Perplexity AI Proposes Merger with TikTok U.S. to Avoid Ban

U.S. search engine startup Perplexity AI has proposed a merger with TikTok U.S., aiming to resolve the platform's looming ban in the United States, according to a confidential source. TikTok, owned by China's ByteDance, faces restrictions starting Sunday unless it separates from its parent company. However, President-elect Donald Trump may offer a 90-day extension.

Perplexity AI’s bid suggests merging with TikTok U.S. and forming a new entity in partnership with New Capital Partners. This structure would allow ByteDance's existing investors to retain their equity stakes while integrating TikTok’s video capabilities into Perplexity AI’s platform. The proposal, described as a merger rather than a sale, is believed to have a strong chance of approval.

Perplexity AI, powered by advanced language models from OpenAI and Meta’s Llama, offers users fast, citation-backed answers. This technology aligns with TikTok’s massive user base, which includes nearly half of the U.S. population. TikTok has significantly influenced online culture and supported small businesses.

Despite the urgency, TikTok has not commented on the proposal, and New Capital Partners could not be reached. TikTok previously announced it would shut down in the U.S. unless the Biden administration provides assurances against enforcement actions impacting companies like Apple and Google.

The merger could offer a path forward for TikTok while expanding Perplexity AI's capabilities, ensuring both companies continue to thrive amid regulatory challenges.