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One of the primary product changes announced is the plan to merge the HBO Max and Paramount+ streaming services into one giant unified streamer.

Netflix meaningfully engaged in a bidding war for Warner Bros. Discovery but eventually abandoned its interest when the asset became too pricey.

The transaction is described as one of the most highly levered in American history. To finalize the deal, Paramount raised $52 billion in new debt, with some of that debt carrying a yield of nearly 9%. Additionally, the new Skydance entity will carry Warner Bros. Discovery's existing liabilities, which totaled $87.5 billion in debt according to Fitch Ratings.

A dozen Democratic state attorneys general sued to block the transaction as it approached its conclusion in the summer of 2026, citing traditional antitrust laws regarding film and cable dominance. However, a settlement was eventually announced that cleared the deal. As part of the settlement, Skydance made commitments to include theatrical film release minimums and investments in domestic production jobs to alleviate regulatory concerns regarding the concentration of assets.

Daly stated that whether more hikes are needed depends on whether current shocks—specifically tariffs, oil prices from the Middle East conflict, and AI—are "conventional shocks" that will come and go with temporary effects, or if they will compound each other or last longer than forecasted. For example, she suggested that a second round of tariff negotiations resulting in more tariffs would represent a second shock on top of a first, extending the period over which those shocks play out.

The friction point exists because the "hyperscalers" driving the AI boom are among the least sensitive to higher interest rates. While Daly noted they may become more sensitive as they rely more on borrowing to finance the AI buildout, the biggest spending numbers are concentrated among these firms. Therefore, while higher rates can still restrain the broader economy and inflation outlook, they may be less effective at slowing the specific firms at the center of the AI boom.

Daly identified a risk that the scramble for AI-specific hardware will begin to compete with the chips used in cars, appliances, and other consumer goods. She pointed to the automotive industry after the pandemic as a precedent, where chip shortages left manufacturers unable to finish vehicles and pushed prices higher. She fears the AI demand will spill into the broader semiconductor market, raising costs for companies with no connection to data centers.

Daly noted that companies are beginning to brace for tighter chip supplies by seeking forward contracts for memory chips to secure suppliers in a fast-depreciating market. Additionally, some firms are starting to "reengineer their products" to rely less on chips, providing them with more maneuverability in the event that supplies tighten further across the broader semiconductor market.