Photo illustration of the TikTok app logo on a smartphone screen displayed with the American flag.
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Perplexity AI on Sunday amended the merger proposal it submitted to TikTok’s parent company ByteDance. The proposal would create a new company that would combine Perplexity and TikTok US, and would also allow the US government to own up to 50% of the new company’s stock in the event of a future IPO, CNBC revealed. .
The proposal, seen by CNBC, was shared with ByteDance and potential new investors and details the creation of a new U.S. holding company, NewCo.
The document proposes that ByteDance will contribute to TikTok US, except for its core recommendation algorithm, in exchange for the company’s existing investors receiving stock in the new company. Perplexity AI will be offering itself in exchange for its investors receiving distributions of NewCo stock.
According to the proposal document, the merger funding will be raised from “a new (mutually agreed upon) third-party capital provider” and will “pay a one-time dividend to ByteDance investors in exchange for simplification.” Capital will be provided for this purpose. governance” and support the growth of new organizations.
Perplexity AI is an artificial intelligence search engine startup that competes with OpenAI. googlestarted 2024 with a valuation of about $500 million and ended the year with a valuation of about $9 billion after increased investor interest amid the generative AI boom and controversy over plagiarism accusations. Investors view AI-assisted search as one of Google’s key risks because it could change the way consumers access information online.
OpenAI, which started the generative AI boom in late 2022 with ChatGPT, introduced a search engine called SearchGPT last year. Google then launched “AIOverviews” in search, allowing users to see a quick summary of answers at the top of results.
The proposed new structure would allow most of ByteDance’s existing investors to keep their shares and provide more video to Perplexity, a person familiar with the situation told CNBC earlier this month. told. And while ByteDance has publicly indicated it won’t sell TikTok US, that’s part of why Perplexity AI believes an acquisition is possible — because the deal is a merger rather than a sale. The source added:
The revised proposal would allow the U.S. government to own up to half of a new entity if the IPO is worth at least $300 billion, the people said.
The paper said the fair price is “well over $50 billion,” but the final numbers attached to the proposal will determine which of ByteDance’s existing shareholders want to remain part of the new company. , which will depend in part on which shareholders want to cash out. sauce.
A potential deal between Perplexity AI and ByteDance is likely to take months to complete, but President Donald Trump has so far temporarily reinstated TikTok in the United States, and U.S. stakeholders has indicated plans to acquire the company and then sell 50% of its shares to the US. government. “President Trump is committed to working with us to find a solution to keep TikTok available in the U.S.,” CEO Shou Tze Chiu said in a video posted to TikTok earlier this month. I would like to thank them for their commitment.”
Perplexity is one of several companies and individuals vying to acquire or merge with TikTok, reportedly including: microsoft, oracle And potentially Elon Musk. On Saturday, President Trump said he would likely make a decision on the app’s future in the United States within the next 30 days.
