Meta Recruits AI Superteam & Google’s AI is Killing News Sites

0:26Race the rudders! Good morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today the Smartlist guys are launching a company showing that podcaster hubris has no bounds. That Zuck is assembling an ultra expensive super intelligence team as Meta desperately tries to avoid falling behind in the AI race. It's Wednesday, June 11th. Let's ride.

0:55School is out for the summer, which means it's internship season, the annual rite of passage for students to learn important skills like email etiquette and how to chit-chat your way around an office. But not all internships are created equal. ZipRecruiter crunched the numbers to find the highest paid internships being offered this summer. And at number one on the list is software engineering, where interns can expect to earn between$20 and$29 an hour. That's followed by internships in architecture, financial advising, process engineering, actuarial roles, and data analysis. which is news to me because instead of having summer internships, I was a camp counselor.

1:31Hey, at least they are all getting paid. I also think it's interesting that software engineering is still at the top, even though those jobs are getting cut from the job market by advances in AI. Maybe this is a lagging indicator and that number will go down, or maybe cheap interns will always be valuable. But yes, Neil, I don't see summer camp counselor on the list, nor do I see play for summer soccer team to stay in shape for the season. Not a very lucrative summer internship. So pretty clear we were not rolling in the cash during our intern days. And now a word from our sponsor, Domain Money.

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3:18Checking 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. Money. Mark Zuckerberg is not happy he is losing the AI race. so he is going full founder mode to try and make up some ground. According to multiple reports, he is assembling his own personal AI Avengers, recruiting a brain trust of researchers that he is calling his super intelligence group.

3:57The vision is to reach artificial general intelligence, the holy grail of AI development, before competitors like Google or OpenAI, then weave it into Meta's vast array of social media and physical products. But in order to beat the competitors, you gotta outspend them, and boy is the AI race expensive. The Iron Man 2 Zucks Avengers is Alexander Wang, the CEO and founder of Scale AI, who is close to joining the super intelligence group after Meta reportedly acquired a 49 % stake in the company that values it at$28 billion. So in some sense, that is a cool$15 billion for a single AI leader. Meta is also reportedly offering 7 to 9 figure compensation packages to try and lure top talent.

4:40The reason behind the frantic recruitment is Meta is coming off a disappointing model release with their Llama 4 model underwhelming. It also delayed plans to release its most powerful model yet, Behemoth, after it did not sufficiently advance on previous additions. Hence the founder mode invocation for Zuck, who has been very involved in building out the new team, even rearranging Meta's offices so new hires can sit near him. Neil, Zuck is getting back in the trenches here. A lot to unpack here. Let's first start with the AI talent wars, because maybe we should have done internships in AI development because these people are getting paid so much money.

5:19I just want to stress the figure nine figure pay packages. That's at least one hundred million dollars. It's almost unfathomable, but Meta feels like it needs to spend that amount of money because it's losing talent to competitors. You hear reports in the tech world of Meta offering AI talent$2 million per year in offers, but they're still losing them to competitors like OpenAI and Anthropic. This is happening across the industry where Meta is losing out on the top AI talent to the companies that it's competing with. So it feels like it needs to pay up. And Zuck is personally undergoing this recruiting mission to offer, you know, ridiculous pay packages to these people to scale AI as scale AI employees as well to come on board, because this is how important Zuck thinks AI is or super intelligence is to the company's future.

6:12And it does seem like Meta has a pretty compelling offer to these people beyond just the money because he is saying unlike rivals like OpenAI who has to rely on fundraising, these massive fundraising rounds to continue to finance their investments in AI, Meta has a cash cow in its advertising business. It's one of the most profitable businesses in the world. So they have that cash flow to continue plowing resources into their own AI development. in. Zuck was kind of tangling this idea of a multi-gigawatt data center, which only they could afford because they have such a robust business supporting it.

6:48So internally, Meta's saying, like, why wouldn't you want to come join us? Because we have this leg up on the competition. But then the reason why you might not want to join Meta is that it is behind the AI race. Llama 4 has lagged behind other frontier models, and they had to kind of walk back some of their claims about Behemoth, which was supposed to be, you know, the most powerful model in the world, hasn't even hit the market yet. So that is some of the considerations you have to make. Yes, they have a ton of resources, but right now they are lagging behind the competition. And another piece of intrigue here is this deal with Scale AI.

7:20Now, Scale AI is a growing startup that essentially has cut its teeth on cleaning up data so that other tech companies can come in and use that to train their models. This is the currency that AI models require in order to produce results like ChatGPT and Claude for Anthropic. So Meta is taking reportedly a 49 % stake in ScaleAI for$14.8 billion. That is a lot of money. That would be the largest private funding event perhaps ever in the world. So why aren't they just acquiring it? Because they're also bringing in the CEO of ScaleAI, Alexander Wang. Well, perhaps you could look to antitrust regulators Because what is the FTC doing right now is trying to spin off Instagram and WhatsApp that Facebook then Facebook purchased many like a decade ago.

