The Information : Anthropic and OpenAI Take Different Stances On Disrupting Soft

Anthropic and OpenAI Take Different Stances On Disrupting Software Incumbents

Anthropic on Tuesday unveiled new details of how businesses could use its Claude Cowork AI software to access and use data stored in enterprise apps, including DocuSign, LegalZoom and Salesforce. Given the recent market jitters about the disruptive impact of AI on these software firms, you’d think the news would have depressed stocks even more.

Instead, stocks recovered a bit. Figma shares, for instance, were up 10%, while ServiceNow inched up 1.4% and Salesforce rose 4%. What’s going on? Possibly the actual details weren’t as bad as some investors had feared.

Indeed, Tuesday’s update seems to position Claude Cowork as a potential replacement for employees rather than the software they use. New AI tools will continue to use the software, which means businesses will still have to pay for it. (For more on what Cowork actually does, see this, this and this.)

It’s a delicate balance Anthropic seems keenly aware of. At an event announcing the new Cowork features, the AI firm looped in its head of economics, Peter McCrory, who said AI’s impact on labor would be “very uneven.” He said high-skilled workers would become more productive with AI while lower level data-entry workers could potentially be replaced.

Derek Hernandez, an analyst at PitchBook Data, said Anthropic’s Claude features for financial services tasks could put jobs in that field at risk.

“The disruption is seats at investment banks, seats in equity research, white collar jobs  particularly on the lowest levels,” he said.

The tone Anthropic used is striking because it highlights partnerships, rather than competition, with software providers and risks to human employees. And inside Anthropic, employees continue to use all manner of traditional enterprise apps, as we’ve noted before. While that shouldn’t completely allay concerns from software providers—who of course benefit from larger workforces rather than shrinking ones—it contrasts somewhat with OpenAI’s public and private messaging about enterprise apps.

OpenAI’s Worker-Savings Calculation
To be sure, OpenAI has struck similar partnerships with enterprise firms like Salesforce, such as allowing ChatGPT customers to use Salesforce apps from the chatbot. But OpenAI told its investors in a meeting last week that its AI agents and future products would be capable of replacing software from tech firms including Salesforce, Workday, Adobe and Atlassian, my colleagues reported Friday.

As if to emphasize the point, OpenAI showed investors the revenues of those enterprise software firms, its own current revenue and the gargantuan revenue it projected to generate by 2030. (Of course, much of that revenue will come from OpenAI’s consumer ChatGPT business, not from enterprises per se.)

OpenAI leaders also told investors it believes the average worker using ChatGPT is saving about 50 minutes per day, translating to savings of about $50 a day per person. (For those calculations, OpenAI relied in part on estimates from Ark Invest, an OpenAI shareholder.) The business-friendly version of ChatGPT starts at $25 per worker per month, so OpenAI believes it’s only capturing a small fraction of the value it’s providing.

The private comments appear to confirm what many in the enterprise software world suspected when OpenAI announced its new “Frontier” AI product last month. It sees its technology as sitting on top of companies’ enterprise applications that store critical corporate data, exerting more influence on how businesses use and pay for software and AI.

Saas Strikes Back?
Meantime, many legacy software providers are staging a defense from the potential assault they face from OpenAI and its AI ilk. As we reported this morning, companies like ServiceNow and Microsoft are, predictably, aiming to convince customers that their software is more reliable than AI from labs like OpenAI and Anthropic. Other enterprise firms such as HubSpot are thinking about charging customers who want to use AI agents to tap their data stored in HubSpot’s systems.

“We are not a free data pipeline for everybody to take that information out,” HubSpot CEO Yamini Rangan told shareholders earlier this month.

The question now is how much power HubSpot and its ilk will have to slow down AI agents. The whole point of AI agents like OpenClaw is to take over a person’s computer and use apps the way that person would. Even Microsoft CEO Satya Nadella said in a 2024 podcast that he didn’t think his company would be able to block AI agents from using enterprise apps.

We’ll be closely following efforts from HubSpot and others to act as a kind of tollbooth operator, extracting what they can from customers using AI. We imagine this move will generate some fireworks.

Enterprise firms’ strongest defense against AI upstarts is their longstanding experience in complying with global data laws and privacy regulations—something that experimental AI products might not be able to handle for some time.

CrowdStrike Savings
It’s worth noting that most of the customers we’ve spoken to in recent weeks haven’t actually tried to replace enterprise software with AI. But some of them said they’re increasingly relying on agents to automate tasks using the raw data sitting in their existing systems, which is changing how employees interact with the software.

