Sonic the Hedgehog may be able to run faster than the speed of light, but his film franchise nearly came to a screaming halt in 2019.

A less-than-three-minute trailer released early that year to tease the film’s release, which was just six months away, was widely panned by fans who took to social media to rail against Paramount’s character design. Dubbed “Ugly Sonic,” the blue creature that appeared on film was a far cry from the iconic video game speedster.

Cinematic Sonic, version 1, had more realistic facial features, including human-like teeth, and his body proportions were deemed inconsistent with the character fans grew up with in the ’90s.

“The trailer goes out, and I think it became the most viewed trailer in the history of Paramount Pictures. Which is amazing,” said Toby Ascher, who acquired the rights to Sonic and produced the film franchise. “The only problem was that 90% of people hated the trailer because of the design of Sonic.”

“All of a sudden we went from trying really, really hard to make a really, really faithful video game adaptation to being next in line of the people who had ruined video games for everyone. It just was a disaster of epic proportions,” Ascher added.

The studio pivoted, opting to redesign the title character and push the film’s release back three months to February 2020. The fix cost Paramount around $5 million but resulted in a franchise that has generated nearly $1.2 billion at the global box office. The studio hopes to build on that momentum with a fourth installment in the film franchise, set to debut in 2027.

“The Sonic franchise owes its box office success and longevity to a monumental decision early in the development of the first films’ marketing campaign,” said Paul Dergarabedian, senior media analyst at Comscore. “A re-design of a main character is no small thing. … These decisions can make or break what is every studio’s dream of having a single film turn into a long-term revenue generating franchise. The return on investment by turning an ‘ugly’ Sonic into a beautiful revenue generating franchise is undeniable.”

Ascher first acquired the rights to Sonic the Hedgehog in 2013, a time in Hollywood when video game-inspired films had failed to resonate with audiences.

“When we first started working on Sonic, making a video game adaptation was, like, a really bad idea,” he told CNBC.

No film based on a video game property had, to that point, managed to earn a positive rating from review aggregator Rotten Tomatoes. It wasn’t until 2019 that a video game-based film generated a “fresh” rating on the site, indicating more than 60% positive reviews.

“I don’t think anyone in town really thought making a Sonic movie was a good idea,” Ascher said. “But, I think our strategy was that we had grown up with these games. We’ve grown up with these characters, and we wanted to treat them like any other character. We wanted to give them real emotional arcs, and real emotional stories where you could relate to them.”

Ascher noted that previous video game adaptations typically focused on worldbuilding rather than character development.

“What we’ve been able to do is inject into the franchise heart, and I think that that’s what’s made it different,” said Neal Moritz, Ascher’s producing partner and producer of franchises like “The Fast and the Furious” and “21 Jump Street.”

Both Ascher and Moritz noted that while the filmmaking team behind the first “Sonic the Hedgehog” film overhauled the main character’s design, the story remained pretty much the same.

The filmmaking team was blindsided by audiences’ reactions to the first trailer, but were resolute in trying to resolve the issue rather than shelve the film or release it in its current form.

Moritz said he made an “impassioned speech” to the heads of Paramount and Sega to allow the filmmakers to fix the mistake.

As Moritz recalls, he told executives: “We really screwed up here, but there’s an incredible amount of interest and what we need to do is fix it … We need some more money and we need some more time. If you give that to us, I think we could turn this thing around.”

“I give both Paramount and Sega a lot of credit,” Moritz said. “They said ‘OK.'”

In the redesign, the team brought back Sonic’s iconic white gloves and classic red shoes. They reinfused the character with some of his cartoon roots, and six months after the first trailer, Paramount released a new iteration.

“The fans saw that we were trying to be really genuine in our love for this franchise,” Ascher said, noting that in the wake of the first trailer the team began engaging more with fans and focus groups to drum up feedback and inspiration.

The new trailer was well-received by fans, and three months later “Sonic the Hedgehog” opened to $58 million at the box office. The feature went on to collect $146 million domestically before the pandemic shuttered theaters. Globally, it pulled in $302 million.

The Sonic franchise has continued to thrive in the following years, with each follow-up feature outperforming the last.

“Sonic the Hedgehog 2” snared $190 million domestically and $403 million globally, while “Sonic the Hedgehog 3” tallied $235 million stateside and $485 million worldwide.

“That’s a big jump,” said Marc Weinstock, Paramount’s president of worldwide marketing and distribution. “I get excited that every new movie does better than the last one, which is rare.”

Following the success of the second “Sonic” film, the studio’s then-president and CEO of Paramount Pictures, Brian Robbins, greenlit a “Knuckles” series based on the franchise for the company’s streaming service, Paramount+, as well as a third Sonic film.

Sonic was becoming multi-platform, much like Robbins and Paramount had done for franchises like “Teenage Mutant Ninja Turtles,” “A Quiet Place,” “Spongebob Squarepants” and “Paw Patrol.”

