Latest / What the Flux / Microsoft invests $25 billion into Australia | WarnerBros Discovery vs Hollywood | SpaceX eyes $60 billion AI purchase

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Microsoft invests $25 billion into Australia | WarnerBros Discovery vs Hollywood | SpaceX eyes $60 billion AI purchase · What the Flux

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  Speaker 1: This is what the Flux. I'm Brett and I'm Justin
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  Speaker 1: and it's undated twenty seven to April.
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  Speaker 2: Josey Boy.
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  Speaker 1: Despite the volatility of the share market over the past month,
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  Speaker 1: it ain't stopping Australian investors.
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  Speaker 2: Get this one.
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  Speaker 1: The Australian ETF market is expected to grow to three
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  Speaker 1: hundred and eighty billion dollars in funds under management in
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  Speaker 1: twenty twenty six, which is up from about three hundred
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  Speaker 1: and twenty bill last year and just seventy one billion
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  Speaker 1: in twenty twenty.
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  Speaker 2: That's five hundred percent growth in just six years. Huge
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  Speaker 2: bossies are investing big sam.
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  Speaker 1: Some people say AI is the biggest invention since sliced bread,
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  Speaker 1: and right now every single tech giant is lining up
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  Speaker 1: for a slice. But there is another revolution going on
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  Speaker 1: that people are talking about, maybe a little bit less.
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  Speaker 1: It's the bond market. We're breaking it down in the
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  Speaker 1: Flux app, the role of bond markets in today's AI
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  Speaker 1: boom and how.
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  Speaker 2: It can play a key part in your portfolio. So
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  Speaker 2: if you want to learn more, make sure to download
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  Speaker 2: the Flux app and check it out.
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  Speaker 1: Three massive stories today, Juzy Boy, let's do it for
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  Speaker 1: our first Microsoft is investing a whopping twenty five billion
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  Speaker 1: dollars into Australian data centers as demand for AI just
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  Speaker 1: keeps booment.
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  Speaker 2: Microsoft cannot stop, will not stop here, b man, So
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  Speaker 2: tell me what's going on.
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  Speaker 1: So obviously Microsoft needs no intro. It's the four point
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  Speaker 1: four trillion dollar software company behind Windows, Microsoft three, six,
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  Speaker 1: five and Xbox YEP. It was founded back in nineteen
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  Speaker 1: seventy five, but Microsoft has been in the trusty hands
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  Speaker 1: of CEO Sarcinadella since twenty fourteen, who has made a
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  Speaker 1: big push into cloud computing and AI. And just last
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  Speaker 1: week Nadella flew to Sydney to make it official. Microsoft
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  Speaker 1: will invest twenty five bill over the next three years
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  Speaker 1: in Australian data center. And that's not even their first
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  Speaker 1: radio b man, because Microsoft also made a five billion
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  Speaker 1: dollar investment last year and it edges out Amazon's twenty
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  Speaker 1: billion dollar pledge over the same period. Jeff Bezos, Andy Jesse,
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  Speaker 1: if you're listening, thoughts and prayers, uhha, and Jazi boy.
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  Speaker 1: As part of this mega investment and agreement with the
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  Speaker 1: Australian government, Microsoft has made some other commitments.
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  Speaker 2: Firstly, Microsoft's promised.
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  Speaker 1: To add electricity supply to cover all or part of
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  Speaker 1: their usage. They're also going to use water sustainably and
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  Speaker 1: invest in local jobs. On top of that, Microsoft said
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  Speaker 1: it would train three million Australians with quote workforce ready
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  Speaker 1: AI skills by twenty twenty eight.
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  Speaker 2: So be man.
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  Speaker 1: Microsoft obviously needs a regulatory license to build these big
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  Speaker 1: data centers, but it's pushing hard for something a lot
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  Speaker 1: more fragile. It's social license too. Mm hmm, So what's
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  Speaker 1: the key learning here? A social license is basically the
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  Speaker 1: unwritten approval that a company needs from the public and
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  Speaker 1: key stakeholders to operate, especially when they're building a large
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  Speaker 1: scale or potentially controversial infrastructure. Now, be man, we know
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  Speaker 1: that AI data centers consume really large amounts of power
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  Speaker 1: and water. We're talking around sixty four billion leaders of
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  Speaker 1: order a year through cooling. Wow, and this is a
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  Speaker 1: number projected to double or quadruple by twenty twenty eight.
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  Speaker 2: It also potentially threatens jobs.
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  Speaker 1: Yep, especially when just last year Australian jobs were included
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  Speaker 1: in a cup of fifteen thousand Microsoft workers globally, and
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  Speaker 1: one in ten Aussie workers say they feel really scared
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  Speaker 1: AI will replace their job. So public sentiment is important here,
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  Speaker 1: which means AI companies need to convince people that tech
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  Speaker 1: will help, not harm society. For our second story, Warner
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  Speaker 1: Brothers Discoveries investors have overwhelmingly approved the one hundred and
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  Speaker 1: ten billion dollar Paramount takeover deal, but some others are
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  Speaker 1: not too happy about this one. This was a modern
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  Speaker 1: day heist snatch out of the hands of Netflix being manned,
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  Speaker 1: So tell me more about this. So, Warner Brothers Discovery
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  Speaker 1: is the entertainment giant behind HBO, CNN, DC, comics, Harry Potter,
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  Speaker 1: the HBO Max Now. In December last year, Netflix announced
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  Speaker 1: the deal to acquire Warner Brothers Discovery studio and streaming business.
