FTC Investigates OpenAI, Birth Control Finally Available Over The Counter & Bob Iger Goes Off

0:00Stocks? ETFs? Or what about mutual funds? Choosing your investments is easier with Fidelity. Our step-by-step experience can help you pick out the right investments for you. Plus, with recurring investments, you can decide how much and how often to invest. Lastly, there's 24-7 help if and when you need it. To find your next investment, head to fidelity.com slash trading. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSC SIPC. Good Morning Brew Daily Show. I'm Toby Howell. And I'm not Toby. be on today's very special friday episode we're checking in on the fdc which has its sights set on a new big tech foe plus a new white paint is so white it could solve global warming oh yes an electric show we have for you we're also going to be talking about a historic fda decision for over-the-counter birth control and breaking news we'll be talking about a sport other than pickleball it's friday july 14th let's ride

1:04all right not toby it's our first show without neil and it feels like our parents are out of town for the weekend we're about to throw a rage that's the perfect metaphor i the electricity in the air is astounding and i am actually worried that toby putting toby and not toby together will have unintended consequences i see the heat death of the universe in our future because you're right it's too an unstoppable force meets an removable object type deal in the yang right now Yeah, absolutely. But seriously, thanks for jumping in as you always do. But Neil's parting words to me before he left for Portland on Friday was don't forget to do fast week and slow week.

1:40So here I am not forgetting Kyle. Was this a fast week or slow week for you? Well, first I have to say, we miss you, Neil. Yes. For sure. Enjoy Portland. This was a very fast week for me, actually. My actual job, besides jumping on the podcast when you need me, is running these courses for Morning Brew. And we had one this week for new managers. So I was running that all week. That's so fun. I had one late last night, and then I woke up at 4 a.m. to do this. So it was a very fast week. You do a lot, man. It's actually crazy. My week feels actually slow in comparison to that because, honestly, I had this date marked on my calendar for a while.

2:13So I was nervous but excited to do our first Not Toby, Toby show. But that's our Fast Week, Slow Week. So, Neil, if you're listening, I did not forget. All right, Neil. I mean, Kyle. Let's jump into our top story of the day where the Federal Trade Commission is taking another big old swing at a tech company, but not one with a trillion dollar market cap. No, this time the agency is probing OpenAI's chatbot, ChatGPT. The FTC is especially interested in whether it harms consumers by spreading misinformation that may damage people's reputations. And so while OpenAI doesn't command the market cap of an Amazon, of a Microsoft, or other targets of the FTC, it is the buzzy tech of the summer, and Washington is desperately trying to get out ahead of figuring out how to regulate this new technology.

3:01But the awkward undercurrent to all this is that the FTC has been striking out big time trying to rein in big tech. FTC chair Lena Khan swung and missed at stopping the$69 billion Microsoft Activision Blizzard merger, though they are appealing, and also tried and failed to stop Meta's acquisition of a VR gaming company earlier this year. So Kyle, what do we think about the beaten down and bruised FTC picking OpenAI as its next target? I mean, I think everyone is trying to figure out, first and foremost, how to regulate AI. So I think the lawsuit will probably, if it does go the distance, will just tell us more about how the U.S.

3:39is going to view artificial intelligence going forward. So it might actually help set some guardrails and frameworks. But I think this is part of a much more aggressive FTC. They've challenged 10 mergers in court last year, up from six in 2021 and eight in 2020. And this is pretty much the Lena Kahn playbook. But I actually think Lena Kahn, her story is fascinating. So I want to give a shout out to Lena Kahn. Give it to us. she's born in England family of Pakistani origin she moves to the U.S. at age 11 and now she's the chair of the FTC at 34 I'm close to her age and I sometimes host a podcast so like pretty freaking cool to me though shout out to Lena she had then had an offer from Wall Street Journal or to go to Yale she goes to Yale and she wrote this essay at Yale called Amazon's Antitrust Paradox and somehow an essay at law school like blew up like her debut was like Jay-Z's reasonable doubt like it was huge and it actually gained a lot of traction.

4:33And in it, she said, we can't just look at consumer welfare, which is what the FTC normally would do, making sure that consumer prices don't go up because of monopoly. She said, we have to have a much more expansive view of monopolistic practices. So that's what they've been doing. It looks like they're going to continue doing that with OpenAI and Twitter and others. Yeah. And just to go back to the question of like, how do you regulate something like ChatGPT or OpenAI? There's been all these questions around how artificial artificial intelligence models are trained. And actually, Sarah Silverman, the comedian, sued OpenAI and Meta for copyright infringement literally this week because she said that they were reproducing stuff that she had written way too closely to how she had originally written it.

