TikTok through the years has gobbled up data based on human behavior, specifically from those based in the United States.
The ByteDance company has generated a treasure trove for any AI-based search engine that could train its large language models (LLMs).
Perplexity AI reportedly on Saturday submitted a bid to TikTok’s parent ByteDance to merge with its U.S. operations. The combined companies could create a new company.
If Perplexity merged with TikTok, it would give the company access to an immense user base and the data needed to feed its AI-driven search engine.
The new structure would allow for most of ByteDance’s existing investors to retain their equity stakes and bring more video and training data to Perplexity, a source told CNBC.
The move -- a merger rather than a sale -- could satisfy the Department of Justice’s concerns over data collection by the People’s Republic of China, which has access to data of all Chinese-based and Chinese-run companies.
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Last week, the Supreme Court upheld a law that will ban TikTok un the U.S. unless the company separates from its Chinese-owned parent company.
On Saturday, President Donald Trump said that he would likely give TikTok a 90-day reprieve on Monday.
TikTok users woke Sunday morning to an app that was down, but by midday President-elect Donald Trump had issued an executive order to allow time for ByteDance to work with the new administration on a long-term solution.
BrightEdge, which focuses on AI and SEO, last week released a report detailing analysis of Perplexity, and other AI engines, across nine industries. Perplexity distinguishes itself through visual integration and related content connections, the analysis found.
When explaining technical concepts such as data modeling, Perplexity pairs clear explanations with visual examples, making complex topics easier to understand at a glance. Tying in information about human behavior would make ad targeting that much more precise.
BrightEdge also noted a fundamental flaw in Perplexity's handling of time-sensitive queries, which could be alleviated by merging with TikTok, giving it real-time information and data.
Other than Perplexity, there have been many reports on possible suitors including Elon Musk, whom the Chinese government has been evaluating as a potential new owner, as well as investors Kevin O’Leary and Frank McCourt, who have offered about $20 billion to buy TikTok.
TikTok reportedly has been estimated to be worth as much as $50 billion for its algorithms and ability to generate revenue for small businesses, influencers, and advertisers.
Entrepreneurs and influencers will say that free speech and business is behind the need to keep running TikTok in the U.S., but for TikTok it’s likely the data.
TikTok also has been exploring revenue streams beyond advertising, such as in-app purchases and e-commerce, further contributing to its overall growth, Statista reported.
Those who want the U.S. government to uphold the ban argue that TikTok collects data related to references, location and behavioral trends about those who live in the U.S.
And while some say it is no different from what Google, Microsoft, Meta and X collect, all that data is not going to China's government, which presents security concerns.