Googling with AI, Topgolf Off its Game, sweetgreen Goes Robotic

0:00Hey Fidelity, how can I remember to invest every month? With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs. Oh, that sounds easier than I thought. You got this. Yeah, I do. Now, where did I put my keys? You will find them where you left them. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC, member NYSE SIPC. Good morning, Brood Daily Show. I am Neil Freiman. And despite my parents' concerns, I've legally changed my name to Not Toby. Wow, Kyle. Today on the show, Google wants to make green text cool again. And the prices for one kitchen staple have spiked to become the most expensive it's been in nearly 30 years.

0:50Make your guesses now, and we'll get to it in the show. Yes, and if those don't get you excited, we're also going to talk about why theme parks are making a comeback and why golf has gotten itself into a double bogey. I think that was an accurate golf fun. Like a six out of ten. Neil, let's ride.

1:10Welcome to the show. We have Not Toby, the artist formerly known as Kyle Haggy, joining us once again, subbing in for our normal host, Toby. Excited to be here. Great to have you again. The sophomore slump, I hopefully avoided it. And now you're ready to surge in your third season. Yeah, exactly. Have you heard of this corgi named Lilo? or Lilo? This is my neighbor's pet from seventh grade? It is not. It is a corgi that has gone viral on TikTok by correctly predicting the first five games of the Warriors-Lakers playoff series. It bops this ball into hoops labeled either Warriors or Lakers, and it's done this on video.

1:46And it's 5-0 so far. It correctly predicted the game last night that the Warriors would stave off elimination. And it thinks that the, or he thinks, that the Warriors are going to come back and win in seven games. Oh, wow. So the Corgi's already predicted this whole series? Yes. Do we have protection for the Corgi? I do feel like fans might get a little upset. If they take his advice and use a lot of money on betting. Yeah. There's no known protection for the Corgi. The Corgi's also known as the Fluffy Mamba and Steph Furry, or Air Corgi. So we'll see what happens. I think the next game is either tomorrow or Saturday.

2:26And the Warriors are apparently going to win. Don't let the corgi down. I got to get hashtag protect corgi trending on Twitter. I think it's okay. I don't know why you assume there will be violence. Let's go to our first story. Google held its big annual conference yesterday. And let's just be real here. It was basically about one thing and one thing only. AI. AI. AI. AI. Generative AI. Generative AI. Generative AI. AI. AI. AI. AI. AI. AI. AI. AI. It uses AI to bring AI, AI, AI, AI, AI.

3:03Riveting from Sundar there. You know how you hear a word over and over again and it becomes meaningless. That's, I feel like, what just happened there. Yes. All right. So, yes, obviously you heard that. CEO Sundar Pichai talked a lot about how AI was front and center to the company's future growth. Google had been facing pressure to respond to Microsoft's growing expertise in generative AI. like adding chat GPT to Bing. And it responded by basically infusing AI into 25 different products. The biggest one, hands down, is Search, which is Google's biggest product and the one that is maybe most at risk from AI.

3:42So Google said it will start putting AI-generated answers at the top of results pages and allow users to ask follow-up questions in what it's calling conversational mode. You might be wondering, it also has this chatbot named Bard. Yes. and you're like, okay, how is Bard and Google in this new AI Google search going to interact? Google's vision is to keep these two distinct for two different types of queries. So here's the cheat sheet. When do you use Google? Traditional Google search is like finding and seeking straight up information. Maybe you have a question like how many kids does Robert De Niro have?

4:19Which we'll get to. Yeah, we'll cover later. Which we'll get to, but you should use Google for that. You use Bard when the chatbot is for creative collaboration, for multi-part questions, more complex questions. So here's an example. It's like whether Los Angeles used Google. What's a cute outfit to wear when going out in Los Angeles? Use the chatbot. And quiet luxury is the answer. So what do you think about Google's move to AI? I actually love it. I think that any emerging technology like AI, it's not necessarily the first mover that wins, but it's the company that can figure out how to make it practical for consumers.

