Canada Wants to Link Up with the EU & America Reveals its Space Weapon

0:01Are you sucking wind from trying to keep up with AI and its impact? Take a breather and tune in to the Intelligence Shift, Morning Brew's new podcast with PwC. It bridges the gap between big picture AI concepts and what it actually means in practice. Host Dan Priest is joined by expert guests to discuss AI's role in sports, music, HR, and more. Listen to the Intelligence Shift wherever you get your podcasts. Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Mark Carney wants to make Canada European again. Then, the U.S. just revealed it has weapons up in space. It's Wednesday, September 16th.

0:39Let's ride.

0:50Netflix is reviving the OG Squid Games. The streamer has reportedly commissioned an unscripted series called The New Stanford Prison Experiment, debuting next month, in which participants will enter a prison and be assigned randomly as guards or prisoners, mimicking the original highly controversial Stanford study from 1971. It is set to consist of six 45-minute episodes, but we'll see if it lasts that long. Plan to last two weeks, the original study was shut down after just six days when the guards started psychologically abusing the prisoners. Toby, I saw someone say they're reinventing Mr. Beast from first principles.

1:28Many were also quick to point out that the original Stanford experiment has been pretty much debunked by psychologists at this point because the researchers were essentially coaching the guards to act in a more cruel way. and the Netflix show is definitely going to face the same issues. Maybe not because producers are coaching them to act one way, but the very fact that you're on a reality show at all, if you act completely normally, it's a pretty boring television, so maybe people are going to play it up again. So I can't wait for the very scientifically rigorous recreation of this psychological experiment to play out on TV.

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2:40Plus, get up to 20 % off select hotels instantly with member discounts and earn rewards for future travel. Sign up for their free rewards program and start earning on every work stay at hotels.com slash morning brew. That's hotels.com slash morning brew. Loyalty members 18 plus. In a year of map upheaval, Canada is plotting the biggest cartographic gamble of them all. It wants to join Europe. Canadian Prime Minister Mark Carney has been making a very real and very rapid play for his country to plug into Europe's single market, heading to the continent this week to essentially rush the fraternity of the European Union.

3:16His chances look good. This morning, European Commission President Ursula von der Leyen floated a plan to make Canada, North American Canada, an associate member of the EU. She told Carney, we share one ocean, one set of values, one way of seeing the world, and we will now build our shared future as well. he'll likely accept her invitation while delivering a major keynote address to the European Parliament tomorrow. In cozying up to Europe, Carney is making a bold bet to steer Canada away from dependence on its neighbor to the south, the United States. Whereas other countries have accepted trade terms proposed by the White House, Carney has rejected a deal with Trump and retaliated with tariffs against the U.S., claiming that Canada was effectively at war.

3:56The public has supported his fight after taking much offense from Trump, who has called Canada the 51st state and changed the name of Lake Ontario to Lake America. It won't be a simple pivot and is fraught with risks. Canada is deeply reliant on the U.S. for trade, with 70 percent of its total exports heading across the border. Entire industries have been set up to cater to the U.S. market. But Carney thinks transforming Canada beyond America's little brother is existential. European leaders are rolling out the red carpet. Finnish President Alexander Stubbs said, wouldn't it be lovely if Canada was the 28th state of the European Union rather than the 51st state of the United States?

4:33So maybe the leaders at the very top of the EU are excited for this, but you go one level down to some of the diplomats in the European Union, and they're actually not quite as excited. The Financial Times published this article this morning saying that the EU has rebuffed Mark Carney's unique alliance with Canada. According to the Financial Times, they have given a cool reception to be granted a unique alliance with the bloc, deflating prime ministers. Mark Carney pits for middle powers to close ranks around the U.S. and China. And part of the reason is because of the EU's relationship with Trump and the United States.

