Perplexity AI has reportedly revised its initial offer to merge with TikTok — this time with a carveout to give the U.S. government 50% control in a future initial public offering (IPO).
CNBC (CMCSA+0.40%), citing a proposal document shared with TikTok-parent ByteDance and prospective advisors, reports that a new holding company would be created named “NewCo.”
It would see TikTok’s U.S. division, minus its coveted algorithm, be contributed by ByteDance. In exchange, ByteDance’s existing investments would create equity for the new company, CNBC reports. Perplexity AI’s investors would receive a distribution of NewCo equity in exchange for the company giving itself up.
According to the Associated Press, which also viewed the proposal, the U.S. government would own up to half of the new entity following an IPO valued at at least $300 billion. If successful, the government would not get a seat on NewCo’s board, nor would its shares have voting power, the Associated Press reports, citing a person familiar with the matter. The structure is based on feedback from President Donald Trump’s administration.
“I would like the United States to have a 50% ownership position in a joint venture,” Trump wrote on his Truth Social last week. “By doing this, we save TikTok, keep it in good hands and allow it to say up.”
TikTok briefly went dark on Jan. 18 before coming back the following day after both then-President Joe Biden and Trump signaled they had no intention of upholding the ban. On Jan. 20, Trump signed an executive order directing the attorney general not to enforce a ban on TikTok for 75 days nor impose penalties on entities for not complying with the ban.
Perplexity AI — a $9 billion artificial intelligence search engine startup competing with rivals, such as OpenAI and Google (GOOGL+1.13%) — is just one of a handful of bids for TikTok’s U.S. operations.
The most overt rival is The People’s Bid for TikTok, a group formed by billionaire Frank McCourt in partnership with his nonprofit organization Project Liberty; He’s been joined by Shark Tank star Kevin O’Leary. Another is a consortium led by Employer.com Founder Jesse Tinsley, which also features the major YouTuber MrBeast.
The post Perplexity AI wants to buy TikTok — and give the U.S. government a big stake appeared first on Quartz.
