Perplexity AI proposes TikTok merger with 50pc US govt ownership stake

Perplexity AI, the US search engine startup, has revised the merger proposal it had earlier presented to TikTok’s parent ByteDance to form a new form combining Perplexity and TikTok United States.

This has been claimed by a person familiar with the proposal.

According to him, the proposal calls for the US government to retain upto 50 per cent of the new firm upon a future initial public offering (IPO).

He said that the Perplexity document that was shared with ByteDance and new investors has proposed formation of a new US holding firm named “NewCo”.

He continued, under the proposal, ByteDance would sell TikTok US to the investors that will give the app’s existing investors equity in the firm. The said proposal would also exclude the short-form video-hosting service’s core recommendation algorithm that ByteDance would keep.

It is proposed that the US government would hold upto half of the new structure once it goes through an IPO having a valuation of at least $300 billion.

The source further revealed that the Perplexity AI would also offer to acquired the holding company if its own investors received a distribution of the NewCo equity.

The news of the proposal was first reported by CNBC.

Last week, TikTok services were restored after US President Donald Trump said he would revive its access in the country after returning to power.