Anthropic’s White House Feud Heats Up & Dirty Sodas Take Over America

0:00Toby A. B. H. G. Harris:Thy ticket, Lady Jennifer of Coolidge. Well, many thanks, good sir. Heareth my Discover card. They accept Discover at Renaissance Fairs? Yeah, they do here. Discover is accepted at the places I love to shop. Getteth with the times. With the times? You're playing the lute. Yeah, and it sounds pretty good, right? Discover is accepted at 99 % of places that take credit cards nationwide. Based on the February 2025 Nielsen Report.

0:33Toby A. B. H. G. Harris:Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the car being dubbed the McRib of autos.

0:40Neal Freyman:Then oil prices went up, then down, then up, and then down again. It's Tuesday, March 10th. Let's ride.

0:52Toby A. B. H. G. Harris:Good morning and happy Mario Day, which is celebrated every March 10th because when you write out M-A-R-1-0, it looks like Mario. Hey, I didn't come up with it. Anyway, Mario is absolutely deserving of his own day because ever since his debut as a character in the 1981 version of Donkey Kong, he's become undoubtedly the most popular video game character of all time. If you're wondering why Mario dresses the way he does, well, I'll tell you. It's because of earlier limitations with gaming technology. Shigeru Miyamoto, who created Mario, outfitted him with red overalls and a blue shirt because that would contrast against each other and the background to make his arm movements more visible.

1:31Toby A. B. H. G. Harris:And he wears a hat because drawing hair and a forehead and making the physics of those work in motion were just too difficult given the graphics capabilities of the time. Okie dokie.

1:41Neal Freyman:Okie dokie. I got a fun fact for you, too. You know how the game is called Mario Bros. That would imply that the last name of the brothers is Mario, which would mean the plumber's full name is Mario Mario. Neil, Neil, what do you think of that?

1:56Toby A. B. H. G. Harris:That is fascinating.

1:58Neal Freyman:But Mario Day also allows a trip down memory lane, and I truly believe I am top 1 % at Mario Kart on the Wii, specifically on the Wii, because that was the only console I had growing up. So anyone out there who wants to challenge me at, you know, Mushroom Gorge or Moo Moo Meadows, hit me up. You know where to find me.

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3:04Neal Freyman:Who needs to go to Six Flags when you can just watch The Price of Oil to experience the thrill of going on a roller coaster. Yesterday morning, as oil was pushing$119 a barrel, the group of seven nations floated the idea of breaking the glass in case of emergency on their oil stashes. Finance ministers of the US, UK, Canada, France, Germany, Italy, and Japan all hopped on a call to decide if it was the right time to dip into their strategic oil reserves. The ultimate answer was no, not quite. Despite the decision, oil prices mellowed, easing to$95 as the prospect of a coordinated release was enough to calm traders.

3:42Neal Freyman:Prices fell even further after Trump told reporters he is, quote, thinking about taking the Strait of Hormuz over while also indicating he thought the war would be over, quote, very soon. He went on to post on TrueSocial that the U.S. would hit Iran 20 times harder if it stopped oil flows through the Strait. The combo of ending the war and reopening the Strait was music to the oil market's ears. And as of this morning, a barrel of Brent crude is trading at a much more mild$87. Stocks also got brought along for the roller coaster ride. All three major indexes opened deep in the red, then staged an epic comeback after Trump's comments to finish the day in the green.

4:19Neal Freyman:Neil,$100 a barrel was seen by many as a breaking point for the economy. We've backed away from that triple digit abyss.

4:26Toby A. B. H. G. Harris:Oil is GameStop and Trump is Roaring Kitty. I'm sorry for the visual, But that's exactly what happened yesterday. Wall Street was hanging on his every word and the volatility was absolutely dizzying yesterday. This reminded me and other people, of course, of almost one year ago, which was when Trump released his Liberation Day tariffs in early April. Over the subsequent week, markets had a meltdown similar to what oil prices were doing over the past week. bond price bond yields spike stocks tumbled and then one week later trump came out and said you know what i'm delaying these tariffs for 90 days because the bond market's getting real spooky here very similar to what's happening with trump coming out of the press conference and saying he's looking at winding the war down because oil prices at the levels they were shooting up to were

5:11Neal Freyman:becoming untenable for the economy but it was a little confusing yesterday because as trump was giving signals that the war would be ending soon his own defense secretary pete hegseth commented that the war is just beginning. So a reporter at a press conference said, hey, how do I square the circle here? You're saying it's ending. He's saying it's just beginning. And Trump kind of split the middle and said, it's the beginning of building a new country. He said, it's a little bit of both. So again, we are in a market right now that is trading a lot on quotes and a lot on sentiment right now. So make of that what you will, because the sentiment is a little cloudy.

5:45Toby A. B. H. G. Harris:And there's no question that if the war continues to go on, this will devolve into a huge energy crisis. We're already having the biggest oil supply disruption in history because Iran has blocked the Strait of Hormuz, through which 20 percent of all oil flows. Just this morning, the CEO of Saudi oil giant Aramco, which is the biggest oil company in the world, they reported their earnings. So everyone was asking him, hey, what do you see going on in the market? And he said that the word caused a, quote, severe chain reaction and a, quote, drastic domino effect for a bunch of industries across aviation, agriculture, and automotive.

