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A $7B AI Power Play and a Hollywood Deal Rejected · Connecting the Dots

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  Today's tech news moves fast, but understanding
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  it shouldn't be hard. That's why Snarful Solutions
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  Group brings you Connecting the Dots, where we
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  break down what's happening in tech and why it
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  matters to you. Now, let's dive in with your
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  hosts. Welcome to Connecting the Dots from Snarful
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  Solutions Group here in Sacramento. It's Wednesday,
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  December 17th, 2025. Happy Wednesday and it's
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  a bit of a dreary one here in Sacramento. We've
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  got showers some patchy fog But looks like it'll
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  clear up to partly sunny with a high of 61. Yeah
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  pretty standard for us But our thoughts are with
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  folks elsewhere a really powerful storm hitting
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  from the northern Rockies to the plains We're
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  seeing dangerous winds 50 to 70 miles per hour
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  and even some critical fire weather in Eastern,
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  Colorado So a lot going on nationally a lot indeed
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  now quick check on the markets from yesterday's
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  close Sure, you know, things were mostly quiet
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  on the surface. The Dow slipped about half a
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  percent, closing at 48 ,114, still holding a
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  small gain for the week, though. The S &P 500
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  was basically flat, no movement there. And Bitcoin
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  is just holding steady around 87, 786, down just
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  a tiny fraction. So the big indices are calm,
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  but that really hides the the massive deals happening
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  underneath. That's what we're getting into today
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  in our Morningstar report. We're talking huge
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  infrastructure bets and some serious Hollywood
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  drama. Absolutely. But first, we want to give
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  a shout out to our sponsor, Old Glory. Look,
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  Really iconic stuff. It is. And as a listener,
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  way to get that shopping done. Okay, so let's
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  start with this first story. I call it the AI
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  Infrastructure Gold Rush, and it's all about
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  a company called Hut8. Right, Hut8, the Bitcoin
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  mining company. Ticker H -E -S -U -T -T. And
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  their stock just exploded. It soared over 20%.
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  Yeah. And it was on the news of this just colossal
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  deal, a 15 -year lease with an AI infrastructure
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  firm, Fluidstack. And when you say colossal,
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  the numbers are, well, they're kind of staggering.
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  They really are. The deal is valued at $7 billion.
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  That's for 245 megawatts of IT capacity at their
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  campus down in Louisiana. And that's just the
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  start, right? There's a potential expansion.
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  Oh, yeah. It could expand by another 1 ,000 megawatts,
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  if that happens. And with renewals, the total
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  value could jump to $17 .7 billion. Wow. OK,
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  so this is why we've seen crypto miners trying
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  to pivot. They have the infrastructure, but this
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  is a pivot on a whole other level. It's a complete
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  transformation, and that's why investors loved
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  it. Hut 8 is expecting to generate, get this,
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  $6 .9 billion in cumulative net operating income.
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  $6 .9 billion. Yeah. That works out to a very
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  steady $454 million a year. So they go from being
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  this speculative, volatile crypto company to
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  basically being a utility, a high -demand landlord
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  for AI processing. But there's a missing piece
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  here, the dot we have to connect that makes this
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  whole thing solid. The guarantee. The guarantee.
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  It's from Google. Alphabet subsidiary is providing
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  a financial backstop. for the entire 15 -year
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  lease. And that is the absolute linchpin. It
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  takes almost all the risk off the table for HUD
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  8. I mean, when Google steps in and says, we'll
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  back these multi -billion dollar payments, it
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  just signals where the real giants are placing
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  their bets. It says the demand for AI compute
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  power is real, and it's here to stay for the
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  long haul. Exactly. And you can see the real
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  world impact of this. In Louisiana, this could
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  be one of the state's largest private capital
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  projects ever. The sources mentioned a thousand
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  jobs during construction and then at least seventy
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  five permanent operational jobs. That's a huge
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  for West Feliciano Parish. It really is. It feels
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  like the new oil isn't crypto anymore. It's AI
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  processing, and the money is just flooding toward
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  anyone who can provide reliable power for it.
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  A really powerful shift. OK, so from physical
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  infrastructure, let's pivot to the dream factories
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  in Hollywood, where the battle for control is,
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  well, maybe even more dramatic. Oh, definitely
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  more dramatic. We're talking about the cage match
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  between Warner Bros, Discovery, WBD, and Paramount
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  Skydance, or PSKY. And the big news is that the
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  WBD board has unanimously and very publicly rejected
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  Paramount's unsolicited bid. Yeah, a $30 per
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  share all cash hostile bid. They said no. And
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  here's the fascinating part. They're sticking
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  with a lower offer from Netflix. That one's valued
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  at $27 .75 per share, and it's a mix of cash
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  and stock. So they're turning down more cash.
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  And to understand that, you really have to dig
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  into the structure of the two deals. They're
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  fundamentally different. OK, break that down.
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  So the Paramount Skydance bid, the PSKY one,
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  wants everything. The whole empire. The studio,
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  HBO, HBO Max, plus all the cable networks like
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  CNN and TNT. They want to build an old school
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  integrated media giant. Precisely. The Netflix
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  bid, on the other hand, is more like surgery.
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  It only wants the high growth parts, the Studio,
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  HBO, and HBO Max. And what happens to the cable
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  networks? They'd be spun off into a whole new
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  company, what they're calling Discovery Global.
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  So it lets WBD clean up its structure and focus
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  on streaming. Right, which explains why the WBD
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  board used such strong language. They called
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  the Paramount offer illusory. You don't hear
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  that word in a corporate filing every day. No,
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  you don't. And they backed it up with three huge
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  red flags. The first one was financing certainty.
