Warner Bros. Says Paramount’s New $31 Offer May Top Netflix

Summary

Bloomberg Intelligence Podcast Episode Summary

Episode: Warner Bros. Says Paramount’s New $31 Offer May Top Netflix
Date: February 25, 2026
Hosts: Paul Sweeney & Scarlet Fu (with guest analysts)
Theme: In-depth analysis of current investment news with a special focus on M&A in the media space, housing and retail sector updates, and the ongoing impact of AI on technology companies.

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Episode Overview

This episode dives into:

• A high-stakes bidding war for Warner Bros. Discovery, evaluating the new Paramount offer versus Netflix.
• Detailed insights into Lowe’s performance amid the current housing and home improvement environment.
• Retail sector dynamics, particularly around TJX (TJ Maxx) adapting to consumer trends.
• The disruptive impact of generative AI on the software sector, and how companies are adapting.

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1. Media M&A: Warner Bros. Discovery Bidding War

Guest: Geeta Ranganathan, Senior Media Analyst, Bloomberg Intelligence
Timestamps: [01:31]–[06:38]

Key Discussion Points

• Latest Bids:

  • Paramount has upped its bid for Warner Bros. Discovery to $31 per share, improved from $30 ([01:54]).
  • Netflix’s offer remains at $27.75/share but is only for the studio and streaming assets ([01:54]).

• Board Response and Deal Mechanics:

  • Warner Bros. board is reassessing both offers; once they declare Paramount’s as “superior,” Netflix has 4 days to respond ([01:54]).
  • Paramount’s new offer addresses previous board concerns, including covering financing costs, termination fee (raised from $5.9B to $7B), a ticking fee of $0.25/share/quarter if the deal drags on, equity backstop, and debt guarantees ([03:11]).

• Netflix’s Position:

  • Geeta suggests Netflix’s best move may be to walk away, pocket a $2.8B termination fee, and avoid overleveraging ([04:33]).
  • An increased bid is possible but would make their balance sheet less attractive (potential leverage rising to 4× from 0.6×) ([04:33]).

• Competitive Implications:

  • If Paramount “wins,” the combined company will have high leverage, likely focusing on cost reduction rather than aggressive investing—thus only temporarily strengthening competition for Netflix ([06:01]).

Notable Quotes

• “The best option... for Netflix... is to just walk away, pocket the $2.8 billion... and just focus on your core business.” — Geeta Ranganathan ([04:33])
• “[Paramount] are going to pay something called a ticking fee, which is 25 cents per share per quarter for every quarter that the transaction does not close beyond September.” — Geeta Ranganathan ([03:11])

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2. Housing and Home Improvement: Lowe’s & Sector Trends

Guest: Drew Redding, U.S. Homebuilding Analyst, Bloomberg Intelligence
Timestamps: [07:31]–[12:42]

Key Discussion Points

• Lowe’s Quarterly Results:

  • Solid quarter, outperforming in same-store sales due to strength with pro customers & e-commerce ([08:35]).
  • Earnings guidance for 2026 is flat to +2%; stock down on more conservative than expected guidance and acquisition-related margin pressure ([08:35]).

• Sector-Wide Challenges:

  • Mortgage rates (now ~6.09%) are better but not enough to unlock housing supply; 5.5% is the "magic number" for noticeable change in activity ([10:12]).
  • Home prices persistently high; affordability is still challenged ([10:30]).
  • Big-ticket renovations are subdued as consumers pull back on discretionary spending due to financing costs and economic uncertainty; smaller improvement projects remain stable ([11:55]).

Notable Quotes

• “Typically what we hear is that something in that five and a half percent range is kind of that magic number.” — Drew Redding ([10:30])
• “Big-ticket discretionary spending… has seen a pullback. It goes back to… less confidence in the direction of home prices.” — Drew Redding ([11:55])

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3. Retail: TJX (TJ Maxx) and the K-Shaped Economy

Guest: Mary Ross Gilbert, Senior Equity Analyst, Bloomberg Intelligence
Timestamps: [14:23]–[20:06]

Key Discussion Points

• TJX Outlook:

  • Conservative Q1 guidance from TJX but robust early quarter sales data—likely to beat expectations ([14:59]).
  • Strength attributed to ability to serve all income levels and offer branded merchandise at discounts ([16:12]).

• Consumer Resilience:

  • Despite bifurcation ("K-shaped economy"), employment drives confidence across income groups—keeping the sector resilient ([17:46]).

