Last week, artificial intelligence startup Perplexity AI submitted its revised proposal to acquire TikTok, giving hope to millions of users after the ban. According to a source familiar with the matter, the bid filed with TikTok’s parent company, ByteDance, will hand over 50% of a newly formed entity’s stake to the U.S. government, merging TikTok’s U.S. operations with Perplexity.
The proposal, submitted last week, revises a previous offer made on January 18, just a day before a law banning TikTok in the U.S. went into effect. However, ByteDance has yet to formally respond to either proposal.
Perplexity AI’s Deal Designed to Woo Washington
Perplexity’s revised offer aims to address the Trump administration’s concerns about TikTok’s ties to China. Under the proposed structure, ByteDance would retain a stake in TikTok’s U.S. business but ‘relinquish’ full board control.
Additionally, the plan excludes the proprietary algorithm that influences TikTok’s content recommendations. This clause aligns with the U.S. regulators’ concern, who view it as a potential national security risk.
The newly created entity would eventually go public with an estimated initial valuation of at least $300 billion, at which point the U.S. government could acquire up to a 50% stake. However, the government’s shares would be non-voting, and it would not have representation on the company’s board.
The approach reflects a strategy proposed by former Treasury Secretary Steven Mnuchin, who recently suggested that a U.S. investor should “dilute down” Chinese ownership while maintaining operational control in American hands.
The U.S. government has long argued that TikTok’s Chinese ownership poses a security threat. It claimed that ByteDance could be compelled to share American user data with Beijing. Nonetheless, bipartisan pressure has pushed for ByteDance to divest its U.S. operations or face an outright ban.
Source: https://qz.com/quote/CMCSA
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