Perplexity AI, a leading artificial intelligence search engine startup, has submitted a formal bid to ByteDance, TikTok’s parent company, to create a new merged entity combining Perplexity, TikTok U.S., and additional capital partners. Sources familiar with the matter revealed the proposal on Saturday, highlighting Perplexity’s intent to integrate AI innovation with TikTok’s extensive video platform.
The deal structure would allow ByteDance’s current investors to retain their stakes while introducing new capital partners. Perplexity, valued at approximately $9 billion by the end of 2024, has positioned itself as a key player in the generative AI boom, gaining investor interest despite controversies over plagiarism allegations. The startup’s AI-assisted search technology is seen as a potential disruptor to traditional search engines, including Google, which recently introduced its “AI Overviews” to compete in this space.
While ByteDance has resisted selling TikTok U.S., Perplexity’s proposal as a merger rather than a sale aims to address these concerns. A source close to the negotiations suggested the deal’s valuation could exceed $50 billion, depending on ByteDance shareholders’ decisions to retain equity or cash out.
TikTok CEO Shou Zi Chew, in a video statement, expressed gratitude for ongoing efforts to keep TikTok operational in the U.S. amid regulatory scrutiny. The situation remains fluid, with the Biden administration’s stance and ByteDance’s decision playing critical roles in determining the outcome. Perplexity’s bid marks a bold step to merge AI-driven innovation with one of the world’s most influential social media platforms.
