Perplexity AI has submitted a revised proposal to merge with TikTok in a deal that would grant the U.S. government up to 50 percent ownership of the resulting entity, according to a report by The Associated Press.
A source familiar with the matter confirmed that the AP’s report is accurate. The revised proposal comes as Perplexity seeks to address concerns raised by the Trump administration regarding TikTok’s Chinese ownership and national security risks.
Under the new plan, Perplexity AI proposes the formation of a new company by merging Perplexity, TikTok’s U.S. operations, and additional equity investors. The U.S. government’s stake would be realized following an initial public offering (IPO) of at least $300 million. Meanwhile, ByteDance, TikTok’s current Chinese owner, would still retain a stake in the company.
Reports suggest that the revision was influenced by feedback from the Trump administration. President Donald Trump had earlier expressed interest in seeing the U.S. government gain a significant share of any TikTok sale, although it remains unclear if he referred specifically to government ownership or a U.S. investor stake.
Last weekend, TikTok faced a temporary outage due to a law compelling ByteDance to sell its U.S. operations or face a ban. The app resumed operations after Trump announced plans to sign an executive order extending the sale deadline, while reiterating his preference for a deal that benefits the U.S. government financially.
In a related development, another report suggested that Oracle is negotiating to take over TikTok’s U.S. operations. Oracle currently provides the infrastructure for TikTok’s U.S. traffic. When asked about these negotiations, Trump stated that he had spoken to “many people about TikTok” but not directly with Oracle.
The developments underscore the ongoing tussle over TikTok’s U.S. operations as parties race against the clock to strike a deal acceptable to all stakeholders.