Key takeaways:

• Perplexity AI has submitted a revised merger proposal to TikTok's parent company, ByteDance.
• The proposal allows the U.S. government to own up to 50% of the new entity post-IPO, valuing at least $300 billion.
• Shares held by the government would lack voting rights and board representation.
• ByteDance retains control of TikTok's core algorithm in the proposed structure.
• Former President Trump remains involved in discussions about TikTok's future and potential investors.

On January 26, U.S. search engine startup Reuters reported that Perplexity AI has submitted a new proposal that would merge its operations with TikTok’s U.S. business, allowing the U.S. government to acquire up to 50% ownership of the newly formed entity. This revised proposal builds on an earlier submission made on January 18, just before legislation aimed at banning TikTok was enacted. The initial plan had not received a response from ByteDance, TikTok's Chinese parent company.

The updated structure aims to create a new holding company under which ByteDance would sell TikTok's U.S. business, disregarding the proprietary algorithm that determines app content. A source familiar with the matter noted that the U.S. government’s stake would be contingent on a successful initial public offering (IPO), which must be valued at a minimum of $300 billion. However, shares held by the government are designed not to provide voting rights or representation on the board, as detailed in a report by AP News.

According to further analysis, the proposal closely follows former Treasury Secretary Steven Mnuchin’s vision of a diluted Chinese ownership framework that could address U.S. national security concerns. Mnuchin, who had shown interest in TikTok, stated that "the technology needs to be disconnected from China" as part of any restructuring plan.

Meanwhile, discussions surrounding TikTok have garnered significant attention, with former President Donald Trump indicating that decisions regarding the platform's future could come within thirty days. Trump mentioned various substantial investors expressing interest in the app during a flight aboard Air Force One, even as TikTok briefly halted its operations in the U.S. over legal concerns.

Despite the ongoing discussions, TikTok has not been accused of improperly handling user data or allowing access to its algorithms by Chinese authorities. The Biden administration continues to monitor the situation closely as it weighs the implications of TikTok’s ownership and operational structure

For more details on the proposal and ongoing developments, visit India Times.