BofA Spends Big on GLP-1s & AI Invents a Virus Not Found in Nature For First Time

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0:30Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Bank of America's astonishing bill for weight loss drugs. Then AI just designed a virus that's never before existed in nature. It's Friday, August 7th. Let's ride.

0:56If you missed the treasure hunt of finding movies at Blockbuster, we found the next best thing, Binge Buster. It's a new website that recreates Blockbuster, but for the streaming era. When you head to BingeBuster.net, you'll enter a digital video store where you can browse titles from HBO Max, Netflix, and other streaming services perched on shelves like it's the 90s again. And the best part, no teenage employees judging your movie picks. Toby, wandering around BingeBuster reminded me just how many bad movies have been made. It's glorious. I won't lie. Great idea, but awful experience. Very difficult to navigate.

1:30the movie titles aren't too small. It's hard to turn around in this virtual store, but just seeing the movies piled up on the virtual racks did make me yearn for a simpler time. And Christopher Nolan has been beating the drum of physical discs for a long time. Now he wants you to buy more physical media like Blu-ray. So discs are so back, but it made me think of a business idea too. People like physical media, but buying a Blu-ray disc is very expensive. What if we launched a business that did that for you, buys them, aggregates them. You can come into a store and browse around, rent it for a short period, then give it back.

2:06I don't see how it fails. Honestly, I thought you were going to say, okay, why don't we rent out discs? And I was like, you know what? That is actually a pretty good business. I'm talking about Netflix. You put them on, no, you put them on a block actually. So you can, it's a physical store. I'd call it, I don't have a name for it yet. Someone else come up with the name for it. All right. So head to binge buster on it. If you want to see what we're talking about and browse some titles. It also just made me think I know the passwords to absolutely zero of my streaming services. So it gave me a lot of anxiety.

2:35This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50 page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up Required compatibility and availability varies 18 plus. All right, here is a little pop quiz for you on a Friday morning. How much would you guess Bank of America spends covering GLP-1 weight loss drugs for its employees?

3:10The answer is$250 million, and it says it might be the best quarter bill it's ever spent. This week, CEO Brian Moynihan revealed the figure in an interview with CNBC. We spent about$250 million or more on GLP, as he said, and that's up from zero four or five years ago. He added, we see a great impact on the employees. It also has a great impact on its budget. These medications account for about 13 % of Bank of America's total healthcare spending of$2 billion. Still, Moynihan believes it's the right thing to do. He said the company has set up health coaching to help employees on the drugs, monitor weight loss and rejigger their lifestyle.

3:49He's bullish on GLP-1s for long-term health, but also mentioned short-term benefits as well, like lowering the risk of cardiovascular issues. The two leading GLP-1 companies, Nova Nordisk and Eli Lilly, have got to love what they're hearing. They've been pleading with companies to cover these drugs for their employees, but have only achieved modest success so far. Just over one-third of global employers offer coverage of GLP-1s for their workforce, according to a survey released in July. Toby, that's a hefty bill. Employees really want this covered in their health plans. One survey found that 29 % of employees would be willing to switch employers to gain access to GLP-1 benefits.

4:28But the tension here is that most employers aren't actually willing to spend the money, spend the quarter billy that Bank of America did. Only 36 % of companies cover GLP-1s for both diabetes and weight loss, and a lot of them are actually moving in a different direction. And PwC has recently stopped covering the drugs for weight loss. And if you zoom out to employers with 500 plus employees, 6 % dropped weight loss drug coverage in 2026. 5 % plan to do it in 2027. So you have this inherent tension because for the businesses, it's very difficult to make the math work. It's hard to say that the return on investment of allowing your employees to take these drugs is the good thing for the business.

