Whether TikTok stays with Perplexity AI's backing or goes, without that juicy algorithm ByteDance doesn’t seem willing to part with, the app won't ever be the same.

Perplexity AI search startup has a new proposal to merge with TikTok, which would give the US government a stake of up to 50%.

WASHINGTON (AP) — Perplexity AI has presented a new proposal to TikTok’s parent company that would allow the U.S. government to own up to 50% of a new entity that merges Perplexity with TikTok’s U.S. business, according to a person familiar with the matter.

TikTok, which faces the ticking clock of a ban enforcement, is being pursued by several suitors for a US merger or sale.

Perplexity AI submitted a bid on Saturday to TikTok parent ByteDance, proposing that Perplexity merge with TikTok U.S., CNBC has learned.

Perplexity AI has submitted a revised proposal to merge with TikTok in an arrangement that would give the U.S. government up to 50% ownership of the new