Cameron later said the studio-side suggestion went even further: Medavoy proposed Schwarzenegger as Reese and O. J. Simpson as the Terminator. Cameron rejected the Simpson idea immediately, and he has also stressed that Schwarzenegger was never formally offered the Reese role by him. The important point is that Orion wanted Cameron to meet Schwarzenegger with Reese in mind. Cameron agreed even though he expected the meeting to prove that the casting would not work. (BFI)
At that point Cameron was hardly a Hollywood power player. The Terminator was a relatively small independent production being assembled through Hemdale with Orion handling distribution. Cameron had a strong script and a vivid visual concept, but very little commercial leverage. Schwarzenegger, meanwhile, had become valuable enough internationally that attaching his name could make the financing easier. Producer Gale Anne Hurd later recalled that securing Schwarzenegger had become important to the film’s financing. (The Ringer)
According to Cameron, he left for lunch joking that he was going to “pick a fight with Conan.” His plan was not literally to start a confrontation. He expected to have the meeting, return to the producers, and explain that Schwarzenegger was creatively wrong for Reese. Instead, the lunch destroyed Cameron’s argument before he ever had the chance to make it. (BFI)
Recollections differ slightly about exactly who sat at the table. Gale Anne Hurd remembered going with Cameron to the upscale Scandia restaurant on Sunset Boulevard. Schwarzenegger has also recalled producer John Daly being involved in the lunch. The details around the table have shifted with decades of retelling, but Cameron, Hurd, and Schwarzenegger agree on the crucial part: Arnold arrived supposedly connected to the heroic role, yet he spent much of the conversation talking about the killer. (The Ringer)
Schwarzenegger had read the screenplay carefully. What caught his attention was not primarily Reese’s romance with Sarah Connor or the future resistance. He became fascinated by the logic of the Terminator. He began explaining how an actor should behave if the character were truly a machine rather than a human villain pretending to be emotionless.