OpenAI’s Struggles Spooks Tech Stocks & UAE Walks Away From OPEC

0:00Neal Freyman:Study and play. Come together on a Windows 11 PC. And for a limited time, college students get the best of both worlds. Get the Unreal College Deal. Everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 Premium and a year of Xbox Game Pass Ultimate with a custom color Xbox Wireless Controller. Learn more at windows.com slash student offer. While supplies last, ends June 30th. Terms at aka.ms slash college pc. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, why the UAE is leaving OPEC. Then is OpenAI doing OK?

0:40Neal Freyman:One report says no. It's Wednesday, April 29. Let's ride.

0:49Good morning. If you're flying to Tokyo this summer and something happens to your luggage, you might be able to blame a robot. Japan Airlines is beginning a trial in May that'll introduce humanoid robot workers to the tarmac at Haneda Airport, handling luggage and cargo. The goal is to see whether these bots can alleviate some of the physically demanding work of human baggage handlers while plugging the gap on a widening labor shortage. Toby, this might be the biggest tech innovation at airports since moving walkways.

1:16Neal Freyman:Whatever Japanese airports decide to do, I'm on board with because Japan is home to Kansai International Airport, which hasn't lost a single piece of luggage since it opened back in 1994. I haven't gone one year without losing my wallet or keys, but Kansai is three decades in and they have a perfect record. Kansai even turns the handles of the suitcase on the conveyor belt in the baggage claim area so they are facing the passengers. I'd like to see a robot do that, Neil. Seriously, I would love to see a robot do that. That seems really helpful. But whatever you want to do over there in Japan when it comes to your airports, I trust you.

1:52Neal Freyman:And now a word from our sponsor, Windmill. Neil, how do you stay cool? Well, I've got these hip glasses. That's not the kind of cool I meant, although I can confirm you look great in those. The real answer is Windmill's Window AC. Between its award-winning design, easy-to-install build, and smart controls, it's one of the coolest ways to stay cool this summer. And it runs as quiet as a dream. The coolest part is Windmill pre-assembles the install kit, so it's super fast to get set up, only takes a few minutes. Windmill is offering MBD listeners a special 10 % discount on their first order at windmillair.com slash mbd that's windmillair.com slash mbd for 10 off the uae is pulling a harry styles and leaving the band to go solo yesterday the emirates announced it was leaving opec on may 1st dealing a major blow perhaps a fatal one to the group of large oil exporters in a statement the uae said during our time in the organization we made significant contributions and even greater sacrifices for the benefit of all.

2:54However, the time has come to focus our efforts on what our national interest dictates. And increasingly, the UAE's national interest has come at odds with the aims of the wider OPEC membership led by Saudi Arabia. The UAE wants to pump more oil and invest more in oil infrastructure. OPEC, on the other hand, wants to keep a lid on oil production to boost prices. To use a sports metaphor, it's very rare for me. The UAE feels like it's a freewheeling, high potential quarterback stuck in a conservative offensive coordinator's scheme. For OPEC, this is really bad news, like existentially bad. For decades, the organization has wielded power and influence by orchestrating global oil flows and prices throughout the world.

3:33But the UAE was a key part of that. It is the third biggest oil producer in OPEC, accounting for about 12 % of its overall supply. Toby, this wasn't a massive surprise. It was widely known that the UAE was disgruntled in OPEC. But you can't overlook the timing of coming when the war in Iran has caused an unprecedented shock in energy supplies.

3:51Neal Freyman:I'm going to piggyback on your sports metaphor and say that the conservative offensive coordinator in this metaphor is Saudi Arabia. Saudi Arabia and the UAE have been beefing over the direction OPEC should go in for nearly a decade at this point. UAE and Saudi Arabia are two of the only countries that have spare production capacity that they can bring into the market that can affect global energy flows. The UAE's position is, hey, we have this extra production. We want to bring that onto the market. The Saudi position is that they want to keep oil prices right around$100 a barrel. They align more with Russia in this regard.

4:31Neal Freyman:So they don't want to bring that excess spare capacity online. And that has been simmering over time. It looks like under the cover of the Iranian war, now is the time that UAE is going forth and saying, we do want to spread our wings. We want to run that, you know, five out offense and start producing more oil. Right. So right now, OPEC quotas recently limited the UAE to 3.2 million barrels of production a day. Well, they have the capacity to produce closer to 5 million barrels a day. So they're part of this, you know, group project where they feel like where they're putting the team on their back and they're being constrained by the rest of the membership.

