Sam Altman Launches 'Worldcoin', Who College Admissions Are Snubbing & Neopets' New Era

0:00Stocks? ETFs? Or what about mutual funds? Choosing your investments is easier with Fidelity. Our step-by-step experience can help you pick out the right investments for you. Plus, with recurring investments, you can decide how much and how often to invest. Lastly, there's 24-7 help if and when you need it. To find your next investment, head to fidelity.com slash trading. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSC SIPC. Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. On today's pod, a blockbuster new study exposes how elite colleges favor the wealthiest kids in their admissions policies.

0:41And Spotify just did something it hasn't done in 12 years. Then WorldCoin, Sam Altman's dystopian eyeball scanning crypto startup is officially open for business. Plus, the Saudi League is at it again, this time bidding an absurd amount of money to try and land French soccer star Kylian Mbappe. It's Tuesday, July 25th. Let's ride.

1:07All right, Neil. So I was talking to my mom yesterday and she was telling me how she's perfected the art of referring people to the podcast. So obviously she likes to spread the good word, but a lot of people just kind of smile and nod and say, oh, that's nice, your son does a podcast. But she says she started to take their phones and manually enter in Morning Brew Daily to YouTube or wherever they listen to their podcasts. And apparently it's dramatically increasing listeners. So if you've been wanting to get people on the MBD wagon, but have gotten lackluster results, Mama Howell says get your hands on their phone.

1:39Hijack a phone. She should write a LinkedIn post, I think. It would go viral. Yeah, thought leadership on referrals. But yeah, thanks, Mom, for literally taking people's phones and spreading the good word. All right, Neil, let's dive into our top story of the day where Sam Altman's crazy eye-scanning crypto project, WorldCoin, is officially rolling out its services globally. This is the company that has been going around and using a basketball-sized eye-scanning orb to build a database of people's identities. The idea is that in a world where it's getting harder and harder to distinguish between humans and robots, using biometric data to verify people is the future.

2:19So once verified, users can be issued some of the company's crypto tokens called WorldCoins that Altman and Co. envision as sort of this universal basic income for the human race. Neil, there are so many buzzwords here and so many potential ways for it to turn into a dystopian nightmare. But remember, WorldCoin has actually landed$250 million in funding from the likes of A16Z and others. So now that it's here, what do we think about his new venture? I know that everyone listening to this is probably thinking, how can I sign up? I can't wait to get my iris scanned. The problem is you can't do it in the U.S.

2:54yet. There's no regulatory approval here in the U.S., but I think in, you know, a bunch of other countries, 95 percent of the world's population. You can literally download their wallet on your phone and then head to an iris scanning orb, which I don't know where these are. These are going to be like in the middle of malls there. No, the way that they've been doing it is hiring people to go around and infiltrate communities and hold the orb and convince people to do it. Yeah, it's very dystopian. The orbs themselves, any time you have to look into an orb, you're going to get like... Have you looked into an orb?

3:28No, dystopian nightmare fuel. It brings up Hal from Space Odyssey. But yeah, I also just think it's super ironic because obviously Sam Altman is leading OpenAI, which has kind of kicked off the AI era. and one of the key problems they're trying to solve with world coin is a thing that's become harder to do because of ai which is determine who is a human and who is potentially an ai like chat bot so he's kind of like attacking the problem that he's creating with his other startup so it's it's very interesting that he's working on two of these like paradigm shifting projects he has his fingerprints everywhere yeah but there is some sort of theory but it may sound crazy to people why anyone would want to do this.

4:09But there is some sort of theory behind what they're trying to do at WorldCoin. And that's because there's this big authentication problem in the Web3 cryptosphere where it's called Sybil attacks, where a hacker can infiltrate a network and create multiple fake accounts. You're not actually a person and then take over, you know, a particular thing and scam everyone. So that is kind of the problem they're trying to solve. I don't know whether it makes sense to collect a bunch of iris scans, But, you know, they do, you know, some crypto experts look at this and say, you know, I guess this is one possible solution to protect this major problem that we have with these decentralized applications.

