Perplexity AI throws its hat into TikTok bid, offering U.S. government stake

In a dramatic development poised to reshape the global technology landscape, Perplexity AI has submitted a revised proposal to acquire TikTok‘s U.S. operations. This ambitious bid outlines a unique arrangement that would grant the U.S. government up to a 50% stake in the new entity following a future initial public offering (IPO). The proposal reflects escalating national security concerns surrounding foreign-owned platforms and highlights the growing intersection of politics and technology.

Adding further complexity to the saga, Oracle Corporation is reportedly leading parallel negotiations to acquire TikTok’s U.S. operations from ByteDance, the platform’s China-based parent company. This landmark move could redefine global tech ownership and comes amid persistent U.S. government concerns over the handling of American user data under Chinese jurisdiction. Oracle’s potential acquisition would grant it majority ownership while positioning the company as the custodian of TikTok’s data infrastructure—a critical step in addressing national security fears.

What does Perplexity AI’s bid involve?

Perplexity AI’s proposal centers on creating a U.S.-based holding company, tentatively named “NewCo.” Under this structure, ByteDance would divest TikTok’s U.S. operations to a consortium of investors while retaining ownership of TikTok’s core recommendation algorithm. This algorithm, considered TikTok’s most valuable asset, would remain under ByteDance’s control, raising questions about its long-term impact on TikTok’s user experience.

The key feature of the proposal is its provision to grant the U.S. government a 50% ownership stake in NewCo upon reaching a minimum IPO valuation of $300 billion. This arrangement aims to address security concerns while providing the U.S. government with significant influence over the platform’s operations.

For Perplexity AI, the acquisition would create a transformative opportunity to integrate its advanced AI-driven search engine with TikTok’s massive user base. By combining cutting-edge technology with TikTok’s social media dominance, Perplexity AI seeks to establish itself as a major player in the competitive tech ecosystem, rivaling giants such as Google.

Why is TikTok’s U.S. ownership under scrutiny?

TikTok has long faced scrutiny over data privacy concerns and its potential vulnerability to Chinese government influence. Under the 2025 Protecting Americans from Foreign Adversary Controlled Applications Act, ByteDance was mandated to divest TikTok’s U.S. operations by January 19, 2025. Failure to comply risked a complete ban on TikTok in the United States.

In an effort to meet regulatory demands, ByteDance temporarily halted TikTok’s U.S. services earlier this month, only resuming operations after President Donald Trump indicated that an extension to the divestment deadline was under consideration. The U.S. government’s emphasis on safeguarding user data remains a central theme in negotiations, underscoring the stakes for both Perplexity AI and Oracle Corporation as potential acquirers.

Can Perplexity AI and Oracle handle TikTok’s U.S. operations?

While Perplexity AI’s proposal is bold, it has sparked skepticism among analysts due to its financial limitations compared to TikTok’s estimated $40 billion U.S. valuation. Experts argue that the company’s relatively small valuation and exclusion of TikTok’s recommendation algorithm could hinder its ability to maintain user engagement.

On the other hand, Oracle’s potential acquisition offers a different approach. By assuming majority ownership and taking on the role of custodian for TikTok’s data infrastructure, Oracle positions itself as a solution to address national security concerns head-on. Oracle’s established reputation in enterprise data management could help restore trust in the platform’s handling of U.S. user data, making its bid a strong contender in negotiations.

What’s at stake for U.S. national security?

Both Perplexity AI and Oracle’s bids reflect a broader trend of increasing government involvement in critical technology platforms. The U.S. government’s potential 50% stake in Perplexity AI’s proposed NewCo highlights the prioritization of oversight and security in today’s digital economy. Similarly, Oracle’s promise to safeguard TikTok’s data infrastructure underscores the importance of addressing vulnerabilities tied to foreign-owned platforms.

These developments signal a shift in how governments approach tech ownership, balancing innovation with regulation to protect users and national interests. As both companies vie for TikTok’s U.S. operations, the outcome could establish a precedent for future foreign-owned platforms operating in sensitive markets.

Perplexity AI and Oracle Corporation’s competing bids to acquire TikTok’s U.S. operations underscore the growing intersection of technology, security, and politics. While Perplexity AI’s bold proposal could grant the U.S. government unprecedented ownership, Oracle’s focus on data security offers a compelling alternative for addressing long-standing concerns.

As ByteDance evaluates its options, these bids highlight the broader challenges of balancing corporate innovation with national security imperatives. With billions of dollars and the future of a globally influential platform at stake, the coming weeks will be pivotal in determining the fate of TikTok’s U.S. operations—and potentially the next chapter in the relationship between technology and governance.