Perplexity, a startup known for its AI-powered search engine and emphasis on citation-based results, has put forward a public proposal to acquire TikTok’s U.S. operations.
The company outlined a TikTok acquisition proposal, pitching a full rebuild of the platform’s recommendation system along with a promise to open-source the code, store all user data in U.S.-based infrastructure, and introduce third-party oversight.
This renewed offer arrives amid rising legislative pressure. On the U.S. House of Representatives passed a bill requiring TikTok’s Chinese parent company ByteDance to divest the platform within six months or face a ban.
That followed a January Supreme Court ruling affirming the U.S. government’s authority to prohibit foreign-owned apps on national security grounds. While former President Trump issued a 75-day delay to that enforcement, the more bill supersedes it—setting an official divestment deadline that now looms over all negotiations.
Perplexity’s approach positions itself as a counterweight to both Big Tech consolidation and foreign control. The company wrote:
“Perplexity is singularly positioned to rebuild the TikTok algorithm without creating a monopoly, combining world-class technical capabilities with Little Tech independence. Any acquisition by a consortium of investors could in effect keep ByteDance in control of the algorithm, while any acquisition by a competitor would likely create a monopoly in the short form video and information space. All of society benefits when content feeds are liberated from the manipulations of foreign governments and globalist monopolists.
TikTok’s “For You” feed is personalized to each user and building a real-time recommendation system is vital to keeping a short video platform fresh and fun to use. Perplexity would start by building these basic systems to ensure users maintain a seamless experience. This infrastructure would be developed and maintained in American data centers with American oversight, ensuring alignment with domestic privacy standards and regulations.”
A Transparency-Driven Vision for TikTok
Rather than absorbing TikTok into its existing operations, Perplexity proposes an overhaul. The company would build a new recommendation engine from the ground up, host it in U.S.-controlled data centers, and publish the code for public scrutiny.
In its words:
“The TikTok algorithm today is a black box. We believe these recommendation systems should be transparent. To eliminate risks of user manipulation, we propose rebuilding TikTok’s algorithm from the ground up with transparency as the guiding principle. Our promise is to turn TikTok into the most neutral and trusted platform in the world. To achieve this, we commit not only to developing a new algorithm but also to making the TikTok For You feed open source.”
The proposal also includes the offer to creating a new body composed of journalists, legal scholars, and technologists who would oversee the algorithm’s design and issue public audits. Another component is the integration of Perplexity’s own citation tools—powered by a retrieval-augmented generation (RAG) system—into TikTok videos.
This system surfaces live citations behind answers and video claims to promote information transparency.
Multilingual translation would be built in by default, and users could optionally link their Perplexity and TikTok accounts to enable personalized content recommendations. The company also says it would use Nvidia’s Dynamo platform to power the system’s AI workloads. Dynamo is optimized for high-throughput inference, though real-world performance at TikTok’s scale remains speculative.
ByteDance’s Algorithm Stance May Doom Any Deal
Despite the proposal’s ambition, ByteDance’s reported position could make any acquisition effort a nonstarter. ByteDance has indicated it would rather shut down TikTok’s U.S. operations than relinquish control over the app’s recommendation engine.
That refusal directly undermines any buyer intent on taking over or rebuilding the platform’s core engagement system—including Perplexity.
While Perplexity says it would start from scratch, it’s unclear whether a newly developed engine would satisfy user expectations, regulatory demands, or the need to maintain continuity across TikTok’s massive U.S. user base.
Moreover, the proposal avoids outlining how it would address TikTok’s extensive moderation challenges—ranging from misinformation and hate speech to regulatory compliance and child safety obligations.
With real-time video, algorithmic discovery, and advertising systems in constant motion, rebuilding the platform also means replicating a complex operational backend that even established tech giants find difficult to manage.
Perplexity’s Resources May Not Match Its Vision
Questions also surround Perplexity’s capacity to operate a platform of TikTok’s scale. While Perplexity is reportedly in early talks to raise funding at an $18B valuation, no such deal has been confirmed. In contrast, a $73.6 million Series B round in December 2024 valued the company at closer to $1 billion.
This raises the question of whether the bid is as financially viable as Perplexity suggests. TikTok’s U.S. operations are estimated to be worth between $30 billion and $50 billion. Running a social platform of that size requires infrastructure, legal compliance, moderation, and ad systems that go far beyond what Perplexity currently operates.
Critics may also view the proposal as a continuation of the startup’s headline-seeking tendencies. Earlier this year, Perplexity aired a $2.5 million Super Bowl ad calling out Google’s AI-generated search results. It also attempted to sponsor a Formula 1 team and appointed actor Jimmy O. Yang as its fictional “Chief Security Officer”—a reference to his role in HBO’s Silicon Valley.
Other Bidders and the Race Against the Clock
Perplexity isn’t the only player attempting to secure TikTok’s U.S. assets. Former LA Dodgers owner and billionaire Frank McCourt is leading a public-interest bid for TikTok through a consortium that includes Guggenheim Securities and former FCC Chair Tom Wheeler. McCourt’s pitch proposes converting TikTok into a public-interest technology platform, emphasizing civic utility over profit.
Microsoft and Oracle, both of which have past experience negotiating with the U.S. government over TikTok, are also reportedly in the mix. So far, ByteDance has not commented publicly on any of the proposals.
With the new congressional deadline ticking down toward its expiration, any viable deal must not only win regulatory approval but also convince ByteDance to part with its most valuable algorithmic asset. Whether Perplexity’s open-source, civic-minded approach is a serious acquisition strategy or a sophisticated marketing campaign remains to be seen.