The “Knuckles” show generated more than 11 million global viewing hours in its first 28 days on Parmount+.

The theatrical success also rocketed Sonic from a $70 million licensing business to one that generates more than $1 billion in retail revenue annually, according to Ivo Gerscovich, Sega’s senior vice president and chief business and brand officer of Sonic the Hedgehog.

“The great thing about Sonic — and the success of Sonic from the very beginning — is that we basically have listened to the fans from day one,” Robbins, now co-CEO of Paramount, said. “The fans are fanatical about this franchise and love this franchise and know this franchise. Because of that, they’ve become really key in shaping the franchise … They evangelize it.”

Fans inspired the casting of Keanu Reeves as Shadow, an archrival of Sonic, in the third Sonic film. And the filmmaking team says it continues to look to fans to inspire which characters it will add to the films and series next.

Ascher and Moritz both teased that the fourth Sonic film with again feature a new fan-favorite character, but said the team will continue to expand the franchise’s universe at a slow pace.

“If all of a sudden we bring every character, they are not going to get the time that the audience needs to understand them and relate to them and really fall in love with them,” Ascher said. “So, as we bring characters in, whether it’s film or it’s TV, the most important thing is that they have a good story that really showcases the character in an incredible way.”

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Rotten Tomatoes and is the distributor of “The Fast and the Furious” films.

High mortgage rates and elevated home prices combined to crush home sales in January.

Pending sales, which are based on signed contracts for existing homes, dropped 4.6% from December to the lowest level since the National Association of Realtors began tracking this metric in 2001. Sales were down 5.2% from January 2024. These sales are an indicator of future closings.

“It is unclear if the coldest January in 25 years contributed to fewer buyers in the market, and if so, expect greater sales activity in upcoming months,” said Lawrence Yun, NAR’s chief economist. “However, it’s evident that elevated home prices and higher mortgage rates strained affordability.”

While weather may have been a factor, sales rose month to month in the Northeast and fell in the West, which would have seen the smallest impact of cold temperatures. Sales fell hardest in the South, which has been the most active region for home sales in recent years.

Mortgage rates were also higher in January. The average rate on the popular 30-year fixed loan spent the first half of December below 7% but then began rising. It was solidly above 7% for all of January, according to Mortgage News Daily.

Home prices have been easing over the last few months in certain areas, with more sellers cutting prices, but nationally they are still higher than they were a year ago.

This drop in sales also came despite the fact that the inventory of homes for sales in January, including houses that were under contract but not yet sold, increased by 17% compared with last year, growing on an annual basis for the 14th month in a row, according to Realtor.com.

“More for-sale inventory has the potential to generate more contract signings, but climbing home supply is not evenly distributed across the U.S.,” noted Hannah Jones, an economist with Realtor.com. “Moreover, many areas with high demand see relatively low for-sale inventory, which limits progress towards more home sales.”

The egg aisle is anything but cheaper by the dozen these days — and that’s becoming a big problem ahead of the Easter holiday.

The makers of Easter egg dye kits are bracing for the potential fallout if the egg shortage doesn’t begin to clear up before the April 20 holiday. For many companies that specialize in these activity sets, egg dye kits and related products make up a significant share of annual revenue. Diminished sales could have a major impact on their bottom lines.

“I think sales will be down,” said Ashley Phelps, founder and CEO of Color Kitchen, a plant-based baking decoration company. “That remains to be seen, but I think it probably will be.”

Wholesale egg prices have eclipsed record levels, reaching a high of $8.58 per dozen amid a domestic bird flu outbreak, according to global commodity data firm Expana. More than 52 million egg-laying birds have died, leaving the national flock at just 280 million, a critically low level, said Ryan Hojnowski, a market reporter at Expana.

He noted that rising prices have slowed consumer demand as retail egg prices average around $6 per dozen or higher. Additionally, many stores have implemented purchasing limits, restricting the number of cartons that customers can buy at one time.

The combination of inflated price and limited availability could curtail sales of eggs for the Easter holiday, ultimately affecting the demand for egg dye kits.

Natural Earth Paint, a company that manufactures natural art supplies and craft kits for kids, typically sells between 40,000 and 50,000 egg dye kits around the Easter holiday, according to founder Leah Fanning. So far this year, the company’s retail partners have ordered only 7,000 kits.

“It’s definitely a huge drop,” Fanning said, noting that most buyers have cited the egg shortage for the smaller orders.

Fanning told CNBC that the egg dye kits have been Natural Earth Paint’s bestselling product for 13 years and kept the company in business for its first eight years. Of the company’s more than 40 products, the egg dye kit remains its “absolute bestseller.”

She noted that while the majority of Natural Earth Paint’s sales come from retail locations, online sales typically pick up around three weeks before Easter. That leaves the chance that direct-to-consumer sales could get a boost in mid-March.

Color Kitchen said its Easter items represent 20% of the company’s total stock of items and outpace sales of all other items, including its Christmas icing kits.

