Perplexity Makes a New Play for TikTok Acquisition
In a bold move that could reshape the future of TikTok in the United States, Perplexity AI has submitted a revised proposal to merge with TikTok, granting the U.S. government up to 50% ownership of the new entity. The Associated Press first broke the story, and sources have since confirmed its accuracy to TechCrunch.
The Proposal in Detail
Perplexity AI, known for its cutting-edge AI search engine, had initially proposed forming a new company that would merge Perplexity, TikTok’s U.S. operations, and additional equity investors. The updated proposal introduces a significant change: the U.S. government would receive its stake following an initial public offering (IPO) of at least $300 million. ByteDance, TikTok’s Chinese parent company, would retain partial ownership under the revised arrangement.
The changes reportedly reflect feedback from the Trump administration, which has been scrutinizing TikTok over national security concerns tied to its Chinese ownership. President Donald Trump has expressed a desire for the U.S. to gain financial benefits from any sale or restructuring of TikTok, mentioning a preference for the government to secure a 50% stake. However, it remains unclear if Trump’s comments were directed specifically at the government or U.S.-based investors.
TikTok’s Legal and Operational Challenges
TikTok has faced ongoing turbulence in the United States. Over the past weekend, the app experienced a temporary shutdown due to legal pressures enforcing ByteDance to divest from its U.S. operations. The platform resumed operations after Trump announced he would extend the sale deadline via an executive order, buying TikTok more time to finalize a deal.
The president’s emphasis on securing financial benefits for the U.S. has added a layer of complexity to the negotiations. The latest proposal from Perplexity AI appears to directly address these concerns, aiming to create a compromise that satisfies both economic and national security priorities.
Competition for TikTok
Adding to the drama, reports earlier this week suggested the White House is in talks with Oracle, a U.S. tech giant that already supports TikTok’s U.S. traffic infrastructure. Oracle’s potential involvement as a buyer or partner has sparked speculation about its role in TikTok’s future. When asked about Oracle, Trump acknowledged speaking with “many people about TikTok” but denied having direct conversations with Oracle representatives.
What Lies Ahead?
Perplexity AI’s revised bid demonstrates the high stakes of TikTok’s U.S. operations and the broader implications for international tech companies navigating U.S. scrutiny. If approved, the deal could set a precedent for government involvement in tech mergers, particularly when national security is at play. The focus now shifts to whether the Trump administration will accept the proposal or if other bidders, such as Oracle, will emerge as frontrunners in the ongoing negotiations.
