In a bold move, artificial intelligence startup Perplexity AI has proposed a merger with ByteDance's TikTok US operations. As part of a revised plan, Perplexity AI has offered to allocate up to 50% ownership of the combined entity to the US government.
Under the proposal, the US government would receive stock in the new company once Perplexity AI achieves an initial public offering (IPO) valued at a minimum of $300 billion. However, these shares would be non-voting, meaning the government would hold 50% ownership without influencing TikTok's day-to-day operations or securing a seat on the board of the merged entity.
The proposed holding company, tentatively named "NewCo," would include investments from TikTok's current stakeholders. Perplexity AI has also expressed willingness to be acquired by NewCo, provided its investors receive a share of the equity.
This revised plan follows Perplexity AI's initial merger proposal, which ByteDance did not respond to. The updates were reportedly made after feedback from the Trump administration. Notably, even if the offer is accepted, the merged entity would not gain access to ByteDance's highly valued recommendation algorithm, a key driver behind TikTok's success as a social media platform.
Perplexity AI is not the only party interested in TikTok. Former President Donald Trump recently stated that "numerous people" have expressed interest in investing in the company, though he denied discussing the matter with Oracle CEO Larry Ellison. Both Oracle and Microsoft are reportedly in talks to negotiate a TikTok acquisition, potentially allowing ByteDance to retain a minority stake in the app.
The proposal comes amid ongoing legal and political developments. TikTok briefly went dark in the US on January 19 after the Supreme Court upheld a bipartisan law requiring ByteDance to sell the app to an American entity by that date or face a nationwide ban. The following day, Trump issued an executive order reversing the ban, granting TikTok an additional 75 days to sever ties with its Chinese parent company.
This merger proposal represents a significant development in the ongoing saga surrounding TikTok's future in the US, as stakeholders navigate complex regulatory and ownership challenges.
News Source: TechSpot
