NIX Solutions: Microsoft Enters Race to Buy US Part of TikTok

Late last week, former President Donald Trump announced that he expected to make a decision regarding TikTok’s future in the United States within 30 days. Since then, he has expressed hope that enough parties will step forward to purchase TikTok’s American operations. Among the potential buyers is Microsoft, while a relatively new startup, Perplexity AI, has proposed an alternative solution by merging with TikTok’s American assets.

NIX Solutions

Perplexity AI’s Proposed Merger

According to CNBC, Perplexity AI, founded just last year, suggests merging with TikTok’s American business to sidestep potential resistance from ByteDance, TikTok’s Chinese parent company, which reportedly opposes a direct sale. Perplexity’s plan involves creating a new entity, “NewCo,” with proportional shares allocated to TikTok’s and Perplexity’s existing stakeholders. Funding for the deal would come from new investors chosen by both parties.

The proposal envisions NewCo going public, with an estimated market capitalization of $300 billion. Notably, half of NewCo’s shares would be allocated to the U.S. government, fulfilling its objective of bringing TikTok’s American operations under domestic control. However, this arrangement would not include transferring TikTok’s core recommendation algorithm—an integral part of its success—to U.S. investors, notes NIX Solutions.

Microsoft and Trump’s Perspective

As Reuters reports, Trump began the week confirming Microsoft’s involvement in discussions to acquire TikTok’s U.S. assets. He remarked that he would welcome competition among potential buyers for the social media giant. This stance aligns with his previous efforts during his presidency to separate TikTok’s American operations and transfer control to a consortium of U.S.-based companies, which included Microsoft.

While Microsoft’s leadership has previously described negotiations during Trump’s presidency as peculiar, the company may now have stronger motivations to pursue such a deal. We’ll keep you updated as more developments unfold around TikTok’s fate in the U.S.