• Tariffs & Margins:

  • Impending tariffs less of a concern for TJX, as only ~10% of sourcing is direct imports; most is bought via closeout channels ([18:46]).
  • Other companies (e.g., Steve Madden) are more cautious about giving margin guidance due to tariff uncertainty ([18:46]).

Notable Quotes

• “When you think about all of the off-price retailers, they’re in the best position to appeal to consumers across all income cohorts.” — Mary Ross Gilbert ([16:12])
• “What makes [TJX] in a great position… is they really cover brands across the spectrum… appeal to consumers across both the high end all the way down.” — Mary Ross Gilbert ([16:12])
• “Strong employment… keeps the consumer resilient… across all consumer segments.” — Mary Ross Gilbert ([17:46])

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4. Tech Sector: Generative AI and Software Shakeup

Guest: Anurag Rana, Senior Tech Analyst, Bloomberg Intelligence
Timestamps: [21:26]–[26:01]

Key Discussion Points

• Investor Anxiety:

  • Recent sector selloff less about near-term earnings and more about long-term survival: Will current software businesses be relevant in five years? ([22:03])
  • “Terminal value” fears drive indiscriminate index selling ([22:03]).

• Sector Winners & Losers:

  • Cybersecurity looks most insulated, could even benefit from AI expansion ([23:14]).
  • Smaller SaaS firms, especially in online travel and sales/HR automation, appear most exposed ([23:14]).

• Company Adaptation:

  • Major players (e.g., Workday, Figma) actively pivoting to build AI-powered agents and capabilities ([24:16]).
  • Rapid change comes at a cost—uncertainty over whether it leads to lower margins or opportunities for new, native competitors ([24:16]).

• Data Ownership:

  • Companies with proprietary data may be more protected, but ultimately, client ownership of data (e.g., banks) determines real competitive advantage ([25:34]).

Notable Quotes

• “The big question is whether these guys will be relevant five years from now or not. And when you put a question on somebody’s terminal value, then there is no argument.” — Anurag Rana ([22:03])
• “Cybersecurity… is an area that is doing better than the others, and in fact could even benefit down the road.” — Anurag Rana ([23:14])
• “If you have your own data, that’s fine, but at the end of the day, it’s customers’ data… when disruption happens, it happens very fast.” — Anurag Rana ([25:34])

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Memorable Moments

• [03:11] — Geeta Ranganathan details “ticking fee” logistics, showing the complex deal structuring at play.
• [10:30] — Drew Redding breaks down the “magic number” for mortgage rates.
• [16:12] — Mary Ross Gilbert’s explanation of the “K-shaped economy” and TJX’s positioning.
• [22:03] — Anurag Rana’s frank comment: “When you put a question on somebody’s terminal value, then there is no argument—it’s a one or a zero.”

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Conclusion

This episode delivers an incisive look at some of today’s most relevant investment stories: the ongoing battle for Warner Bros. Discovery, sector trends in housing and retail, and how the accelerating pace of AI-driven change is forcing tech companies to reimagine their futures. The conversation is lively, thorough, and peppered with actionable insights and industry expertise straight from Bloomberg’s top analysts.

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Transcript

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[Paul]

Let's get to a little M and A in the media space. The Warner Brothers Discovery, the never ending deal seems like it's moving a little bit forward here. We got a higher bid from Paramount. We want to check in with Gita Ranganathan. She covers all the media stocks for Bloomberg Intelligence. So, Geeta, give us the latest on this Warner Brothers Discovery sale process. Where are we right now?

[Geeta Ranganathan]

Yeah, so Paul, we got the higher number from Paramount. It's $31. So they upped it from $30 per share for the entire company. Now, what that has forced the Warner Brothers Discovery board to do is to go back to the drawing board, kind of rein engage with Paramount, see exactly what number they can come up with. But ultimately they have to deem whether this is a superior proposal or not. So far, they have two offers on the table. This one from Paramount and the $27.75 per share from Netflix. But that is only for part of the business. That's only for the studio and the streaming assets. So they're still in the process of making a determination about which offer is superior. But the minute that they, you know, that they make that determination and they call the Paramount offer Superior. Then the clock starts ticking for NetFL four days to come up with their own enhanced offer. So to match the Paramount offer and then, you know, we'll kind of see where the chips fall after that.

[Christina Raffini]

Yeah, well, Geeta, you know, I recall the Warner Brothers board really did not like some of the financing terms for the Paramount bid initially. Right. So does this new improved offer improve upon some of those sticking points in the earlier deal and does that really de risk the transaction now that they've come up with another offer here?

