Inside Paramount’s $111 Billion Deal Pause

When Paramount Skydance announced it was putting its massive $111 billion deal with Warner Bros. Discovery on pause until as late as June 2027, they made it sound like a smart, strategic move.

Instead of admitting they were on the defensive, they spun the delay as a calculated game plan to win their day in court. They're facing a court order and a huge lawsuit from 12 state attorneys general (led by California) who want to block the merger on antitrust grounds. Paramount’s official story is simple: pausing gives them the time they need to present their evidence and win the trial.

But behind the scenes, there's a much bigger financial headache brewing.

The real driver behind this pause might actually be the guy bankrolling the whole thing: Larry Ellison, along with his company, Oracle. Oracle has been throwing billions upon billions of dollars at OpenAI, which has left them burning through cash at an alarming rate. Add in major real world delays, like struggling to get enough electrical power for all their massive AI data centers and Oracle is feeling the squeeze.

So while Paramount blames the courtroom battle for the delay, the truth is that Ellison and Oracle probably just need to catch their breath and protect their own bank account right now.

1. The Legal Catalyst: State AGs Push Back

Officially, the delay is happening because the deal hit a massive wall with regulators:

• Twelve Democratic state attorneys general sued to stop it. They argue that mashing two giant Hollywood studios together will hurt competition, drive up prices for viewers, and kill off jobs in streaming (where HBO Max and Paramount+ would join forces), TV production, and cable news (combining CNN and CBS).
• A federal judge stepped in and paused the deal. Because of that, Paramount agreed to hold off until at least June 1, 2027, while they fight it out in court.

Big media mergers run into legal trouble all the time, but in this case, waiting around is painfully expensive. Starting October 1, 2026, Paramount has to pay Warner Bros. shareholders about $650 million every three months — that's roughly $7 million a day just for being delayed. On top of that, if the whole deal falls apart completely, Paramount could owe a whopping $7 billion penalty.

2. Larry Ellison and the Oracle Connection

David Ellison is trying to buy Paramount, and he’s relying heavily on his dad, Oracle co-founder Larry Ellison, to back him up. To make the deal happen, the Ellison family personally promised over $40 billion of their own wealth as a guarantee.

At first, that promise looked completely solid. Oracle’s stock was skyrocketing thanks to the hype around artificial intelligence, so the family had money to burn. But recently, Oracle’s big, expensive push into AI has hit serious financial and operational trouble, making that $40 billion safety net look a lot less certain.

3. The OpenAI Factor: Massive CapEx, Negative Cash Flow & Energy Walls

Oracle has made itself the main tech backbone for OpenAI, promising to spend billions building massive data center projects with names like Project Jupiter and Project Stargate.

However, trying to keep up with OpenAI’s endless demand for supercomputing power is creating some major headaches:

• Spending is completely out of control: Oracle’s spending on equipment and facilities exploded to over $55 billion. At the same time, their long-term project commitments shot past $638 billion—mostly because they promised so much computer power to OpenAI.
• They're losing a ton of cash: Because Oracle is buying up expensive computer chips and building data centers as fast as they can, they're spending way more money than they're bringing in—losing nearly $24 billion in cash.
• OpenAI still isn't making money: OpenAI is burning through billions of dollars just to train and run its AI models. Since OpenAI is nowhere near profitable, Oracle is taking a huge gamble: they're spending massive amounts of cash upfront to build real-world facilities for a partner that might not be able to pay them back anytime soon.

Building the massive data centers needed for AI requires mind-boggling amounts of electricity, and Oracle has run headfirst into a literal power shortage:

• The power grid can't handle it: Local electric companies simply can't supply the huge, continuous flood of power Oracle needs to train OpenAI’s models on the timeline they want.
• Local pushback and red tape: Environmental lawsuits and delays in connecting to the grid forced Oracle to scrap plans to build its own gas-powered plants for its huge Project Jupiter facility. To bypass the grid entirely and get power faster, Oracle had to make an experimental deal with a company called Bloom Energy to use off-grid fuel cells as an alternative power source.

4. The Pause May Be Oracle’s Choice

When a family’s main source of wealth takes a huge hit because they poured gobs of cash into AI tech that isn't making money yet, tying up tens of billions in a traditional media deal gets a whole lot scarier.

The Big Takeaway

Pushing the trial out to June 2027 gives the Ellison family and Oracle some much-needed breathing room. It saves them from having to dump a mountain of cash or take on huge new debt for the Warner Bros. Discovery deal right now, exactly when Oracle needs every spare dollar to handle its AI promises and figure out its power supply issues.