Tesla Unveils Its $30K Robotaxi…Finally & FTC’s Lina Khan Spars With Billionaires

0:00Tuesday on NBC, Jimmy Fallon and Bozma 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. Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Tesla finally unveiled its robo-taxi.

0:38Will Elon Musk's grand bet on autonomous driving pay off? Then, United Airlines announced new far-flung routes that will have you busting out a world atlas to plan your next vacation. It's Friday, October 11th. Let's ride.

0:56It's always a good idea to keep your LinkedIn profile up to date to show you are actively engaged in your professional life and are serious about your career. But Ryan Salem, the former co-CEO of FTX, might be a little too actively engaged and serious. Salem reported to federal prison yesterday to serve a seven and a half year sentence on campaign finance fraud charges. But before he checked in, he updated his LinkedIn saying, I'm happy to share that I'm starting a new position as inmate at FCI Cumberland. Neil, I guess he didn't want to risk the dreaded resume. Yeah, no, this is smart. Every recruiter will say no gaps in the resume.

1:34And Ryan did absolutely that. The comments section, though, so funny. People were posting very tongue in cheek. Well-deserved, Ryan. Bro went from LinkedIn to locked in. Can you refer me? And finally, they're lucky to have you. So I thought this was pretty dang funny and just the next evolution of LinkedIn into maybe a more Reddit-style platform. I honestly think some people didn't really look at what the update said, too. and just use one of the canned LinkedIn, like, congrats, so happy for you. So there was definitely some people who were in on the joke and some people who definitely weren't, which made it all the funnier.

2:10And the prison looks like a company name, kind of. Right, FCI Cumberland. You wouldn't know unless you know, but it is still live on LinkedIn. So go give Ryan some kudos there. Now, a quick word from our sponsor, Wise Business, the app for doing things in other currencies. Neil, today is our last Wise ad. Time flies when you are saving money on international payments. Time flies indeed. Honestly, doing all these ads has me inspired to start my own international business just so I can start using Wise. Well, I think you're supposed to have the business idea figured out first before you start planning out which tools you're going to use.

2:44The idea will come. All I know is I'm taking it international and I'm using Wise when I do. The end of an era of Wise ads, but the start of something new and beautiful for Toby. For all you international business owners out there, visit wise.com slash business. That's wise.com slash business.

3:25All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. In 2016, Elon Musk said Tesla's self-driving cars were two years away. In 2017, he said six months definitely. In 2019, feature completes full self-driving this year. None of that happened. But on a fall night in October 2024, he finally came through. Yesterday, in Tesla's most hyped event in a decade, Musk unveiled a prototype for a Tesla robo-taxi, the autonomous vehicle that could mark a paradigm shift for transportation or it could be a generational setback. Elon Musk has laid everything on the line for self-driving cars.

4:08Facing heated competition in Tesla's primary business of electric vehicles, he decided to make a big pivot earlier this year. Out a new cheaper model that could freshen up Tesla's aging lineup in, all in, robo-taxis and artificial intelligence. in April, Musk said that anyone who doubted Tesla could solve autonomy shouldn't invest in the company. So is this robo-taxi going to be the game changer Musk has promised? It certainly looks like it could. The two-seater prototype that he showed off last night has no steering wheel, no pedals, and has butterfly doors that open upwards. Musk said it should arrive by 2026 and cost less than $30 ,000.

4:47Toby, is a robo-taxi firing you up? It does not have a steering wheel. It does not have pedals. What it does have is the entire hopes and dreams in Tesla's market cap resting on its shoulders. Remember Tesla's status as the world's most valuable company used to be driven by this narrative that the company would sell a lot more cars than it does. Elon painted this vision that it would sell 20 million cars by the end of the decade. This was kind of in the mid-2000s or 2020s as he was saying this. But now it has completely changed. That narrative has been poked. There's been holes poked in that narrative because of kind of flatlining traditional auto sales.

5:25And so now everything is resting on the cyber cab on this autonomous robo taxi. And who knows? It was a buzzy event. It was a classic Tesla event with a very cool demonstration of it kind of wandering through the Warner Bros set of actually where they filmed the Westworld. So there was definitely some robot parallels there as well it was a little light on specifics there's a lot of questions around the regulatory environment that will allow these robo taxis to actually take the road a lot of questions on just if it is ready for prime time in general it looks cool that's about all you can say right now it is a prototype that looks very futuristic it does not have wheels it does not have pedals like it does have wheels it does have wheels sorry it does not have pedals it does not have a steering wheel just like elon musk promised so clearly they're going on all in here where that all in is is still up for uh kind of questions yeah let's talk the advantages and disadvantages that tesla might have in this marketplace i guess the disadvantage early on is that it's kind of behind its rivals there are companies that are out there providing autonomous robo taxi service one of them that comes to mind is obviously waymo the google subsidiary it's now providing more than 100 000 rides a week in san francisco phoenix in los Angeles.

