US search engine startup AI has submitted a new proposal to TikTok’s parent company (ByteDance) according to a person familiar to the proposal.
The proposal was submitted last week.
The new proposal would allow the US government to own up to 50% of the new entity that merges perplexity.
The former proposal which had been submitted on January 18th was not responded by ByteDance sought to create a new structure that would merge San-Francisco based perplexity with TikTok U.S business and include investments from other investors.
According to the perplexity document shared with ByteDance and new investors, there was proposal of creation of a new U.S holding company called ‘NewCo’.
Under the proposal, ByteDance would sell TikTok U.S to the investors, which would give TikTok’s existing investors equity in the company.
The new proposal would exclude TikTok’s core recommendation algorithm which ByteDance would keep.
The U.S government would own up to half of the new structure once it goes through an IPO of a valuation of at least $300 billion.
Perplexity AI would also offer to be acquired by the holding company if its own investors received a distribution of the NewCo equity.
Initially, there had been a law which required TikTok’s parent company to either sell the app or ban it’s use in the US which was supposed to be lifted by January 19th.
The law was as a result of fear of national security.
President Donald Trump restored TikTok services once he took office after TikTok had already shut off its app for U.S users.
Currently, TikTok’s fate in the U.S is unsure.
