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Microsoft, OpenAI (MSFT) redefine ties in shift to for-profit model. (00:24) Warner Bros. Discovery (WBD) jumps on report Paramount Skydance (PSKY) preparing offer. (01:37) Apple Watch (AAPL) hypertension detection to roll out next week after FDA nod- report. (02:56)
Microsoft (NASDAQ:MSFT) and OpenAI have signed a non-binding memorandum of understanding to redefine their relationship, paving the way for OpenAI to restructure into a for-profit company.
According to an official statement, “OpenAI’s planned evolution will see the existing OpenAI nonprofit both control a Public Benefit Corporation (PBC) and share directly in its success. OpenAI started as a nonprofit, remains one today, and will continue to be one—with the nonprofit holding the authority that guides our future.”
OpenAI’s nonprofit arm stands to receive over $100 billion, or about 20% of the $500 billion valuation the company is targeting in private markets.
Microsoft and OpenAI are working toward a final agreement.
Microsoft (MSFT) has been a key OpenAI backer, investing $1 billion in 2019 and $10 billion in 2023. The earlier deal gave Microsoft exclusive rights to sell OpenAI tools through Azure and have preferred access to its technology.
This year, however, OpenAI began diversifying by building its own data center project, “Stargate,” and signing major cloud deals with Oracle (ORCL) and Google (GOOG) (GOOGL) worth more than $300 billion.
The restructuring still requires approval from regulators in California and Delaware.
Warner Bros. Discovery (NASDAQ:WBD) jumped 29% on Thursday after a report that Paramount Skydance (NASDAQ:PSKY) is preparing a majority cash bid. Paramount Skydance climbed 15.5%.
According to a WSJ report on Thursday, which cited people familiar with the matter, the offer will be for the entire company, including its cable networks and movie studio. The bid will be backed by the Ellison family.
According to CNBC’s David Faber, a Paramount Skydance bid for Warner Bros. Discovery may come as soon as next week.
The potential bid comes after Warner Bros. Discovery (NASDAQ:WBD) in June confirmed that it would separate into two companies, with one focused on streaming and the other on its television networks.
A deal would combine Paramount’s CBS News with Warner Bros. CNN as well as Warner Bros. studio with Paramount studio.
Paramount Skydance may be trying to make a bid before Warner Bros.’ planned split in an attempt to pre-empt a possible bidding war for the studio and streaming unit that could include Amazon.com (AMZN) and Apple (AAPL), according to the WSJ report.
A Paramount Skydance (NASDAQ:PSKY) bid would also follow after Oracle Corp. co-founder Larry Ellison’s wealth jumped by more than $100 billion on Wednesday after the stock 36% surge, at one point making him the richest person in the world, over taking Elon Musk, according to the Bloomberg’s billionaire index.
Apple (NASDAQ:AAPL) gets the go ahead from U.S. Food and Drug Administration for its new hypertension detection tool for Apple Watch. It’ll roll out next week.
The tool uses data from the Apple Watch’s optical heart sensor to analyze how a user’s blood vessels respond to heartbeats over a 30-day time period, Apple reported.
The hypertension detection tool has been developed using machine learning trained on data from studies with over 100,000 participants and is compatible with Apple Watch Series 9, 10, 11, Ultra 2, and Ultra 3.
The tool will notify the smartwatch user if any signs of chronic hypertension are detected and would encourage sharing results with a medical provider.
The feature will be available in 150 regions, including the US, EU, and Hong Kong.
Apple unveiled its new Apple Watch Series 11, Ultra 3, and SE models at its latest product launch event earlier this week.
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Take-Two Interactive (TTWO) will release the Borderlands 4 videogame for PlayStation 5, Windows, and Xbox Series X/S, with a Nintendo Switch 2 release following on October 3.
Dow, S&P and Nasdaq futures are in the red. Crude oil is up 0.2% at $62/barrel. Bitcoin is down 0.3% at $115,000. Gold is up 0.2% at $3,638.
The FTSE 100 is up 0.2% and the DAX is down 0.3%.
The biggest movers for the day premarket: RH (NYSE:RH) -7% – Shares sank after the upscale furniture retailer missed Q2 expectations and cut its full-year forecast, citing new U.S. tariffs, delayed catalog releases, and a weak housing market.
On today’s economic calendar:
And finally, our most recent news quiz just dropped. If you haven’t checked it out, it’s 10 questions all about the news of the week. One of the questions this week is about a story we talked about today on Wall Street Breakfast but it has a twist. It says: Warner Bros. Discovery (WBD) soared on a report that Paramount Skydance (PSKY) is preparing an all-cash bid for the company. If the deal goes through, which planet will the combined company NOT have the rights to?
I can’t wait to see if you get it right. I’ll leave a link to the quiz in the show notes section.
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