Stephen Colbert’s Last Hurrah in Late Night & US Invests $2B into Quantum Firms

0:01Morning Brew Daily Hosts:Consider this comparison. PwC data found the percentage of CEOs who report revenue gains or cost reductions from AI is almost equal to the percentage who say they're still stuck. What separates these two groups? PwC points to a clarity issue. Even for CEOs, it's hard to tell what's AI hype, what's reality, and where this tech can make a tangible difference. Learn where AI can actually make an impact and what successful adoption looks like at pwc.com slash us slash brew AI. That's pwc.com slash us slash brew AI. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Spotify is going to reserve concert tickets for super fans.

0:43Then, does anyone actually care about the new Star Wars movie coming out? It's Friday, May 22nd. Let's ride.

0:54Just in time for the unofficial start to summer this weekend, Dr. Beach has released his annual list of the best beaches in America. Each year, coastal scientist Stephen P. Leatherman, a.k.a. Dr. Beach, publishes a top 10 list of beaches based on 50 criteria, including water and sand quality, wave size, cleanliness, and the shape of the beach. This year, Poipu Beach on Kauai, Hawaii, earned the number one spot, followed by St. Andrews State Park in Panama City, Florida, and Kaladesi Island State Park near Clearwater, Florida. It pains me to say this as a Northeasterner, but we were not well represented with just Maine Beach in East Hampton, New York, and Coast Guard Beach on Cape Cod sneaking into a top 10 that was dominated by Hawaii and Florida.

1:38Dr. Beach, we may need to strip your license to practice. I have oscillated back and forth on Dr. Beach over the years. When we first started covering his rankings, you know, three years ago on this show, I thought he didn't prioritize sand quality enough because I still think he doesn't give enough credence to that soft white sugar sand that, you know, is dominated in Florida, like beaches, like Siesta Key. But I do like that he focuses on swimming beaches, which is why you're probably not seeing more Northeast representation there because there's too much of a nip in the water. And that's the main thing I want when I go to the beach.

2:11I want to be warm. I want the water to be warm. I don't want it to be chilly. Have you been to the Jersey shore on in August? It's perfectly warm. The Atlantic heats up over the course of May to August. There's a nip, Neil. There's a nip. I just don't like the Jersey Shore eraser, Dr. Beach. And now a word from our sponsor, LinkedIn Ads. Toby, you've made some bad investments before, right? Who are you, my mother, accountant, and fiance? So that's a yes. Marketers know that feeling too. They invest in the numbers that look great at first, impressions, views, reactions, but don't see revenue. That's why LinkedIn Ads helps you invest in what looks good to your CFO.

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3:29That is the context behind the release of The Mandalorian in Grogu, which comes out today as Disney's first Star Wars film to hit theaters in the last six years. This is not your normal Star Wars fare. The two titular characters are relatively unknown by casual fans unless you've been subscribed to Disney+. Despite its theatrical drought, Disney has been pumping out TV shows, producing seven live-action Star Wars spinoffs since 2019, including The Mandalorian, which won fans over with its stripped-down storytelling and compelling father-son dynamic between Mando and Baby Yoda. The big question is, will it translate to the big screen?

4:07So far, reviews have been mixed. No one hates what director Jon Favreau, who's had success across other Disney franchises created, but no one really loves it either. The vibe is it'll sell some toys, but it isn't going to inspire outrage or devotion. Neil, it feels like the only force going on at Disney right now is forcing more Star Wars content out, even if no one is clamoring for it. Yeah, let's not sugarcoat this. This is expected to be the worst opening for any Star Wars movie ever. They're projecting$80 million at the box office in US and Canada over the four-day Memorial Day weekend. Now, that is a lot of money.

4:43I mean, look at the top openings this year. Project Hail Mary, 80.5 million. So it'd be on par with that. Devil Wears Prada 2, 76.7 million dollars. Dune Part 2 back in 2024, which was this huge blockbuster, opened to 82.5 million dollars. So that is a lot of money. People still like Star Wars, but compare it to other Star Wars movies, especially the ones in the 2010s, and it's just a fraction of what they earned in their opening weekend. Rise of Skywalker in 2019, opened to 177 million dollars. 2015, Force Awakens, 2017's Last Jedi. Those opened to north of$200 million. So the people are not that excited about Baby Yoda and The Mandalorian.

