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Perplexity AI proposes merger with TikTok US

Perplexity AI submitted a merger bid for TikTok US, aiming to integrate video into its AI search engine before the ban deadline.

With the United States considering a ban on TikTok, Perplexity AI has stepped forward as the latest bidder, aiming to offer the popular video app a fresh corporate home.

According to reports from CNBC, Perplexity AI, led by CEO Aravind Srinivas, has formally submitted a proposal to merge with TikTok’s US operations. Sources close to the matter confirmed the bid to TechCrunch and shared details about the proposed merger.

A merger, not a sale

The plan put forth by Perplexity AI involves creating a new entity that combines Perplexity, TikTok US, and new equity partners. ByteDance, TikTok’s parent company, would allow most current investors to retain their equity under the new structure.

By merging with TikTok, Perplexity AI seeks to integrate the platformโ€™s vast library of video content into its AI-powered search engine. This move could transform how users interact with search results, adding a more dynamic and engaging visual element to AI-driven searches.

Unlike traditional sale bids, Perplexityโ€™s merger proposal might appeal to ByteDance, which has resisted selling TikTok outright. This alternative approach could help address ByteDanceโ€™s concerns about losing control over the popular app while complying with US government demands.

A race against time

The urgency stems from a looming deadline. A law requiring ByteDance to sell TikTok or face a ban in the US is set to take effect on Sunday, January 19. This marks the final day of President Joe Bidenโ€™s term in office. While Bidenโ€™s administration has indicated it will leave the enforcement of the ban to the incoming government, TikTok faces an uncertain future.

President-elect Donald Trump, who is scheduled to take office on Monday, has stated he is โ€œmost likelyโ€ to grant TikTok a 90-day extension. In response, TikTok CEO Shou Zi Chew posted a video thanking Trump for his support.

However, TikTok officials maintain that if the Biden administration does not provide clear assurances about the ban’s non-enforcement, they will be forced to suspend operations in the US by Sunday.

A crowded field of interest

While several buyers have expressed interest in acquiring TikTok, ByteDance has consistently stated its intention to retain ownership of the app. Recently, rumours about a possible acquisition by Elon Musk were dismissed by ByteDance as โ€œpure fiction.โ€

Perplexity AI hopes its merger proposal can break through these barriers. By suggesting a partnership rather than an outright sale, Perplexity aims to meet US regulatory requirements while preserving ByteDanceโ€™s stake in the platform.

As the deadline approaches, all eyes remain on TikTok and its potential suitors. Whether Perplexity AIโ€™s innovative proposal will be enough to secure the appโ€™s future in the US remains to be seen.

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