NAIROBI, Kenya- In a high-stakes game of tech and geopolitics, U.S.-based search engine startup Perplexity AI has revised its ambitious merger proposal to ByteDance, the Chinese parent company of TikTok.
The pitch? A new U.S. holding company named “NewCo,” where the U.S. government could potentially hold up to 50pc ownership after a future IPO.
The move could redefine TikTok’s presence in the U.S. market and address lingering national security concerns.
According to sources, Perplexity’s proposal outlines the creation of NewCo, which would oversee TikTok U.S. operations.
ByteDance would sell TikTok’s U.S. assets to investors, enabling TikTok’s current investors to gain equity in the new structure.
Perplexity AI, backed by Jeff Bezos, has updated its proposal to merge with TikTok’s U.S. operations. The new plan? Give the U.S. government a 50% stake in the merged entity via a $300B IPO! 🇺🇸 No voting rights, but ByteDance stays connected to TikTok without its secret sauce…
Crucially, TikTok’s core recommendation algorithm—widely regarded as its secret sauce—would remain under ByteDance’s control.
The U.S. government would hold up to half of the newly formed entity—following an IPO projected at a valuation of at least $300 billion.
Perplexity AI has offered to merge with the new holding company, provided its own investors receive a share of the NewCo equity.
This strategic move positions Perplexity not just as an architect of the merger but also as a potential key player in the revamped TikTok U.S. ecosystem.
Earlier reports revealed that Perplexity’s initial proposal included a merger with New Capital Partners. However, this revised approach seems to prioritize collaboration over outright acquisition, perhaps to appeal to both ByteDance and U.S. regulators.
The timing of this proposal couldn’t be more critical. TikTok U.S. faced a shutdown last week due to a national security law, only to see its services restored after President Donald Trump intervened, signaling an interest in the app’s future.
Trump recently shared that discussions are underway with multiple stakeholders and promised a decision within 30 days.
ByteDance and the White House have remained tight-lipped on the revised proposal, leaving many to speculate about the potential impact of such a merger on TikTok’s 150 million U.S.-based users.
Perplexity AI’s proposal offers an intriguing compromise between U.S. national security interests and ByteDance’s desire to maintain some level of control over TikTok.
By excluding the recommendation algorithm from the deal, ByteDance safeguards its competitive edge while addressing American regulatory concerns.
This revised merger proposal by Perplexity AI is a potential blueprint for resolving the complex intersection of technology, geopolitics, and user trust. Whether it succeeds or not, the implications of such a merger could ripple across the tech landscape for years to come.