[Geeta Ranganathan]

They have, they have all of the points that Warner Brothers had initially raised. They have. The Paramount management team has proposed remedies. So one of the big things that they have kind of come up with is that they're going to cover the financing costs and the termination fee if Netflix exit this, exits this process. They actually upped their own termination fee from 5.9 billion to $7 billion. They are going to pay something called a ticking fee, which is 25 cents per share per quot quarter for every quarter that the transaction does not close beyond September. So they've offered a lot of different things, including kind of backstopping the whole equity portion of the deal as well as providing guarantees for the debt financing. So a lot of the points that Warner Brothers had initially raised, you're absolutely right, Christine. Paramount has kind of come out and addressed that. So definitely providing a lot more comfort to the Warner Brothers discovery board.

[Paul]

Yeah, you're right. It seems like Paramount's really stepped up and really said, we're going to be really credible here. Meanwhile, Netflix has been quietly waiting on the sidelines, not really doing anything. But it now seems like now's the time for them to, you know, really make a decision, step up with a bigger, better offer, different offer. I'm not sure. What do you think the options are for Netflix?

[Geeta Ranganathan]

The best option in my view, Paul, for Netflix, and I think majority of, you know, its investors would also agree, is to just walk away, pocket the 2.8 billion that you get in termination fees. Just walk away and just focus on, just focus on your core business because they do have a very strong core business. You know, as we've said many times, Paul, and you agree that this, you know, Warner Brothers is a great asset, there's absolutely no doubt about it. But it is really just a nice to have, not a must have for Netflix. So it could end up actually becoming a distraction. So, you know, in many cases, I mean, I think the way that, you know, the street almost perceives that is that Netflix is a winner if they, if they lose this whole bidding process. But that said, I mean, they do have a lot of financial firepower. If they did have to increase their bid, up it by about $1, $2, they absolutely can do that. The only thing is once they go beyond that, then they kind of risk overpaying for the asset. They risk their leverage profile really kind of getting a little bit dangerous, I would say. I mean, gross debt is going to be well above $100 billion. Leverage could be at four times, they're at 0.6 times right now. So all of those things start kind of coming into question. But of course they have a great free cash FL. Deleveraging wouldn't be an issue. That said, there still are, you know, integration and execution risks, always with any M and A deal.

[Christina Raffini]

Yeah, well, so if Paramount does indeed win the deal, does that present stronger competition for Netflix, at least in the streaming space?

[Geeta Ranganathan]

I mean, it definitely will to some extent. But I think what Netflix and everybody else is banking on is that leverage is just going to be so high for the combined Paramount, Warner Brothers discovery that, you know, at least for the first couple of years, I think they're just going to be really focused on kind of driving costs down, hitting their synergy targets, not really being able to invest in the business. But again, you know, it all comes down to exactly what the number is going to be. But, but you're right, they definitely will be a stronger competitor. Although I don't think it's going to be a make or break for, for Netflix at all.

[Paul]

Stay with us. More from Bloomberg Intelligence coming up after this.

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[Christina Raffini]

All right, let's move on though, to John Tucker, one of John Tucker's favorite stocks, and that is Lowe's reporting results. And let's bring, you know, I'll say

[Drew Redding]

the difference between Lowe's and Home Depot. I find more women at Lowe's than Home Depot.

[Paul]

Nice to know.

[Christina Raffini]

Yeah, well, I wasn't saying that.

[Drew Redding]

I'm just like saying just my observation.

[Paul]

Okay. Why is it, I wonder?

[Drew Redding]

It's more like non professional friendly, I

[Christina Raffini]

guess, more diy, but apparently Paul's going

[Drew Redding]

there to pick people up, so can

[Christina Raffini]

I just say that the demographic of women might not be interested in you, Paul.

[Paul]

Okay, yeah, yeah, no surprise. And John Tucker, speaking of do it yourself. He just fixed our microphone here in our studio, folks. We had a professional come in here. John. No, I got it.

[Drew Redding]

Yeah, that's okay. We do it all here.

[Paul]

Don't worry, Anthony, we got it.

[Christina Raffini]

Very much a product of Lowe's diy, but. All right, well, let's get to Lowe's. What is the preview there? And with that let's bring in Drew Redding who is the Bloomberg Intelligence U.S. home building analyst. Drew, what is going to be the takeaway?

