LT Weekly: Jun 13, 2025

We wanted to start by highlighting our LionTree’s Lens: Sector Insights & A Look Ahead, Summer 2025 which offers an updated snapshot of the trends and market dynamics shaping the TMT and consumer space.

Markets have staged a strong rebound from earlier this year, helping to bring renewed energy to both IPO and M&A activity. While many investors are still playing it safe for now in some ways, Wall Street is looking ahead to 2026 with more optimism, even as questions around tariffs, regulation, and the broader macro picture remain.

In this edition, we also touch on how AI is transforming shopping and online search (which we are very excited about), streaming platforms’ progress toward profitability, the evolving sports betting landscape amid tax uncertainties, the connectivity sector’s push for price locks, the domino effects of the advances in autonomous vehicles, ongoing regulatory scrutiny of Big Tech, and more.

CLICK HERE to watch the ~20-minute video presentation and to access the full slide deck. 

As always, we’d be happy to dive deeper into any of these topics — just let us know. And any and all feedback is greatly appreciated. See below for the table of contents.

• Macro & Markets
  • With The Strong Market Re-Bound, Multiples Are Back Towards YE Levels
  • But Investors Are Still Sticking With Defensives YTD…
  • …This Trend Is Reflected Within The LT Universe Winners As Well
  • 2025 Is Seen As A Short-Term Bleep
  • Wall Street Analysts Are Fairly Optimistic Regarding TMT In 2026
  • Along W/ The Market Re-Bound Has Come Some Recent Momentum In The IPO Market
  • And IPO Performance Of $100mn+ Deals YTD Has Skewed Positive
  • M&A Is Gaining Stream, Especially With Larger Size Deals…
• Key Themes Across The Sector
  • Tariff & Macro Impacts Have Been Limited But The Near-Term Is Cloudy
  • Who Will Bear The Cost Of Tariffs? In Many Cases The Consumer
  • Online Search Is Being Re-Imagined From The Ground Up
  • Shopping Is On The Cusp Of Becoming Much More Artificially Intelligent
  • We Are Still Waiting For The Super Fan Tier In The US, But The Strategy Is Working Overseas
  • Media Conglomerates Paced Ahead On Streaming Profitability But Still Have A Long Way To Go
  • Franchise Videogames Keep Pushing The Envelope To Drive Value
  • Odds Are On The House In Sports Betting…But Taxes Remain A Wildcard
  • The Connectivity Sector’s Big Push To Price Locks
  • AVs Are Gaining Speed On The Long Road Ahead
  • Big Tech Faces Structural Scrutiny From Regulators
• Wall Street Sentiment
  • Wall Street’s Top TMT Picks & Pans
  • At Current Levels, Wall Street Sees More Modest Upside TMT Stock Price Levels

In Feb 2025, WarnerBrosDiscovery (WBD) announced an internal restructuring, separating its Streaming & Studios and its Global Linear Networks businesses.  Now the Co announced what we’d call an “external reorg” by making a move to create 2 distinct publicly traded companies, WBD S&S (Streaming & Studios) and WBD GN (Global Linear Networks). Notably, WBD GN will house some digital assets such as Discovery+ and CNN+ and it will also hold the sports media rights. So overall, this update was not a huge surprise given the previous action, but this transaction brings the Company one step closer to being a part of future media M&A for which investors have been patiently waiting. Mgmt specifically called out that the Co would be “free and clear” to do strategic deals once this transaction closes one year from now, which led to some enthusiasm as investors have been looking for a clearer path to M&A in the media sector. However, not all constituents were happy. As part of the split, the Co is using a tender offer in order to “reduce our overall gross leverage, adjust the maturity profile to create the right capital structures here for both companies, and to give us an opportunity to issue new secured debt to be able to really target the capital structures for both individual companies by the time we close”…”I have full conviction that this is going to go over very well with bondholders. It’s a very fair offer”. But S&P Global Ratings downgraded WBD’s unsecured notes to BB (after the cut to BB+ last month). With that said, Moody’s and Fitch still have investment grade ratings, as of now.

Also note that Disney CEO Bob Iger was vocal this week (again) about the virtues of the Co having Linear and Streaming under one roof vs the split path that Comcast and WBD are taking.

See below for our takeaways from WBD’s update as well as Bob Iger’s comments.

-> WBD’s stock had a wild ride in reaction to the deal, initially trading up as high as 13% out of the gate, but then closing the day down -3% and closed the week up +2.1%; YTD, WBD is down -5.1% vs Paramount Global is up +13.7%, FOX up +10.5%, and Disney up +5.9%

WarnerBrosDiscovery Is Separating Into 2 Companies – WBD GN and WBD S&S

• WBD Global Networks (WMG GN) –
  • What’s included? Sports, news and entertainment content provider; Will include some digital properties such as Discovery+ & CNN digital
  • Leadership – CEO will be Gunnar Wiedenfels (WBD CFO)
  • Expect to see a successful networks business for “many years to come”
  • Have an “unrivaled” global footprint
  • Have more room for efficiencies in Global Networks but also have investment opportunities

