Confusion AI Revises TikTok Merger Proposal Allowing US Government 50% Stake – CNBC By Investing.com

Investing.com- US search engine startup Perplexity AI has updated its merger proposal with TikTok parent ByteDance, aiming to form Perplexity and TikTok US, a new US-controlled entity, according to a proposal document seen by CNBC on Sunday. is it.

According to the revised proposal, a new American holding company named “NewCo” is to be established, the report said. ByteDance will sell TikTok’s US operations to Newco investors, giving TikTok’s existing shareholders equity in the newly formed entity. Confusion has proposed a buyout by Newco as a condition of distributing equity to its investors, he added.

The plan proposes that the US government take up to 50% stake in Newco following an initial public offering (IPO) worth at least $300 billion. However, ByteDance will continue to own Tik Tok’s core recommendation algorithm, which is a key driver of its global popularity, the report said.

Reuters also reported the revised proposal, citing a source familiar with the matter.

TikTok’s future in the United States has been clouded by national security concerns, leading to a temporary shutdown and ongoing discussions about restructuring.

President Donald Trump recently indicated that he will continue to discuss the future of TikTok with several parties, and that a decision is expected within 30 days. TikTok services were restored last week after Trump announced that he would allow the app to continue operating in the country.

Confusion AI’s proposal reflects an innovative approach combining merger and investment strategies, which it believes can bypass political barriers directly related to sales. ByteDance and the White House declined to comment on the revised proposal, the reports said.

The development comes as TikTok and ByteDance navigate complex regulatory controls, alongside efforts by other suitors to protect their stake in the widely used video-sharing platform.