[Drew Redding]

So Lowe's report earlier this morning, and overall it was a solid quarter. They had a nice beat on same store sales, really due to the strength of their professional customers and their E Commerce Channel. They had about a 50 basis point lift from recent storms. You see the stock is down about 4 to 5%. There's a couple of things going on there. They guided the same store sales for 2026 being about flat to up 2%. While that's exactly in line with what we heard from Home Depot, consensus was on the higher end of that. We think there could be a little bit of conservatism in there which rightfully so given where we are with housing. Also there's a modest earnings reset for the company. You know, the midpoint of their guidance was about 4% below the street. And really that's a reflection of weaker than expected operating margins. And that's largely due to some of the acquisitions they've made over the last couple of years. So there's a little bit of company specific noise in there. The other thing that's going on with the stock and really if you look across the housing space as a whole, whether you're talking about the builders, the building product manufacturers, developers, really anyone, they're all red across the board. And I think that has to do with the lack of dialogue around housing policy. During the State of the Union address last night, you know, we heard a victory lap on mortgage rates which have certainly come down, but it was really just a reiteration of the administration's plan to ban institutional purchases. So I think a lot of investors, you know, across the Housing landscape, including home improvement retailer, were hoping for some policy that could really stoke the housing market.

[Paul]

So I'm looking at the mortgage bankers association 30 year fixed mortgage 6.09%. That's as low as it's been in a long time. Is it low enough to get folks out of their homes, you know, and free up the existing homebuyer market?

[Drew Redding]

Yeah, you're right. We're about 100 basis points below where we were just a year ago. And certainly every, you know, every tick lower in mortgage rates is going to help bring that incremental buyer off the fence. Typically what we hear is that something in that five and a half percent range is kind of that magic number. Now that being said, you know, as we, as we've said for a long time, it's not just about mortgage rates. They've certainly helped affordability, they've brought monthly payments down. But home prices continue to rise. Dropped more than 50% since 2019. So when you look at, you know, a more holistic view of housing affordability, it's still really constrained. You know, the other thing that we can continue to hear, whether it's from the retailers or from the builders, is that, you know, buyers are increasingly concerned about the economy, they're increasingly concerned about the outlook for the labor market. So there's a lack of urgency out there. You know, you also have a lot of people maybe sitting on the fence because you know, they're saying to themselves, look, maybe home prices are going to come down, maybe rates are going to come down further. Maybe I should wait before making such a big purchasing decision.

[Christina Raffini]

Yeah, well, so if that sort of turnover, new housing buyers, that's still going to be stall Given the uncertainty in the macro environment with something like repair and remodel spending, that segment of Lowe's customers, is that something that's going to be enough to carry them through? And I suppose for the rest of the house building sector, for the home

[Drew Redding]

improvement retailers specifically, I think demand has been pretty stable, if not modestly improving. If you look at comp store sales on a two year basis, there was a little bit of an uptick this quarter. So I think their customer has been pretty resilient. When you think about what's holding back more robust growth in the sector, it's really that big ticket discretionary spending. These are categories like large scale kitchen and bath remodels, maybe a big flooring project, you know, replacing all the doors and windows in your house. And these are things that typically tend to be financed. So with rates at an elevated level. You've seen a pullback in that. And it also goes back to what we said on confidence, you know, with, with less confidence in the home, the direction of home prices. You have people who are maybe waiting for to take on those bigger ticket projects.

[Paul]

Stay with us. More from Bloomberg Intelligence coming up after this. This is Special Agent Riegel, Special Agent Bradley Hall. The time is approximately 11:15am about to start consensual telephone call with Dr. Daewa Sang.

[Lisa Mateo]

China's Ministry of State Security is one

[Mary Ross Gilbert]

of the most mysterious and powerful spy

[Lisa Mateo]

agencies in the world. But in 2017, the FBI got inside.

[Paul]

I'd never seen that much evidence in

[Drew Redding]

my entire career and I don't think we'll ever see that much evidence again.

[Anurag Rana]

I now have several terrorists, terabytes of an MSS officer, no doubt, no question of his life.

[Drew Redding]

And that's a unicorn.

[Anurag Rana]

This is a story of the inner workings of the MSS and how one man's ambition and mistakes opened its vault of secrets. Listen to the Six Bureau from Bloomberg Podcasts starting on February 13th on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts.

