suggesting Oracle's interest in acquiring TikTok's global operations alongside other investors. Trump noted the widespread interest in TikTok and emphasized that any deal must ensure significant benefits for the United States. Perplexity AI and ChatGPT are both advanced language models with distinct strengths. Perplexity AI excels in research and fact-checking, whereas ChatGPT is better suited for creative tasks and interactive conversations. Perplexity AI offers a free version with basic search functionality, as well as a Pro version with enhanced features available through a subscription.

Perplexity submits a new bid for TikTok | TechCrunch

Perplexity AI has submitted a revised proposal to merge with TikTok, in an arrangement that would give the U.S. government up to 50 percent ownership of the new entity. The Associated Press first reported on the new proposal. A source with knowledge of the bid confirmed to TechCrunch that the AP's reporting is accurate. The AI search engine had previously proposed creating a new company by combining Perplexity, TikTok US, and additional equity investors. Under the new bid, the government would receive its stake after an initial public offering of at least $300 million, while TikTok's current Chinese owner ByteDance could also retain ownership, according to the AP. Perplexity reportedly revised its bid based on feedback from President Donald Trump's administration. TikTok briefly went down last weekend due to a law forcing ByteDance to sell the app or see it banned in the United States. It sprang back to life after Trump said he would sign an executive order extending the sale deadline. He also said he'd like to see the U.S. receive "50% ownership," although it wasn't clear whether he meant the government or U.S. investors. Another report this week suggested that the White House was negotiating a deal that would see Oracle (which already provides the infrastructure for TikTok's U.S. traffic) take over; when asked, Trump said he's spoken to "many people about TikTok" but "not with Oracle."

Perplexity AI Revised Proposal Could Open Door to U.S. Government Stake, CNBC Reports

-- Perplexity AI has revised its merger proposal with ByteDance, the parent company of TikTok, that could pave the way for the U.S. government to own a stake, says a CNBC report. -- According to a new proposal document that CNBC viewed, the new entity would allow for the U.S. government to own up to 50% of the new company after any initial public offering. -- The document proposes that ByteDance contributes TikTok U.S. in exchange for the company's existing investors receiving equity in the new company, and Perplexity AI would offer itself up in return. The proposal wouldn't include TikTok's core recommendation algorithm. -- Perplexity is both a search engine and an AI chatbot that was started in 2022, and it is reported to be a new rival to Alphabet's Google in the internet search market. It recently launched a shopping assistant supported by payment firm Stripe. Full article: https://www.cnbc.com/2025/01/26/perplexity-tiktok-revised-merger-proposal.html Write to Adriano Marchese at adriano.marchese@wsj.com

Perplexity AI proposes to merge with Tiktok, with U.S. government getting half, source says

U.S. search engine startup Perplexity AI has revised the merger proposal it had submitted to TikTok's Chinese parent ByteDance to create a new entity combining Perplexity and TikTok U.S., a person familiar with the proposal told reporters on Sunday. The proposal calls for the U.S. government to own up to 50% of the new company upon a future initial public offering (IPO), the person said. A Perplexity document shared with ByteDance and new investors proposed the creation of a new U.S. holding company called "NewCo," the person said.

Trump may leave TikTok's algorithm under ByteDance's control

It was apparently a busy weekend for key players involved in Donald Trump's efforts to make a deal to save TikTok. Perhaps the most appealing option for ByteDance could be if Trump blessed a merger between TikTok and Perplexity AI -- a San Francisco-based AI search company worth about $9 billion that appears to view a TikTok video content acquisition as a path to compete with major players like Google and OpenAI. On Sunday, Perplexity AI submitted a revised merger proposal to TikTok-owner ByteDance, reviewed by CNBC, which sources told AP News included feedback from the Trump administration. If the plan is approved, Perplexity AI and TikTok US would be merged into a new entity. And once TikTok reaches an initial public offering of at least $300 billion, the US government could own up to 50 percent of that new company, CNBC reported. In the proposal, Perplexity AI suggested that a "fair price" would be "well north of $50 billion," but the final price will likely depend on how many of TikTok's existing investors decide to cash out following the merger. ByteDance has maintained a strong resistance to selling off TikTok, especially a sale including its recommendation algorithm. Not only would this option allow ByteDance to maintain a minority stake in TikTok, but it also would leave TikTok's recommendation algorithm under ByteDance's control, CNBC reported. The deal would also "allow for most of ByteDance's existing investors to retain their equity stakes," CNBC reported. But ByteDance may not like one potential part of the deal. An insider source told AP News that ByteDance would be required to allow "full US board control." According to AP News, US government ownership of a large stake in TikTok would include checks to ensure the app doesn't become state controlled. The government's potential stake would apparently not grant the US voting power or a seat on the merged company's board.