Perplexity AI
Perplexity AI has officially taken a significant step toward acquiring TikTok. On Saturday, the company submitted a proposal to TikTok’s parent company ByteDance to form a new merged entity that would combine Perplexity AI, TikTok’s U.S. operations, and additional capital partners, CNBC reports.
The proposed structure would allow many of ByteDance’s existing investors to retain their equity stakes while Perplexity’s platform would be enhanced with an increase in video content, according to an anonymous source familiar with the talks, who revealed this information due to the sensitive nature of the deal.
Perplexity AI, an AI-powered search engine that competes with industry giants like OpenAI and Google, started 2024 with a valuation of around $500 million. By the end of the year, its valuation grew to $9 billion, driven by growing investor interest amid rising demand for generative AI technologies — despite facing plagiarism allegations.
Investors see AI-assisted search as a serious threat to Google’s dominance, as it could change the way users access information online. OpenAI entered the search market last year with its SearchGPT tool, while Google responded by integrating “AI overviews” into its search results, providing summarized answers at the top of pages.
Although the Perplexity-ByteDance deal is still in its early stages and could take months to finalize, TikTok is facing an imminent deadline in the US. TikTok has warned that it will “go dark” on Sunday unless the Biden administration ensures that Apple, Google and other service providers will not face penalties for hosting the app. However, President-elect Donald Trump told NBC News on Saturday that he would “most likely” give TikTok a 90-day extension to negotiate a solution after his inauguration on Monday.
In a TikTok video posted Friday, TikTok CEO Shu Zi Chew expressed optimism and thanked President Trump for his willingness to collaborate on a solution to keep the app operating in the U.S.
ByteDance has publicly stated it will not sell TikTok in the U.S., which is in line with Perplexity AI’s strategy. By proposing a merger instead of a sale, Perplexity believes its bid has a strong chance of succeeding, the source told CNBC.
The source also estimated the deal would be valued at more than $50 billion, but said the final figure would depend on who existing ByteDance shareholders want to stay in and who wants to exit.
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