5:12because they are rather expensive. Now, there is nuance to that too because Moynihan just says, it's still the right thing to do. We're not in it for an exact perfect corporate ROI. We don't necessarily need our employees to work at the company for this many years until our investment plays off. He's just saying, it's just the right thing to do. Yeah, some employers might say, actually, it does make sense economically because there was this study published by Aon in January. It said individuals who took a GLP-1 for 18 months saw slower medical cost growth, reduction in hospitalization. So you think over the long term, if this employee sticks with you and they can use GLP-1s under your dime, then they will just be healthier overall and have a healthier workforce.

5:53And it will lower your costs for health care overall. That's not what's happening in the short term. So if your budget is being squeezed and you see that this is when you look at what is the rising line item in your total budget, especially for health care spending, and it's GLP-1s, then you're saying, OK, I don't know if we can do that. So that's why you're saying a lot of companies on the uptake in 23, 24, and then in 25, 26, 27, the number is actually going down 5%, 6 % per year. You're going to see some infighting amongst employees too, because one study found that premiums could rise 10.4 % when health plans expand to include GLP-1 coverage.

6:30So essentially, if you are not on this class of drugs and your coworker is, that means your premiums are going up. And that is controversial. This is a uniquely American thing, the fact that a lot of employers are offering health care. So that means you are inextricably tied to your coworkers because of these employer-insponsored health insurance plans. So that is causing inter-office tension. Some HR managers are saying, this has been one of the most stressful years of my life because I'm trying to weigh all of these things. And plus, there's social stigma that comes along with these drugs as well.

7:03So it's absolutely changing the dynamics within workplaces as well. Moving on, SpaceX stock has been on a roller coaster so far in its short time as a public company. And yesterday, it entered its biggest loop-de-loop yet. More than 900 million previously unavailable shares became eligible for sale yesterday as the first of its major lockup periods ended. While they aren't forced to sell, when a lockup ends, investors and employees who were granted equity in the company have the opportunity to turn their paper wealth into cold, hard cash. Even though SpaceX's stock has fallen nearly 50 % from its peak, many of those insiders are likely sitting on massive gains, which can easily turn diamond hands into paper ones.

7:44The first share unlock had the chance to really cause a ruckus too, because when SpaceX went public, just 5 % of its shares were actually tradable. As Bailey Gifford, an early investor back in 2018, put it, there's probably a reasonably good chance that this will be the biggest single increase in the supply of shares for a single company in a single day ever. What happens on that day? I don't know. So what did happen? Not too much. Shares actually rose 6 % as the flood of selling never materialized or was previously priced in. But Neil, this was just the start. Several more lockup expirations are scheduled for later this year, which means we get to do this song and dance a few more times down the road.

8:23Everything about this IPO was unusual. SpaceX is like your friend that comes into the party and is like always doing a bit. And you're just like, can you just be normal for once? Because typically when a company IPOs, the lockup period ends 180 days after. That's the standard. Basically, all of the employees, all the insiders, all the early investors get a cash out if they want 180 days down the road. SpaceX, Elon Musk decides, no, let's do something different. Basically, let's crop dust everywhere. Let's just let out a little at different points. We got 900 million shares coming in early August.

8:56We got another 300 million coming in late August. And Elon Musk himself can't sell any of his shares until next year. And the idea there is why don't we smooth out these lockup dumps? Instead of doing this all at once where potentially the stock could go haywire, instead of ripping off the Band-Aid, let's peel it off slowly. And many Wall Street analysts have different views about that. but at least for the first lockup period ending yesterday, the stock went up. So this was a test that it passed. You can't be talking about crop dusting this early in the morning right now. There's a lot of people listening on their way to work.

9:30Anyway, the other reason why SpaceX is so unique is that it has a very wide swath of early investors and early employees because remember, this has been a private company for over two decades before it went public. That's just the space business too. It then merged with XAI, which also merged with X, the social media platform. So the shareholder base was very broad, very varied, lots of different companies all coming together under one thing. So maybe that's another reason why they designed this phased release instead of that one traditional 180-day lockup period. I just wish I was a part of the early investors.