5:06But let's talk about OPEC's influence over time. It threw a lot of weight around in the 70s and 80s, back when the United States was maybe a more smaller producer in oil markets. But recently, because of the shale revolution, the United States has become a net oil exporter. It's now one of the largest oil producers and exporters in the world, which has diminished the power and influence of OPEC. So a bunch of countries have actually left OPEC in recent years. Angola quit, Ecuador quit, Qatar quit. But those are just very small minnows, very small players compared to the UAE 12 percent of overall supply, which is why, you know, a lot of energy experts have declared OPEC dead over the past few years and decades.

5:48But this could be a fatal blow just because of how much muscle the UAE has. Right.

5:53Neal Freyman:And a lot of people have been writing OPEC's obituary for many years now because there has been almost a continual exodus over time. But it looks like UAE, you know, third biggest, could start another flow of countries leaving. Venezuela might be next in line, even though the current government under Delci Rodriguez says, hey, we're committed to the cartel. If the opposition government takes power, it looks like Venezuela would be hot on UAE's heels. Kazakhstan, too, already has a foot outside the door. So this could be the moment where OPEC does lose some of its sway because the U.S. has brought so much excess capacity online.

6:28Neal Freyman:And we won't even be talking about OPEC as a major player in a decade from now. And you can't help but talk about the timing, too. This is happening as the war on Iran has completely shaken up global energy markets. And it looks like the UAE decided now was the time to leave OPEC because it wouldn't shake up prices too much because, you know, There's a thing called the Strait of Hormuz that's closed, and that's the overriding factor in what oil prices are doing. So the UAE can kind of bow out at this point when everyone else is concerned with what's going on with the Strait of Hormuz. And just an update on that.

6:57I mean, there is no update. The Strait of Hormuz is still closed. Trump has vowed to continue the U.S. blockade. Meanwhile, oil prices are now continuing to rise up to$115 a barrel, and U.S. gas prices are rising as well. And they just hit their highest level in four years at$418 a gallon.

7:14Neal Freyman:Moving on, it's not often that a reporter can press publish on a story and know that it's going to upend trillions of dollars in the global markets. One of those moments happened yesterday when the Wall Street Journal's Berbergen hit send on his report about OpenAI missing key revenue in user targets. Stocks were deeply red yesterday as fear spread that the company at the center of the AI infrastructure buildout could be doing worse than people thought. Oracle, which has committed$300 billion to help fund OpenAI's data center ambitions, dropped more than 4%. Chip makers like NVIDIA, Broadcom, and AMD fell a similar amount before pairing some losses.

7:49Neal Freyman:The report from the Wall Street Journal revealed that OpenAI missed an internal goal of reaching 1 billion weekly active users for ChatGPT by the end of last year. It also apparently missed its yearly revenue target after Google's Gemini rose in popularity, a trend that's only continued into this year with Anthropik emerging as the main challenger, taking bites out of OpenAI's coding and enterprise business. Again, all of these are internal figures and OpenAI never officially announced them. And the company has pushed back on any rumored shortcomings, saying in a statement that the report is prime clickbait and the company is firing on all cylinders.

8:25Neal Freyman:But storm clouds are gathering. Neil, this is where the tangled web of circular deals and computing contracts that make up the AI industry really reveal itself. I love this quote from CoreWeave. So CoreWeave is a company for whom OpenAI is a major customer. And it's just one of those in the constellation of circular deals that's going on. So CoreWeave did not exactly support OpenAI. They said, OpenAI is a terrific partner, but not our only one. Our business is supported by a diverse and expanding set of customers like MetaAnthropic, Microsoft, Google, IPM, Perplexity, Jane Street, and many others.

9:02So if they were looking for support from some of these customers, they did not find it in Corby, which looks like it's hedging its bets. But you can't say that about other companies like Oracle, which is why you saw Oracle stock decline more so than the others.

9:15Neal Freyman:I mean, OpenAI strategy has been we are going to buy all the compute possible. We think that compute is the main constraint of the AI revolution. This is the path that we're going down. So they have committed roughly$600 billion going forward. And people were happy to, you know, fund the company. They were happy to give them debt because Chachapiti seemed like this invincible success. It was this unstoppable force that was going to be on its way to being the most used consumer product of all time. And yet, if that narrative is not true, if it is petering out, that growth is not coming down the pipeline, all of those promises, all that$600 billion in spend can't come to pass.

