Perplexity AI submits bid to merge with TikTok U.S.
Created on January 20|Last edited on January 20
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Perplexity AI, the rapidly growing AI search engine startup, has reportedly submitted a bid to merge with TikTok U.S., according to multiple reports. The proposal, made to TikTok’s parent company ByteDance, aims to create a new entity that combines Perplexity, TikTok U.S., and new equity partners. The merger would allow most of ByteDance’s existing investors to retain their stakes while potentially bringing TikTok’s popular video content into Perplexity’s AI-powered search ecosystem.
TikTok’s future in the U.S. now rests on negotiations that could spill into the incoming Trump administration, with President-elect Donald Trump indicating he would “most likely” grant TikTok a 90-day extension to finalize a solution.
Perplexity’s meteoric rise in generative AI
Founded to innovate in AI-assisted search, Perplexity AI has seen extraordinary growth over the past year, fueled by the generative AI boom. Beginning 2024 with a $500 million valuation, the company ended the year valued at $9 billion after securing major investor interest. Despite its rapid ascent, Perplexity has faced controversies, including plagiarism accusations, as it competes with industry giants like OpenAI and Google.
Perplexity’s bid comes as AI search increasingly challenges traditional search models, forcing companies like Google to adapt. Perplexity’s ability to integrate TikTok’s vast video library could mark a significant shift, blending short-form video content with its AI-driven search capabilities.
TikTok's uncertain future and ByteDance's stance
ByteDance, which owns TikTok, has publicly stated it has no intention of selling TikTok U.S., complicating efforts by other potential buyers. However, Perplexity’s proposal is framed as a merger rather than an outright sale, which could make it more appealing to ByteDance. The deal’s valuation is expected to exceed $50 billion, though the final figure will depend on which ByteDance investors choose to remain in the new entity.
TikTok has been fighting for its survival in the U.S. amid national security concerns and bipartisan pressure to sever ties with ByteDance. If the app is banned, TikTok has stated it will “go dark” in the U.S. on January 19 unless the Biden administration provides assurances against enforcement actions on hosting services like Apple and Google.
President-elect Donald Trump’s potential 90-day extension could offer TikTok more time to finalize a solution, though the situation remains volatile. TikTok CEO Shou Zi Chew thanked Trump for his willingness to seek a resolution in a video posted on Friday, expressing hope for a favorable outcome.
A potential game-changer for Perplexity
If successful, Perplexity’s merger with TikTok U.S. could significantly reshape the AI search and social media landscape. By integrating TikTok’s video-centric platform with its AI-driven tools, Perplexity could offer a unique combination of search and content discovery. This could elevate Perplexity's position in a competitive market dominated by OpenAI and Google.
With TikTok’s future in the U.S. hanging in the balance, the coming weeks could be pivotal for both companies and the broader tech industry.
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