It was apparently a busy weekend for key players involved in Donald Trump's efforts to make a deal to save TikTok.
Perhaps the most appealing option for ByteDance could be if Trump blessed a merger between TikTok and Perplexity AI—a San Francisco-based AI search company worth about $9 billion that appears to view a TikTok video content acquisition as a path to compete with major players like Google and OpenAI.
On Sunday, Perplexity AI submitted a revised merger proposal to TikTok-owner ByteDance, reviewed by CNBC, which sources told AP News included feedback from the Trump administration.
If the plan is approved, Perplexity AI and TikTok US would be merged into a new entity. And once TikTok reaches an initial public offering of at least $300 billion, the US government could own up to 50 percent of that new company, CNBC reported. In the proposal, Perplexity AI suggested that a "fair price" would be "well north of $50 billion," but the final price will likely depend on how many of TikTok's existing investors decide to cash out following the merger.
ByteDance has maintained a strong resistance to selling off TikTok, especially a sale including its recommendation algorithm. Not only would this option allow ByteDance to maintain a minority stake in TikTok, but it also would leave TikTok's recommendation algorithm under ByteDance's control, CNBC reported. The deal would also "allow for most of ByteDance’s existing investors to retain their equity stakes," CNBC reported.
But ByteDance may not like one potential part of the deal. An insider source told AP News that ByteDance would be required to allow "full US board control."
According to AP News, US government ownership of a large stake in TikTok would include checks to ensure the app doesn't become state controlled. The government's potential stake would apparently not grant the US voting power or a seat on the merged company's board.