• WBD Streaming & Studios (SBD S&S):
  • What’s included? Content producer w/ scaled and growing streaming platform
  • Leadership – CEO will be David Zaslav (WBD CEO)
  • Financial and KPI targets:
    • The Studio is still targeting to hit the $3bn+ adj EBITDA target
    • Streaming is on track to generate at least $1.3bn of adj EBITDA in 2025 and surpass 150mn subs by the end of 2026
    • Expect the streaming business to be self-funded by the time the deal closes
    • On track to launch HBO Max in UK, Ireland, Germany, and Italy early 2026

• What percent of US viewership on HBO Max comes from the networks being spun off? 25%

• U.S. sports rights will reside at the Global Networks, and its mgmt will determine how best to monetize the streaming and digital rights over time (internationally, sports will largely coexist, both on linear and streaming, as they do today)
  • Sports is not as important to streaming: “Inside the US, sports has been less critical. It’s viewed, but it hasn’t been a real driver for us. And so it will continue to be on HBO Max, but the Global Networks business will evaluate over time where the best place for that is”

-> These comments led to questions about the future of TNT Sports and what happens with the Co’s sports rights

• Other notable transaction terms
  • WBD S&S is intended to be tax-free spin
  • WBD GN will retain up to a 20% retained stake in WBD S&S, which will be monetized over time
    • “Think the current valuation is not reflected and the market will determine out of the gate”
  • Arm’s length TSA & commercial agreements to be implemented to facilitate transition and cont’d operational efficiencies
  • Commenced a tender offer to reduce gross leverage, create the right capital structure, & issue new secured debt
    • Funded by a $17.5bn committed secured bridge facility
  • What are the capital structures for WBD GN and WBD S&S? “Too early” to talk about target capital structure but…
    • “Safe to assume, the majority of the debt with live with Global Networks but not an insignificant portion on streaming”
  • Expected close: Mid-2026 (but will try to move faster)
  • How will ~$1.2bn in corporate overhead be split? Still finalizing but broadly assume 50/50 split

• Future M&A? Will there be any restrictions on doing deals after the transaction closes? No, “both companies are free and clear to engage in transactions”
  • “I want to be absolutely clear, once this deal closes, both companies are going to be free and clear. There is no minimum time, there is nothing, that’s a function of the fact that there is no plan for any transaction existing at this point and that means once the separation closes, they’re free and clear”
  • There could be consolidation with some “regional or local players”

Disney CEO Bob Iger Weighed In On WBD’s Decision To Split & Whether It Impacts Disney’s Strategy With Its Own Linear Assets

• After Iger returned to Disney two yrs ago, the Co conducted an internal review on linear TV assets & decided to “hold on…and to integrate them seamlessly” with their streaming biz
  • This has enabled them to –
    • Aggregate rev on both the advertising and subscription sides for both bizs
    • Program both “seamlessly”
    • Aggregate audiences for marketing purposes
    • “We manage them in one organization, and so there’s been great economies of scale in doing that”
  • What “we’ve determined is the combination of both is actually a winning combination for us… over the next several years it will enable us to grow margins significantly on the streaming side because, again, the ability to amortize program costs and the ability to essentially aggregate audiences and revenue”

• “It’s also interesting to us that as many others exit that business, I think it gives us a stronger hand to stay in that business”
  • “When you think about it, these spinoff companies won’t have the assets from a streaming perspective that we will have. Again, I think that gives us an advantage”

Expectations were relatively muted going into Apple’s WWDC 2025 regarding potential AI updates and our hopes of being surprised on the upside didn’t exactly materialize.  While the event showcased some meaningful AI enhancements, they mostly represented evolutionary steps rather than revolutionary leaps. Major updates to Siri were notably absent (“this work needed more time to reach our high-quality bar”), which especially stood out given that last year, Apple announced plans for a more dynamic version of its virtual assistant.

Nonetheless, there were a range of updates across devices and software — from Apple Intelligence improvements and expanded multitasking features to a fresh OS design and smarter continuity tools across Macs, iPads, and Watches. “Liquid Glass” was one of the most prominent updates.

See below for a breakdown of the biggest updates from WWDC 2025 (link/link/link/link) but there was nothing that came out of the event to change investors’ perception that Apple is a laggard in the AI race amongst the tech giants. We are hopeful that Apple is making progress in the background, but investors want to see more meaningful and groundbreaking advancements in this area. Interestingly, shortly after the event, Bloomberg reported per sources that Apple’s major Siri AI upgrade is internally targeted to launch in ‘spring 2026’ (link).  Hopefully it will be worth the wait!

-> Apple shares closed the week down -4%

Apple Rebrands OS Lineup & Debuts First Major UI Overhaul In Over A Decade   

• New naming convention: iOS 26 (vs expected iOS 19)
  • Apple OS versions now named by release year
  • Consistent naming across platforms: iOS 26, watchOS 26, tvOS 26, macOS 26, visionOS 26, iPadOS 26

• “Liquid Glass” – first major OS design update since iOS 7 (released back in 2013) –
  • Translucent, glass-like design language mimicking optical glass
  • Dock, lock screen, app icons, and toolbars now feature transparency and depth
  • Clock font on lock screen resizes dynamically; Widgets redesigned to match new UI
  • Pop-out menus introduced for quicker access to settings and options
  • New design extends across platforms – iOS 26, iPadOS 26, macOS Tahoe 26, watchOS 26, and tvOS 26

Source

Apple Intelligence Advances with New AI Features Across Devices, Though Siri’s Overhaul Is Still Pending

