M & A

State of play.

• State AGs have become the dominant blocking force in media M&A. A 12-state coalition has sued to block the $110 billion Paramount Skydance–Warner Bros. Discovery merger despite DOJ clearance, and a separate 14-state coalition has secured a court ruling characterizing Nexstar's attempted end-run around a hold-separate order as "shocking" and "brazen" in the $6.2 billion Nexstar–TEGNA deal (→ 12 State AGs Sue to Block $110B Paramount-Warner Bros. Discovery Merger, California AG Says Nexstar and Tegna Are Violating Court’s Merger Block, Twelve Blue States Sue to Block Paramount-Warner Bros. Discovery Merger After DOJ Clearance, 12 State AGs File Antitrust Lawsuit to Block $110B Paramount-Warner Bros. Merger).
• Paramount Skydance has elected to bypass preliminary-injunction proceedings and go directly to trial, accepting delay and cost exposure rather than risk an early adverse ruling — a posture that keeps the deal alive but activates the $650 million quarterly ticking fee owed to Warner Bros. Discovery (→ Paramount Skydance Goes to Trial to Try to Save Its Warner Bros. Deal).
• AI infrastructure investment is consolidating around the Stargate ecosystem. Nvidia's reported $3 billion stake in Lancium — structured as $2 billion for ~20% equity plus $1 billion in milestone-contingent capital — extends Nvidia's vertical integration from chips into the power and data-center layer underpinning Stargate (→ Nvidia reportedly plans up to $3B investment in Stargate power firm Lancium).
• OpenAI's recapitalization and financing architecture is now the template for hybrid nonprofit-for-profit M&A. Wachtell's work on the October 2025 conversion, the renegotiation of Microsoft's IP rights through 2032, and back-to-back raises valuing OpenAI at $852 billion have produced a structure with no settled precedent on foundation control, investor rights, or regulatory treatment (→ Wachtell’s Justin Orr honored after OpenAI recapitalization and fundraising work).
• For counsel advising on media consolidation, AI infrastructure deals, or fintech acquisitions, the practical baseline is that state AG enforcement is now a standalone deal-risk category independent of federal clearance, and AI-sector transactions require diligence on compute access, government-contract eligibility, and novel governance structures simultaneously.

Where things stand.

• State AG antitrust enforcement has decoupled from federal clearance in media M&A. The DOJ cleared the Paramount–Warner deal on June 12, 2026; 12 states sued anyway, alleging the combined entity would control approximately one-third of U.S. theatrical film distribution and basic cable programming (→ 12 State AGs Sue to Block $110B Paramount-Warner Bros. Discovery Merger, Twelve Blue States Sue to Block Paramount-Warner Bros. Discovery Merger After DOJ Clearance, 12 State AGs File Antitrust Lawsuit to Block $110B Paramount-Warner Bros. Merger). The Nexstar–TEGNA litigation demonstrates that state coalitions will also police compliance with hold-separate orders post-injunction (→ California AG Says Nexstar and Tegna Are Violating Court’s Merger Block).
• The Paramount–Warner trial strategy introduces a new deal-preservation playbook. Bypassing the preliminary-injunction stage to proceed directly to trial avoids an early loss but extends exposure under the $650 million quarterly ticking fee and creates compounding contractual pressure on both parties (→ Paramount Skydance Goes to Trial to Try to Save Its Warner Bros. Deal).
• AI infrastructure M&A is concentrating within the Stargate ecosystem. Nvidia's reported investment in Lancium — the Blackstone-backed power developer anchoring Stargate's Abilene campus — is a vertical integration move that raises CFIUS and market-concentration questions around AI compute infrastructure (→ Nvidia reportedly plans up to $3B investment in Stargate power firm Lancium).
• OpenAI's hybrid nonprofit-for-profit structure is the leading template for AI corporate governance. The October 2025 recapitalization, renegotiated Microsoft IP rights, and sequential raises at a $852 billion valuation present unresolved questions on foundation control, investor governance rights, and regulatory treatment of the hybrid structure (→ Wachtell’s Justin Orr honored after OpenAI recapitalization and fundraising work).
• Visa's $2.4 billion acquisition of BioCatch — a Tel Aviv-based behavioral biometrics firm backed by Permira — signals payments-sector M&A driven by AI-enabled fraud risk; the deal requires regulatory approval and raises cross-border data-handling questions given BioCatch's Israeli base (→ Visa to buy BioCatch for $2.4B in cash to expand fraud defenses).
• Semiconductor infrastructure investment is attracting concentrated, high-risk capital. Situational Awareness committed $500 million total to Source Foundry, a stealth-mode lithography startup valued at approximately $5 billion, weeks after the fund faced near-collapse from AI-related losses — a structure with undisclosed governance terms and no public regulatory filings (→ Situational Awareness Puts $400M More Into Stealth Chip Startup Source Foundry).
• Volkswagen's controlling families have escalated the internal governance battle, publicly backing management's restructuring against labor and Lower Saxony's blocking stake — a cross-border governance conflict with implications for stakeholders holding debt, equity, or employment claims .

Latest developments.