6:20Toby A. B. H. G. Harris:And he said the longer this disruption goes on and the more drastic the consequences for the global economy, he said it was by far the biggest crisis faced by the oil and gas industry in the Gulf.

6:29Neal Freyman:But also right now, this morning, Saudi Arabia, UAE, Iraq, and Kuwait have all decided to cut oil output by as much as 6.7 million barrels a day. That, again, seemed to be priced in because oil futures and oil prices didn't really budge on that news. That would be something that you would expect to send oil prices up. But I do think that traders are now taking Trump at his word and thinking that this war is winding down as of now. I do want to talk a little bit about that first bulletin of news that we were talking about, which was the strategic oil reserve. In full transparency, that was kind of what this story was going to be about before Trump's comments later in the afternoon.

7:08Neal Freyman:What is a strategic oil reserve? Why is it something that calmed the market so much? It's basically a big stockpile of oil that you keep for a rainy day just like this in case you need to tap into something. It's almost like a pressure release valve for the oil market. The U.S. has the largest one. It's stored in these giant underground salt caverns along the Gulf Coast. It held around 415 million barrels of oil as of last month. It is cool the way that they get the oil out of these. Again, I went pretty deep down this rabbit hole. You pump water in, and, you know, oil and water don't really mix.

7:40Neal Freyman:You just skim the oil off the top, and that is how you access the strategic oil reserve. So just the fact that people were talking about tapping them was enough to make people chill out because in the short term, if this war really does wind down by the end of the week, there would be enough oil to keep the economy humming.

7:58Toby A. B. H. G. Harris:It's very rare to do this. It's only happened five times in history. The United States has tapped the strategic petroleum reserve. First time was during the Gulf War in 1991, then Hurricane Katrina in 2005. Then all the Libya unrest in 2011. And then President Biden did it twice in the wake of Russia invading Ukraine, which caused the energy market to go haywire. Didn't really do much because after he tapped the reserve the second time, gas prices surged to$5 a gallon, their most in history in June 2022. So this is seen as a bandaid to a much larger systemic problem. Who knows what today is going to bring for the oil markets.

8:37Toby A. B. H. G. Harris:Moving on, the beef between Anthropic and the U.S. government is heading to the courtroom because where else would it end up? The AI giant sued the Trump administration yesterday after the government deemed it a supply chain risk and ordered other companies who work with the Pentagon to stop doing business with Anthropic, effectively blacklisting it. Anthropic called the administration's actions a, quote, unlawful campaign of retaliation that imperils hundreds of millions of dollars of revenue and sends a chilling signal to other companies who may disagree with the government's policies. Because that is where this all started, a disagreement.

9:07Toby A. B. H. G. Harris:Months ago, Anthropic, which until recently was the only AI company authorized for classified work at the Pentagon, raised concerns about AI's use in the military. Anthropic drew two red lines. It did not want its AI to be used for mass surveillance of Americans or in autonomous lethal weapons without a human involved. This struck a nerve in the Trump administration, who said essentially, who are you to impose controls on what we do? We will use AI for all lawful use as we see fit. If it's not legal, we won't do it. But a private company shouldn't have influence, this much influence on the government.

9:38Toby A. B. H. G. Harris:That argument wasn't enough to convince Anthropic CEO Dario Amadei, who refused to agree to those demands. When talks broke down late February, Defense Secretary Pete Hegseth took the drastic step of declaring Anthropic a supply chain risk, indicating the company was a threat to U.S. national security. Meanwhile, the DoD signed a deal with OpenAI and Elon Musk's ex-AI to replace Claude. Toby, a high-stakes clash over the use of AI in the military.

10:02Neal Freyman:Yeah, a lot of Anthropics revenue, not just specifically tied to the government, is at risk here. Just listen to Anthropics Chief Commercial Officer Paul Smith. He kind of laid out some specific examples of deals that were at risk or had already fallen through. One customer paused negotiations over a$15 million deal because of the supply chain label. A grocery store chain, which again is very far removed from the government, canceled a sales meeting because they cited the supply chain risk as well. A drug maker wants to shorten its contract by 10 months. He went on and on labeling all of these deals that were at risk because no one wants to get on the bad side of the government.

10:41Neal Freyman:So in total, they used to expect their revenue from the public sector in 2026 to be$500 million. That's annual recurring revenue. Now they think that figure will fall by$150 million. So beyond just this specific contract with the Pentagon, it does put a lot of the revenue at risk.

11:01Toby A. B. H. G. Harris:Yeah. And this legal case will surround this concept of a supply chain risk and whether the Trump administration is allowed to deem Anthropic a supply chain risk. And the reason that is questionable is because how can Anthropic be deemed a national security threat? This is the government. This is the company's argument when it's literally being used right now in the war in Iran. How can it be a national security threat to the U.S. government when they're using it in the military? Currently, they also are just kind of doing the nuts and bolts of the statute, exactly saying that the supply chain risk can only be applied to foreign companies.