4:56And Google already has all of that built in search. I actually think that putting it in workspace like Gmail and Google Docs and Google Sheets will be huge. I never want to have to write another email again. And so I think they already own so much of the customer's life through their products that now infusing it with AI. It's easier to do that than to build AI and then get your customer to like your own version of docs. So I really like this from Google. I think it is a pretty incredible move. And I also love that this developer day in the article started in 2006. It had just 100 attendees. And now it's, you know, it's huge.

5:31It's the biggest thing. Aesthetically, it looked beautiful. It did look. You just looked at this presentation. Right. I was like, keep saying AI. As long as I get to see that background, I'm fine. Yeah. So we'll see. I think, you know, Google may have been a few months late. But in the grand scheme of things, if you think AI is going to be this paradigm changing technology, it's going to play out over 10, 20 years. Decades. And I think all this freak out about Google being behind and it's, you know, Google search is going to be a wasteland now because of Bing all of a sudden. I think Sundar basically put that all to rest.

6:02I'm still betting on Google versus Bing. Can we talk about the foldable phone? We can talk about the foldable phone. So Google announced a foldable phone named the Pixel Fold. It looks like a regular phone, but you can open it up like a book to reveal a bigger screen. More screen space means more money and this thing starts at$1 ,799. Are you buying this? We have to interview anyone that buys this phone. I need a breakdown of it, but I have an idea for the foldable phone. Let's just make it bigger and then call it, I don't know, a laptop. We don't need foldable phones. Okay, but you can't fit a laptop in your pocket.

6:39That's because the laptops are meant to be big. I think the phone is small. This is collapsible. This is like a very useful thing. that you can stick in your pocket. I don't think we should be folding phones. And then you can bring it out on your desk and then make a foldable phone. I mean, obviously these things have not been super popular. Samsung's had it for years. Current market share for foldable phones in the entire smartphone market is just 1.1%. And this analyst thinks it's going to grow to a whopping 3 % of market share. Hey, that's a 3X. By 2026. So yes, it is maybe the fastest growing segment of the smartphone market.

7:12But with that price point, you don't need it to be, You don't need to sell a ton of them. You just need to sell a decent shop. Low volume. Have some loyal fans. Have some rich people who want to show off their foldable phones. So, you know, it's an interesting play by Google. It's not guaranteed for success, obviously. Apple has said we're not really into the foldable phone business. They're focusing on their VR and AR stuff and just making their iPhones incrementally better. But we'll see. Shots with the iPhone. Google also announced its new affordable Pixel 7a phone. I have the 6a here, so I might upgrade.

7:48Flex on us. But it's only, here's the thing about the 7a, it's$499. Yeah, that's an attractive price point. It's a very attractive price point. And I don't think the Google and Apple phones are that different. It really depends on whether you use Apple services or Google services. We won't get into it. This could be an hour-long podcast. But overall, I'm bullish on Google, but I'm bearish on the foldable phone. Let's go into earning report season, Neil, and let's talk about a few highlights. So first up, we have the multinational mass media and entertainment conglomerate. Morning Brew? I'm not talking about Morning Brew.

8:21I'm not talking about Waystar Royco. I'm talking about the Walt Disney Company. Disney posted$21.82 billion in revenue for the quarter. These results were actually in line with Wall Street's expectations. Their streaming losses narrowed. Their global membership is down 2%. But theme parks made a significant growth, 17 % increase in revenue. Clearly, it's Dippin' Dots season. And also, in Disney, I think there's some interesting things outside the numbers. This is CEO Bob Iger, who returned to the helm. His second earnings report, he replaced the former CEO, Bob JPEG. I honestly almost forgot that he existed.

8:59Yeah, if your name is Bob, you might be the next CEO of Disney. He's overseeing a broad restructuring. They've done a few rounds of layoffs, and they're also facing some uncommon challenges. On Monday, they expanded their federal lawsuit against Florida Governor Ron DeSantis, and also they're starting to see ripple effects from the writers' strike. So I think Disney is a company to watch. We just mentioned the past two CEOs have been named Bob. Neil, are you a little mad at your parents that have taken you out of the running? I don't want to be CEO of Disney. This seems like a huge headache. You have the streaming wars, which I'm ready to declare over.

