A new proposal from Perplexity AI could drastically reshape the future of TikTok in the United States. The artificial intelligence startup has pitched a plan that would allow the U.S. government to own up to 50% of a merged entity between Perplexity and TikTok’s U.S. operations. The move could lead to a significant restructuring of one of the world’s most popular social media platforms.
Government Stake in TikTok’s U.S. Operations
The fresh proposal, presented last week, is a revision of an earlier plan submitted to TikTok’s parent company, ByteDance, on January 18. It comes after the looming threat of a U.S. ban on TikTok and in response to concerns voiced by the previous U.S. administration.
If successful, the proposal would allow the U.S. government to acquire 50% of the new structure once it undergoes an initial public offering (IPO) with a valuation of at least $300 billion. However, the government would not hold voting rights, nor would it have a seat on the company’s board.
This proposal marks a turning point in the ongoing battle over TikTok’s ownership and operations within the U.S. It’s a move that could offer ByteDance a way to maintain some degree of control over TikTok’s global operations, but with the assurance that the U.S. government has a substantial stake in the platform’s future.
The Technology at the Heart of the Deal
At the center of this deal TikTok’s U.S. business, excluding the proprietary algorithm that powers the app. This technology, as a key asset of TikTok, would remain under ByteDance’s control, while investors in the new U.S. entity would gain equity in exchange for their contribution.
This shift could help assuage national security concerns, which have been central to the ongoing debates surrounding TikTok’s ownership. As Steven Mnuchin, former U.S. Treasury Secretary, noted, the solution is to “dilute down” the Chinese ownership, ultimately aiming to sever ties between TikTok’s technology and China.
With U.S. lawmakers pushing for a resolution, the Perplexity AI proposal could be a pivotal moment for TikTok’s future in the U.S. President Trump has indicated that a deal could come within 30 days, signaling that negotiations are intensifying. Meanwhile, multiple parties, including tech mogul Larry Ellison of Oracle, are reportedly eyeing a potential stake in TikTok’s operations.
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