For instance, one cybersecurity executive told us he used an AI agent to avoid spending over $100,000 in annual fees for a CrowdStrike product that automated the process of managing employees’ accounts. The tool can flag suspicious logins, or find accounts that appear dormant—indicating an employee left the company but wasn’t properly offboarded—and automatically lock them down.

Instead of using the CrowdStrike product, which can cost up to hundreds of dollars per user per month, he found he could do the same thing by hooking up an AI agent from the startup Torq, powered by OpenAI and Anthropic models, to his company’s raw login data that was already being collected by its Microsoft software. The Torq agent automated the account “cleanup” at a much lower price. (Read our full story for more details.)

That doesn’t necessarily mean all older software products are at risk of losing money, especially if customers need to keep them around as data sources for AI agents. (CrowdStrike said in a statement that it lets such AI agents connect to its software so customers can use them together.) But in the nearer term, it could make software products feel less crucial to customers and their employees, who may instead come to see AI as the primary tool for work.

The Information : Why OpenAI, Anthropic Missed Their Own Gross Margin Forecasts

Why OpenAI, Anthropic Missed Their Own Gross Margin Forecasts


OpenAI has become increasingly optimistic about the revenue it expects to generate from both consumers and businesses, pushing up its projections for the next five years. Clouding those forecasts, however, are escalating cloud server costs that have outstripped revenue growth.

Those pressures were stark last year, when OpenAI’s gross margins fell to 33% from 40% in 2024, missing its own forecasts of 46%. Archrival Anthropic, which also recently raised its revenue forecasts, said in December it anticipated 2025 gross margins of 40%. While that’s a big improvement from a negative 94% gross margin in 2024, it was still 10 percentage points short of Anthropic’s earlier goal.

For both companies, one of the main culprits was a jump in inference costs, the payments they make to cloud providers to power AI models when customers talk to their chatbots or use models through an application programming interface.

OpenAI quadrupled its inference costs last year, to $8.4 billion, higher than the $6.6 billion it forecast last summer. It has told potential investors it had to buy more expensive access to servers due to higher than expected demand for its services.

Cloud providers typically charge a higher rate to rent their servers on demand, known as spot instances, rather than reserving them in advance.

Anthropic’s 2025 inference costs, meanwhile, were expected to rise more than three times to $2.7 billion, also higher than the company had projected, though it’s not clear why.

The fact that both companies’ margins worsened as more people used its services is notable, because the average cost of renting computing power fell throughout the year and the companies have consistently said they’re finding ways to run large AI models more efficiently.

One reason OpenAI’s margins likely slipped is that it spends a lot of money powering ChatGPT for nonpaying users. Of OpenAI’s 910 million weekly users, only about 5% are paying customers, I’ve reported. Last year, nearly half of its total inference costs, or $3.9 billion, supported those nonpaying users, versus $4.5 billion for paying users, the company’s financial forecasts show.

Another factor is the type of AI these companies run. Last year OpenAI introduced video generator Sora, which takes more server power to run than text-based queries, as well as reasoning models that require more computing power to calculate answers than traditional large language models do.

The company also allowed users to experiment with new compute-intensive features before eventually introducing user limits. Those features included the GPT-4o model, which became popular for generating images in the style of Studio Ghibli, a Japanese animation studio, according to a person with knowledge of the company’s efforts.

There’s a bright spot, however. OpenAI has gotten more efficient at serving paying users: Its compute margin—the revenue left after subtracting the cost of running AI models for those customers—was roughly 70% in October, an increase from about 52% at the end of last year and roughly 35% in January 2024.

OpenAI plans to generate more revenue from nonpaying users, mainly in the form of ads and e-commerce, and by selling subscriptions to more of those users. In January, for instance, it introduced an ad-supported ChatGPT subscription priced at roughly $5 to $8 per month worldwide.

This year, OpenAI expects to spend about 66% of its $14.1 billion in inference costs on serving paying customers. By the end of the decade, it estimates 94% of its roughly $85 billion in inference costs will support paying users. That year, 2030, it projects that its gross margin will rise to about 67%.

Still, the recent financial performance of OpenAI and Anthropic raises questions about how they will hit their respective targets of 60%-plus gross profit margins by the end of the decade, which would put them in the same ballpark as some of today’s best-of-class, publicly traded software companies.

OpenAI and Anthropic seem to have no problem getting investors to cover these costs. But eventually they’ll need to prove that the business these users generate more than offsets the costs of supporting them.

