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Perplexity AI makes bid to merge with TikTok US
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Perplexity AI, a rapidly growing artificial intelligence search engine startup, has submitted a merger proposal to ByteDance aimed at combining Perplexity with TikTok’s U.S. operations.

Key details of the proposal: Perplexity AI’s bid envisions creating a new merged entity that would combine Perplexity, TikTok U.S., and new capital partners, while allowing ByteDance’s existing investors to maintain their equity positions.

  • The proposed deal structure is specifically designed as a merger rather than a sale, which Perplexity believes could make it more appealing to ByteDance
  • Sources familiar with the matter suggest the deal could be valued at “well north of $50 billion”
  • The final valuation will depend on how many existing ByteDance shareholders choose to remain invested versus cashing out

Company background: Perplexity AI has experienced remarkable growth in 2024, with its valuation surging from $500 million to approximately $9 billion.

  • The company competes directly with OpenAI and Google in the AI search market
  • Perplexity has faced some controversy over plagiarism accusations
  • The startup’s rapid valuation growth reflects strong investor interest in generative AI applications

Regulatory context: The proposed merger comes at a critical time as TikTok faces regulatory pressure in the United States.

  • TikTok has warned it may “go dark” in the U.S. on Sunday without assurances from the Biden administration regarding service providers
  • President-elect Donald Trump has indicated he would likely extend TikTok’s deadline by 90 days after taking office
  • TikTok CEO Shou Zi Chew publicly thanked Trump for his willingness to work toward a solution

Market implications: The potential merger highlights the evolving landscape of AI-powered search and social media platforms.

  • AI-assisted search is increasingly seen as a potential threat to Google’s market dominance
  • OpenAI has already entered the search market with SearchGPT
  • Google has responded by introducing “AI Overviews” in its search results

Looking ahead: While the proposed merger represents a bold strategic move, significant hurdles remain before any deal could be completed. The complex intersection of technology, national security concerns, and regulatory requirements will likely require careful navigation by all parties involved. The outcome of this proposal could reshape the competitive dynamics in both the social media and AI-powered search markets.

Perplexity AI makes a bid to merge with TikTok U.S.

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