WASHINGTON: US-owned artificial intelligence startup Perplexity AI has proposed a plan to TikTok’s parent company, ByteDance, that would allow the US government to acquire up to 50% of a new entity merging Perplexity with TikTok’s US operations, the Associated Press reported.
The proposal, submitted last week as reported by AP while citing a person familiar with the matter, is a revision of a prior plan Perplexity AI had presented to ByteDance on January 18, a day before the law that bans TikTok went into effect.
The first proposal, which ByteDance hasn’t responded to, sought to create a new structure that would merge San Francisco-based Perplexity with TikTok’s US business and include investments from other investors.
The new proposal would allow the US government to own up to half of that new structure once it makes an initial public offering of at least $300 billion, AP reported citing a source not authorised to speak about the proposal. The source said Perplexity’s proposal was revised based on feedback from the Trump administration.
If the plan is successful, the shares owned by the government would not have voting power, AP reported. The government also would not get a seat on the new company’s board.
Under the plan, ByteDance would not have to completely cut ties with TikTok, a favourable outcome for its investors. But it would have to allow a “full US board control,” the source said as quoted by AP.
Under the proposal, the China-based tech company would contribute to TikTok’s US business without the proprietary algorithm, AP cited a document. In exchange, ByteDance’s existing investors will get equity in the new structure that emerges.
The Perplexity proposal comes as several investors are expressing interest in TikTok. President Donald Trump said late Saturday that he expects a deal will be made in as soon as 30 days.
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On a flight from Las Vegas to Miami on Air Force One, Trump also said he hadn’t discussed a deal with Larry Ellison, CEO of software maker Oracle, despite a report that Oracle, along with outside investors, was considering taking over TikTok’s global operation.
“Numerous people are talking to me. Very substantial people,” Trump said. “We have a lot of interest in it, and the United States will be a big beneficiary. … I’d only do it if the United States benefits.”
Under a bipartisan law passed last year, TikTok was to be banned in the United States by January 19 if it did not cut ties with ByteDance. The Supreme Court upheld the law, but Trump then issued an executive order to halt enforcement of the law for 75 days.
