When he's passionate about something, he's like a dog with a bone, and he's just like, 'This is how I feel, and I've got the facts to back it up in my opinion, and I'm going to make sure that I persuade you into my opinion.'
Mergers, AI spending, and Bill Ackman. Welcome back to Fortune Daily, and here's what I'm thinking about today.
So, a federal judge just put a firm date on when we can expect an answer to the biggest will they won't they question in Hollywood. And don't worry, it's not anytime soon. A March 2027 trial has been set for the big antitrust challenges to Paramount's acquisition of Warner Brothers Discovery. It's yet another setback for Paramount, which had hoped to close the merger this very summer. But in mid July, a coalition of state attorneys general and the Writer's Guild of America filed lawsuits to stop the deal in its tracks. A judge issued a temporary restraining order and yesterday set the trial date for March 2nd. So that timeline guarantees at least seven more months of limbo and headlines adding strain for both companies and the finance is backing the $10 plus billion deal because this delay comes with a very real price tag. Under the merger agreement, Paramount must pay Warner shareholders about $7 million for every single day after September the 30th that the deal has not closed. That is a hefty amount of cash. A March trial date means Paramount will owe well over $1 billion in ticking fees before the judge rules. So, of course, there could always be a settlement before then, but there's no sign right now of any negotiating taking place. Looking past the immediate corporate intrigue of this story, this battle is ultimately about who controls the pipes of culture. If these two media heavyweights join forces, one single company will own a huge chunk of the movies, of the shows, of the sports, and the news that most of us watch. That changes how much you pay for streaming. It changes how many choices you have between apps. And importantly, it also changes how many buyers creative workers can sell to. It's also a test case because if it goes ahead, it sends a very clear signal that very large media mergers are fair game in a world where Netflix and Amazon and Apple are already giants. If it doesn't, it's a warning shot for the next wave of consolidation.
Now it's time to dive into the data with today's big number. An analysis of this data is done in collaboration with the RAMP economics lab. And you should be sitting down for this one because it's pretty big. So today's big number is $4,883.33. That's how much the top 1% of AI spending companies shell out every month per employee. For contrast, the average business is spending just $1,066. That's the price of say a basic seat license on a shared enterprise subscription. The top 1% are dropping 400 times more than that. RAMP's AI index measures actual corporate spending using actual payment data and it captures a snapshot of how intensely the most advanced AI adopters are spending effectively how much they're betting on each employee per month. In a second, I'll be chatting to my colleague Emily Fellini to dig deeper into today's big number. The Big Number is powered by RAMP, a finance platform built to get other companies to spend less. The median company on RAMP cuts expenses 5% and grows revenue 16% in its first year alone. Learn more at ramp.com.
So now I'm here with Emily Fellini, senior AI reporter, to dig a bit deeper into that big number. So Emily, we've got some companies that are spending upwards of $4,000 per month per employee on AI and we've got others who are spending $10. That's a huge gap. Does it actually matter? Is the size of spend significant to a company's productivity?
I think what we're seeing is that companies don't know how to measure that. So there has been a backlash against these really hefty AI bills. So now if you've noticed the headlines are talking about what's the ROI? Is this more AI mean you know more products more money more revenue and I think the consensus is it speeds up the work and more gets done but it's unclear if that's actually making more money so they don't know if it's worth it so that's where you're seeing some of the pullback and we saw last week OpenAI slashed costs on their recent model and so they're trying to make it cheaper.
What does on a concrete level a $4,800 per month spend look like?
I think it's probably in the engineering department. So they give them access to the APIs for these different AI models. And so they're just cranking away at their computer using what's called tokens, which is kind of like currency in this world. And so they're just sending a lot of requests in and it's using a lot of compute power. And so they're racking up really big bills. But then there's also just subscriptions. You know, it's probably anywhere from 20 to $200 per person. And so that's the combination of costs.
And I'm sure the question on everyone's lips is what would you spend $4,800 on this month if you had that kicking around?
You probably wouldn't be up all night using AI. It'd probably go on a good vacation and get away from AI.
I think that's a very good call and thank you for joining us.
Pershing Square founder and CEO Bill Ackman is as outspoken as he is ambitious. He sat down with Fortune editor-in-chief Allison Chantel to talk about big bets and his polarizing playbook.