5:21Just look also at YouTube trailer views. This YouTube trailer has 12 million views. Let's compare that to other movies coming out this summer. Spider-Man, brand new day, 31 million. The Odyssey, 41 million. Supergirl, 25 million. So just from those data points, seems like the hype isn't there. You can see why Disney made the decision to go forth with this movie, though, because Nielsen said Americans watched 33 billion minutes of Star Wars TV shows last year. So clearly there's an audience on their streaming service for it. Also, as you mentioned, the previous Star Wars movies did very well. They grossed nearly six billion dollars at the box office from 2015 to 2019.

5:59So they wanted to make some money off of this, but where fans are showing a little bit of trepidation is like, we're not really sure where this fits in into the canon of Star Wars. It feels like you had to have watched the Disney Plus shows to know what's going on. That has been a major complaint of Disney fans over the last few years across multiple franchises, especially Marvel as well. It feels like homework trying to catch up on what is going on with the show. And then also one of the reasons why this movie is probably not going to do as well as other movies is that it is struggling internationally because, again, these characters are just not that well-known outside of a dedicated streaming audience.

6:37Yeah, since 2019, Disney has moved Star Wars IP toward TV. They've pumped out 13 Star Wars shows. Has anyone ever heard of these? Skeleton Crew, The Acolyte. I mean, The Mandalorian and Andor are probably the two that really broke through. And let's just say this. The Mandalorian was a huge success. It remains the most popular Disney Plus series. People love Baby Yoda. You remember Baby Yoda? I remember Baby Yoda. It was crazy. The merch sales on Baby Yoda were crazy. And two years after Mandalorian was released, 13 million Grogu toys were sold, including, Toby, did you buy any? I didn't buy any, but I was some of those trailer reviews of the other movies that you mentioned.

7:17But it's a great point. Disney doesn't only care about the box office. They obviously have a much larger business outside of just movies when it comes to their theme parks, when it comes to their toy sales. But fans are smart. Fans are not going to let you pull the wool over their eyes. They know that Baby Yoda has sold very well, which is why they feel like this is just fan service to get more toy sales out there, which is not the best movie-going experience. All right, so Disney is going to completely lean into Star Wars because this is just some of the best IP that has ever been created in human history.

7:50and it's not going to be the last Star Wars movie, of course, even if it does well or does poorly. They already have one coming out in 2027 called Starfighter. You know who's starring in that one? Ryan Gosling. Ryan Gosling coming off a heater after Project Hail Mary. Keep that man in space. Just keep him up there. Moving on, Spotify's disco ball logo might be going away, but the party's just getting started in Stockholm. At its investor presentation yesterday, the audio streaming platform unveiled its plan to reach 1 billion subscribers and$100 billion in revenue by 2030. And investors love what they heard, sending shares 13 % higher.

8:24Among a slew of announcements, a couple stood out. First is a landmark deal with music giant Universal that will allow Spotify users to create AI covers and remixes of artists. So I'm thinking something along the lines of telling Spotify, play me Drop Dead by Olivia Rodrigo, but make it ska. However, it's only if Olivia wants that because artists and songwriters need to opt into the program. Spotify said the AI Remix service will be a paid add-on for premium users and would offer a new revenue stream for artists that join in. Another big reveal, Spotify wants to make the concert ticket buying process less frustrating with Reserved, which offers superfans the chance to reserve seats at a show before tickets are available to the public.

9:04You have to be really obsessed with this artist, like Toby and Benson Boone level, to qualify because Spotify is only going to identify the most engaged listeners. But in launching this program, which is a deal with Live Nation, the company is showing it's eager to get its tentacles deeper into the live concert space. That really sums up the new era of Spotify unveiled yesterday, moving into new areas outside of music streaming like podcasts, audiobooks, live events, all judged up with a heavy dose of AI. I just love Benson Boone's ability to backflip off of pianos. What can I say? All right, let's talk about the AI remix feature.