4:48Right. And so a lot of people have been saying WorldCoin's not innovating on the token side. Like the crypto token they're issuing doesn't differ from any of the other tokens like Bitcoin or Ethereum out there. They're innovating on the authentication side, which is, yeah, tying your identity to your eyeball. although whenever whenever you have like biometric data at play yeah there's obviously security concerns and so a lot of people are saying when you're building these databases of identities like obviously that's susceptible to being hacked and stuff like that but then world coin says we delete the data uh like we delete your picture as soon as we scan your eyeball all that's on file is just like your iris uh hash which is a set of numbers that are associated with you so they're saying like it's going to be secure like no one's going to be able to i don't know hack into the hack into the orb and steal your identity yeah but again it just makes people nervous because yeah hardware as uh the ethereum co-founder vitalik buterin uh wrote this blog post this week criticizing a world's coin with a few points and one of them was saying look any piece of hardware always has a backdoor no matter what you build how matters no matter how secure it is there's always a backdoor that you can infiltrate.

6:03And it appears, I mean, WorldCoin has been signing up people in developing lower income countries for years now. And there was this massive investigation by MIT Tech Review, which exposed that they used deceptive marketing practice, collected more personal data than they acknowledged, and they didn't obtain consent, maybe violating privacy laws like GDPR. So this is going to be an uphill battle for Sam Altman to begin with for a long time. Are you getting your eyeballs scanned? I don't know. I mean, I'm not actually that scared that someone's going to like steal my Irish hash data, but it just doesn't seem like something necessary to do.

6:42Because my big thing is in order for WorldCoin to have any value, people have to start trading like the token and agree that the token has value in itself. So that's always the big hurdle with these cryptocurrencies where you're trying to create value out of thin air and you kind of need everyone to agree that a world coin has a value in order for it to have any value so that would be my hang up but so far they say they've collected two million users the goal is to get two billion users signed up to the platform by the end of 2023 so we'll see say what you will about sam altman he swings big he swings big all right toby we've now got empirical evidence to confirm what was long suspected the richest americans have a greater chance of getting into elite universities just by virtue of them being extremely rich.

7:30Call it affirmative action for the 1%. We know this because of a groundbreaking piece of research that was released yesterday by an all-star team of Harvard economists, including Raj Chetty, who's been dubbed the Beyonce of economics because he churns out banger after banger. I'm not lying. Look this guy up. He is. I did not know that. He's a legend in economic circles. So Chetty and his team utilized a unique data set of federal records of college attendance, parental income taxes, and standardized test scores to show how the top 1 % have a better chance of getting into 12 of the most selective universities, even when they have the same standardized test scores and academic record as another applicant.

8:08So here are the main takeaways. Children of families in the top 1 % were 34 % more likely to be admitted to elite universities than the average applicant with the same SAT or ACT score. Children from the top 0.1 % were more than twice as likely to get in. And I'm sounding a lot like Bernie Sanders here. And overall, 16 % of the students at elite colleges come from the top 1 % of the income distribution. 16 % come from 1%. By the way, the college we're talking about are the kind that you have to found and sell a company in high school to get into in the first place. Eight IVs plus Stanford, Duke, MIT, and the University of Chicago.

8:44Yeah. I mean, this study was a lot of people were just saying it was groundbreaking because they finally got to peek behind the curtain of the emissions data of these elite institutions. And yeah, what they found is something that everyone kind of knows deep down. Like, obviously, to get into the elite schools, it helps to be in the 1 % income bracket. But just to see how stark the numbers were and how much it like the curve accelerated, the higher you got up the income bracket was crazy. I also think that the athlete numbers were extremely interesting because, yeah, one in eight elite college attendees were from the top 1 % were recruited athletes compared to just one in 20 admittance from the bottom 60 % of family incomes.

9:29And so basically what that's saying is rich families have the ability to put their kids into youth sports. You sports cost a lot of money. And if you excel at sports, you have a much better chance of getting admitted to these elite institutions. Right. And so, yeah, I mean, I totally I totally saw it. Like I attended a school. I was an athlete. And you look around at some of the athletes and you're like, man, I don't know if you would have gotten in here without. They wouldn't have. Yeah, your athletic background. The researchers did identify three sort of systemic things that allowed the top 1 % to get in at a higher rate than everyone else.

