AI startup updates ByteDance proposal with new U.S. holding company and potential government stake.
Perplexity AI has revised its merger offer for TikTok parent ByteDance (BDNCE), proposing a structure that could give the U.S. government up to a 50% stake in a future IPO, multiple news reports indicate. The new proposal introduces a U.S.-based holding company, NewCo, which would oversee TikTok U.S. and ByteDance's core recommendation algorithm.
Existing investors from Perplexity AI and ByteDance would receive equity in the new entity. The deal's financing would involve third-party capital providers, enabling a one-time dividend payment to ByteDance investors in exchange for simplified governance. The previous offer was valued at over $50 billion, but the final amount will depend on ByteDance shareholders' participation.
Perplexity AI, a rising competitor to Microsoft (NASDAQ:MSFT)-backed OpenAI and Google (NASDAQ:GOOGL), reached a $9 billion valuation by late 2024 amid growing demand for generative AI. It is among several firms, including Microsoft, Oracle (NYSE:ORCL), and potentially Elon Musk, exploring TikTok-related deals.
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