Perplexity AI proposes TikTok merger with 50% U.S. government ownership stake

Perplexity AI has presented a new proposal to TikTok's parent company that would allow the U.S. government to own up to 50% of a new entity that merges Perplexity with TikTok's U.S. business, according to a person familiar with the matter.

The proposal, submitted last week, is a revision of a prior plan the artificial intelligence startup had presented to TikTok's parent ByteDance on Jan. 18, a day before the law that bans TikTok went into effect.

The first proposal, which ByteDance hasn't responded to, sought to create a new structure that would merge San Francisco-based Perplexity with TikTok's U.S. business and include investments from other investors.