The Information : Anthropic Research Memo Shows Focus on Rogue Agents, Scheming

Anthropic Research Memo Shows Focus on Rogue Agents, Scheming Models

The Takeaway
  • Of nearly 50 projects proposed for its research fellows, many involved agents
  • Agents have contributed to Anthropic’s recent growth but come with risks of errant behavior
  • The proposals give a rare look into Anthropic’s research focus

Puncturing the buzz over AI agents such as Anthropic’s Claude Code and the open-source project OpenClaw is the prospect that these agents could get tricked into revealing sensitive information such as a person’s banking information. In a sign of those concerns, Anthropic earlier this year singled out rogue agents as a topic of focus for its research fellows.

Anthropic’s staff proposed that the fellows train an agent to misbehave in certain circumstances—say, by writing code with security vulnerabilities. They also asked the researchers to create a benchmark for measuring how often agents fall prey to security issues, according to copies of the proposals seen by The Information. In total, Anthropic proposed that the fellows work on 49 projects, ranging from training Claude to win cybersecurity challenges to investigating Chinese open-source models, giving a rare look into the company’s research priorities.

The fellows work under a more senior researcher to advance Anthropic’s work on AI safety and security. That excludes some of itscritical research, such as developing new techniques to train more powerful frontier models. Although the fellows only pursued about half of the proposed projects, the proposals give a window into the topics Anthropic’s researchers have identified as important. That’s significant because at Anthropic and rivals such as OpenAI, Google DeepMind and xAI, research is the first step toward developing new products and applications, as well as the guardrails that give customers confidence in using them.

Last year, the fellows program was responsible for over half of the research that Anthropic’s alignment team, which works on catastrophic risks from AI, published in November and December, according to a spokesperson for the company. The fellows, who are often college or graduate students, spend four to six months pursuing research projects chosen by Anthropic’s employees and collaborators, such as staff at Berkeley, Calif.–based AI research organization Redwood Research.

The program is “a huge uplift to us research-wise and also helps us bring more people into the field,” said Ethan Perez, who leads much of Anthropic’s safety research and helped start its fellowship program.

Of the 49 projects that Anthropic staff and collaborators proposed for the program that started in January, 15 of them focused on security. These generally involve understanding security issues that arise with agents and coming up with ideas on how to patch them. Dozens of others set out to oversee and steer the actions of AI systems, including those that are potentially scheming against their users.

For instance, one project proposed using Claude Opus, Anthropic’s leading model, to reproduce attacks so the company can better defend against them. Currently, when Anthropic discovers a new exploit against its agents, its employees have to manually create an environment that reproduces the attack—for instance, a fake banking website that hijacks its agents. Instead, the researchers proposed using Claude Opus to generate its own version of these websites, which employees could use to train models so they don’t fall for the attacks.

Preventing hackers from misusing its agents is crucial for Anthropic’s business. It gained an early lead against rivals such as OpenAI with its coding agent, Claude Code, and its related agent for nontechnical work like responding to emails, Claude Cowork.

Revenue from Claude Code, which launched last February, recently reached an annualized pace of $2.5 billion, a figure that does not include Cowork, according to an Anthropic spokesperson. This growth helped attract investors, which poured $30 billion into the company, at a $350 billion valuation before the investment, earlier this month.

But regular reports of agents going awry—say, deleting a person’s inbox—could limit customers’ embrace of such agents, underscoring the need for safeguards. Already, Anthropic advises Cowork users to “monitor Claude for suspicious actions.” The difficulty of blunting such attacks has also presented obstacles for OpenAI.

Anthropic researchers also proposed several projects focused on Chinese AI models, such as one that involved replicating innovations from Chinese AI labs—although none of the recent fellows elected to work on those projects, said Perez. It’s not clear why they were more interested in other work.

Another nine projects focused on understanding the internal workings of AI models, a mainstay of Anthropic’s research and an area in which Anthropic is hiring rapidly. The projects include uncovering the math behind some of the AI models’ more bizarre behavior.

For instance, one project aims to understand “LLM mind viruses” such as the parasitic personas AI models have reportedly adopted, in which they become obsessed with spirals and convince humans to post strange messages on social media, spreading the “virus” to other AI models.

Pursuing such research has become so important to AI companies that they have offered hundreds of millions of dollars in compensation to top researchers. Even the Anthropic fellows are well paid, receiving $3,850 per week in the upcoming programs, which comes out to a salary of over $200,000 per year, according to an application for the program.

In addition to helping with core research areas, fellowship projects allow Anthropic to explore “more offbeat ideas” that could turn out to be important research directions, Perez said.