10:09There's been these Facebook groups that have popped up between employees and early investors being like, so what do you guys want to do? Should we sell? what is the right strategy here, especially for tax purposes. There was one Facebook group with about 1 ,200 members, and it is estimated that they collectively had at least a billion dollars worth of shares, probably the most valuable Facebook group of all time. I wish I was in it. I was not. But it is interesting to think about, hey, why did the stock not fall, right? The stock was supposed to fall. It's a simple supply and demand situation.

10:41There's more than double the supply coming onto the market. And it looked like the demand was there to meet it. There's a few theories why there was demand to meet it. One is that a bunch of indexes changed their rules to get SpaceX in their lists even before it was supposed to, because SpaceX is worth$1.6 trillion, and you kind of want it in your index. So the NASDAQ is one of many indexes that said, hey, SpaceX, you're invited a little earlier than usual. That creates demand right there. The other is maybe selling wasn't as bad because this is just a never bet against Elon story. If you were a Tesla investor when it went public and you sold your shares early, then you would have missed out on probably billions and billions and billions of dollars in gains.

11:24Still. So we mentioned that this is the first of many lockup periods to come. That was 900 million shares, which sounds like a lot, but additional unlocks later this year could eventually release more than 5 billion shares onto the market. So again, this is not going to be the last time we're talking about this because more shares are coming. Welcome to stock of the week, dog of the week, where we pick one stock that got a prime table at Toby's wedding and another that got stuck with the randos. I won the pre-show slip inside race. So I get to go first. And my stock of the week is sample Gates management, a real estate private equity firm that just sold its first investment, a warehouse in Indianapolis for a tidy 65 % gross profit after just 16 months.

12:04Now, wait till I tell you that this PE shop is run by a bunch of undergrads at Indiana University. Each year, 20 Hoosiers run their own real estate investment business named Sample Gates after the Arches welcoming you to campus in Bloomington. With$12 million in equity, Sample Gates is the biggest undergrad student managed real estate private equity fund by both capital raised and fund size in the country. Some, like rising senior Brooks Hiller, chose IU specifically because of the opportunity to participate in this real estate company, according to the Wall Street Journal. It's easy to understand why.

12:37As the landscape of higher ed changes, students are looking for real-world experience to make that astronomical tuition pay off, and universities are eager to provide those experiences to prove they're worth it. Sample management success is also symbolic of the shifting real estate business, the journal writes. This industry used to be under lock and key, a clubby pursuit once exclusive to elites, but now, thanks to digitization, anyone with an internet connection, even a 19-year-old undergrad can access public data. Toby, I could barely bring myself to a 10 a.m. class in college, let alone manage a$12 million fund.

13:09So they raised a bunch of money from 74 investors. So it got me thinking, who is giving money to these kids to manage? And a lot of them are Indiana alumni who work in the space. But it's actually not only an opportunity to return their capital to them, but it's a way to mentor and recruit top students. If you are a real estate professional, you might as well get your foot in the door with these kids that are coming up through the pipeline. The ironic thing, though, too, is that a lot of the students who enter into this prestigious program already have full-time jobs lined up. So maybe those Indiana investors were hoping for, like, oh, man, I'll get this access to this cream of the crop.

13:47And yet most of them probably have Wall Street jobs or something even before that they enter the program. But this is definitely something we're going to see proliferate going forward because there are more of these undergraduates pulling off pretty high level work in the professional workforce. I'm thinking of this Harvard undergraduate consulting club that has made money and built $7 million to major corporations like AstraZeneca, Delta, Samsung. And these corporations are basically tapping students at a fraction of the cost of McKinsey because who are you actually getting when you hire McKinsey?

14:22you're probably getting Harvard undergraduates. So now you can go straight to the source. It gives them real world experience. So I am going to go out on a limb here and say, these programs are going to proliferate because it just makes sense for so many people. Yeah. About a decade ago, there was just a several student managed real estate funds in the country. Now there are at least 18 at different colleges and a bunch more are set to launch this next school year. I was trying to, I was interested about how this works. Like, do the students just picket? Is there any oversight? Do they just find these random properties across the country and say, okay, let's just throw all this investor money at it.