10:05One of them is legacy admissions. They said that was the biggest by far, which we know some colleges are phasing out like Wesleyan last year, but the majority still have. Then there was this private school angle where these guidance counselors at places like Andover have just a really good relationship with the most elite schools. And they're writing the best cover letters for you. There's a tight relationship. So if you go to a private school rather than a public school, that's a huge leg up to get to these elite universities. And then the last thing is this recruitment of athletes, which gives them a much higher chance of getting in with the same test scores.

10:41Yeah. So what are the solutions here? I mean, get rid of legacies, get rid of recruitment of college athletics and also put this was interesting to me. Put less emphasis on the resume fluffer stuff like volunteering or being a national honor society, because that is kind of what gives the wealthiest top one percent a leg up. then people were just like, well, I'm, you know, of a middle class background and I just like crank through test scores. Like I'm so good at academics. I don't have all of this, you know, president of whatever. And that is more heavily weighted at these elite universities.

11:18Yeah. That's my big takeaway is that the middle class is kind of like the missing middle in this case, because yeah, people who went to a good public school, but don't have the opportunity to do these yeah, like crazy extracurriculars, they were less likely to be admitted than the richest or even some of the poorest students with the same test scores. So yeah, there's this graph that's going around that shows the admittance, the average admittance rate for people by income with the same test scores. And you see like a bump on the lowest incomes, a dip on the middle incomes, and then this huge spike in the highest incomes.

11:58And so that was everyone's big takeaway from the studies. It's like, dang, it's like really hard to be just a middle class, middle class person at a public university. They get gypped the most. Yeah. All right. Let's head to Israel, which is in chaos right now as mass protests swell and major businesses are striking and threatened to shut down large swaths of the economy. Here's what's going on in a nutshell. Yesterday, lawmakers approved part of a judicial reform plan that Prime Minister Bibi Netanyahu, far right government says, is important to rein in what it considers a judiciary that oversteps its authority.

12:30But opponents, which include the powerful tech industry, major CEOs, economists and central bankers, military leaders and intellectuals like Yuval Noah Harari, he always comes up, warn that these changes would dismantle the only checks and balances Israel has left and would send Israel on the path to dictatorship. Since January, when this plan was announced, they've staged mass protests to try and put a stop to this plan. But Bibi and his religious slash nationalist coalition went ahead with it anyway. Now, who knows what could happen, but it won't be good. Former Prime Minister Ehud Olmert said in a TV interview, I quote, we are going into civil war and a group of 150 of the country's largest companies, including banks, shopping centers, gas stations, went on strike ahead of the vote.

13:16Yeah, the population is not on board with these reforms to say the least. Yeah, we've seen these massive, massive protests, like 250 ,000 people across a few days. You mentioned the 150 large companies, which is a sizable amount in a nation like Israel. And then also the Army reservists vowed to not show up to duty if the law was passed. That's a big deal. Which, again, makes a lot of people very nervous, especially like the U.S., who has like military interests, military ties with Israel. So, yeah, it's just pretty crazy how widespread and vocal the opposition is to these reforms. Imagine if this happened in the U.S., you know, Google, Microsoft, all of the companies.

13:54we've seen them come out against Supreme Court decisions or political debates, but they usually just write, you know, an angry worded letter. These people are like the biggest tech companies. And you've heard of them. This is Wix. This is Monday.com. This is Lemonade, the insurance company. They're giving their employees off of work so they can go protest. Because the problem is if you don't have checks and balances anymore, then you don't create a structure, a regulatory structure that people feel. that foreign investors feel confident in investing in. So that's their worry is that foreign investment, which is really a key part of the Israel startup ecosystem because they don't have super rich, wealthy investors.

14:38I mean, they have some, but nothing like Silicon Valley. So they need Silicon Valley to come invest in their companies. And if they're like, well, Israel's on this path to dictatorship and we have a judiciary that could step in whenever they want and kind of overturn laws, then we're going to see investment dry up. So you're seeing 70 % of startups in Israel saying that they're going to move their operations, at least some of them, abroad because of the uncertain regulatory situation there. Yeah, it's just, it's brutal because Israel is a startup nation. It has the highest number of startups per capita.