WSJ : Key Takeaways From Trump’s State of the Union Address

Key Takeaways From Trump’s State of the Union Address
The president defended his leadership in speech to Congress infused with patriotism

President Trump doubled down on tariffs in his State of the Union address, imposing 10% duties on imports for 150 days despite a Supreme Court ruling.
President Trump defended his economic policies, blaming Democrats for high costs, and attacked Democrats on immigration, calling for voter identification laws.
President Trump avoided direct attacks on the Supreme Court over its tariffs ruling and named Vice President JD Vance to lead a “war on fraud.”

WASHINGTON—President Trump delivered a State of the Union address to the nation, setting a record for the longest speech of its kind. Polls show him struggling to connect with the public on the economy and Republicans bracing for a challenging midterm election. In an address heavy on patriotism, Trump billed the past year as a “turnaround for the ages.”

Here’s a look at the main takeaways from Tuesday’s address before a joint session of Congress.

Doubled down on tariffs
Trump addressed the nation only days after the Supreme Court’s 6-3 ruling striking down his sweeping tariffs agenda and the president’s swift move to impose 10% tariffs on imports from all countries for 150 days. He said last Saturday that he would raise duties to 15% but hasn’t done so yet.

Trump said “everything was working well” and the U.S. was gaining revenue through tariffs. He bemoaned the Supreme Court’s ruling but said foreign countries and companies wanted to keep the tariffs in place.

The president said tariffs were “saving the country” through the “kind of money we’re taking in” and implausibly said tariff revenue could one day replace the nation’s income tax, “taking a great financial burden off the people that I love.” But Trump’s new tariff approach is premised on a legal authority never before used by a president for tariffs and is likely to be challenged in court.

Pulled punches on the Supreme Court
The stage was set for a confrontation between Trump and the Supreme Court after the president vented his frustration over the court’s tariffs ruling last week. He previously said the families of justices Neil Gorsuch and Amy Coney Barrett—whom he nominated during his first term—should be “embarrassed” they voted with the majority opinion written by Chief Justice John Roberts.

But there were no major blows. When Trump arrived and walked past the area where the justices were seated, he shook hands with the four justices in attendance, including Roberts and Coney Barrett. Gorsuch didn’t attend. During his speech, the president referred to the tariffs decision as an “unfortunate ruling,” but avoided attacking the justices by name.

A defense of the economy
Trump blamed Democrats for making the high cost of living an issue. “You caused that problem,” he said, eliciting a standing ovation from Republicans. “Their policies created high prices; our policies are rapidly ending them.”

Trump painted a rosy picture of declining costs on major goods—eggs, beef and fuel—though prices haven’t broadly fallen. He said he planned to address “the crushing cost of healthcare” by calling on Congress to codify the healthcare framework he released earlier in the year, which seeks to redirect federal subsidies from insurers to consumers. The plan hasn’t gained momentum in Congress.

The president also highlighted his steps to reduce the cost of prescription drugs. He touted efforts to stop private investment firms from buying residential homes and asked Congress to codify the measures.

Polls show voters are frustrated with the economy and stock markets have displayed volatility in recent weeks, though the Dow has steadily climbed since he took office. The president’s advisers have urged him to focus on efforts to make Americans’ lives more affordable as Democrats emphasize economic hardship on the campaign trail. “The roaring economy is roaring like never before,” the president said.

Iran: diplomacy or conflict?
Trump said the U.S. is in negotiations with Iran to halt their nuclear program and his preference is to reach a resolution through diplomacy. But he said, “we haven’t heard those secret words, ‘we will never have a nuclear weapon.’”

The president said the Iranian regime was the world’s largest sponsor of terrorism and had killed more than 30,000 protesters during recent unrest in the country.

The U.S. has moved a vast array of military equipment and aircraft into the Middle East in recent weeks and has been considering an attack against Iran. Trump said he has pursued a foreign policy underpinned by “peace through strength.”

Tough talk on immigration
Trump’s speech presented an unapologetic defense of his immigration policy. He attacked Democrats for allowing a “border invasion” and blamed them for cutting off funding to the Department of Homeland Security.

In one of the speech’s more heated moments, he asked everyone in the chamber to stand if they agreed with the proposition that the first duty of elected officials was to protect American citizens instead of immigrants that have entered the country illegally. The line drew silence from Democrats, most of whom remained seated, and elicited prolonged applause from Republicans who broke out in chants of “U.S.A.”