Phelps noted that most retailers order these egg kits months ahead of the holiday to ensure they are in stock immediately after Valentine’s Day. She said retailers “took a little less product this year” given sensitivity to the inflationary environment.

“The other concern is that, some of the grocery stories, if they don’t sell through, then we get charged back for product that goes discounted to try and move it out of the store,” Phelps said. “So, that’s where we’ll get hit if the stuff that’s already been shipped out to grocery stores does not sell. That could potentially be very bad.”

Phelps said 75% of Color Kitchen sales are from the shelf. The remaining 25% is from direct-to-consumer sales on its website and on sites such as Amazon.

There are some companies that still expect to see solid business this Easter. The holiday takes place in late April, giving companies three more weeks of sales compared with last year.

Hey Buddy Hey Pal, a company that makes the Eggmazing Egg Decorator, a crafting tool that spins eggs so kids can use markers to color them, generates between 85% and 90% of its annual revenue from its Easter product. Last year, the company generated $14 million in sales, a 22% bump from the year prior.

Curtis McGill, co-founder of Hey Buddy Hey Pal, said retailers have ordered fewer of its products this year. Still, the company said it expects another jump of 18% in annual revenue as it’s set to sell between 600,000 and 700,000 egg decorators this year.

Even as egg prices boil over, some dye kit makers see egg decorating as an essential tradition that few families will opt to skip, even if they reduce the number of eggs they use.

Paas, the leader in the egg dye kit space, expects that some families will decorate fewer eggs this year, but said many will still participate in the tradition.

“It’s just such a sticky tradition,” said Joe Ens, CEO of Signature Brands, which owns the 140-year-old iconic Paas brand.

The company recently completed a survey of 120 consumers and found that 94% of them still plan on decorating eggs this holiday.

“And the reason for that, other than the tradition being so important to consumers, is if you really break down the cost of the tradition, it is arguably the most affordable family tradition during any holiday,” he said.

Paas expects to sell more than 10 million kits this year, one of the company’s strongest sell-ins ever, he said.

Arts and crafts store chain Michaels said it’s already seeing shoppers opt for egg-inspired products. The company told CNBC that 43% of its planned Easter sales this year are for plaster, plastic and craft eggs.

Michaels said a particular craft egg kit designed to “mimic the traditional egg-decorating experience” is selling nearly three times faster than the company had anticipated.

Similarly, Hey Buddy Hey Pal expects some families may opt to purchase wooden eggs instead of real ones. Though the alternatives are typically more expensive than real eggs, they’re an opportunity to keep the creations around long after the holiday is over.

“A lot could happen between now and then, we can continue to see an outbreak of avian flu and some different egg farms that hadn’t been affected,” said McGill. “It could get worse before it gets better. That’s not the projections, but at this point … I’m just gonna hold my breath until we get to April the 20th.”

Correction: This story has been updated to correct, based on updated information from Michaels, that 43% of its planned Easter sales this year are for plaster, plastic and craft eggs. An earlier version mischaracterized the metric.

American Airlines is planning to test complimentary inflight Wi-Fi starting next week as pressure mounts on carriers to offer the service free of charge.

The tests will be available on three flights: Between hub Charlotte Douglas International Airport in North Carolina and Raleigh-Durham International Airport; Charlotte and Jacksonville International Airport in Florida; and between Miami International Airport and Chicago O’Hare International Airport.

More and more carriers have either launched or are preparing to offer free inflight Wi-Fi, making it harder for competitors to charge for connectivity. American’s prices vary and are some of the U.S. industry’s highest, with flight passes often topping $20.

It was not immediately clear whether American will expand complimentary service to larger swaths of its network, and if so, when.

Delta Air Lines two years ago announced it would make Wi-Fi free for members of its SkyMiles loyalty program, following JetBlue Airways. United Airlines plans to offer complimentary Wi-Fi on board this year using Elon Musk‘s Starlink satellite Wi-Fi, a service Hawaiian Airlines, which was acquired by Alaska Airlines, also uses.

“Through this test, we’ll be assessing customer take rates for inflight Wi-Fi, evaluating our provider and aircraft capacity, and – perhaps most important – measuring the impact to customer satisfaction,” American’s chief customer officer, Heather Garboden, said in a staff memo Friday.

In addition to facing more competition for a complimentary service, Fort Worth, Texas-based American has been in the process of working to win back customers after a failed business travel sales strategy last year.

“While relatively small in scope, this is already a big stride in our organization’s very critical work to give our customers what we know they want,” Garboden said.

Paramount Global told its employees this week that it’s ending numerous diversity, equity and inclusion policies, according to a memo obtained by CNBC.

In the memo sent to employees Wednesday, Paramount said it would comply with President Donald Trump’s executive order banning the practice in the federal government and demanding that agencies investigate private companies over their DEI programs.

Co-CEOs George Cheeks, Chris McCarthy and Brian Robbins cited the executive order in the memo, as well as the Supreme Court and federal mandates, as the impetus for the media giant’s policy changes.

