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Greetings! Can I have a show of hands of those who plan this weekend to see the new Apple-made Brad Pitt movie, “F1,” which opened today in theaters? It is the kind of film—full of shots of cars racing at high speed—that surely looks better on the big screen. That’s definitely the view of Eddy Cue, the Apple executive with responsibility for the company’s entertainment operations: He told Bloomberg in an interview published this week that “theatrical experiences are great and I’m a huge fan.” Movie theater owners across America will be grateful for his support—if not Apple shareholders. It’s one thing for Apple to lose a billion dollars annually on a streaming service, as it now does. It’s another to make big-budget movies for theatrical release, where the possibility of losing massive amounts of money is very real. The new movie, which reportedly cost $200 million, intensifies long-standing questions about Apple’s rationale for getting into entertainment. In that context, it’s instructive to see Cue’s comment to Bloomberg that “Apple got into this business because we thought it would be a good business.” That’s a bit worrisome. No sane person gets into movies and TV thinking it’s a good business! Of course, while they might say that’s the reason, it’s usually more about the razzmatazz, to mingle with stars and attend the Oscars. Maybe Apple thinks it helps enhance its brand. But profits aren’t likely to be the rationale. Film and television production is more a consumer of funds than a producer. Take Disney and Warner Bros. Discovery, two of the biggest entertainment companies, with well-established film and TV studios. Both reported that their studio operations had an operating profit margin in their 2024 fiscal year of a little above 4%. The year before, it was lower for both (Disney lost money in the segment!). Apple’s profit margin, by the way, was 31%. Both Warner and Disney make a bunch more money from TV channels (mostly the traditional style, which are declining), while they’re trying to transition into streaming, which remains a work in progress. Apple’s one streaming service isn’t likely to ever attract a mass audience or become a barn burner of a business, given its emphasis on high-brow content. Netflix, which has become a big moneymaker, specializes in a wide array of content, very little of which anyone would consider highbrow. But it works for the mass market. If Cue is serious that Apple was hoping entertainment would be a good business, then the company really should buy something bigger, like the new company housing the Warner Bros. studio and Max streaming service that is about to separate from the cable channel part of WBD. A big film library, like the one attached to Warner Bros., would provide a stream of cash to support new film production and give Apple a fighting chance to turn its entertainment operations into a profitable business. As things stand now, Apple has less chance of becoming a leader in entertainment than it does in artificial intelligence—and that’s saying something. One of the biggest tech stories nowadays is the frenzied recruiting war for AI talent. Our Weekend Big Read takes you inside that world, with colorful detail and the revealing perspective of those getting the big offers. The frenemy relationship between Microsoft and OpenAI continues to be a big story. This week we published this deep dive into a key issue dividing them, OpenAI’s ability to cut off Microsoft from access to its most advanced tech by claiming it has reached artificial general intelligence. It’s a fascinating story that is well worth reading. Meanwhile, we scooped the news that OpenAI has designed productivity software that could compete with Microsoft Office and Google software, the latest example of OpenAI competing with Microsoft. Offering a different angle on Microsoft’s AI efforts, we reported in depth on Microsoft’s stumbles with its AI chip, which it hopes could reduce its dependence on Nvidia chips. Elsewhere in AI, we revealed what DeepSeek is up to, both in developing its latest-generation model and in the challenges it faces getting Chinese companies to use it. We also scooped details of the business plan of Mira Murati’s Thinking Machines Lab. And we delved into the shortcomings of AI software investment banks might use for automating grunt work. On the entertainment front, we scooped the news that TikTok and Instagram are both working on apps that can work on the TV, showing how two of the most popular social media apps want to follow YouTube’s success in picking up viewers and ad dollars on the television set. Meanwhile, we revealed that Google has cut its budget for its Google TV and Android TV, a sign it is putting less effort on a niche part of the TV streaming ad market—selling ads on TV program menus. On the crypto front, we scooped that OKX, one of the biggest global crypto exchanges, is considering going public, part of a wave of crypto players pondering that move after the blockbuster success of Circle’s IPO. We also broke the news that Polymarket, the world’s biggest prediction market, which relies on crypto as the currency for bets, is raising $200 million at a valuation of more than $1 billion. We also did a deep dive into the Trump family’s latest crypto venture and their partners at a bitcoin miner known as Hut 8. • Nvidia this month acquired CentML, a startup developing software to make AI run more efficiently on specialized server chips, according to The Logic. The startup’s CEO, co-founders and other employees now work at Nvidia, according to their LinkedIn profiles. • Meta Platforms is in discussions to raise $29 billion in debt and some equity to fund its AI data center push, the Financial Times reported. Meta has had discussions with Apollo, KKR, Brookfield and Carlyle, the paper said. Dealmaker was named the “Best in Business” newsletter for its insightful coverage of private technology and the AI hype cycle. Start receiving the newsletter here. | 