5:16And then remember, there was this Australian mayor back in April that threatened to sue ChatGBT after it just made up the fact that he was involved in a bribery case. So these are some of the questions that, why the FTC has kind of turned its laser beam onto OpenAI. But literally as this FTC probe into OpenAI was disclosed, FTC chair Lena Kahn was on Capitol Hill getting roasted by politicians. And we actually have a little clip we'd like to play for you that shows the gist of how her appearance went. Determinations. But are you bringing cases that you expect to lose? Are you bringing cases that you expect to lose?

5:52Absolutely not. Okay. Well, your track record seems to suggest otherwise. so clearly it did not go well and both sides of the aisle were actually jumping down her throat jim jordan who's republican said the fdc had unchecked power democrats agreed a little bit saying that the protection of consumers which is the fdc's job is not a political thing and then another rep called con a bully for trying to prevent mergers and then rep kevin kiley who you just heard in that clip said you are now over four in merger trials why are you losing so much So it didn't go great for her. No, she, yeah, she was getting roasted.

6:26It's quite interesting because her nomination was pretty bipartisan. Right. 69 to 28. Granted, that was in the Senate, but things are maybe not going well for Commissioner Kahn. Yeah, it's crazy, too, because her whole goal was to take big tech down a little bit of a peg. And it seems like big tech is taking her down a peg in some ways. I mean, Twitter actually is also piling on. They asked the federal court yesterday to end an FTC commission on how the company stores user information. And that actually dates all the way back to 2011. And Twitter is basically saying, like, you guys are piling all these investigations on us.

6:59Like, it's time. Like, just let us – we're not violating any laws. Just let us, like, store our consumer data as we want to. So it has been a rough – it's been a rough go of it for the FTC. Yes. And your girl, Lena. So we're talking FTC. Now let's talk OTC. and that is over the counter. No, it's not getting emergency for a cold. It's not getting Tylenol for a searing hangover headache. You're actually soon going to be able to get birth control pills over the counter. Now, this move was approved by the Food and Drug Administration on Thursday. This is actually incredibly historic. This will be the first birth control pill to be sold without a prescription in the U.S., which is a huge milestone, which could significantly expand access to contraception.

7:43The medication is called Opil. It will actually be the most effective birth control method available over the counter. It's more effective than current methods such as condoms or spermicides at preventing pregnancies. We're not sure if it's more effective than men putting a picture of themselves fishing in their hinge profile. We will see. But in all seriousness, experts in reproductive health said its availability could be especially useful for younger women and those who have difficulty dealing with the time, cost or logistical hurdles involved in visiting a doctor or obtaining a prescription.

8:14a.k.a. everyone in America. So, Toby, what do you think about this decision? I think the big looming question over this is actually the price of the pill because Perigo, which is a pill's manufacturer, has not named a price yet. And so a VP at the company did say that it's committed to making O-Pill affordable and accessible, but a drug company's definition of affordable and accessible might be a little different than a normal person's definition of that. So that's the real, I think, maybe sticking point to see if this is going to be a viable over-the-counter solution for people. Because if it's prohibitively expensive, then it doesn't matter if it's available if people just can't afford it.

8:54So I think that's going to be the big thing. And then also the big question comes around, will insurance be able to cover it? Because right now insurance doesn't cover over-the-counter medications. Like if you're buying Tylenol, your insurance isn't going to kick in to help with that. So Congress is actually pursuing a bill that would require insurers to pay for non-prescription birth control. But that's still that's going to take a while to go through. So those are the two questions I have when I saw this headline initially. Yeah, I think they're great questions. And zooming out a bit, I think, after kind of, quote unquote, post-Roe abortion bans and other threats to reproductive rights.

9:28This is coming at, again, like a pretty historic time. And, you know, just I wanted to know, like, how many other countries do this? So there's about 100 other countries that have non-prescription birth control pills available. So this is pretty common. And estimates say that about 19 million women living in areas that lack health centers could really benefit from having more contraceptive options. Yeah. I mean, again, we're not it's breaking ground in the U.S., but like 100 other countries already have some form of over-the-counter pill. And so it is, again, it's historic for like the current moment you're in.