8:11So Zuckerberg is looking at all this stuff happening in the court system saying they want us to break off all those acquisitions. Well, they're probably not going to let us buy another company because they don't want us to have these other companies, these other subsidiaries to begin with. So doing some creative corporate engineering here by taking a 49 percent stake saying, hey, we're not buying it. We're just investing it and taking all of the talent as well. It's something that we've seen other big tech companies do, like Google with another startup character, AI, just kind of acquihiring all of the talent to come over because they see antitrust regulators bearing down and they just want to avoid all of that.

8:45Moving on, coming into the 2020s, economists were hopeful this decade would usher in a new roaring 20s, a century after the first one. Five years in, it's looking more like the 60s, just with fewer Jesus sandals. In a major report yesterday, the World Bank warned that the 2020s were shaping up to be the weakest decade of global economic growth since the 1960s, and this year, 2025, would mark the slowest pace of growth in 17 years out of recessions in 2009 and 2020. That's because the World Bank slashed its growth projections from January, blaming the trade war launched by the United States for diminishing living standards for people across the globe.

9:22Global output is forecast to slow 2.3 % this year from 2.8 % last year, 0.4 percentage points below its earlier projections. World Bank chief economist Endermot Gill said, quote,

9:43The country that will be hurt the most by this, the United States. U.S. output is projected to slow to 1.4 % this year from 2.8 % last year and receive the biggest downgrade of any country in the World Bank's report. Toby, so far this year, the U.S. has raised tariffs on other countries to their highest level in a century, often through chaotic on-again, off-again announcements, and the World Bank is expecting it to take a steep toll. Yeah, it looks like the theme here is just a loss of confidence. And when you don't have confidence in what policies are coming down the pipeline, it's very hard for just an economy to function.

10:17And when you have the biggest superpower in the world in the United States, projecting that sort of loss of confidence, that is when you start to see these cracks form in the world economy, hence the downgrade of the World Bank here. But you also have to remember that who's going to be hurt the most, obviously, United States, but also Gil said that the poorest countries will suffer the most. He said by 2027, the per capita GDP of high income economies will be roughly where it had been expected to be before the COVID-19 pandemic. But developing economies would be worse off with per capita GDP levels 6 % lower.

10:53So, again, the rich are going to stay right around where they were on in the trajectory that kind of ignores the COVID-19 pandemic. But the lower income countries are going to be in a much worse off place because of all the uncertainty surrounding it. And it's something that the World Bank slipped into this report, which was kind of interesting. They effectively supported President Trump's complaint about other countries having higher tariffs on the United States than the tariffs that the United States has on other countries. You have to remember the World Bank is this development lender. They have long promoted free trade.

11:27They want barriers to trade reduced around the world. They think an economic cooperation and everyone kind of trading with each other is the unlock to global prosperity. So they said, you know what? Trump is right that other countries have a lot of tariffs on the United States in a way that the United States doesn't have on the other countries. So, hey, you guys should bring your tariffs down. It didn't endorse the trade war specifically, but it said everyone should be lowering their tariffs here. President Trump has an actual grievance that the United States is getting tariffed up the wazoo. So everyone needs to lower their barriers and we'll all grow together right now.

11:59That isn't happening. And that's why it downgraded its economic growth schedule. And then maybe the scariest part of this whole report, though, is that this forecast assumes that the reciprocal tariffs that Trump announced on Liberation Day will not go into effect. And so if that is the case, then obviously that report is outdated and that probably you'd have to revise growth numbers even lower. So they're making a rather hopeful assumption here that, you know, the pause will be extended and these tariff rates will come down. If that isn't the case, then who knows what will happen? The situation could deteriorate even further, impacting growth even more.

12:33Right. We're right now on day 63 of the tariff pause. Remember, that pause is lasting 90 days. We were promised 90 deals in 90 days. We have essentially one framework established with the U.K. So that's 89 more deals left. And we have, let me do some math, 27 days left. So the trade team better get on it. As industries grapple with the disruptive effects of AI, perhaps no one is shaking in their boots quite as much as news publishers. That's because more and more people are heading to ChatGPT to figure out which new cutting board to buy instead of going to New York Times Wirecutter or skimming Google's AI overviews to find out who won the Tonys, cutting out link clicks to news orgs in the process.

13:15As a result, outlets from the HuffPost to Business Insider have seen their organic search traffic fall by over 50 % in the past three years. It's caused the whole news industry to rethink their business models, with the CEO of The Atlantic telling staff recently that the publication should assume traffic from Google would slowly drop to zero, a major shakeup of what used to be a clicks-based business. It's also led to a rash of layoffs at media companies. Business Insider cut 21 % of its workforce last month, citing massive traffic drops. It's also forced news orgs to pivot once more, this time towards pursuing direct relationships with readers through subscriptions, events, and newsletters as companies figure out how to survive in a post-search era.