6:41You have Cruise, which is a unit of General Motors that had a little hiccups when it hit a person and then dragged her. But now they're back on the road. You have Zoox owned by Amazon. So there are very well capitalized companies already providing fully autonomous service. Tesla is not doing that currently. It does have self-driving features in its Tesla Model 3s, Model Ys. But a person needs to be constantly alert. There needs to be constant human supervision for that. So they are behind on this particular technology. Other companies are racing ahead, so there's catch-up to be made. So why could Tesla win in this marketplace?

7:22Well, I do think that the business model is interesting that they have for robo-taxis. They want you to buy your own personal robo-taxi, but then they also say that you can lease it out and earn extra money to ferry passengers around. The analogy that I saw in the New York Times was it's the automotive equivalent to listing a home on Airbnb. So it is kind of like this car sharing program that they do think will just redefine how transportation is currently just carried out. Another cool thing about the car, it's got wireless induction charging. So it doesn't actually have a charge in port like you are used to on electric vehicles.

7:58Elon says that running a cyber cab will cost about 20 cents a mile. So that is a big unlock as well. They also unveiled this RoboVan too, which is this very futuristic, very Art Deco looking bus shuttle service essentially that they say that it can be even cheaper at$0.05 a mile because it can carry 20 people. So it is painting this vision for a world where everyone's zipping around in these cars that are self-driven, very cheap, very efficient. You don't have to spend a lot of time charging it because it is charging potentially on the road as it drives through induction charging. So there is a compelling vision for the future there.

8:35Yeah, but we'll just see the timeline. I think that's the biggest thing, because remember I said the first time he promised self-driving cars was 2016, which was eight years ago. And now he expects the robo-taxi to actually start being made in 2026. I think, you know, obviously we can question that. But investors in Tesla want to know when this thing is coming because it has this aging lineup of vehicles that has just not been refreshed. And Elon Musk prioritized a robo-taxi over a cheaper electric vehicle priced at about$25 ,000 that would better compete with all these Chinese EV makers that are unleashing all these cheap vehicles that are taking market share in China.

9:16And then in the United States, there's been a ton of competition from EV makers or traditional legacy automakers that have rolled out cheaper EVs. So if Tesla's bet on autonomy doesn't work out, then I could only see its business declining. The final thing we have to mention, too, was there was a lot of Optimus talk, which is Tesla's autonomous robot. There is this film that showed it serving drinks, playing with children, unloading groceries from a car. And Elon painted this vision that he thinks that everyone will have one for personal use. And the words that he used was, this will be the biggest product ever of any kind.

9:49So even buried within this RoboTaxi event, he says, autonomous robots that will be priced in the$20 ,000 to$30 ,000 range might be the biggest product that has ever been sold ever. So it's a little classic Elon, but you got to slide that in there as well. There was some interesting optimist demonstrations as well. That was quite the Tesla event right there. All right. Is it my birthday today, Neil? Because inflation hasn't been this low since February of 2021. Yesterday, September's CPI data showed inflation continuing to cool, with the consumer price index falling slightly to 2.4 % in the month compared to a year earlier.

10:29However, that 2.4 % reading actually came in slightly hotter than economists' expectations, as food and housing prices remain stubbornly high. But again, zooming out, we haven't seen inflation this low in nearly three years. The chiller vibe around inflation reports these days is reflected in the market too. It was a muted day across the three major indexes, as it looks like the inflation crisis is mostly behind us without any glaring warning signs that prices might reignite soon. But there's still some trepidation out there as we enter a period filled with more angst and uncertainty than Neil's high school prom corporate earnings season.

11:05The S &P 500 is off to a torrid start to the year up 20 % so far, but now it has to digest earnings reports starting with JP Morgan, Delta, BlackRock, and others today, in addition to September's inflation numbers. I hope it took some Pepto-Bismol, Neil. Yeah, seriously. I mean, this inflation report showed that inflation coming down from its 9 % peak is not going to be a constant downhill. downhill. It's like, you know, when you're coming down from a hike from the top of a mountain and you're going down and then you start going uphill a little bit and you're like, what is going on here? I thought I'm going downhill.

11:39And then you realize, OK, the overall trajectory when you zoom out along along a long enough timeline that this trajectory is going down. But along the way, there should be some bumps. As you said, the market digested this perfectly fine because it does not appear to derail the Fed's rate hikes, which is driving the majority of market moves. It looks like they're still, come November, going to be cutting interest rates by a quarter of a percentage point and then maybe one more before the year is out. But this is also important because this is the last inflation report before the election. And as we know, voters say the economy is number one on their list of most important topics.