10:01and you're totally right, but this is not historic in the grand scheme of how other countries approach reproductive health. So yeah, this is a big deal, and I will just be closely wondering when that price point comes out to see, hey, is this really a solution or not? All right, let's move on. So on Wednesday's show, we actually mentioned that there was a big conference going down in Sun Valley where financiers and media moguls and billionaires get together. Yeah, I got my invite. You got an invite? Ours is lost in the mail. Come on. Maybe it said Toby. Yeah. I told him I had to do the podcast.

10:35I love that for you. So Disney CEO Bob Iger was one of the names we mentioned to keep an eye on. And boy, were we right. Iger gave an interview yesterday that was absolutely filled to the brim with revelations about the future of the company that he leads. First and foremost, it came out that Disney extended Iger's contract two more years to keep him at the helm till 2026. and in that time it looks like Iger will be in fat trimming mode. He entertained the idea of selling off Disney's linear TV assets which include ABC and cable networks like Nat Geo and FX because he kind of thinks that traditional TV is dying.

11:13He did make sure to clarify that ESPN isn't on the chopping block as of now but the company would be open to taking on a strategic partner for the sports network and then finally he dropped a bomb for some super fans saying that There will for sure be a pullback in content spending and creation for the Star Wars and Marvel franchises. Kyle, so many soundbites there. Any of those stand out to you in particular? I have a few, but first I have to say, Bob Iger is the worst at retirement in the history of the world. He's addicted. He's addicted to the game. He is literally trying to Mike Jordan us.

11:46He retired briefly. He's coming back, and he's looking to try to three-peat again like Mike. But he is facing a lot of battles, right? the strikes, the decline of linear TV. He has a duel with DeSantis, Pixar's underperforming, tough macroeconomic environment. So he's got a lot to worry about, but I feel like he actually loves that. And his track record is not one to bet against. The things that I'm quite interested in are one, he talked a lot about focus. And I think during COVID, companies experimented, they tried producing a lot of content. Now it is kind of the year of focus where they're trimming the fat, so to speak, as he said, and really doubling down on what is working.

12:21And then the second thing is, I got to say, when he said they're going to pull back on Marvel, that made me so happy. This might catch me some flack. I can't stand how many Marvel movies there are. Ant-Man and the Wasp Quantumania debuted as the 31st film in the Marvel Universe. Every time I try to watch one of these movies, it's like I need to watch seven prior to understand what's going on. You need a PhD in Marvel studies. So thank you, Bob, for doing that. That got me excited. There is an odd sort of symmetry to these planned moves because some key Bob Iger moments from the past were acquiring Marvel, acquiring Lucasfilm, who makes Star Wars, and acquiring Pixar.

12:59And now he's kind of gambling on himself by doing the exact opposite, cutting down on these major mainstay franchises. I mean, you're totally right, though. I'm a Marvel guy. Marvel overload is a real thing because, yeah, I did not – like, I'm just disinterested at this point. Once phase one ended, blah, blah, blah. We don't need to get into it. But yeah, sometimes a company just becomes too bloated. And earlier this year, Disney rolled out this huge reorg where they're trying to cut$5.5 billion in costs,$3 billion of which are coming from its content biz. So this was him. And then I do just want to touch briefly on the – you mentioned the actor strike.

13:35So we talked about that on the show yesterday, but the actor strike did go into effect yesterday. So as of right now, Hollywood is pretty much shut down. And Bob Iger did comment on that, and it did not come off greatly because he said that he respects the fact that the unions want to get the best possible deal for their members, but they must be realistic about the business environment. And, of course, whenever you have a CEO saying to workers, get realistic about the business environment, it's never going to go over well. It's not a good look. And it's a very interesting time in kind of Hollywood and in TV.

14:07And, you know, one of the things that were interesting that Bob talked about was streaming services, including live TV offerings, have proliferated. And cable, a lot of people are cutting the cord. I think in 2023, there were 60.5 million U.S. households with cable TV packages, which is down 40 percent from a decade earlier. and it seems like YouTube is where people are going. I think maybe because we're on YouTube. That must be it. That's a plug. If you're listening to this podcast, go check us out. See what Toby and not Toby look like. Thank you for that plug, Kyle. All right, before we jump into the next story, we're going to take a quick break.

