Perplexity AI, a rising star in the US search engine startup scene, has reportedly submitted a bid to merge with TikTok US, the American arm of the popular short-video platform owned by ByteDance, based in China. The move comes at a critical time for TikTok, as it faces the looming threat of a US ban. If the ban proceeds, TikTok would be required to sever its ties with ByteDance, its Chinese parent company, by Sunday. This decision has sparked a flurry of activity as various stakeholders work to navigate the complex political and business environment surrounding the social media giant.
According to a source familiar with the situation, the merger would combine Perplexity AI with TikTok US to create a new entity. The combined company would also incorporate New Capital Partners, a financial investment group. This bold move could potentially provide a path for TikTok to maintain its operations in the US while distancing itself from its Chinese roots, which have been the focal point of national security concerns.
The United States has long expressed apprehension over TikTok’s data-sharing practices with the Chinese government, raising fears that American users’ data could be accessed by the Chinese government. As a result, TikTok has been under intense scrutiny from US lawmakers, and President-elect Donald Trump has threatened to enforce a ban unless ByteDance sells TikTok’s US operations or severs all ties with China.
However, just days before the deadline, President-elect Trump indicated that he would likely grant TikTok a 90-day reprieve, giving the company a temporary reprieve from the potential ban. This extension could give TikTok more time to explore strategic alternatives like the proposed merger with Perplexity AI, which would allow it to remain operational in the US while reducing its connection to ByteDance.
The Perplexity AI bid comes at a time of heightened tension and uncertainty for TikTok. If the deal goes through, it could reshape the future of both companies and could have significant implications for the tech industry in the US.
