Perplexity AI Eyes TikTok Merger Amid US Ban
Search engine startup Perplexity AI reportedly wants to merge with TikTok.
The company has submitted a bid to TikTok’s China-based parent ByteDance, Reuters reported Saturday (Jan. 18), citing a source familiar with the matter.
The merger attempt comes as a U.S ban on TikTok goes into effect, with the platform going dark Sunday (Jan. 19) for American users.
The ban was signed into law last year by President Joe Biden, and had been supported by a bipartisan group of lawmakers, citing national security concerns. It required ByteDance to find a new owner for TikTok or risk losing access to Google and Apple’s support in the U.S.
According to the Reuters report, the source said Perplexity would merge with TikTok U.S. to form a new entity by combining the merged company with New Capital Partners. This new structure would let most of ByteDance’s investors hold onto their equity stakes, while bringing more video to Perplexity, the source added.
PYMNTS has contacted ByteDance for comment but has not yet gotten a reply. A spokesperson for Perplexity declined to comment.
The news comes a little more than a year after Perplexity began making headlines for its effort to take on Google in the artificial intelligence (AI)-powered search space. The company’s search tools let users to get quick answers to queries, offering sources and citations. It is powered by large language models such as the ones from OpenAI and Meta.
The company began 2024 with a valuation of $520 million and ended the year valued at $9 billion, with backers including SoftBank, Nvidia and Amazon founder Jeff Bezos.
As for the TikTok ban, President-elect Donald Trump said Saturday he would likely pause the measure after taking office Monday (Jan. 20).
TikTok had sought help from the U.S. Supreme Court in halting the ban — citing a First Amendment argument — though the justices on Friday (Jan. 20) upheld the law.
The unanimous verdict cited “well-supported national security concerns regarding TikTok’s data collection practices and relationship with a foreign adversary.”
Trump wrote last week on his social media platform Truth Social that he had talked with Chairman Xi Jinping of China about TikTok and other subjects.
“It is my expectation that we will solve many problems together, and start immediately,” Trump said. “We discussed balancing Trade, Fentanyl, TikTok, and many other subjects.”
And in a TikTok video titled “Our response to the Supreme Court decision,” TikTok CEO Shou Zi Chew said the company is “grateful and pleased to have the support of a president who truly understands our platform.”
“On behalf of everyone at TikTok and all our users across the country, I want to thank President Trump for his commitment to work with us to find a solution that keeps TikTok available in the United States,” Chew added.
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