EA’s new owners are making “a huge bet” on generative AI cost-cutting to help repay a $20 billion loan, claims report

Yesterday, a group of moneyfolk including private equity firm Silver Lake, Saudi Arabia’s Public Investment Fund, and Donald Trump son-in-law Jared Kushner’s Affinity Partners unveiled plans to acquire Electronic Arts for an estimated $55 billion.

The buyers are committing $36 billion of their own equity (briefly and inexpertly, “equity” is the value of your assets after you deduct anything you owe), including the value of the PIF’s existing investments in EA. They’re making up the rest of the total thanks to a $20 billion loan from JPMorgan Chase Bank. How will they manage that massive debt? According to the Financial Times, who cite unnamed insiders, they’re gambling on the deployment of generative AI tools as a gigantic cost-saving measure.

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