Perplexity AI, founded by Aravind Srinivas, Denis Yarats, and Johnny Ho, has officially expressed its intent to merge with TikTok U.S., forming a new entity that would combine Perplexity, TikTok U.S., and additional capital partners. This proposed deal comes just a day after TikTok’s brief service interruption in the U.S. over the weekend.
The merger, according to sources cited by CNBC, would allow ByteDance’s existing investors to retain their equity stakes in the new entity, while bringing more video content to Perplexity AI. The move is significant, as ByteDance has publicly stated its reluctance to sell TikTok U.S., positioning the merger as an alternative to a sale.
Although the deal could be valued well above $50 billion, the final amount will depend on which of ByteDance’s current shareholders opt to remain part of the new entity and which choose to cash out. The deal’s completion, however, could take several months.
Perplexity AI, a search engine and AI chatbot, recently launched a shopping assistant powered by payment company Stripe. It has been valued at $8 billion following its latest funding round, with early investors including Jeff Bezos, Nvidia, and New Enterprise Associates.
The timing of the merger attempt coincides with the U.S. Supreme Court’s decision to uphold federal laws that could result in a ban of TikTok unless ByteDance sells its U.S. operations. Meanwhile, ByteDance has reportedly also explored a potential deal involving TikTok and Tesla’s Elon Musk.
This proposed merger, if it materializes, could redefine TikTok’s future in the U.S. amid increasing regulatory scrutiny.
