Good morning. Andrew here. We’re looking at this year’s Super Bowl ads, which were dominated by artificial intelligence companies, as well as the further drop in Bitcoin. And we’ve got an exclusive look at a letter that Senator Tim Scott, Republican of South Carolina, wrote to the S.E.C. about the Netflix-Warner Bros. Discovery deal. By the way, here’s a fun factoid: Super Bowl Monday is typically the day of the year with the highest volume of workers calling in sick. Next year, the Super Bowl takes place over Presidents’ Day weekend, so the Monday after will be a federal holiday. (Was this newsletter forwarded to you? Sign up here.)
Ad blitzBig Tech’s artificial intelligence spending spree has roiled the market lately. The wallet was open for last night’s Super Bowl LX broadcast, too, with a flood of A.I.-related ads that may prove more memorable than the game. The A.I. Bowl, as some are calling it, appeared to overshadow the Seattle Seahawks’ victory. Yes, there were some creative gems among the commercials. But the torrent of spending is reminding some of previous years when tech companies tried to capitalize on the Super Bowl limelight. Those efforts didn’t end well for the advertisers. The numbers: Almost a quarter of this year’s Super Bowl ads — 15 of the 66 spots, which sold for an average of $8 million for 30-second slots — featured A.I., according to iSpot, a TV advertising analytics company. That includes major names like OpenAI and Anthropic, which are said to be preparing to go public this year. Start-ups like Genspark and Base44 — and Svedka, the vodka brand, which used A.I. to make an ad — also tried to capitalize on the A.I. buzz. This comes after investors punished tech giants — including Alphabet, Google’s parent company, Microsoft, Amazon and Meta — for announcing huge increases in A.I.-related capital expenditures that would see the four spend $650 billion in 2026 on data centers and computing power. The presence of technology companies was double what it was the last time that NBC broadcast the game, in 2022, Peter Lazarus, executive vice president of ad sales and partnerships at NBC Sports, told Ad Age. That has struck some on Wall Street as ominous. The game in 2022 became known as the Crypto Bowl, when Coinbase, Crypto.com, eToro and FTX spent a combined $54 million on ads. By the end of the year, FTX had declared bankruptcy and Coinbase shares had tanked. Then there was the Super Bowl of 2000, a.k.a. the Dot-Com Bowl, after more than a dozen ad spots were bought by internet start-ups like Pets.com, Epidemic.com and Lifeminders.com. Many shut down months later after the tech stock bubble popped. “When an entire sector floods the most expensive advertising real estate on the planet, it’s not a signal to buy. It’s a signal to think VERY carefully about what comes next,” George Noble, a longtime investment professional, wrote on X yesterday. The A.I.-related ads didn’t resonate with critics. Adweek put only one, Anthropic’s, on its list of favorites. Mike Hale, a TV critic for The Times, ranked OpenAI’s at No. 17. But lots of people saw the ads. Preliminary estimates of the Super Bowl audience put it around 130 million, some of whom may have tuned in to catch Bad Bunny. The Puerto Rican star headlined the halftime show, an appearance that rankled President Trump. But the show also generated a boom in side bets on who would perform with him, especially on prediction markets.
Lawmakers call on Howard Lutnick to resign over Epstein ties. A prominent Republican and the top Democrat on the House Oversight Committee called on the commerce secretary to step down after revelations that he had a more extensive relationship with Jeffrey Epstein than previously disclosed. Separately, the Epstein files show Ghislaine Maxwell played a major role in setting up the Clinton Global Initiative, and KKR has cut ties with the lobbying firm set up by Peter Mandelson, a senior British politician under investigation over his Epstein ties. Jimmy Lai, a Hong Kong media mogul, is sentenced to 20 years in prison. A Hong Kong court meted out the punishment after Lai was convicted under a security law for what Beijing said was masterminding pro-democracy protests years ago. (Six of his former employees at Apple Daily were also sentenced.) The move underscores the tighter hold China has exerted over Hong Kong in recent years. Investors celebrate a landslide victory for Japan’s prime minister, Sanae Takaichi. Japanese stocks soared after the governing Liberal Democratic Party won by huge margins. The result was interpreted as a mandate for Takaichi and her agenda, including an expansionary fiscal policy and state-led investments in so-called national champions. Shares in Novo Nordisk soar after the F.D.A. deals a blow to a rival. The Danish drugmaker’s stock jumped in Copenhagen trading today after Hims & Hers called off plans to introduce a generic version to a pill variant of Wegovy. Hims & Hers made its move after the F.D.A. warned that the generic pill, which was meant to be far cheaper than Wegovy, might be illegal. This morning, Novo Nordisk sued Hims & Hers, seeking to permanently block the telehealth company from offering unauthorized copies of its GLP-1 treatments. “Is Bitcoin dead?”Bitcoin is slumping again this morning, sinking to $69,000. That’s