In a nutshell: AI startup Perplexity is once again proposing the unlikely scenario that it takes over TikTok’s US business operations. If the company were able to pull off this feat, it promises to make some major changes to the app, including rebuilding the algorithm, adding community notes, and open-sourcing the recommendation system.
Perplexity first proposed a merger with TikTok’s US operations in January. The plan would see the US government hold 50% ownership of the company but have no influence over TikTok’s day-to-day operations and not be granted a seat on the merged entity’s board.
ByteDance has until April 5 to find a US buyer for TikTok’s operations in the US, so Perplexity is once again putting forward a case for why it would be a good choice.
The AI firm writes that it is singularly positioned to rebuild the TikTok algorithm without creating a monopoly, combining “world-class technical capabilities with Little Tech independence.”
It adds that any acquisition by a consortium of investors – such as the group that includes YouTube star MrBeast – could effectively keep ByteDance in control of the algorithm, while any acquisition by a competitor would likely create a monopoly in the short-form video space.
Perplexity writes that “all of society benefits when content feeds are liberated from the manipulations of foreign governments and globalist monopolists.”
Perplexity’s pitch includes rebuilding TikTok’s algorithm from the ground up in American data centers and with American oversight. It also wants to make the “For You” recommendation system transparent and open source.
Another proposed change is the introduction of community notes, in which contributors can add context such as fact-checks under a post. The feature has proven so popular on former Twitter platform X that Meta CEO Mark Zuckerberg said he is introducing it to Facebook and Instagram.
Perplexity writes that the community notes will sit alongside the citations feature used by its own search engine to “turn TikTok into the most neutral and trusted platform in the world.”
The rest of Perplexity’s proposal includes upgrading TikTok’s AI infrastructure using Nvidia Dynamo technology, enhancing the app’s search feature with Perplexity’s answer engine, and improve personalization for those who connect their Perplexity and TikTok accounts.
Exactly where Perplexity would find the money to buy TikTok is unclear. It has been looking to raise funds at an $18 billion valuation, but TikTok’s US operations have been valued at up to $50 billion.
TikTok had until January 19, 2025 to find a US buyer or be banned in the US under legislation introduced in 2024. Donald Trump signed an executive order extending the deadline to April 5, 2025, when he took office, though the President has said he would “probably” extend it if necessary.
