Perplexity AI, a US-based search engine company, has submitted a bid to merge with TikTok US, as per a recent report by Reuters. The proposal, submitted to TikTok's parent company ByteDance on Saturday, was first reported by CNBC and confirmed by a source familiar with the discussions.

The merger plan involves creating a new entity by combining TikTok US, Perplexity AI, and private equity firm New Capital Partners, states the Reuters report. The structure would allow existing ByteDance investors to retain their equity while integrating TikTok's video content capabilities with Perplexity's search tools, according to the source, who requested anonymity due to confidentiality concerns.

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Perplexity AI, known for its search technology powered by advanced language models, reportedly believes the merger structure—rather than a direct sale—has a better chance of approval, adds the report.

Neither ByteDance nor TikTok provided immediate responses to inquiries from Reuters. New Capital Partners was also unavailable for comment.

The proposal comes as TikTok seeks to navigate regulatory scrutiny and maintain its presence in the US market, currently being unavailable to US users. Whether this merger will meet government requirements or gain ByteDance's approval remains unclear.