Perplexity AI officially made a move for TikTok on Saturday by submitting a proposal to its parent company, ByteDance, to create a new merged entity that would combine Perplexity, TikTok U. S. , and new capital partners, according to CNBC. This new structure would enable most of ByteDance's current investors to keep their equity stakes and would enhance Perplexity's video offerings, based on insights from an anonymous source familiar with the matter since the discussions remain confidential. Perplexity AI, the AI search engine startup competing with OpenAI and Google, began 2024 valued at approximately $500 million and saw its worth soar to around $9 billion by the year's end, bolstered by growing investor interest during the generative AI surge, despite facing controversy over plagiarism allegations. Investors view AI-assisted search as a significant risk to Google, as it potentially alters how consumers obtain information online. Last year, OpenAI, which sparked the generative AI trend in late 2022 with ChatGPT, launched a search engine called SearchGPT. In response, Google released "AI Overviews" to provide quick answer summaries at the top of search results. While any potential deal between Perplexity AI and ByteDance would likely span several months to finalize—especially with TikTok indicating it would "go dark" in the U. S.

on Sunday unless the Biden administration reassures it won't penalize Apple, Google, and other service providers—the president-elect, Donald Trump, stated to NBC News on Saturday that he would probably grant TikTok an additional 90 days to negotiate a deal following his inauguration on Monday. In a TikTok video posted on Friday, CEO Shou Zi Chew expressed gratitude to President Trump for his dedication to collaborating with TikTok to secure a solution that keeps the app operational in the United States. ByteDance has suggested publicly that it will not sell TikTok U. S. , which is partly why Perplexity AI feels optimistic about its bid—since it proposes a merger instead of a sale, according to CNBC's source. The source estimates that a reasonable price might be "well north of $50 billion, " but the final amount associated with the proposal will depend on which of ByteDance's current shareholders wish to stay with the new entity and which prefer to cash out. CORRECTION: Perplexity AI's bid for TikTok aims to establish a new merged entity comprising Perplexity, TikTok U. S. , and new capital partners. A prior version of this article incorrectly identified one of the participants.