5:07The main concern were that countries that rely on NATO protection in the face of Russian threats were concerned that Trump would not like to see the EU and Canada aligning themselves even further. But also maybe their ego was bruised just a little bit. Carney has coined this term the middle powers and the EU ministers were basically like, we're not part of that. We are much bigger. Our bloc actually commands a lot more financial power than you do, Canada. We don't necessarily need you. Again, this is all kind of reports from the financial time of what diplomats are saying to each other. That is one thing standing in the way, though, is just one, Trump.

5:46And then two, can the EU put aside their ego to maybe align themselves to a smaller economic market? Unfortunately for those diplomats, people that are higher up are very close with Carney because, remember, this guy was the head of the Central Bank of Canada and England. He spent 13 years at Goldman Sachs. He knows all of the European leaders. He's buddy-buddy with pretty much all of them. He worked in banking with the German chancellor, Frederick Merck. So he is very tight with them. They really like him at the top levels. And he is just making a ton of moves this week. Maybe they won't necessarily join the European Union.

6:21That will remain to be seen. But at the same time, Carney is making a huge play for inward investment. He assembled around 300 CEOs and senior executives from the biggest investment firms this week. BlackRock CEO Larry Fink, Blackstone President John Gray. These are really heavy hitters with tons of money. He assembled them in an investment conference in Canada, the biggest one that Canada has ever seen. And he made this huge announcement that he's extending and expanding tax relief that will reduce Canada's marginal effective tax rate on business investment to just 6.4 % from 13%, which would be the lowest of G7 countries, half the rate of the US.

6:59He is trying to portray Canada as a trustworthy, stable investment partner where you can come and open an oil field in Alberta. You can create a pipeline if you want. We're gonna give you very preferential tax treatment and you're seeking$500 billion worth of investment. So that also got a pretty excited reception to see Canada just opening up to the world after rebuffing calls from the United States. It's a big switcheroo for Canada as well because if you go back in their recent history, they basically took the exact opposite approach to foreign investment. They made it very difficult, actually, to put your money into Canada.

7:36It was very much almost actually like a Trumpian turn of buy Canada. We want the Canadian industries to thrive inside our borders. We do not necessarily want to invite money from outside people. That is shifting now, especially because I think Carney does see the moment to contrast themselves with a pretty volatile United States right now. So pitching themselves as stability, as a trustworthy partner, that could go a long way when you are inviting foreign money into your country. And we'll see whether Canada and the U.S. make up. But Carney yesterday told a story that basically captures where the two are right now.

8:14In an interview, he told them about he was talking about Trump presenting him with a key to the White House. And he said, you just bring it. They let you in. And then he says, maybe they'll shoot you. And that sort of sums up the relationship we have. Moving on, it's been almost a week since an Anthropic employee quit and posted a thread warning super intelligent AI could destroy humanity within a decade. An alarm bell that's rippled across Wall Street, the halls of governments, and probably your family group chat. The problem is no one can agree on what to do about it. It's not for lack of ideas.

8:46It's that there are too many of them. Ask 100 different people on how we should regulate AI and you'll get 200 answers ranging from we don't need any rules at all. This is a hoax to let's build a kill switch that shuts an AI down if it gets too dangerous. The first thing you need to know is so far there are virtually zero laws that have been passed that regulate AI at the federal level. Plenty of bills have been sloshing around Capitol Hill and lots more are on their way. However, there's been no follow through. None have gotten close to becoming law. One of the most notable is the Frontier Act, unveiled in July by a bipartisan group of lawmakers that would mandate the biggest AI firms release reports on their models and undergo audits by third-party monitors.

9:26Other bills would create independent watchdogs similar to the ones that oversee the financial industry. And even others may target AI-driven biological or nuclear threats. Some in Congress want to act as quickly as possible, claiming the future of humanity is at stake. But many others, particularly Republicans, are saying, hold your horses. Let's not panic here. President Trump has repeatedly downplayed the threat of AI while House Speaker Mike Johnson reassured us you're not all going to be dead in 10 years. Thank you, Mike. There are a lot of different ways to attack the AI question, which is why we've seen legislation continually stall out.