• 12-state AG coalition sues to block the $110 billion Paramount Skydance–Warner Bros. Discovery merger despite prior DOJ clearance, alleging Clayton Act violations in film distribution and basic cable (→ 12 State AGs Sue to Block $110B Paramount-Warner Bros. Discovery Merger, Twelve Blue States Sue to Block Paramount-Warner Bros. Discovery Merger After DOJ Clearance, 12 State AGs File Antitrust Lawsuit to Block $110B Paramount-Warner Bros. Merger).
• Paramount Skydance elects to proceed directly to trial, bypassing preliminary-injunction proceedings; trial schedule remains contested between the parties (→ Paramount Skydance Goes to Trial to Try to Save Its Warner Bros. Deal).
• Court characterizes Nexstar's board maneuvers as "shocking" and "brazen" in response to a 14-state AG motion to enforce the hold-separate order in the $6.2 billion Nexstar–TEGNA merger (→ California AG Says Nexstar and Tegna Are Violating Court’s Merger Block).
• Visa signs definitive agreement to acquire BioCatch for $2.4 billion in cash; deal expected to close by end of Visa's fiscal Q2 2027, pending regulatory approval (→ Visa to buy BioCatch for $2.4B in cash to expand fraud defenses).
• Wachtell's role in OpenAI's recapitalization and record financing rounds detailed: October 2025 conversion to for-profit-within-nonprofit, Microsoft IP renegotiation through 2032, $110 billion and $122 billion raises at $852 billion valuation (→ Wachtell’s Justin Orr honored after OpenAI recapitalization and fundraising work).
• Nvidia reportedly investing up to $3 billion in Lancium — $2 billion for ~20% equity plus $1 billion milestone-contingent — valuing the Stargate power developer at approximately $10 billion; neither party has confirmed (→ Nvidia reportedly plans up to $3B investment in Stargate power firm Lancium).
• Situational Awareness commits $500 million total to Source Foundry, a stealth lithography startup valued at ~$5 billion, following the fund's near-collapse from AI-related losses (→ Situational Awareness Puts $400M More Into Stealth Chip Startup Source Foundry).
• Volkswagen's Porsche-Piëch families publicly back accelerated restructuring through Porsche SE, escalating the governance conflict with labor representatives and Lower Saxony's blocking stake .

Active questions and open splits.

• Can state AGs block deals the DOJ has cleared? The Paramount–Warner litigation is the highest-stakes test of whether state antitrust authority under the Clayton Act can independently enjoin a transaction after federal regulators have concluded it is not anticompetitive. The answer will define the risk calculus for every large media and technology deal going forward (→ 12 State AGs Sue to Block $110B Paramount-Warner Bros. Discovery Merger, Twelve Blue States Sue to Block Paramount-Warner Bros. Discovery Merger After DOJ Clearance).
• What remedies attach when a party circumvents a hold-separate order? The Nexstar–TEGNA court's characterization of the board maneuvers as "shocking" and "brazen" signals willingness to impose structural remedies beyond clarification — but the precise enforcement toolkit for hold-separate violations in pending M&A litigation is unsettled (→ California AG Says Nexstar and Tegna Are Violating Court’s Merger Block).
• How does the $650 million quarterly ticking fee interact with Paramount's trial strategy? Paramount's decision to skip the preliminary-injunction stage extends the timeline by months; whether the ticking fee creates renegotiation pressure or triggers material adverse change analysis before trial is an open deal-structuring question (→ Paramount Skydance Goes to Trial to Try to Save Its Warner Bros. Deal).
• What governance rights attach to OpenAI's foundation-control structure? The hybrid nonprofit-for-profit conversion — with the foundation retaining control and significant equity while investors hold rights at a $852 billion valuation — has no settled regulatory template; the California AG MOU conditions and Microsoft's renegotiated IP rights through 2032 are the only disclosed constraints (→ Wachtell’s Justin Orr honored after OpenAI recapitalization and fundraising work).
• Does Nvidia's Lancium investment trigger CFIUS review or antitrust scrutiny? Vertical integration from chips into the power-infrastructure layer of a $500 billion government-backed AI initiative raises novel questions about market concentration in AI compute; neither Nvidia nor Lancium has confirmed the deal or disclosed a regulatory pathway (→ Nvidia reportedly plans up to $3B investment in Stargate power firm Lancium).
• What diligence standard applies to concentrated, pre-revenue AI infrastructure investments? Source Foundry — incorporated July 2025, valued at $5 billion, no disclosed technical roadmap or regulatory filings — received $500 million from a fund that was near collapse weeks earlier; the governance terms, investor rights, and securities-law implications of the structure remain entirely opaque (→ Situational Awareness Puts $400M More Into Stealth Chip Startup Source Foundry).
• How does Lower Saxony's blocking stake constrain VW restructuring options? The Porsche-Piëch families' public escalation strengthens management's hand, but Lower Saxony retains veto power over major decisions — creating a governance deadlock with direct implications for creditors, labor claimants, and any counterparty negotiating long-term supply or partnership agreements with VW .

What to watch.

• Trial scheduling ruling in the Paramount–Warner litigation — whether the court sets a 2026 or 2027 date will determine whether the $650 million quarterly ticking fee becomes a deal-killer before the merits are reached.
• Whether the Nexstar–TEGNA court imposes structural board remedies following its "shocking" and "brazen" characterization — the first major enforcement ruling on hold-separate order violations in a pending media merger.
• Regulatory approval process for Visa–BioCatch: any conditions imposed on cross-border behavioral biometrics data sharing will become the template for fintech acquisitions involving Israeli targets.
• Whether Nvidia and Lancium publicly confirm the reported $3 billion investment and disclose a CFIUS filing or regulatory pathway — the absence of confirmation leaves the deal's antitrust and national security treatment entirely open.
• OpenAI's path toward IPO: any S-1 filing will be the first public disclosure of the foundation-control governance structure, Microsoft IP arrangements, and investor rights at the $852 billion valuation — documents that will immediately become drafting references for AI sector transactions.
• Whether additional state AGs join the Paramount–Warner coalition or file parallel actions, which would signal that the decoupling of state and federal antitrust enforcement in media M&A is structural rather than episodic.