Perplexity Bids to Acquire TikTok, Promises to Open-Source Algorithm Before April 5 Deadline
AI Startup Proposes to Rebuild TikTok's Algorithm
AI search startup Perplexity has confirmed its bid to acquire TikTok, proposing an ambitious plan to rebuild the app's recommendation algorithm and make it open source.
As the April 5th deadline approaches for ByteDance to divest TikTok or face a US ban, Perplexity has positioned itself as a potential buyer alongside other contenders like Microsoft, Oracle, and a consortium led by Frank McCourt.
"Perplexity is singularly positioned to rebuild the TikTok algorithm without creating a monopoly, combining world-class technical capabilities with Little Tech independence."
Key Proposal Points
- Rebuild TikTok's algorithm "from scratch" in American data centers
- Make the "For You" recommendation system transparent and open source
- Upgrade AI infrastructure using Nvidia Dynamo technology
- Add citation capabilities similar to Perplexity's existing features
- Integrate Perplexity's search with TikTok's video library
TikTok Ban Background
The law banning TikTok took effect on January 19, 2025, amid concerns that the Chinese government could exploit the platform to spy on Americans or covertly influence US public opinion.
President Trump suspended the ban for 2.5 months after beginning his second term, seeking a solution with Beijing. The deadline for ByteDance to divest TikTok is now April 5, 2025.
Recent reports indicate the US administration is in talks with four different groups about potential acquisition deals.
Perplexity's Funding Challenge
While Perplexity has made its intentions clear, questions remain about its financial capacity to complete such a major acquisition:
- Perplexity is reportedly seeking new funding at an $18 billion valuation
- TikTok's US operations are valued between $30-50 billion by analysts
- Larger companies like Microsoft and Oracle may have more financial resources
Some industry observers have questioned whether Perplexity's bid is a serious acquisition attempt or simply a publicity move, given the startup's previous marketing stunts.
Other Potential Buyers
- Oracle and a group of investors (reportedly in discussion with the White House)
- Microsoft, which previously attempted to acquire TikTok
- "The People's Bid for TikTok" - led by Frank McCourt's Project Liberty
- A group including internet personality MrBeast (Jimmy Donaldson)
- Wyoming entrepreneur Reid Rasner ($47.45 billion bid)
Perplexity has criticized other acquisition scenarios, claiming consortiums might keep ByteDance in control of the algorithm, while acquisition by competitors could create monopolies.