• It was a disappointment that Siri’s AI overhaul in still in progress (many had hoped to see Apple debut a fully revamped, more capable Siri at WWDC 2025)
  • “As we have shared, we are continuing our work to deliver the features that make Siri even more personal…This work needed more time to reach our high-quality bar, and we look forward to sharing more about it in the coming year”

• Apple Intelligence can “see” your screen
  • Ask ChatGPT questions about what’s on your display
  • Visual lookups will be supported in apps like Google and Etsy

• AI-powered live translation across apps
  • Messages: Translates incoming texts in real time
  • Phone: Translates speech during live calls
  • FaceTime: Displays live translated captions as you listen

• Apple Music adds AI-powered AutoMix and real-time lyrics translation
  • Announced AutoMix, a new DJ-like feature that uses AI to meet users’ music tastes
  • Lyrics translation and pronunciation tools now available in Apple Music

• Smarter package tracking with AI-powered summaries
  • Apple Intelligence automatically pulls order and delivery info from emails
  • Provides a consolidated tracking view, similar to the Shopify Shop app, without requiring Apple Pay usage

• Genmoji – AI-generated emoji mashups and custom creations powered by Apple Intelligence
  • Able to combine two existing emoji to create an entirely new, custom Genmojis for more personalized and expressive reactions

• Apple Intelligence is also now open to developers
  • On-device foundation models will be available for 3P apps through the new Foundation Models Framework API
  • Allows developers to build AI features that work offline and incur no inference costs

Multitasking, AI, And Continuity Stood Out In Apple’s Latest Cross-Platform OS Updates Across Devices

• iPad will now have better windowing features with iPadOS 26
  • New windowing capabilities will let users resize app windows, place them around your display, and open more windows at once

• Mac will now have deeper Continuity and AI integration with macOS 26 Tahoe
  • New Continuity features include iPhone Mirroring (full remote control, drag-and-drop files) and a Phone app with live translation, call screening, and contact customization
  • Spotlight gains in-app/system commands, customizable Quick Keys, and clipboard history
  • Shortcuts now leverage Apple Intelligence to automate tasks like summarizing text, generating images, or using ChatGPT
  • Live Activities from iPhone (i.e.., deliveries, rideshares, etc.) now appear in the Mac’s menu bar in real time

• Apple Watch adds gesture controls and AI-powered fitness coaching with watchOS 26
  • Wrist-flick gesture enables quick dismissal of notifications
  • Will also have a new AI-powered “Workout Buddy” which will generate personalized advice and encouragement

• Vision Pro gets even more expression with VisionOS 26
  • New 3D widgets and spatial browsing let users pin apps and pull web objects into their space
  • Personas are more lifelike for FaceTime and shared experiences like co-watching
  • New enterprise features include saved user profiles and a “for your eyes only” privacy mode
  • Supports new inputs like Look to Scroll, Logitech Muse stylus, and PS VR2 controllers
  • Now supports immersive wide-angle videos from GoPro, Insta360, and Canon

• Apple TV can now become a karaoke machine with tvOS 26
  • Added a machine learning feature that can turn down the vocals in an Apple Music song, making it good for sing-alongs and karaoke
  • Users can still turn down the vocals in the Apple Music app on TV, but now they can also replace them with their own vocals, using their iPhone as a microphone, as the lyrics play on the screen

• AirPods will soon offer new camera controls + “studio-quality” voice recording
  • Tap to take a photo with iPhone/iPad via AirPods stem
  • Also working on a new feature that lets users record “studio-quality” vocals in noisy areas with voice isolation
  • Features will come to the AirPods 4, AirPods 4 with Active Noise Cancellation, and AirPods Pro 2

Key Software and App Updates  

• Announced new app called Games: Pulls all the games a user has downloaded into a single list
  • Also has some social features, including lists of what your friends are playing, the ability to send a message to a friend to challenge them to a game, and high-score leader boards

• Safari gets privacy-focused, full-screen redesign
  • Immersive full-screen browsing experience
  • Transparent address bar blends with the UI
  • Advanced fingerprinting protection enabled by default for added privacy

• Camera app simplified for quicker access
  • Streamlined layout with two main modes: Photo and Video
  • Swipe to access additional features like Slow-Mo, Cinematic, and Panorama

• Phone app gets new layout adds smart tools for call management
  • New unified tab for Favorites, Recents, and Voicemail
  • AI-powered voicemail summaries surface key takeaways
  • Call screening displays real-time transcripts from unknown numbers
  • Hold Assist alerts you when a live agent joins the line

• FaceTime improves usability
  • Call controls repositioned to bottom-right for easier access

• Messages app adds more personalization and protection
  • Set custom chat backgrounds, visible to everyone in the thread
  • Create polls in group conversations
  • Typing indicators now available in group chats
  • Send and receive Apple Cash in group chats
  • On-device spam detection moves unknown senders to a separate folder

• Photos app enhances navigation
  • Tabbed interface returns for easier browsing and sorting

• Wallet app adds smarter travel features
  • Create a digital ID using your passport
  • Refreshed boarding passes now include live flight update, airport navigation maps, and baggage tracking tools

• Maps app becomes more personalized and secure
  • Learns preferred routes (i.e, commute or school drop-offs)
  • Adds location history feature, fully end-to-end encrypted