14:58There is some checks and balances. They have to present investments to a committee, which is a board of 10 seasoned real estate executives. They have to sign off on all of their deals. What do you think their rejection rate is? It's about a third. So you get rejected for about a third of the one that undergraduates bring to this committee of 10, which is not bad because, again, I can't even imagine doing this when I was 20 years old. Well, they are evaluating three to eight deals per week. So 400 potential events per year are coming across their desks. And it should be a highly selective process.

15:32I would want that if I was an investor. But yeah, I don't even know what I was doing. I had no job prospects. I always wanted to be a podcaster with my best bud, Neil. We got to start a podcasting committee and then started at your alma mater of Maryland. All right, we're going to take a quick break and come back with my dog of the week right after this. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks.

16:09Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required compatibility and availability varies 18+. The following is a paid advertisement. Toby, do you have a personal philosophy? Yes, everyone should have more money. New York Life's protection-powered growth philosophy might align with yours then. It explores how protection can serve as a strategic foundation for long-term financial success that enables future opportunities. Their approach brings protection and growth together, helping clients build confidence through every stage of life.

16:43To learn more, head to newyorklife.com slash protection dash powered dash growth. That's newyorklife.com slash protection dash powered dash growth. My dog of the week is humanity because AI has gone from making videos of Will Smith eating spaghetti to viruses never before produced by nature. The breakthrough Stanford researchers just achieved reads like the opening credits of a post-apocalyptic horror movie. Scientists trained an AI model named Evo to understand the underlying grammar of DNA. Using its newfound fluency, they asked it to come up with a genetic recipe for viruses that have never existed.

17:24It pumped out 700 ,000 of them. Of those 700 ,000, researchers handmade 285. And of those, 16 viruses proved they could function by attacking bacteria in petri dishes. Now, before you go stocking up your underground bunker, the team behind this breakthrough took precautions by intentionally withholding data from Evo on viruses capable of infecting humans, plants, or animals. But while this particular experiment does not pose a threat to humanity, it does prove that AI can learn how to write the DNA of viruses that can survive when brought into the physical world. It's not difficult to see how those capabilities could be used in the wrong way.

18:01You could say, hey genomic language model, make me an influenza a genome that is modified to be more transissible or more lethal, an AI and biology researcher unaffiliated with the study told the New York Times. Neil, the reaction to the study was strong. Some people think we, meaning humanity, are screwed. Are we screwed? Yeah, a lot of people are focusing on the negatives here, which is completely reasonable. It's Friday morning. I want to focus on the positives. Why are they doing this in the first place? These are Stanford researchers. They're not the villain in the next Mission Impossible movie that Tom Cruise has to save humanity from a virus created by an AI entity.

18:38Okay, so they did this because there are a lot of infections that become resistant to antibiotics. And the way they actually tested the AI viruses was they sicked them on E. coli and said, can you kill this bacteria in this petri dish? And yeah, they were really good. It was far more effective, the AI virus, at killing E. coli than a natural one. So the potential that could be unlocked for figuring out, for killing bacteria and for healing certain illnesses and developing new treatments and, you know, unlocking this new utopia for public health is enormous. And that's why you have other researchers who weren't affiliated with the study saying this is a historic moment.

19:21For the first time, we're beginning to design biology on a computer. Another called it biology's Wright Brothers moment. So there's a lot of promise here, a lot of anxiety, but also a lot of promise. Yeah. When we hear virus, we think about disease, but viruses are actually biological Uber Eats delivery vehicles. You can load them up with therapeutic genes, not just bad genes, and deliver those to human cells. So you're absolutely right that if you design viruses specifically for medical or biotechnology applications, that is a breakthrough in science. Let's go to the darker implications though, because if I can learn the rules of viral genomes, you can create entirely new ones that you don't know how to fight.