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  Speaker 1: The border proof pens were out, contracts were ready, then bam,
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  Speaker 1: Paramount Skydance entered the chat and it wasn't a quiet
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  Speaker 1: entry either. No, no, no, They launched one hundred and
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  Speaker 1: ten billion US dollar or cash hostile takeover off up for.
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  Speaker 2: The entire Warner Brothers Discovery.
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  Speaker 1: And now Warner Brothers Discovery shareholders voted overwhelmingly to approve
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  Speaker 1: the takeover by Paramount Skydance and not the Netflix offer,
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  Speaker 1: but be mann. Despite the shareholder support, the deal is
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  Speaker 1: facing a serious backlash. Yeah, more than four thousand people
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  Speaker 1: in Hollywood signed a petition opposing the deal. So while
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  Speaker 1: shareholders might be on board, the deal is still stuck
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  Speaker 1: in a bit of regular to limber and in the
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  Speaker 1: meantime it's what a contract also includes a break fees
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  Speaker 1: and ticking fees just in case it gets derailed by
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  Speaker 1: the industry or regulators. So what is the key learning here?
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  Speaker 1: In major acquisitions, companies often include financial protections to manage risk.
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  Speaker 1: A break fee or termination fee is a penalty paid
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  Speaker 1: if the deal falls through. In this case, b Man
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  Speaker 1: Paramount will do seven billion US dollars to Warner Brothers
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  Speaker 1: Discovery if regulators block the merger. And why would they
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  Speaker 1: pay for this? Because it effectively compensates Warner Brothers for
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  Speaker 1: their time, their effort, and other lost opportunities Netflix offer. Yeah,
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  Speaker 1: and the ticking fee, this is a fee paid when
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  Speaker 1: deal is delayed.
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  Speaker 2: Yeah.
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  Speaker 1: Here, Warner Brothers shareholders will receive twenty five cents per
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  Speaker 1: share per quarter if the deal isn't finalized by a
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  Speaker 1: certain day and does boid. These types of clauses are
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  Speaker 1: put in contracts to keep both parties committed to the deal,
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  Speaker 1: which can often drag for a long long time. For
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  Speaker 1: our third and final story, SpaceX has hired a sixty
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  Speaker 1: billion dollar acquisition of an AI coding startup called Cursor
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  Speaker 1: as it ramps up to become an AI developer. Just
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  Speaker 1: your average weekly spend for Elon Muski Musk, just a boy,
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  Speaker 1: what's going on here? So you may not have heard
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  Speaker 1: of Cursor, b man, but it's one of the hottest
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  Speaker 1: startups in Silicon Valley right now.
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  Speaker 2: Oh, I've heard.
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  Speaker 1: They use AI to help developers write code faster, essentially
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  Speaker 1: enabling it to automate huge chunks of software development. And
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  Speaker 1: as for SpaceX, that's Elon's satellite orbit company, which is
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  Speaker 1: expected to IPO later this year for up to one
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  Speaker 1: point seventy five trillion dollar valuation.
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  Speaker 2: That's wild.
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  Speaker 1: But b man, it ain't just a satellite orbit company
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  Speaker 1: because SpaceX also previously acquired Elon Musk's XAI, and XAI
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  Speaker 1: previously acquired elons X, so they now all sit under SpaceX.
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  Speaker 1: This is one hell of a corporate with Bush Godol.
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  Speaker 1: But here's where it gets interesting. Because SpaceX wants to
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  Speaker 1: combine curses software with its supercomputer called Colossus, and so
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  Speaker 1: b Man, this deal would either be a ten billion
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  Speaker 1: US dollar partnership with Cursor or an option to buy
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  Speaker 1: Cursor for sixty billion US dollars later this year. The
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  Speaker 1: old try before you buy a strategy. So what is
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  Speaker 1: the key learning here? Some of the smartest companies don't
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  Speaker 1: rush into mega mega deals. They actually try before they
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  Speaker 1: buy and only commit if it actually were I take
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  Speaker 1: you back to twenty fifteen when Microsoft and LinkedIn developed
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  Speaker 1: partnerships that integrated LinkedIn's data into Microsoft products like Outlook
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  Speaker 1: and Office. This gave Microsoft insight into how valuable LinkedIn's
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  Speaker 1: network could be within its own ecosystem. By twenty sixteen,
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  Speaker 1: Microsoft announced they would acquire LinkedIn for more than twenty
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  Speaker 1: six billion US dollars. On the other hand, back in
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  Speaker 1: twenty fifteen, Google partnered with Twitter to integrate tweets directly
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  Speaker 1: into search results, and at the time there was heavy
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  Speaker 1: speculation that Google might acquire Twitter for around twenty billion dollars,
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  Speaker 1: but after testing the relationship, they walked away because it
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  Speaker 1: didn't fit strategically and likely wasn't worth the price. So
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  Speaker 1: Jasi boy, the try before you buy can be an
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  Speaker 1: effective way to test the relationship for plowing billions in
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  Speaker 1: cap flax term, there are a whole lot of companies
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  Speaker 1: issuing massive one hundred year bonds. We break it down
• 6:45
  Speaker 1: into Flux app explainings water bond is outworks, and how
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  Speaker 1: you can invest in bonds as part of your border portfolios.
• 6:50
  Speaker 1: Make sure to download the Flux app and check it out.
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  Speaker 2: Thanks for listening and we'll see you on Wednesday.