TikTok and Perplexity: The unlikely AI partnership

The potential merger underscores a challenge for AI startups: gaining access to the user base and scale needed to compete with Big Tech.

I spent an inordinate amount of time this past weekend thinking about TikTok. It wasn't just because I was asked to comment on the ban on Fox News and ABC Radio in Australia. And it wasn't because I operate a moderately successful channel for one of my podcasts. No, it was because Perplexity, a major AI company, was in the running as one of the potential suitors to save the app from getting banned in the U.S.

And sure, the whole exercise was probably a blatant grab for publicity, but a deal between Perplexity and a platform like TikTok, as unusual as it sounds, actually makes a certain kind of sense. That's the subject of today's column, but before we get to that, I'm excited that my upcoming class on AI for PR & Media Professionals is now just two weeks away from kickoff! And we've still got a few spots left. Here's how to get 'em:

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What Perplexity gains from a TikTok merger

Could TikTok creators do with a little more AI? (Credit: Midjourney)

TikTok just had the most eventful weekend of its entire existence. After the US Supreme Court unanimously supported a law forcing the sale of the app lest it be banned from American platforms, the social video app went dark late Saturday. Instead of their usual For You page, TikTok users were greeted by a message explaining the ban and all but imploring President Trump to intervene.

And intervene he did. One day before he was officially inaugurated as the 47th president of the United States, Trump said on Truth Social that he would issue an executive order on Monday to delay enforcement of the law to give time to facilitate a sale. TikTok clearly felt that was clear enough for it to feel comfortable restoring service for U.S. users, and access to the app was restored on Sunday. And on Monday, his first day in office, Trump made good on his promise, signing an executive order giving TikTok a 75-day window to find a buyer (though the legality of the order is in question, and the app is still not available for download on the Apple App Store or Google Play).

Amidst the weekend drama, offers to buy TikTok began to get serious. Curiously, one of them was Perplexity. The AI "answer engine" has a valuation of about $9 billion, which is a fraction of TikTok's value (estimated at $50 billion or even higher). How could it acquire TikTok? Well, it couldn't — Perplexity instead proposed a merger that would allow ByteDance's investors to keep their shares in the new merged company.

A source familiar with the matter told me the proposal was indeed real, though the whole thing smells like a publicity stunt. There's a good chance it's simply a plan to get the name of a fast-rising AI company mentioned alongside other, more credible acquirers, in the hope that some of that credibility will rub off. It also might cultivate some goodwill toward Perplexity among tech entrepreneurs and thought leaders who are newly close to government power.

Even if the offer isn't serious, the idea of a Perplexity-TikTok merger is worth thinking about.