12:15So this is just a big deal for a lot of Americans. How much things cost obviously has been headlines after headlines over the past three years. This shows that inflation is cooling. There are some bumpy roads on, bumps on the way back down, but overall it doesn't concern anyone. Right, core prices, which exclude the more volatile food and energy components, rose 3.3 % annually, which is again a little bit faster than August and a little bit faster than economists expected. But most of that core figure was driven by housing prices. They're still remaining stubbornly high. They rose 4.9%, though technically it did ease on a monthly basis.

12:53So we are still seeing the usual suspects, housing, a little bit of food costs are still remaining elevated, driving inflation. You are totally right, though, that this is the number one issue for a lot of voters. U.S. voters ranked the economy as the most important issue in their choice for president. So that is why a lot of people were still looking at this inflation report, despite maybe its muted effects on the market. Interestingly enough, though, a MarketWatch analysis of wage and inflation data found that for the average U.S. worker, it actually takes fewer hours of work now to afford a week's worth of groceries.

13:27So it does reflect that wages have been outpacing inflation. That's probably not something that a lot of people necessarily have been feeling because they are still seeing those higher egg prices. They're still seeing those higher prices in the grocery store. But technically, due to wage gains, it does take fewer hours of work to afford like your normal grocery bill. potentially that's not what is reflected in the general sentiment but it is the reality that the wage data inflation data is showing that's an interesting fact um someone call riff and tony because there's a rumble going down democratic billionaires and lawmakers are escalating a feud about the future of ftc chair lina khan it all started with mark cuban this is seriously a mad lib story at an event on tuesday the cube said that harris if elected should replace khan as the head of the FTC.

14:16If it were me, I wouldn't keep Khan on, he said. Key context, Cuban has been a major donor and vocal backer of Harris's campaign. And then the next day, the knives came out. Representative Alexandria Ocasio-Cortez vowed there would be an out and out brawl if more billionaires like Cuban pushed for Khan to get the boot. AOC said it would be terrible leadership to remove her, and she was supported by Senator Bernie Sanders, who called Khan the best FTC chair in modern history. If you told someone even five years ago that leadership changes at the sleepy Federal Trade Commission would spark this much drama, this much passion, they wouldn't have believed you.

14:56But this isn't your grandma's FTC. Since Lena Kahn took the reins three years ago, she has remade the agency into an antitrust megaforce that has delighted progressives like Sanders and AOC and irk tech leaders like Cuban. Toby, you buy in the pay-per-view. Yeah, I mean, it is. The FTC is not your mother's FTC because in the past, the FTC has kind of, they've had this mandate to protect Americans from unfair or deceptive corporate behavior, but they've so often been so outmatched by the corporations of America that they haven't really done anything. I mean, it often used to face off in court against companies that would use as many law firms as the FTC had lawyers.

15:34So they were just hopelessly outgunned and outmatched. But now it is a new FTC. You start digging into who's actually pushing back against LenaCon, and you start to realize that it's the majority of these billionaires are operating companies that are under investigation or under scrutiny by the FTC. So you can kind of see where their motivations lie. this is the stat that's been thrown around that just shows the new FTC that we're currently under. Nearly half, around 43 % of companies in the S &P 500 are currently under antitrust scrutiny. So NVIDIA, Meta, Amazon, Microsoft, you can go down the list.

16:10So much of the entire market cap of the S &P 500 is currently being investigated because the FTC under Leaning Khan has just, they've dropped any pretense of being buddy-buddy with corporate America, and they're going after them. Yeah, she's really expanded the scope to be got to go beyond just rooting out scammers to really suing and tackling huge antitrust cases. I mean, the one that's going through the courts now is Kroger wants to buy Albertsons, which is a twenty six billion dollar supermarket mega merger. And then outside of antitrust, there have been other things that Lena Khan has done.

16:44She's gone after non-competes, which restrict as many as 30 million Americans from going to a rival competitor that is blocked in courts. She's also suing Amazon and Meta. And so she's 35 years old and she was just like wunderkind coming out of Yale Law School. She, in 2017, wrote this viral paper that basically said the way we've been doing antitrust law is so outdated and we need to update it for the digital world we're in. She used Amazon as an example of that. And that sort of catapulted her profile to become a place where she at 30, she was less than 35 then, she was younger than 35 then, to become the chair of the FTC.

17:25And she's just raised his profile so much so that they're making it a huge deal over who the chair of the FTC was. And I can't stress this enough that very few people would care the chair of the FTC was just a few years ago. But now it's taken on such heightened importance. Up next, you got Stock of the Week, Dog of the Week coming your way. Eczema isn't always obvious, but it's real. And so is the relief from EBCLIS. After an initial dosing phase, about 4 in 10 people taking EBCLIS achieved itch relief and clear or almost clear skin at 16 weeks. And most of those people maintain skin that's still more clear at one year with monthly dosing.