“You should be ashamed of yourself not standing up,” Trump told congressional Democrats. A camera showed Rep. Ilhan Omar (D., Minn.), a frequent Trump target who represents a Minneapolis area district, shouting at the president and responding at one point, “You should be ashamed.”

Trump called for laws requiring voter identification to vote, and claimed that Democrats opposed such measures because they “want to cheat” in elections.

War on fraud
Trump named Vice President JD Vance as the leader of the “war on fraud.” The vice president, who is seen as a likely candidate for president in 2028, has been a critic of Minnesota Gov. Tim Walz, over a welfare fraud scandal involving many residents of Somali descent, which the state and federal government is now investigating.

“He’ll get it done, and if we’re able to find enough of that fraud, we will actually have a balanced budget,” Trump claimed. Vance said last month he was assembling a major interagency task force to take on the issue.

Trump said he expects his administration will root out more fraud and mentioned several Democratic-led cities that would be scrutinized. Immigration and Customs Enforcement officers in December were deployed en masse to Minnesota on the heels the fraud scandal, touching off widespread protests.

Olympic glory
Early in his speech, Trump introduced the gold-medal winning U.S. men’s Olympic hockey team, who emerged from the gallery of the House chamber to chants of “U.S.A.! U.S.A.!” after their overtime victory over Canada Sunday.

Trump basked in the glow of America’s first men’s hockey Olympic gold since the 1980 “Miracle on Ice” and announced that the team’s goaltender, Connor Hellebuyck, would receive the Presidential Medal of Freedom, the nation’s highest civilian honor. Trump said the women’s hockey team, which also defeated Canada to win gold, would soon be visiting the White House.

WSJ : Cava Fourth-Quarter Sales Rise on Higher Prices, New Restaurant Openings

Cava Fourth-Quarter Sales Rise on Higher Prices, New Restaurant Openings
The restaurant chain posted a profit of $4.9 million, or 4 cents a share

  • Cava Group’s fourth-quarter sales increased due to higher prices and new restaurant performance, though foot traffic fell at existing locations.
  • The company reported a $4.9 million Q4 profit and forecast 3% to 5% same-restaurant sales growth for the fiscal year.
  • Chief Executive Brett Schulman said Cava focuses on consistent value and does not plan further menu price increases this year.

Cava Group’s CAVA -0.80%decrease; red down pointing triangle fourth-quarter sales rose on higher prices and better-than-expected performance at new restaurants. However, foot traffic fell at existing locations.

The Mediterranean fast-casual restaurant chain said its results show it is resonating with increasingly discerning consumers, who have become more choosy with how they spend. The company also forecast that its same-store sales growth will continue this year.

Chief Executive Brett Schulman said Cava has been focused on delivering value consistently, while its competitors have looked to offer discounts recently after years of hiking prices.

“It’s these intentional decisions made consistently over time that reinforce trust with our guests and strengthen the long-term foundation of our brand,” Schulman said during a call with analysts.

The company said it raised its menu prices by about 1.4% last month, and doesn’t plan to increase prices again this year.

The stock rose 8.9% to $73.80 in after-hours trading. Through market close, shares have fallen 35% in the past year.

Last year, Cava and other fast-casual restaurant chains such as Chipotle saw weaker demand from younger consumers and pointed to economic strains including student loan repayments, inflation and healthcare and housing costs. At the time, Schulman said Cava would work to tout its value proposition to draw increasingly cautious consumers and continue to grow its market share.

Cava on Tuesday posted a fiscal fourth-quarter profit of $4.9 million, or 4 cents a share, compared with $78.6 million, or 66 cents a share, a year earlier. The year-ago quarter was helped by a tax benefit, the company said.

Adjusted earnings per share were 4 cents, compared with estimates of 3 cents a share according to analysts polled by FactSet.

Revenue rose 21% to $275 million, compared with analyst estimates of $268.4 million. The company said the increase was driven in part by new restaurant openings, which are exceeding its expectations.

Same-store sales, which account for restaurant openings and closings, increased 0.5%, compared with analyst expectations for a decline of 0.9%. The growth was due to menu price and product mix, partially offset by a decrease in traffic, the company said.

For the fiscal year, the company guided for same-restaurant sales growth of 3% to 5%, compared with analysts’ forecast of 3.2%.

The company expects to open 74 to 76 net new restaurants this year.

