Perplexity AI on January 26 revised the merger proposal it had submitted to TikTok parent ByteDance. The proposal, which would create a new entity combining Perplexity and TikTok US, would now also allow for the US government to own up to 50% of the new company upon a future IPO, Report informs via CNBC.
A proposal document viewed by CNBC, which was shared with ByteDance and prospective new investors, detailed the creation of a new US holding company, “NewCo.”
The document proposes ByteDance contribute TikTok US, minus its core recommendation algorithm, in exchange for the company’s existing investors receiving equity in the new company. Perplexity AI would offer itself up in exchange for its own investors receiving a distribution of the NewCo equity.
Money for the merger would come from “new third-party capital provider(s) (to be mutually agreed upon),” per the proposal document, which would provide capital for a “one-time dividend payment to ByteDance investors in exchange for simplified governance” and to help the new entity grow.