• CarPlay gets an updated interface for easier multitasking
  • Redesigned widget layout for quicker access to key info
  • New screen design lets users see navigation and other features even during calls

Compatibility & Availability  

• iOS 26 support: iPhone 11 and newer, or iPhone SE (2nd gen+).
• Apple Intelligence features: iPhone 16 series, iPhone 15 Pro/Pro Max, and newer iPads/Macs
• Availability –
  • Developer beta: Available now
  • Public beta: July 2025
  • Full release: Fall 2025 (likely after September iPhone event)

World dominance as it relates to AI is still up for grabs but leading the world in supercomputer power certainly give a strong edge in this race hence it was interesting to see that the US retained its position at the top of the new TOP500 list of the world’s most powerful supercomputers, which was released this week at the ISC 2025 conference in Germany. One caveat that we would mention related to the rankings is that China had stopped submitting performance data to the Top500 a couple years back so it is hard to understand where there are relative to these metrics. (link / link)

Our observations from the Top500 data are below, along with quick takes on other key supercomputer updates this week…namely, IBM’s new quantum computer plans and a couple of quantum related partnerships across the sector.

-> Separate but related, Nvidia CEO Jensen Huang has shifted to a more positive tone on the commercialization timeline for quantum…he previously talked about 15-20 years before useful quantum is available but this week at the Co’s GTC Paris developer conference he said that  “quantum computing is reaching an inflection point”…and that “we are within reach” of being able to apply quantum computers “in areas that can solve some interesting problems in the coming years” (link).

The Top500 List…  

• U.S. retains its dominance: The U.S. holds the top 3 positions w/ exascale systems, all hosted at Dept of Energy labs and performance of these top 3 leapt higher vs the last published list in Nov 2024…
  • #1 El Capitan: Performance improved from ~1,686 to 1742 Pflops/sec
    • El Capitan leads not just in performance but also in energy efficiency at 60.3 GFLOPS/watt
  • #2 Frontier: Performance improved from 1,194 to 1,353 PFlop/sec
  • #3 Aurora Performance improved from 585 to 1012 Pflops/sec

• The US added 2 new systems to the list bringing its total # of systems to 173
• Europe is on the rise: Europe has 5 systems in the top 10
  • JUPITER Booster (Germany) was the only new entry in the top 10, debuting at #4

• By continent:
  • North America leads with 187 systems
  • Europe with 163 systems
  • Asia with 135 systems

• BUT we see a big caveat in the rankings as there is no new data on China’s supercomputer performance: China’s stopped submitting results for the TOP500 list several years ago
  • And China dropped its number of machines from 63 to 46

Source: link

Quantum Computer Development Continues TO Make Strides Toward Commercialization

• IBM annc’d plans to build the world’s first large-scale, fault-tolerant quantum computer by 2029: (link)
  • System name: IBM Quantum Starling will be housed in Poughkeepsie, NY
  • Power? It will have 20k times the computational power of today’s quantum computers per the Co
  • Tech advances: IBM is focused on quantum error correction & fault tolerance, which are essential due to the fragile nature of qubits
  • Limited addtl details: While IBM didn’t provide details on commercial availability, or specific dates for when its error-corrected systems will be released, this is another key update in the supercomputer world

• Nvidia & Hewlett Packard annc’d a partnership w/ the Leibniz Supercomputing Centre to build a new supercomputer using Nvidia’s next-generation chips (link)
  • System name: The Blue Lion supercomputer
  • Timeline: Will become available to scientists in early 2027, using Nvidia’s “Vera Rubin” chips

• Vodafone & ORCA Computing annc’d a partnership to explore how quantum computing can optimize the expansion of fixed and mobile broadband networks (link)
  • The collaboration will use ORCA’s photonic quantum system (PT-2 Series) to enhance Vodafone’s network planning by solving complex problems faster and more efficiently than classical computers
    • The solutions generated by the quantum system could help reduce total cable length and optimize the location of mobile base stations to maximize speed and minimize major civil engineering work

The AI race is non-stop — not just as it relates to building better models, but in locking in the people and infrastructure behind them. Meta reportedly plans to invest $14.8bn for a 49% stake in Scale AI in a deal that could bring Scale AI’s CEO Alexandr Wang to Meta to help lead a newly formed “superintelligence” team. CEO Mark Zuckerberg is said to be personally spearheading the effort, part of a broader push to attract top AI talent. It’s a move similar to Microsoft’s $650mn licensing deal with Inflection, which also brought over co-founder Mustafa Suleyman and much of the team, and Google’s $2.7bn investment in Character.AI.

In the midst of deal and talent speculation on Meta, Open AI announced it crossed $10bn in ARR (nearly doubling in a yr), and slashed prices on its most advanced model, o3, by 80%. In a new blog post, CEO Sam Altman framed AI’s trajectory as both a massive opportunity and responsibility, touching on the energy usage of a single ChatGPT query (roughly equivalent to a lightbulb running for a few minutes) and predicting that the cost of intelligence will ultimately fall to the cost of electricity. He also offered a big-picture vision of AI remaking work, policy, and progress over the near future.

In terms of other KPIs, Amazon, seemingly quietly but steadily, is making progress too, with more than a million people now having access to Alexa+ on the back of its early access launch in late March.

