U.S.-based search engine startup Perplexity AI has submitted a proposal to merge with TikTok U.S., according to a source familiar with the matter. The bid, submitted to TikTok’s parent company ByteDance on Saturday, aims to address the looming threat of a U.S. ban on TikTok, set to take effect on Sunday unless the platform severs ties with ByteDance.
President-elect Donald Trump indicated on Saturday that TikTok could receive a 90-day reprieve starting Monday, offering the company more time to resolve its ownership issues.
The proposal, first reported by CNBC, suggests a merger between TikTok U.S. and Perplexity AI to form a new entity that would also incorporate New Capital Partners. This structure would allow ByteDance’s existing investors to retain their equity stakes while Perplexity AI’s advanced search tools would enhance TikTok’s functionality by integrating video content with rapid, citation-based search capabilities.
A source close to the negotiations, speaking on condition of anonymity, stated that Perplexity’s approach is unique as it proposes a merger rather than a sale, which could appeal to ByteDance’s interests. TikTok and New Capital Partners have yet to comment on the proposal.
Perplexity AI, known for its cutting-edge language model-powered search tools, sees this merger as an opportunity to expand its capabilities while maintaining TikTok’s popularity. TikTok currently boasts nearly half of the U.S. population as users, influencing online culture and driving growth for small businesses.
Meanwhile, TikTok announced on Friday that it would halt operations in the U.S. on Sunday unless the Biden administration provides assurances to tech giants like Apple and Google that enforcement actions under the ban will not apply to them.