Perplexity AI and TikTok propose a US share ownership plan
Perplexity AI proposes a merger with TikTok, with the US government owning up to 50% of the shares. This potential merger would allow the companies to leverage their resources and reach while ensuring user data control and security in compliance with American regulations.
Perplexity AI has proposed partnering with TikTok, which would create a new company in which the US government could own up to half the shares. This initiative is a response to threats regarding 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, the application disappeared from the US market due to data security concerns, but President Donald Trump intervened, and it returned within a few hours.
Perplexity AI's proposal involves establishing a new American holding company called NewCo. In exchange for shares in the new company, ByteDance would contribute to TikTok U.S., excluding the recommendation algorithm. The funds for the merger would come from new external capital providers.
Perplexity AI ended 2024 with a valuation of approximately $9 billion CAD, attracting investors' attention. 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 its 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.
