Paramount Muscles Out Netflix for Warner Control

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0:32Daniel Bach:Pakistan bombs Afghanistan following a series of cross-border attacks. Plus, Paramount wins the bidding war for Warner Brothers as Netflix bows out.

0:42Sune Rasmussen:Netflix dropped out after Paramount had raised its bid to a point where Netflix said,

0:48Daniel Bach:Uncle. And Anthropic rejects a Pentagon ultimatum to loosen its AI guardrails. It's Friday, February 27th. I'm Daniel Bach for The Wall Street Journal, filling in for Luke Vargas. And here's the AM edition of What's News, the top headlines and business stories moving your world today. Pakistan has declared open war with Afghanistan following a series of cross-border attacks. Pakistan's defense minister said the country's patience had run out after years of simmering conflict. The country's security forces say they've responded in full force, striking Taliban hideouts and hitting targets in the Afghan capital, Kabul.

1:27Daniel Bach:According to the Taliban government, there were no casualties. Journal correspondent Suna Rasmussen has spent years covering the war in Afghanistan. Suna, just explain to us what's happening this morning.

1:38Sune Rasmussen:Yes, Pakistan has now officially declared war in Afghanistan after some cross-border attacks from the Afghan side of the border. This comes in retaliation, the Taliban have said, to some attacks earlier this month by the Pakistani security forces inside Afghanistan, which the United Nations say killed about a dozen civilians. But this is part of sort of a longer conflict between the two countries, between Pakistan and the Afghan Taliban government. This can be a little bit confusing. Pakistan says it's attacked these targets inside Afghanistan to punish what's known as the Pakistani Taliban or the TTP.

2:17Sune Rasmussen:And there is a distinction here between the Afghan Taliban and the Pakistani Taliban. They are sort of ideologically aligned, but they have different nationalistic purposes. And what Pakistan is doing now is going after the Pakistani Taliban, which it says is trying to wage war on the government in Islamabad. And to add to the confusion, the Afghan Taliban used to have a safe haven in Pakistan. In fact, it was only with Pakistan's support that the Afghan Taliban were able to wage a 20-year war against U.S. and other international forces and the U.S.-backed government in Kabul until they took control in 2021.

2:55Sune Rasmussen:And that relationship between Pakistan and the Afghan Taliban has now clearly broken down. And that can have wide-ranging consequences for the broader region.

3:04Daniel Bach:And what could be the impact of this conflict? Can you flesh out some of those regional consequences for us sooner?

3:09Sune Rasmussen:Yeah, this can evolve into quite a difficult situation for the Afghan Taliban. Afghanistan is quite isolated. It has been since the Taliban took control in 2021. Very few international countries deal diplomatically with the Taliban. The Taliban are under severe international sanctions. And in fact, 40 % of Afghan exports go to Pakistan. So Pakistan is not just a neighboring country, but it's also a crucial trading partner. So that being said, a more long-term conflict between Afghanistan and Pakistan can certainly destabilize South Asia. Both countries border India. Both countries also have relationships with China.

3:48Sune Rasmussen:So there are larger regional players that have an interest in maintaining some level of stability between these two countries.

3:55Daniel Bach:Yeah, a Chinese foreign ministry spokesperson this morning saying Beijing had been mediating between Pakistan and Afghanistan and would now try to cool the situation. Undoubtedly, a developing story we will continue to watch. Suna, thanks for the update.

4:09Sune Rasmussen:You're welcome.

4:13Daniel Bach:In a Hollywood plot twist, the bidding war for Warner Brothers Discovery is over. In a stunning turn of events, Paramount emerged victorious in the bidding war for Warner Brothers Discovery. That's media and entertainment reporter Joe Flint.

4:26Sune Rasmussen:The Warner board, which had long favored Netflix, could no longer refuse Paramount's overtures when they raised their share price from$30 to$31 per share for Warner and offered several other concessions.

4:39Daniel Bach:Pending regulatory approval, Paramount is set to take control of the entertainment company, home to the likes of HBO, CNN, and franchises like Superman and Harry Potter. And despite bowing out of the Warner acquisition, Netflix shares surged 10 % in off-hours trading. Wall Street had initially punished Netflix for the deal, wiping$170 billion off its market value since last September.

5:00Sune Rasmussen:For Netflix, this is being spun as it would have been nice to have but not necessary. So we'll all be watching to see if they do go after any other big studio assets.

5:10Daniel Bach:The Trump administration plans to reverse a Biden-era rule on gig workers, once again making it easier for companies to classify staff as independent contractors rather than employees. While businesses argue this maintains flexibility, critics argue it would allow companies to avoid providing workers with benefits like health insurance and paid leave. The public can submit comments on the proposal through the 28th of April. And the Federal Reserve is pushing back against the Trump administration's investigation into Chair Jerome Powell. We're exclusively reporting that the central bank is waging a behind-closed doors legal challenge to a pair of subpoenas issued as part of Attorney General Jeanine Puro's criminal investigation.

