Perplexity AI’s unverified $18B TikTok acquisition claim conflicts with regulatory realities and its $1B valuation, as Oracle and Microsoft lead data partnership talks.
AI startup Perplexity’s rumored $18 billion TikTok bid faces skepticism as regulatory hurdles and valuation gaps undermine speculative tech acquisition narratives.
Startup’s Bold Claim Meets Legislative Reality
Perplexity AI reportedly proposed acquiring TikTok for $18 billion through a blog post on July 14, 2024, suggesting open-sourcing parts of its recommendation algorithm. This claim surfaces days after the U.S. House voted July 10 to extend ByteDance’s divestiture deadline to January 2025, as reported by Bloomberg.
Regulatory Roadblocks Intensify
The Department of Justice confirmed on July 8 that open-sourcing TikTok’s algorithm remains off the table due to national security concerns, according to Reuters. Meanwhile, Oracle expanded its ‘Project Texas’ data hosting agreement with TikTok on July 9, as detailed in The Wall Street Journal.
Valuation Versus Visibility
Industry analysts highlight the disconnect between Perplexity’s $1 billion April 2023 valuation and its purported $18 billion offer. TechCrunch’s July 12 interview with CEO Aravind Srinivas revealed the company currently focuses on search monetization rather than acquisitions.
Historical Tech M&A Patterns Resurface
This incident recalls Microsoft’s 2020 TikTok acquisition attempt, which collapsed amid similar regulatory scrutiny. The $68.7 billion deal marked the last major U.S.-China tech transfer attempt before current restrictions. Like the 2017 Snapchat rebuff of Facebook’s $3 billion offer, unverified acquisition rumors often serve as visibility tools – particularly for startups like Perplexity seeking Series B funding.
Data Localization Precedents
TikTok’s ongoing Oracle partnership mirrors Microsoft’s 2013 ‘Trusted Cloud’ initiative with the NSA, which established early data sovereignty models. These technical frameworks now complicate acquisition logistics more than financial terms, as seen in Amazon’s abandoned 2018 TikTok bid over server migration costs.
