Perplexity AI revises Tiktok merger proposal that could give the U.S. government a 50% stake

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The document suggests ByteDance contribute TikTok U.S., minus its central recommendation algorithm, in exchange for the company's current investors receiving ownership in the new company. Perplexity AI has offered itself in exchange for its own investors receiving a distribution of NewCo's equity.

The proposal outlines that funds for the merger would come from "new third-party capital sources (to be agreed on by both parties)," among which would be investors who would receive "a one-time dividend payment in exchange for governance changes" for ByteDance shareholders and to support the growth of the new combined entity.

Individuals have seen AI-assisted search as a key risk for Google, as it could fundamentally change the way internet users acquire information.

They are working on allowing users to see a summary of answers at the top of the search results.

TikTok in the U.S. is part of the reason Perplexity AI thinks it has a chance with its offer — since the deal would be a merger rather than a sale, a source said.

Under the revised plan, the U.S. government could end up owning up to half of the new entity once it goes public through an initial public offering of at least $300 billion.

A fair price is "well over $50 billion" but the final number attached to the proposal will be determined, in part, by how many of ByteDance's current shareholders want to stay with the new entity and how many want to sell.

TikTok has for the time being reinstated itself in the U.S. and proposed plans that would have an American investor buy the company and then sell a 50% stake to the U.S. government. In a video posted by TikTok earlier this month, CEO Shou Zi Chew said, "I want to thank President Trump for his commitment to work with us to find a solution that keeps TikTok available in the United States."

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