9:53Neal Freyman:So obviously it's bad news for OpenAI because they're not making as much money as expected. But it's really bad news for everyone else who is in line to fund those big AI buildouts. So that is why you saw one single report kind of ripple out into the global market. There are plenty of folks who came to OpenAI's defense and said this report was making a mountain out of a molehill and was backward looking to 2025. Because OpenAI has done a number of things early in 2026 to maybe supercharge growth. One of those is Codex, putting more investment into this Codex coding tool. We're seeing Anthropic make so much money from its coding tools.

10:29Well, OpenAI is investing a lot more into Codex, and it's gotten some pretty good results. And then recently, it launched GPT-5, which is a new model that has topped a number of industry benchmarks. At the same time, Anthropic, yes, it's been on a great run, but it's running into a compute crunch, the likes of which OpenAI probably wouldn't run into because it's spending so much money on it. So if you've been on Claude recently or some of Claude's various tools, then you probably noticed that there have been a couple outages because Anthropic is dealing with a supply shortage. So as much as this report was worrying about OpenAI, the same amount of defenders came to OpenAI's support and said, look, OpenAI is doing just fine.

11:05We're talking about 2025. Things are completely different in 2026. Moving on, Disney once again finds itself under legal assault by the Trump administration. Yesterday, FCC Chairman Brendan Carr took the extraordinary step of launching an early review of the company's broadcast TV licenses one day after President Trump called on Disney-owned ABC to fire late-night host Jimmy Kimmel. I say extraordinary because this sort of early review almost never happens, the last one coming decades ago against a tiny station. Carr said the action against Disney was an expansion of a probe begun last year into the company's DEI practices.

11:39Critics called BS, saying the review is clearly retaliation for what's going on with Jimmy Kimmel. And here's what's going on with Jimmy Kimmel. Last week, the comedy host held a mock White House Correspondents Dinner speech where he made this joke.

11:51Neal Freyman:Of course, our First Lady Melania is here. Look at Melania, so beautiful. Mrs. Trump, you have a glow like an expectant widow. At the real White House Correspondents Dinner several nights later, a gunman allegedly tried to assassinate Trump. That led to both the first lady and the president on Monday calling on ABC to fire Kimmel, with Trump saying his comments went beyond the pale. Later that night on his show, Kimmel defended his joke. Obviously was a joke about their age difference and the look of joy we see on her face every time they're together. It was a very light roast joke about the fact that he's almost 80 and she's younger than I am.

12:29Neal Freyman:It was not by any stretch of the definition a call to assassination. And they know that. I've been very vocal for many years speaking out against gun violence in particular. The FCC is framing its review into Disney as coincidental timing with the Kimmel controversy. Skeptics call it a direct attack on the First Amendment. And new CEO Joss DiAmaro for Disney calls it a massive headache early on into his tenure. It's a big test of his leadership because there has been a previous dust up. What are you supposed to do when Disney also got into a spat with kind of the conservative over a joke that Jimmy Kimmel made about Charlie Kirk's killing?

13:08Neal Freyman:That actually put Kimmel on the bench for a little bit. Disney suspended him. Is Josh DiMario going to do something similar this time around? So far, he's done not much of anything. No suspension, no public statement supporting Kimmel. So it's been very interesting how he's going to navigate this tenuous situation. One factor that is different this time around. Even though the FCC is kind of wielding its power, the local broadcasters are much quieter this time around because in the previous setup in September 2025, Nextstar and Sinclair, which are two TV station owners that carry a lot of ABC programming, were pressuring Disney into saying, hey, we're going to take you off the air if you do not retract your statement.

13:47Neal Freyman:That was because they were looking to get a merger across the finish line and they wanted to appear friendly to the FCC. This time around, the merger is approved, so they're not exerting that pressure, which could be one of the reasons why it's not ratcheted up to quite the same level as September 2025. So what does this mean, early review? I was looking into it. So you mentioned that a lot of broadcasters carry ABC programming like Sinclair. But ABC actually owns just a handful of stations itself, these owned and operated stations. There are eight of them in cities like New York and Chicago. And these networks like ABC need to apply for license renewals every eight years.

14:27For ABC station licenses, they come up for renewal between 2028 and 2031. So the fact is that FCC is right now calling on ABC to apply for a new license in an early fashion because it's not 2028 yet, which is something that is completely unprecedented. So the FCC says basically what's going to happen is just a huge legal headache and a distraction for ABC. Critics say there's no way that the FCC would go ahead and revoke these licenses because this would just cause a massive legal First Amendment dust up. But what it is meant to do is put a lot of pressure on Josh DeMauro, the new CEO, to see how he's going to respond.

