Official statements from the U.S. government or President Trump

Perplexity AI Proposes Merger With TikTok to Form NewCo, Offering U.S. Government 50% Stake in $300 Billion IPO

Jan 26, 2025, 10:26 PM

Perplexity AI has revised its merger proposal to TikTok's parent company ByteDance, which would now allow the U.S. government to own up to 50% of a new entity, named 'NewCo,' formed by merging Perplexity AI with TikTok's U.S. business. The proposal, submitted last week, is a response to feedback from the Trump administration and comes after a previous proposal was not responded to by ByteDance. Under the new plan, the U.S. government's shares would not have voting power nor a seat on the new company's board. The merger would enable ByteDance to retain ties with TikTok, benefiting its investors, while allowing for a 'full U.S. board control.' The proposal suggests that ByteDance would contribute TikTok's U.S. business without its proprietary algorithm. This move is part of ongoing efforts to address national security concerns and comply with a law that bans TikTok unless it cuts ties with ByteDance, with President Donald Trump indicating a decision on TikTok's future could be made within 30 days. Perplexity AI, valued at about $9 billion, is an AI search engine startup. The proposed IPO for the new entity is set at a minimum of $300 billion. Former Treasury Secretary Steven Mnuchin has discussed a similar strategy, and President Trump has mentioned interest from investors like Larry Ellison. TikTok CEO Shou Chew attended Trump's inauguration, and a 75-day extension has been granted to halt the enforcement of the TikTok ban.