The Billion-Dollar Stakes for OpenAI

Andrew here. With the Ellison family planning to back a bid by Paramount to buy Warner Bros. Discovery, it could become the most important player at the intersection of media and technology. Larry Ellison, a backer of President Trump, is also in pole position to acquire TikTok if the U.S. can reach a deal with China.

The Ellisons could ultimately control Oracle, Paramount-Warner Bros. Discovery and TikTok — a collective juggernaut with unique reach and influence. That ambition might also explain Paramount’s plan to buy Bari Weiss’s Free Press. It’s a way to signal to regulators in the Trump administration that the media powerhouse plans to move its news operations — and a potentially combined CBS-CNN — rightward. Or, as the company might say, more toward the center. More on all this below. But first:

A step forward for OpenAI

OpenAI appears to be moving closer to resolving an existential crisis, reaching a tentative agreement to rework its partnership with Microsoft.

A finalized deal would help the artificial intelligence start-up in its quest to convert into a for-profit company, a crucial step to unlocking billions more in funding. But even that doesn’t lift all the questions that are hanging over the ChatGPT maker, as investors continue to show concerns about the A.I. boom.

What we know about the OpenAI-Microsoft talks so far:

• The Times reports that the two have agreed to rework a clause in their original agreement that would rescind Microsoft’s access to OpenAI’s most advanced technology once the start-up had achieved so-called artificial general intelligence. (Read: A.I. as capable as a human brain, though the definition is hazy.)

• The Financial Times reports that Microsoft is also set to take a roughly 30 percent stake in a reorganized OpenAI once it becomes a for-profit company, worth perhaps $170 billion. The nonprofit organization that currently controls OpenAI will get a stake worth at least $100 billion, or more than 20 percent of the for-profit entity.

The stakes are huge. Establishing a for-profit structure (via a public benefit corporation) would let OpenAI eventually go public and raise money from outside investors. Nearly $20 billion worth of funds it has raised during the past year is contingent on the conversion.

For Microsoft, maintaining its uniquely close ties to a leading A.I. developer — even if it’s reportedly deepening its relationship with rivals like Anthropic — will help it maintain a technological lead over competitors including Google. Shares in Microsoft are up 1.2 percent in premarket trading on Friday.

OpenAI still faces questions about its future. Company executives are worried about the possibility state regulators in California and Delaware could block the conversion. (Elon Musk is also fighting the move.)

Then there’s the sheer cost of researching and running A.I. Consider:

• The Information reports that OpenAI recently projected it would burn through $115 billion by 2029, and costs would probably remain sky-high for years to come.

• The company is also announcing deals to spend hundreds of billions on tech, including cloud computing from Oracle and reportedly on custom processors from Broadcom.

All that rests on the assumption that OpenAI’s finances will keep up with the rocket-like growth of ChatGPT use. But The Wall Street Journal points to recent research that calls into question whether customers will open their wallets as wide as expected.

HERE’S WHAT’S HAPPENING

Korean workers who had been detained by I.C.E. in Georgia arrive back in Seoul. The workers, who were arrested during an immigration raid at a Hyundai-LG Energy Solution battery plant last week, made it back to the South Korean capital on Friday — but the fallout continues. Hyundai officials say the raid will set back construction at the plant by months. And a review of arrest records by The Times revealed that some workers had the proper visas and, in at least one case, a legally employed worker was forced to leave the U.S. anyway.

U.S.-China trade talks are set to resume next week. Treasury Secretary Scott Bessent is scheduled to meet in Madrid with He Lifeng, Beijing’s vice premier, who is a top trade negotiator. (Discussions about TikTok are also on the agenda.) That has led to speculation about a face-to-face meeting next month between President Trump and President Xi Jinping of China as the tensions between the superpowers grow before a November tariff deadline.

LVMH, EssilorLuxottica, and L’Oréal emerge as Giorgio Armani’s preferred buyers. The will for the Italian designer, who died last week, was released on Friday; it directs heirs to sell an initial 15 percent stake in his company to one of three luxury giants, or comparable businesses, within 18 months. (An I.P.O. is an option if an agreement isn’t reached.) The big question: Will bidders want the whole company or just select business units? One analyst values it at 5 billion to 7 billion euros (as much as $8.2 billion).

David Ellison’s M.&A. gambit

Earlier this week, Larry Ellison briefly surpassed Elon Musk as the world’s richest man. Now we know how the Oracle co-founder plans to spend some of that money: financing a takeover bid for Warner Bros. Discovery by Paramount, his son David’s media company.

Any offer would be a blockbuster, given Warner Bros. Discovery’s $40 billion in market value and nearly $40 billion in debt. Lauren Hirsch breaks down what is at stake — and what could come next.

It’s a bet on much-needed scale:

• Fusing HBO Max and Paramount Plus would help the combined streaming service better compete against Netflix.

• Paramount would get access to one of the biggest movie studios, whose portfolio of intellectual property includes Batman and Bugs Bunny.

• The combined company’s TV business would have additional leverage with cable providers like Comcast, since Paramount’s CBS has the rights to show N.F.L. games, while Warner Bros. Discovery’s TNT has M.L.B. ones.

Yet Warner Bros. Discovery’s C.E.O., David Zaslav, has a dilemma. He has told investors the company plans to spin off its TV networks by April. That means Paramount will need to convince Zaslav’s board and shareholders that a cash deal now is worth more than betting on any stock price rises after the split.

