Everyone Hates Google’s AI Ad & Who's Boeing's New CEO

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0:27Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Boeing hired a new CEO, and all we have to say is good luck. Then an AI necklace that's always listening wants to be your friend, but it could be a flop. It's Thursday, August 1st. Let's ride.

0:50Holy moly, it's August. Life comes at you fast and summer goes by even quicker. But there is a lot to look forward to this month. Definitely begin brainstorming your fantasy football team name. Get your taste buds prepared for PSL season just a few weeks away. and start thinking about what you're going to get me for my birthday, probably the most important thing on this list. Toby, what are you looking forward to? That's literally all I got in August because both you and my girlfriend have birthdays in August, and I know that it's Leo season because of that, so happy Leo season to you, Neil. That and the Premier League starting, of course.

1:25Oh, and by the way, we have a shirt update for you all. The contest has officially ended, but our e-commerce team isn't awake yet, So we will give you that much-awaited update tomorrow, so stay tuned. We'll see if Team Toby or Team Neil won the MBD shirt contest. Now a word from our sponsor, Beehive. You know what makes Disney a successful company, Neil? Ryan Reynolds jokes? No, it's a flywheel. The movies introduce characters that appear in the parks that you can sell merch of. Everything feeds into everything else leading to success. you know you can do the same thing with your newsletter on Beehive 2.

2:04Wait, Ryan Reynolds is an essential part of my newsletter becoming successful? He would probably help, yes, but Beehive's flywheel looks like this. Launch your website, send a newsletter, grow your list, monetize that newsletter, use that money to help grow your list even more, send another newsletter, and repeat all over again until you never have to think about Ryan Reynolds ever again. You got beef with him? Yes, I do, but I don't want to stir anything up between him and Blake. The point is, you don't need Ryan Reynolds to build and grow a successful newsletter. All you need is Beehive. To see how Beehive Flywheel can work for you, head to beehive.com slash brew.

2:39That's B-E-E-H-I-I-V dot com slash brew and get a 30-day free trial plus 20 % off three months with code brew. I'm Christian McCaffrey, pro running back, and Abercrombie is an official fashion partner of the NFL. I'm not kidding when I say NFL by Abercrombie broke the internet last year. and I think this season's lineup is even cooler. And so does my wife, who keeps stealing all my hoodies. Stay fit for the season and Abercrombie's newest arrivals. Shop NFL by Abercrombie in the app, online, and in store.

3:16Well, after months of asking Jerome Powell, are we there yet, and him sternly responding, no. It seems like our destination is finally on the horizon. Interest rate cuts look like a go in September. At yesterday's Fed meeting, Powell kept rates unchanged from where they've been for the last 12 months. But he also said that if current economic trajectory holds, quote, a reduction in our policy rate could be on the table as soon as the next meeting in September. That would be a huge relief to anyone who's avoided buying a home because of a 7 percent mortgage or looked at the interest rate on their car loan and thought this has to be a typo.

3:53The Fed's benchmark interest rate has been at a 23-year high since last July with the goal of cooling the economy and bringing down skyrocketing inflation. It's taken a while, but those elevated rates appear to be doing their job. Inflation is down to 2.5%, just a hair above the target 2%. So inflation isn't a major concern for the Fed anymore. What it is worried about is keeping Americans employed, and there have been several indications that the labor market is slipping. So the Fed thinks the timing is right to cut interest rates and release its tight grip on the economy to prevent further slippage.

4:28If keeping interest rates the same was an Olympic sport, Jerome Powell would be Simone Biles. The man has just been very consistent with his messaging, his communications. So he's basically saying if data continues to give the central bank confidence that inflation is slowing, we're going to pencil in. we're going to almost pen in. He's doing his crosswords in pen now to put that rate cut on the horizon for September. But let's talk about the labor market because that's kind of the start of the show of this latest Fed meeting because employers aren't hiring at the same pace that they have in recent years.

5:03It's become a lot tougher if you're unemployed to find a job again. Wage growth is slightly cooling. Demand for labor is falling a little bit. And the unemployment rate It's actually at its highest point in more than two years. It's still just 4.1%, so it's not bad. So that all sounds pretty dire. But remember, the labor market has been running very, very hot since the pandemic in 2020. So it's been a byproduct of this rate hiking cycle that the labor market was going to cool. But remember, part of the Fed's responsibilities is to keep the labor market intact. So we're definitely seeing a shift in focus from the race against inflation to now, all right, Are we are we torpedoing the labor market too much?

5:42Let's let's take a broader look at here and make sure that we're keeping Americans employed. Right. And some of those labor market indicators, such as there were one point two job openings for every unemployed worker in June, which is down from two during the peak of the pandemic. So we're back to a pre pandemic labor market. Essentially, those indicators actually have some commentators, some former Fed officials saying we should have cut rates now. Like, this should be the rate cut at this meeting in August, in July, rather than waiting to September. They fear that there is a cycle of unemployment that could happen should these interest rates stay elevated and that tight grip on the economy that the Fed is holding just becomes too tight and it sends unemployment to essentially recessionary levels.