13:59Neil, this is beyond just an algorithmic tweak. It's an entirely new ballgame. The warnings are stark. Nicholas Thompson of The Atlantic said Google is shifting from being a search engine to an answer engine. The Washington Post CEO said we are moving quickly and urgently to a post search era. So the news business that did rely on organic search traffic from Google, people searching and clicking those blue links are under the assumption now that at least in the next few years, Google will be taking those sort of all that traffic will be drying up because Google is wants to promote its AI overviews.

14:36It's even launching an even more comprehensive AI search feature, which is called AI mode, which is essentially a chatbot. And there is no room for links there. So once again, the news business is going to have to pivot. It's having to do that for the past few decades. So nothing new for the news business, which has been sort of struggling under the weight of constant platform shifts and looking for a new distribution model. Yeah, I mean, first, the Internet totally decimated print publications. Then social media took over and started to funnel traffic towards sites. But then social media sites pivoted away from giving priority to news.

15:14Search seemed to be like this last bastion of traffic over the past decade, despite some algorithmic tweaks here and there. But now AI is rewiring again how the internet is used altogether. So yeah, the news orgs can just not catch a break right now. Google does think that they are still going to give a life to news organizations. They're trying to say that they're committed to sending traffic to these web pages and that people who do click on links after opening AI overviews end up spending more time on those pages. So Google is trying to have its cake and eat it, too, in some sense. Still cater to, you know, businesses that rely on link clicking, but also trying to say that, hey, we are an AI forward company.

15:54So building the plane, whatever metaphor you want to use, they're building the plane while landing it. They're having their cake and eating it too, basically trying to do two things at the same time. Who knows how successful it will be or what carnage will be left in their wake. But they have no incentive to. I mean, their whole game plan is to keep people on Google properties as long as possible. And the data shows that it's working. According to BrightEdge, impressions on Google were up nearly 50 % since AI overviews launched. Because if you Google, how long do I need to bake salmon in the oven?

16:25and you don't have to click on a link to get there and Google just tells you that's 14 minutes and 375. Yeah, I just did this last night. You're not gonna go anywhere. You don't need to go to any of those lifestyle blogs. You don't need to go to Wirecutter or Washington Post lifestyle section or wherever you would go typically for that. Google wants to keep you there. So it can say that it wants to send traffic to other publishers that really were the lifeblood of Google search for so long. It really has no reason to want to do that. Still, you need people to click links though because in order for them to attract those ad dollars and for people to spend on Google Ads, you need to incentivize people to click.

16:59So again, it still needs to support that business and it still needs to incentivize some clicking. It's just how user behavior is gonna change now that that AI overview is popping up above most search results. Up next, we're gonna talk about another podcast. The Jack Welch Management Institute at Strayer University helps you go from I know the way to I've arrived with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to made it happen and keep striving. Visit Strayer.edu slash Jack Welch MBA to learn more. Strayer University is certified to operate in Virginia by Shev and as many campuses, including at 2121 15th Street North in Arlington, Virginia.

17:45Tuesday 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! On brand with Jimmy Fallon. Series premiere Tuesday on NBC. Will Arnett, Jason Bateman, and Sean Hayes are comedic actors who host the popular SmartList podcast, an interview show that aims to humanize other celebrities and make you laugh along the way.

18:25So naturally, they're starting a phone company. Yesterday, the SmartList guys announced SmartList Mobile, a wireless provider that aims to offer cheaper plans than leading players Verizon, AT &T, and T-Mobile, who convince you to buy pricey unlimited data plans, even though you don't really need all that data. SmartList Mobile said its plans will range from between$15 to$30 and offer 30 gigabytes of high-speed data. Will Arnett said his company could cut your phone bill in half. Wait a sec, what is going on here? What am I even saying? Will Arnett, Job from Arrested Development, is pledging to lower your wireless bill by 50 percent.

19:02Look, celebrities using their massive audience reach to launch products is nothing new. George Clooney made a billion on Casamigos tequila. Hailey Bieber also just sold her beauty brand for 10 figures. You could list dozens of other examples. But for a comedy podcast to start a wireless phone company, seems like we've entered a new era of celebrity entrepreneurship, one that ventures out of the cozy confines of booze and skincare and into the rough and tumble world of telecommunications. Toby, help me make sense of this. Does this make sense? It is a little funky. I'm not going to lie. I mean, their train of thought is that, hey, a lot of people listen to smart lists on phones.