[Lisa Mateo]

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[Christina Raffini]

We're going to be talking a little bit about retail now. And for that let's bring in Mayor Ross Gilbert, Bloomberg Intelligence Senior Equity Analyst list joining us from Sunny L A. Very different from the weather that we're seeing over here in New York, Mary. Mary, thank you so much for joining us. Let's start with TJ Max because we did get that disappointing outlook from them and very surprising, right, because they did have a strong holiday season. But it seems like they're guiding expectations now for the future. What's the takeaway from that? Is this whole customers trading down to more affordable goods is that flocks over now for T.J. maxx?

[Mary Ross Gilbert]

Thank you, Christine. But actually TJX is known for providing conservative guidance. So even though this guidance is coming in below what analysts expect for the first quarter already, if you look at the first quarter and the company said this, they're off to a great start. When we looked at the Bloomberg second measure transaction data, we're seeing really robust sales. So it looks like a huge beat right now. The trend that we're seeing, it's very early in the first quarter, but it's looking very, very strong. And I Think when you think about tjx, this company, the management team here executes so seamlessly and the brands that they have, which include Stuart Weitzman's jeweled sandals for example, you can get dragon bone attire and consumers love it.

[Paul]

I am looking at the stock actually is up about 910 of 1% today at a 52 week high. Good news there. Mary, what's the company saying about the consumer out there? We've got the K shaped economy. I'm not sure how TGX plays within that marketplace, but what are they seeing?

[Mary Ross Gilbert]

Paul, you raise a valid point. The K shaped economy. The thing about tjx, when you think about all of the off price retailers, they're in the best position to appeal to consumers across all income cohorts. So they've got the brands that include Celine, Chloe, Gucci, Brunello, Cucinelli, but then they'll have brands like Theory or Eli Tahari. So they Nike, Puma. So they really cover brands across the spectrum that appeal to consumers across both the high end all the way down to those consumers that are really paycheck to paycheck. And so that's what makes them in a great position and why their business model really works. And when you think about home goods, everybody shops home goods. Whenever you go to a dinner party, what you're seeing there on the table likely came from HomeGoods.

[Christina Raffini]

You know, very interesting us in the retail space, kind of the developments that we're seeing as a result of that K shaped economy that Paul mentioned. Because you know, in contrast we did have the SAC CEO of course on Bloomberg TV yesterday talking about where they are in the Chapter 11 process. But they're also saying that, you know, hundreds of luxury brands are shipping again and then at the same time, you know, TJX holding up relatively well with what does this tell us about the state of consumers? Are you seeing some kind of a bifurcation where these segments, certain segments are doing better than others?

[Mary Ross Gilbert]

Yes. So I would say that we're seeing strength across all consumers really and you see it with the consumer confidence data. But most importantly, I think whenever you have strong employment, which we have had for many years now, and that really keeps the consumer consumer resilience. So even if you're sort of going paycheck to paycheck when you're employed, you feel really good and you might cut back on some essentials just so that you can get something new that makes you feel good. So I really see strength across all consumer segments. It really comes down to the retailer and their ability to execute. So when you see companies that are outperforming, it's because they're executing, executing. And that's really the delineation that we see there.

[Paul]

Hey, Mary, the Supreme Court and our president just brought tariffs right back to the front burner again. I wonder if the good folks at TJX had any thoughts about what seems to be a new round or a renewed interest in tariffs.

[Mary Ross Gilbert]

Yes, well, so the tariff question is going to be top of mind with fourth quarter earnings coming in. And TJX, though, because they buy primarily closeouts, like less than 10%, they're sourcing directly. So they're really not that impacted by tariffs. It's so small for them because like I said, over 90% of the inventory that they're sourcing is closeouts. And they see tremendous availability of closeouts. So they're not impacted. But we did have news out today that Steve Madden decided not to provide margin guidance. They did provide sales guidance, which was strong, but they decided not to provide that guidance because they felt that there was some uncertainty. But when you look at it, we already know the tariffs that went into place prior to the 10% that went into effect. So you know that you get at least a 50% savings for 150 days on new shipments. And then once they issue the executive order for 15%, then you'll have a 25%. So that's really the best way to look at what the margin impact could be. And most of these companies are passing on those price increases. And then they're also employing other mitigation measures, including sharing with the suppliers.

[Paul]

Stay with us. More from Bloomberg Intelligence coming up after this.

