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There’s a lot going on all of a sudden. We’re all still trying to come to grips with the latest Anthropic-Trump administration standoff. SpaceX’s market performance so far has been like a rocket ship: The stock rose 20% on Monday, finishing with a market capitalization of $2.5 trillion. And back on Earth, we got some notable acquisitions on Monday, in a sign that mergers and acquisitions are alive and well. (Indeed, late Monday we scooped that Qualcomm was in talks to buy AI chip designer Tenstorrent).
Earlier in the day, Salesforce said it would buy Fin, a customer-focused AI agent maker, for $3.6 billion (more on that below). The much bigger deal, though, was Fox’s $22 billion proposed purchase of Roku, the streaming-device maker and ad service. That acquisition represents a triumph for Roku CEO and founder Anthony Wood, although not necessarily for Fox, whose stock plunged 15%. (And some on Wall Street wondered if rival bidders might emerge for Roku—New Street Research made the case for Meta Platforms or TikTok, neither of which seems likely. Never say never, though.)
Wood is selling to Fox at $160 a share, double where the stock was this time last year, and the highest price Roku has reached since the pandemic-powered business surge of 2020–21. It’s a better exit for Roku and investors than might have been expected in, say, 2022 or 2023, when its growth slowed sharply. In the past two years, though, Wood has turned things around. Among other things, Roku started allowing outside ad tech firms to help sell its ad inventory. It also allowed any kind of marketer to buy spots on its valuable home screen, rather than limiting those ads to entertainment firms as it had been doing.
Both moves accelerated ad growth. Cost-conscious management also helped: Roku’s free cash flow more than doubled to $483 million last year. The turnaround won back investors, who pushed the stock up from $60 last April to $119 on Thursday. And while you might wonder why Wood is selling now, Roku’s long-term growth prospects remain uncertain given that the streaming market—at least in the U.S.—is maturing.
Also, the streaming ad market is relatively small—WPP forecast on Monday that it will reach $61.4 billion globally by 2027. (By comparison, WPP projects that social media advertising will reach $504 billion that year.) And the streaming ad market is crowded, with everyone from Disney to Amazon to YouTube jockeying for a piece. That makes it very uncertain how much more growth Roku can squeeze out of this market.
All that said, why is Fox, a shrunken part of the Rupert Murdoch empire run by Lachlan Murdoch, buying? Fox, you might recall, sold some of its most valuable pieces to Disney a few years ago—its film studio and high-profile cable channels—and is left with its aging broadcast TV business as well the Fox News Channel. Fox acquired the free streaming service Tubi in 2020, giving it a piece of the streaming ad market. Roku gives Fox much more exposure to streaming, which isn’t a bad thing.
Given the growth clouds over Roku, though, Murdoch is likely overpaying. It’s a cash and stock offer, so the drop in Fox’s price on Monday reduces its value a bit. But at $160 a share, the price is the equivalent of 24 times Roku's estimated 2027 earnings before interest, taxes, depreciation and amortization, judging from S&P Global Market Intelligence data. Fox itself is trading at just over 6 times.
Benioff’s Back
Marc Benioff is revving up his company’s dealmaking engine, after a self-imposed hiatus a couple of years ago under pressure from activist investors. Salesforce on Monday announced the purchase of Fin, a company once known as Intercom, which sells a customer-focused AI agent. (Intercom has an interesting history.)
That deal follows Salesforce’s $9.6 billion purchase last November of Informatica, described as an “AI-powered cloud data management firm.” A few weeks before Salesforce completed that deal, it spent $815 million in cash to buy Regrello, another AI firm. In 2024, Salesforce expended close to $3 billion on several acquisitions. Benioff’s buying is certainly not what it was—remember, he paid $27.7 billion to buy Slack in 2021, the last of his big deals. But he’s getting back in shape.
In Other News
• Tencent Holdings has backed a new AI lab founded by Junyang Lin, former lead researcher of Alibaba Group’s Qwen models, according to two people with knowledge of the investment.
• Nvidia said Monday it plans to raise new debt even as the AI chip leader keeps generating tens of billions of dollars in cash every quarter. It will be the company’s first corporate bond sale since 2021, when it raised $5 billion. Bloomberg earlier reported that Nvidia would sell more than $20 billion in new debt.
• A Washington-based Anthropic customer filed a class-action lawsuit against Anthropic Sunday night alleging that the company had misled customers about the value of its premium “Max 5x” and “Max 20x” subscription plans.
Today on The Information’s TITV
Check out today’s episode of TITV in which we speak to the CEO of Abridge about why the company is pursuing its own AI models.
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