6:27Some people say we're not there yet. The Fed and Powell clearly do not think we're there yet, but he thinks that waiting past September would send the job market down a cliff. And Jerome Powell has been very vocal about this being a highly unusual economic cycle because we are looking at both slowing inflation, but also strong GDP growth. Remember, the GDP growth came in very healthy at 2.8 % annualized rate in the last GDP reading. So Powell literally called that a historically unusual development. He said that this is such a welcome outcome for people we serve. What we're thinking about all the time is how do we keep this going?

7:05And this is a part of that. So he's definitely trying to, I think he's a little confused because in all of the recent monetary policy history, you raise interest rates, the economy cools, it doesn't grow at the rate that it was before you raised rates. But that has not been the case here at all. Actually, growth accelerated in the last GDP reading. So it's been, it's going against conventional wisdom, But Jerome Powell's kind of saying, hey, I'm not going to complain if we're still seeing this growth even in this high-rate environment. And meanwhile, whenever you have a Fed meeting, you always take a look at the stock market to see how the markets reacted to what Powell said.

7:42And they had an actually insane day. The S &P 500 and the Nasdaq both posted their best days since February. And we shaded some AI companies yesterday. I said NVIDIA was down 7%, which it was. But it said, and I'm going to take that personally. And then it was up 13 % yesterday. It added a record$329 billion in value, which was the single-day record for a company adding market cap. So NVIDIA just completely went ballistic yesterday. Meta also did well after it reported its earnings. Investors weren't scared about how much it's spending on AI. So the stock market really responded well to Fed's comments and sent AI companies that had been hurting way back up yesterday.

8:23If you've watched the Olympics in the past week, you've no doubt been inundated by athletes hawking products for all sorts of brands. Tech companies in particular have used the spectacle to unveil their AI products to a global audience. And it's going about as well as trying to chase down Katie Ledecky in a 1500. An ad from Google especially is taking a lot of heat. It features a dad using its Gemini chatbot to help his daughter write a fan letter to one of her favorite Olympians. The daughter is an aspiring runner and star 400 meter hurdler Sydney McLaughlin superfan who wants to one day meet her on the track.

9:00But where Google was hoping you'd see Gemini helping the dad get the words just right as the ad intones, a lot of viewers see this as a dire and tone deaf warning about how AI is sucking humanity out of things that should be heartfelt and handwritten. People on Reddit called out the dad for lazy parenting, while others wrote think pieces about how dystopian it all felt to outsource what could have been a moment of connection with your child to a chatbot. Neil, the think pieces are pouring in, and it speaks to the difficulty tech companies are having marketing their AI to people in a way that doesn't feel Black Mirror-y.

9:35Totally. I mean, we've seen this over and over again of companies very much struggling to pitch their AI services to consumers through ads. Obviously, one of the biggest examples of this was in the spring when Apple had its new AI commercial and it showed it crushing all of these things of artistic expression like musical instruments. And then a new sleek iPad emerged and people responded to that very negatively. It took that ad off there and apologized. Looks like Google is in the same boat here. They turned off comments in the YouTube version of this ad. People did not like it at all, and it does speak to a lot of the fears that people have about AI is taking their jobs or AI is just stripping out the humanity, and it's painting a future that we just don't want.

10:23I think a big tonal shift that people recognize in this ad is that it went from just helping you at work to now helping my daughter, which just changes everything entirely because that's a much more personal relationship than you have with an Excel spreadsheet, for instance. So it's one thing for AI to help you offload some of the more tedious parts of your job. But if you're offloading emotional connection, then that feels like everything that we've been warned about about this AI age that we're in. And Google is very careful here. They try to hedge what they're saying by Gemini's just helping you get a draft started with a little help from Gemini.

11:04They're using these phrases to show that this is just a starting point. It's not an ending point, but still it's not difficult to get to a conclusion that a kid might use Gemini and use it as an ending point because, I mean, let's face it, humans are lazy, kids are lazy. So if you type in, write me a fan letter to Sydney and it just spits out a fan letter for you, you're probably just going to copy and paste that. So that's why a lot of people just were zeroing in on this ad in particular because of that kind of emotional connection at the heart of this ad. I have a counterpoint, and that is that a ratings company that surveys people about advertising and commercials say that this one was actually one of the strongest ones of the Olympics so far.