Allison, thank you for joining us. So, you recently went to Bill Ackman's very beautiful office in Manhattan to interview him. How do you prepare for an interview with someone as direct and opinionated as Bill Ackman?
I do a ton of research. My goal is to try and understand how he thinks, how he'll answer questions, and to be as informed about him as I possibly can so we don't waste time in the interview. He's got a big job. I've got a big job. Nobody wants to waste their time. So, I spend a ton of time prepping so that the conversation is fun. It flows. I feel prepared. I kind of know how he might answer things. And I kind of know what will be something he enjoys talking about and something where I'm going to have to press a little bit more. So, it's a lot of research.
And you spoke to him about office culture at Pershing Square, which I thought was really interesting. Let's watch a clip and then I've got a follow-up question.
How are you building the culture of the firm to pick these bets?
Sure. So, first of all, I'm a big in-the-office believer. So, it's actually five days a week, 10 months of the year. The summer actually, the investment team all collocates. The investment team's all in an office out east, as they say, in Bridgehampton. But the rest of the firm, you have a choice. You can come into the office or you can work from home unless there's something really important going on where we need to bring everyone in.
I guess. So, yes. [laughter]
First of all, do you have any plans to collocate Fortune to the beach in the summer because I think we'd all be very keen. [laughter]
I think that would be awesome. I think we should push for that hard. I will bring it up in the next SLT meeting.
Please do. And I'm going to hold you to it. So, his approach, it seems quite unique. You speak to a lot of leaders the whole time, this sort of collocating for two months of the year. Is that something you've ever heard before? What does it say about him as a leader?
I haven't heard about typical collocating, but you know, everybody's return to office plan is a little bit different, but in general, the executives we're talking to are very pro-five days a week, so that doesn't surprise me to hear. But what I think is pretty genius about the plan is like if you or I the summer to be fully remote, it would feel a lot better to be in the office. We're four days a week in the office right now going on five probably. It would feel great if it was the summer that we were flexed for. So I think it's a really smart plan and his employees seem to like it.
It buys a lot of goodwill. Give me a sense what else you felt about Bill as a leader or any insights you got from your time with him.
Yeah, I think you know he is a big believer that capitalism can solve most problems and one of the biggest problems we have in America is that just not enough people are participating in it and in the stock market in particular. So he's very focused on helping come up with policies and using his large 2.7 million followers to activate on Twitter around this topic. He sees Mamdani coming into New York and kind of a more socialist agenda as the affordability gap gets really insane and he's not pro that he thinks capitalism can solve a lot of problems. So even at his own firm, he told me they recently had two public offerings at Pershing Square and he told me that every employee, there's only 48 of them, but that every employee now owns the equivalent of millions of dollars worth of shares from the front desk people to the dozen or so partners that he works with to actually pick the investments they do.
Wow. So they're doing pretty well. If you're working for Bill, you're doing okay.
Yeah. Look, a hedge fund life, there's a reason the office is so gorgeous. It's a little bit different than media. I'd love that to be our office someday, but a ways to go.
And did you get a sense from him about how he decides which topics to weigh in on on X? Because Ackman is very vocal. He writes these actually very articulate essays quite frequently. How does he choose when he's going to speak out?
Well, first off, I think he's actually a really good writer. He is. And as you and I know, that is a skill that a lot of people don't have, and it's a very powerful skill. It's why we have our jobs. It's why he has 2.7 million followers. He's not just thinking something. He can articulate it in a way that people can grasp onto whether they love it or they hate it. He's not afraid to be polarizing. One of the things that I thought was really funny when I was researching him was even from a young age, he clearly was very verbose. He had a friend in his yearbook in high school write, 'A closed mouth gathers no foot.' And so, like, even then, clearly he was an outspoken guy. Very self-confident, assured of himself. And so I think but he also does his homework and he does a ton of research and when he's passionate about something he's like a dog with a bone and he's just like this is how I feel and I've got the facts to back it up in my opinion and I'm going to make sure that I persuade you into my opinion. But he also wants to be challenged. It's something he said he expects of all of his CEOs he works with at the companies he's investing in or when he's sitting on a board or even his own board or his own employees. He's like I want them to fight back. I want them to give me a smart argument as to why I'm wrong and I'm happy to listen. But he thinks that speaking truth and arguing is actually a really healthy thing for society. So he likes to kind of roll up his sleeves and fight.
