TikTok Deal Proposal: US Government Ownership Stake Considered
Perplexity AI has proposed a revised deal to TikTok's parent company, ByteDance, that involves the US government owning up to 50% of a new entity merging Perplexity with TikTok's US operations.
The proposal, submitted to ByteDance last week, seeks to address concerns raised by the Trump administration. ByteDance had previously rejected an initial plan presented on January 18.
Under the revised proposal, the US government would gain ownership up to 50% of the new entity upon an initial public offering (IPO) of at least $300 billion. The government would not have voting rights or a seat on the new company's board.
ByteDance would retain partial ownership of TikTok but must relinquish full US board control. China-based ByteDance would contribute TikTok's US business without its proprietary algorithm.
The proposal echoes comments made by Treasury Secretary Steven Mnuchin on Fox News. Mnuchin suggested that a new investor could "dilute" ByteDance's ownership and comply with US law. He stressed the need to disconnect TikTok's technology from China.
President Donald Trump has indicated that he expects a deal to be reached within 30 days. Several investors, including Oracle, are reportedly interested in acquiring TikTok.
Congress enacted a bipartisan law last year banning TikTok unless ByteDance severed ties. The Supreme Court upheld the law, but Trump later issued an executive order suspending enforcement for 75 days.
TikTok faced a brief shutdown in the US but resumed operations after Trump's postponement. CEO Shou Chew attended Trump's inauguration, highlighting the company's efforts to foster ties with the administration.
Concerns over TikTok's potential national security risks and user data handling prompted Congress' ban. However, the US government has yet to provide concrete evidence of TikTok sharing user data or manipulating its algorithm at the behest of Chinese authorities.