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Perplexity AI Proposes Merger with TikTok U.S. to Prevent Ban

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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.

Trump Security Adviser Open to Continued Chinese Ownership of TikTok Under Certain Conditions

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Incoming National Security Adviser Mike Waltz suggested that President-elect Donald Trump may consider allowing TikTok to remain under Chinese ownership if measures are implemented to ensure American users’ data is securely stored in the United States. Waltz’s comments came during an interview with CNN on Sunday, as TikTok ceased operations for its 170 million U.S. users due to a newly enacted ban over concerns of potential misuse of data by Chinese authorities.

Waltz stated that Trump is working to “save TikTok” and hinted at the possibility of establishing “firewalls” to safeguard U.S. data. Additionally, TikTok noted in a message to users that Trump had promised a likely 90-day reprieve once he assumes office on Monday. Waltz told CBS News that this extension would allow TikTok to address key issues and evaluate potential buyers.

Despite Waltz’s remarks, Republican leaders in Congress appear divided on the matter. House Speaker Mike Johnson expressed skepticism about continued Chinese ownership, advocating instead for TikTok’s parent company, ByteDance, to sell the app entirely. “It’s not the platform… It’s the Chinese Communist Party,” Johnson emphasized during an NBC “Meet the Press” interview.

Other Republican lawmakers, including Senators Tom Cotton and Pete Ricketts, strongly oppose any extension of TikTok’s ban. In a joint statement, they argued that there is “no legal basis for any kind of ‘extension’ of (the ban’s) effective date.”

The debate highlights ongoing tensions over TikTok’s ownership and data privacy concerns, with the future of the platform’s U.S. operations hanging in the balance.

 

China Announces Crackdown on Illegal Data Handling

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China’s state planner announced plans to intensify efforts to combat illegal practices related to data acquisition, sale, and provision, through newly published regulations aimed at bolstering data circulation security. The authorities are targeting “black and grey industries” involved in the illegal handling of data, with a strong focus on preventing misuse and ensuring the safe and secure flow of data.

The regulations emphasize the importance of tightening data security risk monitoring, particularly in critical industries and sectors. The Chinese government aims to address systemic and large-scale data security risks, ensuring national security and social stability in an increasingly digital world.

The move is part of China’s broader effort to strengthen governance over data use and enhance oversight in response to rising concerns about data privacy and protection.