5:50Daniel Bach:The specific legal arguments couldn't immediately be learned, but the fight is taking place out of public view because of secrecy rules that apply to criminal investigations pending before a grand jury. The subpoenas prompted an unprecedented public response from Powell last month, who said the investigation was a pretext for President Trump's continuing campaign to pressure the Fed to cut interest rates and end the central bank's independence. Coming up, Anthropic refuses a Pentagon ultimatum to loosen its AI safeguards, and software companies try to sell investors on how AI will add more to their products, not kill them.

6:25Daniel Bach:We've got those stories after the break.

6:43Sune Rasmussen:investors, and founders about how they built careers, took risks, and reinvented themselves. If you're starting your own journey, this is the kind of advice you won't want to miss. Available wherever you get your podcasts. Published by Capital Client Group, Inc.

7:05Daniel Bach:The dust-up between Anthropic and the Pentagon just ramped up, with the AI company saying it won't change the guardrails preventing users from deploying its cloud models in scenarios involving mass domestic surveillance or autonomous weapons. It comes ahead of Defense Secretary Pete Hegseth's 5 p.m. deadline for Anthropic to agree to the military's right to use the technology in all lawful cases. If Anthropic declines, Hegseth has threatened to invoke the Defense Production Act to make the company do what the military wants or to designate it as a supply chain risk, which would hurt the company's ability to work with other government contractors.

7:44Daniel Bach:OpenAI has told Canadian authorities it will beef up safety protocols and change how it refers user accounts to law enforcement following a school shooting in British Columbia where the suspect had interacted with ChatGPT. The shootings in the town of Tumblr Ridge earlier this month left eight people dead and dozens injured. The Journal reported last week that OpenAI considered alerting Canadian authorities about interactions between the suspect and ChatGPT after the AI company's employees worried that some of the writings were a warning about potential real-world violence. OpenAI shut down the ChatGPT account after detecting a violation of its policy, but didn't notify police about the suspect.

8:26Daniel Bach:The company said the new measures are just the first step in its commitment to improving AI safety.

8:34Daniel Bach:Shares in Block are up more than 20 % in off-hours trading after the payments company founded by Jack Dorsey said it plans to lay off 40 % of its workforce. In a letter to shareholders, Dorsey alluded to AI Tools as a reason for the cuts, saying with the tools the company is developing, a significantly smaller team can do more and do it better. The boost to Block shares come after weeks of market panic over the impact of AI tools wiped out$1.6 trillion off the market value of software companies. Investors have been questioning whether customers would even need products from the likes of Adobe or Salesforce anymore.

9:10Daniel Bach:But Journal Financial Markets reporter Jack Pitcher says the mood could be shifting after Anthropic showcased new updates to Claude Cowork this week. We've seen some CEOs come out and make statements on why they think some of

9:24Sune Rasmussen:the fears are off base, why their products are still going to be in demand, the proprietary data they have, or other things that set them apart that others might not be able to replicate very easily. We're also seeing software companies come out and announce deals with some of these AI providers like Anthropic. They'll announce a deal that Anthropic is going to be part of their software going forward. There's going to be an AI plugin or tool.

9:50Daniel Bach:And we've seen the market respond positively to some developments like that. Anthropic featured software giant Salesforce in its presentation and added the ability for the tool to be integrated in Google Apps, DocuSign, and LegalZoom.com. And for more from Jack on the software sell-off and how companies are trying to reinsure investors, check out the latest episode of our Tech News Briefing podcast. We've left a link in our show notes.

10:19Daniel Bach:And finally, where are the best business ideas dreamed up? Well, across the pond, it turns out it's very often in the pub. New polling from GoDaddy shows that one in five budding founders in Britain come up with their company idea at the local pub, which is becoming a primary incubator to scrutinise ideas and call for unfiltered feedback. So essentially, it's like a story of many pubs. That's Dominic Radcliffe, who originally shared his idea for his tea company, Heavy Nettle, over pints with a friend at their local.

10:49Sune Rasmussen:And I said, well, what if I were to call it something like Heavy Nettle? and he kind of leapt on it and got very, very excited after we'd had about two pints or so. We then went to another pub called the Army and Navy with two of my other friends who also were similarly enthused. In the spirit of that excitement, we bought the Domain and I think I actually bought the trademark there and then. I finally got my samples and then took the samples back to the Army and Navy where those same friends and I had samples of nettle tea with our pints of Guinness.

11:19Daniel Bach:So if you're heading out for an after-work drink this Friday, maybe take Dominic's advice. The next time you go to a pub, take a piece of paper and a pen.

11:27Sune Rasmussen:You never know, something might come out of it. After two pints, Bob's your uncle. After five, all bets are off.

11:33Daniel Bach:Do you have a business idea you might pursue? Well, let us know where you came up with the idea for your pre-buy a cat food startup or innovative picnic blanket brand in the comments if you're listening on Spotify. Or maybe you can just tell your friends about it later when you buy them around. And that's it for What's News for this Friday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Sondra Kilhoff. And I'm Daniel Bach for The Wall Street Journal. We'll be back tonight with a new show. Until then, have a nice weekend and thanks for listening.

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