15:09So whenever you have the startup founders saying, listen, we're just going to peace out if this passes, that's a sign of concern. All right, Neil, before we jump into our next story, we're going to take a quick break. This episode is brought to you by State Farm. Listening to this podcast? Smart move. Being financially savvy? Smart move. Another smart move? Having State Farm help you create a competitive price when you choose to bundle home and auto. Bundling. Just another way to save with a personal price plan. Like a good neighbor, State Farm is there. Prices are based on rating plans that vary by state.

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16:191-800-CONTACTS.com today to save on your first order. 1-800-CONTACTS. All right, Neil, we are back with another edition of Toby's Trends, where I, a young and vigorous Gen Z-er, educate you, a cultured and discerning millennial, about a trend I've had my eye on recently. But honestly, today's trend actually comes from the Y2K era, so you might actually have a better grasp on it than me. And that's because today's trend is all about Neopets, which is relaunching this week after a years-long period where it was kind of on life support. Remember, Neopets were all the rage in the mid-2000s. Users peaked at 25 million in 2005 as everyone wanted to take care of their little virtual pets.

17:03But eventually, the shine started to fade off, user numbers started dropping, and Adobe Flash was discontinued, which led to the near death of the Neopet community. but as of 2020 there were still around 100 ,000 daily active users and some of them were passionate enough to keep the site afloat despite it running at a loss recently new leadership team has stepped in they've raised four million dollars in funding earlier this year and now they're ready to re-roll out neopets to the world with a new site and mobile game neil i'm sure a lot of the people listening had a neopet growing up were you one of those people no you weren't a neopet guy i was busy playing flight simulator my thing was not neopets but do you think in our current social media era where people are watching you know npc uh live streamers they want to take care of a virtual pet is that something that could thrive in 2023 i think there's always a market for neopets and you know what actually gives me hope of saying that is roblox yeah because roblox is like the most popular social network with kids right now we've talked about it on the show before and i think what it does it allows people to like affect their environment it allows you to build up like your own kind of uh like world right in a virtual community and neopets offers that same thing where you can create your pet you can like uh yeah upgrade it like what do you do with them do you is it a game on top of it or is it more of just uh there's a few games like it's kind of like pokemon where you have like these characters and they can exist in different worlds um but yeah i I mean, 25 million users in 2005 is nuts.

18:39So obviously there was always going to be rumblings that Neopets would come back. And also, I think the funniest part of this relaunch is they have a new brand ambassador. And it's John Legend. Of course. Of all people, where I think they're just like going down like, what's the most famous person we can get that doesn't cost the most money? And I think John Legend was right. He's kind of low. In that sweet spot. Again, it's Neopets. Like they only have a certain amount of cash on hand. But yeah, Neopets are back, baby. Neopets are back. All right, moving on. Did you know, Toby, that Spotify hasn't raised the price of its premium plan in the U.S.

19:12in 12 years? That is actually crazy. Well, the streak is over because yesterday the streaming service announced it was raising its subscription by$1. So now you get to listen to the entire library of recorded music of history ad-free for$10.99 a month instead of$9.99, which it's been priced at since 2011. The price bump comes at a time when Spotify is facing heat from investors and the music industry. to boost its sales and payouts to artists and to bring its prices more in line with competitors. Amazon, Apple, Tidal, and YouTube Music have all bumped up their prices by$1 to 10.99 per month. So, anything.

19:49I think it's so funny because Spotify said in their announcement that the market landscape has continued to evolve. And what I think that's code for is that literally every single other music streaming service bumped their prices$1. It's amazing how in line all the prices are across the they're all 1099 every single one is 1099 obviously there's difference with like family plans and some of the student plans but i just think it's very funny that every everybody went from 999 to 1099 and now spotify's like finally falling in line this is a brutal business it is really low margin i can't imagine that you can become a you know really big profit driver doing music streaming because the more you grow the more you're paying out per stream right yeah it is brutal and yeah Spotify has never made an annual profit.