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15:21Well, I'm letting go of the worry that I wouldn't get my new contacts in time for this class. I got them delivered free from 1-800-CONTACTS. Oh my gosh, they're so fast. And breathe. Oh, sorry. I almost couldn't breathe when I saw the discount they gave me on my first order. Oh, sorry. Namaste. Visit 1-800-CONTACTS.com today to save on your first order. 1-800-CONTACTS. All right, Kyle, we are back with our Friday segment, Stock of the Week, Dog of the Week, where we check in on one stock that you would bring home to your parents and one that your friends are kind of hinting at you should break up with.

15:56As always, Not Toby and I are not financial advisors, so please do not take any of this as financial advice. Kyle, as my guest, you have the honors. What's our stock of the week? Yes, definitely don't take this as financial advice. I got a D in AP accounting, so do not listen. I didn't even take it, so that's fine. There you go. So my stock of the week is actually Nikola, which is the EV company specializing in hydrogen-powered trucks. Now, you actually might remember Nikola from a few years back because they kind of did everything during COVID that a company could to get attention. They came out of nowhere and they went public through a SPAC in 2020.

16:31Then their original CEO, Trevor Milton, was convicted on securities and wire fraud. And then they named their company Nikola, as in Nikola Tesla, the famous scientist. Maybe you've heard of the last name Tesla, which was already taken by another car company. So they really did everything they could to get attention. With that being said, they're trying to turn the corner and become actually legit. They've hired Michael Lockseller as CEO, who has worked in the auto industry for decades. He was the CFO of Volkswagen and Mitsubishi. and they just announced just the purchase of 50 Nikola hydrogen fuel cell electric vehicles for the transport of hydrogen gas.

17:08So very cool technology. Shares are up 34 % to a whopping $1.84, which is a long way to go from their high around$70. But look, the EV craze is heating up. They're looking to be a significant player, but it is going to be tougher. Higher interest rates, car companies need a ton of capital, but they have a long way to go. We love a good comeback story though. So my stock of the week is Nikola. I want to own a Nikola and a Tesla. So good luck to them. I cannot believe that we were talking about Nikola in 2023 because yeah, we left him for dead. Yeah. He got, Trevor Miller got, remember the funniest part from the rise of Nikola was that Hindenburg, which is this activist short seller who like publishes these deep reports, basically exposed it for what they called being a intricate fraud.

17:55And they also accused it of rolling its truck down a hill during a promotional video and like passing it off like that it was driving. Yeah. Which is hilarious because they were right. Like they, Nicola did admit to rolling a truck down a slight incline and saying, look at this thing go. But yeah, I think this is, so the deal that actually made the stock jump 30 % is a kind of I scratch my back, you scratch your back thing. It's with a hydrogen fuel transport company. And so they both bought, agreed to deals to each other. The hydrogen transport company will buy some of Nikola's trucks and then Nikola will actually use the technology that the hydrogen transport company is coming up with.

18:36So it's, it's kind of a good deal. And like this, I don't know if we're not financial advisors, but like if Nikola is actually back, like hydrogen powered vehicles is a huge, huge potential business, which is why we're still talking about Nikola to this day. We just can't quit it. Yeah, exactly. All right, Kyle, our dog of the week is progressive insurance. While Flo was out at the Barbie movie premiere, I'm literally not making that up. She was at the premiere. The insurance provider was getting hammered in the markets. The stock fell 13 % yesterday after it reported some less than stellar earnings.

19:10Basically, it's a very weird time to be an insurance provider. Car insurance is getting more expensive. But while that sounds like a good thing for an insurance provider. That affects everyone from consumers to automakers to repair shops. So even though Progressive is charging more for insurance, fixing cars is also getting more expensive, which we talked about on yesterday's show. So sales are up, but the price to fix a car is also up. So it's pressuring profits. All that to say that Progressive has a 1 % profit margin from insurance underwriting last quarter, which means they essentially didn't make any money from writing insurance.

19:44It's a very weird time to be in the insurance game. Yeah, I think your point about Flo at the beginning was huge. She got too big and she needs to get back and focus on the core competency of the business because we know she's an all-star when she's locked in. So good luck to Progressive. I do love that she's a celebrity that goes to red carpets or pink carpets in the case of Barbie. She's incredible. So Toby, let's move on to a sports segment now. We've talked about pickleball on the show. We talked about paddle on the show, which is still my favorite, by the way. We've talked about golf on the show.

