Perplexity AI Bids for TikTok Merger, Creating a New Entity
Perplexity AI has submitted a bid to ByteDance Ltd., TikTok's parent company, to merge with its US operations and form a new entity, according to a source familiar with the matter.
Structure Allows for Investor Retention
The proposed structure would enable most of ByteDance's existing investors to maintain their stakes. Perplexity and TikTok representatives declined to comment.
Challenges in Finding a TikTok Buyer
Finding an acquirer for TikTok remains a challenge due to ByteDance's resistance to a sale and the app's estimated value of up to $50 billion. Potential buyers include wealthy individuals such as Elon Musk (whom the Chinese government is considering) or investor groups like Frank McCourt and Kevin O'Leary.
Perplexity AI's Valuation Surge
Perplexity AI, an AI search engine startup, had a valuation of approximately $500 million in 2024, rising to $9 billion by year-end.
Supreme Court Ruling and Biden's Response
The Supreme Court upheld a law that would shutter TikTok in the US due to national security concerns, with a deadline of Sunday. President Biden stated he would not enforce the ban and leave the decision to his successor.
Deadline for ByteDance to Find a Buyer
TikTok's parent company must find a buyer or risk a shutdown on Sunday. TikTok has indicated it will "go dark" in the US unless the Biden administration provides written assurance to service providers.
Potential Extension from Trump
President-elect Trump has stated he may grant a 90-day extension if a genuine purchase negotiation is ongoing. Inauguration day is set for Monday, January 20th.