10:01One is how do you pace the frontier? Who gets to decide if a model is too dangerous to be released? Is it independent third-party auditors? Is it the U.S. government? A lot of people within the U.S. government have said, we probably don't have the technical know-how to even try to regulate this, so maybe it isn't our job to do it. There's the national security question as well. You want to always make sure that you have the ability to fend off attacks from other countries' cyber attacks armed with AI. You want to protect your physical infrastructure from it, so there's bills around that. There's also your actual electric bill.

10:36A lot of these representatives in Congress are saying like, hey, the people that I represent are coming to me and saying, I don't want my bill to go up. Let's attack it from this electricity angle. There's the job loss angle. AI comes for a lot of different industries. So that's kind of Bernie Sanders's approach here is that he wants the people he represents to capture some of AI's upside. So he's putting a bill forward that does that. And then I can keep going down. There's the copyright question. There is what happens if this entire AI boom blows up. There are so many different ways to attack this problem.

11:11And lawmakers all have their own kind of agendas, which is why maybe we've seen nothing really get passed. And they might take their cue from the industry itself. And over the past few days, we've heard a number of interesting ideas floated by Elon Musk, Dario Amadei of Anthropics, Sam Altman of OpenAI, Jensen Huang of NVIDIA. They all have kind of different ideas, but at least the opening, the AI leaders are coalescing around this idea of we need to grade each other's homework. We need some peer review. Elon Musk at the All In Summit on Monday was like, we just want to have other companies come in and so, quote unquote, test harness their models to evaluate their safety.

11:51These are really complicated models. And just to have someone else come in, maybe a third party auditor, maybe another company come in and just check your work to make sure you didn't miss anything. So these an AI agent swarm won't take over the Internet might be helpful. And what's interesting is that Dario Amadei of Anthropic has actually proposed that the U.S. grant an antitrust waiver to these AI companies so they can work together in a sort of cartel to slow things down. Said without that, we won't be able to work together because we'll just be sued for being a monopoly here at the top. Yeah, potentially the best example of this playing out in a different industry is FINRA.

12:29That is essentially Wall Street's industry-funded regulator operating under SEC oversight. I think this is kind of what AI leaders are pushing towards because they want it to be funded by the industry, staffed by people within the industry that actually know what's going on with these models, but ultimately overseen by the government. That is sort of where you're seeing a lot of these industry leaders align themselves. One notable exception to that is Mark Zuckerberg, who posted another kind of rebuttal to this push for regulation yesterday. So we'll see if it does become this big kumbaya moment or there's some infighting and we never get that FINRA-esque regulator.

13:07But that probably is the closest thing we have to the AI industry trying to regulate itself right now. And we should point out that there is another major critic of regulation, what the AI labs want to do. And that's probably the biggest kahuna of them all. That's Jensen Huang of NVIDIA. He is the CEO of the biggest company in the world that's applying the chips that make these models go vroom. And yesterday at the Salesforce conference in San Francisco. All these people do is go to conferences and summits and just say stuff. That's what being a CEO is. And I'm sure some of you listening to this are at that conference themselves.

13:41So maybe you heard him say that. He pushed back on the idea for any laws at all. He said the fact that we need new laws, new antitrust laws or new regulations so that these companies can do their fundamental engineering and do it properly before they are released. That is just completely unnecessary. So he has aligned himself with maybe the Trump camp that says this is all a little too much. You know, I don't think that AI is going to kill humanity at all. So very interesting battle lines being drawn. Let's move on. Did you see that, Neil? Was it a bird? A plane? Nope. It was an orbital weapon deployed by Space Force.

14:15This week, Air Force Secretary Troy Mank confirmed that the shooting star you saw might have actually been a space control weapon. The first time the Pentagon has openly admitted that such weapons are orbiting us right now. Space control weapons is an intentionally broad term and can include anything from a simple radio frequency jammer to laser dazzlers that mess with optical sensors. It also includes so-called kinetic weapons, which have the ability to physically destroy satellites. If that all sounds scary, hand-wavy, and futuristic, that's sort of the point. Secretary Mink said that the disclosure is meant to act as a deterrence to other nations without fully disclosing the weapons capabilities.

