Perplexity AI has proposed a groundbreaking deal to merge with TikTok's U.S. operations, offering the U.S. government up to 50% ownership stake in the newly formed entity. This revised proposal was submitted last week as an attempt to address concerns about TikTok's ownership structure and data security.

Key aspects of the proposal include:

• A minimum $300 billion initial public offering (IPO)
• Full U.S. board control
• ByteDance remaining as a minority investor
• Transfer of algorithm control away from Chinese ownership
• Compliance with U.S. security concerns

This new offer modifies Perplexity's initial January 18 proposal, which focused on creating a merged structure with additional investor participation. ByteDance has not yet responded to either proposal.

Former Treasury Secretary Steven Mnuchin emphasized the importance of separating TikTok's technology from Chinese control, stating "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."

Meanwhile, Oracle and other investors are reportedly discussing a potential takeover of TikTok's global operations, adding another layer of complexity to the ongoing negotiations.

The proposal represents a significant shift in approach to addressing U.S. security concerns while maintaining TikTok's operational capabilities in the American market. Its success will largely depend on approval from both U.S. regulators and ByteDance's willingness to relinquish substantial control over its prized asset.

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