Investors seem to like the idea of a Paramount bid, pushing Warner Bros. Discovery’s shares up 29 percent on Thursday. But for Zaslav, doing a deal would likely mean giving up running a major studio — or pursuing his own takeovers. If Zaslav didn’t want to sell to Paramount, would Ellison then go hostile?

Will Warner Bros. Discovery get a bidding war? Warner Bros. Discovery is probably hoping for tech giants like Apple, Amazon or Google to jump in. But those titans have been more focused on spending on artificial intelligence projects, and it’s not clear that Google, which owns YouTube, or Netflix could get antitrust approval for any offer.

Traditional media suitors face their own challenges. Disney’s $36.5 billion debt load may make a bid unlikely. And Brian Roberts, Comcast’s C.E.O., has become a target of President Trump’s ire.

There’s a CNN factor, too. Deal makers generally believe the Trump administration is good for mergers — except if they involve a business Trump feels strongly about.

Would federal regulators make the president’s animus for CNN an issue in approving any sale of Warner Bros. Discovery? David Ellison surely is hoping his father’s ties to Trump would give him an advantage. But as the drawn-out talks over the deal that gave him control of Paramount made clear, deal-making in the Trump era can become full of drama.

The crypto I.P.O. comeback

The crypto rally has minted a new generation of moguls, but it has barely dented the financial markets. New listings could test that, starting with Gemini Space Station’s trading debut on Friday.

Gemini, the crypto exchange founded by the longtime industry boosters Cameron and Tyler Winklevoss, priced its initial public offering at $28 on Thursday, Niko Gallogly reports. That was above the expected range; the I.P.O. was reportedly 20 times oversubscribed.

Gemini is going public amid heightened investor demand for I.P.O.s. The financial payment company Klarna jumped 14 percent after its listing on Thursday and the ticket marketplace StubHub’s planned I.P.O. is reportedly oversubscribed ahead of its listing next week.

The crypto industry is riding positive news from Washington. Congress recently passed long-awaited crypto regulations that have lent greater legitimacy to the industry, and the Trump administration — and family — have embraced cryptocurrency.

“We have the most robust regulatory tailwinds we’ve ever seen in the history of the industry,” Nic Carter, a crypto investor who runs Castle Island Ventures, told DealBook.

Gemini’s I.P.O. is a bet that those tailwinds will continue. Consider:

• Gemini is the eighth crypto or blockchain company to go public this year in the U.S., according to the I.P.O. research firm Renaissance Capital.

• Figure, a blockchain lender, closed up 24 percent on its first trading day on Thursday.

The I.P.O. is a comeback for Gemini’s co-founders. During the 2022 crypto market crash, the company froze withdrawals for its lending operation, Gemini Earn. That spurred a wave of lawsuits and an S.E.C. investigation. Gemini paid customers back last year, and in February the S.E.C. dropped the case. Lately, the Winklevoss twins have forged close ties with President Trump, advising him on crypto policies that have boosted their industry.

Still, Gemini faces hurdles. It lost $283 million in the first half of 2025, up from $41 million in the same period a year ago. The company has had to depend on loans from its billionaire owners, Bloomberg reported, and its trading volume is dwarfed by its rivals Coinbase and Kraken.

Talking A.I. With the C.E.O. of PayPal

Every week, we’re asking a C.E.O. how he or she uses generative artificial intelligence. Alex Chriss, the C.E.O. of PayPal, told DealBook that an internal “A.I. summit” helped spur employees to use A.I. more often.

How do you personally use A.I.?

I can say, “Hey, have you seen this pattern or seen some other group or some other field actually go through this type of transformation?” And A.I. just has access to so much different data.

When I was looking for examples of when a type of new product really delighted and changed the mind of consumers, it mentioned changes in the restaurant game from 20, 30, 40 years ago. I would have never thought of it. But it was a good example that now I can use with teams to plant the seeds of the kind of transformation we’re going through.

What directives have you given your employees on A.I.?

We held an A.I. summit for the whole company and talked about my expectation that everyone think in an A.I.-native way. We brought in external speakers and our internal A.I. leaders, and really just immersed the entire organization in examples, inspiration and what they could do to really leverage it.

The uptake of our tools and services coming out of that summit went from a small amount to really almost everyone. We track use of our A.I. tools across the entire landscape of employees. Our weekly active use of A.I. is really starting to see a trajectory change.

THE SPEED READ

Deals

• The U.S. will share profits with Tokyo from projects funded by Japan’s $550 billion tariff fund, Commerce Secretary Howard Lutnick said. (CNBC)

• BlackRock weighs making E.T.F.s available to investors as tokens on the blockchain. (Bloomberg)

Politics, policy and regulation

• U.S. senators have called for hearings on JPMorgan Chase’s work with Jeffrey Epstein, the disgraced financier. (WSJ)

• China has stopped ordering soybeans from American farmers amid a trade clash with Washington. (WSJ)

Best of the rest

• Water tanker companies are banned from filling a new lake at Steve Schwarzman’s 2,500-acre British estate (BBC)

• “Did a Brooklyn Couple Kill a Neighbor’s Trees for a Better View in Maine?” (NYT)

We’d like your feedback! Please email thoughts and suggestions to [email protected].

Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.

Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.

Sarah Kessler is the weekend edition editor of the DealBook newsletter and writes features on business.

Michael J. de la Merced has covered global business and finance news for The Times since 2006.

Niko Gallogly is a Times business reporter, covering diversity and environmental and social justice efforts in corporate America. Email them at [email protected].

Lauren Hirsch is a Times reporter who covers deals and dealmakers in Wall Street and Washington.

The post The Billion-Dollar Stakes for OpenAI appeared first on New York Times.