this post was submitted on 30 Sep 2025
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EA's new owners are making "a huge bet" on generative AI cost-cutting to help repay a $20 billion loan, claims report (www.rockpapershotgun.com)
submitted 1 day ago by bytesonbike@discuss.online to c/games@sh.itjust.works
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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."

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[โ€“] Manjushri@piefed.social 16 points 1 day ago (5 children)

This has got to be some form of vulture capitalism. They will sell off all the IP and physical property, either directly or by spinning off divisions into new companies to sell off. Then sell off any other pieces of the company that they can, and finally they'll take all that income as bonuses for the new owners and leave the remains of EA with nothing but debt and no option other than to file for bankruptcy. Same thing that was done to companies like Toys-R-Us but on a larger scale.

[โ€“] The3represents@sh.itjust.works 5 points 21 hours ago

That was exactly my thought. Extract cash for the owners through massive cuts, gut the company and discard the husk. Classic leveraged buy out scheme.

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