Biggest LBO Ever, SPAC 2.0, Open Source AI Models, State AI Regulation Frenzy

Saudi Arabia is using EA’s $55 billion take-private as a long-horizon gaming platform bet, not a simple buyout. PIF will be the majority owner after already holding 10%; Affinity will own about 5%, while Saudi vehicles have also bought Scopely and Niantic and hold stakes in Nintendo, Take-Two and Activision Blizzard.

Chamath Palihapitiya argued that private equity’s real problem is a distribution drought caused by too much capital chasing too few good opportunities. He said distributions have been scarce for four to five years, expects capital to concentrate in proven firms like Silver Lake, and called private credit the next bubble forming.

Palihapitiya’s new SPAC is deliberately designed to remove the incentives that damaged the first SPAC boom. He said the sponsor earns nothing until the stock rises 50%, 98.7% of capital went to institutional investors, and he explicitly advised retail investors to avoid his own SPAC because the risk resembles venture investing.

AI adoption inside traditional private equity may be blocked more by ownership and management than by technology. Josh Kushner’s Thrive is buying CPA firms and applying AI, while Palihapitiya said his nine-figure AI business has won almost no private-equity portfolio work despite extensive selling; owner-controlled businesses move faster.

Cheap frontier models do not automatically win workloads because switching costs are becoming a serious form of lock-in. Palihapitiya said 8090 shifted substantial work from Amazon Bedrock to Kimi K2 on Groq for better economics and performance, but moving complex prompts between models can require weeks or months of re-engineering.

The U.S. may be leading most of the AI stack while China leads the most important open-source models. Sachs named DeepSeek, Kimi and Alibaba’s Qwen as leading examples, while stressing that a Chinese-origin model can be forked and run entirely on U.S. infrastructure without sending customer data back to China.

AI’s near-term constraint may become electricity politics before model capability. An energy executive told Palihapitiya household rates could double within five years without changes; Sachs said shifting only 40 peak hours annually to backup generation could unlock roughly 80 gigawatts, buying time for more gas capacity and eventually nuclear.

The coming U.S. AI-policy fight is increasingly about whether states can impose dozens of incompatible regimes or Washington preempts them with one national standard. Colorado already imposes liability on AI developers and deployers for certain discriminatory outcomes; an earlier federal moratorium failed in Congress, but Sachs said Trump backs a single national standard.