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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.

AI-Driven Shopping Boosts Online Holiday Sales, Salesforce Data Shows

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AI-powered chatbots and other digital tools significantly contributed to a nearly 4% year-over-year increase in U.S. online sales during the 2024 holiday season, according to Salesforce data. Retailers harnessed AI-driven customer service features such as conversational chatbots, targeted promotions, and personalized product recommendations to attract shoppers seeking trending products and the best deals.

From November 1 to December 31, U.S. online sales reached $282 billion, up from $272 billion in 2023, surpassing Salesforce’s initial 2% growth forecast, despite more restrained discounts. AI-based chatbots saw a 42% increase in usage compared to the previous year, with Salesforce analyzing data from 1.6 trillion page views to reach this conclusion.

Globally, AI-driven sales grew to $229 billion, compared to $199 billion in 2023. While AI was a major growth driver, a concerning 28% product return rate, up from 20% in 2023, was highlighted as a potential drag on profit margins for retailers, according to Caila Schwartz, director of Consumer Insights at Salesforce.

“Retailers who have embraced AI and agents are already seeing the benefits, but these tools will be even more critical in the new year as retailers aim to minimize revenue losses on returns and re-engage with shoppers,” Schwartz said.

The report also noted that mobile shopping peaked on Christmas Day, with 79% of all orders made through smartphones during the holiday season. Social media platforms like TikTok Shop and Instagram helped drive 14% of all traffic to e-commerce sites.

 

Meta Scraps U.S. Fact-Checking Program Ahead of Trump Administration’s Return

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Meta Platforms (META.O) has announced the discontinuation of its fact-checking program in the U.S. and a reduction in its restrictions on controversial topics such as immigration and gender identity. This move, which represents a significant shift in Meta’s approach to political content, comes as the company adjusts to the expected return of President-elect Donald Trump to office.

The decision is seen as a response to conservative criticism, and CEO Mark Zuckerberg has emphasized the importance of returning to the company’s roots in promoting free expression. Meta will instead adopt a “community notes” system, which allows users to contribute to content moderation, similar to the model used by Elon Musk’s X platform. In addition, Meta will scale back its proactive efforts to detect and remove rule-breaking content, focusing its automated systems on high-severity violations like terrorism, child exploitation, and fraud.

Meta’s overhaul of its content moderation approach includes the relocation of teams responsible for writing and reviewing content policies from California to Texas and other U.S. locations. These changes are a result of more than a year of discussions within the company, although the specific details of the relocation remain unclear.

The decision to end the fact-checking program, initiated in 2016, has taken its partner organizations by surprise. Critics argue that the shift may facilitate the spread of disinformation, with some claiming it is politically motivated. Meta’s independent Oversight Board expressed support for the move, while fact-checkers and other journalistic organizations expressed concerns about the impact on credibility.

While these changes are initially limited to the U.S. market, Meta has not yet indicated whether similar adjustments will be made in other regions like the European Union, which has stricter tech regulations under its Digital Services Act.