9:38The optimistic view is, yes, for the business, it brings in a new revenue stream. It allows fans to engage more deeply. That is something that Spotify was really hammering yesterday, that this is a new era of music where you can get your hands dirty and participate in music rather than just passively listen to it. That's the optimistic view. The pessimistic view is that you're just putting out slop. What you described of Olivia Rodrigo, but in the tone of ska, that is musical slop, honestly. and it makes human artistry a little less profound. It dilutes it. Dead artists are in this liminal space as well where like, should you be able to remix their work if they didn't explicitly opt in just because someone owns their catalog?

10:20So I am not so sure. It sounds great on an investor presentation, but maybe it's just one thing where, haha, we had a funny afternoon laughing about remixing a Taylor Swift song, but I don't know if it's actually going to drive meaningful long-term engagement from fans. It's pretty interesting because that's what, investors were paying attention to. I mentioned the reserve concert thing. And we have again to this other announcement, which was I'll say now it's a personal podcast. So basically Spotify wants you to create an AI generated podcast that it says it's not a podcast like ours, thankfully, but it is like a daily briefing.

10:53So they're saying that is our podcast daily briefing, not like of any substance about the news or anything, but like, here's what I need to do today. So an example they use is create a daily audio brief for my road trip through Italy. Walk me through my day using my calendar and bookings. Recommend a memorable dinner spot near we'll all be. So they're encroaching onto Google Space, which has this notebook LLM feature, which allows you to create an AI generated podcast. And back to my first point that investors were really looking for an AI strategy here because we've seen a lot of AI generated music streaming services like Suno come up very popularly and are challenging Spotify in this space.

11:31So this deal with Universal and this podcast and these other AI agentic initiatives were really pleasing to investors who were a little worried about what Spotify was doing here. And I am bullish on this idea of giving tickets to super fans as well and Spotify moving deeper into ticketing because the one thing that Spotify has that is the holy grail of the music industry is they know your listening habits. They know what you are into. They know what you don't like. It's the reason why Spotify wrapped is always such a big cultural moment because they know your listener behavior. And if you can serve up tickets that feel exclusive to fans of the top artists who are in the 0.1%, that is a meaningful reason to stick with Spotify.

12:13That is a value add to a lot of people. So I do think that taste is a big advantage here. Knowing your listeners is a big advantage here and that the ticketing side of things could be an interesting foray. Yeah, it's a big stamp of approval for the new co-CEOs. Remember that Daniel Ek, who was the founder and really the face of Spotify for multiple decades, left last year. And these two new guys, Gustav Soderstrom and Alex Nostrom, suddenly they could play first line on the Detroit Red Wings, have taken over. And they're looking to, yeah, get$1 billion users,$100 billion in revenue. And also a lot of these announcements were angled to juice margins and profitability.

12:50Because remember, for a long time, for 20 years, Spotify was not profitable. It recently became profitable. So they wanted to get those margins from 30 % right now to about 40%. All right, moving on. It's Stock of the Week, Dog of the Week time, the segment where we pick one stock that is getting nothing but sun for the long weekend and one stock that is staring down three straight days of rain. I won the pre-show game of Flip Cup, so I'm up first. And my stock of the week is the quantum computing industry because it just got a nice little pick-me-up from Uncle Sam this week. The Trump administration announced yesterday that it is awarding$2 billion in grants to nine quantum computing companies to try and give the industry a leg up in their development of the nascent technology.

13:32Right now, there's a gap between quantum hype and reality. While there are a few applications for quantum computers when it comes to large simulations or cryptography, skeptics abound. But the government sees Quantum as potentially the next AI moment with economic and national security implications and would rather be ahead of the curve than behind. IBM is the big winner here, with Big Blue set to receive$1 billion to further develop the nation's first Quantum chip manufacturing facility. Other companies handing the government equity stakes for cash include popular retail investing names like D-Wave and Regetti.

14:07Shares around the industry popped between 10 and 30 % as the prospect of government support got investors fired up. Neil, the rumor mill had quantum pegged as the next in line for Trump's industrial favoritism, joining rare earths and chips as industries he's taken a liking to. Turns out the rumor mill was correct. Yeah, the promise of quantum computing is that you can solve really complicated problems in a fraction of the time that traditional computers can. Remember, Google has the state-of-the-art quantum chip called Willow. It performed the same complex physics simulations, benchmark calculations in just minutes that would take the fastest classical supercomputer, an estimated 10 septillion years to complete.

