TheChek News Flow

David Ellison’s media group is discussing remedies with Brussels in order to clear key regulatory hurdle

Brussels is set to approve Paramount’s $111bn takeover of Warner Bros Discovery provided the company accepts certain remedies, in a move that would clear the way for a deal to create one of the world’s largest media and entertainment groups.

The deal, agreed in February after a months-long bidding battle with Netflix, will combine some of the industry’s most valuable assets under one roof, including HBO, CNN, CBS News, Paramount Pictures and Warner Bros studios.

The exact remedies are still being worked out between the companies and the European Commission, the bloc’s antitrust enforcer, after they met on Tuesday, according to two people involved in the discussions.

The people added that the remedies could include a requirement for Paramount to exit its joint venture with Universal Pictures, which distributes films in several international markets. They cautioned that a final decision had yet to be taken.

The Commission’s review is among the last major regulatory obstacles facing David Ellison, the billionaire son of Oracle founder Larry Ellison, whose Paramount Skydance is seeking to create one of the world’s largest media and entertainment groups. 

The deal gained approval from the US Department of Justice this month.

The Commission has a July 7 deadline to either approve the deal or open an in-depth investigation. The transaction is also being reviewed under the bloc’s foreign subsidies regulations, which are designed to prevent state-backed financial support from distorting competition in the EU.

Paramount’s offer is backed by financing from Saudi Arabia’s Public Investment Fund and L’Imad, an investment vehicle backed by Abu Dhabi’s sovereign wealth fund.

The EU’s competition chief Teresa Ribera on Wednesday told Bloomberg TV that the bloc was looking to determine “to what extent there is a reduction of the capability of creators to reach their audiences in the context of this deal”.

The combined company is betting that greater scale will help it compete in an increasingly fragmented media market upended by deep-pocketed technology groups and streaming rivals.

A spokesperson for Paramount said the company does not comment on ongoing regulatory proceedings. A spokesperson for the Commission declined to comment.

This episode features a conversation recorded live at StrictlyVC LA in El Segundo between Connie Loizos; Chang Xu, partner at Basis Set Ventures; and Carter Reum, founder of M13.

Together, they discuss whether today’s AI boom represents a bubble, how investors are thinking about soaring startup valuations and ARR growth, and what it takes to build a lasting company in an increasingly competitive AI landscape. The conversation also explores the opportunities and risks facing founders, the impact of AI on venture investing, and where each investor sees the next generation of breakout companies emerging.

Here’s a suggestion for Mark Zuckerberg: Maybe you should ditch AI model development and spend even more on smart glasses! Meta Platforms on Tuesday unveiled its latest selection of smart glasses, devised with eyewear giant EssilorLuxottica, and it’s hard not to be impressed with the way they look. Meta would seem to have more chance of succeeding with smart glasses than beating the leading AI labs in developing state-of-the-art models.

One big question is just what anyone’s using these glasses for. Meta says glasses are “the most exciting hardware category of the AI era,” and with that in mind, its smart glasses have its AI assistant built in. But my bet, based on asking random wearers of the glasses, is that they are using them as a convenient way to make phone calls, listen to music and take photos more than anything else. (We suspect Meta would disagree.) Even if that is all anyone is using the glasses for, though, that’s not nothing.

Many people will likely find glasses that make phone calls and play music a big advance over other wearables. (How many brands of earbuds have to fall out of my ears onto the street before I get an ear infection? Just wondering.) And by getting these glasses in widespread circulation, Meta has one up on other companies—including Google, OpenAI and eventually Apple—who are likely to follow with their own AI-equipped wearables.

At $299 a pair, the new styles are $80 cheaper than the older Ray-Bans Meta line introduced a couple of years ago and $200 cheaper than a new line of Ray-Ban Meta Optics unveiled in March. While buyers who need prescription lenses will have to fork over a lot more, Meta’s pricing should be low enough to entice even more people to buy a pair.

So far, demand is growing—Meta says sales tripled last year—but EssilorLuxottica said it sold 7 million pairs of AI glasses, which means the market is still relatively small. (By comparison, the smartphone market this year will be 1.09 billion units, according to IDC). Still, Zuckerberg has a point when he notes that billions of people wear glasses or contacts for vision correction. He said in January, “I think we’re in a moment similar to when smartphones arrived,” replacing flip phones. “It’s hard to imagine a world in several years where most glasses that people wear aren’t AI glasses.” That’s probably true.

A government-backed startup developing lasers for chipmaking wants to make a laser that can squeeze even more circuits onto semiconductors.

