SAN FRANCISCO: Perplexity, an artificial intelligence (AI) startup, expressed its interest on Friday (March 21) in acquiring TikTok, which faces a deadline to divest from its Chinese parent company, ByteDance, or risk being banned in the United States.
In a blog post, Perplexity outlined its vision for integrating its AI-powered search capabilities with TikTok’s video-sharing platform. The company argued that merging its advanced search engine with TikTok’s vast video content would create the world’s best search experience.
“By combining Perplexity’s answer engine with TikTok’s vast video library, we would be able to create the most efficient search experience globally,” the San Francisco-based firm stated. “Perplexity is uniquely positioned to redesign TikTok’s algorithm without creating a monopoly, offering top-notch technical expertise along with independence from large tech corporations.”
Earlier this month, President Donald Trump revealed that the U.S. was in talks with four groups interested in buying TikTok, as the app’s future in the U.S. remains uncertain. A U.S. law mandates that TikTok must separate from ByteDance or face a ban in the country.
“We’re working with four different groups, and many people are interested, but the decision is up to me,” Trump remarked aboard Air Force One. “All four are good,” he added, but did not identify the groups.
The law banning TikTok took effect on January 19, due to concerns that the Chinese government might use the app to spy on Americans or influence U.S. public opinion. In his first term, Trump also attempted to ban TikTok over national security concerns. The app was briefly removed from the U.S. app stores, angering millions of users. However, Trump suspended the ban in January after starting his second term, seeking a resolution with China. TikTok resumed its services in the U.S. and returned to the Apple and Google app stores in February.
While TikTok has shown little urgency about selling the app, other potential buyers include “The People’s Bid for TikTok,” led by real estate and sports mogul Frank McCourt’s Project Liberty initiative. Other interested parties include Microsoft, Oracle, and a group that includes internet personality MrBeast (Jimmy Donaldson).
Perplexity argued in its post that any acquisition by a consortium of investors could allow ByteDance to maintain control over TikTok’s algorithm, while a purchase by a competitor would likely lead to a monopoly in the short-form video and information space. The company stressed that society benefits when content feeds are free from the influence of foreign governments and monopolistic corporations.
Perplexity also proposed setting up TikTok’s infrastructure in U.S. data centers, with American oversight, and rebuilding the app’s algorithm from scratch, including making TikTok’s “For You” feed open-source. Additionally, Perplexity promised to allow TikTok users to cross-check the accuracy of videos as they watch them.
Two sources familiar with the discussions revealed that White House-led talks on TikTok’s future are focusing on a plan to create a U.S. entity for TikTok and reduce Chinese ownership below the 20% threshold required by U.S. law. Susquehanna International Group, led by Jeff Yass, and Bill Ford’s General Atlantic are leading the discussions with the White House, with private equity firm KKR also involved.
Under the proposed plan, Oracle would house U.S. user data and ensure that it is not accessible from China, the sources added. TikTok, ByteDance, Susquehanna, Oracle, and the White House were unavailable for comment, while General Atlantic and KKR declined to comment.
Legal filings from TikTok last year revealed that global investors own around 58% of ByteDance, with the company’s Chinese founder, Zhang Yiming, holding 21%, and employees of various nationalities (including around 7,000 Americans) owning the remaining 21%.
The White House has played an unprecedented role in overseeing the ongoing discussions, effectively acting as an investment bank in the process.
