Good morning. Andrew here. We’ve got a lot of deal news to bring you below. But keep an eye on this transaction: Meta is partnering with Blue Owl, an investment firm that specializes in private credit, to finance its massive data center in Louisiana, which is expected to cost $27 billion. Meta is offloading much of the building expense — and risk — to Blue Owl, which will own 80 percent of the financing joint venture. (Meta will also get a one-time $3 billion payout from the vehicle; it has also guaranteed the data center’s lease from the joint venture for 16 years.) The financing for the data center — set to be as big as about 1,700 football fields — is the largest private credit deal yet. Watch for more deals like this in the future. (Was this newsletter forwarded to you? Sign up here.)
The calculus behind a potential media mega-dealWeeks of behind-the-scenes jockeying burst into public view yesterday as Warner Bros. Discovery revealed it was considering a sale after receiving takeover interest for some or all of the company. As potential buyers circle — chief among them Paramount, but also Comcast, Amazon and, reportedly, Netflix — the big question now is how much higher David Ellison, Paramount’s C.E.O., will go above his roughly $23-a-share offer, and whether rivals can outmaneuver him, Lauren Hirsch writes. The latest: Warner Bros. Discovery, which previously outlined a planned split of its two core businesses, said it was now open to an “alternative separation structure” that would merge its studio and streaming operations with another company while spinning off its cable division. That structure could unlock a wider range of potential deals. In some ways it would mimic Disney’s 2019 acquisition of 21st Century Fox, which allowed assets like Fox News and the Fox broadcast channel to be spun off into a separate entity. And it sends a signal to possible suitors that they may be able to acquire only certain parts of Warner Bros. Discovery. That could be particularly appealing to Comcast or to Netflix, whose executives reiterated yesterday on the streaming giant’s earnings call that they weren’t interested in legacy media networks. Wall Street thinks Ellison probably needs to bump up his bid. Jessica Reif Ehrlich, an analyst at Bank of America, told DealBook last week that Warner Bros. Discovery should only consider selling at $30 per share. (Shares of the company jumped 10 percent on yesterday’s news but closed at $20.33.) Yet while Ellison has a deep-pocketed backer — his father, the Oracle co-founder Larry Ellison — he doesn’t have unlimited money. Significant questions about the structure of Paramount’s bid remain, Reif Ehrlich said, including whether any deal would end up significantly diluting Paramount shareholders. Then there’s the Trump factor. Antitrust experts saw potential roadblocks for many of the deal options. But DealBook hears that some people involved in the process believe many of these risks can be managed with M.&A. provisions like a hefty breakup fee. The bigger question is how President Trump might react to any deal, especially given his strong feelings about CNN, which is owned by Warner Bros. Discovery. Trump has made clear his anger with Brian Roberts, Comcast’s C.E.O., and is friendly with Larry Ellison. But even Larry Ellison’s relationship with the president couldn’t expedite the lengthy government review of his son’s takeover of Paramount. And Trump has repeatedly shown he is ultimately transactional. So if Roberts ends up making a play for Warner Bros. Discovery, can he find a way to win over Trump?
Netflix slumps on tax fight with Brazil. Shares in the streaming giant fell more than 6 percent despite the company’s reporting a 17 percent jump in quarterly revenue, thanks to hits like “KPop Demon Hunters” and the second season of “Wednesday.” The culprit: a $619 million payout to settle a tax dispute with Brazil that ate into profits. (The quarter ended before Elon Musk called for people to cancel Netflix subscriptions because of its “woke” content.) Gold posts its biggest drop in more than a decade. The price of gold fell 5.7 percent yesterday, its biggest one-day fall since 2013 — and just a day after settling a record. (Silver followed suit.) Precious metals had been on a tear as investors sought safe-haven assets as refuge from inflation and President Trump’s tariffs. Novo Nordisk’s chairman steps down. Helge Lund, the Danish drugmaker’s chair, and six other directors said yesterday that they would resign after a dispute with the company’s majority shareholder, the Novo Nordisk Foundation. Novo Nordisk, the maker of Ozempic, has been under pressure to turn around its business after falling behind Eli Lilly in the market for next-generation obesity drugs. Travis Kelce goes activist on Six Flags. The N.F.L. star has teamed up with the hedge fund Jana Partners and others to take a 9 percent stake in the theme park operator, seeking changes to its business and, perhaps, a sale. Jana has worked with sports celebrities before, including Dwyane Wade and C.C. Sabathia, as a way to get attention. What’s behind the browser war rebootArtificial intelligence companies are striking fund-raising and computing power deals at a frenzied and seemingly endless clip as they seek to dominate the technology. That race — and the need to eventually cover its astronomical costs — has led companies like OpenAI to march into increasingly competitive internet sectors to win. The latest: OpenAI yesterday unveiled Atlas, a free browser powered by ChatGPT. (There’s no address bar, per se — all queries go through the chatbot.) Available initially just for Apple’s Mac operating system, the app lets users ask ChatGPT queries directly in the browser, with paying subscribers also getting access to “agents” that can perform tasks on their behalf. “We think that A.I. represents a rare, once-a-decade opportunity to rethink what a browser can be about,” Sam Altman, OpenAI’s C.E.O., said during the product’s unveiling yesterday. Atlas serves several functions for OpenAI:
Can OpenAI succeed where others haven’t? Other A.I. companies have rolled out A.I.-infused browsers, including Comet by Perplexity and Neon by Opera. But they haven’t taken much territory from the heavyweights of the category, including Google Chrome and Microsoft Edge — both of which have been beefed up with A.I. capabilities. The announcement created waves. Shares in Alphabet, Google’s parent company, fell 2 percent yesterday. Expect leaders of the tech giant to be peppered with questions about Atlas on the company’s earnings call next week. Atlas is unlikely in the near term to dethrone Google as the browser market leader, Ronald Josey, a Citigroup analyst, wrote in a research note yesterday. But the growth of A.I. agents represents a potential transformation of “the broader internet experience,” especially when it comes to advertising and e-commerce, he added. “Nobody else has the same incentive as Amazon to find the way to automate. Once they work out how to do this profitably, it will spread to others, too.”— Daron Acemoglu, a Nobel laureate who studies automation, in a Times report on Amazon’s plans to replace more than half a million jobs with robots. The e-commerce giant has more than tripled its U.S. work force since 2018, to almost 1.2 million people. But its increasingly automated warehouses could create a drastic workplace shift in which the company becomes “a net job destroyer, not a net job creator,” Acemoglu warned.
The incredible growth of the private marketPrivate capital — the money managed by private equity, venture capital, private credit and other alternative asset managers — has been on a decades-long tear. But a new report by Bank of America’s global research group reveals the staggering scale of the industry and the world’s largest private companies. The report includes an eye-opening diagram depicting 55 of the largest private companies, which have a combined valuation of $2.8 trillion. Here are three more data points that caught our eye:
What’s next? Retail investors are expected to be the industry’s fastest-growing segment, a trend driven by the Trump administration’s executive order clearing the way for private markets to enter 401(k)s. That could be a boon for retail investors seeking higher returns, though experts caution it could pose serious risks for everyday investors. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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