14:55Talking publicly about space weapons is part of a chess game going on hundreds of miles above your head, with Russia and China already sitting at the orbital table. The U.S. has been keeping an eye on Russian testing of anti-satellite weapons as far back as 2020, while a 2025 space threat assessment deemed China has the ability to form, quote, a formidable counter space arsenal. Neil, it appears that the U.S. is saying we also have things in space that go pew pew. And this also provides us with a potential peek into a future where what's going on in space influences warfare down here on Earth.

15:30Yeah, first of all, this is not just armies for the first time looking skyward and saying, hey, maybe we can use space for weaponry or to help us in our objectives. Militaries have been using space for decades, whether it's for communications, navigation, missile warnings. They've been talking to satellites, and satellites have been very helpful in war. Now we're talking about something completely different, which is literally putting a weapon up in orbit, up in space. And my first question was, obviously, what kind of weapons are we talking about? like lightsabers, like that would be cool. But the answer is no, it's not lightsabers, but it's something maybe similar.

16:05One idea is that it could be a directed energy type of weapon, like a laser dazzler or something called a spoofer. And that's the other kind of category here that it could be, which is just a jammer to target radio frequencies or things like that. Then you're also talking about kinetic weapons, which you mentioned. There's one big drawback to kinetic weapons, which is, as we saw with the Death Star, when you blow things up it creates a ton of debris and that's exactly what the u.s army and honestly pretty much every army does not want to have in space because that can just fly off and destroy your own satellite so there's a lot of collateral physical damage when you actually blow sink blow like an enemy satellite up in space so most analysts there's tons of speculation about what this weapon could be they're like i don't think it's just kind of like an artillery thing in space I'm trying to figure out how a lightsaber weapon would work because that is a personal sword that you wield.

17:00It's a weapon. A lightsaber in space is just spinning around slowly and just already. I'm trying to wrap my head around that one. One of the reasons why Mank acknowledged that we have these weapons up there is deterrence. That was kind of the big idea here is that, hey, if we say that we have something up there, maybe nations would be less inclined to attack us or something like that. But a lot of critics said that the announcement was too vague to actually create any meaningful deterrence. They pointed towards nuclear deterrence, this concept of mutually asserted destruction. That works because everyone involved understands roughly what a nuclear weapon can do and when they might be used.

17:38If you just kind of hand wave the fact that you have a space weapon, it's not really going to deter anyone because they don't know if it's a laser dazzler or if it's a kinetic weapon or if it's a lightsaber. this concept does not exist up in space so maybe what you actually just did is create a space arms race because now china and russia feel emboldened to publicly acknowledge that they have their own orbital weapons without actually disclosing what they do either so that was some of the pushback to this idea that this was purely a deterrence play and it's actually a good idea for the safety of the united states and if you're a company in the space business you're loving this arms race because these companies actually have actually been raising tons of money from various investors because they think this economy and perhaps this industrial military complex is going to move above earth there's been a couple of european space companies that have raised 346 million dollars and 450 million dollars just in the past few days alone so far this year investors have put in$16.5 billion globally into space tech startups.

18:43That is on track to almost double last year's haul. So there is a lot of money going into space, space tech, defense tech, in space right now. So that'll be the next big arms race. All right, we're going to take a quick break and come back with a story about a big IPO right after this. Neil, what's your plan for managing your money. Good one, Toby. Tell me another. Listeners, please don't take after my co-host. Northwestern Mutual's comprehensive planning approach can give you peace of mind in an uncertain world. Whether you're just getting started or wondering if you're on the right track, they'll match you with a financial professional who will meet you where you are and ask better questions to uncover blind spots and find new opportunities.

19:25Get started at nm.com. Plus, to better understand your finances, tune in to the award-winning podcast, A Better Way to Money. That's nm.com. The Northwestern Mutual Life Insurance Company, Milwaukee, Wisconsin. Meet Amazon Ads rising star, Daryl Spencer, who set out to redefine men's self-care with his brand, Crown Skin. Amazon Ads helped him grow. I walked away from big tech to build a luxury brand in a category that no one was paying attention to. With the help of Amazon Ads, I'm reaching relevant audiences and competing with the biggest names in men's grooming. We've scaled to over$500 ,000 in monthly revenue.

