Perplexity has put in a bid to merge with TikTok's US business
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- AI startup Perplexity bids to merge with TikTok's US business before potential shutdown.
- Perplexity was recently valued at $9 billion, a lot less than the estimated value of TikTok US.
- Perplexity backers include SoftBank and Nvidia, with $914 million in funding secured: PitchBook.
Hours before TikTok could go dark, AI startup Perplexity has put in a bid to merge with the platform's US business, according to a person familiar with the matter.
It's unclear how a startup of Perplexity's size could merge with an operation this huge. The startup was recently valued at $9 billion, while TikTok's US operations could be worth $40 billion to $50 billion, Wedbush analyst Dan Ives estimated earlier on Saturday.
"We now expect a slew of TikTok bids to come over the coming weeks from a host of larger tech players, private-equity, and other strategic names for this key social media platform," Ives wrote in a note to investors.
The person familiar with Perplexity's bid said the combined entity would include other institutional investors. This person declined to name these other investors, and asked not to be identified discussing private matters. CNBC reported the news earlier on Saturday.
A law passed by Congress and signed by President Biden last spring requires ByteDance, TikTok's Chinese owner, to sell the app's US operations by January 19 or be banned.
While Perplexity is relatively small compared to TikTok US, the startup does have large, deep-pocketed backers including SoftBank, Nvidia, and the venture capital firm IVP.
Perplexity has secured $914 million in funding to date, according to PitchBook data. In April, investors valued Perplexity at $1 billion. That figure soared to $9 billion in the newest round of funding, which closed in December.
The startup uses artificial intelligence to power a new type of search engine that responds to queries with a brief answers and annotations, instead of a list of links.
Correction: January 18, 2025 — An earlier version of this story misstated who besides Perplexity is involved in this bid.