15:04Neal Freyman:Yeah, Disney would most likely win a court battle, but it would find itself locked into a very long and expensive legal fight. And that's exactly what the federal government wants to threaten here. Even though Disney would win, it would just take a lot of time and money. Let's take a quick break and come back with a story about electric air taxis right after this. Neil, are you obsessed with helping people keep more of what they invest? No, but I'm really into sculptures made of little cheeses right now. Then you're not cut out to be a financial advisor because that's their job and Vanguard will help with that.

15:39Vanguard is slashing fees again, this time for more than 50 of its funds. Low fees give Vanguard's skilled bond managers more freedom to maneuver as they pursue outperformance.

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17:06Neal Freyman:That's pulley.com slash brew. Joby Aviation is almost ready to offer flights to get you to your flight on time. The Electric Vertical Takeoff and Landing Company, aka eVTOL, completed its first demonstration flight in New York City this week as it looks to bring its unique take on urban air mobility to the masses. A Joby pilot flew between some midtown helipads in JFK Airport, which can take upwards of two hours in a car depending on traffic, but took just 10 minutes in the skies. Now, if you're thinking, don't we already have vertical takeoff vehicles that can ferry you from point to point? And the answer is yes, helicopters do exist, but Joby's value prop is one, their smaller rotors mean a ride is a lot quieter than the thwomp thwomp of a helicopter.

17:54Neal Freyman:Plus, it's electric, which means zero emissions. The New York flight was a key proof-of-concept moment for the company as it gears up to launch passenger flights in the second half of this year. Air taxi proponents are hoping that this will be a turning point for the industry, but there will be no traffic-skipping rides that will help you make your flight just yet. Joby is still awaiting final FAA approval for commercial passenger service. Neil, eventually Joby wants to bring these flights to people for around the price of an Uber Black. Would you fly in one? Well, when I'm sitting in standstill traffic on the Van Wick, then yes, it'd probably be something I'd consider.

18:29Joby is bringing a very compelling pitch to New Yorkers in that it would make a lot of these helicopters go away or be a lot quieter. Noise complaints have absolutely surged in New York City in the past few years. There were just 3 ,300 calls, noise complaint calls to 311 in 2019. That grew to 59 ,000 in 2023. And there are also a lot of safety concerns around helicopters. There's been a few fatal crashes over the past four to five years, including that Siemens executive last year. So I think not a lot of New Yorkers perhaps aren't so satisfied with the status quo, whether it's ways to get to New York City or the two hour Uber,$200 Uber it takes to get there or all the noise from all the helicopters.

19:11So, you know, this is a very small pilot program, no pun intended, for Joby to see whether these electric air taxis can bring a safer, quieter option for people heading to JFK.

19:22Neal Freyman:And we cannot emphasize enough how much quieter a Joby air taxi is than a helicopter. The acoustic profile, according to a Joby company rep, is 100 times lower than a helicopter. While Joby's CEO was kind of debuting this new product to the New York City assembled reporters, a helicopter came and hovered over him while he was speaking. No one knew if it was on purpose or not, but obviously you couldn't hear anything he was saying. So it really just drove home the point that, hey, these air taxis are silent as a whisper when you compare it to these giant birds making a lot of noise. Yeah, except, I mean, Joby has a long way to go to bring this air taxi to the masses.

20:01It also wants to introduce service, not just in New York City, but in Florida and Texas later this year. First of all, these aircraft are small. They can fit four passengers plus a pilot. This is not going to revolutionize transportation compared to just making a new subway line or investing in more buses. This is going to be a bespoke service, probably for rich people, because who's going to pay for an Uber Black price level to get from Manhattan to JFK when you can just take the subway?

20:29Neal Freyman:I mean, by the way, that Uber Black price level is aspirational. It's not going to debut at that price. It's going to come in much higher than that. So$150 is their absolute value prop price point, not necessarily what it's going to cost right out of the gate. So, yes, it's going to be costly. It sounds great on the surface. They also have some other ways to make money, though. They have tested these Joby Air taxis around military bases to get around, around airports itself. So it's not only going to be a passenger ferrying service, but it was kind of interesting to see it just make its mark on a urban footprint.

21:06Neal Freyman:Although it only flew over water because, again, it doesn't have the FAA license as of now. But still kind of cool to see what could be the way that you get to the airport in the future going forward. All right, let's sprint to the finish with some final headlines. When you flip open your passport at customs, you might be greeted by a familiar face and it won't be Francis Scott Key. The State Department announced yesterday that a limited number of new U.S. passports will feature an image of President Trump on the inside front cover. The special edition is set to commemorate America 250 and will be available for anyone who applies for one at the Washington Passport Agency until supplies run out.