Perplexity AI Bids to Merge With TikTok U.S. for Over $50 Billion, Seeks 90-Day Extension

Jan 18, 2025, 07:50 PM

Perplexity AI has submitted a bid to merge with TikTok's U.S. operations, proposing a deal that would create a new entity combining Perplexity, TikTok U.S., and New Capital Partners. The proposal was made to TikTok's parent company, ByteDance, on Saturday. The new structure would allow most of ByteDance's existing investors to retain their equity stakes and would enhance Perplexity's offerings with more video content. The source familiar with the situation indicated that a fair price for the deal would be 'well north of $50 billion,' with the final valuation dependent on which ByteDance shareholders choose to remain invested. The bid comes as TikTok faces potential shutdown in the U.S., with the app warning it could go dark on Sunday unless the Biden administration provides assurances it won't penalize service providers for hosting it. President-elect Donald Trump has indicated he would 'most likely' grant TikTok a 90-day extension to secure a deal after his inauguration on Monday. Perplexity AI, which competes with OpenAI and Google in the AI-assisted search market, saw its valuation surge from about $500 million at the start of 2024 to approximately $9 billion by the end of the year.