AI startup Perplexity bids to merge with TikTok’s U.S. operations ahead of possible shutdown. Perplexity was recently valued at $9 billion, much lower than the estimated value of TikTok US. Perplexity’s backers include SoftBank and Nvidia, with $914 million in funding secured: PitchBook.
Hours before TikTok was shut down, AI startup Perplexity announced interest in merging with the platform’s U.S. operations, according to people familiar with the matter.
It’s unclear how a startup of Perplexity’s size can merge with such a large operation. Wedbush analyst Dan Ives said earlier Saturday that the startup’s valuation was $9 billion, but that TikTok’s U.S. operations could be worth $40 billion to $50 billion. estimated.
“We expect to see a number of TikTok bids from a number of large tech companies, private equity and other strategic players for this major social media platform in the coming weeks,” Ives said in a note to investors. “We are,” he wrote in a note to investors.
A person familiar with Perplexity’s bid said the combined entity would also include other institutional investors. The person declined to name the other investors and asked not to reveal that they were discussing private matters. CNBC reported the news on Saturday.
The law passed by Congress and signed by President Biden last spring: part time danceTikTok’s Chinese owners have until January 19th to sell the app’s US operations or face a ban.
Although Perplexity is relatively small compared to TikTok US, the startup has large and deep backers including SoftBank, Nvidia, and venture capital firm IVP.
Perplexity has secured $914 million in funding to date, according to PitchBook data. In April, investors valued Perplexity at $1 billion. In its latest funding round, which closed in December, that number jumped to $9 billion.
The startup uses artificial intelligence to power a new type of search engine that responds to queries with short answers and annotations rather than lists of links.
Correction: January 18, 2025 — A previous version of this article incorrectly stated who was involved in this bid other than Perplexity.