Lastly, on the creative front, AI advertising was in focus this week given that a Kalshi ad aired during the NBA Finals was made in just two days using Gemini and Google Veo 3. We detailed their process, in addition to more color on the above updates, below.

Meta Reportedly Is Targeting A $14.8bn Scale AI Stake As Zuckerberg Personally Builds AI “Superintelligence” Team

• Meta is reportedly taking a 49% stake in Scale AI for $14.8bn (link/link)
  • What is Scale AI? Founded in 2016, the Co provides vast amounts of labeled data or curated training data that is used to train advanced AI models to ensure it is accurate
    • Scale AI was valued at $13.8bn in a funding round last spring…: It generated about $870mn in revenue in 2024 and expects more than $2bn this year; The Co had more than $900mn of cash on its balance sheet at the end of last year
    • …and will now be valued at $28bn if the deal comes to fruition, marking the second consecutive yr that Scale AI has doubled its valn
  • As part of the deal, Scale AI CEO Alexandr Wang will step down and instead take a top position inside Meta and join a new “superintelligence” lab (Scale AI’s Chief Strategy Officer Jason Droege will assume the CEO role)
  • The deal structure could be to avoid regulatory scrutiny: While Meta could have acquired Scale outright, the 49% minority stake may be structured to avoid heightened regulatory scrutiny amidst ongoing antitrust challenges over Instagram and WhatsApp
  • Similar deals have been happening across Big Tech: Last year, Microsoft paid $650mn to hire Inflection co-founder Mustafa Suleyman and his top employees, and to license the start-up’s technology; Google also paid $2.7bn for a similar arrangement with Character AI

• On the back of reports of the purchase, there has been addtl chatter that Meta CEO Mark Zuckerberg is personally creating a new “superintelligence” team (link/link)
  • Given his frustration with the pace of Meta’s AI development, Zuckerberg has gone into a more hands-on mode to accelerate progress
  • Zuckerberg has personally been leading recruiting for the team of ~50 people, including a new head of AI research, and has even rearranged Meta’s offices so the new hires sit near him
    • Meta has reportedly offered compensation packages between seven- and nine-figures to AI researchers from top competitors, some of whom have accepted
  • What is Zuckerberg pitching?
    • Unlike rivals who are out raising large funding rounds, Meta’s ad biz is strong enough to finance investment in the growing AI space
    • Meta has enough cash flow to fund a multi-gigawatt data center, which would give the Co one of the most powerful server bases in the world

OpenAI Hits $10bn ARR And Slashes o3 Pricing, As CEO Sam Altman Outlines His Updated Thoughts On AI’s Societal Impact

• OpenAI hit $10bn in annual recurring revenue (link/link): This is up from ~$5.5bn last yr
  • Includes the Co’s consumer & business products but excludes its licensing revenue from Microsoft and large 1x deals
    • OpenAI currently has 500mn+ weekly active users and 3mn paying business customers
  • As a reminder, OpenAI closed a $40bn funding round in March, the largest private tech deal on record
  • The company is targeting $125bn in rev by 2029

• OpenAI lowered its prices for o3, it’s most powerful reasoning model (link)
  • Cut costs by 80% for both input and output tokens
    • $2 per million input tokens (vs previous $10)
    • $8 per million output tokens (vs previous $40)
    • Extra discount of $0.50 per million tokens when the user enters information that has been cached (stored and identical to what they provided before)
  • How does this compare to competitors? See chart below

Source

• OpenAI CEO Sam Altman on how much energy a ChatGPT query uses (link/link/link)
  • The avg query uses –
    • ~0.34 watt-hours (“about what an oven would use in a little over one second, or a high-efficiency lightbulb would use in a couple of minutes”)
    • ~0.000085 gallons of water (“roughly one fifteenth of a teaspoon”)
  • That said, he did not specify what is considered to be an “average query”, if the more intensive deep research requests are included, and if training costs or differences across data centers, hardware, and evolving model complexity are reflected
  • He also continues to expect that as datacenter production gets automated, “the cost of intelligence should eventually converge to near the cost of electricity”
    • It is not the first time Altman has predicted that AI will become cheaper to use: In February, he wrote on his blog that the cost of using AI will drop by 10x every yr

• Some additional highlights from Sam Altman’s latest blog post – “The Gentle Singularity” (link)
  • “In some big sense, ChatGPT is already more powerful than any human who has ever lived. Hundreds of millions of people rely on it every day and for increasingly important tasks”
    • “A small new capability can create a hugely positive impact”
    • “A small misalignment multiplied by hundreds of millions of people can cause a great deal of negative impact”
  • There will be very hard parts like whole classes of jobs going away, but on the other hand the world will be getting so much richer so quickly that we’ll be able to seriously entertain new policy ideas we never could before. We probably won’t adopt a new social contract all at once, but when we look back in a few decades, the gradual changes will have amounted to something big.
  • Looking ahead –
    • “2025 has seen the arrival of agents that can do real cognitive work; writing computer code will never be the same”
    • “2026 will likely see the arrival of systems that can figure out novel insights”
    • “2027 may see the arrival of robots that can do tasks in the real world”
    • “In the 2030s, intelligence and energy—ideas, and the ability to make ideas happen—are going to become wildly abundant”

