Artificial Intelligence backed search engine Perplexity AI has submitted a bid with TikTok parent company Bytedance to merge with TikTok US, according to a Reuters report. Reportedly, Perplexity AI would merge with TikTok US and create a new entity called New Capital Partners.
The report states that the proposal put forward by Perplexity would allow most of the existing ByteDance investors to retain their equity and lead to more video coming to the search engine.
Notably, TikTok faces an imminent ban in the US on Sunday if it does not cut ties with its Chinese parent company ByteDance. However, President-elect Donald Trump recently said he would give the short video platform a 90 day breather when he assumes office on 20 January.
While many names have emerged in the race to take control of TikTok US including billionaire Frank McCourt, Shark Tank investor Kevin O’Leary and former Treasury secretary Steven Mnuchin, ByteDance has publicly stated that it will not sell TikTok US. This is why Perplexity believes that it has a shot with its new proposal given that it is offering a merger rather than an outright sale.
Why is TikTok facing a ban in US?
The US Supreme Court on Friday (17 January) dealt a blow to TikTok by refusing to block a law that mandates the popular video app to either be sold by its Chinese parent company, ByteDance, or face a ban in the United States on national security grounds. This decision has serious implications for TikTok, which is used by nearly half of Americans.
In a unanimous ruling, the justices upheld the law, passed with broad bipartisan support in Congress last year and signed by President Joe Biden. The Court ruled that the law did not violate the First Amendment rights to free speech, affirming a lower court’s decision. The ruling emphasized Congress’s concerns over national security, particularly TikTok’s data practices and its connection to China.
