Perplexity AI has officially made a bid to merge with TikTok U.S., a move that could potentially create a new entity combining Perplexity, TikTok U.S., and New Capital Partners. This bid comes as Perplexity AI, a search engine startup, has seen a significant increase in investor interest and valuation over the past year, reaching roughly $9 billion by the end of 2024.
The potential merger between Perplexity AI and TikTok U.S. comes at a time when AI-assisted search is seen as a key risk for tech giants like Google. The generative AI boom has led to the introduction of new search engines such as SearchGPT by OpenAI and "AI Overviews" by Google, changing the way consumers access information online.
While any potential transaction between Perplexity AI and ByteDance would likely take months to complete, TikTok has stated that the app will "go dark" in the U.S. on Sunday unless the Biden administration intervenes to prevent potential punishment for hosting the app by service providers like Apple and Google.
President-elect Donald Trump has indicated that he would likely give TikTok 90 more days to work out a deal after he is sworn into office on Monday. However, ByteDance has publicly implied that it will not sell TikTok U.S., which is why Perplexity AI's bid for a merger is seen as a potential solution.
A source familiar with the situation believes that a fair price for the merger could be "well north of $50 billion," but the final number will depend on the decisions of ByteDance's existing shareholders regarding their involvement in the new entity. The bid by Perplexity AI represents a significant development in the ongoing saga of TikTok's future in the U.S.