Bloomberg Tech – Episode Summary

Episode Title: EA Agrees to Largest Leveraged Buyout in History
Date: September 29, 2025
Hosts: Caroline Hyde (New York), Ed Ludlow (San Francisco)
Main Theme: Electronic Arts (EA) agrees to a $55 billion leveraged buyout—the largest in history—marking a pivotal moment for gaming, tech finance, and global investment. The episode dissects the deal's financial structure, its market impact, implications for game development and innovation, as well as broader market and geopolitical currents.

Episode Overview

This episode explores the record-breaking leveraged buyout (LBO) of video game giant Electronic Arts (EA) by a consortium of investors led by Silver Lake and the Saudi Public Investment Fund (PIF), with involvement from Jared Kushner’s Affinity Partners. The discussion covers the structure of the deal, the motivations for taking EA private, potential changes in the gaming industry, and broader technical, economic, and geopolitical implications. Other top stories include Huawei’s big AI chip production ramp-up, the ongoing arms race in AI infrastructure, Peloton’s major hardware refresh, the surging stablecoin market, and Modal Lab’s funding news.

1. The EA $55 Billion Buyout: Breaking Down the Deal

Key Takeaways

• Largest leveraged buyout in history, valuing EA at $55B.
• Offer of $210/share – a significant premium over pre-deal trading.
• Investors: Silver Lake, Saudi PIF, and Affinity Partners (Jared Kushner), with $20B debt arranged via JP Morgan.
• The move is consistent with Saudi PIF’s aggressive investments in gaming.

Deal Structure and Players

• JP Morgan is providing $20B in bank debt, while investors’ equity contributions are still being clarified.
• Jared Kushner’s presence through Affinity Partners could help regulatory approval, as foreign takeovers require CFIUS scrutiny.
• PIF had already owned ~10% of EA, solidifying its play for gaming dominance.

Quote:

“It equates to an offer of $210 per share. The structure really important, Silver Lake, Saudi Public Investment Fund and a group of other investors... JP Morgan's involved."
– Ed Ludlow [02:35]

"It's just a leverage buyout… PIF already is a big shareholder with about 10% of EA. They're certainly going to be involved. They have a huge portfolio of video games."
– Diana Baker, Bloomberg US Deals Managing Editor [03:59]

2. Why Go Private? Effects on EA and the Gaming Industry

Transformation of Revenue Model

• The shift from unit sales to “live services” (microtransactions, in-game spending) has made 75% of EA’s revenue recurring and highly predictable.
• Private equity seeks to exploit the stability for cash flow–focused returns, freeing EA from public market quarter-to-quarter pressures and allowing for riskier innovation.

Quote:

"75% of EA's revenue in the last fiscal year came from live service microtransactions... Gaming has started to become a mature market—it is not seeing a ton of growth, it is seeing maturity and predictability among its games."
– Jason Schreier, Bloomberg Video Games Coverage [05:38]

Timing and Strategic Considerations

• EA’s leadership has been semi-public about seeking scale via M&A for years.
• The buyout comes just before release of Battlefield 6, a potential blockbuster, surprising some analysts expecting a higher premium post-launch.

Quote:

"I would think that EA would want to hold off for a better price given Battlefield is expected to be a pretty big hit… this deal has been in the works for months."
– Jason Schreier [06:49]

Industry Impact & Future Strategy

• Going private could empower EA to develop bold new IP beyond safe bet franchises.
• Saudi PIF’s expanding entertainment portfolio, including Scopely and Niantic, positions EA as the flagship for console/PC.

Quote:

"Going private will allow them to take a risk to develop some new IP and also be a powerhouse once again for generating new experiences for gamers."
– Jason Chapman, Convoy Managing Partner [26:23]

"EA will now probably dominate their console and PC and alternative strategies outside of mobile. This is forming a formative move by the PIF."
– Jason Chapman [28:49]

3. Market & Finance Analysis of the Buyout

• EA is free cash flow positive but lacks significant growth. The buyout leverages this stability in a market hungry for debt instruments.
• Current debt demand (both actual and synthetic) is high, driven by demographics (retiring boomers) and low yields elsewhere.

Quote:

"The $2 billion of free cash flow that Electronic Arts currently has is going to go to servicing debt as compared to significant investment. There is tremendous demand for debt both in actual form… and synthetic form."
– Michael Green, Chief Investment Strategist, Simplify Asset Management [08:10]

• Private equity and sovereign wealth funds are increasingly driving industry consolidation, offering new exit opportunities for startups.

