Meet the New OpenAI Challenger & GenZ Investors LOVE Crypto

0:00This episode is brought to you by State Farm. Checking off the boxes on your to do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you. Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs. Like a good neighbor, State Farm is there.

0:27Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Gen Z and millennials have a very different investing strategy than older generations. call it the anti-Warren Buffett. Then Amazon has found a new packaging material to replace those fun little plastic air pillows, and it's a lot more environmentally friendly. It's Friday, June 21st. Let's ride.

0:53Happy Friday, everyone. You know, a big theme in recent weeks has been restaurants from Applebee's to McDonald's slashing prices and offering discounts to lure customers back. McDonald's$5 value mill goes on sale next week. But there's one chain that is holding out Olive Garden. The head of the OG's parent company said of slashing prices yesterday, we're not doing that. Even at a time that our competitors have ramped up discounting, says he's playing the long game and doesn't want to get into a race to the bottom that could hurt everyone's profits. What do you think, Toby? Not only is Olive Garden keeping its prices steady, it's also going to continue to emphasize its never-ending first-course items in its marketing.

1:34So it looked at Red Lobster's endless strip deal right in the face and said, not today. We are going to continue to provide those unlimited breadsticks. And for that, I thank them. Meanwhile, Olive Garden is part of a bigger parent company called Darden Brands. But the company that is outpacing Olive Garden is becoming the gem of this portfolio is Longhorn Steakhouse. I've never been, but it sounds like a delightful, do they have some sort of like unlimited breadsticks type appetite? I don't think so. appetizer because they should. Now let's hear a word from our sponsor Yahoo Finance. Today I want to talk about stock market group chats.

2:11I'm sure if you're listening to Morning Brew Dale you probably have a group chat with some friends where you send charts of Nvidia back and forth and say dang should have bought a little earlier. I hope you're celebrating it rather than rueing but yes if you have a group chat with your friends where you're dropping investing takes consider introducing Yahoo Finance to the mix. If you can bust out trusted news and analysis plus real-time market data in quick succession from Yahoo Finance, you'll be on your way to becoming the group leader of the group chat in no time. Neil, the group chats we're in together are usually just us trying desperately to find some way to watch the Euros, but let's head to Yahoo, lock in, and get some ideas flowing.

2:47I like the sound of that. If you want to make your group chats a place for high-level stock talk, head to yahoofinance.com or download the Yahoo Finance mobile app. 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. They 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!

3:21On Brand with Jimmy Fallon. Series premiere Tuesday on NBC. Breaking news, another former OpenAI employee has defected to start another AI company. That headline on its own isn't exactly newsworthy, but it is when that former employee is Ilya Sutsgevr, the man at the center of the coup that briefly ousted Sam Altman from OpenAI back in November, and the company's founding aims to produce superintelligence in a safe way, which was also the issue at the center of that November dust-up. The new startup is called, fittingly, Safe Super Intelligence, and it speaks to the growing concerns around the need to build AI with safety baked in as the main priority.

4:00Before SuitsGiver left OpenAI, he helped create the so-called Super Alignment Team there, which was supposed to help ensure that whatever tech they built would do no harm and wouldn't lead to, you know, the end of human civilization as we know it. But that approach was at odds with Altman's push to commercialize the AI tech, which led to the eventual departure of Ilya from the company. Ilya is a bit of a mythical figure in the AI space. And for months, there was this meme going around that asked, where's Ilya? Well, even though the details are still murky, we now know where Ilya is and what he's working on.

4:35Safe super intelligence. How did the AI industry all of a sudden just become like Game of Thrones with factions being formed, alliances shifting? And they're all after these dragons, which is super intelligence, which is intelligence, artificial intelligence that is smarter than humans. We've heard a lot about artificial general intelligence, which all of these startups and companies, including Microsoft, Google, OpenAI, are after. And super intelligence is even one step beyond that, where these machines are smarter than humans. And the big problem to solve there is figuring out a way to make sure that's safe.

