New bid for TikTok

The new proposal from Perplexity AI, the artificial intelligence search engine startup, could give US government 50 per cent stake in the new entity

Washington: Perplexity AI has presented a new proposal to TikTok’s parent company that would allow the US government to own up to 50 per cent of a new entity that merges Perplexity with TikTok’s US business, according to a person familiar with the matter.

The proposal, submitted last week, is a revision of a prior plan the artificial intelligence startup had presented to TikTok’s parent ByteDance on Jan 18, a day before the law that bans TikTok went into effect.

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The first proposal, which ByteDance hasn’t responded to, sought to create a new structure that would merge San Francisco-based Perplexity with TikTok’s US business and include investments from other investors.

The new proposal would allow the US government to own up to half of that new structure once it makes an initial public offering of at least $300 billion, said the person, who was not authorised to speak about the proposal.

If the plan is successful, the shares owned by the government would not have voting power, the person said. The government also would not get a seat on the new company’s board.

ByteDance and TikTok did not immediately responded to a request for comment.

Under the plan, ByteDance would not have to completely cut ties with TikTok, a favourable outcome for its investors. But it would have to allow a “full US board control,” the person said.

Under the proposal, the China-based tech company would contribute TikTok’s US business without the proprietary algorithm that fuels what users see on the app, according to a document seen by the Associated Press.

In exchange, ByteDance’s existing investors will get equity in the new structure that emerges.

The Perplexity proposal comes as several investors are expressing interest in TikTok. President Donald Trump said late Saturday that he expects a deal will be made in as soon as 30 days.

On a flight from Las Vegas to Miami on Air Force One, Trump also said he hadn’t discussed a deal with Larry Ellison, CEO of software maker Oracle, despite a report that Oracle, along with outside investors, was considering taking over TikTok’s global operation.

TikTok CEO Shou Chew attended Trump’s inauguration on January 20, along with some other tech leaders who’ve been forging friendlier ties with the new administration. AP