On Saturday, US search engine startup Perplexity AI presented a proposal to TikTok’s Chinese parent company, ByteDance, suggesting a merger with TikTok US, according to a source familiar with the plan who spoke to Reuters.
TikTok is facing a potential ban in the United States starting Sunday if it does not sever its ties with ByteDance. However, President-elect Donald Trump indicated on Saturday that he may grant a 90-day extension for the platform on Monday.
This information was first reported by CNBC.
The merger proposed by Perplexity would involve combining TikTok US with New Capital Partners to form a new entity, the source revealed.
This strategy aims to allow a majority of ByteDance’s current investors to retain their equity stakes while also enhancing Perplexity’s offerings with additional video content, the individual added, requesting anonymity due to the confidential nature of the discussions.
A response from TikTok was not immediately available, and attempts to reach New Capital Partners were unsuccessful.
Perplexity AI remains optimistic about the success of its proposal, noting that it entails a merger rather than a sale.
Perplexity AI specializes in search tools that provide quick answers to user inquiries, complete with sources and citations. Its technology leverages large language models capable of summarizing and generating information from various platforms, including OpenAI and Meta Platforms’ open-source model, Llama.
As TikTok has engaged millions of American users, fostering small businesses and influencing online culture, the platform announced on Friday that it would cease operations in the US on Sunday unless the Biden administration offers guarantees that companies like Apple and Google would not face enforcement action when the ban takes effect.
© Thomson Reuters 2025
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