EA's $55 Billion Buyout: AI-Driven Cost-Cutting Raises Concerns in Gaming Industry

EA's new owners are leaning heavily on AI to make some money and its huge debt go away, which seems like one helluva gamble to me

If corporate consolidation of one of the biggest entities in the video game industry by private equity, a Saudi Arabian investment fund, and a major investment firm doesn't signal a worrying future for EA, leveraging AI to further cut costs will do the trick. The $55 billion required to buy out EA includes $20 billion worth of financing in the form of a loan from JPMorgan. Not paying back that loan could result in the closure of the gaming giant, like what happened with toy chain Toys R Us (via Los Angeles Times). As reported by the Financial Times, the deal is reportedly betting big on AI cutting down operational cost for EA significantly. EA reportedly has not shouldered huge amounts of debt prior to now, and this could signal a change in business operations. It's not exactly stated how, but the Financial Times report claims that 'people involved in the transaction' suggest AI will boost profits for the company, which will then be used to pay that debt. This AI could take the form of more efficiently managing workloads, or it could be in the form of AI-generated art and voice-over work. This approach towards AI is not new for EA, and seemed to exist under the previous management. Just last year, EA CEO Andrew Wilson said EA's developers have a "hunger" to use generative AI tools, and suggested it could be used to "build bigger, more innovative, more creative, more fun games more quickly so that we can entertain more people around the world on a global basis at a faster rate." Just months prior, Wilson envisioned a world where three billion players were creating their own worlds with these tools. Oversaturation seems to be prevalent in the game industry, with almost 19,000 games released on Steam last year alone. The potential of companies making more and bigger games in shorter time frames with less bespoke art to chase an ever-smaller cut of the pie feels like the opposite of what I actually want from my games. Part of the problem with generative AI in games right now (other than the obvious ethical implications that come from scraping artists' work without consent) is that it flags a lack of care. Call of Duty using AI-generated calling cards at the start of the year left some users disappointed that their effort to earn a calling card was met with virtually no effort from Activision in response. And, it's only getting easier to get a hold of AI tools. AI assets have become a calling card (heh) of low-effort game development, and are often left forgotten in the annals of the Steam marketplace. EA games using such assets removes that intrinsic humanness granted by hundreds of people working towards the same goal, and only makes the hundreds of real people laid off from EA projects leave an even more sour taste in the mouth. Generative AI has proven itself handy at dealing with wide swathes of data, so there are ways it can be leveraged to help businesses, but there has been a trend over the last year of nebulously claiming 'AI will fix it' and moving on. Earlier this year, a report came out suggesting AI energy demands would quadruple in the next few years, with some large data centres estimated to use up to 5,000,000 households' worth of energy. The response to this concern is that AI will have a positive impact on the environment due to the efficiency it could bring. Just last week, over half of Japanese game studios in a survey reported using AI at some level, so it is present in the industry, but it being pitched as a tool to chip away at that mountain of debt feels like putting the horse ahead of the AI cart. We don't know how much and to what extent AI is proving valuable to games companies, and it's all very early days. There are naturally productivity earnings to be had in some form, but plenty of companies have seen backlash from the use of AI and how much will be gained from AI, in contrast to the money spent to actually implement it, will take some time to fully figure out. Chasing AI to deal with a debt feels like a huge gamble under these circumstances. It could, of course, be true that EA raises efficiency and cuts costs with AI, but it's certainly not a given for the company, especially when we factor in how consumers may respond or how costly it is to implement. And that debt will linger over its head for some time, even with the recent success of the Battlefield 6 beta.

Starfield and Deus Ex actor has done "a lot" of work with EA, but isn't sitting idly by as rumored AI-powered cost-cutting plans surface following controversial $55 billion buyout: "F*** you"

It's been claimed that investors are hoping to use AI to save money and help manage the $20 billion of debt EA is set to take on EA is set to be acquired for $55 billion - assuming the deal goes through successfully - and it's been claimed that its new investors are looking to use AI to cut costs and boost profits. This obviously isn't a concept that everyone is thrilled about, including Starfield and Deus Ex actor Elias Toufexis, who's made his thoughts very clear despite doing "a lot" of work with the company. The big EA deal will see the company take on $20 billion of debt in order to help finance the buyout, and I'm sure I don't need to tell you that's a very significant amount of money. EA employees are worried about layoffs - one ex-BioWare veteran thinks that situation is "likely," and we may see a "dramatic reduction in people" thanks to the debt, which may prompt significant cost-saving measures. But, according to the Financial Times, individuals involved with the transaction have revealed that investors are banking on using AI-powered cost-saving measures to reduce operating costs, manage the new chunk of debt, and boost profits. Responding to these claims, Toufexis - who voices Adam Jensen in Deus Ex: Human Revolution and Mankind Divided, Sam Coe in Starfield, and more - initially appears to take a more diplomatic approach on Twitter. "I work for EA a lot so I should be careful here," he begins, before quickly adding his true feelings: "Fuck you." As one fan replies, "Very subtle." Assuming these claims are true, it's not clear exactly how AI is planned to be used within the company. It may not result in us suddenly seeing a load of AI-generated EA games, for example, but it's still concerning to imagine creative processes being taken over by AI, or humans losing their jobs after being replaced with a soulless program. CEO Andrew Wilson has previously been very flattering of the technology, however, saying that "AI in its different forms has always been central to this creative journey," and that "this remarkable technology is not merely a buzzword for us - it's the very core of our business."

EA's new buyers reportedly hope AI can be used to cut operating costs and boost profits, just in case that $20 billion in debt wasn't already concerning enough

Battlefield, The Sims, and Dragon Age owner EA is set to be acquired in a $55 billion deal, and although the buyout is being partially financed by the company going $20 billion in debt, investors are apparently hoping that AI will be able to reduce its operating costs to help manage said debt. That's according to a report from The Financial Times, which writes that, according to individuals involved with the transaction itself, investors are banking on AI-powered cost savings boosting EA's profits going forward. What is unclear is the extent to which AI will be used and for what specific purposes. It's not stated, for example, that the technology would be heavily relied on during game development, which would arguably be the most worrying outcome for multiple reasons. Beyond environmental concerns - and the fear that soulless technology could replace genuine human creativity - there's also the question of whether employing AI could lead to real people losing their jobs. We know that EA has previously been quite optimistic about the use of AI, too. It was only last year that CEO Andrew Wilson stated that "AI in its different forms has always been central to this creative journey," before adding: "We all remember playing against the AI. And it has evolved into today's innovations in generative AI. This remarkable technology is not merely a buzzword for us - it's the very core of our business." Concerns had already been raised by those reacting to the acquisition news about potential layoffs at EA, given that the company is taking on significant debt. Some have also been wondering what impact this could have on fan-favorite games, with Mass Effect fans fearful for the series' future (although at the time of writing, nothing has been said that confirms any franchises are being left in the dust). For now, all we can do is sit and wait. The deal is currently expected to close in the first quarter of FY27, "subject to customary closing conditions, including receipt of required regulatory approvals and approval by EA stockholders," the company adds. In a message sent to employees, CEO Wilson insists that "with continued rigor and operational excellence, we can amplify the creativity of our teams, accelerate innovation, and pursue transformative opportunities that position EA to lead the future of entertainment. Together, we'll create experiences that are bold, expressive, and deeply connected to inspire generations of players around the world."