What We Learned This Week

Passing the Torch (Again): Disney announced this week that Josh D’Amaro will succeed Bob Iger as CEO, bringing an end to a long and closely watched succession process. D’Amaro, who currently leads Disney’s Parks and Experiences division, will step into the role on March 18, while Iger remains on as a senior advisor and board member through the end of the year before fully retiring. The transition seems familiar because it is. Iger first stepped down in 2020 after a 15-year run defined by transformative acquisitions such as Marvel and Lucasfilm, only to return in 2022 after his handpicked successor, Bob Chapek, oversaw a period of strategic missteps and declining investor confidence. Iger’s second tenure was always meant to be transitional, focused on stabilizing the business and resetting leadership.

That reset included a major corporate restructuring that reorganized Disney into three core segments: Entertainment, Sports and ESPN, and Parks and Experiences. Leaders across those divisions were considered for the top job, but the search ultimately narrowed to D’Amaro and Entertainment co-chair Dana Walden, who will now take on the role of President and Chief Creative Officer reporting directly to D’Amaro. He steps into the role at a pivotal moment. Streaming remains central but unsettled, linear television continues to decline, and investor confidence has yet to fully recover. D’Amaro’s advantage is clear: he comes from Disney’s most reliable and profitable business. How effectively he can translate that operational discipline into broader strategic clarity will shape Disney’s next chapter after Iger’s storied era.

Musk Consolidates: Elon Musk announced that SpaceX will acquire xAI in a transaction valuing the combined entity at roughly $1.25 trillion, with SpaceX at about $1 trillion and xAI at $250 billion. The deal comes ahead of SpaceX’s highly anticipated IPO, which could take place later this year and reportedly aims to raise as much as $50 billion at a valuation approaching $1.5 trillion. Musk said one motivation behind the merger is to accelerate development of orbital data centers, an idea gaining traction as companies look for ways to scale computing power without placing additional strain on Earth-based infrastructure.

The transaction also effectively bolsters xAI’s capital position as it looks to expand the role of its Grok chatbot across Musk’s broader ecosystem. While the valuations involved are aggressive, they are broadly in line with recent benchmarks in the AI space, with OpenAI and Anthropic both commanding similarly sky-high valuations. SpaceX, meanwhile, remains easier to justify on fundamentals given its dominance in commercial launch, Starlink’s growing scale, and deep relationships with NASA and the Department of Defense. With its IPO approaching, SpaceX is already set to be one of the most consequential public listings in years, and this merger further concentrates Musk’s ambitions across space, AI, and infrastructure. Stepping back, the sheer scope of what has been built across Tesla, SpaceX, and xAI is hard to ignore, even as questions around valuation linger.

Software Repriced: Software stocks were hit hard this week, pulling the broader market and the tech sector lower as investors reassessed long-term risk. The immediate catalyst was the release of a new AI tool from Anthropic designed to automate legal tasks such as contract review, compliance work, briefs, and NDAs. That announcement reignited concerns that entire categories of enterprise software could eventually be disrupted. If AI can reliably handle legal workflows, investors naturally start extrapolating to other areas like accounting, auditing, marketing, design, or customer relationship management. As a result, shares of companies like Salesforce, Intuit, Adobe, and others sold off sharply as investors moved to reduce exposure before any tangible impact shows up in reported results.

To be clear, none of these companies have yet seen meaningful earnings damage from AI competition. What has changed is valuation. Investors are now less willing to pay premium multiples for predictable software cash flows when the perceived risk to those business models is rising. We saw early signs of this shift last week following Microsoft’s earnings, when questions emerged about how AI might eventually alter usage of its Office suite. There’s an irony here. AI was initially viewed as a tailwind that would make these companies more powerful and efficient. Now, that same technology is being viewed as a potential existential threat. How much of this fear ultimately materializes remains uncertain, but it’s becoming clearer that AI will create clear winners and losers, and the market is increasingly focused on avoiding the latter.