Perplexity AI seeks to merge with TikTok US: report

The AI-assisted search engine startup, Perplexity AI wants to merge with the short-video social media platform, TikTok, in the United States, where that company is facing certain ban unless it severs ties with its Chinese parent, ByteDance.

Perplexity AI is reported to have submitted a bid to ByteDance, on Saturday, proposing its merger with TikTok US. 

Perplexity AI in its merger bid has proposed a new merged structure that would allow most of ByteDance’s existing investors to retain their equity holdings while shifting operations to Perplexity AI, reports citing sources close to the development as saying.

The merged entity will have Perplexity, TikTok US and some new investors. However, any potential transaction, even if approved, will take months to complete.

The merger proposal comes a day before the TikTok ban comes into effect on Sunday.

However, President-elect Donald Trump has offered a 90-day reprieve for TikTok to transform itself into a full US company.

A TikTok video, posted on Friday, also showed CEO Shou Zi Chew as thanking President Trump for his commitment to finding a solution that would keep TikTok available in the US.

TikTok US has a current valuation of around $50 billion, against Perplexity’s latest valuation of about $9 billion. Any merger deal would have TikTok as the pivot. Also, ByteDance is in no mood to sell TikTok US, although it may consider a merger, but on its terms. 

Perplexity AI is backed by the likes of Amazon’s Jeff Bezos Shopify CEO Tobi Lutke, NVIDIA and Institutional Venture Partners (IVP) and is widely seen as a potential alternative to Google’s data-based search.

The startup’s co-founder Arvind Srinivas has recently been looking for talent to grow in India.

Perplexity AI was jointly founded by Srinivas, Denis Yarats, Johnny Ho, and Andy Konwinski, in August 2022. It has attracted attention worldwide, and has over a million users in India.