5:10One of the big things that this new company is selling, because right now they haven't really explained what exactly that they plan to do with this new company that they've started. They're selling Focus because they put out this press release that calls out all the external pressure these AI companies face at companies like OpenAI, Google, Microsoft, to produce and go through multiple product cycles, produce something that they can commercialize, make money. They said, we're not going to mess with any of that. We're going to have one singular focus, and that is to avoid distraction by management, overhead, or product cycles.

5:46We're going to focus solely on building safe superintelligence. How they're going to commercialize that, they haven't explained whatsoever. But their big thing that they're selling is we are focused on this one mission. The thing is, these guys are not going to have any problem raising capital. If you have a startup, if we have a startup, and we're like, we're only going to do this one thing that we don't even know exists, and no one can really describe it, and we're not going to do anything else or release any products, we would probably have a lot of problem raising money. But as you mentioned, Ilya is such a legendary figure in this space, just a very respected researcher.

6:19And he brought on two other guys, Daniel Gross, who's the former Apple AI lead, and Daniel Levy. These guys are an absolute—Daniel Levy, who also he worked with at OpenAI. These guys are a dream team. I mean, Kevin Durant probably wants to get over here because they have many problems to solve. But raising capital is not going to be one of them because any investor who's looking at where to put their money in the AI space is looking at these three guys. And they're like, wow, they are absolute studs. Yeah. So the trick and the thing that will make this company successful or not is if they can if they can achieve this safe super intelligence.

6:52One of their big approaches is rather than trying to apply guardrails or these safeguards on the fly to AI tech as you're building it. They're going to try to bake it into the very code base itself. And so that's one big difference where OpenAI is trying to put these things out in the wild, figure out if it's going to lead to any catastrophic things and put safeguards on top of it. They're going first principles thinking, going from the very start and trying to bake safety into that super intelligence. Meanwhile, another person who defected from OpenAI, Jan Laika, who worked with Ilya Sutskever on the super alignment team and left OpenAI because he didn't really like it at all, moved to Anthropic, which is another very well-funded AI startup backed by Google, Salesforce, and Amazon.

7:38And you can see the arms race continuing apace because yesterday Anthropic released its most advanced model yet. Claude 3.5 Sonic Claude is one of those chatbots that competes with Gemini, that competes with ChatGPT. And Anthropic is saying that, is showing that this chatbot competes on par with those other models. So, I mean, this space is heating up. Very Game of Thrones-y, very political, very dramatic, and we'll only see what happens going forward. Stonehenge is always in the news this time of year. Thousands of people flocked to the ancient monument in England to celebrate yesterday's summer solstice.

8:14But the stone formation has been in the spotlight for a different reason entirely. Activists from the UK group Just Stop Oil sprayed part of Stonehenge with orange paint in order to raise awareness around climate change and the UK's continued production of fossil fuels. The two protesters were arrested Wednesday and drew widespread outrage for defacing one of Earth's historical treasures. UK Prime Minister Rishi Sunak called it a disgrace, and his rival in the upcoming election said the action was outrageous. But Just Stop Oil was not deterred. They continued to escalate their protests yesterday when two members broke into a London airport and sprayed orange paint on a jet they thought belonged to Taylor Swift.

8:53Disclaimer, it turned out to not actually to be Swift's jet. Toby, extreme protests against climate change have been on the rise this year, disrupting sporting events, artworks and plays. Activists seem to think the media attention they get from it is worth the wrath from the public. Yeah, it is a very interesting game that they are playing because you've definitely seen these videos on social media. And the response is always overwhelmingly negative because you're just seeing these people defacing sometimes monuments, defacing sometimes private property. and you just have this very visceral reaction to them.