11:38Toby A. B. H. G. Harris:That could be either a cybersecurity threat or a material risk. This would be the first time that it has been used on an American company. Usually it's reserved for Russia cyber espionage or Chinese companies over fear that they might be hacking into American systems. So that's the legal contours of their argument.

11:54Neal Freyman:There's also a core First Amendment claim here because Anthropik said on top of those immediate economic harms, Anthropik's reputation and core First Amendment freedoms are under attack here. So that's one other avenue that they are potentially looking at is, hey, you can't just disparage us like this. You can't say that we are a woke AI that no one else should use. We have First Amendment rights. So a couple multi-pronged attack to how they are approaching this legal case.

12:21Toby A. B. H. G. Harris:And meanwhile, the Anthropic OpenAI U.S. government love triangle or hate triangle is really shaking up the talent race in the AI industry. Since OpenAI swooped in and signed that deal with the Pentagon to work in classified systems without some of the types of safeguards that Anthropic had been demanding, at least two high-level employees have resigned from OpenAI, specifically citing values and principles. These are pretty high-level people. One was the robotics head and the other was a vice president of research. And that guy, Max Schwarzer, actually wrote that he was leaving OpenAI to join Anthropic.

12:55Toby A. B. H. G. Harris:I think it's a hate triangle, Neil. I don't think it's a love triangle. Okay, moving on. After being gone for years, a cult favorite car is back on dealer's lots after customers demanded its return, which it has, but for a limited time only before it disappears again. It's being dubbed the McRib of autos. It's the Chevy Bolt. The 2027 all-electric Chevy Bolt is on sale several years after it was discontinued by General Motors. Yesterday, reviewers one by one released their experiences with the new Bolt, and they agreed that it maintained the soul of the original while adding promising new features.

13:27Toby A. B. H. G. Harris:As one put it, in all, the 2027 Bolt represents a solid upgrade. That's nice for the Bolt, but don't get too attached. In a melancholy twist, it's already been condemned to death. The Bolt is being made at a Kansas assembly line that's slated to switch over to gas-powered Buick and Chevy SUVs in just 18 months. So GM is bringing it back, much like the McRib, for a limited time, perhaps two model years. Toby, we'll get into the details of the car, but the primary selling point by Chevy is this. The Bolt is the cheapest EV for sale in the US today, starting at$29 ,000, including the destination fee.

14:00Toby A. B. H. G. Harris:You think we'll see McRib level hysteria?

14:02Neal Freyman:I think so, maybe with a little less, you know, napkins involved with the buying process. The Bolt is a very impressive vehicle in GM's lineup. It is bizarre that they even canceled it in the first place because you go back to 2023 when they did pull the plug. That was its best sales year ever. And then they also have some more stats that GM itself provided to some outlets. 60 % of GM's EVs represent conquest from other brands. Basically, that means you're switching from buying one car to another car brand. And Bolt had the highest conquest rate of any vehicle GM sold. Per GM's own stats, once owners go EV, they never switch back.

14:45Neal Freyman:Bolt has an extremely high loyalty within the model itself. So all of these things are pointing to the broad question of why the heck would you cancel this at all? Obviously, there were some issues with the political winds that were blowing at the time. Obviously, there were some issues with the battery pack that they were using with some fires along that line. But the question I have in my mind is, why would you ever cancel this thing at all? And then why are you going to cancel it again after 18 months?

15:07Toby A. B. H. G. Harris:Because the answer, I think, is that GM only has so many assembly lines. They're very expensive to put up. And they always thought that they could find more profitable uses for these particular assembly lines than making this$30 ,000 electric vehicle at a time when demand was slowing. So for its entire existence since 2017, since the Chevy Bolt was released then, it was made in Orion Township, Michigan. Now, so it had a pretty good run there. It was doing okay, but there were these fire concerns over batteries. There was a very costly recall. It cost it$1.8 billion. So GM was looking at this particular assembly line and saying, how can we make more money on this assembly line?

15:44Toby A. B. H. G. Harris:So they said in 2022, we're going to switch over to making these full-size EV SUVs like the Chevy Silverado EV version that we think will make us more money. And therefore, Chevy Bolt, sorry, we're basically evicting you from this assembly line, and we're going to make this more profitable vehicle. So that's the first reason for its demise. The reason it's coming back only for a limited time is they looked at this plan in Kansas and they're saying, oh, we have an 18 month window before we're going to make the Buick and the other Chevy SUV, both gas powered. And so what are we going to do there for 18 months?

16:17Toby A. B. H. G. Harris:Okay, let's bring the Chevy Bolt. Let's bring our McRib back to occupy that assembly line for 18 months. And I think it's just, you know, a car without a home, essentially.

16:25Neal Freyman:It is very funny too. We never actually talked about the car that much itself and we have to move on soon. But the one thing that stood out from reviews to me is that the car makes a lot of funny noises. There's a door chime sounds that whenever the door is open that cannot be silenced. There's a triple honk every time you walk away or lock the vehicle. Doesn't seem like you need this many noises.