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New bid for TikTok from Perplexity AI could give US government 50% stake

Jan 26, 2025 - financialpost.com
Perplexity AI has proposed a new plan to TikTok's parent company, ByteDance, that would allow the U.S. government to own up to 50% of a new entity merging Perplexity with TikTok's U.S. business. This proposal, submitted last week, revises an earlier plan and aims to comply with a law banning TikTok in the U.S. unless it cuts ties with ByteDance. The plan suggests an initial public offering of at least $300 billion, with the U.S. government's shares lacking voting power and board representation. ByteDance would retain some connection to TikTok but would need to allow full U.S. board control, excluding the proprietary algorithm.

The proposal aligns with a strategy discussed by former Treasury Secretary Steven Mnuchin to reduce Chinese ownership in TikTok. President Donald Trump has expressed optimism about reaching a deal soon, emphasizing U.S. benefits. Despite the Supreme Court upholding the ban, Trump issued an executive order delaying enforcement. Concerns about TikTok's ownership structure and data security persist, though no public evidence has been provided of data misuse by Chinese authorities.

Key takeaways:

  • Perplexity AI has proposed a merger with TikTok's U.S. business, allowing the U.S. government to own up to 50% of the new entity.
  • The proposal is a revision of a previous plan and was submitted to TikTok's parent company, ByteDance, after a law banning TikTok went into effect.
  • The U.S. government's shares would not have voting power or a seat on the new company's board, and ByteDance would retain some ties to TikTok.
  • The proposal aims to address security concerns by excluding TikTok's proprietary algorithm from the merger.
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