07:13 AM EST, 01/27/2025 (MT Newswires) -- Perplexity AI has reportedly revised its merger proposal to TikTok's Chinese parent ByteDance to form a new entity, NewCo, that would combine Perplexity and TikTok U.S., multiple media outlets reported Monday, citing unnamed sources.

The proposal suggests that ByteDance sell TikTok U.S. to new investors, granting TikTok's current investors equity in the new company. It also excludes TikTok's core recommendation algorithm, which ByteDance would retain.

The U.S. government could own up to 50% of the new entity after a future IPO, valued at a minimum of $300 billion, according to the media reports.

Perplexity AI has proposed to be acquired by NewCo if its investors receive equity in the merged entity.

Perplexity AI and ByteDance did not immediately respond to requests for comment from MT Newswires.