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For tech CEOs, having an investment banker playing the role of president has its advantages. President Donald Trump is displaying a willingness to consider all sorts of deals that might be verboten on national security grounds—as long as the government is getting paid. Not only is he allowing Nvidia to sell its China-specific H20 artificial intelligence chips to the country in exchange for a 15% cut of the resulting revenue, Trump signaled today that he might allow Nvidia to sell its more advanced Blackwell chips to China too, if it modified them in some “negative way” to make them less powerful.
Then there’s his willingness to disregard the TikTok sell-or-ban law so he can do a deal for U.S. investors to buy control of the app. Trump has previously expressed a hope that the government will get paid in that transaction as well: Earlier this year, he asserted that if TikTok was allowed to keep operating in the U.S. “it’s worth like a trillion dollars” and the U.S. should get half ownership as a result. He also took that stance back in 2020, incidentally, when he was the one insisting that TikTok be sold or banned. This kind of government-as-banker approach is certainly interesting. Executives have a president who speaks their language and who isn’t bothered by the niceties of government policy or regulations. (CNBC quoted Trump saying today that he initially asked Nvidia CEO Jensen Huang he for a higher cut: “I said, ‘Listen, I want 20% if I’m going to approve this for you, for the country.’”)
Where will it end? Should the federal government get money anytime it has to approve a company taking action of some kind? For instance, will we see Trump demand 10% of the revenues of a company in exchange for the Justice Department approving a merger, for instance? Of course, some see CBS’ decision to cancel “The Late Show With Stephen Colbert” as part of the price it paid the government to win approval for Skydance’s purchase of Paramount, which closed last week. So perhaps the payment won’t always be made in cash.
Companies could see these payments as simply a cost of doing business. Nvidia could just include any government payoff, err, fee, in cost of revenue. While that would depress its gross margin, Nvidia executives probably think that’s better than losing the Chinese market entirely. Assuming, of course, the latest Nvidia deal happens—Bloomberg today pointed out that it likely violates the constitution’s ban on export taxes.
But there is also a risk for Nvidia in how the Chinese government might perceive this kind of deal. It suggests Nvidia is acting simply as an arm of the U.S. government. Chinese authorities are already wary of the company, as they demonstrated when they reportedly called its staffers into a meeting a couple of weeks ago to discuss the security risks of Nvidia chips. For multinational companies, juggling the demands of Trump and foreign governments is becoming much more complicated.
Paramount’s Name Indecision
What is the name of David Ellison’s new entertainment company? We’re talking about the one that swallowed up control of Paramount last week. In securities filings, the new corporation is described as Paramount Skydance. But in press releases—like one today referring to Paramount’s UFC rights deal—it is described as “Paramount, a Skydance Corporation.”
If Ellison opts for the second choice, he’s likely to see the company described as Paramount in the news media, as no reporter will write “Paramount, a Skydance corporation” on first reference (or ever, other than to mock the company). In contrast, Paramount Skydance rolls off the tongue smoothly. Perhaps Ellison should stick with what appears to be the legal name.
In Other News
• Ticketing platform StubHub updated its IPO paperwork on Monday, in a sign it plans to renew its plans to go public. But it will now have to explain lumpy business results to prospective investors. The company publicly filed first-quarter financial information Monday, revealing that revenue growth had slowed to 10% in the first quarter from 30% annually last year. More here.
• In David Ellison’s first major move after taking control of Paramount, the company has announced a seven year, $7.7 billion media rights deal with UFC, the mixed-martial arts organization owned by Ari Emanuel-led TKO.
• The CEO of Microsoft’s GitHub subsidiary, Thomas Dohmke, will step down, he announced on Monday. He plans to found a new startup.
• Bullish, a Peter Thiel-backed crypto exchange and owner of news outlet CoinDesk, is seeking to raise as much as $990 million in its U.S. IPO, up from its earlier target of $629 million.
• A small Nasdaq-listed company said Monday it’s raising $1.5 billion through stock offerings to buy tokens of World Liberty Financial, the crypto project co-founded by Donald Trump’s sons last year.
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