Perplexity AI and TikTok propose merger to ease US tensions
Perplexity AI proposes a merger with TikTok, allowing the US government to own up to 50% of the shares. The potential merger could enable the companies to combine their resources and reach, while ensuring user data control and security in accordance with American regulations.
Perplexity AI has suggested collaborating with TikTok, which would create a new company in which the US government could own up to half of the shares. This initiative responds to concerns about the potential withdrawal of the Chinese company from the US market.
An application sparking much controversy
TikTok is a popular short video application that has raised controversies related to data management. In January, it was removed from the US market due to data security concerns, but it returned within a few hours after President Donald Trump intervened.
Perplexity AI's proposal involves setting up a new American holding company called NewCo. ByteDance would contribute to TikTok U.S., excluding the recommendation algorithm, in exchange for shares in the new company. The funds for the merger would come from new external capital providers.
Perplexity AI ended 2024 with a valuation of approximately £6.9 billion, which attracted the attention of investors. The new structure would allow most of ByteDance's current investors to retain their shares and also increase the video presence in Perplexity.
30 days for decisions
President Trump decided to temporarily allow TikTok to continue operating in the United States while also indicating the possibility that an American investor could acquire the company and then sell half of their shares to the US government. The final decision regarding the fate of the application in the US is expected to be made within the next month.