A Quick Update On Amazon’s Alexa+

• Since rolling out early access in late March, more than a million people now have access to Alexa+ (link)
  • This is up from “hundreds of thousands” just last month, per an Amazon spokesperson
  • It is now being rolled out to customers with Echo smart speakers and displays “at an increasing pace” following its initial launch
    • Amazon will “make it even more broadly available over the summer”
  • Why the slow rollout? Due to Amazon’s SVP of Devices & Services Panos Panay’s insistence that all Alexa+ problems be ironed out before the full release, per The WSJ
    • “He knows that getting Alexa+ right is critical because it will be released to millions of people who depend on the technology across multiple devices. It’s a very public rollout”
  • Originally annc’d in Sept 2023, Alexa+ faced over a year of delays
    • Relaunched under Panay in Feb 2025 as a completely new assistant
    • Early Access rollout began in March
  • ~ 90% of announced features are now live in Early Access: Include managing calendars, moving music from room to room, booking an Uber, finding tickets to an upcoming event, creating Alexa Routines by voice, controlling multiple devices at once, and customizing your own smart home widget on Echo Show devices
  • Features announced at the launch event that aren’t yet in Early Access: Asking Alexa to jump to your favorite scene on Fire TV; order groceries; order delivery through Grubhub; set personalized reminders and Routines for your family; create personalized music on the fly and Access Alexa+ on browser
    • Missing features “will ship over the coming weeks and months”
  • Pricing – fully released version will cost $19.99/month (free for Prime members)

Also To Flag…Kalshi Broadcasted What Is Considered To Be The First-Ever AI-Generated Advert During An Prime Time NBA Finals Game – Creator PJ Ace Breaks Down The Process (link)

• Link to view the ad HERE

• Concept Development–
  • Ace pitched a GTA VI style concept – “I think that unhinged street interviews are Veo 3’s bread and butter right now”
  • Kalshi’s team provided a list of topics they wanted covered (according to Ace, it was “NBA, Eggs, Hurricanes, Aliens, etc.”)

• Scripting –
  • Rewatched the GTA VI trailer and got inspired by locations, characters, etc. and came up with a rough script (see below)
  • Used Gemini/ChatGPT to convert the script into a structured shot list and detailed Veo 3 prompts
    • Each prompt would fully describe the scene as if Veo 3 has no context of the shot before or after it
    • This included the setting, the character, and the tone every time to maintain consistency

Source

• Video Generation –  
  • Multiple Veo 3 windows were used to run prompts in parallel
  • After reviewing outputs, prompts were refined in ChatGPT and re-run to improve results
  • Typical iteration cycle: prompt → render → review → revise → re-render, repeated across the full shot list

• Post Production –  
  • Over 300–400 video generations yielded 15 usable clips
  • Entire production completed in 2 days by a single person
  • “That’s a 95% cost reduction compared to traditional advertising” BUT “just because this was cheap doesn’t mean anyone can do it this quickly or effectively. You still need experience to make it look like a real commercial”

It was a headline-heavy week across the media & entertainment landscape, with a flurry of developments spanning streaming, theme parks, theatrical, and gaming.

Headlining it all was commentary from Disney CEO Bob Iger, who gave a wide-ranging interview on CNBC covering several key areas of the Co’s biz. On the Experiences side, consumer demand at Parks has still not slowed down and they continue to focus on increasing offerings to improve price-to-value ratio. Iger continues to view the upcoming Abu Dhabi park as a “win-win” deal, and that remains the main focus on the international Parks front, with no additional intl Parks plans in motion. On the streaming side, Iger discussed the upcoming integration of Hulu into Disney+ now that Disney has full ownership, and he floated the possibility of shifting to periodic subscriber number disclosures (similar to Netflix) as the company places greater emphasis on profitability metrics. He also addressed Warner Bros. Discovery’s decision to spin off its linear assets and whether that has any implications for Disney’s own strategy in that area (spoiler: it doesn’t — see Theme #2 for more).

Beyond Disney, the week brought a series of notable updates across the broader media and entertainment landscape. YouTube TV revealed that NFL Sunday Ticket pricing will hold steady y/y, Amazon doubled the ad load on Prime Video, while Fox is reportedly in active discussions to bundle its forthcoming Fox One platform with other major streamers. Amazon MGM Studios announced plans to release a slate of content worth $1bn in 2026, and SAG-AFTRA officially suspended its nearly year-long video game strike after reaching a deal that included significant wage increases and AI protections.

Amongst all these updates, we would also flag that the first-ever 100% AI-generated commercial aired during an NBA final on primetime– see Theme #5 for more on that – and see below for more on all the above.

