Diller's $18B MGM Bet, Iran's Cable Threat, and Kirkland's $500M AI Gamble

Barry Diller's holding company People Inc. has launched a formal takeover bid for MGM Resorts at an $18 billion valuation, offering $48.30 per share in cash for the 73.9% of the casino giant it doesn't already own. The offer represents a 10.6% premium over MGM's most recent closing price and a 30% premium over its 90-day volume-weighted average. People Inc. already holds a 26.1% stake — acquired during the 2020 pandemic lockdowns — plus two board seats, one occupied by Diller himself. That existing position functions as a potential blocking stake against rival bidders should the offer spark a broader auction.

Diller has framed MGM as a strategic anchor for People Inc., which shed Angi and Care.com over the past year to focus on digital media (anchored by People magazine) and the casino stake. In a shareholder letter, he praised MGM's ownership of 40% of the Las Vegas Strip as an irreplaceable asset and described its hard physical assets as a hedge against rapid, unpredictable change. MGM shares have risen roughly 19% year-to-date on Las Vegas comeback optimism, though the company faces mounting competition in digital betting — BetMGM competes against DraftKings and FanDuel, and increasingly against prediction markets like Kalshi and Polymarket.

Separately, corporate anxiety is rising over Iran's threats to undersea data cables running beneath the Strait of Hormuz. In early May, an Iranian military spokesman floated the idea of demanding license fees from Amazon, Google, Microsoft, and Meta for use of cable networks under the strait, with hints that the cables could be physically cut or tampered with. A semiofficial Iranian news agency estimated those cables carry roughly $10 trillion in daily financial transactions. Tech giants are reportedly engaged in intensive back-channel diplomacy to protect the infrastructure, which connects the Gulf to Europe, Asia, and Africa. A precedent for the danger: a 2024 Houthi-linked cable cut in the Red Sea knocked out 25% of regional internet traffic and took weeks to repair — and there are only about 20 specialized repair ships globally.

In the legal industry, Kirkland & Ellis — the world's highest-grossing law firm with $10.6 billion in 2024 revenue — announced plans to spend $500 million building a proprietary AI platform rather than licensing software from vendors like Harvey or Legora. Some 180 in-house developers are building the system on top of existing AI models, with an early rollout expected within weeks. The goal is a comprehensive work platform, not just a chatbot, trained on decades of Kirkland's internal deal data. The move reflects a broader corporate fear that relying on third-party AI tools exposes confidential client data — and a recognition that the wealthiest firms may be able to use AI to dramatically extend their competitive lead.

Finally, the Epstein document releases have done lasting reputational damage to Bill Gates. Files revealed a closer relationship with the convicted sex offender than Gates had acknowledged, along with extramarital affairs. Gates was quietly disinvited from an AI summit dinner in New Delhi attended by Prime Ministers and major tech CEOs, with Indian officials citing concern that the Epstein news would overshadow the event. He also skipped the Berkshire Hathaway annual meeting for the first time in years, reportedly after associates advised against attending. Meanwhile, former Barclays CEO Jes Staley, who resigned over Epstein ties, has agreed to testify before Congress.