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Perplexity AI formally made a play for TikTok on Saturday, submitting a bid to its mum or dad firm, ByteDance, to permit Perplexity to merge with TikTok U.S. and create a brand new entity combining Perplexity, TikTok U.S. and New Capital Companions, CNBC has realized.
The brand new construction would permit for many of ByteDance’s present traders to retain their fairness stakes and would carry extra video to Perplexity, in line with a supply accustomed to the state of affairs, who requested to stay nameless as a result of confidential nature of the potential deal.
Perplexity AI, the artificial intelligence search engine startup competing with OpenAI and Google, began 2024 with a roughly $500 million valuation and ended the 12 months with a valuation of about $9 billion, after attracting rising investor curiosity amid the generative AI growth — in addition to controversy over plagiarism accusations.
AI-assisted search has been considered by traders as one in all Google’s key dangers, because it probably modifications the way in which shoppers entry info on-line. Final 12 months, OpenAI, which began the generative AI craze in late 2022 with ChatGPT, introduced a search engine known as SearchGPT. Google later launched “AI Overviews” in search, permitting customers to see a fast abstract of solutions on the prime of outcomes.
Although any potential transaction between Perplexity AI and ByteDance would possible take months to finish — and TikTok has said the app will “go darkish” within the U.S. on Sunday until the Biden administration assures it will not punish Apple, Google and different service suppliers for internet hosting it — President-elect Donald Trump told NBC News on Saturday that he “more than likely” would give TikTok 90 extra days to work out a deal after he’s sworn into workplace on Monday.
In a video posted to TikTok on Friday, CEO Shou Zi Chew mentioned, “I need to thank President Trump for his dedication to work with us to discover a answer that retains TikTok out there in the US.”
ByteDance has publicly implied it will not sell TikTok U.S., which is a part of why Perplexity AI believes it has a shot with its bid — because the proposal is a merger reasonably than a sale, the supply instructed CNBC.
The supply believes a good value is “nicely north of $50 billion” however that the ultimate quantity hooked up to the proposal will likely be determined, partly, by which of ByteDance’s present shareholders need to stay a part of the brand new entity and which need to money out.
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