19:40This is a real idea put forth by Jason Bateman saying that, hey, a lot of people listen to smart lists using their iPhones. Let's give them a data provider plan that works for them, which is very tenuous at best because, I mean, people use phones for all sorts of things. Sports betting, food delivery. You don't see DoorDash launching a telecom company. You don't see Giraffe Kings doing the same thing. So that seems like a bit of a stretch. But follow the money here. What did Ryan Reynolds just do? He just sold his stake in Mint Mobile for$1.3 billion. That was a telecom celebrity tie up. So maybe that's where they got some of their inspiration from.

20:16But I think you're right. Just like the weirdness of these comedic guys launching a very mundane product doesn't seem to jive with other sort of celebrity endorsed brands that are more frivolous like alcohol and beauty products. These are things you buy after you pay all your phone bills, after you buy your grocery bills. They have kind of that era of celebrity attached to them. And this does not have that because it's such a more meat and potato sort of product, which is why it feels a little weird for some people. Well, here's how it came about. This is according to Will Arnett. He went with his kid to buy a new phone plan, and he got sold an unlimited data plan.

20:55He has his friend, Paul McAleese, who's the former president of Shaw Communications, which is a Canadian telecom giant. So Will Arnett said, hey, did I do this right? And then the guy from Shaw McAleese was like, no, you got totally ripped off. And then they started talking and decided to start this cheaper phone plan saying that, you know, 90 percent of people don't use as much data as they need. So that is the thesis here. And, you know, if you think they're actually going to be running this company, well, absolutely not. The Shaw guy is going to be running the telecom company and they are going to be the spokespeople, the marketing people behind this.

21:33But you're right. We'll see whether people have any inclination to follow their favorite podcasters into something that's so interwoven to their daily life, like a phone rather than something more indulgent, like a tequila brand or beauty like Hailey Bieber just showed with her one billion dollar sale. And I say good luck to them. But, you know, I think more people are a little skeptical for sure. OK, let's sprint to the finish with some final headlines. Maybe some of those trade restrictions the World Bank was worried about are simmering down just a bit. Last night, officials from the U.S. and China, who had been meeting in London, announced a framework for preserving their trade de-escalation truce, worked out last month and will now take it to the two countries' leaders, Trump and Xi, for their final sign off.

22:15Remember, the U.S. and China had agreed to lower tariffs on each other in May, but then tensions ratcheted back up after each side accused each other of reneging on the pact. The U.S. slammed China for curbing access to those crucial rare earth minerals, while China complained about the U.S. withholding chips for its tech companies. So now, according to Commerce Secretary Howard Lutnick, the two largest economies in the world have reached a handshake for a framework, which sounds a little Monty Python-esque, but I'm sure markets will be a little pleased this morning. Yeah. Is this a long-term deal, a very stable deal?

22:47Maybe not, because it's more something that's been kind of forced together by motivated by the leverage both sides have over each other. For China, that's rare earth. For the US, it's advanced chips. So this wasn't necessarily born of just a sudden seeing of eye to eye, a sudden shared interest in thawing global trade tensions. So it also means that potentially more stops, more starts are coming down the pipeline since the foundation it was built on is a little bit shaky. And you see that because U.S. stock futures are relatively flat in early morning hours. So you would think there'd be a little bit more celebration for a handshake to a framework, which, you know, yeah, it does sound a little bit made up.

23:26But I do think that there is still some ways to go before the market really believes that the tensions have fully simmered down. President Trump's immigration agenda reached new levels as Kabi Lame, the world's most followed TikTok star, was briefly detained by ICE in Las Vegas for overstaying his visa before voluntarily leaving the country without a deportation order. Lame is a Senegalese-born Italian citizen who is known for his silent comedic reaction videos, racking up 162 million followers on TikTok in the process. Since his rise, Lame has made cameos in movies and even starred in a TV show called Kabi is Coming to America.

24:04He also attended the Met Gala earlier this year. But, Neil, this incident paired with the continued protests in L.A. will bring even more attention to the larger immigration crackdown being carried out by the current administration. Absolutely. And we'll see what happens to his business empire because he really has created one by just not talking at all. His properties are just through his endorsement deals. He grows$16.5 million in 2023. That's from partnerships with Google, State Farm and Pepsi. He has a partnership with the clothing brand Hugo Boss. He was at the Met Gala. So he is a big influential player.

24:38And he told Business Insider a few years ago that literally all of his deals happen in the United States. He doesn't have any sort of business going on in Italy. But now it looks like he won't be able to come to the United States through these immigration crackdowns. So we'll see what happens to this. Apparently, he's still posting. He's in Brazil. And so you can't keep him off social media. You can keep them off the United States, but you can't keep them off TikTok. Whole Foods is looking more like partial foods after a cyber attack on its main supplier has left shelves empty in some stores. Last week, United Natural Foods, a Providence-based distributor to Whole Foods, said it shut down its IT systems and pulled back on shipping after finding that hackers had infiltrated its network.