Perplexity’s New TikTok Deal Offers US 50% Stake

Search engine startup Perplexity AI has reportedly revised its plans to merge with TikTok.

Under the new proposal — submitted to TikTok owner ByteDance — the U.S. government would own up to half of the combined company upon a future initial public offering (IPO), Reuters reported Sunday (Jan. 26), citing a source familiar with the matter.

This source said a Perplexity document shared with ByteDance and new investors floated the creation of a new American holding company dubbed “NewCo.”

The proposal — an updated version of one submitted earlier this month — calls for ByteDance to sell TikTok U.S. to the investors, giving TikTok’s existing investors equity in the company and letting ByteDance keep TikTok’s core recommendation algorithm, the source said.

The U.S. government would own up to 50% of the combined organization following an IPO of a valuation of at least $300 billion, the report added. The source told Reuters Perplexity could also be acquired by the holding company if its investors got a portion of the NewCo equity.

This latest deal comes as the government and ByteDance continue to work towards an agreement that would allow TikTok to keep operating in the U.S.

Congress last year passed a law requiring China-based ByteDance to divest itself of the wildly popular video sharing app due to national security concerns.

ByteDance had until Jan. 19 to sell. When that deadline passed without a deal, TikTok briefly went dark, only to be restored hours later when President Donald Trump — one day before being inaugurated — promised to halt the ban.

Over the weekend, Trump said a deal could arrive within 30 days, telling reporters on Air Force One that he was in talks with several potential buyers.

“I have spoken to many people about TikTok and there is great interest in TikTok,” said Trump.

Meanwhile, PYMNTS on Monday (Jan. 27) spoke with Sandie Hawkins, former head of TikTok’s U.S. eCommerce division and now president of Teikametrics, about the opportunities presented to brands by social commerce platforms.

“If you’re not on a marketplace, your brand doesn’t exist to the people shopping there,” Hawkins told PYMNTS CEO Karen Webster, comparing marketplaces to digital malls where visibility on its own can fuel sales. Social commerce platforms, in particular, have transformed how brands connect with potential shoppers.

“It’s like your friends are telling you how cool [a product] is, and now you want to buy it,” said Hawkins.