The battle for TikTok is intensifying with more and more interested parties. Information provided by CNBC and collected by agencies indicates that Perplexity AI, a company born in 2022, would seek merge with the US division of TikTok and avoid the platform’s blackout. If this operation is carried out, the legal veto would be lifted and would allow ByteDance and other investors to maintain their stakes in the social network. Donald Trump announced that he would extend a 90-day extension for the social network to find American buyers before the law forces access to TikTok on North American soil to be permanently blocked.
Perplexity AI is a company that was born three years ago and that at the beginning of 2024 raised more than 70 million dollars (68 million euros) in a financing round. The company offers a search engine powered by natural language and artificial intelligence similar to Google with Gemini or Bing with Copilot. The acquisition of TikTok would position this company among the most important technology firms in the digital ecosystem. According to sources cited by CNBC, Reuters and Bloomberg, Perplexity wants to merge by combining TikTok and Perplexity with New Capital Partners, an investment capital firm specialized in this type of operations.
Merger instead of purchase
Donald Trump, who in recent weeks has defended the presence of TikTok in the United States communication ecosystem, proposed this weekend that a coalition of American companies acquire 50% of the US division of TikTok owned by ByteDancewhich would guarantee national security against possible interference from China and avoid the blockade.
Whether Trump’s idea goes ahead or whether Perplexity manages to tie up its plan is unclear. who and how the operation is going to be paid. Estimates say that TikTok may be worth about $50 billion (€48.5 billion) and half of the 330 million Americans use it. The only similar operation is the acquisition of Twitter by Elon Musk: he paid 44,000 million dollars after a tortuous operation in which he had to search financial lenders in addition to mobilizing their personal resources through his holdings in Tesla. The richest man in the world is still footing the bill.
Last week it emerged that China was considering selling TikTok’s US division to Musk, as a strategy to avoid blocking and, in addition, improve relations with the US Administration. None of the parties have spoken since then and TikTok considered its sale to be “pure speculation.” This scenario leaves more doubts about the viability of Perplexity’s plan.
China will still have the key
If there is anything true about the anti-TikTok law (the law specifically cites ByteDance now the social network) is the role it has the second world power in this whole matter. Beijing has the last word, since TikTok’s code takes advantage of an algorithm ‘made in China’. The country’s national law requires that the Asian Executive must grant specific permission to sell or acquire companies powered by Chinese software. Furthermore, China has strategic holdings in ByteDance -despite the TikTok matrix It has its registered office in the Cayman Islands.
The US law seeks to break the ties that Beijing has with the social network. To do this, it prohibits the presence of TikTok in the US unless ByteDance gets rid of its control. Last week the Supreme Court endorsed the constitutionality of the rule, so this same Monday, January 20, its access should have been blocked. However, the standard provides a 90-day extension if there are operations underway to acquire the company. This extension of the deadline is what Trump has promised to activate starting today when he is sworn in as president of the United States and officially becomes the new tenant of the White House.
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