20:04If nature doesn't create it, we barely know how to stop viruses in nature. Now, all of a sudden you're adding these human made ones in the physical world. And so if you are engineering previously existing viruses to be more transmissible, that is absolutely a scary thing, especially because we just don't have the governance rules set up for this. How are you supposed to regulate something that does not exist yet? What are you supposed to do? There's obviously regulations around high-risk research. Like you can't go and try to engineer smallpox. You will not get research funding for that. But how can you stop researchers from doing exactly what these Stanford scientists did and going off the deep end and trying to create something never before seen?

20:44So there exists a regulatory medical issue that has not been solved yet. that's kind of where a lot of scientists are saying, maybe we jump the shark a little bit here. Let's sprint to the finish with some final headlines. Meta just got hit with its biggest legal bill yet for the damage its social media platforms have done to kids. Yesterday, a New Mexico judge ordered the company to pay$567 million to an abatement fund on top of the$375 million it was already required to pay by a jury. This stems from a case back in March when Meta was found to have enabled sexual exploitation of young people and misled users about the safety of its apps.

21:21On top of the payment, Meta will have to make changes to its platforms in New Mexico, such as hiding by default the number of likes on photos from underage users and banning push notifications to them from 10 p.m. to 7 a.m. Meta says it disagrees with the decision and is planning to appeal. Yeah, they're also limiting underage users to 90 hours per month across platforms. That comes out to about three hours per day. So it's absolutely a big change as to how you can use social media in the state of New Mexico. This is one of many lawsuits nationwide, though. A lot of school districts, a lot of teenagers, a lot of state attorney generals have brought them.

21:58Another major trial begins later this month in California, where a coalition of attorneys from California, Colorado, Kentucky, and New Jersey are all kind of pursuing similar things. So not the last that we've heard of this sort of case against Meta. And it's actually eating into its profits at this point. We've heard so much about these lawsuits. but a couple of these verdicts have been handed down. It's having to pay these bills. Just in its last earnings report, Meta unveiled a legal charge of$2.4 billion. Looks like that is not going away anytime soon and could only increase. Ford is releasing an electric pickup truck that'll start at less than$30 ,000, and it's called the Fathom.

22:34The automaker has been hyping its push into affordable EVs for a while now, and yesterday it lifted the hood on the price and the name of its first vehicle in its new electric era. The Ford Fathom, a four-door pickup truck, will start at$28 ,350 plus a$1 ,500 delivery charge. We don't know exactly what it looks like, but it's expected to be around the same size of a Ford Maverick with a roomier cabin than that of the Toyota RAV4. Toby, Ford's first foray into EV pickups, the Lightning F-150, didn't really pan out. It's hoping more people can fathom paying for the Fathom. The Fathom is also big because it's the first car that's going to be built on Ford's new universal electric vehicle platform.

23:16This is their idea to compete with the likes of Chinese EV makers and Tesla on price. They've just reimagined how you make cars from the ground up. So that is a big test case for that. It's also a big test case to see if America still wants EV trucks. I mean, everyone was so hyped for the F-150 Lightning. It just didn't sell. but maybe that was because it started above$50 ,000. The bet here is that Americans don't hate EV trucks. They just hate expensive cars. Let's bring the price down and give it one more go. And if it doesn't work, I don't know where Ford goes from here because the company took a nearly$20 billion hit last year due to EV related restructuring charges.

23:57So the fathom has got to pan out. And a new auto rivalry was born, which I'm excited about because this is going to go directly head-to-head with the Slate Auto pickup, which is this new company backed by Jeff Bezos that says, like, really, you can customize this to the T, but it's gonna start at$25 ,000, which is a couple thousand dollars less than the Ford starts at. So those two cars, I think there's gonna be a lot of emotion between fans of the Ford and fans of the Slate pickup, which should be really interesting to watch. Finally, a steakhouse in Florida is serving up a dining experience where the only thing getting dressed is the salad.