AI Company Submits Acquisition Proposal for TikTok Business in the US with Revised Terms Allowing Government to Hold up to 50% Shares

CNBC references a document outlining the revised proposal to acquire TikTok’s business in America from Perplexity AI, a company openly expressing interest in the acquisition. This proposal piqued interest as it offers benefits to the United States government.

Perplexity AI proposes to acquire TikTok’s business by establishing a new holding company in the US temporarily named NewCo. This entity would have ByteDance as a joint shareholder in TikTok US, without the inclusion of major algorithms. ByteDance and existing shareholders would exchange shares for NewCo’s shares, supplemented by external investor funding to compensate ByteDance shareholders.

The NewCo strategy ensures ByteDance shareholders do not lose out on TikTok US’s business sale, framing it as a new business merger that eliminates the need for selling off assets—a stance previously emphasized by the company. Additionally, the proposal allows the US government to own half of NewCo after the company goes public.

The main challenge lies in valuing the NewCo business, estimated at around $50 billion by Perplexity AI, while ByteDance’s business is valued at $300 billion, including the anticipated capital infusion. This disparity in business valuation creates a hurdle for the proposal.

TLDR: Perplexity AI presents a proposal to acquire TikTok’s US business through the establishment of NewCo, offering benefits to ByteDance shareholders while posing challenges in business valuation.