9:28But to them, they are living on the edge of what's called the activist dilemma in the sense that you have to choose between doing very moderate actions that would just totally get ignored by the media or very extreme actions that are definitely gonna garner negative attention and may be counterproductive to general feelings towards those protesters. But to them, that is a risk they're willing to take because if no one is talking about them, then no one's talking about you. are. We are right now. Let's talk specifically about what they want. Let's move past the sort of the action themselves and talk about the cause they want the UK to stop approving new fossil fuel projects.

10:05Rishi Sunak recently announced that 100 new North Sea licenses had been granted, and he said he would award them further for oil and gas exploration in the North Sea. He wants to be net zero by 2050. Who knows whether he'll still be in power? I mean, he definitely won't be in power by then, but that's the roadmap he set. And he said, we still need oil and gas to power our future. Either way, we're going to have to get some of our energy mix from these sources, why we should do it domestically instead of rely on foreign countries to provide us that energy. So that's basically what they're after.

10:40And they're taking this to a very extreme measures that has upset a lot of people, including Druids and pagans who came out against this as they were going to Stonehenge to celebrate the solstice. Right. There is one thing that I don't really want to mess with. It is a mythical kind of monument that a lot of people say there is some sort of energy around it on the summer solstice. So I understand that a lot of odds was on Stonehenge and that's why they picked it. But man, I do not want to mess with the Druids and the Pagans if they say that this is something where a lot of energy is going to be concentrated at this time of year.

11:12You may not have heard of CDK Global before, but if you're listening to this in a car or have ever ridden in a car, then you have more than likely benefited from this niche software product. CDK provides everything from online scheduling to e-signing tools to around 15 ,000 car dealerships across North America. And it's also been the subject of two major cyber attacks on Tuesday and Wednesday. CDK is the lifeblood of daily operations for car dealerships. Without it, you get stories like a BMW store in Manhattan that was forced to pause all new business, including car servicing and new appointments because of the attacks.

11:49Or the Philadelphia dealership that told Bloomberg its employees have been rendered unable to even print out a repair order because of how reliant they are on CDK. You often hear about health care companies or casinos experiencing large scale cyber attacks, but not often car dealerships, software providers. But look at how disruptive it's been. I mean, the past few days, you can't have bought a car in the in the United States. It seems like thousands of dealerships have gone offline because of this cyber attack. It hits CDK, which provides pretty much everything for car dealerships. It's essentially their operating system.

12:25They took themselves online to figure out what was going on with this cyber attack. It's led dealerships into chaos over the past few days. And it couldn't come as at a worse time because this is the summer. I mean, Wednesday was a holiday where a lot of people were probably shopping for cars. The summer is the height of the car shopping season. And for car dealerships to be taken offline like this, and even for things like service or just scheduling appointments, they couldn't do and they had to rely on sticky notes and spreadsheets and get out that pencil and paper, which we're seeing a lot of companies use when they're hit by cyber attacks.

12:57That is what has been happening in the past few days. And I'm not sure whether they're going to be able to get it up by the weekend. Yeah, one Hyundai dealer wrote on Reddit that service is dead in the water. We are still selling and showing cars, but doing paper contracts, I feel like a caveman. This software is just so integral to everything that they do. People can't look up customer data, and so you can't do anything from service changes. You can't schedule appointments or anything like that. Some dealers said all we're doing is oil changes because that's literally all we can do. You come in, it's very analog.

13:29You just change the oil. So you don't often think about car dealerships as a target for cyber attacks, but they are an attractive target because think about the vast amount of sensitive customer data they have on file. You have the credit applications, customer financing information. You have the insurance information. So there is a meaty amount of stuff right there. Right now, it's unclear whether this cyber attack is related to ransomware. I don't know who's behind it or what they want from it, but all we do know right now that it has been very debilitating. Meanwhile, when you see posts about the car dealership hack online, a lot of the comments are not exactly flattering towards car dealership.