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  Or the lack thereof. Exactly. PSKY's $40 billion
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  equity commitment, it relies on, and this is
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  a quote, an unknown and opaque revocable trust
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  from the Ellison family. So the Ellison family
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  of Oracle fame. Yeah. But opaque and revocable
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  are two very scary words when you're talking
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  about $40 billion. They are. Revocable means
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  the funding could you know, just disappear halfway
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  through the regulatory process. It's not a secured
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  commitment from a bank. It's conditional. That's
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  a massive risk for WBD. Okay. So that's red flag.
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  Number one, what's number two credit risk. I
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  mean, look, KSKY is a much smaller company, only
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  a $15 billion market cap. It's credit rating
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  is basically junk status. Their debt is already
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  at 6 .8 times their earnings. That's a really
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  high leverage ratio. The combined company would
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  be extremely vulnerable to any kind of economic
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  downturn, which leads right into the. The third
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  red flag, the hidden cost if this all falls apart.
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  Yes, this is the kicker. If the Paramount deal
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  fails for any reason, WBD shareholders are left
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  holding the bag for $4 .3 billion. $4 .3 billion,
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  how does that break down? Okay, so there's a
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  $2 .8 billion reverse breakup fee they would
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  owe to Netflix for walking away from their deal.
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  Right, that's like a penalty payment. It is,
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  plus another $1 .5 billion in debt financing
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  costs they'd have racked up. And Paramount never
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  offered to cover any of that. For WBD shareholders,
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  that's a loss of $1 .66 per share. So when you
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  frame it like that... Turning down the higher
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  cash offer makes perfect sense. You have one
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  deal that's a risky leveraged buyout that could
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  implode and cost you billions. Right. And the
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  other is from a stable partner like Netflix with
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  a $400 billion market cap and an investment grade
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  balance sheet. And Netflix is putting its money
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  where its mouth is. They're committing to a record
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  setting $5 .8 billion regulatory termination
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  fee. They're showing real confidence they can
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  get this done. Plus, they've made promises about
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  keeping WBD films in theaters, respecting that
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  legacy. which is a smart PR move. It is. Which
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  brings us to the final piece of this puzzle,
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  the politics and the regulators. This is where
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  it gets really messy. Paramount tried to argue
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  they'd have an easier path to approval. Yeah,
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  their argument was, hey, we're not a streaming
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  giant like Netflix, so it's less of an antitrust
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  issue. But WBD's board and most experts, frankly,
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  said there's no material difference in the regulatory
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  risk. Both deals face a long, long fight, probably
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  into 2026. At least. And you have international
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  bodies, like the European Commission, who are
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  going to look very, very closely at a Netflix
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  deal, arguing it would eliminate a major competitor
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  in HBO Max. And the political side for Paramount
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  has just, well, it's kind of backfired spectacularly,
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  hasn't it? It really has. The Ellisons have touted
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  their political connections, but then President
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  Trump recently slammed the owners of CBS, which
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  is part of Paramount's holdings. And right after
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  that, Jared Kushner's firm, Affinity Partners,
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  just pulled out of the bid entirely. Yep. So
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  that political capital seems to be vanishing
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  pretty quickly. But this is where the story pivots
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  from just a boardroom fight to a national security
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  issue. The CFIUS review. Explain that. Because
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  this is a huge dot to connect. PSKY's funding
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  includes $24 billion from three different Middle
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  Eastern sovereign wealth funds. And that massive
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  foreign investment immediately got the attention
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  of lawmakers who urged WBD to seek a review from
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  CFIUS, the Committee on Foreign Investment in
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  the United States. So now we're talking about
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  foreign influence over American media, over content.
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  Exactly. Now, the funds claim they agreed to
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  give up any governance rights, but CFIUS looks
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  deeper than that. They look at what they call
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  practical influence. access to information and
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  leverage. Right. So even without a board seat,
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  if you have access to sensitive strategic information,
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  that can be seen as a national security concern.
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  Absolutely. So the risk of the whole deal getting
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  bogged down or even killed by a CFIUS investigation
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  is very real. It just adds another massive layer
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  of uncertainty. So what this all boils down to
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  for you is that WBD's rejection wasn't just about
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  the price per share. It was a choice for certainty
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  and stability over a higher but much riskier
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  cash offer. A very messy high stakes drama. Before
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  we wrap up, a quick thank you to our other sponsor,
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  Their website is scony .com. Okay, so to bring
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  it all together today, first we saw Hut8 make
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  that giant $7 billion leap from the speculative
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  world of crypto into the much more reliable world
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  of AI data centers. with Google's backing. And
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  then we unpacked the very dramatic politically
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  charged rejection of Paramount's bid by Warner
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  Bros. Discovery. They chose the stable, structurally
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  cleaner deal with Netflix despite a lower price
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  tag. because of all the financial and regulatory
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  risk. And, you know, the final thought here is
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  that the conflict isn't just about who wins this
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  one deal. It's really about the future of Hollywood.
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  What do we want it to look like? Do you prefer
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  a giant integrated company that owns everything
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  from the studios to the cable networks? That's
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  the Paramount vision. Or do you prefer a more
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  focused streaming -first behemoth that spins
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  off the old legacy assets to focus purely on
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  digital, which is the Netflix vision? The shows
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  and movies you get to watch in the future really
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  depend on who wins this fight. It's something
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  to think about. We're here to help at SNARFL,
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  so reach out on our website if you have any more
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  questions. That's a wrap on today's top stories.
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  Remember, tech doesn't have to be complicated,
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  and we're here to help connect the dots. If you've
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  got questions or want to learn more, visit us
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  at snarfl .com. Thanks for listening, and we'll
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  catch you next time.