14:50So you can solve – you can crack really hard problems, and that could revolutionize industries like drug discovery, material science, GPS, cryptography. So for years, it has been a pipe dream of these quantum companies, including IBM, to actually make this a reality to commercialize quantum technology. But it just has never been there. It finally feels like this is the government saying, we see that there's light at the end of the tunnel for you guys to actually start making money from this technology. Yeah, the joke about quantum is always 10 years away from being 10 years away because the science always is proven out.

15:26But then when it comes to real-world applications, quantum computers are just a little fragile. They break. They're very good at one thing but not very good at a wide array of things. But I mentioned that a big winner here is probably IBM because they got the biggest chunk of chain because IBM has been going down this quantum path for decades now at this point. Now they are really ramping up operations in upstate New York, actually, to build a state-of-the-art 300-millimeter quantum wafer foundry. So when you start building physical chips, it becomes real. And I do think that IBM foresees a future in which quantum computing is very important.

16:02So they want to be the first on the ground floor because you kept hearing like this is like a pre-ChatGVT moment for the industry, which, again, maybe we've heard for the last couple of years or so. you just don't want to miss out in case it is an AI moment. And it's also a very interesting play by the Trump administration. So I thought what was pretty fascinating here is they're using money from the 2022 Chips in Science Act, which was a Biden administration policy that lent money to early stage technology, specifically in the semiconductor industry. And that was really in the form of grants or loans.

16:36And then the Trump administration has come in and said, you know, to hell with all that. We are going to actually take stakes in companies, which is a more of a socialist policy. So the Republican administration is doing more of a socialist policy than the Democratic administration. They've taken stakes in a bunch of companies like rare earths companies and most notably Intel. And that investment is doing really well. So they invested in Intel nine billion dollars back in August 2025. As of April 2026, the value of that stake had jumped to about$36 billion, a$27 billion paper gain, a 300 % return.

17:12So that investment has done well. They're doing better than us. But the question is, these quantum companies are very experimental, very early stages. And so what are we doing with taxpayer money to basically play venture capital with a very nascent experimental technology? So people are asking Commerce Secretary Howard Lutnick, who was the orchestrator of all this, he replied, well, that's why I'm we're diversifying our bets. We're going into nine different companies where we have a diversified portfolio within the quantum space. And so we are trying to be a good steward of taxpayer money. All right, we're going to take a quick break and come back with our dog of the week right after this.

17:52Neil, I've got something pretty big on the Verizon. You mean Horizon? Nope. Pretty sure that's not a real word. But the Verizon Visa card helps eligible Verizon customers get more from everyday spending. You can earn 4 % rewards on gas, groceries, and dining. Redeem rewards toward Verizon bills or devices with no annual fee and unlimited rewards with no expiration. For a limited time, new cardholders can get up to$150 cash back. Just head to verizon.com slash morningbrew to learn more. That's verizon.com slash morningbrew. Did you happen to catch what Emily told us to absolutely not do on next week's episode?

18:32No, I missed that. I usually meditate during our team meetings. That's where Plod NoPro could come in handy. It's an AI-powered note-taking device that magnetically attaches to your phone and helps capture and organize real-world conversations from meetings to deep work. Instead of scrambling to take notes or relying on memory, Plod automatically transcribes and summarizes its discussions, turning long conversations into clear, structured notes and actionable takeaways. It meets enterprise-grade standards, including SOC2, HIPAA, and GDPR compliance. Start at plod.ai slash brew. Use code brew for 10 % off.

19:08Neil, let me tell you something about bond markets. I'm all ears. They are confusing. Insightful as ever. But yes, capturing value in fixed income is not easy. Thankfully, Vanguard bonds are institutional quality. That means top-grade products across the board. Vanguard is able to invest across all kinds of sectors, maturities, and geographies, which means they can spot and act on opportunities that others might miss. So check out vanguard.com slash audio. That's vanguard.com slash audio. All investing is subject to risk. Vanguard Marketing Corporation Distributor. My dog of the week is late night television because the late show with Stephen Colbert is no more.