XLight, a startup developing advanced lasers for semiconductor manufacturing, is in talks to raise $350 million in funding from a pair of investment firms just weeks after receiving substantial investment from the U.S. Department of Commerce, according to the company’s verbal and written pitch to prospective investors.

The company wants to reduce the cost and time needed to make the most advanced AI server chips by developing an alternative approach to extreme ultraviolet lithography, the process of beaming UV light to print microscopic patterns onto the chips. It’s aiming to sell the technology to ASML, whose EUV machines produce critical material for the chip systems of Nvidia and other top chip designers.

ASML isn’t currently an investor in xLight but is “working with them so they can demonstrate their technology—we feel that’s a responsibility on our side,” ASML CEO Christophe Fouquet told TechCrunch in May. “But it’s still a very long journey.” (A single ASML machine can cost hundreds of millions of dollars, and the factories containing the machines can cost tens of billions.)

XLight, founded in 2021 by Nicholas Kelez, former chief product officer at quantum computing startup PsiQuantum, told potential investors it plans to pitch ASML on participating in the funding round, along with chipmaking giant Taiwan Semiconductor Manufacturing Co., which operates ASML machines, as well as chip designer Intel and memory designer Micron Technology.

New York–based tech investment firm Boardman Bay Capital Management and Boston-based Bain Capital are in talks to lead the round, xLight’s pitch stated. It couldn’t be learned what valuation the company is targeting.

XLight raised money earlier this month, receiving a $150 million investment from the U.S. Department of Commerce and the National Institute of Standards and Technology as part of the CHIPS and Science Act. The U.S. is now likely one of xLight’s largest shareholders; the company has raised approximately $200 million in total. Former Intel CEO Pat Gelsinger, whose venture firm, Playground Global, invested in xLight last year, is executive chair of the startup.

Playground and Bain Capital declined to comment. XLight and Boardman Bay didn’t respond to requests for comment before publication.

The startup is currently developing its first prototype site in Albany, N.Y., with the goal of finishing its first working light source by 2028, the company has said. It has signed nonbinding agreements with lenders willing to provide $4.2 billion in project financing to build its first seven facilities, according to pitch materials sent to prospective investors, though it’s unclear where those will be located and when they are expected to be operational.

Agility’s humanoid robot, Digit, is used by companies including Amazon

Agility Robotics, a startup that makes humanlike robots used in manufacturing facilities and warehouses, is set to go public in a deal valuing it at about $2.5 billion, its executives told The Wall Street Journal.

Agility is set to merge with dealmaker Michael Klein’s special-purpose acquisition company, Churchill Capital Corp. XI CCXI 0.48%increase; up pointing triangle, and list under the ticker symbol AGLT.

The companies expect gross proceeds of over $600 million from the deal, including $420 million cash from Churchill XI and over $200 million via a common-stock private investment in public equity, or PIPE investment, led by Foxconn, the Taiwan based electronics-contract manufacturer that is an existing Agility backer, the executives said.

Agility’s flagship humanoid robot is known as Digit. Digit robots help automate tasks such as moving and stacking heavy containers.

Agility’s customers include Amazon.com, which uses the company’s products in warehouses, logistics company QXO, car parts manufacturer Schaeffler and Toyota Motor Manufacturing Canada, according to the company.

Agility’s competitors in humanoid robotics include established companies such as Tesla and Boston Dynamics, as well as startups including Figure AI and Apptronik.

Agility is led by Peggy Johnson, a former Microsoft executive who was previously CEO of augmented reality-tech company MagicLeap.

Johnson said she believes Agility will have an advantage by going public before other stand-alone humanoid robotics businesses, because of pent-up demand from individual investors looking to put dollars into the industry.

“Plus, we see so much interest from companies seeking to fill the labor gap,” Johnson said.

Johnson said the combination of older workers retiring and the Trump administration’s focus on reshoring manufacturing jobs will continue demand for its robots.

Johnson said Agility’s factory in Salem, Ore., should be able to make 10,000 units annually once fully up and running.

The company has already secured orders for a new version of Digit that it is developing, which should have finer dexterity to move smaller objects and incorporate higher safety standards, according to Johnson.

Agility’s other backers include Amazon, Nvidia and SoftBank. On Monday, Nvidia announced a new safety protocol for robotics that it said Agility would be the first company to implement.

SPAC mergers can be popular for those looking to skip the rigors of the conventional process for an initial public offering. They exploded in popularity in 2021, when interest rates were historically low during the Covid-19 pandemic.

Klein, a former Citigroup banker, has been one of the most prolific SPAC sponsors, having used the vehicles to take public such companies as Oklo, the nuclear power company, and Lucid, the EV maker. SPAC deals are becoming more popular again as the IPO market stages its own revival.