14:08There seems to be a lot of animosity towards this. And I think it's because people see them, some people see them as a unnecessary middleman that has monopolized the retail market. And there's been a lot of regulation from governors, from states around the country that sort of require them to exist. Some new car upstarts like Tesla and Rivian are trying to circumvent them and sell cars direct to the customer. But, you know, last year, I remember, Ron DeSantis of Florida signed a law that required legacy automakers to sell through dealerships to protect the franchise model. So there is a lot of animosity.

14:47I don't know if they're garnering as much sympathy as another industry that has been hit by a cyber attack. Up next, Gen Z and millennials have way different investing habits than older generations. 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.

15:46so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Our typical Friday segment, Stock of the Week, Dog of the Week, is being swapped out today for a broader look at the investing habits of young people. And it's very symbolic because the youth, they're out on stocks. According to a Bank of America study of wealthy Americans, Nearly three quarters of millennial and Gen Z investors say that it's not possible to achieve above average returns by investing only in stocks and bonds.

16:25Compare that to only a quarter of older Americans who have that view. And you realize there's a wide generational gap in how people think about investing. When you ask young people about the growth opportunities in investing, their top three are real estate, crypto and private equity. And they're putting their money where their mouth is. About one third of their portfolios are dedicated to alternative investments and cryptocurrencies. Meanwhile, older generations are putting just 6 % into these categories. And just to be clear, this survey talked to high net worth individuals or people with more than$3 million in investable assets.

16:59So they're not the average, Joe, but it still highlights a real paradigm shift, which is that the future of wealth is running through alternative investments. Yeah, the old 60-40 portfolio, 60 % stocks, 40 % bonds is very much dead and gone. Stocks now comprise only 28 % of younger investors' portfolios. That's compared to 55 % for older investors. And you see the flip to where's that money going? It's going to the alternative investments, the cryptos of the world. Because crypto comprises 31, or alternative investments and crypto comprise 31 % of younger investors' portfolios, just 6 % for older.

17:35So definitely generational shift. If you look into the psychology behind why this is happening, think about what millennials have gone through in their lifetimes already. You've had the dot-com boom when they are first entering kind of consciousness, when they understand what's happening in the financial markets in 2000. Then you had the financial crisis in 2008, 2009. Then you had the market going south in COVID in 2020. So you've had three very traumatic, very impressionable financial events that happen in your investing timeline. So, of course, you're going to be a little more skeptical of traditional stocks and gravitate more towards these alternative assets.

18:14I don't buy that. You don't buy that at all? I don't buy that at all. Why? If that's the case and 2008 was precipitated by a huge housing crash, why would their top investments be in real estate or why would they view real estate as an interesting alternative investment? I think this has to do with just the access, right? Bitcoin didn't exist before 2008. There's all of these apps and ways to access alternative investments now that there were when our parents were investing. And that is they could just do stocks and bonds. We can do crypto. There are these platforms to invest in fractional shares of real estate.

18:51You can buy fractional shares of old cars and collectibles and all these different ways to invest in it. So I think it's the widening of the investing sphere that is driving this rather than these traumatic events. I mean, if you go back to 2008, the S &P has been up over 500 percent since then. It's returned 10 percent annually. I mean, if you look at that, that seems like a very attractive proposition to stash your money there. So I don't know exactly what's behind it, but I don't think it's necessarily this trauma from previous crashes. Part of it also comes down to the fact that they're just young people as well.

19:23So older generations have a bigger timeline, a broader data set, if you will, to look at how stocks have performed. They also have just more calibrated expectations when it comes to investing. Younger people are more likely to take on risk. And so, of course, they're going to gravitate towards these riskier assets. This is something that I think we'll see reflected going forward. Like young people are always going to want to be interested in kind of the more fringe, more alternative assets. and old people are going to be a little more stead and a little bit less inclined to do that. So if we're still on the show in 40 years, I think we're going to be having a very similar conversation about younger generations.

