Perplexity AI, a new rival to Alphabet's Google in the internet search market, on Saturday submitted a bid to TikTok parent ByteDance seeking a merger with the U.S. business of the social media firm, according to a CNBC report. With TikTok, Perplexity could emerge as a stronger rival to Alphabet , a potential blow to Google stock.
Started in 2022, Perplexity is both a search engine and AI chatbot. It recently launched a shopping assistant supported by payment firm Stripe.
The Supreme Court on Friday upheld the federal law that will ban TikTok unless the China-based parent company sells the popular short video app's U.S. operations. TikTok late Saturday said it has temporarily shut down U.S. operations. President-elect Donald Trump has signaled that he plans to give ByteDance more time to resolve issues. He takes office on Monday.
Congress passed the law banning TikTok on national security grounds. Lawmakers have demanded that TikTok take steps to prevent the sharing of data from U.S. users with the Chinese government. A TikTok ban or sale could boost social media stocks such as Meta Platforms and Snap.
Further, Oracle would take a financial hit if TikTok shuts downs temporarily or for a long time. Oracle provides cloud computing services to TikTok.
Bezos, Nvidia Among Perplexity Investors
Perplexity's proposal would create a new merged entity also including new capital partners, according to a report.
Perplexity holds a $8 billion valuation after its latest funding round. Its early investors included Amazon.com founder Jeff Bezos, Nvidia and the venture firm New Enterprise Associates.
ByteDance reportedly has explored the option of a TikTok deal with Tesla founder Elon Musk, who has emerged as a key advisor to Trump. Musk owns social media platform X, formerly called Twitter.
To finance a deal with TikTok-parent ByteDance, Perplexity would need to line up support from deep-pocketed investors.
"We see the Perplexity bid as having no chance given its inherent value is too low for what likely is a $40 billion-plus deal," Wedbush analyst Daniel Ives told IBD in an email. "Musk is a front runner in what could be a very competitive bid process for TikTok"
Google Stock: Big 2024 Gain
Further, Bezos and Musk are long-time rivals, competing in the space industry and elsewhere. Musk founded SpaceX while Bezos started Blue Origin. Both are working with the National Aeronautics and Space Administration as part of its lunar-exploration campaign.
Like startup OpenAI's ChatGPT, Perplexity provides answers to questions based on information it gathers from searching the web. OpenAI recently raised $6.6 billion in new funding, valuing the startup at $157 billion. OpenAI's biggest investor is Microsoft.
Google stock has gained 3.5% in 2025. Shares jumped 37% last year. GOOGL stock has five-weeks-tight pattern with a 201.42 buy point that could turn into a flat base after next week.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
