What has Perplexity AI proposed to the US government to buy TikTok?

In a groundbreaking proposal, artificial intelligence startup Perplexity AI has suggested merging with TikTok’s US operations, allowing the United States government to own up to 50% of the newly formed entity.

The plan aims to address national security concerns while preserving TikTok's presence in the US, according to a source familiar with the matter mentioned in a report by CBS.

A New Framework for TikTok’s US Business

Perplexity AI’s proposal, submitted to ByteDance last week, revises an earlier plan to create a new structure for TikTok’s U.S. operations.


The updated proposal includes a provision for the U.S. government to own half of the entity once it goes public with an estimated valuation of at least $300 billion, as mentioned in the report by CBS.

The proposed government stake, however, would lack voting rights and exclude a seat on the company’s board.

ByteDance, TikTok's parent company, would retain a minority stake but would need to cede full control of TikTok's U.S. board.

The proprietary algorithm that powers TikTok's content recommendations would not be part of the merger, ensuring a separation of technology from ByteDance.

Addressing National Security Concerns

The proposal mirrors strategies previously suggested by former U.S. Treasury Secretary Steven Mnuchin, who advocated for diluting Chinese ownership of TikTok to comply with U.S. law.

Mnuchin emphasized the importance of disconnecting TikTok’s technology and data from China, a sentiment echoed by bipartisan lawmakers concerned about potential risks tied to ByteDance’s ownership.

Perplexity AI’s plan appears to balance these concerns by limiting Chinese influence while maintaining the app's operations in the US.

The proposal also provides a path for ByteDance investors to retain some involvement, potentially making the deal more palatable to all parties.

Investors Show Growing Interest in TikTok

Perplexity AI is not the only entity eyeing a stake in TikTok. President Donald Trump recently stated that numerous “substantial” investors are in discussions about the platform.

He expressed confidence that a deal could be finalized within 30 days.

During a flight aboard Air Force One, Trump denied speaking to Oracle co-founder Larry Ellison about TikTok, despite reports suggesting Oracle’s interest in acquiring TikTok’s global operations alongside other investors.

Trump noted the widespread interest in TikTok and emphasized that any deal must ensure significant benefits for the United States.

FAQs

Is Perplexity AI better than ChatGPT?

Perplexity AI and ChatGPT are both advanced language models with distinct strengths. Perplexity AI excels in research and fact-checking, whereas ChatGPT is better suited for creative tasks and interactive conversations.

Is Perplexity free to use?

Perplexity AI offers a free version with basic search functionality, as well as a Pro version with enhanced features available through a subscription.