WSJ : Paramount’s Newest Bid Could Open Door to Beating Netflix Deal, Warner Say

Paramount’s Newest Bid Could Open Door to Beating Netflix Deal, Warner Says
Warner received a revised offer from Paramount to buy the entire company for $31 a share

  • Warner Bros. Discovery received a revised $31-a-share offer from Paramount, which its board deemed potentially superior to Netflix’s deal.
  • Paramount’s revised offer includes a 25-cent “ticking fee” per quarter and covers a $7 billion regulatory termination fee.
  • The Justice Department is investigating Netflix for potential anticompetitive practices related to its $72 billion deal for Warner’s studios.

Warner Bros. Discovery WBD 0.80%increase; green up pointing triangle said Tuesday it has received a revised offer from Paramount PSKY -1.61%decrease; red down pointing triangle to buy the entire company for $31 a share, up from its previous per-share purchase price of $30. It’s Paramount’s latest effort to derail rival bidder Netflix NFLX 2.66%increase; green up pointing triangle, which has a deal to buy the company’s prized studios and HBO Max streaming service.

Warner said in a statement its board of directors determined Paramount’s revised bid “could reasonably be expected to lead” to a proposal superior to Netflix’s signed agreement.

Should Warner decide Paramount’s offer is better, Netflix has the right to match it, under the terms of its purchase agreement. Warner said its board hasn’t made that determination yet. If it does, Netflix would have a four-day window to make a new offer.

Netflix’s deal for the studios and HBO Max is for $27.75 a share, or $72 billion. The prior bid from David Ellison-led Paramount was $30 a share, or $77.9 billion, for the entire company including its cable networks CNN and TNT.

Netflix isn’t interested in the cable networks, which Warner is in the process of spinning off into a separate company called Discovery Global. Netflix will acquire Warner’s Turner Classic Movies channel as part of the deal.

As part of its revised bid, Paramount agreed to exclude the Warner cable networks from the agreement’s “material adverse effect” clause, meaning the deal’s price tag won’t shrink if the linear TV networks business declines in value before the close.

Warner said Paramount’s owner has also agreed to contribute additional funding, if needed, to satisfy its lenders.

In addition to $31 a share in cash, Paramount proposed a “ticking fee” of 25 cents, which it would pay to Warner shareholders for each quarter its deal hasn’t closed, starting after Sept. 30, Warner said. Under Paramount’s previous proposal, the ticking fee would have begun in January 2027.

The offer also includes a $7 billion regulatory termination fee that Paramount would pay if the transaction failed to close due to regulatory concerns. Paramount would additionally be on the hook for the $2.8 billion breakup fee Warner would owe Netflix should that deal fall apart.

“The Netflix merger agreement remains in effect, and the Board continues to recommend in favor of the Netflix transaction,” Warner said, adding that shareholders are “advised not to take any action at this time with respect to the amended PSKY tender offer.”

Warner reopened talks last week with Paramount, giving the company a seven-day window to negotiate and telling the hostile suitor to make its “best and final” offer.

Paramount said Tuesday it “welcomes the WBD board’s determination and looks forward to continuing to engage constructively with WBD to deliver the benefits of Paramount’s proposal to WBD shareholders, the creative community and consumers.”

Paramount is scheduled to release its latest earnings results on Wednesday, and Warner on Thursday.

Warner reopened talks after Paramount amended its takeover bid, agreeing to pay the termination fee Warner would owe Netflix and introducing the 25 cent ticking fee.

Netflix signed off on Warner’s decision to give Paramount a new negotiating window, saying it still has the best offer and that it would put to rest the “ongoing distraction” of Paramount’s attempts to undermine the deal.

Last week, Netflix went on a public relations offensive against Paramount, with Netflix Co-Chief Executive Ted Sarandos using several news interviews to make the case for why its offer is better for shareholders and the entertainment industry.

Both deals will face review from government officials in the U.S. and abroad.

As part of its investigation, the Justice Department is looking into whether Netflix has engaged in anticompetitive practices, The Wall Street Journal previously reported. Netflix lawyer Steven Sunshine has disputed that, saying the company thinks the department is conducting a standard review of its proposal for the Warner studios and HBO Max.

President Trump criticized Netflix over the weekend for having Susan Rice, a former adviser to Presidents Obama and Biden, on its board. Trump demanded she be removed or the company will “pay the consequences.”

Rice said recently on former U.S. Attorney Preet Bharara’s podcast that when Democrats come back into power they shouldn’t “forgive or forget” those entities, including universities, law firms and corporations, that “bent the knee” to Trump. “You need to play a long game, not this short game that has been so detrimental,” she said.

Netflix and Rice didn’t respond to requests for comment.

