Fox and the art of aquisitions, The AI bubble and Plant gossip

Insights from The Economist, 20th Jun, 2026 edition

Photo by Michal Janek on Unsplash

Buying is often better than building when technology is evolving quickly

Last week, I wrote about BYD and the limits of vertical integration. As new technologies emerge across multiple layers of the value chain, it becomes increasingly difficult for one company to innovate faster than specialists in every area. Competitors that partner for selected capabilities can often move faster.

This week, Fox provides another interesting example.

While Disney spent billions building its own streaming platform to compete with Netflix, Fox stayed focused on its profitable linear television business. Over the past five years, Fox’s share price has risen by roughly 40%, while Disney’s has fallen by a similar amount.

Now Fox is making a much bigger move into streaming, not by building from scratch, but by acquiring Tubi and Roku. Together, these businesses make Fox the third largest streaming platform in the United States by viewing share, behind only YouTube and Netflix. 30% of Fox’s revenues would now be from streaming.

Even more interesting is Fox’s business model for streaming. Rather than relying primarily on subscriptions, both Tubi and the Roku Channel are FAST (Free Ad Supported Streaming Television) platforms. That aligns with a broader industry shift, as more than half of new streaming subscribers now choose ad-supported plans.

The lesson extends well beyond media.

When technology is changing rapidly, acquiring proven capabilities can be faster, less risky, and ultimately more valuable than trying to build everything yourself.

The AI bubble is closer to bursting

Research by Ramp, a corporate credit card provider, indicates that spending on AI “tokens” has increased 13-fold over the past year. The increase is heavily skewed toward large technology companies, which now spend about $7,450 per employee each month on tokens. That is enough to hire a software developer in India.

Companies are beginning to respond by scrapping leaderboards, capping AI spending and switching to older, less capable models that are good enough for many use cases. In other words, businesses are becoming more disciplined about AI costs.

Yet the stock market is telling a very different story. A put option gives its holder the right to sell a stock at a pre-agreed price and becomes more valuable when share prices are expected to fall. A call option gives its holder the right to buy a stock at a pre-agreed price and becomes more valuable when share prices are expected to rise.

Traditionally, put options trade at higher prices than comparable call options because institutional investors buy them as insurance against market declines. Today, however, the average call option on the NASDAQ is priced roughly the same as the average put. That suggests strong expectations that the prices of shares, especially in AI companies will continue to soar in the future.

These two signals are inconsistent. On one hand, companies are becoming more selective about AI spending. On the other, investors continue to price technology stocks as though AI-driven revenues will keep accelerating. That gap is unlikely to persist indefinitely. As businesses settle on the right balance between investing in AI and human capital, market expectations may need to adjust, reducing the disconnect between operational reality and investor optimism.

Plants can talk to each other

It has long been known that plants communicate distress signals to one another by releasing chemicals called volatile organic compounds (VOCs). However, scientists did not know whether plants also communicate when there is no immediate threat.

To find out, researchers grew three varieties of barley: fast-growing, medium-growing and slow-growing. The plants were kept in separate growing chambers so they could not shade one another. The chambers were connected by one-way air vents, allowing air from one plant to reach another.

When air from the slow-growing barley was directed to the fast-growing barley, the fast-growing plants slowed their growth because they did not need to compete as intensely for sunlight. In contrast, when air from the fast-growing barley reached the slow-growing plants, they grew faster.

The researchers also found that plants change how they use their resources. When they sense strong competition for sunlight, they invest more in growth. When competition is low, they invest more in producing chemicals that make their leaves less appealing to herbivores.

There is a lot that remains to be discovered about the natural world around us.