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Larry Ellison's backing of Trump's $500B AI project could help save Paramount merger: sources
PGREParamount (PGRE) New York Post·2025-01-22 18:13

Core Viewpoint - Larry Ellison's support for the 500billionStargateAIinfrastructureprojectmayfacilitatethemergerbetweenParamountGlobalandSkydanceMedia,despiteregulatoryconcernsandoppositionfromfigureslikeElonMusk[1][2].Group1:MergerDynamics−Ellison′sbackingofStargateisseenasastrategicmovetohelphissonDavid′sSkydanceMediasecureregulatoryapprovalforits500 billion Stargate AI infrastructure project may facilitate the merger between Paramount Global and Skydance Media, despite regulatory concerns and opposition from figures like Elon Musk [1][2]. Group 1: Merger Dynamics - Ellison's backing of Stargate is seen as a strategic move to help his son David's Skydance Media secure regulatory approval for its 8 billion merger with Paramount [2]. - The new Federal Communications Chair Brendan Carr has expressed concerns regarding the merger, particularly about alleged bias from Paramount-owned CBS in the upcoming 2024 Presidential election [3]. - Paramount is reportedly considering settling a 10billionlawsuitfiledbyTrumpagainstthecompanyoverallegedbias,whichcouldinfluencethemergerreviewprocess[3][4].Group2:FinancialImplications−FollowingtheannouncementoftheStargateproject,Oracle′ssharesroseby710 billion lawsuit filed by Trump against the company over alleged bias, which could influence the merger review process [3][4]. Group 2: Financial Implications - Following the announcement of the Stargate project, Oracle's shares rose by 7% and an additional 5% in after-hours trading, indicating positive market sentiment towards Ellison's ventures [11]. - Skydance is offering Paramount shareholders 15 in cash for approximately half of their shares as part of the merger agreement [14]. - Paramount's stock is currently trading below $11, reflecting investor skepticism about the company's future value post-merger [15]. Group 3: Regulatory Scrutiny - The House China Select Committee, led by Rep. John Moolenaar, has called for a review of the Skydance-Paramount merger to assess potential Chinese influence, particularly concerning Tencent's involvement [6][10]. - Tencent is expected to hold less than a 5% stake in the combined entity, with assurances that it will not have an attributable interest in CBS' licensed broadcast stations [8][9]. Group 4: AI Project Significance - The Stargate project, which involves Oracle, OpenAI, and SoftBank, aims to build large data centers and is positioned as a significant advancement in AI infrastructure [10]. - Ellison highlighted the potential of AI in early cancer detection and personalized vaccine development during the announcement, showcasing the project's broader implications for healthcare [12][13].