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19:17it is time for stock of the week dog of the week where Neil and I pick one stock that dances like nobody's watching and one stock that is too scared of how society perceives it to really let loose and have some fun Neil believe it or not you won the pre-show game of dance dance revolution I have never seen anyone break it down to cotton-eyed Joe like that before. So you are up first. What is our stock of the week? My stock of the week is Palantir, the data analytics firm that has quietly become one of the biggest software companies in the world. Palantir, which is named after an indestructible crystal ball in the Lord of the Rings, has been pretty indestructible this year.

19:55After another 10 % gain this week, its stock has jumped more than 160 % for 2024, good for the third best performance of any company in the S &P 500. Palantir has a very interesting backstory. Co-founded by billionaire investor Peter Thiel more than 20 years ago, its early focus was on helping secretive government agencies like the CIA pluck insights from enormous amounts of data. Now, though, it's shed its mysterious aura and broadened its client base to commercial customers while still maintaining its tight relationship with Washington, D.C. About half of its total revenue comes from government contracts.

20:32Another quirk, CEO Alex Karp, who has a doctorate in neoclassical social theory, has tied the company's fortunes to a broader mission helping Western countries defeat their enemies. He told Forbes, we stand unapologetically with America and its allies, and its sole commitment is to our partners' success in business and on the battlefield. I mean, Palantir started off 2024 with a$37 billion valuation and is now closing in on a$100 billion valuation. It's one of those stocks that always splits analysts because you can definitely say Palantir's valuation is a bit excessive. Of the 23 analysts who cover Palantir shares, 6 have buy ratings, 9 have hold ratings, and 8 have sell ratings.

21:15So that is about as split down the middle as you can be when it comes to analysts covering a stock. Palantir did grow revenue at a 27 % clip last quarter. It's posted eight quarters in a row of gap profits. It just got included into the S &P 500. It's up 42 % since joining the index just as recently as September. So you can point to whatever data point you want. You can point to whatever kind of earnings signal that you want to say it's either undervalued or overvalued. It is one of those very polarizing stocks. Well, it is the most expensive stock of any in the S &P 500 based on a revenue multiple.

21:51It's trading at 36 times its annual revenue, which is insane. And it speaks to kind of the Elon Musk effect that CEO Alex Karp has, who is just this larger than life character who's driving a lot of investor and specifically retail investor enthusiasm. But I can't believe I haven't mentioned this yet, but two letters, AI. Palantir has a very in-demand AI platform that it's been working on for decades. And then now all of a sudden, all of these enterprise huge customers are saying, well, we have so much data, we want help analyzing it. And so they're turning to Palantir, which has the groundwork in place with this AI platform.

22:30So that is driving it. And I'm sorry, I just left that to the end. But a lot of this hype around Palantir certainly has come from its investments in AI and helping companies sift through tons of data. This is separate than the military stuff that it works on, even though that is a big part of its business, but just helping them sift through tons of data. And that's kind of what those guys won the Nobel Prize for earlier this year, earlier this week. I do think that you're right. Like it used to be known solely for this government contracts, but it's the customer count of the company has jumped 41 % from a year ago.

23:02So it is definitely opening up to a brighter, broader commercial and private or audience getting away from its kind of reputation as just this government contract worker, although it does still have a big US government business as well, but its commercial business is taking off as well. My dog of the week is any retailer that has a red box DVD vending machine in front of it. The company behind the anachronistic DVD delivery mechanism filed for bankruptcy this past summer due to some cashflow issues, leading the kiosk operator to go out of business. Now, if you loved a good movie night brought to you by a physical DVD, this probably upset you, But it definitely upset some of the nation's biggest retailers because Redbox just left 24 ,000 of its now useless vending machines just sitting out in the field.

23:52And that has caused a logistical nightmare. These things weigh as much as 890 pounds and often require an electrician to disconnect. So chains like CVS, Walgreens, Walmart, Albertsons, and Dollar General, all popular Redbox spots, are sitting looking at these things wondering what the heck to do with them. Most will be hauled away and sold for scrap parts. Some will find their way into collector's hands who want to own a piece of movie history. But all will represent costly headaches for the chains left to deal with them. Talk about costly. Walgreens said that it spent$184 ,000 each month at its 3 ,800 stores to power these 5 ,400 machines for a failed business that's not even doing anything.

24:35They just have to keep them up. They have to keep the upkeep there so they don't wreck their stores. So this is a huge headache. And not only are these Redbox boxes around, but they have stuff inside them. These each contain about 600 DVDs. So not only are there huge, I don't even know what to call them, containers, DVD containers, but there's also the content inside them that you need to dispose of. So if you are a DVD recycler or know what to do with scrap metal, I mean, go up to your nearest Walgreens or CVS location, talk to them and see if you can make a quick buck taking care of their Redbox.