US-Based AI Company Perplexity Submits Revised Bid for TikTok

New Delhi: Perplexity, a US-based artificial intelligence (AI) company, has reportedly submitted a revised proposal to merge with the popular Chinese-owned short-form video platform TikTok.

This move comes amid mounting pressure from the US government and growing concerns about the app’s national security risks due to its Chinese ownership.

Perplexity’s New Proposal: A Potential Path Forward for TikTok in the US

In a new bid that could reshape TikTok’s future in the United States, Perplexity has reportedly revised its initial offer to merge with TikTok US, proposing a structure that could give the US government up to 50 percent ownership of the newly formed entity.

This move is part of an ongoing effort to comply with US security concerns and avoid a nationwide ban on TikTok.

Perplexity’s new proposal indicates that the government’s stake would be secured after an initial public offering (IPO) valued at a minimum of $300 million.

Notably, ByteDance, the Chinese parent company of TikTok, could still retain a portion of the platform’s ownership, despite the regulatory scrutiny surrounding its operations in the US.

TikTok’s Ongoing Regulatory Struggles in the US

The US government’s regulatory pressure on TikTok has been intensifying, especially following a law that mandates the company to either sell its US operations to an American or allied entity or face a ban.

The law, which came into effect on January 19, required TikTok to make significant changes to its ownership structure by that deadline.

However, the app temporarily avoided the ban after US President Donald Trump signed an executive order on January 25, extending the ban deadline by 75 days.

Under the new executive order, President Trump directed his Attorney General not to impose fines on app stores and service providers continuing to offer TikTok to US users.

This delay gives TikTok more time to negotiate a solution, such as the potential merger with Perplexity, and avoid an immediate shutdown of the app in the US market.

Also Read | US TikTok Ban Takes Effect as Google, Apple Remove App from US Stores

TikTok’s Response to the Executive Order and Market Challenges

TikTok briefly experienced an operational shutdown last week, following the enactment of the law that would have forced ByteDance to sell the app or risk a ban.

However, the company quickly resumed operations after Trump’s executive order extended the enforcement timeline.

The ongoing uncertainty has caused significant challenges for TikTok in terms of market stability, as users and investors await clarity on the app’s future in the US.

The Implications of Perplexity’s Revised Proposal

Perplexity’s revised proposal suggests a potential solution to the regulatory crisis faced by TikTok in the US. If approved, the merger could pave the way for greater government oversight, with the US government obtaining up to 50 percent ownership of TikTok’s US operations.

This structure aims to address national security concerns while allowing ByteDance to maintain a degree of control over the platform.

The proposed deal also includes provisions for TikTok to undergo an IPO, which could generate substantial revenue and provide a more transparent ownership structure.

This would likely be a key factor in addressing concerns about the platform’s data security and potential influence from the Chinese government.

Political Dynamics: TikTok, Trump, and China Relations

The ongoing debate over TikTok’s future in the US is not only a matter of national security but also part of the broader geopolitical tensions between the US and China.

President Trump has repeatedly stressed the need for a “level playing field” with China, especially concerning issues like trade and intellectual property.

In addition to his executive actions against TikTok, Trump has engaged in high-level discussions with Chinese President Xi Jinping, addressing a range of issues including trade policies, fentanyl, and the security risks posed by Chinese tech companies operating in the US.

TikTok’s Key Figures and Strategic Moves

In a symbolic gesture, TikTok CEO Shou Chew attended President Trump’s inauguration, where he was seated next to Tulsi Gabbard, who was nominated for the position of Director of National Intelligence.

TikTok also sponsored a Washington party celebrating Trump’s inauguration, further intertwining the platform with US political circles.

Despite these connections, TikTok’s relationship with the US government remains complicated. As the platform navigates the complex regulatory landscape, it is clear that securing its future in the US market will require significant adjustments, including potential changes in ownership and governance.