11:44They felt the biggest connection to it. They said it told a strong story with a lot of emotional ties. So, you know, it may be a vocal minority that are irate at this ad, and most people were just like, yeah, this is like a pretty compelling story. My final take on that is outsourcing emotional labor. outsourcing personal writing is bad. And I feel okay saying that. Well, companies are definitely having trouble pitching AI in their commercials. There are many jobs I'd probably turn down. Rodeo clown, bomb disposal engineer, and also up there is the CEO of Boeing. Luckily, a guy has signed on to take the role.

12:19Yesterday, Boeing announced that Kelly Ortberg will be its new chief executive after Dave Calhoun steps down and he'll be tasked with engineering one of the biggest turnarounds in the history of corporate America. Boeing is not in a good place. It's under heavy scrutiny for its safety practices following a mid-air door panel blowout on an Alaska Airlines 737 MAX 9 in January. Regulators are breathing down its neck. It had to cap production of its best-selling plane, and its balance sheet could be mistaken for WeWorks. It burned through$4.3 billion in the latest quarter. So, into this dumpster fire steps Ortberg, who was hired following a months-long CEO search.

12:57Is he the guy for the job? Many aviation experts say yes, absolutely. Ortberg is both an outsider and an insider. He was the CEO at Rockwell Collins, a Boeing supplier. So he knows the aviation biz in and out, but he hasn't worked at Boeing itself. So maybe he could bring a fresh set of eyes. Good hire, Toby? I mean, all the power to you, Kelly Ortberg. The market was clearly desperate for a change here because the stock actually finished up yesterday. That was despite revealing that it had finished Q2 with a loss of$1.4 billion, up from$149 million loss the previous quarter. And just the losses that Boeing is dealing with, the burn that they're burning right now, it does remind me of peak WeWork days in a sense.

13:41The Wall Street Journal calculated that its total losses since 2020 is nearly$25 billion. So he's stepping into the dumpster fire of all corporate dumpster fires right now. So it seems like definitely investors wanted an outsider. They wanted someone to bring a fresh perspective in. Wall Street kind of sees him as this savvy dealmaker. That's kind of the brand that he has created over his career because he's made deals with airlines. He's made deals with the government, with the Pentagon. So I think that they're hoping that, one, he can kind of reinstitute Boeing's good name amongst their major suppliers.

14:17But also he is a culture guy. Like the Wall Street Journal said that he regularly walked the production floor at his previous company, which I think could be like the biggest feather in his cap because Bowen clearly has got some culture issues. I think they want to see someone on the floor amongst the factory floor. So maybe that's where Ortberg will shine here is just changing the culture. Yeah. And one thing I think that is also an advantage for him is that he is an engineer. He started his career in 1983 at Texas Instruments as an engineer. Maybe he even created Block Dude, which would be amazing.

14:51But the main criticism of Boeing had been that it shifted from its engineering prowess to more of a shareholder focus. So they're hoping that Orpah can bring that engineering acumen, that focus on safety and like building that Boeing had perhaps turned away from in recent years. But, you know, he's got a really long to do list. He's going to have to oversee all of those cultural changes. He's going to finish contract negotiations with the company's largest union, which they're locked in right now. He has to complete the acquisition of this merger that Boeing is doing with its biggest supplier, Spirit Aerosystems.

15:25He has to stabilize production, lead the development of new planes, and he starts next week. I'll take Palm Disposal Expert as an easier job. All right. Up next, we got Neil's numbers on deck, and it's ready to hit dingers.

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16:18EBCLIS can be used with or without topical corticosteroids. Don't use if you're allergic to EBCLIS. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with EBCLIS. Before starting EBCLIS, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EBCLIS and visit ebglis.lily.com or call 1-800-LILY-RX or 1-800-545-5979. Tuesday on NBC, Jimmy Fallon and Bozema St. John host the highly anticipated new competition show. I hired 10 creatives from all walks of life.

16:52They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not Play Play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On Brand with Jimmy Fallon. Series premiere Tuesday on NBC. If you didn't like the AI software that big tech is peddling, may we interest you in some AI hardware from a startup instead? Friend is the latest wearable AI-enabled assistant to hit the market, and the internet is going crazy over it. It comes in the shape of a necklace and will run you$99.

17:31bucks, but rather than focusing on making you more productive, Friend just wants to be your friend. It is always listening to you while you go about your day. Then when you want to interact with it, you press a button on the pendant, say what you want to say, and wait for its response that is forwarded to your phone. For instance, if I was wearing it now, I'd press the button and ask it, how do you think I just did explaining all that? And it would reply, you did great and your parents are definitely proud of you. Friend's founder Avi Schiffman sees Friend as a way to combat the loneliness crisis by giving everyone an AI companion to have close by.

18:05But Neil, this got strong reactions when the launch video dropped on X. Some people loved it. Some people invoked the inevitable Black Mirror comparison. What did you make of Friend? Friend is a very interesting little device because of what its founder says it's intended to do. It is not supposed to take any of your tasks off your plate. It really is a companion and someone to be in a relationship with you. And he's very explicit about that. He says, this is a toy. A lot of the other AI hardware that has come onto the market has been sort of to replace your phone and has done a lot. It can tap into your apps.

