Chapter 1: What is the main topic discussed in this episode?
Good morning from the Financial Times. Today is Friday, May 8th, and this is your FT News Briefing.
Chapter 2: What is the latest news regarding Big Tech's cash flow?
Big tech is on a massive spending spree and investors are dumping Indian assets. Plus, can GameStop close a wild deal for eBay?
The test here is like whether a meme stock king can actually pull off the first meme M&A deal in history. I'm Mark Filippino, and here's the news you need to start your day.
Big tech companies are burning through cash to invest in AI infrastructure. Amazon is expected to spend more than it makes this year. Meta and Microsoft will likely also dip into the red later on in 2026. These three companies and Alphabet are hyper-focused on AI right now, and they could hit their lowest yearly free cash flow levels in more than a decade. That's according to forecasters.
Back in 2014, though, their collective revenues were about seven times smaller. Tech companies have transformed into some of the biggest investors in AI infrastructure, but the spending spree means their resources are strained. And analysts say those investments will only start to pay off next year as the AI boom brings in more revenue.
Foreign investors are ditching Indian assets at a record pace. That's because the Iran war is driving energy costs up and the value of India's currency down. The rupee has been hitting historic lows since the conflict began at the end of February. Investors have responded by pulling out $22 billion from India. Krishna Kaushik is our Mumbai correspondent.
He's here to give us a sense of how all this is looking on the ground. Hi, Krishna. Hi, Mark. So how bad is this energy price surge for India's markets?
Yeah, the problem is that while, of course, India's economy last year was in a soft spot, it was trying to recover. This year, at the starting of this year, Indian economy was looking like, you know, it's going to boom this year. And then the war hit. And India, which relies on 90% of its energy needs on imports, nearly half of the crude oil comes from the Middle East.
And that's been completely disrupted. So what has happened is this has put pressure on the rupee, which was already a pretty badly performing currency in this region. And there's a very limited dollar supply. And as India has to go and scour for oil, which is costlier compared to what it was buying before the war started. So it is spending a lot more dollars on buying the same amount of fuel.
So the rupee has drastically been falling to new lows, even though the central bank has intervened to try and plug that. But the pressures are mounting.
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Chapter 3: How is the energy crisis affecting India's economy?
I hear you. I'm just saying that that math doesn't get you to the price that you're offering. That's a pretty straightforward question. I don't get it. Where's the rest of the money coming from? I don't understand your question. We're offering half cash, half stock, and we have the ability to issue stock in order to get the deal done.
How would he pull off this deal? It seems like he's being purposefully opaque here.
I mean, that was some great TV. And he's instantly become a meme on social media. So the math does add up. The way he'd do it is... half cash, as he says quite clearly. And the cash portion is fairly straightforward. He's got about $9 billion on GameStop's balance sheet, which is kind of insane for a company of that size. And then he's taking on another $20 billion from TD Bank.
So that's the cash portion, easy. And then, as you mentioned earlier, GameStop is worth about $11 billion in equity. So you'd be still missing about $15 to $16 billion. He plans to do that by issuing new stock. And so that is really something that will depend on the appetite of investors of taking that new issuance. So that's where a lot of question marks are coming in. The maths can add up.
It's a question of whether he will manage to do so or not.
What do you think is going to happen next? Do we know what eBay is thinking about the deal?
The vibes that we've got from the eBay camp are not warm. Let's put it that way. I'd expect them to reject this bid. It's not been confirmed yet. Partly because Cohen and GameStop have not really even tried to reach out to eBay. So this kind of came out of nowhere. and partly because he's already prepared for a fight.
So we're likely to see Cohen going directly to eBay shareholders for a proxy fight. That could mean trying to remove the whole board and get his own people in there, which would then allow him to kind of approve the deal that way. So it's still early days, but in terms of what Cohen seems to be intending to do is make this a really public, unfriendly battle.
James Fontanella-Khan is the FT's U.S. Finance Editor. Thanks as always, James. Thank you, Mark. Next week is a big one for diplomacy. On Thursday, U.S. President Donald Trump will begin a two-day visit to Beijing. It's a trip that includes a summit with Chinese President Xi Jinping. Here to chat more about what we can expect from that meeting is Victoria Craig.
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