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US search engine Perplexity AI proposes merger with TikTok

Reuters |
Jan 19, 2025 11:53 AM IST

Perplexity AI proposed a merger with TikTok U.S. as the platform faces a ban unless it severs ties with ByteDanc

U.S. search engine startup Perplexity AI submitted a bid on Saturday to TikTok's Chinese parent ByteDance for Perplexity to merge with TikTok U.S., a source familiar with the company's plans told Reuters.

The Chinese parent company of TikTok, ByteDance, received an offer on Saturday from the U.S. search engine startup Perplexity AI to combine with TikTok U.S., a source familiar with the business's intentions told Reuters.(REUTERS/Dado Ruvic)
The Chinese parent company of TikTok, ByteDance, received an offer on Saturday from the U.S. search engine startup Perplexity AI to combine with TikTok U.S., a source familiar with the business's intentions told Reuters.(REUTERS/Dado Ruvic)

TikTok faces a U.S. ban starting on Sunday if it does not cut ties with ByteDance, although President-elect Donald Trump said on Saturday he would likely give the short-video social-media platform a 90-day reprieve on Monday.

CNBC first reported the offer.

Perplexity would merge with TikTok U.S. and create a new entity by combining the merged company with New Capital Partners, the person said.

Also read: What is Xiaohongshu, Chinese app topping US download charts after TikTok's exit?

The new structure proposed by Perplexity would allow for most of ByteDance’s existing investors to retain their equity stakes and would bring more video to Perplexity, the source said, requesting anonymity because the matter is confidential.

TikTok did not immediately respond to requests for comment. New Capital Partners could not be immediately reached.

Perplexity AI believes its bid may succeed since the proposal is a merger rather than a sale, the person said.

Perplexity AI's search tools enable users to get fast answers to questions, with sources and citations. It is powered by large language models that can sum up and generate information, from OpenAI to Meta Platforms' open-source model Llama.

Also read: As Joe Biden prepares to demit office, here's how US stocks performed under him

TikTok, which has captivated nearly half of all Americans, powered small businesses and shaped online culture, said on Friday it will go dark in the U.S. on Sunday unless President Joe Biden's administration provides assurances to companies such as Apple and Google that they will not face enforcement actions when a ban takes effect.

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