FT : Why 2026 will be a blockbuster year for biotech M&A

Why 2026 will be a blockbuster year for biotech M&A
Big pharma has emerged from its 2025 paralysis with plenty of firepower

Drug companies have caught the dealmaking bug. Big recent transactions in the pharmaceuticals industry include Novartis’s $12bn acquisition of Avidity Biosciences, Pfizer’s $10bn bid for Metsera and on Monday Gilead Sciences’ agreement to buy blood cancer specialist Arcellx for up to $7.8bn. From the way the market is shaping up, that’s only the beginning.

There is lots of pent-up demand. Company bosses spent much of 2025 paralysed by the threat of pharma tariffs and unsure of how far the White House would push them to give US patients the lower prices available elsewhere. Most of the action happened after the fog had cleared: fourth-quarter biopharma mergers and acquisitions nearly hit $95bn, according to Biomedtracker. If that level sticks, 2026 will be the best year in the past decade.

Big pharma has emerged from its stasis with plenty of firepower. If giants in the sector were happy to lift their leverage to twice their annual ebitda, still a fairly conservative level, it would free up $38bn in spending capacity for Merck & Co, $16bn for AbbVie and $56bn for Eli Lilly, on Barclays’ estimates. And they might feel freer to spend, since the financial impact of the pricing agreements President Donald Trump struck with 17 pharma companies is less onerous than the market initially feared.


Deals are likely to get bigger because companies are getting bigger. The XBI Biotech Index has climbed more than two-fifths in the past year, taking it to levels last seen in late 2021. And big drugmakers’ so-called patent cliff is getting closer: Merck’s Keytruda, responsible for roughly half its revenue, loses exclusivity as early as 2028. Patent expiries across the global pharma industry threaten an estimated $61bn in sales a year between now and 2030, on Bernstein estimates. That’s a major incentive to go shopping.

Drugmakers buy promising drugs at all stages of development, in particular sourcing earlier-stage products from Chinese biotechs that run cheaper trials. But to the extent that they are seeking to replace evaporating near-term revenue, they will have to go for more expensive biotechs with drugs almost ready for market.


The companies themselves are not being shy about their renewed appetite. At last month’s JPMorgan Healthcare conference, Merck said it was seeking deals in the “multi tens of billion-dollar” range. Last year was the starter dose of dealmaking; this year may bring the full course of treatment.

FT : Efune consortium willing to improve offer for Telegraph Media Group

Efune consortium willing to improve offer for Telegraph Media Group
Publisher of New York Sun, backed by Axel Springer, tries to upend sale of UK newspaper group to DMGT

A consortium led by Dovid Efune and Axel Springer is willing to sweeten its bid for Telegraph Media Group, escalating efforts to upend an agreed £500mn sale of the business to DMGT, said people familiar with the matter.

Efune, publisher of the New York Sun, has sent a new letter in recent days to RedBird, which is overseeing the Telegraph sale process, offering to improve financial terms and urging the private equity group to engage in serious discussions.

The consortium — which includes UK hedge fund manager Jeremy Hosking and US broadcasting multimillionaire David Smith — informed RedBird that it had the capacity and willingness to increase the cash portion of its offer, people briefed on the matter said.

Efune and his consortium partners also stated their bid had greater certainty of completion than DMGT, which already owns a number of newspapers in the UK including the Daily Mail.

The consortium’s latest move comes after it submitted an offer in recent weeks with the support of Axel Springer, owner of Politico and Business Insider in the US and Bild and Die Welt in Germany, thereby adding a heavyweight international publisher to Efune’s bid.

DMGT, led by Lord Rothermere, has offered £400mn in cash upfront for the Telegraph and a further £100mn over two years.

Efune’s consortium was offering more cash upfront than DMGT and had signalled it could pay more in the letter to RedBird if the group seriously engaged with it, people familiar with the situation said.

RedBird had been reluctant to engage substantively because it wanted to honour its agreed deal with DMGT, other people briefed on the process said. The group led by Gerry Cardinale had long tried to sell the Telegraph and was keen not to derail those plans, they added.

Efune’s consortium hopes its willingness to sweeten its bid will push RedBird to reconsider and explore a proposal that could offer greater value.

Hosking had pledged about $100mn to Efune’s consortium and Smith — who owns the Baltimore Sun — had made a smaller contribution, people with knowledge of the matter said.

The consortium has also attracted support from a wealthy British investor, although their identity could not be determined.

UK culture secretary Lisa Nandy recently referred the proposed sale of the Telegraph to DMGT to the Competition and Markets Authority and media regulator Ofcom for review.

