Elon’s SpaceX Buys Musk’s xAI & Will Bob Iger Actually Leave Disney This Time?

0:00Neal Freyman:Oh, could this vintage store be any cuter? Right? And the best part? They accept Discover. Accept Discover? In a little place like this? I don't think so, Jennifer. Oh, yeah, huh. Discover's accepted where I like to shop. Come on, baby, get with the times.

0:16Toby Lavery:Right, so we shouldn't get the parachute pants?

0:19Neal Freyman:These are making a comeback. I think.

0:23Toby Lavery:Discover is accepted at 99 % of places that take credit cards nationwide. based on the February 2025 Nielsen Report. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, why is Elon selling his AI startup to his rocket company?

0:40Neal Freyman:Then minivans are so back. It's Tuesday, February 3rd. Let's ride.

0:50Toby Lavery:Look, it's been a brutal winter out there. In the tundra of New York, temperatures didn't rise above freezing for nine straight days this morning it's colder here than in nuke greenland in florida they've got frozen iguanas falling out of trees and to top it all off phil the groundhog predicted six more weeks of this and yet there's light at the end of the tunnel literally over the next 28 days we gain 77 minutes of daylight and that's before daylight

1:18Neal Freyman:saving time begins on march 8th leaving the office and not having it be pitch black is a moment to be celebrated and cherished. At this rate, you'll be sun tanning in no time. Speaking of rates though, right now we are tacking on two minutes and 30 seconds of daylight per day, but that will rise closer to three minutes by the end of the month and peak around the March equinox before slowing down in the summer. Never knew that it wasn't a consistent rate. So thank you to the old farmer's almanac for teaching me that.

1:50Toby Lavery:And now a word from our sponsor, our very relevant sponsor, Sandals. This cold weather is really affecting my mood, Toby. For the better? No. This is the first time I've left my apartment in days. If only I were at a Sandals resort.

2:04Neal Freyman:Sandals adult-only resorts let you explore the Caribbean's most beautiful islands and best beaches with powder white sand and turquoise waters. Perfect for kicking back, sipping a Mai Tai, and reading a good book.

2:15Toby Lavery:Plus, enjoying globally-inspired dining across more than 10 restaurants per resort, including food trucks, Italian cuisine, their new Bukin locally sourced dining concept, and the world-famous Jamaican jerk shack.

2:25Neal Freyman:There is no better place to experience the Caribbean than at resorts founded by a family from the Caribbean. The winter blue sale last day is today, so visit sandals.com for the best all-inclusive value in the Caribbean. That's sandals.com.

2:39Toby Lavery:They're calling it the most ambitious mashup since DJ Earworm's United States of Pop 2009. Elon Musk is combining two of his companies, the rocket giant SpaceX and his AI startup XAI. The deal, which was announced yesterday, marks the collision of two supernovas in Musk's universe. And the term mega merger wouldn't do this justice. SpaceX and XAI were two of the most valuable private companies in the world, and together they'll form the biggest. In the deal, SpaceX is valued at$1 trillion, more than all but 11 public companies, while XAI was valued at$250 billion, also more than most public companies.

3:15Toby Lavery:The combined company will be worth, doing some back of the napkin math here,$1.25 trillion. So what would it accomplish? According to Elon, the goal is to, quote, form the most ambitious vertically integrated innovation engine on and off Earth with AI rockets, space-based internet, direct-to-mobile device communications, and the world's foremost real-time information and free speech platform. But analysts think it mostly comes down to one word, money. Infrastructure for artificial intelligence, if you hadn't heard, is extremely expensive and for that matter, so are rockets. Combining the two would be a tacit acknowledgement by Musk that some of his companies don't make financial sense on their own.

3:53Toby Lavery:And on top of that, SpaceX and XAI would complement each other nicely to bring data centers to space, a goal Elon said is just a couple of years away. Toby, welcome to the MCU, the Musk corporate universe.

4:05Neal Freyman:The funniest memes that came from this mega merger is the fact that all these reports of SpaceX were in talks to acquire XAI And everyone's like, who's he talking to himself? A top negotiation. Right. It's literally Elon negotiating with Elon. But this is a pattern. If you've watched Elon's career over the years, he loves doing this. In 2016, he used Tesla stock to acquire SolarCity, which his cousin was running. Last year, he used XAI to acquire X. So this kind of Russian doll of corporate maneuvering is something that is an Elon trademark because this is how he likes to run his companies. He loves moving staff and resources in between companies in ways that most other corporations wouldn't do so.

4:51Neal Freyman:I remember reading the Elon Musk biography last year from Walter Isaacson, and he brings in SpaceX engineers to work with the Twitter takeover, which you wouldn't think that those two businesses are very similar. But in the Muskiverse, he does like sharing resources like that. This is another instance, albeit the biggest one ever.

5:08Toby Lavery:Yeah, he really does love going Kirby mode. As Ryan Mack pointed out on X, this was the third time that Elon Musk has bought Twitter in four years because he bought it for$44 billion by himself. And then he used XAI to buy Twitter. And then now he's using SpaceX to buy XAI, which also owns Twitter. So that is true. That is the third time in four years. Let's not lose sight of how daringly ambitious this is. Axios' Dan Primack called it one of the most audacious moves in the history of business and tech, arguably betting his empire on the idea of orbital data centers that are powered by the sun.

