The consortium of investors that are to acquire EA are betting on AI to cut operating costs and boost profits, according to a new report.
According to the Financial Times, the buyout deal represents a “huge bet” that artificial intelligence (AI) will play a critical role in slashing operating costs and boosting profitability for EA. The investor group, including Saudi Arabia’s Public Investment Fund (PIF), Silver Lake, and Affinity Partners, reportedly views AI as the key to making that financial structure sustainable.
AI is already widely used across Silicon Valley to accelerate software development. With regards to game development specifically, it can help automate play testing to catch bugs before release, generate environmental backdrops and other assets, and even replace some voice acting. If applied successfully, these tools could shorten production cycles and lower development costs across EA’s portfolio. “The investors are betting that AI-based cost cuts will significantly boost EA’s profits in coming years,” people involved in the transaction told the Financial Times.
Behind the scenes, key figures helped bring the investor group together. Jared Kushner, son-in-law of US President Donald Trump, reportedly played a central role in securing PIF’s participation at a time when the fund was scaling back on some other private investments. He founded investment firm Affinity Partners after leaving the White House in 2021, and PIF is a significant investor in his fund. Working with Silver Lake co-CEO Egon Durban, he began studying the takeover earlier this year. Sources cited by the Financial Times added that Kushner’s involvement could smooth the deal’s path through the Committee on Foreign Investment in the US (CFIUS), which reviews transactions involving foreign buyers.
For the uninitiated, EA recently announced that it will be acquired by an investor consortium in an all-cash transaction valued at approximately 55 billion dollars. It is the largest all-cash sponsor take-private investment in history. Under the agreement, EA stockholders will receive 210 dollars per share in cash, representing a 25 percent premium over the company’s unaffected share price of 168.32 dollars as of September 25. The deal also surpasses EA’s previous all-time high share price of 179.01 dollars.