18:42You can listen to music on it. It really is meant to be a replacement of the phone. And this is not going to be a replacement of the phone at all. It is meant to be sort of a symbiotic relationship with your phone because it'll send you text messages through your phone. So it really isn't just a totally different category than the AI hardware we've seen. So I don't know what's going to happen. All I do know is that the concept of developing relationships with software, with AI, with artificial beings is a thing. I mean, There are these startups called Replica and Character AI that are hugely popular.

19:21They have some of the most popular apps in the AI space where people are just chatting with bots of various characters and they're developing relations with them. People talk about their AI boyfriends and AI girlfriends. Clearly, this is a thing. And if this can tap into that sentiment, then it could be successful. Right. A couple of things I think it also has going for it as a product. It's$99. It's no subscription fee. It is, in Schiffman's own words, he does view it as an AI toy rather than this game-changing device. Like we saw, the humane AI pin tried to make itself out to be as that replacement for its phone.

19:54So I think that people, they'll either like it or they won't. And since it's only$99, I don't think it's going to make or break people's kind of like entire budget. They're not replacing their phone with it. Part of what we have to talk about too is the marketing that went around this launch. The marketing video went very, very viral on X. It had 19 million views last time I checked. And it also created this intense debate because the friend.com URL that Avi bought, he paid$1.8 million for that domain. He only raised$2.5 million total for his company. And we do have to include a disclosure here that Morning Brew's co-founder and CEO, Austin Reef, invested in this round.

20:35But it set off this intense debate on, is this a responsible use of cash to spend$1.8 million of the$2.5 million you raised on a single domain name? So that set off an entirely separate debate about stewarding cash. How much is a domain worth? Right. And so then people started doing the acquisition cost of, okay, you paid$1.8 million. You got nearly 20 million views on X. Was it actually a good marketing spend? So there was just a ton of discourse around it, not even just centering on the product, but also just how the product marketed it itself. Right. And there are so many critics here, too.

21:09I mean, they talk about the loneliness epidemic. Sixty one percent of young people say they are seriously lonely. Do we really want to ameliorate that by giving people technology to create more relationships with technology instead of people? Critics say it's giving like it's like giving a starving person junk food. So there's a lot of backlash to what Avi Schiffman is trying to do with trying to establish friendships between people and robots instead of people and people. I did see also some people talking about who take care of their elderly parents. And they're like, this feels like a meaningful device that could be created to cater towards the elderly as well.

21:49because you can make the decision or the argument that it is not the best use case of technology to create these symbiotic relationships with an AI companion. But if they are lonely as is right now, if they are not interacting with humanity as much as possible, why wouldn't they benefit from a device that they can interact with that is always on, that can pick up on the context of what you've been talking about throughout the day? So it's definitely polarizing. I can see both sides of it for sure. And like we saw it with just how big it exploded on X. So we're only going to see more of these devices.

22:25And I'm not on the waiting list right now, but I might be. You should get one and give your review. I'd love to hear that. Okay. Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will award you the gold medal in knowledge. First, people get ready. There's a train stat coming, and it's an encouraging one, too. Rail travel in the U.S. is booming. According to the Wall Street Journal, Amtrak is on track, get it, to set an annual record for ridership. As of June, 24.1 million riders suffered through spotty Wi-Fi on Amtrak trains since the beginning of the fiscal year last October, which is an 18 % increase from the year earlier.

23:04So what's going on? It's probably due to a number of factors, including more government spending on rail upgrades, people finding that it's a more reliable way to travel than car or plane. And there's just no better feeling than listening to some moody music while looking out the train window and pretending you are in a movie. And it's not just Amtrak calling more passengers. Brightline, the privately owned rail service in Florida, tripled its revenue in a year after introducing its Miami to Orlando high speed route. Rail travel is still a rounding error compared to cars or even planes in the U.S.

23:35This is a wild stat. More people fly at U.S. airports on a single summer day than took Amtrak trains in or out of Boston South Station for an entire year. Still, if you're a train geek, there's reason to be hopeful. There is absolutely reason to be hopeful. And I know our European listeners are listening to us say like, oh, trains are great. And they're going, yeah, we know that. We've known that for a long time. But yes, America is very much still a car and honestly plane driven country. It's not surprising. Trains are amazing. like you love trains we love trains we use them all the time but i do just want to give a big shout out to uber as well it is a big unlock oh i did not i know you didn't see us coming but i was just thinking about you take these trains and it's a very uh rigid ending point and so you need the the kind of capillary action that uber provides to spread out to go to your actual destination so it's just getting me thinking like in a country as sprawling as america and car dominant, you still need that last mile, two-mile delivery.