News of the Cyber World

[kyonides]

EA SOLD!?

Video gamer Electronic Arts to be bought in largest-ever private equity buyout valued at $55 billion

Electronic Arts, the maker of video games like “Madden NFL,” “Battlefield,” and “The Sims,” is being acquired by an investor group including Saudi Arabia’s sovereign wealth fund in the largest private equity-funded buyout in history.

The investors, who also include a firm managed by Jared Kushner, President Donald Trump’s son-in-law, and the private equity firm Silver Lake Partners, valued the deal $55 billion.

EA stockholders will receive $210 per share. The deal far exceeds the $32 billion price tag to take Texas utility TXU private in 2007, which had shattered records for leveraged buyouts.

PIF, which was currently the largest insider stakeholder in Electronic Arts, will be rolling over its existing 9.9% investment in the company.

The commitment to the massive deal is in line with recent activity in the gaming sector by the Saudi fund, wrote Andrew Marok of Raymond James.

“The Saudi PIF has been a very active player in the video gaming market since 2022, taking minority stakes in most scaled public video gaming publishers, and also outright purchases of companies like ESL, FACEIT, and Scopely,” he wrote. “The PIF has made its intentions to scale its gaming arm, Savvy Gaming Group, clear, and the EA deal would represent the biggest such move to date by some distance.”

PIF is also a minority investor in Nintendo.

The deal needs approval from national security regulators on the Committee on Foreign Investment given that the Saudis are involved, but there are plenty of reason to expect it will go through.


Not only does Trump’s son-in-law want to do the deal, but the president could also be inclined to look favorably on any Saudi investment because he has benefited directly from their spending. His family business has been paid by Saudi-backed LIV Golf for hosting its tournaments at his clubs starting at a difficult time years ago when the PGA Tour pulled out of events at the same venues following the Jan. 6 siege of the Capitol by Trump supporters in 2021.

The U.S. agency leading the foreign investment committee, the Treasury Department, did not immediately respond to a request for comment about the potential conflicts of interest.

If the transaction closes as anticipated, it will end EA’s 36-year history as a publicly traded company that began with its shares ending its first day of trading at a split-adjusted 52 cents.

The IPO came seven years after EA was founded by former Apple employee William “Trip” Hawkins, who began playing analog versions of baseball and football made by “Strat-O-Matic” as a teenager during the 1960s.

CEO Andrew Wilson has led the company since 2013 and he will remain in that role, the firms said Monday. Electronic Arts would be taken private and its headquarters would remain in Redwood City, California.

Kushner, the CEO of Affinity Partners, said, “I’ve admired (EA’s) ability to create iconic, lasting experiences, and as someone who grew up playing their games - and now enjoys them with his kids - I couldn’t be more excited about what’s ahead.”

AI ACTRESS!?

AI Studio Chief Says Talent Agencies Rushing to Sign AI Digital Movie Star Tilly Norward

Hollywood talent agencies have reportedly been looking to sign AI actress Tilly Norward, the first creation of AI talent studio Xicoia.

Founded by actor, comedian technologist Eline Van der Velden, the AI talent studio has set its sights on creating digital movie stars with Tilly Norward as its first prospect. Speaking on a panel at the Zurich Summit this past Saturday alongside Verena Puhm, head of Luma AI’s new Studio Dream Lab LA, Van der Velden said that studios are quietly embracing AI.

“We were in a lot of boardrooms around February time, and everyone was like, ‘No, this is nothing. It’s not going to happen’. Then, by May, people were like, ‘We need to do something with you guys.’ When we first launched Tilly, people were like, ‘What’s that?’, and now we’re going to be announcing which agency is going to be representing her in the next few months,” said Van der Velden.

According to Deadline, the revelation just days after Van der Velden “officially announced the creation of Particle6 offshoot Xicoia, an AI talent studio designed to create, manage and monetize a new generation of hyperreal digital stars.”

Verena Puhm agreed that studios are warming up to AI.

