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By Lilith Foster-Collins
News Reporter
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The U.S. government could own up to 50% of Perplexity AI and TikTok's U.S. business as part of a new deal, a source familiar with the matter has said.
Perplexity AI presented a new proposal to TikTok's parent company ByteDance last week.
The proposal is a revision of a prior plan presented on Jan. 18, a day before the law that bans TikTok went into effect.
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Why It Matters
The proposal represents a potential compromise between banning TikTok and addressing concerns over its Chinese ownership.
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What To Know
The revised proposal allows for a new structure merging Perplexity AI and TikTok's U.S. business.
The U.S. government could acquire up to a 50 percent nonvoting stake after a public offering valued at $300 billion or more.
ByteDance would maintain equity in the new entity but cede control to a U.S. board.
The plan aligns with feedback from the Trump administration and echoes strategies previously suggested by former Treasury Secretary Steven Mnuchin.
ByteDance and TikTok did not immediately respond to a request for comment from The Associated Press.
Why Was TikTok Banned?
Congress voted to ban TikTok in the U.S., citing concerns that the platform's ownership structure posed a security risk.
The Biden administration spent months in court arguing that allowing a Chinese company to control the algorithm determining what users see on the app was too great a threat.
Officials also raised alarms about the potential misuse of user data collected on the platform.
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Trump's Relationship With TikTok
Under a bipartisan law passed last year, TikTok faced a U.S. ban by Jan. 19 unless it severed ties with its parent company, ByteDance.
The Supreme Court upheld the law, but Trump issued an executive order delaying its enforcement by 75 days.
TikTok briefly shut down operations in the U.S. a week ago but resumed service after Trump announced a postponement of the ban.
Although Trump previously attempted to ban TikTok during his first term, he has since reversed his stance, crediting the app for helping him gain support from young voters during the last presidential election.
TikTok CEO Shou Chew, alongside other tech leaders, attended Trump's inauguration on Jan. 20.
What People Are Saying
Steven Mnuchin, former Treasury Secretary: "The technology needs to be disconnected from China ... There's absolutely no way that China would ever let us have something like that in China."
President Donald Trump: "Numerous people are talking to me. Very substantial people," Trump said. "We have a lot of interest in it, and the United States will be a big beneficiary. ... I'd only do it if the United States benefits."
What Happens Next
If successful, the plan could shape the future of TikTok in the U.S. However, there were also reports that Oracle, in conjunction with outside investors, was considering taking over TikTok's global operation.
This article includes reporting from The Associated Press
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