On Saturday, U.S. search engine startup Perplexity AI made an offer to TikTok’s parent company, ByteDance, to merge with TikTok in the U.S., as reported by a source familiar with the situation to Reuters.

TikTok may face a ban in the U.S. starting Sunday unless it severs its ties with ByteDance. However, President-elect Donald Trump suggested on Saturday that he might extend a 90-day delay on this action, to be announced on Monday.

CNBC was the first to cover this development.

The proposed deal involves Perplexity merging with TikTok U.S. to form a new company alongside other collaborators, according to the insider.

This arrangement would likely allow most of ByteDance’s current investors to keep their ownership stakes and would provide Perplexity with an expanded video content offering, the source indicated, requesting anonymity due to the sensitive nature of the discussions.

TikTok has not yet responded to requests for comments.

Perplexity AI optimistic about TikTok merger

Perplexity AI is hopeful that the merger could be successful since it is framed as a collaborative merger, rather than a transaction involving a sale, the source noted.

Perplexity AI’s search technology allows users to quickly obtain answers to queries, complete with sources and references. It utilizes advanced language models, including those from OpenAI and Meta Platforms’ META.O open-source model Llama.

TikTok, which has attracted nearly half of the U.S. population, has been essential for small businesses and has influenced online culture. It announced on Friday that it will cease operations in the U.S. on Sunday unless the Biden administration offers assurances to major companies like Apple AAPL.O and Google GOOGL.O that they will not face penalties if a ban is enforced.

(Reported by Mrinmay Dey in Bengaluru; Edited by Cynthia Osterman and Rod Nickel)