Perplexity AI has initiated a formal acquisition proposal to TikTok’s parent company, ByteDance. The proposal aims to merge Perplexity, TikTok's US operations, and a new capital partner into a new entity.

An insider revealed that the new structure allows the majority of ByteDance’s current investors to retain their equity, potentially bringing more video content to Perplexity.

As a startup competing against giants like OpenAI and Google, Perplexity AI has become an attractive prospect for investors amidst the AI boom, with a projected valuation of $500 million in early 2024, rising to $9 billion by the year's end.