Among the changes, the company said it “will no longer set or use aspirational numerical goals related to the race, ethnicity, sex or gender of hires.” Paramount also said it ended its policy of collecting such stats for its U.S. job applicants on forms and career pages, except in the markets where it’s legally required to do so.

“To be the best storytellers and to continue to drive success, we must have a highly talented, dedicated and creative workforce that reflects the perspectives and experiences of our many different audiences. Values like inclusivity and collaboration are a part of the Paramount culture and will continue to be,” the co-CEOs wrote in the memo.

They added that they will continue to evaluate their policies and seek talent from all backgrounds.

Paramount has taken part in a number of diversity, equity and inclusion efforts. It donated millions to racial justice causes in 2020 after the police murder of George Floyd and has touted initiatives such as a supplier diversity program and Content for Change, a campaign to overhaul storytelling about racial equity and mental health. The company has hosted an annual Inclusion Week for years and maintains an Office of Global Inclusion.

“Diversity, equity and inclusion is fundamental to our business,” former CEO Bob Bakish said at Paramount’s 2023 Inclusion Week, according to The Hollywood Reporter.

Paramount joins companies like Walmart, Target and Amazon in rolling back their DEI goals and policies in recent months. Others, like Apple and Costco, have publicly defended and committed to their DEI stances, even as the Trump administration has escalated its attacks on the practices.

Media companies have taken a variety of steps to respond to the Trump administration’s policy changes since the president’s inauguration last month.

Earlier this month, Disney changed its DEI programs, which included updating performance factors and rebranding initiatives and employee resource groups, among other things.

Around the same time, public broadcaster PBS — which, as a recipient of federal funding, is more directly affected by Trump’s order than corporations are — said it would shut down its DEI office. CNBC reported that DEI employees would exit the company in order for it to stay in compliance with Trump’s executive order.

Meanwhile, the Federal Communications Commission began investigating Comcast over its DEI efforts. Trump’s executive order, signed on his first day in office, directs federal agencies to identify and probe “most egregious and discriminatory DEI practitioners” in their sectors. Comcast previously said in a statement it would cooperate with the investigation.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

Elon Musk said Thursday that he’s sending his Starlink satellite internet terminals to the Federal Aviation Administration while saying, without providing evidence, that current technology poses a risk to air travel safety.

The billionaire and top advisor to President Donald Trump, who has been tasked with cutting costs throughout the federal government, posted the claims on his social media platform, X.

Executives at major airlines told CNBC on Thursday that they do not see risks to air travel safety because of the FAA’s technology.

The FAA, which regulates Musk’s company SpaceX, didn’t immediately comment but earlier this week said it has been testing Starlink technology in Atlantic City, New Jersey, and in Alaska. The White House referred a request for comment to the FAA.

The FAA “has been considering the use of Starlink since the prior administration to increase reliability at remote sites, including in Alaska,” the agency said Monday. “This week, the FAA is testing one terminal at its facility in Atlantic City and two terminals at non-safety critical sites in Alaska.”

The Washington Post reported on Wednesday that the FAA is close to canceling a contract with Verizon for new communication technology for air traffic control and giving it instead to Musk’s Starlink.

Musk said Thursday on X: a “Verizon communication system to air traffic control is breaking down very rapidly.” Verizon said in a statement that “the FAA systems currently in place are run by L3Harris and not Verizon.” He later corrected himself and said that L3Harris is responsible for the “rapidly declining” system.

L3Harris didn’t immediately return request for comment.

Verizon said it is working on replacing older air traffic control technology.

“Our Company is working on building the next generation system for the FAA which will support the Agency’s mission for safe and secure air travel,” Verizon said in its statement. “We are at the beginning of a multi-year contract to replace antiquated, legacy systems. Our teams have been working with the FAA’s technology teams and our solution stands ready to be deployed. We continue to partner with the FAA on achieving its modernization objectives.”

Musk didn’t immediately respond to a request for comment.

Some Democrat lawmakers have raised concerns about Musk’s role in the Trump administration while also potentially working to provide technology to one of his regulators.

“While I support efforts to modernize our air traffic control system and improve aviation safety, this decision raises conflicts-of-interest concerns, given Elon Musk’s dual position as Chief Executive Officer of SpaceX and wide-ranging role in the Trump administration,” wrote Sen. Ed Markey, D-Mass., to Chris Rocheleau, acting head of the FAA, on Wednesday.

Others have raised alarms after the Trump administration laid off hundreds of FAA employees, though they do not include air traffic controllers.

“At a minimum, we need to know why this sudden reduction was necessary, what type of work these employees were doing, and what kind of analysis FAA conducted – if any – to ensure this would not adversely impact safety, increase flight delays or harm FAA operations,” Sen. Tammy Duckworth, D-Ill., wrote to Rocheleau on Feb. 19.

