Happy Monday, I’m Eriq Gardner.

Welcome back to The Rainmaker! This week, a deep dive into a legal issue that’s ready to explode through Hollywood: artificial intelligence. Plus news on Shari Redstone, Elon Musk, Anderson Cooper, Ben Smith’s new hire, and more.

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First up…

These suits are remarkable for many reasons. While it used to be extremely common for shareholders to sue over M&A, that’s become a much rarer phenomenon thanks to obscure developments that have made it tougher for class action lawyers to collect attorneys’ fees for this type of litigation. But some march on regardless, and those that do are less likely to settle.

Paramount’s attorneys unsuccessfully tried to get the suits dismissed. Recently, the plaintiffs said there was a “mountain of evidence”—get it, like the Paramount mountain—that ex-CBS C.E.O. Joseph Ianniello was essentially paid millions “to do nothing” as part of “an effort to make it appear as though CBS senior executives would remain at the Company to lead CBS’s valuable assets after the Merger.” Vice Chancellor Sam Glasscock said he’d rule after trial. (Ianniello’s lawyer has yet to respond or offer comment.)

The trials should provide an inside look at how Redstone engineered the merger—the subject of James B. Stewart and Rachel Abrams’s upcoming Unscripted: The Epic Battle for a Media Empire and the Redstone Family Legacy, which comes out next week—and also whether other media giants kicked the tires on CBS and Viacom at the time. But the exact extent of the disclosures is still being litigated. Over the past few months, the two sides have waged holy war over evidence including a mysterious email that was sent by Redstone to her lawyers a few months before the merger was officially announced. That private email (which the company wants to claw back and is currently under seal) was accidentally copied to former CBS News president David Rhodes, so the parties have been arguing extensively over whether the message is privileged. Intriguingly, the plaintiffs say Redstone’s email and text message practices were “extremely careless.” Hopefully we’ll soon learn more.

The dual trials could also shed some light on the future of Paramount, which is the subject of near-constant deal speculation, including possibly selling the combined company and/or spinning off CBS. This past week, Paramount C.E.O. Bob Bakish hired two powerful new lobbyists, former senators Debbie Stabenow and John D. Rockefeller IV, ostensibly to advise the company on tax issues, but also, presumably, to grease other wheels in Washington. The F.C.C., after all, has just begun its quadrennial review of media ownership rules. On the table is the “dual network” rule, which prohibits a merger between any two of the four major TV broadcasters.

Redstone has said repeatedly that she’s not a seller, but there’s no doubt that she would appreciate the optionality. Getting rid of the “dual network” rule would, after all, open up the possibility of a CBS acquisition by Disney, which owns ABC, or Comcast, which owns NBC, unlocking more possibilities than if the company was sold in parts. A rethink of the rule is probably overdue, anyway, given the diminished importance of the “Big Four” in the streaming era. If that restriction is lifted, it’s off to the races for Wall Street.

• Elon Musk, who just beat a lawsuit over his 2018 “funding secured” tweet, already has new legal problems piling up, including an advisory firm now suing over fees for its work during the Twitter acquisition, as well as a Justice Department investigation, disclosed in a 10-K this past week, over Tesla’s “autopilot” features. The latter could be very serious for Musk’s company, even rising to criminal charges, and of course, there will likely be shareholder litigation, too.

• CNN is still facing a big defamation lawsuit over its arguably misleading reporting on infant mortality at a Florida hospital, but anchor Anderson Cooper is off the hook. The plaintiffs argued that Cooper should have asked harder questions about the reporting featured on his show, and that a jury should decide whether he was negligent. But at a recent hearing, Judge Richard Oftedal responded that it was clear Cooper relied on CNN staff, and there wasn’t any legal precedent for holding an anchor liable for the research and vetting of a news story. The case is expected to go to trial in the coming months (pending ongoing appeals), and the parties are still gathering evidence. Former CNN president Jeff Zucker is scheduled to be deposed next week.

• The Washington Post also prevailed on the defamation front when a D.C. federal judge threw out a lawsuit from Donald Trump over two opinion pieces that discussed the Mueller report on Russian interference in the election. The details of the decision are less interesting than the fact that the paper had to wait an extra two years for a ruling after the presiding judge, Ketanji Brown Jackson, was promoted. If Trump conquers long odds and gets this case to the Supreme Court to challenge the actual malice standard for public figures in libel cases, Jackson might have to consider a recusal.