In a letter published last month outlining her provisional decision, Nandy noted DMGT controlled more than half of the daily national print newspaper market in the UK and about 36 per cent of the right-leaning daily print segment.

She warned the number of owners serving the UK’s right-leaning daily and Sunday national newspaper market would fall from four to three if the deal proceeded.

Regulators have until June to deliver their findings, extending by up to four months a sale process that has dragged on for three years and left the Telegraph without a permanent owner.

The appearance of a competing bid may offer some comfort to RedBird, which has been compelled to relinquish control of the Telegraph.

RedBird’s attempt to secure ownership of the Telegraph encountered repeated obstacles, including UK political opposition linked to the financial backing it initially received from Abu Dhabi.

RedBird and the Efune consortium declined to comment.

>>> US After Hours Summary: AXON +16.4%, CAVA +9.4%, TREX +6.6% higher on earnin

After Hours Summary: AXON +16.4%, CAVA +9.4%, TREX +6.6% higher on earnings; ATEC -12.1%, FSLR -11.5%, WDAY -9%, HPQ -6.6%, MELI -5.9%, lower on earnings; PSKY increases bid for WBD to $31/sh

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: RCKY +25.7% (also authorizes new $7.5 mln share repurchase program), UIS +23%, AXON +16.4%, ECG +14%, ABCL +13%, FLYW +9.9%, CAVA +9.4%, REZI +7.8%, TMDX +7.8%, AROC +7.7%, GIC +6.7%, TREX +6.6% (also CEO to retire, names new CEO; also authorizes new $150 mln share repurchase program), SLDE +5.8%, UVE +5.5%, CCC +5.1%, EXLS +4.4% (also authorizes new $500 mln share repurchase program), MTDR +4.2%, BBIO +3.9%, IGIC +3.7%, SUPN +3.2%, JAZZ +3.1%, MATX +3%, ZETA +3%, RVLV +2.7%, RRC +2.2%, MMSI +0.9%, NVTS +0.8% (also CFO to step down), CLNE +0.4%, EOG +0.2%, SUI +0.1%

Companies trading higher in after hours in reaction to news: KOS +5.8% (announces sale of Equatorial Guinea production assets to Panoro Energy for up to $219.5 mln), AII +4.5% (declares special cash dividend of $1.02/sh), CVI +3.6% (Icahn Enterprises increases stake with $16.445 mln purchase of shares), NVCR +2.6% (received letter from CMS rescinding the revocation of billing privileges), CPRI +1.9% (names Tyler Reddien as CFO and COO), NFLX +1.3% (PSKY increases bid for WBD to $31/sh in cash), PSKY +1.2% (PSKY increases bid for WBD to $31/sh in cash), BBNX +0.8% (files mixed securities shelf offering), JNJ +0.2% (seeks FDA approval of IMAAVY), HRL +0.2% (names new CTO), PVLA +0.1% (commences $150 mln stock offering), DHR +0.1% (increases dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: ATEC -12.1%, FSLR -11.5% (also patent licensing agreement with Oxford Photovoltaics), PARR -9.8%, WDAY -9%, INGN -8.7% (also authorizes new $30 mln share repurchase program), CWH -7.9%, VRRM -7%, GDDY -6.6%, HPQ -6.6%, MELI -5.9%, LCID -5.7% (also files a prospectus supplement to register for resale up to 69.1 mln shares), TALO -5%, MQ -4.8%, ALC -4.3%, DAWN -3.7%, TEM -3.7%, DAWN -3.7%, EVH -3.5%, HURN -3.5%, CDNA -3.4% (also names Keith Kennedy as COO/CFO), CSGP -3.4% (also plans to repurchase $700 mln of its shares in 2026), MOS -2.9%, EXPI -2.3%, SAM -1.5%, LTC -1.1%, SILA -1.1%, ATRO -1%, CORT -0.9%, CYTK -0.9%, SEI -0.9%, GPOR -0.8%, GPOR -0.8%, O -0.5%, SPXC -0.3%, NMFC -0.2%

Companies trading lower in after hours in reaction to news: TYGO -9.9% ($15 mln registered direct offering of its common stock; also reports earnings), ZURA -6.6% (stock offering), VIR -3.5% ($200 mln stock offering), SER -2.8% (doses first patient in Phase 1b trial for SER-252), MYGN -1.3% (files for $200 mln mixed shelf offering), WBD -0.8% (PSKY increases bid for WBD to $31/sh in cash), AAPL -0.2% (will soon introduce MacBooks with touch screens, according to Bloomberg)