What just happened? Many people are justifiably concerned about the $55 billion purchase of EA by a Saudi-led consortium, including a couple of US senators. Richard Blumenthal and Elizabeth Warren are worried about the company's loss of editorial and operational independence, but the bigger fears relate to foreign influence and national security risks.
Saudi Arabia's Public Investment Fund (PIF) – which already owned 9.9% of EA – Silver Lake Partners, and Jared Kushner's Affinity Partners investment firm agreed to the $55 billion acquisition of EA last month.
Democratic senators Blumenthal and Warren wrote a letter to Treasury Secretary Scott Bessent highlighting "a number of significant foreign influence and national security risks" in the proposed transaction, "beginning with the PIF's reputation as a strategic arm of the Saudi government."
The letter notes that the PIF has already made dozens of strategic investments in sports, video games, and other "cultural institutions." The senators say these are more about influence than money, as Saudi Arabia looks to normalize its global image and expand its cultural reach.
The involvement of Trump's son-in-law has also raised concerns. It's noted that his Affinity Partners firm received an investment of $2 billion from the PIF six months after he stepped down as senior advisor to the president in 2021.
The senators say there are troubling questions over whether Kushner's involvement with the EA deal is solely to ensure the federal government's approval of the transaction. "Consistent with the Trump administration's unprecedented corruption and monetization of federal government power, 'What regulator is going to say no to the president's son-in-law?'"
The deal's $210 in cash per share given to stockholders was 25% more than EA's closing price on September 25 and even higher than the company's all-time trading high of $179.01. The senators say that this is further evidence of Saudi Arabia's desire to buy influence. "The investors propose to pay more than $10 billion above EA's trading value for a company whose stock has 'stagnated for half a decade' in an unpredictably volatile industry," the letter reads.
The national security risks stem from the Saudi government's access to and influence over the personal information collected from EA's millions of users, its development of artificial intelligence technologies, and the company's product design and direction. With over 700 million users globally, EA has a trove of insight into its consumers.
The senators warn that access to the information represent surveillance risks against Americans, covert Saudi propaganda, and selective retaliation and censorship of persons disfavored by the Saudi government.
It's proposed that the Committee on Foreign Investment carry out a thorough investigation into the acquisition and publicly release its findings.
Saudi Arabia has expanded its investments in the video game industry in recent times, buying stakes in Nintendo, Take-Two, Niantic, Capcom, SNK, and others.
Also worried about the takeover are BioWare employees – staff at the long-running studio fear it will be closed down. The prospect of AI being used more extensively by EA to cut costs isn't being well-received by gamers, either.