The FAA has said it has retained staff “who perform safety critical functions. The FAA does not comment on ongoing certification work.”

Airlines for years have pushed for air traffic modernization. Carriers have long complained about how older systems have not kept up with the industry’s needs, leading to flight delays that cost both passengers and carriers. Air travel demand hit records after the pandemic.

“Carriers have made remarkable changes and significant investments in technologies, operations, product and people,” Airlines for America, which represents major U.S. carriers, said Thursday. “The government needs to do the same in an organized and timely way.”

Musk’s comments on air safety failures, which didn’t include evidence, come after last month’s fatal collision between an American Airlines regional jet and an Army Black Hawk helicopter, killing all 67 people on board the two aircraft. It ended an unprecedented period of air travel safety in the U.S., marking the first fatal passenger airline crash in the country since 2009 and the deadliest since 2001.

Last week, more than a dozen aviation industry groups and labor unions, urged lawmakers to approve “emergency funding” for air traffic control modernization and staffing.

With Venu done before it even got out of the starting blocks, Fox Corp., Disney and Warner Bros. Discovery have been mapping out how to go it alone in live sports streaming.

Last month the media giants called off the launch of Venu — a planned direct-to-consumer streaming offering of the entirety of the three companies’ live sports — in January in the face of headwinds, including cost sensitivity and legal challenges.

The joint venture originally planned to launch the platform ahead of the 2024 NFL season.

However, when its debut got blocked by a U.S. judge, the companies went back to the drawing board, and despite appealing the decision, ultimately decided to move forward alone.

Investors have been keen to hear about each company’s next steps as competition ramps up for streaming subscribers and the traditional TV bundle bleeds customers. While Disney’s ESPN already had a strong foothold in streaming live sports, Venu was a bigger piece of the future for Fox and WBD.

In recent weeks, each company has been detailing their plans. Disney’s ESPN and WBD’s Max appear to be putting more weight behind their already announced or existing platforms. Meanwhile, Fox is taking the plunge into direct-to-consumer streaming.

Disney will shift its focus to the direct-to-consumer ESPN streaming platform, a yet-to-be-named flagship app separate from its ESPN+, that was already in the works before Venu collapsed. ESPN’s flagship app is expected to launch in the fall, and CNBC recently reported that it will add some user generated content in an attempt to attract younger viewers.

This week, WBD executives doubled down on their existing strategy behind streaming service, Max.

On Wednesday the company announced it would include sports and news at no additional cost on the standard and premium tiers of Max. Initially, WBD planned to charge extra for sports. It’s unclear if the reversal was directly related to the end of Venu. Including live sports in the standard Max cost had been part of WBD’s larger strategy discussions for some time, according to a person familiar with the matter.

WBD CEO David Zaslav said during Thursday’s earnings call with investors that one of the key drivers behind Venu was the motivation to put a big library of sports together in one place. He seemed to lament the loss of a singular, sports-centric app, reiterating his belief that bundling content is the best value proposition for consumers and eliminates confusion in finding your favorite leagues or teams.

“It’s not a good consumer experience and the value creation over the last 50 years almost always follows a better consumer experience,” said Zaslav on Thursday, noting WBD’s separate streaming bundle with Disney.

Finding the best value in the bundle has long been Fox’s proposition when staying out of the streaming wars.

Fox took the biggest swing since the dissolution of Venu with plans for its own streaming platform following years of sitting on the sidelines. The company plans to launch an app that offers both news and sports by the end of this year.

The company announced Thursday that it hired Pete Distad, who was previously in charge of Venu, to run its direct-to-consumer streaming service.

Earlier this week at an investor conference, Fox CFO Steve Tomsic said the impending launch of a streaming service shouldn’t be seen as a shift in strategy, noting that Fox isn’t “trying to chase the [streaming] dream that Netflix and Disney and Peacock and Paramount+ are all chasing. That is not our game.”

Fox divested its entertainment assets — a key component to major streaming platforms — in the sale to Disney in 2019, removing Fox from that game, Tomsic said. He added that streaming “does nothing for the consumer” of news and sports, due to how much is sliced and diced on varying platforms.

But rampant cord cutting pushed Fox to step into the streaming game.

“The reality is, as we sit here today, there’s the better part of 50 million households in the U.S. that are now outside the bundle,” Tomsic said this week, adding Fox’s streamer won’t compete with the general entertainment players.

Live sports have played a pivotal role for media companies as the content that attracts the biggest audiences. This has been true for both traditional TV viewership, as well as streaming platforms looking to grow their subscribers.

In response, the cost of sports rights has ballooned, and media companies have recently become more methodical in what they choose to spend on.

Last week, ESPN stepped away from its long-term relationship with MLB, in part because the price-per-game was getting hard to justify.

And last year, WBD’s Turner Sports lost its rights to air NBA games starting with the 2025-2026 season, but it did pick up some new rights, including to certain college football games and the French Open.

WBD’s Zaslav on Thursday’s earnings call with investors also noted that the company wouldn’t necessarily jump to pay for more sports rights.

