Perplexity AI wants to merge with TikTok US

According to a Jan. 19 report by CNBC, Perplexity AI just made a massive bid to merge with TikTok’s US operations. The AI startup, which grew from a $500 million valuation at the start of 2024 to $9 billion by the end of it, submitted its proposal to ByteDance, TikTok’s parent company.

The report said that the plan is to create a new mega-entity combining Perplexity, TikTok US, and multiple other financial backers.

Per the plan, ByteDance’s existing investors would retain their stakes, while Perplexity would gain TikTok’s unmatched video platform. “The deal could bring more video integration to Perplexity while keeping ByteDance’s shareholders happy,” said CNBC.

ByteDance’s refusal to outright sell TikTok US makes this merger proposal one of the few realistic options on the table. The report says the potential price tag for the deal is north of $50 billion, depending on which ByteDance investors decide to cash out and which stay on board.

TikTok’s US survival

Without assurances from the Biden administration that Apple, Google, and Oracle won’t face penalties for supporting TikTok, the app would go dark tomorrow. But Biden has remained silent.

However, President-elect Donald Trump told NBC News that he’s “most likely” giving TikTok 90 extra days to figure things out once he’s sworn in on Monday.

TikTok’s CEO, Shou Zi Chew, acknowledged Trump’s decision in a video posted Friday, saying, “I want to thank President Trump for his commitment to work with us to find a solution that keeps TikTok available in the United States.”

The US government’s crackdown on TikTok allegedly comes from fears that its Chinese ownership is a major national security threat. Congressmen and intelligence officials have been warning us for months that the Chinese Communist Party could exploit TikTok for ‘espionage” or “propaganda.”

ByteDance has repeatedly denied these allegations, insisting that the app operates independently of Beijing. But in March, Congress passed a law requiring ByteDance to either sell TikTok or face a nationwide ban.

Interestingly, during his first term, Trump signed an executive order to ban TikTok, but courts blocked it. But earlier this year, he opposed Congress’s divest-or-ban measure, arguing that it unfairly benefited Facebook, which had banned him for two years.

Now, as he prepares to take his Oval back, Trump has filled his administration with staunch China hawks. Among them is Mike Waltz, a Florida congressman and former Green Beret, who will serve as National Security Adviser. Waltz has vowed to keep TikTok operational but only under strict measures.

Rush Doshi, a former Biden administration China expert, took to X (formerly Twitter) to call out ByteDance, writing, “TikTok had 268 days to sell itself so it wasn’t operated by China. That would have solved everything. But they didn’t even try. China wouldn’t let them.” He added that any fallout from a shutdown would be “on them.”

Now ByteDance’s resistance to divestment and the tight timeline place the spotlight on Perplexity’s merger bid as a possible solution.

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