20:38I did not know that. Yeah that's insane. Entire existence as a company. I do think though that Spotify users are pretty I hope I'm going to use this correctly. I'm going back to my elastic. No no price in elastic. Which means that demand will stay the same even if the price changes. Absolutely we were getting like I said we could listen to any piece of recorded music in history for$9.99 a month. Right. They were subsidizing us for years. Well, I also just think that Spotify has a grip on you. Once they have their talents in you, once you've signed up, you have your playlist, you have the AI kind of knows your taste.

21:15And so like, sometimes I'll just toss on a Spotify song and it will start playing songs that it knows like I will like. And so I do think it would be a lot of effort to move to say Apple Music where the price is still going to be the same just because Spotify is raising prices. So I I think Spotify said that. They say they haven't seen a ton of churn. So I would expect them to maybe bump prices again shortly because they got to make a profit at some point. I think we've seen this with Netflix, too. They've raised prices a bunch recently, and they don't see a huge amount of churn. I mean, they did the biggest price increase of all, which was kick you off your account.

21:51Right. And they bumped up their sales a lot. Spotify is reporting earnings today. they need to fix some stuff relating to their podcast business, which they've invested hundreds of millions of dollars in, and it's going really badly. Hey, Spotify, if you're listening, we'll take a little Joe Rogan deal. We'll go for half of Joe Rogan, $50 million. All right, Neil, for our last story, it appears the delicate balance of the global soccer scene is once again in question. Al Hilal, a member of the Saudi Arabian Premier League, has submitted a$1.1 billion bid for Kylian Mbappe, who's one of the top three players in the world.

22:29Neil, let me just say that number again. $1.1 billion for one player for one year. Yes, the offer is just one year and includes a$332 million fee to his current club, PSG, and a one-year$776 million salary for Mbappe himself. Just for context, Cristiano Ronaldo is currently making$214 million a year in the Saudi league. I'm quite literally in shock from these numbers. And I want to give a few more contextualizing examples just to show how big this offer is. It's more than the entire valuation of the MLB's Miami Marlins. It is more than Kellogg's earnings over the last four quarters. It is more than the entire MLB payroll in 1997 and well over the entire GDP of the nation of Samoa.

23:18Those numbers are courtesy of the Action Network. But Neil, holy moly, this is bigger than anything we've ever seen before, even in this era of mega sports washing deals. I think the way you know that it's a big deal is you had all of these NBA players saying, hey, Saudi Arabia is starting a basketball league. So Giannis Antetokounmpo, LeBron James, a bunch of other NBA players started tweeting and Instagramming yesterday after this number came out. And they're like, this is absolutely crazy. Like, I would literally leave my sport and go play to do this. I know everyone was kind of like laughing because yeah, Giannis posted this Instagram was saying like, I look like Mbappe, like come sign me.

23:56But then everyone was kind of nervously laughing right background because it is feasible that like Saudi Arabia just launches an upstart basketball league says Giannis will give you yet 200 to 300 million dollars a year. Come play in our new league. So again, and then you had LeBron jumping in too. So I know that the NBA was kind of like, like, right. Very nervous about this, though, because we've seen it with live. They can go. They can literally create an upstart tour because they have the funds to do so. So they were joking, but there was definitely some truth, I think. Do they have the money?

24:27Like, I really want to peek into their finances. I know they make a bazillion dollars from oil, but to pay an athlete$1.1 billion for one year? It's crazy. It's true. That number is mind-boggling. He's got to take it, right? I mean, again, obviously there's like the moral side of things, But if someone offers you$776 million for one year of your services, I don't know. $24 per second. Yeah, it's crazy. Apparently, PSG, his current club, already accepted the bid because they're like, yeah, we'll take$330 million for him. So it's up to Mbappe if he actually does want to join. So would be a shocker if he doesn't.

25:03I know. Seriously. All right. We have to wrap it up there. Hope everyone has a wonderful Tuesday. If you want to write in and let us know why you didn't get into your first choice college, Our email is morningbrewdaily at morningbrew.com. Emily Milliron is our editor and producer. Samantha Veles and Raymond Liu are our associate producers. Yuchenna Waogu is our technical director. Billy Menino is on audio. Hair and makeup had to take their Neopet to the vet. Devin Emery is our chief content officer, and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.

25:41Thank you.