Perplexity AI, a US-based search engine startup, submitted a merger proposal on Saturday to ByteDance, the Chinese parent company of TikTok, according to a source with knowledge of the situation who spoke to Reuters.
As TikTok faces the possibility of a ban in the US starting Sunday, a potential reprieve may be on the horizon. President-elect Donald Trump indicated on Saturday that he is likely to grant the company a 90-day extension before this action takes effect.
This development was first reported by CNBC.
The proposed merger between Perplexity and TikTok US includes plans to create a new entity by merging with New Capital Partners, according to the insider.
The structure of this proposal aims to allow many of ByteDance’s current investors to maintain their equity stakes while also enhancing the video offerings available through Perplexity, the source noted, speaking on condition of anonymity due to the confidential nature of the discussions.
There has been no immediate response from TikTok regarding the merger proposal, and New Capital Partners could not be reached for comment.
Perplexity AI is optimistic about the potential for its bid to be accepted, as the proposal is framed as a merger rather than a sale.
The search tools developed by Perplexity AI enable users to access rapid answers to inquiries, supplemented with sources and citations. Its technology relies on advanced language models capable of summarizing and generating information, including those from OpenAI and Meta Platforms’ Llama model.
With nearly half of all Americans engaged with its platform, TikTok has significantly influenced small businesses and online culture. The company announced on Friday that it would cease operations in the US if the Biden administration does not reassure major tech firms, like Apple and Google, regarding enforcement actions related to an impending ban.
© Thomson Reuters 2025
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