Perplexity AI, founded by Aravind Srinivas, on Saturday made and ambitious proposal to merge with TikTok U.S.
TikTok faces a potential US prohibition, which may force the app to "go dark" without Biden administration promises about enforcement steps against Apple and Google.
The urgency of this merger reflects the growing tension between tech companies and government regulations.
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Navigating uncertainty
The backdrop of this merger proposal is TikTok's struggle to secure its position in the U.S. market. With millions of users depending on the platform for entertainment and information, TikTok's CEO, Shou Zi Chew, has been actively seeking support from policymakers.
Recently, President-elect Donald Trump hinted at a possible 90-day extension for TikTok to negotiate its standing before any enforcement actions are taken against it. This extension could provide a critical window for TikTok to solidify its operations in the U.S.
Perplexity AI aims to leverage this situation by combining its advanced AI search technology with TikTok’s engaging video content.
The proposed merger could allow existing ByteDance investors to maintain their stakes while facilitating a new venture that enhances user experience across both platforms.
A source close to the negotiations revealed that contingent upon investor interest, the merger could be valued at over $50 billion.
The rapid rise of Perplexity AI is remarkable; it surged from a $500 million valuation at the beginning of 2024 to nearly $9 billion by year-end.
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This growth reflects a broader trend in the tech industry, where generative AI technologies attract significant investment. The proposed merger highlights Perplexity’s ambitions and showcases the innovative potential of combining AI with social media.
Successful tech mergers inspire this move. Facebook's acquisition of Instagram allowed both platforms to prosper with pooled resources and technology.
Perplexity hopes to replicate this success by merging its cutting-edge AI capabilities with TikTok’s vast user base.
