The battle for TikTok’s U.S. operations has taken a dramatic twist. Perplexity AI, the upstart challenger to Google’s search dominance, has filed a revised merger proposal that would grant the U.S. government unprecedented control over the viral video platform. If accepted, the deal could reshape not just social media, but the fragile balance between tech innovation and national security.
According to The Associated Press and a TechCrunch-confirmed source, Perplexity’s latest bid creates a hybrid entity merging TikTok’s U.S. operations with its own AI search technology. The kicker? Washington would own up to 50% of the new company following a $300 million+ IPO—a structure seemingly tailored to address Trump-era concerns about Chinese influence. ByteDance, TikTok’s Beijing-based parent, could retain partial ownership, but the proposal cleverly sidesteps a full divestment mandate.
This isn’t Perplexity’s first swing at the deal. Earlier plans leaned on private equity partners, but the revised bid—reportedly shaped by feedback from Trump allies—prioritizes federal oversight. The timing is critical. Last weekend’s brief TikTok outage, triggered by a stalled divestment law, underscored the app’s precarious status. Trump’s subsequent promise to extend the sale deadline (and his vague “50% ownership” remark) now appears directly tied to Perplexity’s maneuvering.
But here’s where it gets messy. Oracle, TikTok’s existing U.S. infrastructure partner, has reportedly been negotiating its own takeover bid. When questioned, Trump denied discussions with the database giant, leaving Perplexity’s proposal as the only publicly confirmed alternative. Skeptics argue that folding a nascent AI firm into a social media titan risks creating a Franken-company, but Perplexity’s leadership seems convinced their search tech could turbocharge TikTok’s ad targeting and content moderation.
The bigger picture? This deal tests whether Silicon Valley’s disruptors can coexist with Washington’s hawkish turn on data sovereignty. If approved, the U.S. government would effectively become a tech shareholder—a precedent with implications far beyond TikTok. For users, the immediate concern is whether Perplexity’s AI algorithms (and federal oversight) would alter TikTok’s famously addictive “For You” feed. For ByteDance, it’s a Hail Mary to retain some foothold in its crown jewel.
One thing’s clear: With Trump’s executive order pen hovering and Oracle lurking, TikTok’s fate hinges on whether Perplexity’s gamble can satisfy regulators, users, and investors—all at once.
FAQs About Key Entities:
Q: How would the U.S. government’s 50% stake in TikTok work?
A: Perplexity’s proposal grants the stake post-IPO, likely through a special share class allowing oversight without day-to-day operational control.
Q: Why is ByteDance allowed to retain ownership under this deal?
A: The revised bid avoids full divestment by creating a new U.S.-domiciled entity, easing Chinese regulatory pushback while addressing American security concerns.
Q: What role does Oracle play in TikTok’s future?
A: Oracle already hosts TikTok’s U.S. data. While not part of Perplexity’s bid, its infrastructure could remain critical under any new ownership structure.
Q: How does Perplexity’s AI integrate with TikTok?
A: Likely through enhanced search, ad targeting, and content recommendation systems—though specifics remain undisclosed.
Q: Could Trump’s involvement delay the TikTok ban?
A: Yes. His hinted executive order extension buys time for deals like Perplexity’s to advance, avoiding an immediate shutdown.