20:15There's actually a new sport in town in the U.S., and that is cricket. So this week, Major League Cricket will play its first ever game in the U.S., and every last ticket to the highly anticipated opener has been sold out, and this is an iconic match. We have the Texas Super Kings on one side. We have the Los Angeles Knight Riders on the other side. Now, why is this a big deal? Cricket has a long way to go in the U.S., Only about 1 % of U.S. consumers say they actually follow cricket. So there is huge potential for growth in the sport. But it is one of the most popular sports in the world. They have a huge following in India, South Africa, Australia, Southeast Asia, UK, UAE, all over.

20:56And the sport has been kind of steadily growing in popularity in the U.S. for years, particularly in areas with large South Asian populations, including Houston, New York, and Los Angeles. and the Dallas-Fort Worth area has more than 220 ,000 Indian Americans itself. And so this has kind of been slowly creeping up. It's still at 1%, but there's actually tons of investors pouring lots of money into this, including Satya Nadella, the CEO of Microsoft. Are you Pickleball or are you Cricket, Toby? Okay, you know I'm Team Pickleball for life, but I'm also Team Cricket because, yeah, there's a ton of factors that are kind of pushing this, mostly the money that's behind it.

21:35the investors including uh sadia and dela has their promise to pour 120 million dollars into this new venture so whenever there's money there's usually a good chance of success so i do think that that gives cricket its best chance to gain a foothold in addition to all these other factors that you've mentioned i do just want to check in on the team names a little bit because they are freaking hilarious you got the washington freedom the Seattle Orcas, the MI New York, which is apparently a cricket type of naming genre, and then the Los Angeles Knight Riders, as you said, and then my favorite, the San Francisco Unicorns, which is just a hilarious...

22:17Classic Silicon Valley. Yeah. I love that they're like, ah, you get it? You see it? The Unicorns in San Francisco. And I also did a little digging into cricket's history in the US because I was wondering like why has this sport not caught a foothold in the U.S. when it has obviously other places in the world. And back in the late 19th century, it was vying with baseball for like kind of local supremacy. There was a pretty hefty cricket scene. And the golden age actually came from Philadelphia Cricket Club, which was once seen as an equal to some of the best international teams. And so Philly, I wish they had a team because that's where like cricket's origins in the U.S.

22:55came from. and so I wish Philadelphia Cricket Club might be a little angry that they didn't they didn't snag a franchise maybe Ben Simmons can go back and start the cricket club in Philadelphia I want to say one more thing the oldest form of the game which are called test matches are take typically a maximum of five days so I do think that is a big threat to gaining a foothold in America we have TikTok brains folks we cannot focus on anything more than 30 seconds to get Americans to care about something for five days is damn near impossible. We had to speed up baseball, which took like four hours.

23:26So that might be the kind of death blow to cricket in the U.S. Although the MLC, Major League Cricket, they are playing a new version called, not a new version, a different version called T20, which is basically a much shorter, much more condensed version. That's right around three hours. And it only consists of two innings, one inning for each team. And those innings last around 70 minutes each. So I do think that MLC recognized the fact that, yes, U.S., we have TikTok brains. We can't pay attention to anything. So they tried to reduce it to like a three-hour, more in line with the baseball games.

24:00I like it. They're smart. We're bullish on cricket. Yeah. Let's get it. All right, Kyle, for our final story on this Friday show, it's especially pertinent given how flippin' hot it's been. Scientists have invented the whitest paint ever, and they think that it can help with our ever-warming climate. So the New York Times did a big interview with the professors who created the paint this week. And get this, it is so white, it reflects up to 98 % of the sun's rays away from Earth's surface and up through the atmosphere and into deep space. Here's the kicker. One of the researchers calculated that if the ultraright paint were to coat between 1 % and 2 % of the Earth's surface, which is slightly more than half the size of the Sahara, the planet would no longer absorb more heat than it was emitting.

24:46and the global temperature would stop rising. Kyle, should we just suit up to start painting stuff white? That's kind of my take. I will say I was very excited by this news because they finally discovered something more pale than my skin, which I'm very excited about. The lighting is doing you a lot of favors. You're looking great today. But this actually tells me one thing and one thing only. The organization that can most positively impact climate change in the entire world is HGTV. What I need HGTV to do is to get hooked on climate change. I need this white paint in every episode of the Property Brothers.