9:32Okay. Because the streaming wars meant all of these companies were launching all of these new streaming platforms and trying to acquire more users as fast as possible and spend as much money as possible to make that happen. Bob Iger has come in and a bunch of other CEOs around the media world and said, all right, this is done. We're not chasing growth anymore. We're focusing on profitability. So Disney Plus users actually declined 4 % last quarter, like you mentioned. Right. And investors were like, you know, that's okay. Like, it's okay. We're not growing anymore. But you you said the losses narrowed.

10:06They the previous quarter before this one, Disney lost a billion dollars on its streaming unit. And now it only only lost six hundred fifty nine million dollars. So it looks like Bob is you don't even know who I'm talking about when I say Bob is is daring his losses. And then, yes, Iger also kind of went after DeSantis being like, do you want us to invest? You said, does the state want us to invest more, employ more and pay more taxes or not? Because it is kind of bizarre for a governor to go after the one of the state's largest employers in Disney. Yeah. Very interesting. And I like the streaming wars is ended.

10:40Like we need a treaty of Versailles for the streaming wars. All right. Let's move on, Kyle. Let's do it. I have a question. Have you ever lied awake in your bed and at night and thought, yes, I really wish I could buy Tesla stock right now. I'm a little afraid to admit it, but yes. Soon you will be able to, if you really want to. Robinhood is going to offer 24-hour trading of popular stocks and ETFs over the course of the weekday from 8 p.m. Sunday to 8 p.m. Friday. Why? Because many people think the way the market works now is antiquated. You can only trade from 9.30 to 4 p.m. And there are some extended trading things, but it's not accessible to many people.

11:19And I thought this was kind of interesting. Robinhood CEO and announcing this, he said, it's the next step in evolving the market to how it should work, which is 24 seven, and more like a piece of software rather than a brick and mortar institution that's tied to the US East Coast working hours. And when you think of it like that, you're like, wow, yes, I am literally living in the 17th century with a Dutch East India company when I'm trading between 930 and four. So Robinhood made stock investing accessible to a lot of people through dropping fees to zero. And now it's trying to make trading 24 seven, which sounds a little dangerous, but we'll see how it plays out.

11:55I do have one feature suggestion, and that is a hotline number you can call if your friend is checking Robin Hood at 8pm on a Friday night. Okay, they need that. Let's move on to the next company. And that is Topgolf Callaway. Their shares actually tumbled the most since October 2020. They're down 13%. They've cut their profit forecast. And they've also said that their high-tech driving ranges, corporate sales are lower than expected. It's tough to be doing layoffs and then see executives hitting a golf ball into an AI-generated lake. So that has cooled a bit. Why does this matter, though? I think it's really interesting.

12:32Golf enjoyed a renaissance moment, as we all know, during COVID. It is basically the perfect sport for pandemics. Socially distanced, it's outside, and it lets you avoid your family for at least four hours. So it really had a moment. And now it's facing some tough headwinds as the World Health Organization has said COVID is over and the world is going back to quote unquote normal. What's your take here, Neil? I think golf is going to be fine. This is a minor blip in, you know, Topgolf gets a lot of its sales from corporations that are doing, you know, like these forced fun events. Yeah, I think Topgolf is going to be fine.

13:06This is a little blip. Golf is so much fun. And I think so many people, 38 % of everyone who played golf last year did it at a non-course venue. So mini golf or a driving range or top golf. So people are accessing golf through ways that aren't on a course, which is admittedly extremely hard. So I'm bullish on top golf in the long run. I think this is a little blip. And you're seeing top golf of every other sport kind of pop up, which is a validation of the model. Right. There's the batting rain, the batting cages. That's a Topgolf knockoff. It's good to be a forced fund investor right now. Yes.

13:44Finally, I just wanted to mention SoftBank, which was basically the king of the tech world in 2017, 2018, 2019. They had this one hundred billion dollar vision fund, if you remember, and they funded basically every U.S. startup known to man. I think you got money. I don't know. Yeah, they invested 50 billion dollars in you. So, OpenDoor, SoFi, pretty much everyone. And that has all come crumbling down. The CEO, Masayoshi-san, who's this eccentric billionaire, this morning said that they lost$39 billion last year on their tech investments as the tech ecosystem has slowed and crashed a little bit.

