Following the feedback from Donald Trump’s administration, Perplexity AI proposed a new deal to merge with TikTok’s US business, agencies reported, citing people familiar with the matter. This deal, as per sources, would let the US government have ownership of up to 50 per cent of the new entity.

TikTok owner ByteDance did no repond to the earlier proposal by Perplexity AI. The US tech firm presented the proposal on January 18, one day before the brief US ban on the app (since lifted).

The latest proposal, however, gives the US administration the option to own up to half of the newly proposed merged entity after it makes an initial public offering of at least USD 300 million, the Associated Press reported, citing the source.

However, according to the person familiar with the deal, the US government would not get any voting rights or a seat on the company’s board despite stake ownership. This plan also allows ByteDance to not completely remove itself from TikTok even if it gets a “full US board control,” the source reportedly stated.

Both ByteDance and TikTok have yet to comment publicly or respond to the reports.

(This is a developing story)