“There are sports rights that we can look at opportunistically and say we can make a real return on,” Zaslav said on Thursday’s call. “But you know, we don’t need any more sports anywhere in the world in order to support our business. We buy sports if we think it would enhance our business. And it’s going to get more difficult…[because of] some of those prices being paid.”

During an investor conference in December, Fox’s Tomsic echoed a similar sentiment around sports rights.

Tomsic said while sports are “foundational” to Fox, which notably has the NFL, college football and soccer, the company has “traded in and out” of it in recent years. He highlighted, as examples, that Fox has dropped the NFL’s Thursday Night Football, U.S. Golf and most recently WWE.

When Fox thinks about what makes sense for its sports portfolio, Tomsic said the company looks at the size of the audience and the potential advertising revenue.

“We take a pretty financially hard-nosed view about them, and so we’ll trade in and out of those sports as we see fit,” Tomsic said in December.

Disclosure: Peacock is the streaming service of NBCUniversal, the parent company of CNBC.

Eli Lilly on Wednesday said it will invest at least $27 billion to build four new manufacturing sites in the U.S., as demand for its blockbuster weight loss and diabetes injections soars and the company develops new drugs for other conditions.

It comes as drugmakers and companies across different industries work to build goodwill with President Donald Trump, who has emphasized reshoring manufacturing to the U.S. and reducing reliance on foreign supply chains. He has threatened companies — and pharmaceutical businesses in particular — with tariffs if they do not manufacture products in the U.S.

Eli Lilly made the announcement at an event in Washington, D.C. — emphasizing the political undertones of the strategy. The event featured several speakers from the Trump administration, including Kevin Hassett, director of the White House National Economic Council, and Commerce Secretary Howard Lutnick, who explicitly tied the announcement to Trump’s policies.

Lutnick said the investment is “exactly what the Trump administration is all about, which is building and manufacturing and reshoring in America, investing in America, building in America.” He thanked Eli Lilly for “doing exactly what the president was hoping would happen.”

Lutnick added that “if you want to understand the tariff policy” of the U.S., “I have just articulated it.”

The move brings Eli Lilly’s total U.S. manufacturing investments to more than $50 billion in recent years. The other $23 billion is from the company’s investments in new plants and site expansions since 2020, which has helped ease supply shortages of its popular drugs.  

“This represents the largest pharmaceutical expansion investment in U.S. history,” Eli Lilly CEO David Ricks said at the event. “We’re making these investments … to prepare for the demand we anticipate for future pipeline medicines across our therapeutic areas.”

Shares of the company closed more than 1% higher on Wednesday.

Three of the future U.S. sites announced Wednesday will manufacture active ingredients in medications, such as tirzepatide, the active ingredient in Eli Lilly’s obesity drug Zepbound and diabetes treatment Mounjaro. Ricks noted that there is a “real gap in supply chain in the U.S. as it relates to active ingredient availability in our country.”

The fourth site will extend the company’s global manufacturing network for future injectable therapies, he added.

Eli Lilly has not decided on where the four new U.S. sites will be located, Ricks said. The company will be accepting location submissions through March 13 and will announce decisions on new sites in the coming months.

Eli Lilly said the four new sites will create more than 3,000 jobs for workers such as engineers and scientists, along with 10,000 construction jobs as the plants are built. The company’s other U.S. plants include sites in North Carolina, Indiana and Wisconsin.

The new investments aren’t solely dedicated to Eli Lilly’s current and future obesity and diabetes treatments. The company is charting its future beyond Zepbound and Mounjaro, with hopes to deliver drugs from its broad pipeline of products for cancer, Alzheimer’s disease and other conditions.

Ricks said the company is optimistic about its pipeline across therapeutic areas, including cardiometabolic health, oncology, immunology and neuroscience.

Still, the new investments build on the success of Zepbound and Mounjaro, which share dominance of the booming market for so-called GLP-1 drugs with Novo Nordisk‘s weight loss drug Wegovy and diabetes treatment Ozempic. Some analysts expect the global obesity drug market to be worth more than $150 billion annually by the early 2030s, making it critical for both companies to maintain their share as other drugmakers scramble to join.

During the event, Ricks took a shot at cheaper compounded versions of its injectable drugs, saying “America faces a growing threat from an influx of counterfeit and compounded medications.”

Eli Lilly’s efforts to boost the supply of Zepbound and Mounjaro aim to ensure that eligible patients are safely accessing those branded treatments instead of cheaper compounded versions. Patients flocked to those unapproved copycats when the branded drugs were in short supply, or if they didn’t have insurance coverage for the costly treatments. 

The FDA has since declared the shortage of tirzepatide over, which will essentially bar many compounding pharmacies from making copycats. 

Hassett said the issue also “disturbs the White House” because offshore producers of copycat drugs are “threatening lives in the U.S.”

