President Trump delayed the US TikTok ban a few days ago, but the reprieve is still temporary. ByteDance, the giant Chinese corporation that owns the social network, still has to sell the US version of TikTok or risk a complete ban in the country once the 75-day deadline expires. The law that forced the situation has not been repealed, and it’s unlikely that will happen. That’s probably why TikTok is not available for download from the App Store, despite Trump’s reprieve.
Plenty of parties are interested in acquiring TikTok US from ByteDance, with Perplexity AI being one of them. The search startup sent ByteDance a proposal a few days ago but has not received a response.
Perplexity updated its proposal to include the possibility of the US government holding up to 50% of the future company managing TikTok. ByteDance would retain its stake along with the algorithm that caused so much friction in recent years among lawmakers in the US and EU.
According to the Associated Press, Perplexity first presented ByteDance a merger proposal a day before the law that would ban the app went into effect. Reuters also learned from a source of Perplexity’s revised offer.
The original Perplexity plan was to create a new company that would merge Perplexity with the TikTok US business. It would include investments from other parties.
The new proposal reportedly says the US government will be able to own up to half of the new venture, assuming an IPO of at least $300 billion. A different source supposedly informed TechCrunch that the report was accurate.
Assuming the US government took some ownership of the resulting company, it would not have voting power. Also, the government would not get a seat on the board.
ByteDance would have to allow full US board control for the new entity, but it would still own a part of it. ByteDance would still contribute to TikTok US’s business without providing the algorithm that decides what content users get to see on the social network.
The US government has alleged that TikTok’s algorithm is a source of manipulation. Among other things, TikTok can improve the image of China in western countries, including the US. TikTok also stores data from US users in China, with the US government claiming that China can access that data.
According to the report, ByteDance’s investors will get equity in the new structure. It’s unclear what the company would do with the algorithm. Also, if such a merger would happen, it’s unclear who would control the TikTok app in international markets excluding the US.
In addition to Perplexity, other parties were named as potential buyers of TikTok US. Most recently, Oracle appeared in reports as an interested bidder. Oracle already provides some of the infrastructure TikTok needs to run in the US. The company turned on its TikTok servers once President Trump announced a ban delay was in the works.
President Trump denied discussing a potential TikTok purchase with Oracle CEO Larry Ellison. According to the AP, Trump said that “numerous people” are talking to him about a purchase.
Whether Perplexity buys TikTok or merges with it, I will remind you that TikTok is not available in China. US social networks like Meta’s apps are also unavailable to Chinese users.
