It isn't hugely surprising to hear that generative AI is a big part of the vision for EA's second coming as a private company, as reported by insiders.

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.

“The investors are betting that AI-based cost cuts will significantly boost EA’s profits in the coming years, people involved in the transaction told the Financial Times,” the paper wrote (paywall) in their own coverage of the story. The FT elsewhere commented that the acquisition “is a huge bet that artificial intelligence can significantly cut EA’s operating costs, allowing the equity consortium to manage a large debt load on a company that historically carried limited net debt.”

  • JackbyDev@programming.devEnglish
    19·
    6 days ago

    Leveraged buyouts are so stupid to me. “Hi, I’d like to buy this company, but since it will be my company, the company needs to have the debt, not me. So if it goes wrong, well, that’s the company’s fault, not mine.” Should be illegal.

      • redhorsejacket@lemmy.worldEnglish
        1·
        5 days ago

        I mean,isn’t that what a foreclosure sale is?

        I’m honestly asking. The world of corporate raiding is a foreign and distasteful place to my arts and sciences brain. The world of home buying is also foreign to my arts and sciences brain, but that’s cause I leaned more into arts than sciences.

        That being said, you put up 20 grand of your money for a down payment. The bank loans you 200k. You fail to make your payments. Bank forecloses and sells off the property to cover the remaining debt, or at least claw back whatever they can get from it. Would that be so different than what’s likely to happen if EA fails to pay JP Morgan back? Is it the liability of Kushner et al vs the liability of a homeowner that is the primary difference?

        • SparroHawc@lemmy.zipEnglish
          1·
          3 days ago

          That’s the idea at least, but a corporation is a vastly different thing. A piece of property doesn’t have employees, obligations, etc etc. (Well okay, large properties often do, but they aren’t hired by the buildings themselves.)

  • vane@lemmy.worldEnglish
    20·
    7 days ago

    This will be fun to watch. Maybe not for 14 500 EA employees. I kindly suggest them to leave as soon as possible.

    • buddascrayon@lemmy.worldEnglish
      8·
      7 days ago

      Indeed. I think it would be in their best interest to find work elsewhere before they end up getting laid off at the most inconvenient time.

      Beyond that it should be amusing to watch this company go down in flames.

    • BlackVenom@lemmy.worldEnglish
      2·
      6 days ago

      Has it been more than a shell in the last decade or two?

      I hope, by some odd twist of fate, that Maxis is spit back out into its formal glory. Most likely it’ll just kill more good game series.

  • Siegehammer85@lemmy.worldEnglish
    16·
    7 days ago

    I just uninstalled EA launcher because it’s a fucking cancer and I see this afterwards… If it’s not on Steam it’s piracy material from here on out. Fuck all other launchers/services except GoG, GoG is cool too.

  • Jaysyn@lemmy.worldEnglish
    9·
    6 days ago

    I’ve not bought an EA game in 11+ years and see no reason to start now.

    “And then it got worse” isn’t only a valid description of Russian History.

  • Almacca@aussie.zoneEnglish
    5·
    6 days ago

    “The investors are betting that AI-based cost cuts will significantly boost EA’s profits in the coming years"

    I’ll take that bet.

  • RememberTheApollo_@lemmy.worldEnglish
    9·
    6 days ago

    Bye EA. Was nice knowing you.

    E: just noticed I’ve been playing EA games since M.U.L.E. on the C-64. Say what you want about the company itself, but they have a long history of making games people want to play. Been playing the entire Battlefield franchise since 1942. Sucks that you can’t play 2142 or even Hardline anymore.

    • No_Eponym@lemmy.caEnglish
      1·
      6 days ago

      How many EA games require you connect to their servers just to play? How many have ToS where you need to install any updates before you play? How long before these PE folks figure out they can push updates to even older games that add data mining capacity?