In another sign of the political goals of the announcement, Ricks touted Trump’s 2017 Tax Cuts and Jobs Act, saying that the legislation has been “fundamental” to the company’s manufacturing investments. He called it “essential that these policies are extended permanently this year.”

Key provisions from that law are set to expire at the end of December — though a reduction in the corporate tax rate will remain in effect.

That legislation, passed by a majority-Republican Congress during Trump’s first term, was the largest tax code overhaul in nearly three decades that slashed taxes for individuals and businesses. It cut the corporate tax rate to 21%, capped deductions for state and local taxes at $10,000, and expanded the child tax credit, among other efforts. 

“Long-term progress will also require U.S. policies to continue to protect the intellectual property rights and foster an innovative environment where we can do our work,” Ricks said.

Novo Nordisk has similarly invested billions in manufacturing to ramp up supply of Wegovy and Ozempic, announcing in 2024 it would take over three sites from contract manufacturer Catalent for $11 billion.

Shares of electric vehicle maker Lucid Group were down more than 10% Wednesday following a downgrade of the company’s stock by Bank of America and the abrupt departure of CEO Peter Rawlinson.

Rawlinson, who also served as chief technology officer at the company, was a driving force in its operations to this point, including the decision to go public in 2021. Investors considered Rawlinson to be the face of the company — and crucial to its success.

The company – majority owned by Saudi Arabia’s Public Investment Fund – is in search of a new CEO, stirring uncertainty among Wall Street analysts.

“We think the departure of Lucid’s (LCID) founder, CEO, and CTO, Peter Rawlinson is much more consequential than understood by the market,” BofA Securities analyst John Murphy wrote in a Wednesday investor note downgrading the stock to underperform. “We now expect product development to stall, consumer demand to be dampened, and anticipate additional funding opportunities could be put at risk.”

Interim CEO Marc Winterhoff, formerly the company’s chief operating officer, will attempt to ensure that’s not the case for Lucid.

Winterhoff said in an interview with CNBC his objective is to build upon Lucid’s success rather than change its course. His top priorities include more than doubling vehicle production this year, narrowing losses and increasing customer awareness and technology offerings.

“We have a clear vision. Now my focus will be on execution,” Winterhoff told CNBC Tuesday ahead of speaking to investors on the company’s fourth-quarter earnings call.

Lucid remains far from profitable, but it has been narrowing its gross losses by increasing scale and making its products more efficient.

Its GAAP gross margin, which includes production and sales but does not factor in other expenses, for was a negative 114% in 2024, improvement from a negative 225% in 2023.

“We expect a significant improvement in gross margin in line with what we see in 2024 compared to 2023. So, we are on the right trajectory,” Gagan Dhingra, Lucid’s interim CFO, told investors Tuesday.

For the fourth quarter, the company reported a net loss attributable to common stockholders of $636.9 million, or a loss of 22 cents per share, on revenue of $234.5 million.

Lucid’s first product was the Air sedan, which it began delivering in late 2021. The pricey car has been praised for its styling and technologies, but demand for the vehicle hasn’t been as strong as anticipated.

Winterhoff said the company will continue to produce Air sedans as it begins to ramp up production of its second product, an SUV called Gravity.

Winterhoff said production of the Gravity SUV will gradually build this year. He declined to speculate Tuesday on what percentage of the 20,000-unit production target the vehicle would represent. He noted Gravity ordering for customers in Saudi Arabia began earlier this month.

“We’re expanding our footprint and markets we are very active in, and then absolutely increasing the ramp of Gravity, which is a big, big focus for us right now,” he said during the company’s investor call.

Lucid also is in the midst of developing a new midsize vehicle platform that’s expected to launch at the end of 2026, which both Winterhoff and Rawlinson have described as critical to the automaker’s growth.

As the automaker increases production and the number of vehicles it offers, Winterhoff said Lucid will “double down” on marketing and advertising to increase customer awareness.

“I’m not planning to create a new vision or something like that for the company,” he told CNBC. “What I’m still focusing on is simply operational topics, like, for instance, increasing the deliveries for our customers. We will double down on marketing. You will see much more marketing from us.”

The company’s selling, general and administrative expenses were $900 million in 2024, including a $19.9 million increase in sales and marketing expenses over the prior year. The company’s total marketing and advertising expense wasn’t immediately available.

The Lucid Air has been criticized for its lack of advanced driver-assistant systems such as Tesla’s “FSD” or General Motors’ “Super Cruise.” Certain Air models cost tens of thousands of dollars more than vehicles from competitors with such technologies.

However, Lucid expects to release a new hands-free driving system for customers later this year.

What Lucid lacks in driver-assistant technologies, it arguably makes up for in battery efficiency, as its cars are among the most efficient EVs in the U.S., according to federal data.

Lucid has attempted to capitalize on its battery technologies by offering to sell them to other companies as a way to increase scale and revenue.

Winterhoff said the company remains in “constant discussions” with companies about using Lucid’s battery technology but declined to provide additional details.