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20:43For more info, head to the link in the show description. Here in the US, everyone is locked in on the potential IPOs of Anthropic and OpenAI, but another mega debut and Ocean Away is making just as big of waves. The richest man in Africa, Nigerian billionaire Aliko Dangote, just launched the IPO of his giant Lagos oil refinery. The$1.6 billion he hopes to raise from investors would make it Africa's largest public offering ever. Dangote's refinery is big. Construction finished in 2024, and earlier this year it reached its full capacity of 650 ,000 barrels per day. For context, Sadia Ramco's biggest refinery, the Rastanura, produces approximately 550 ,000 barrels per day.

21:28It's a critical piece of infrastructure for a company because despite being a very oil-rich nation, Nigeria has been forced to outsource much of its refining to other countries to turn their crude into usable fuels. In the years since Dangote's came online, it has transformed Nigeria from an importer of refined petroleum to an exporter. The refinery cost about$19 billion to build, which means the initial offering price of roughly$49 billion is two and a half times its construction cost, a valuation some critics say is too high. But Dan Gote is counting on retail investors to jump at the chance to snag a piece, setting the minimum investment at just$4 and calling it, quote, the people's IPO.

22:12Neil, I almost see shades of the SpaceX IPO here, not in terms of industry or valuation, but in how it's being marketed to everyday investors. Is this the people's IPO? Tango has a lot of critics. He has a lot of fans, but he also has a lot of critics. This is priced at 40 cents per share. And a lot of analysts are looking at that, looking at the earnings coming in from this refinery and saying, I think this is way too expensive. And retail investors are being asked to pay up for a business that is just not worth that. He's also been dinged for just being in the cahoots with the government. He's a lot of political influence.

22:49And many critics think that he gets preferential treatment from the government. He basically has monopolies on various sectors because he's just granted a free pass by the government. And he's also another big thing that people are pointing out is that he will retain 87 % ownership of this entire enterprise after he IPOs. Again, as we saw with SpaceX and other IPOs, they don't give away the whole thing that, you know, they retain a lot of share, but 87 % is quite a bit of control when you're calling this an IPO for the people. And he's pitched this as a way for, you know, a ticket to middle-class substantial wealth for Nigerians.

23:25He's saying, look, you're young, put money into my IPO. I will grow it for you. And this is your, your ticket to the middle-class essentially. There are two other angles too. One, this comes at a pretty good time for the refinery business. What have we talked about for the last couple of months? The fact that there is not enough refinery capacity in the world right now, even as supply of crude oil is constrained. So he wants it to more than double its capacity to 1.4 million barrels per day, which would make it the largest refinery in the world, overtaking one in India. So it is a good time to be in the oil, specifically the refinery business.

24:02And then the other angle too is that invite people into the capital markets, make this the time where a lot of new retail investors can make their first investment. We've seen platforms already crash that offer shares into this. So there's clearly the demand there. Dengote is saying some wild stuff, though. He says, if you put$76 in today, I will make you a millionaire in two years. So clearly trying to play it up that this is a wealth creation event for a lot of Nigerians. And it's a wealth creation event for him as well. He's already Africa's richest man, and this could raise his wealth by two thirds to$60 billion.

24:37He could very well soon be richer than Ken Griffin. And if you look at what happens in developing economies, maybe without infrastructure, and you build it, then there's this class of billionaires from India and Mexico. So from India, I'm thinking Guatamadani, Mukesh Ambani, and then Mexico, you have Carlos Slim. In Africa, you have Dangote, where you're maybe in a place that doesn't have great telecoms or railroads or ports or sugar or cement. Dangote got rich from sugar and cement. And so there's this class of mogul from more developing countries that he said he himself wants to emulate these guys from India by building airports and things like that.