Disney CEO Bob Iger Shares Some Notable Commentary On The Co’s Experiences Biz… (link)

• Regarding concerns about Theme Park affordability – they are “very mindful…that there are many consumers that are struggling from an economic perspective”
  • The Co continues to protect the lowest price point, particularly at Disneyland
  • They incr’d the # of days those low prices are available
  • They are improving the price-to-value ratio
  • “We don’t really see any sign, as our last quarter results indicated, that pricing has become a huge issue for us. But that doesn’t mean we’re dismissive of the issue at all”

• Any slowdown in consumer activity at Parks or Cruises? “So far, so good”
  • Trajectory for this yr for the biz is “very positive…we’ve not really seen issues”
  • “We’ve not seen issues that in any way would prevent us from continuing to grow that business”

• On Abu Dhabi theme park announcement – “we’re thrilled…[it is] a deal that is truly a win-win”
  • Currently the Co is NOT looking at another location in the world: “Obviously are mindful of possibilities…but [Abu Dhabi is] our focus right now, and I don’t think there’s anything imminent in terms of choosing what would be our eighth location”

…As Well As Several Updates On Disney’s Media Biz 

• Disney ended up paying $438mn to acquire Comcast’s stake in Hulu – a lot lesser than anticipated (link)
  • They were prepared, “if necessary”, to pay more, but 3P appraiser’s valn came in closer to Disney’s internal valn
  • If Comcast’s internal valn had been upheld, it could have cost Disney $5bn more
  • “Now we’re focused on doing what we intended to do once we gain full control of this” –
    • “Put these apps together seamlessly”
    • “Create an experience for the consumer that’s easier to use, easier to buy”
    • “To increase engagement, to lower churn, to grow subs, and ultimately to consolidate more and to save some money in terms of the operation”
  • “This step is the first big step in the direction of turning this into a real growth business for the company…and also turning Hulu into a more global brand as part of the Disney+ offering”

• Disney CEO Bob Iger on future plans to stop reporting subscriber numbers as biz shifts focus to EBITDA, cash flow, and margin growth – “Probably” (link)
  • “I think at some point, what we’re mostly going to disclose is the bottom line”
  • “Obviously, we’ll talk about trends when they’re relevant…and we’ll give the Street other salient points for them to digest”
  • “But as Netflix did by basically getting out of the sub-disclosure business, we’ve certainly considered it, but I don’t have anything specific to say about it at this point”

-> More broadly on the cost front, when asked about the $5bn company-wide cost reduction he initially targeted upon returning as CEO, Iger noted they had actually delivered over $7.5bn in savings; While the team remains “vigilant” about the bottom line, there is no new specific target; Instead, he emphasized a shared commitment across the company to continue operating with peak efficiency

• Iger also made some comments on the recent WBD linear tv split – see Theme #2

Other Key Streaming Updates – YouTube TV’s NFL Sunday Ticket Pricing, Amazon Prime Video’s Increased Ad Loads, And Fox One Reportedly Exploring Bundling Oppties In Advance Of Its Launch

• YouTube TV shares 2025 NFL Sunday Ticket pricing for 2025 (link)
  • No y/y price hike: Had debuted on YouTube and YouTube TV in 2023 w/ a starting price of $349 for the season, which then increased to $378 for the second season
  • Month-to-month option can now be cancelled at any time…: Unlike previous month-to-month options that were previously offered, meaning users could sign up for just a single month if they wanted to
    • ….but comes at a cost: At $115/mo for returning YouTube TV subscribers, just 3 moss costs nearly as much as the full-season plan, making the seasonal plan a better deal if watching beyond 2 mos
    • But still no option for purchasing a single Sunday or a single game
  • Also offering more NFL Sunday Ticket discounts for subscribers –
    • Students can get a season price of $119 ($129 with NFL RedZone) nd only supports one signed-in device and one concurrent stream
    • Military & Veterans, First Responders, Nurses, and Teachers can get a season price of $198 ($208 with NFL RedZone)
  • See chart below for pricing for this season

Source

• Amazon doubles Prime Video ads to up to 6 minutes per hour (link/link)
  • Now showing 4-6 mins of ads per hour which is almost double the 2-3.5 mins of ads from when the Co introduced ads in Jan 2024
  • “Prime Video is now firmly in that middle tier” amongst streamer ad loads: Netflix still offers the lightest ad experience, while svs like Hulu, Tubi, and Paramount+ carry heavier loads
    • Increasing ad load creates more inventory to sell, which is expected to drop CPMs: While buyers haven’t yet seen major drops, they expect them to come soon; Currently, buyers said that Prime Video CPMs fall “somewhere in the middle” compared with other streamers
  • That said, streaming svs still insert fewer ad breaks than broadcast TV: The ad load on traditional television “typically ranges from 13 to 16 minutes per hour”

• Fox executives are reportedly discussing upcoming Fox One bundling oppties (link/link)
  • Discussions include a potential bundle w/ WBD and Disney, which would enable Fox One to exist within a current bundle that already includes the other three svs (Disney+, Hulu, and Max)
    • The discussions w/ WBD reportedly took place before WBD announced plans to spin off its linear TV biz (see Theme #2)
  • Another plan discussed creating a an offering similar to what would have been Venu Sports, a sports-focused streaming app previously being developed by Fox, WBD and Disney through a joint venture before it was called off due to regulatory pushback
    • Would bundle Fox One, Max, and a forthcoming plan called “ESPN Ultimate” at a single price point
  • While Fox can pursue bundling arrangements with other svs, including Comcast’s Peacock and Paramount’s Paramount+, it is unclear if they have held discussions; Under the terms of the Venu Sports JV, all three participants were prohibited from bundling their networks or streaming apps w/ Comcast or Paramount-owned products