Jeff Bezos, the Amazon founder and owner of the Washington Post, said Wednesday that his newspaper’s opinion pages would now be dedicated to supporting “personal liberties and free markets,” and that the organization would not publish opposing views.

“We’ll cover other topics too of course,” Bezos said in an email to Post staffers that he posted on X. “But viewpoints opposing those pillars will be left to be published by others.”

While the move garnered praise from some in President Donald Trump‘s administration, such as Elon Musk, it was panned by some current and former Post staffers, including former editor Marty Baron, who said he was “disgusted.”

Bezos said that editorial page editor David Shipley, who had held the job for over two years, decided to resign rather than lead the opinion section under the new policy.

“I suggested to him that if the answer wasn’t ‘hell yes,’ then it had to be ‘no,'” Bezos said of Shipley, adding, “I respect his decision.”

The Post will be “searching for a new Opinion Editor to own this new direction,” Bezos said.

He asserted that while a major newspaper might once have considered it a service to offer its readers “a broad-based opinion section that sought to cover all views,” that is no longer the case.

“Today, the internet does that job,” Bezos wrote.

“I’m confident that free markets and personal liberties are right for America,” he added. “I also believe these viewpoints are underserved in the current market of ideas and news opinion. I’m excited for us together to fill that void.”

Representatives for Bezos and the Post, as well as Shipley, did not immediately return CNBC’s requests for additional comment.

By erecting new parameters around what opinions the Post can print, Bezos will likely draw fresh accusations that he is seeking to curry favor with Trump, who has long attacked the paper as “Fake News.”

Less than two weeks before the 2024 presidential election between the Republican Trump and Democratic nominee Kamala Harris, the Post announced that it would not endorse either candidate, breaking with decades of recent precedent.

The Post in a news article at the time reported that the paper’s editorial staff had planned to endorse Harris, and that Bezos himself made the decision to end the tradition.

Four days later, the newspaper reported that at least 250,000 of its readers had canceled their subscriptions following the policy shift.

After Trump won the election, Bezos’ Amazon joined with numerous other tech giants in donating hefty sums to the then-president-elect’s inaugural fund. While Bezos stepped down as CEO of the company in 2021, he still serves as its executive chairman.

Bezos was also spotted dining with Trump at his Mar-a-Lago home and club in Florida. The tech megabillionaire later attended Trump’s inauguration on Jan. 20, standing alongside Meta boss Mark Zuckerberg, Apple CEO Tim Cook, Google leader Sundar Pichai and Musk, the Tesla and SpaceX CEO.

Musk, who leads Trump’s government-slashing task force known as DOGE, praised Bezos for implementing the editorial change.

Multiple staffers have recently quit the Post in protest. Cartoonist Ann Telnaes left the paper in early January, after accusing her bosses of killing her drawing of businessmen — including one resembling Bezos — genuflecting at an altar of Trump. When she resigned the same month, columnist Jennifer Rubin accused Bezos and other rich media moguls of enabling Trump and betraying their audiences’ loyalty.

In reacting to Bezos’ announcement Wednesday morning, some have noted that Amazon is currently involved in an antitrust lawsuit brought by the U.S. Federal Trade Commission.

Prior to Trump’s inauguration, Puck News first reported that Amazon would pay $40 million to license a documentary about first lady Melania Trump. The Wall Street Journal reported this month that Melania will pocket more than 70% of that total.

It is not unprecedented for a newspaper’s owner to involve themselves in editorial decisions, New York University journalism professor Adam Penenberg told CNBC. He pointed to the New York Post’s conservative shift after Rupert Murdoch’s takeover in 1976, and Sheldon Adelson’s push to make the Las Vegas Review-Journal more pro-business.

But Penenberg noted that Bezos’ order for his paper’s editorial pages to comply with specific ideological views sets him apart.

The announcement spurred a range of initial responses from reporters at the Post — some of whom said the news department will not be affected.

“As I’ve stated before: Nothing changes,” wrote Dan Lamothe, who covers military affairs, on X later Wednesday morning. “We ask hard questions and hold those in power to account. That’s the job, whether those in power like it or not.”

But chief economic reporter Jeff Stein called Bezos’ decision a “massive encroachment” into the paper’s opinion section that “makes clear dissenting views will not be published or tolerated.”

“I still have not felt encroachment on my journalism on the news side of coverage, but if Bezos tries interfering with the news side I will be quitting immediately and letting you know,” Stein wrote on X.

Baron, who retired as editor of the Post in 2021 after eight years in the role, slammed Bezos in a scathing statement to the Daily Beast later Wednesday.

“What Bezos is doing today runs counter to what he said, and actually practiced, during my tenure at The Post,” Baron said. “I have always been grateful for how he stood up for The Post and an independent press against Trump’s constant threats to his business interests. Now I couldn’t be more sad and disgusted.”

Philip Bump, a current Post opinion columnist, wrote on Bluesky: “What the actual f—.”