• On Sunday night, Semafor made the surprising announcement that it had hired Jay Solomon as its global security editor. Solomon was infamously fired by the Wall Street Journal in 2017 after his emails were hacked and shopped around to the media, leading to questions about an unethical relationship with a source. Solomon is now pursuing a racketeering lawsuit against Dechert, blaming the international law firm for the alleged smear operation. Interestingly, just as Ben Smith announced the hire, Dechert filed a motion to dismiss Solmon’s suit. The firm is hitting back hard against Solomon, telling the court, “If only his unethical conduct had remained secret, his theory goes, Plaintiff could have escaped the consequences of his wrongdoing.” Here’s the complaint and Dechert’s motion. There figures to be more legal activity soon on this front.

After all, the prospect of A.I. taking human jobs has escalated rapidly from “Ha, ha, let me just get comfortable in my Matrix coffin” to “OK, so how much time do I have?” Suddenly, everyone I know is nervously assessing its capabilities. Can Stable Diffusion replace animators? What about the dozens of A.I. startups that can replicate the voices of famous actors? Can ChatGPT write a court brief? How about a legal newsletter?

We’ve already seen these technologies revive Val Kilmer’s voice in Top Gun: Maverick, simulate Bruce Willis in a Russian telecom advertisement, and write and direct short films, so it’s no surprise this has all caught the attention of the Hollywood guilds, which are about to negotiate new overall deals with the studios. From my conversations with insiders, it sounds like A.I. will be an important and contentious topic during these talks.

SAG-AFTRA, the biggest labor union in Hollywood, has just taken the first shot, I’ve learned. On Jan. 28, the union’s national board unanimously agreed that “Global Rule One”—no member should work for an employer who hasn’t accepted the union’s basic minimum agreement—will now extend to the recreation of an actor’s voice or image. The board explicitly articulated its position that the right to simulate an actor’s voice, likeness, or performance using digital technology is a mandatory subject of bargaining.

On Friday, talent lawyers got a memo from SAG-AFTRA that spelled out what this means: Don’t assign likeness rights to anyone working outside the union purview. As for any language in a contract that purports to control the right to simulate an actors’ performance, that’s “void and unenforceable until the terms have been negotiated with the union.” This stance not only represents the first salvo of what’s sure to be a fascinating round of labor talks; it also foreshadows some epic court battles ahead.

These are no longer just academic questions: Today’s A.I.s are frequently trained on copyrighted material, raising thorny legal questions about whether that’s fair use, whether their outputs are too similar to the source material, and even whether the results are copyrightable. The dealmakers I talk to are particularly worried about vague old contracts that might allow the studios to take the position that they already have rights to make A.I. recreations. No wonder SAG-AFTRA is using the phrase “truly informed consent.” Without it, authors and performers might find themselves in court, like Astley, arguing that it’s unfair to appropriate their identity or likeness in a way that falsely suggests their involvement, even if a producer has broad rights to existing material.

Of course, this isn’t the first time that new technology has created a legal mess in Hollywood. Early filmmakers saw their work re-broadcast on TV, and broadcast TV producers reckoned with the legality of cable re-runs. Later there were fights over video cassettes and DVDs, and, more recently, streaming. Each of these shifts sparked court battles and arbitrations over contracts that were written in less technologically-advanced times.

That’s precisely why many Hollywood contracts today claim the authority to exploit a work or performance “throughout the universe in perpetuity by means or methods now or hereafter known.” Does that authority include the ability to, say, train an A.I. on old movie and TV scripts? What about swapping out a cameo from an A-list actor with an A.I.-generated facsimile that can reprise their role instead?

There are opportunities here for actors, too. If you’re Morgan Freeman, for instance, why not license your voice to every documentary filmmaker willing to pay your fee? Or if you’re Zendaya, considering a brief appearance in a new Marvel movie but stuck working on another film, suddenly your earning potential is unlimited. For a real world example, check out musician Holly Herndon, who has released a vocal program called “Holly+” that allows others to easily “deepfake” her singing voice. These scenarios won’t be hypothetical for long.

For now, it’s all a legal gray area. Entertainment lawyers tell me they’ll first refer to old labor agreements to determine whether A.I. infringes their clients’ rights. Unfortunately, they add, when it comes to something like reshoots, it’s ambiguous whether a producer can simulate a performance and avoid having to pay an actor for extra working days. So will they explicitly address these possibilities in contract negotiations, like SAG-AFTRA is doing? “There’s precedent,” one lawyer told me. “We already do things like requiring approval over lookalikes in nude scenes.”

Then again, asking a studio for new rights always runs the risk that they refuse, and you may lose the upper hand in court as everyone figures out how the old contracts should be interpreted. As one savvy dealmaker told me, “I’m more than happy to let the guilds take the lead on this.”