Perplexity AI Proposes Merger with TikTok Amid U.S. Ban Threat

U.S.-based search engine startup Perplexity AI has made a proposal to merge with TikTok U.S., seeking to address the looming threat of a nationwide ban on the popular video-sharing platform. The bid, submitted to TikTok’s parent company ByteDance, was confirmed by a source familiar with the matter.

The proposed merger aims to create a new entity that combines Perplexity AI, TikTok U.S., and New Capital Partners, a private equity firm. The structure would allow ByteDance’s existing investors to retain their stakes while enhancing Perplexity AI’s video capabilities.

Details of the Proposal

• Merger, Not Sale: Unlike previous acquisition attempts, this proposal focuses on a merger, which Perplexity AI believes could have a better chance of success.
• New Entity Creation: The combined entity would integrate Perplexity AI’s cutting-edge search tools with TikTok’s massive video-sharing ecosystem.
• Investor Retention: ByteDance’s current investors would retain their equity stakes in the new structure, minimizing disruption.

The merger, if approved, could help TikTok navigate its legal challenges while strengthening Perplexity AI’s position in the tech industry.

TikTok’s Response to the Ban

TikTok is facing a potential U.S. ban starting Sunday unless it severs ties with ByteDance. However, President-elect Joe Biden may grant a 90-day reprieve, giving the platform time to address security concerns. TikTok announced on Friday that it will go dark in the U.S. unless Apple and Google receive assurances from the Biden administration that they won’t face enforcement actions related to the ban.

Perplexity AI’s Unique Edge

Perplexity AI, powered by advanced large language models like OpenAI and Meta’s open-source Llama, specializes in providing fast, source-cited answers to user queries. By merging with TikTok, the company aims to integrate video content into its offerings, further enriching user experiences.

Current Status

While TikTok and New Capital Partners have not commented on the bid, the move could mark a significant shift in the platform’s U.S. operations. Perplexity AI’s innovative approach and TikTok’s vast user base could result in a mutually beneficial partnership, provided regulatory hurdles are cleared.