[June Grosso]

I'm June Grosso inviting you to join me for the Bloomberg Law Podcast. Every weekday we help you make sense of the legal stories that shape the nation and the world. Listen for complete analysis of the biggest court cases, the latest actions from Congress and regulators, and the legal moves driving the markets. From corporate law to constitutional law and from state courts to the Supreme Court. At Bloomberg Law, we go beyond the day's headlines. We speak with top attorneys, judges, scholars and policy experts to break down what the rulings really mean. We do this every weekday, then bring you the best conversations in our daily podcast search for Bloomberg Law on YouTube, Apple, Spotify or anywhere else you listen on the east coast, listen as you start your day and on the west coast, catch up in the evening. That's the Bloomberg Law Podcast with me, June Grosso. Subscribe today. Wherever you get your podcasts,

[Lisa Mateo]

you're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app Listen on demand, wherever you get your podcasts or watch us live on YouTube.

[Paul]

Certainly if you're a tech investor, you've been dealing with the other side of AI, which is to what extent is AI a threat to my business? And that's been a real big problem for a lot of sectors out there, including software. Software as a service has certainly been, you know, dealing with that over the last several weeks. We want to check in with Anurag Rana and get the latest there. Anurag Run is a senior tech analyst, covers all the tech stuff for Bloomberg Intelligence. Anurag, talk to us about the conversations you're having with institutional investors these days because several weeks ago we saw just a big, big sell on your whole software sector there. Where are we today on that?

[Anurag Rana]

It's been okay the last two days, but things will probably change by the time next week comes around because the discussion around here is not so much about what's happening to the earnings, power or sales growth over the next 12 to 24 months. The big question is whether these guys will be relevant five years from now or not. And when you put a question on somebody's terminal value, then there is no argument it's a one or a zero. So there are those that think that some of them will be fine and maybe even grow stronger and there are certain companies that will be disrupted quite a bit. So I think that's where the dilemma is at this point. People are just selling the entire index. They are not even looking at some of the bigger ones or the better ones at this point.

[Christina Raffini]

Yeah. Well, let's get into which ones are the bigger ones and the better ones. Right. Because we've seen so far the most vulnerable, vulnerable names seem to be companies and online travel or smaller software firms. But then meanwhile, cybersecurity seems to be relatively insulated from the recent bout of caution that we've seen. You know, is that a sector or a segment within this space that could actually benefit from increased spending on security?

[Anurag Rana]

Yeah, I mean, we did publish a big report yesterday and we have put out a framework where we have looked at four or five different segments or different factors. So if somebody has a very high market share, are they selling into an enterprise or a smaller business? Do they have network effect and are they are a platform or a point product company? So, you know, let's you, you mentioned cybersecurity. This is an area that is doing better than the others, and in fact could even benefit down the road if a lot of the agents that people will create would need to have their own identity, would need to have their own safeguards around it. But, you know, there are certain places where we will see more disruptions. Online travel is one area you mentioned. And even the smaller software names, whether that's in hr, whether it's in sales, sales automation, I think they are the most at risk of getting disrupted.

[Paul]

What are the companies saying here? Do they acknowledge that AI is a threat to their business? Are they trying to pivot? Are they ignoring it? What are you hearing from the companies these days?

[Anurag Rana]

So everybody's pivoting at a very fast pace. I'll name a couple of examples. You know, a company like Workday, which is the de facto leader in HR software, they are creating their own agents. And down the road, when you and I will interact with an HR software company, it would be through a chat bot or could be conversational. There's a company called figma. It has added more AI capabilities to its core software. So when you're developing the software, you're actually giving prompts to say, this is what I want the design to look like. And then it pops up something on the system rather than doing it bit by bit using the software. So there is a lot of push by these companies, but that's where the question is whether it's going to lead to lower margins because this is an expensive way to do things, or whether it leads to the native company coming and taking their market share.

[Christina Raffini]

Yeah, very interesting. On that subject, Anurag, of, you know, some companies moving to create their own agents, as you mentioned, because.

[Mary Ross Gilbert]

Yeah.

[Christina Raffini]

Is that something that could potentially drive a wedge also between these companies that are vulnerable to disruption? We had Sarah Hunt earlier mentioning that if you're a company that owns the tech, that owns the proprietary data, you're fine. But maybe if you're leaning on somebody else to provide that for you, maybe you're not. Would you agree with that?

[Anurag Rana]

Yeah, I mean, if you have your own data, that's fine, but at the end of the day, it's customers data. I mean, it's bank of America's data, it's JP Morgan's data. So if they decide to give access to an LLM or a, or an anthropic or an OpenAI to that data, so, you know, that's. It's up to them, frankly. I understand you can't log into somebody's software and try to get that data out of it. So I understand a lot of these arguments, but frankly speaking speaking when disruption happens, it happens very fast.

[Lisa Mateo]

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