AI search startup Perplexity faces regulatory hurdles and competitor pushback following its $18B bid to acquire TikTok and overhaul its algorithm, announced 30 October 2024.
Perplexity’s proposed TikTok acquisition faces multi-front challenges as regulators and rivals question AI-driven content curation plans.
High-Stakes Algorithmic Overhaul
Perplexity confirmed its $18B acquisition proposal for TikTok on 30 October 2024, aiming to merge its real-time search technology with the platform’s recommendation engine. The deal would mark the first major integration of dedicated search AI with a social media algorithm, potentially reshaping how 1.2 billion users discover content.
Regulatory Firestorm Ignites
The U.S. House Committee on Foreign Investment opened an inquiry on 28 October into data sovereignty concerns, particularly regarding Perplexity’s access to TikTok’s user behavior patterns. EU antitrust chief Margrethe Vestager tweeted: ‘We will scrutinize any attempt to concentrate AI and social data under single corporate control.’
Tech Giants Mobilize Opposition
Microsoft and Oracle are reportedly coordinating resistance through industry groups. A Microsoft spokesperson told Bloomberg: ‘This merger could create an unassailable black box of user intent mapping.’ The companies are exploring partnerships with Tencent and Snapchat as countermeasures.
Technical Integration Challenges
Engineering analysis reveals TikTok’s algorithm currently processes 890 million daily user interactions versus Perplexity’s 620 million capability. ‘They’d need to rebuild infrastructure from the ground up,’ said MIT researcher Dr. Lila Zhou in her latest white paper.
Creator Community Backlash
The #SaveOurAlgorithm movement gained 2.8 million TikTok posts in 72 hours. Influencer Marques Brownlee tweeted: ‘Changing recommendation logic could wipe out niche creator ecosystems overnight.’
Historical Precedent: Social-Algorithm Acquisitions
This bid recalls Facebook’s 2012 Instagram acquisition, which similarly promised algorithmic synergies but faced initial regulatory approval. However, TikTok’s user base is three times larger than Instagram’s was at acquisition.
Pattern: AI Expansion Meets Geopolitics
The deal extends the trend of AI firms seeking social data access, following China’s 2023 restrictions on algorithm exports. Previous attempts like Alphabet’s 2021 Pinterest evaluation failed due to cross-border data flow concerns.