after the token fell roughly 16 percent last week, as crypto winter fears reverberate from Wall Street to Reddit message boards. The plunge has raised new questions about whether the asset is losing the investment case that propelled its rise — and whether bigger losses are coming, Grady McGregor reports. For years, crypto traders viewed Bitcoin as a hedge against the dollar, with investors often piling into the asset alongside traditional havens like gold and silver during periods of market stress. But most digital assets sank during last month’s bull run for precious metals. “Bitcoin should have participated in this debasement trade that we’ve seen, particularly in precious metals, but that just didn’t happen,” James Butterfill, the head of research at CoinShares, a crypto investment company, told DealBook. A potential reason: Large holders — whales, in market lingo — may be in sell mode, he added. Another explanation may be structural. The initial wipeout that prompted the monthslong decline came on Oct. 10, a date known in crypto shorthand as 10/10. At the time, DealBook reported that the sell-off was driven in part by an immense buildup of leverage and derivative trades across crypto markets. Some of those dynamics may be resurfacing: Crypto’s sell-off last week prompted $2.5 billion in forced liquidations, the biggest wipeout of leveraged bets since the October crash, according to the data provider CoinGlass. “Many traders believed, prematurely, that a bottom had formed and revenge-traded on leverage, hoping for a relief rally that really hasn’t materialized,” Justin d’Anethan, the head of partnerships at Arctic Digital, a crypto investment company, told DealBook. Even veteran traders are reeling. They have seen big swoons before, most recently in 2022 as the collapse of the industry giant FTX shook the sector. But the market rebounded in 2024 after the S.E.C. approved applications for exchange-traded funds tied to Bitcoin, a move that opened crypto trading to Wall Street and mainstream investors. Many traders are now questioning who the new buyers will be. Ivan Cosovic, the managing director of Breakout Point, a market data firm that tracks investor sentiment. In November, the main discussion theme around crypto was, “Maybe this is a bottom,” he told DealBook. That optimism has since faded. He said: “February has become ‘Is Bitcoin dead?’”
Playing for time in the fight for Warner Bros. DiscoveryAs the fight between Paramount and Netflix over Warner Bros. Discovery gets down to the wire, both sides are battling for an advantage. Netflix and Warner Bros. Discovery argue that their deal is a bird-in-hand for shareholders, while Paramount is looking to show regulatory momentum. A big factor in who gets the upper hand in timing will be the date Warner Bros. Discovery sets for an investor vote on the Netflix deal. It can’t do that until the S.E.C. has approved its proxy filing — and a letter to the agency by a top senator appears aimed at influencing that timeline, Lauren Hirsch reports. The latest: Senator Tim Scott, Republican of South Carolina, wrote to Paul Atkins, the S.E.C. chairman, last week, expressing concern about “the inadequacy of the information” that Warner Bros. Discovery has disclosed in regulatory filings, according to a copy of the letter obtained by DealBook. In particular, Scott focused on a warning in Warner Bros. Discovery’s proxy that how much cash Netflix will pay may be reduced, depending on how much debt Warner Bros. Discovery moves from its cable business, which would be spun out, to the streaming and studio assets that Netflix is set to buy. Warner Bros. Discovery hasn’t given a firm number. “W.B.D.’s stockholders are being asked to evaluate competing offers without access to material information necessary to make an informed decision,” Scott writes. Representatives for Warner Bros. Discovery and the S.E.C. declined to comment. Of note: Scott has described Larry Ellison, the main financial backer of Paramount’s competing offer and the father of the Paramount C.E.O. David Ellison, as a “mentor.” Larry Ellison has also been a major donor to a super PAC aligned with Scott. Both companies are deep into the regulatory process. The Justice Department, which is also examining the Netflix deal, has asked whether the deal could lead to a monopoly. (Scott has written to the Justice Department expressing antitrust concerns about the combination as well.) A Netflix spokesperson told DealBook it was “not aware of any investigation into our business outside of the standard merger review process.” Paramount has applied for antitrust approval for a tender offer, rather than a traditional acquisition. That requires less time for the first stage of the review and less documentation for the full process. Clearance for Paramount could now be weeks away, whereas Netflix has said it expects its own process to take 12 to 18 months. That’s not the same as deal approval: The Justice Department could still sue to block a deal even after an investigation concludes without a suit, as the F.T.C. did with Illumina’s acquisition of Grail. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
Deals
Politics, policy and regulation
Best of the rest
Thanks for reading! We’ll see you tomorrow. We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com. |
