Perplexity AI and TikTok offer U.S. a stake in data control merger
Perplexity AI proposes a merger with TikTok, with the U.S. government owning up to 50% of the shares. Through this potential merger, the companies aim 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 U.S. government could own up to half the shares. This initiative responds to threats regarding the potential withdrawal of the Chinese company from the U.S. market.
An application sparking much controversy
TikTok is a popular short video application that raises controversies related to data management. In January, the application disappeared from the U.S. 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, which attracted the attention of investors. 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 allow TikTok to continue operating in the United States temporarily and suggested that an American investor could acquire the company and then sell half of its shares to the U.S. government. The final decision regarding the application's fate in the U.S. is expected within the next month.