19:46After 11 years behind the desk, Colbert signed off in a celeb-studded final episode last night singing hello goodbye with Paul McCartney, staffers and families before Colbert told McCartney to cut the power in the control room. CBS announced it was canceling the show last summer, claiming it was, quote, purely a financial decision given high overhead costs and smaller audiences for late night television. Many, including Colbert, aren't buying that, saying instead it was a political decision intended to curry favor with the White House ahead of a merger they needed approved. After all, Colbert has the highest TV ratings of any late night show.

20:19But the context is key. At the time, CBS parent company Paramount was hoping to get bought by Skydance Media, a deal that needed the Trump administration's blessing to move ahead. As it was seeking merger approval, Paramount also agreed to pay Trump$16 million to resolve a lawsuit over a 60 minutes interview, a settlement Colbert called on his show a big fat bribe. Allies of Colbert, a vocal Trump critic, believe that CBS also threw him under the bus to appease the White House. Whatever motivations were behind it, the reality is the late show is now over with the curtain dropping on an iconic franchise inaugurated by David Letterman back in 1993.

20:55It was a funny last episode too. One of the best parts was as he launched into his final monologue, he kept getting interrupted by a bunch of actors who would get mad because they weren't his final guests. Like Bryan Cranston came out and go, what the heck, I thought I was the last one. It ended up being Paul McCartney with a very fitting performance of hello, goodbye. buy. But the reason for the late show collapse has been debated ad nauseum. There is the political element, obviously, but also the business collapse has been bad as well. U.S. late night ad revenue has decreased from$519 million in 2017 to just$209 million last year.

21:33The issue is that late night used to be the place you would go for a monoculture where you would get celebrity interviews, where you'd get these topical jokes, where you'd get these musical performance you couldn't see other places. Now you can see all that stuff all across the internet on YouTube, TikTok, it's all immediately served into your phone. So on demand for free, why do you need to stay up till 11 PM to actually watch the late show come on? So maybe it was politics. Maybe it was just a case of technology overtaking what used to be a cultural institution. Yeah. And Colbert would say, look, I know the pie is shrinking, but I've got the biggest slice.

22:09Let's compare them to the other late night shows. So they, this show used to get between 2.4 and 2.7 million total viewers. And second is Jimmy Kimmel Live, 2.1 to 2.5 million viewers. And then in third place is The Tonight Show starring Jimmy Fallon. He just averages 1.2 to 1.3 million total viewers. And laughs per episode. And laughs per episode for sure. So what is Colbert going to do next, right? So one thing is that he's going to write the new Lord of the Rings movie. He's a huge Lord of the Rings fan. He's going to write. He's going to be a screenwriter on the Lord of the Rings movie for for Peter Jackson, the director.

22:46Another potential opportunity is podcasts. And we saw this with Conan O 'Brien. His show got canceled as well. And then he turned it into a podcast empire. I mean, he has this podcast network called Team Coco, which produces his own podcast called Conan O 'Brien Needs a Friend. And he sold that to SiriusXM in a deal that was worth$150 million. So Colbert has this potential opportunity to move into podcasting, which I, you know, just from my - It's a sexy industry, Colbert. It's a sexy industry. But I'm saying in my personal life, I probably heard more people talk about, hey, did you hear who Conan interviewed or what they said on Conan's podcast?

23:23More than, did you see what somebody said on the Colbert show? So it has this same amount of cultural relevance these days, podcasts as a late night show. It is ironic, too, that the very thing that kind of undermined the late show as a concept is where all the late show hosts are ending up and thriving as well. Live by the podcast, die by the podcast. So what's taking Colbert's spot is a show called Comics Unleashed, which is sold in syndication for 20 years. It is hosted by Byron Allen. It's not political at all. It's just comedians. It's smart, too, because it's evergreen, too, and those clips can go viral.

23:56It doesn't have to be topical anymore like the late show had to. All right, let's sprint to the finish with some final headlines. Holy GLP-1, a new drug from Eli Lilly helps some people lose as much weight as gastric bypass surgery. Yesterday, the company released the findings of a large trial for its experimental shot, Red Atrutide, which is sort of like a standard GLP-1 on steroids. And the results showed it caused a lot more weight loss than Zepound or Wagovi. Of the roughly 2 ,300 patients who were obese or overweight, the ones who got the highest dose lost 70 pounds on average, equivalent to 28 % of their body weight after 80 weeks on the drug.