Perplexity AI reportedly modified a proposed merger offer for ByteDance’s TikTok US assets, with the nation’s government to take a 50 per cent stake after the short-form video platform is listed with a valuation of at least $300 billion.
CNBC noted the upgraded merge deal would not include TikTok’s core recommendation algorithm, which ByteDance would retain, eliminating a key factor for the Chinese government likely blocking a divestiture.
The proposal would combine TikTok and Perplexity AI, with ByteDance selling its US platform in return for its existing shareholders receiving equity in a new US holding company, CNBC wrote.
Meanwhile, Perplexity AI would be acquired by the new entity in exchange for its investors receiving a stake.
In 2024, Radio Free Mobile founder Richard Windsor argued China was unlikely to approve an merger, as it would not allow critical algorithms to be in the hands of non-domestic companies.
ByteDance is scrambling to work out a deal to keep TikTok operating in the US, after President Donald Trump giving it 75 days to line up a local partner and suggesting a joint venture could be established in which the nation would hold a 50 per cent stake.
ByteDance board member William Ford told Caixin Global last week the company hoped to line up an alternative to selling its TikTok assets.
US legislation passed in early 2024 banned the service unless a local buyer was found. The ban was due to go into effect on 19 January.
Perplexity AI is an AI-powered search engine start-up established in 2024, raising $500 million in December that year from investors including SoftBank Group and Nvidia.
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