Perplexity AI has submitted an updated proposal to merge with TikTok that would allow the U.S. government to take a 50 percent stake in the newly formed company, a source familiar confirmed to The Hill.
The startup, which runs an artificial intelligence (AI) powered search engine, proposed a merger between Perplexity and TikTok earlier this month as the popular video-sharing platform faced a ban.
After a brief shutdown, TikTok came back online following assurances from President Trump that he would not enforce a law that required the app’s China-based parent company ByteDance to divest by Jan. 19 or face a ban. Trump signed an executive order last week halting enforcement for 75 days.
Perplexity revised its proposal based on feedback from the Trump administration, the source told The Hill. Trump has repeatedly said in recent days that he envisions a deal in which the U.S. has a 50 percent stake in TikTok.
The AI startup’s proposal would allow the U.S. government to take up to a 50 percent stake in the newly merged company after it goes public. However, the government would not have voting power or a seat on the board.
Notably, the proposal does not include TikTok’s algorithm.
While the Chinese government has recently showed increased willingness to strike a deal on TikTok, the fate of the algorithm has remained an open question, given Beijing’s restrictions on the export of such technology.
After previously saying it would “firmly oppose” the forced sale of TikTok, a spokesperson with the Chinese Foreign Ministry said earlier this month that private companies can make independent decisions about the “operation and acquisition of business.”
With both Trump and China indicating greater openness to a deal, potential buyers are lining up. Former Los Angeles Dodgers owner Frank McCourt has long been preparing a bid for TikTok. Joined by “Shark Tank” investor Kevin O’Leary, they made an official offer shortly before the ban was set to take effect.
A group of investors led by Jesse Tinsley, founder and CEO of employer.com, also announced an offer to buy TikTok last week. Trump, for his part, threw Oracle founder Larry Ellison into the mix Tuesday, and NPR reported over the weekend that the White House was in talks with the software firm.
The president also said he was not opposed to his close ally and Tesla CEO Elon Musk buying the company. Chinese officials have considered Musk as a potential buyer, The Wall Street Journal reported earlier this month.