14:21So, SoftBank is just – its empire has fallen. Yeah, it's wild. Like, reading the report, you feel like the B should be an M. Like, you're losing this much. I'm actually impressed at how much money they're losing. Well, no one had ever heard of a venture capital fund that amassed$100 billion before anyway. So if you win, you're going to win a lot. If you lose, you're going to lose$39 billion. And we will hit the next stories after this break. Kyle, we heard a lot about how Google and other big tech companies are integrating AI into their products. This week, a bunch of fast food companies also announced AI integrations that could revolutionize the industry.

15:00Where does it start? the drive-thru. It always starts at the drive-thru. Wendy's said it's going to release an AI chatbot to take your order at the drive-thru. It's starting next month at a restaurant in Columbus, Ohio, Midwest represent. The goal is to make drive-thru lanes faster and prevent a bottleneck when you're waiting in your car forever at the drive-thru. Up to 80 % of food orders at Wendy's are done through the drive-thru lane. So optimizing this sales channel is mission critical for these companies. Yeah, I found it interesting, too. Del Taco is using AI to increase suggestive selling.

15:33Like, imagine an AI being like, it sounds like you want fries with that. And you're like, no. And they're like, it sounds like you want fries with that. And you're like, OK, stop talking to me. I guess I'm getting fries. Yeah, they did program these AIs to be up to upsell you, which is really funny. There have been a bunch of other announcements, as I mentioned. Carl's Jr. and Hardee's announced a partnership with AI companies to roll out voice chatbots at drive-throughs. Wingstop is doing voice bots for phone orders, which makes a lot of sense. Taco Bell, Chipotle, Popeyes, Domino's have been doing this for years now.

16:08So it's not entirely new, but I think the expertise and the advancements in these chatbots that we've seen over the past few months is going to make up-level the technology a little better. So McDonald's has had this since 2021 and it's only been accurate 85 % of the time. And I don't know if you've seen, there's TikToks of people going up to the AI McDonald's ordering thing and just kind of teasing it and making fun of it for being wrong. Yeah, and Sweetgreen is rolling out a all AI powered restaurant. Right, that's more like robots, but Sweetgreen opened its first kitchen. I think it's called the Infinite Kitchen where the entire assembly line, your entire bowl will be made by a robot.

16:48You know, it just kind of goes down the line. And this has nothing to do with, you know, voice chatbots, obviously, but it's just another sign that fast food is being completely automated. I can't imagine in five years you're going to go into a fast food joint and see any human workers. No. Fast food is now faster food. And it is crazy. We're going to come full circle. And eventually we talked about tipping a few days ago. We're going to have to tip the AI to get extra guacamole on our Chipotle bowls. We are. Let's move on to a great segment because it has my name in it. It's called Neil's numbers and I'm just gonna present three of the craziest facts.

17:24I Riveting stuff and I just gonna get Kyle to react or very organically. Let's do it. All right First one is the amount of vacant office space in New York City could fill 26 Empire State buildings So that is seventy four point five million square feet of office space just sitting empty during the pandemic and because of remote work This comparison was made by the New York Times opinion piece by two urban economists they made the argument that New York city and other cities need to adopt what's called a playground city model to revive their business districts. It means that you don't just have a district that's for offices or a district that's just residential or district that just commercial.

18:02You have to go with this mixed use thing, which was popularized by the preeminent urban planner, Jane Jacobs in the 1960s. And we both love Jane Jacobs. So this is not a new idea, but they do. They just wanted to highlight, they used this really interesting comparison to highlight the plight of urban downtowns right now. Yeah, I think this is actually really, really interesting. And Richard Florida and Derek Thompson have some great stuff on this as well. I do think that hybrid work is going to be one of the permanent changes from COVID. And this is radically going to change cities. I think this is a lagging indicator where in three, five years, we're really going to start seeing the effects of this.

18:41But I think if done right, it will make cities more accessible and more fun, better places to live everywhere. You get all serious when you talk about urban planning. Look, you got me going with urban planning. I'm sorry. Your gaze was so serious. All right. Second stat. If you are deciding between butter and olive oil as your base cooking fat, which many of us do, I'm just going to say go with butter for the time being. That's because olive oil, the price of olive oil, has spiked to a 26-year high at around$6 ,000 per metric ton. When you hear of food prices spiking, the first thing you should think of is there are weather problems where this is grown and produced.