"Having another place of capital liquidity is only a good thing for startups and for those who are motivated… Sovereign wealth funds are here to play."
– Jason Chapman [30:31]

4. Global Tech & Geopolitics: AI Chips and Power Shifts

Huawei and China’s AI Ambitions

• Huawei is ramping production of its high-end AI chip (Ascend 910C), targeting 300,000 this year and 600,000 next, aiming to fill domestic market gaps as Nvidia struggles with export controls to China.
• Despite advances, Chinese chips still lag Nvidia’s market-leading GPUs, but progress is accelerating.

Quote:

"As Nvidia stalls, Huawei is racing ahead and trying to fill that market need... They're hitting the market at a very vulnerable, memorable moment for Nvidia."
– Peter Elstrom, Bloomberg Global Technology Executive Editor [19:15]

5. Other Major Technology and Market Developments

AI Infrastructure Funding: Modal Lab

• Modal Lab raised $80M in Series B, at a $1.1B valuation, providing essential software layers for AI workloads, competing (in the stack) with AWS but built for AI-native applications.

Peloton’s Big Hardware and AI Push

• Peloton will introduce its largest hardware and software update in five years, embedding new AI (“Peloton Intelligence”) for personalized coaching.

Quote:

"This is going to be their biggest hardware revamp in at least half a decade... including AI for personalized coaching.”
– Mark Gurman, Bloomberg Consumer Tech Managing Editor [22:18]

Stablecoins and Regulatory Shifts

• Tether seeks $500B valuation in new funding, with interest from SoftBank and Ark, reflecting stablecoin’s centrality in the future of payments and lending.
• The newly passed Genius Act is creating friction between crypto advocates and traditional finance over stablecoin regulation and yields.

Quote:

“Stablecoins take the friction out of the system. It’s an opportunity to move money quickly and efficiently. I think financial services have been waiting for this.”
– Sumner, CEO of Blockchain Association [39:25]

6. Geopolitics: Netanyahu, Trump, AI, and Security

• Israeli Prime Minister Netanyahu met with tech leaders (including Palantir advisers) in New York, discussing AI’s role in Israel’s military and economy.
• Meeting precedes high-stakes talks with U.S. President Trump, with AI and technology as key facets of both military and economic strategies.

Quote:

"This was a group of tech industry people that had existing relationships with Prime Minister Netanyahu… using AI to not just boost the Israeli military, but also Israel's economy.”
– Annmarie Horden, Bloomberg Surveillance Co-host [15:01]

Notable Quotes & Timestamps

• "It equates to an offer of $210 per share… Silver Lake, Saudi PIF and a group of other investors." — Ed Ludlow [02:35]
• "75% of EA's revenue … came from live service microtransactions … gaming has started to become a mature market…" — Jason Schreier [05:38]
• “Going private will allow them to … take a risk to develop some new IP and … be a powerhouse … for generating new experiences for gamers.” — Jason Chapman [26:23]
• "There is tremendous demand for debt… both in actual form … and synthetic form." — Michael Green [08:10]
• “As Nvidia stalls, Huawei is racing ahead and trying to fill that market need…” — Peter Elstrom [19:15]
• “Stablecoins take that out of the system... It’s an opportunity to move money quickly and efficiently…” — Sumner, Blockchain Association [39:25]

Important Segments & Timestamps

• [01:30] - Show opens, quick news highlights, focus on EA deal
• [02:35] - Deal details: price, investors, and structure (Ed Ludlow)
• [03:10] - Diana Baker on investor motivations & CFIUS approval
• [05:38] - Jason Schreier on EA’s business model shift and industry maturity
• [08:10] - Michael Green on debt appetite, market fundamentals
• [12:37] - Passive investing, risk, and circular financial arrangements
• [14:22] - Netanyahu’s U.S. visit, AI, and Israeli tech
• [17:26] - Huawei’s AI chip production boost, Nvidia’s headwinds
• [22:18] - Peloton’s hardware and AI-driven turnaround
• [26:23] - Jason Chapman (Convoy) on motives and industry impact of EA going private
• [34:04] - Tether’s funding, stablecoin regulation, Genius Act debate

Episode Flow & Tone

The conversation is analytical yet conversational, mixing hard financial and deal analysis with direct industry commentary. Host questions encourage insight, while guest experts provide frank takes on the implications for markets, gamers, and global tech power. The episode is rich with both macro perspective and detailed operational insight, keeping pace with a rapidly shifting tech and geopolitical environment.

For listeners seeking:

• The why and how of EA’s historic buyout
• Real talk from finance and gaming experts
• Broader market and geopolitical undercurrents driving today’s big tech stories

This episode delivers a comprehensive, nuanced view on how finance, gaming, and global strategy are intersecting in 2025.