5:43Toby Lavery:Because that is the through line through this SpaceX XAI merger. Elon Musk doesn't think that terrestrial data centers are going to do the job in terms of cost and they're going to run into land regulations and pushback. And he and a bunch of other leaders in the space think that the ultimate future for data centers that power AI are going to be in space. And now that's easy to say, but this is the ultimate goal with this$1.25 trillion company is to build data centers in space, which is truly crazy to think about.

6:13Neal Freyman:Yeah, he thinks that XAI is going to benefit for the increased compute capacity of sending those data centers up into orbit. but he thinks Tesla's ability to manufacture energy storage could actually help SpaceX figure out this data center in space problem. And then he also has talked about using SpaceX Starships to carry Tesla Optimus robots to the moon and Mars and beyond as well. So that gives you just another peek into how his brain is working here, what that flywheel might look like. But all of it comes undone if you can't actually put data centers in space, which is still a big if as much as it makes sense in terms of the fact that there's all abundant energy and space up there.

6:52Neal Freyman:It's still a very difficult engineering problem. Some would say, yeah, to say the least, Elon probably might be the best person to attack that engineering problem. But if he can pull it off is the big if in this scenario.

7:04Toby Lavery:You mentioned Tesla, which is kind of a big question mark here, because that's the other big crown jewel in Elon Musk's portfolio of companies. Tesla is not involved in this deal. It's just XAI and SpaceX. There had been rumors that Tesla would be merging with SpaceX and XAI as well. The difference there is Tesla is a public company, and it wouldn't totally be Elon Musk negotiating against himself. XAI and SpaceX are private. When you bring Tesla into the picture, there are shareholders. There's Delawares involved. It gets to be a lot of paperwork, and Tesla is moving towards a robotics future.

7:37Toby Lavery:It's unclear where all of this fits in the entire constellation of Elon Musk. But, you know, the trend line is convergence, as Elon admits himself. So it wouldn't be so crazy to see Tesla folded in there one day. And the one thing we also haven't mentioned is that SpaceX is planning to IPO later this year because it also needs a lot of fresh capital to do the rocket thing. And I guess that that IPO is going to be the biggest of all time. And then you fold in another$250 billion company into it. It's going to be even bigger than that. Moving on. Yesterday, we talked about new CEOs taking over at Walmart and Target.

8:11Toby Lavery:Now another crown jewel of corporate America is preparing its own succession plans, Disney. This week, Disney's board is going to meet to select a replacement for Bob Iger, who's held two stints as Mouse-in-Chief. First was from 2005 to 2020, then from 2022 until very soon, it appears. Disney will hope to avoid repeating its succession debacle from 2020. Back then, Iger handed the keys to the Magic Kingdom to Bob Chapek, a decision he quickly regretted and reversed just three years later, firing his fellow Bob and reinstalling himself as CEO. Now, as he prepares to retire again, Iger is confident Disney will undergo a smoother transition, mostly because of, according to him, how well he's done during his second stint in charge.

8:55Toby Lavery:Iger told CNBC, I think what is noteworthy is that when I came back three years ago, I had a tremendous amount that needed fixing. But thanks to his repair job, the next CEO will be giving, quote, a good hand in terms of the strength of the company and a number of opportunities to grow. Disney is indeed clicking on many levels as a new era dons. Yesterday, it reported a solid fourth quarter thanks to surging streaming income and an insanely profitable theme park division that makes more money than Scrooge McDuck. Toby, you can't screw this up twice, can you?

9:23Neal Freyman:You absolutely can't screw it up twice. This has been a drag on Disney's stock for a while now because succession, success, and succession has always been a thing that's just been hovering over the company. What do you do in a post-Iger era because the last one went so poorly? It looks like they're going to look internal for candidates. The two leading ones are Joss DeMauro, who oversees the Parks, Cruises, and Consumer Products division. And then there's Dana Waldron, who oversees TV and film content. It's not necessarily a two-horse race anymore, though. Joss DeMauro, who is the park leader, is more than likely going to be the heir apparent to Iger.

9:57Neal Freyman:Because, as you said, it's making more money than Scrooge McDuck. The parks business has been the main profit center for Disney for the last decade or so. So even as they've done this big transformation into a streaming giant, people still love going to Disney World. They still love buying giant turkey legs at concession stands. And we saw that in their last earnings, actually. Even though park visitors only bumped up 1%, we saw earnings in that division jump 4%. So people are spending more money when they're doing a beer tour around Epcot.

10:27Toby Lavery:Well, they're raising prices. That's one of the main reasons that they're making more money. Disney raised prices at its parks for the fourth straight year, and people are still paying up. They did highlight one challenge, which was interesting, though, international visitation headwinds. They said that fewer people were coming from internationally to parks in the United States. And I guess that has to do with sort of Trump's immigration crackdown. It's an interesting data point there. Let's talk about streaming. You said Disney's moving into becoming a streaming first company. And that unit did absolutely gangbusters last quarter, growing 72 percent.

