Democratic U.S. Senators Richard Blumenthal and Elizabeth Warren sent letters to the Department of Treasury Secretary Scott Bessent and Electronic Arts CEO Andrew Wilson, raising concerns about the $55 billion acquisition of the giant American video game company in part by Saudi Arabia’s Public Investment Fund (PIF).
Specifically, the Senators worry that EA, which just released Battlefield 6 last week and also publishes The Sims, Madden, and EA Sports FC, “would cease exercising editorial and operational independence under the control of Saudi Arabia’s private majority ownership.”
“The proposed transaction poses a number of significant foreign influence and national security risks, beginning with the PIF’s reputation as a strategic arm of the Saudi government,” the Senators wrote in their letter. “As Saudi Arabia’s sovereign wealth fund, the PIF has made dozens of strategic investments in sports (including a bid for the U.S. PGA Tour), video games (including a $3.3 billion investment in Activision Blizzard), and other cultural institutions that ‘are more than just about financial returns; they are about influence.’ Leveraging long term shifts in public opinion, through the PIF’s investments, ‘Saudi Arabia is seeking to normalize its global image, expand its cultural reach, and gain leverage in spaces that shape how billions of people connect and interact.’ Saudi Arabia’s desire to buy influence through the acquisition of EA is apparent on the face of the transaction—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.”
As the Senators’ letter notes, Saudi Arabia has made several notable investments in the video game industry in recent years. In addition to its investment in Activision Blizzard and Nintendo, the PIF recently acquired Evo, the biggest video game fighting tournament in the world (one of its many investments in esports), was reportedly a “mystery partner” in a failed $2 billion deal with video game publisher Embracer, and recently acquired Pokémon Go via its subsidiary, Scopely.
“The deal’s potential to expand and strengthen Saudi foreign influence in the United States is compounded by the national security risks raised by the Saudi government’s access to and unchecked influence over the sensitive personal information collected from EA’s millions of users, its development of artificial intelligence (AI) technologies, and the company’s product design and direction,” the Senators wrote.
The acquisition, which is the largest leveraged buyout transaction in history, includes two other investment firms: Silver Lake and Affinity Partners, the latter of which was formed by Donald Trump’s son-in-law Jared Kushner. The Senators letter says that Kushner’s involvement “raises troubling questions about whether Mr. Kushner is involved in the transaction solely to ensure the federal government’s approval of the transaction.”
These investments in the video game industry are just one part of Saudi Arabia’s broader “Vision 2030” to diversify its economy as the world transitions away from the fossil fuels that enriched the Saudi royal family. The PIF has made massive investments in aerospace and defense industries, technology, sports, and other forms of entertainment. For example, Blumenthal and other Senators have expressed similar concerns about the PIF’s investment in the professional golf organization PGA Tour.
The Senators don’t specify what this “foreign influence” might look like in practice, but recent events can give us an idea. The comedy world, for example, has been embroiled in controversy for the last few weeks over the Saudi hosted and funded Riyadh Comedy Festival, which included many of the biggest stand-up comedians in the world. Those who participated in the festival, despite the Saudi government’s policies and 2018 assassination of journalist Jamal Khashoggi, defended it as an opportunity for cultural exchange and freedom of expression in a country where it has not been historically tolerated. However, some comedians who declined to join the festival revealed that participants had to agree to certain “content restrictions,” which forbade them from criticizing Saudi Arabia, the royal family, or religion.