19:16That is exactly what's happening now. There's a heat wave and a drought in the Mediterranean where olives are made. That is cramping supply. Spain is the biggest producer of olive oil, and its yield, its olive yield was down 50%. And I thought this was interesting. This is a broader trend of olive oil production is moving away from the Mediterranean towards the east, towards the Middle East because of the changing climate and growing conditions are way better near in like Turkey and Greece as opposed to Italy and Spain now. I think the real bad impact of this is that the keto diet just got way more expensive.

19:51And oleato, which is the Starbucks olive oil drink. There's three people that know what that is and you're one of them. I mean, I hope all our listeners do. I think we talked about it a month ago. But that's bad for Starbucks. Finally, Robert De Niro, the 79-year-old Oscar winner, legendary actor, just revealed he has a new kid. That is maybe not news, but what news is that he now has seven known children, which is a lot. And he joins a bunch of other kind of celebs with Solving Our Population Crisis. Mick Jagger has eight. Alec Baldwin has seven. And Nick Cannon, everyone knows, has 12. Elon Musk has eight known kids.

20:33Yeah, I think this is just a selfless act. I think that's why Robert is doing it. We've had a lot about fertility declines, population declines, and he's doing his part. And he has a son that is a kid that is 51 years old. And then he has one that is 11. Zero. Oh, yeah, now zero. 51 year range. But that is nothing on. There's this Dutch guy who was told. Have you heard of this? No. There was this Dutch guy who was told last week to stop donating his sperm because he's fathered more than 50, 550 children across the world through sperm donations. Wow. Doing his part. Cool it. No, it was like illegal.

21:07You're not allowed to do that. All right. Final story. Have you heard of this hot new TV show? It's generating more buzz than Succession. White Lotus? Yellowstone or even the NBA playoffs. No. It is actually Microsoft's compliance training videos. Wow. We all know that corporate training videos are like the cringiest things on earth and we hate doing them. Microsoft has turned its training videos into this dramatic TV series called Trust Code. And the Wall Street Journal wrote this article a couple days ago about Trust Code and how Microsoft employees go absolutely goo-goo over this series that has cliffhanger endings and serious actors, recurring characters that people love.

21:50They sell merch. So it's kind of funny how Microsoft has turned what is probably one of the worst parts of being a white collar corporate employee and something that's kind of fun. I do love this story and I love that the actor has been seen at his day job at Warby Parker in Seattle. The actor that plays the main character, Nelson. Neil, if we had to watch one TV show and identify what is an HR violation and what isn't at Morning Brew, what show would we pick? Like what is an existing TV show? I don't know. One thing that sticks in mind is severance. Have you seen severance? I've seen a little bit.

22:26I mean, the whole concept is an HR violation. If anyone hasn't seen severance, I definitely recommend it. It's such a good show. And it is all about a dystopian workplace where many HR violations are made throughout. That is our show. Thanks again. Not Toby. Did I get that right? Of course, yes. An amazing show. You leave my name. Please email us at morningbrewdaily at morningbrew.com. We've got to mention John. We got to mention John who emailed us yesterday with maybe the most epic email we've ever gotten. He compared Morning Brew Daily Host to the San Antonio Spurs. Yes, the championship team.

22:59The 2003 San Antonio Spurs. We have a Photoshop here of us. That's not a Photoshop. That's real. That looks real. I didn't know I have a wingspan. I am apparently Tim Duncan, which is the most flattering thing. It's so accurate. You dominate both ends of the floor, newsletter and podcast. You will your team to victory, and you're both over seven feet tall. And you got, that's true, and you got Manu Ginobili, which I think is very apt. So thanks, John. We want to hear from you as well. You don't have to go the lengths of comparing. You do. You do. Three Spurs, who was a great team. I have to say thank you to everyone who made this show possible.

23:32Emily Milliron is on lead guitar. Yuchenna Waogu on the drums. Samantha Velez and Raymond Liu on vocals. Billy Menino slapping the bass. Hair and makeup got kicked out of the band. Devin Emery is our manager, and our show is a production of Morning Brew. Have a great day, everyone. Thank you.