Perplexity AI is making big moves in the AI and social media space with a bold bid to merge with TikTok U.S. to create a new entity among Perplexity, TikTok U.S. and a new capital partner, as CNBC reported. The proposed merger would combine Perplexity's AI-powered search engine with TikTok's U.S. operations, bringing video content to Perplexity's platform and giving ByteDance's investors the chance to retain their equity stakes. This move comes just as TikTok faces a potential U.S. ban, but President-elect Trump has suggested a 90-day reprieve could give the platform time to secure a deal.
Perplexity, which ended 2024 with a valuation of $9 billion, is riding the generative AI wave and positioning itself as a major player in the AI search space. With the merger, Perplexity could disrupt the market, challenging giants like Google and OpenAI by combining its cutting-edge search technology with TikTok's massive user base and video content ecosystem. It's a smart play that could give Perplexity the edge it needs to shake up the competition.
The deal is still in the early stages and could take months to finalize, but the proposed merger instead of a sale gives Perplexity a strong shot. Sources believe the final price tag will likely exceed $50 billion, but that number depends on how ByteDance's investors decide to play their hand. If successful, this deal could set the stage for a major shift in both the AI and social media industries, putting companies like Meta Platforms (META, Financial) and Google (GOOG, Financial) on notice.