Expect A Busy Theatrical Slate From Amazon MGM Studios In 2026

• Amazon MGM Studios will bring a $1bn slate to market in 2026 (link/link): This is as per George Wilkinson, International TV Distribution Manager, Amazon MGM Studios Distribution
  • Will be releasing 20 movies, 10 of which will be theatrical – “the budget for that whole slate in 2026 will be one billion dollars – and we’ll be committing a P&A spend of one billion to that”
    • Movies will include sci-fi adventureProject Hail Mary with Ryan (described by Roldan as “the star of our slate”) as well heist drama Crime 101, and Masters of the Universe
  • “It means we are heavily invested in theatrical…it also means that all of our partners in this room, we will be distributing that content to them. We’re not holding any content back from the market from that slate”

The Video Games Strike Is Finally Coming To An End 

• SAG-AFTRA video game strike was officially suspended after reaching a deal (link/link/link): The union announced June 11th that the work stoppage will end at 12pm PT
  • The contract details have not yet been disclosed, as far as the specificity of the gains for voice and performance capture workers
    • The SAG-AFTRA National Board said it will meet in a special session to discuss the details of the deal
    • If approved, the agreement will be sent out for ratification, and the details will be made public
  • But some insight came from spokespeople on both ends –
    • Per a spokesperson for the game Cos – “It delivers historic wage increases of over 24% for performers, enhanced health and safety protections, and industry-leading AI provisions requiring transparency, consent and compensation for the use of digital replicas in games”
    • Per SAG-AFTRA chief negotiator Duncan Crabtree-Ireland – “Patience and persistence has resulted in a deal that puts in place the necessary A.I. guardrails that defend performers’ livelihoods in the A.I. age, alongside other important gains”
  • Video game strike was much longer than the 2023 actor’s strike: Video game strike began in July 2024 and went on for 320 days vs the actors strike that lasted 118 days.
  • What gaming Cos were impacted? Activision Productions, Blindlight, Disney Character Voices, Electronic Arts Productions, Formosa Interactive, Insomniac Games, Llama Productions, Take 2 Productions and WB Game
    • Strike also applied to specific games on a case-by-case basis

Some Similarweb data that highlights the dramatic fall in content publishers’ referral web traffic due to AI chatbot type summaries replacing traditional Google searches made the rounds this week. Some publishers have seen a reduction by as much as 55% over the last 3 years.  What are publishers doing? They need to shift their business model and focus on direct engagement/relationships, subscriptions, and live events…see below for more color on this trend.

• Based on data between April 2022 and April 2025: (link)
  • Traffic from organic search to HuffPost, Washington Post, and Business Insider have fallen by almost 50% to 55%
  • The WSJ was an outlier as their traffic from organic search was actually slightly up in April vs 3 yrs prior
    • Though as a share of overall traffic it declined from 29% -> 24%
  • See chart below

• Some notable publisher vs platform comments on this trend:
  • The Atlantic’s CEO Nicholas Thompson: “Google is shifting from being a search engine to an answer engine” and he told his staff to assume traffic from Google would fall towards zero
  • Washington Post’s CEO William Lewis: The rollout of AI-generated summaries instead of providing search links “is a serious threat to journalism that should not be underestimated”
  • Google executives: Have said that people who click on links after seeing AI Overviews tend to spend more time on those sites and that they don’t show AI overviews in some search results like current news

• What are publishers doing?
  • Focused on engagement & direct relationships
  • Subscriptions
  • Events

• Nintendo Switch 2 sets sales records – sold 3.5mn+ Switch 2 units in the first 4 days after its launch, making the console the Co’s fastest-selling gaming device to date (link/link/link/link)
  • Went on sale June 5^th
  • Likely the biggest console launch of all time –
    • PlayStation 5 shipped 4.5mn units in its first seven weeks
    • PlayStation 4 sold 2.1mn in a little over two weeks
    • Nintendo Switch sold 2.74mn in its first month
  • Nintendo has predicted it will sell 15mn Switch 2s during its current financial year (ends March 2026)
    • For reference, the original Switch ended up selling 152mn units since its 2017 release
  • Record sales came despite some hiccups before launch: The Co had to temporarily delay pre-orders a couple of days after announcing the console in response to President Trump’s tariffs, and it had to raise prices on some accessories, even as it kept the console price steady

• French President Emmanual Macron says France will ban social media for children under 15 if the EU does not (link/link)
  • Will ban within “a few months” if this is not done at a European level: “I’m giving us a few months to get the European mobilization going. Otherwise…we’ll start doing it in France. We can’t wait”
    • Comes after a student fatally stabbed a school staff member during a routine bag check at a middle school in eastern France
  • Macron doubled down on his comments by posting on X -: “I’m banning social media for children under 15. Platforms have the ability to verify age. Let’s do it”
  • The EU responds – “let’s be clear … [a] wide social media ban is not what the European Commission is doing. It’s not where we are heading to. Why? Because this is the prerogative of our member states,” commission spokesperson Thomas Regnier said
    • In addition to France, Spain and Greece have also signaled a desire to enact similar child-protection policies in their respective countries (link)

• DoorDash acquires adtech firm Symbiosys for $175mn, as part of its broader retail media push (link)
  • Symbiosus lets retail brands run advertisements on major websites like Google search, YouTube, Facebook, Instagram and Pinterest
  • Would allow DoorDash to offer its advertisers to manage their ad placements on external sites like social media, in addition to the DoorDash app and website
  • Overall, DoorDash & Wolt Ads:
    • Serve 150k+ advertisers in 30+ countries
    • Crossed an annualized ad rev run rate of over $1bn (after 3 years)