11:02Toby Lavery:That's also due to price hikes. Disney has raised prices for Disney Plus, Hulu, or both in each of the past five years. Now, what's interesting about this is that Disney Plus, the streaming service, was not profitable for many years. It was an absolute money pit. So the fact that they're making about$450 million on the streaming service is also good news that they can start to squeeze out profits from what had been a profit loss-making area. area.

11:29Neal Freyman:One thing that I thought was funny too, just a little tidbit is that Bob Iger brought up Disney's acquisition, 2019 acquisition of 21st Century Fox in this last earning cycle, because they bought 21st Century Fox for$71 billion. And he says it actually compares quite favorably to Warner Brothers Discovery being shopped around for$72 billion. So he is kind of doing like this thing where he's padding his resume a little bit saying like the company's in a great spot as I'm leaving. That acquisition that everyone got maybe mad at me for is doing great right now. So definitely something to watch going forward is how this transition is handled because they've boofed it once.

12:07Neal Freyman:Let's see if they boof it again. Moving on, Christopher Nolan's summer blockbuster isn't the only thing bringing attention to the Odyssey these days. Minivans, including the Honda Odyssey, are making a surprise comeback, a resurgence I want to talk about on today's edition of toby's trends minivan sales in the u.s nearly topped 400 000 last year rising 21 from the year prior doing donuts around the broader auto market which saw just two percent growth part of the reason for the big sales of minivans is dudes men around 40 years old have historically favored suvs and trucks but that image problem is fading and men are buying especially as Gen X and Baby Boomers reach grandparents' age.

12:50Neal Freyman:Minivans also compete well with SUVs on cost, offering similar cargo capacity for much less money. The average new car price in the U.S. is around$51 ,000, but you can drive off the lot in a brand-new Chrysler Voyager for$40 ,000 or a Christopher Nolan-approved Honda Odyssey for$43 ,000. Neil, I've always been team minivan. Three-row seating, space for gear and groceries. you can stick a two by four in there or two to four kids glad to see they are making a comeback

13:19Toby Lavery:it's just such good bang for your buck they're really the boston market rotisserie chicken meal of cars you get a little bit of everything and you're always filled up afterward in the 1980s and 1990s minivan was absolutely dominant i my family had one in the 90s i assume yours did i was suburban actually you were suburban so you just like minivans from afar but then they grew to become less than 2 % of the new vehicle market. This comeback that you're talking about has them now at 2.4 % market share. It's huge, but I kid, but that's actually the highest level since 2019 when it was also at 2.4%.

13:55Toby Lavery:So there has been a resurgence for all the reasons you mentioned.

13:58Neal Freyman:Yeah, that is a good market data point to cite. This is not, you're not seeing half the cars on the road being minivans. 2 % is not much, but still I mentioned how guys are more amenable to buying minivans these days. And part of it is because of how they've been marketing themselves. They've been showing, companies have been showing minivans with off-road tires, with tents in the back, trying to push it towards more of an adventure-y crowd than more of a family crowd. And that has paid off dividends. Also, there's been some facelifts from bigger brands. One of the coolest looking ones is the Kia Carnival, which I didn't even know Kia had a minivan that was called the Carnival.

14:38Neal Freyman:A lot of people liken that to a spaceship. It is almost a cross between an SUV and a minivan. So it's kind of a maxi van if you want. But a lot of people are saying this thing looks like something I would want to drive. It doesn't look like the mom mobile of old that, you know, people never wanted to be caught dead in. They're looking cooler and they're selling more units.

14:57Toby Lavery:And another thing driving the growth of minivans is the gig economy. A lot of gig workers have minivans, whether they're delivering for Amazon, Grubhub or DoorDash. And And it's also pretty popular among Uber and Lyft drivers, especially in areas where they're doing a lot of airport runs every single time at the airport. And I call a Lyft or an Uber. It's always a minivan. It's very easy to fit cargo in there. So good for minivans. And the Chrysler Pacifica especially. We didn't even mention it, but that accounts for a quarter of all minivan sales. That's the absolute giant in the room. No offense to the Odyssey.

15:28Neal Freyman:I could see Waymo and some of these other self-driving companies start to dip their toe into the minivan. Waymo has Pacifica. They are. They've been using them for robo taxis. Future fleets could be much more minivan heavy, which, again, I'm a fan. I would love to see. All right, we're going to take a quick break and come back with a story about the movies right after this. Cyber attackers these days don't need exploits. They'll just use your allowed tools against you.

15:57Toby Lavery:That's why ThreatLocker enforces default deny at execution. This security model stops unknown software, scripts, and ransomware the moment it tries to run.

16:06Neal Freyman:They also help you enforce zero trust by blocking any unauthorized applications or behavior from ever running.

16:12Toby Lavery:From global enterprises to lean IT teams, ThreatLocker delivers a practical, enforceable security layer that stops unknown threats, minimizes attack surface, and helps companies stay ahead of an evolving threat landscape.