David Ellison has built a Hollywood giant in Skydance. Now he wants to make it a tech company

By Brian Stelter, Clare Duffy, CNN

(CNN) — The mega-merger of Paramount and Warner Bros. Discovery, which took effect on Tuesday, symbolizes Big Tech’s ascendance in Hollywood.

It also represents an opportunity for the newly combined company, Skydance, to take cues from tech companies and transform the entertainment industry.

Tech is a big part of Skydance’s sales pitch to Wall Street, where CEO David Ellison will be ringing the opening bell later this week. For every reference to timeless storytelling and Ellison’s personal love of film, there’s also been a reference to state-of-the-art tech capabilities and the creation of a “cohesive global entertainment platform.”

On Monday, Ellison’s newly named co-CEO Ynon Kreiz said Skydance will “build the most technologically capable media company through a modern tech platform to enhance the user experience, improve how we work and achieve operating efficiencies.”

Tech was invoked nine times in Ellison and Kreiz’s press release about the new company’s leadership team, which includes veterans of Google, Facebook and Scale AI.

The executives have signaled that they will employ artificial intelligence tools — which Ellison has called a “force multiplier” — throughout the business.

And they will move to upgrade the tech stack that powers streaming services like HBO Max, one of the many Warner assets that Ellison has sought to buy for the past year. CNN is also a part of Skydance as of Tuesday.

On Tuesday morning, Skydance promoted the merger as a good thing for consumers, saying they can “expect greater innovation from a company built with technology at its core, including significant improvements to its direct-to-consumer streaming products, which will unify into a single service over time.”

The price of scale

The formation of Skydance is a stunning achievement for Ellison, 43, who first launched a small production company in Hollywood two decades ago.

With financial backing from his father Larry, an Oracle co-founder and one of the richest men in the world, Ellison took control of Paramount in August 2025 and immediately began bidding for Warner, which is many times larger than Paramount.

Warner Bros. Discovery CEO David Zaslav rebuffed Ellison’s offers over and over again. Warner initially agreed to a deal with Netflix instead. But Ellison eventually made a superior offer, spurred at least in part by Paramount’s need to gain scale in the streaming wars.

To Hollywood veterans, the message was clear: With extraordinary backing from Larry Ellison’s Silicon Valley fortune, a tech scion had bought his way to the center of the entertainment universe.

Now, with Warner’s assets coming aboard, Skydance will reach more than 200 million streaming subscribers globally.

The merger “creates a new formidable global streaming competitor,” Needham & Co. analyst Laura Martin wrote Tuesday.

The merger will also unite two of the five biggest Hollywood studios; dozens of television channels; and two of the biggest US TV news divisions, CNN and CBS News.

As in any merger, there’s a lot of unglamorous backend work to be done. The stakes are especially high here because the new company is highly leveraged, with roughly $80 billion in debt and an aggressive timeline to pay it down.

Ellison’s management team will have to cut costs assertively, in part by streamlining some of Paramount and Warner’s overlapping tech platforms.

When Skydance executives promise to tech-ify the company, “I hear layoffs,” eMarketer Senior Analyst Ross Benes told CNN.

At the same time, he added, there is clearly work to be done to improve the company’s tech infrastructure.

Skydance said Tuesday that most of the cost savings will come from “technology, integration and procurement, marketing and real estate rationalization.”

“There’s numerous streaming services between the two companies, and they probably need some tech investment to just unify those and make them simpler,” Benes said. Compared with rivals like Netflix, Disney+ and Amazon Prime Video, “both Paramount+ and HBO Max aren’t the best user experience.”

Those two streaming services will likely be offered together as a bundle. And “we’re going to unify the tech stacks across direct-to-consumer,” Gerry Cardinale, a key architect of the merger, said at the Bloomberg Screentime conference last week.

Cardinale remarked that “the only way Hollywood is gonna move into this next phase, and level the playing field with the guys up north” in Silicon Valley, is to “turn yourself into more of a technology company.”

But that’s easier said than done in an industry that’s accustomed to shipping films, not software updates.

Furthermore, Skydance faces intense skepticism for consolidating so many studios and platforms under one corporate roof. Merger opponents said the deal would limit opportunities for a broad range of storytellers.

“How are monopolies ever good for any industry? They squeeze out competition. They squeeze out innovation. They limit growth,” said Janet Grillo, a professor at New York University’s Tisch School of the Arts and a former executive at New Line Cinema.

Playing by Silicon Valley’s rules

Skydance is competing for attention in a media environment completely reshaped by Silicon Valley.

YouTube is the most-watched service on American TVs and it continues to improve the experience for creators and viewers with features such as customized feeds and dynamic video thumbnails. For many people, YouTube simply is TV.

At the box office, some of this year’s biggest hits have come not from major studios but from young filmmakers who got their start on YouTube and marketed their films online.

And that’s not to mention the growing amount of time audiences spend watching two-minute “microdramas” produced for TikTok. (Larry Ellison was instrumental in the deal that kept TikTok online in the US, and Oracle owns a stake in the venture. Oracle also oversees storage of Americans’ TikTok data.)

Meanwhile, AI is creating new ways of doing everything from editing content to crafting entire characters — while potentially reducing human jobs.

Ellison told CNBC earlier this year, “I do not believe that AI is a replacement for human creativity. I really view it as a force multiplier for basically filmmakers in the creative communities to be able to realize their visions more fully, and think it’s going to be an incredibly powerful tool for this industry.”

Especially for a company like Skydance with many decades worth of intellectual property. AI could provide new opportunities for licensing — potentially building out a revenue stream that Kreiz knows well from his years as CEO of Mattel. Last year Disney tested a novel licensing approach for its animated characters with OpenAI’s Sora AI video app, although the app shut down just months later.

Ellison has made several key hires from Silicon Valley to support his ambitions.

Last year he hired Dane Glasgow, a Google and Meta alum, as Paramount’s chief product officer. In May, Glasgow recruited former General Motors Chief AI Officer Barak Turovsky to be head of consumer AI. Turovsky previously spent more than a decade at Google applying AI to some of its core products, including Search and Ads.

In August, Paramount added Nick Lee, who spent four years working on AI at Microsoft and 16 years at Google before that, and Suzanne Pellican, whose prior eight years at Google included improving its ads product with AI. And just last week, the company announced two more AI executives.

“There is a significant opportunity to use AI to change how users discover and enjoy what they watch,” one of those hires, Nikhil Mehta, said in a LinkedIn post.

The merger also represents generational change, as David Ellison is decades younger than many of his counterparts. His relative youth may or may not translate to a level of tech fluency that will set Skydance apart.

Last fall, for instance, Ellison greenlit a live-action movie based on the “Call of Duty” video game franchise, partly because he is a lifelong fan.

But legacy media companies like Paramount and Warner are a long way from actually coming up with the next “Call of Duty” on their own.

The formation of Skydance is the culmination of a long-held dream — but long-term success will require it to become more than a Hollywood empire.

As Ellison said last year, on the day he took over Paramount, “Unless you can build a tech product that is truly competitive with what’s coming out of Silicon Valley, you can’t compete.”

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