“I remember having meetings with the studios as an AI artist before joining Luma. Some said, ‘Oh, no, we’re not using AI.’ I knew some were lying, they were already secretly working on some stuff, but some were not open to it at all. Then definitely this year, kind of like March, April, people called me and wanted to talk to me,” said Puhm.

“They were discussing me being a liaison between directors and the AI artists… at that time I was traveling around a lot and educating about workflows and pipelines and how it can be integrated, and then all a sudden that was becoming very interesting to them,” Puhm added. “It was a different language to them and they were like, ‘We really have to get people from the outside that have worked in the AI industry.'”

Puhm said that she is under NDA about the type of AI projects studios are now employing behind closed doors.

“We really want to make them feel comfortable through their testing, through their projects, and working on real projects… we want it to be their decision on when they want to say it out loud, but honestly, I think this year is going to be interesting. In the beginning of next year, there’s going to be a lot of announcements,” said Puhm.

MUSK VS OPENAI

Elon Musk’s xAI Sues OpenAI Alleging Theft of Trade Secrets with Insider Help

Elon Musk’s artificial intelligence company, xAI, has accused rival Sam Altman’s OpenAI of stealing trade secrets with the help of former Musk employees, according to new court filings.

The Washington Post reports that in a lawsuit filed last week with the U.S. District Court for the Northern District of California, xAI alleges that three of its former employees — two engineers and a senior executive — passed along source code and other business secrets to OpenAI after being hired away by Sam Altman’s AI powerhouse. The complaint also claims that OpenAI is engaged in a “strategic campaign” to undermine xAI, the AI start-up founded by Musk in 2023, which also owns X, his social media network.

“By hook or by crook, OpenAI clearly will do anything when threatened by a better innovator, including plundering and misappropriating the technical advancements, source code, and business plans of xAI,” the complaint states. OpenAI, the maker of the popular ChatGPT chatbot, is a direct competitor to xAI’s own Grok chatbot.

The lawsuit is the latest development in the long-standing feud between Musk and OpenAI, the company he co-founded but later left due to disagreements over its direction. Musk has been increasingly critical of OpenAI as it has established an early lead in the AI race.

According to the complaint, one former xAI engineer admitted to stealing the company’s entire code base, while another allegedly harvested xAI’s source code and transferred it to personal devices before taking it to OpenAI. The lawsuit also accuses a former senior finance executive of delivering xAI’s “secret sauce” data center strategy to OpenAI.

xAI further alleges that the hiring of these employees was part of an intentional campaign by OpenAI to steal trade secrets, with the same recruiter involved in poaching both engineers. “OpenAI is targeting those individuals with knowledge of xAI’s key technologies and business plans — including xAI’s source code and its operational advantages in launching data centers — then inducing those employees to breach their confidentiality and other obligations to xAI through unlawful means,” the complaint reads.

SWISS DIGITAL ID

Switzerland to Introduce Digital ID Cards After Razor-Thin Referendum

Digital identity cards are set to be introduced in Switzerland after voters narrowly approved a referendum on Sunday.

Despite the majority of the cantons voting against the e-ID legislation, a razor-thin majority of 50.39 per cent of the Swiss public voted in favour of introducing digital identification, Blich reported.

Voters had previously rejected a similar effort in 2021; however, after Swiss lawmakers backed the creation of a digital ID, signatures were quickly gathered to put the measure back before the people in a referendum on Sunday.

It remains to be seen if this will be the final word on the matter, with opponents calling for another vote given the incredibly narrow result.

Critics of the Federal Act on Electronic Identity have warned that the technology used is insufficient to protect citizen data from cyberattacks and hacks.

Opponents have also warned that digital IDs could be the beginning of an all-encompassing surveillance state, which could be used to punish government critics or dissidents.

Proponents have noted that it will be an optional system, and that government authorities or private firms which use the system will be prohibited from obtaining more information than is needed from the digital ID card.

The system has been pitched as being a means for Swiss citizens to “identify themselves digitally in a secure, fast and uncomplicated way”.