20:02You know those plastic air pillows that come in Amazon packages that make a really loud noise when you pop them? Well, get your last satisfying punctures in because yesterday Amazon announced that it's removed 95 % of them from its packaging in North America and will replace them with boring paper filler made from recycled materials. It's Amazon's biggest step yet towards a less plastic-filled future and says the change will help remove nearly 15 billion plastic pillows annually, which, good lord, we order a lot of things on Amazon. Amazon hasn't publicly announced a goal to phase out all plastic from its operations, but in 2022, it did reveal that it used 85 ,000 metric tons of single-use plastic shipments worldwide which was actually down 12 % from the previous year.

20:50Given this latest commitment, that number has likely fallen even further. Neil, I know some people out there are going to be sad about the lack of pops you're gonna get in, me included, but I'm sure we're willing to get over it for the sake of the planet. Whenever you hear about Amazon packaging and when they make a small tweak to their packaging, something like this, it just brings to mind the scale of Amazon. I mean, the amount of plastic in the form of air pillows that they ship out would circle the earth more than 200 times. They send 5.9 billion packages a year, and that equates to 16 million a day.

21:24So a small change like this can have a very big impact. And it's why a lot of nonprofits and a lot of shareholders at Amazon are urging the company to make these changes to make their packaging more environmentally friendly, because small change in one Amazon package times 5.9 billion over the course of a year is going to make a big big change yeah it makes a huge difference part of it when you make a packaging change though is that you need to make sure that this new packaging performs and keeping the item safe and it looks like they've been performing by many measures even better than the plastic air pillows because they likened if you they likened the paper wrapping to the crumple zone in cars that absorbs the shock of collisions very well so the pillows on the other hand they are almost trampolines that jostle the things around then eventually they can only take so much and will pop, the paper, crumpled paper, will never pop.

22:15And so it is a better material for protecting your items. And Amazon says even though it might cost a little bit more than the plastic pillows, we actually end up saving money with the amount of items that aren't broken in transit and the amount of machinery that we're going to put in that is less costly than the plastic pillows were. So even though on the surface the paper does cost more than the plastic, they're going to save money over the long term. I never knew they were called plastic pillows. It makes so much sense, though, now that I think about it. Did you pop those? No. Oh, they're so loud.

22:48They're like super bubble wrap, so I always like popping those. Yeah, well, so Prime Day is next month, and Amazon said that you will not get any plastic pillows in your Prime Day packages. It's going to be a less loud Prime Day. I can tell you that. It's going to be a less loud Prime Day. Let's wrap up the week with a feel-good story about the dramatic rescue of two beluga whales from a war zone in Ukraine. Over a heart-thumping 36 hours from Monday to Wednesday, the two whales, Plumbier and Miranda, were whisked from their aquarium in the battered city of Kharkiv and sent to their new home in Valencia, Spain, home to Europe's largest aquarium.

23:27Not that any of you thought airlifting two belugas out of a war zone and across a continent was easy, but this evacuation was insanely complicated. In fact, it's been called the most complex marine mammal rescue ever undertaken. To plot out the details, experts were called in from as far as Atlanta and SeaWorld, and the planning took months. But desperate times call for desperate measures, and the whales did not have much time left. Their diets were depleted, medicine was scarce, and Russian artillery has been exploding so close that it caused ripples in the waters. In the end, though, this story has a happy ending.

24:01The whales were saved. Credit to everyone involved for making this happen. It is a feel-good story. There were so many logistical parts of this operation where it could have failed. So the transport crates that the Ukrainians had were too small. So their solution was to drain the water from them whenever they were lifted, which obviously makes it less likely to break. But also now the whales are in dry land. So it increases the timeline right there. And then also the Moldovan airport didn't have any heavy lifting cranes to move the whales. So they had to bring in this special cargo plane. And then if that wasn't enough, too, the Italian prime minister was flying through the airport at the exact same time, which added another additional precious hours to the trip.