US Banning Russian and Chinese Smart Cars? & The Apple Developer Working with OpenAI

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0:29Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the legendary designer of the iPhone has emerged from the shadows, and you'll never guess what he's working on. Then, attention Kmart shoppers, the last Kmart in America is closing its doors for good. It's Tuesday, September 24th. Let's ride.

0:53If you are looking to be inspired this Tuesday morning, look no further than American endurance athlete Tara Dower. The 31-year-old ultra runner just hiked the entire Appalachian Trail in 40 days, 18 hours, in 5 minutes, setting a new fastest known time record for men or women in the process. But hiking is most certainly the wrong word for what Dower just did. To complete the 2 ,197 mile trail in the time she did, she averaged 54 miles per day. Neil, Dower stayed 13 hours off the previous record, and this is honestly being hailed as one of the greatest athletic achievements, really, of all time.

1:32It has to be. I mean, this is insane. Most people who through-hike the Appalachian Trail, which is going from Springer Mountain in Georgia to Mount Katahdin in Alaska or the other way, or Maine, that is another hike altogether, It takes five to seven months, and you start preparing to leave at, like, March, so you can conceivably maybe finish by October or November. And she does it in 40 days, doing the equivalent of two marathons a day. Yeah, she just sprinted this entire thing, and my jaw is dropped. Her strategy actually was not to sprint the entire thing. It was more of a tortoise rather than hare approach because she actually averaged a slower average speed than her previous record, but she just went further every single day.

2:18What's more impressive too is she actually had to come from behind to set this record. She fell behind pretty early on because there was this big rainy spell in New England and she had to make up time in the process. So truly just one of those things that you cannot wrap your head around until you set foot on the Appalachian Trail and see what she was dealing with. One of the greatest athletic achievements of our lifetime. Now let's take a moment to hear from our sponsor, Wise Business, the app for handling payments in multiple currencies. Neil, yesterday I woke up and did the show not only with my shirt on inside out, but backwards too.

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3:30The price of your internet. With the Xfinity five-year price guarantee, you get five years of the most reliable Wi-Fi with our best equipment included for a price that stays exactly the same. Restrictions apply. New residential customers only. Taxes and fees extra and subject to change. Most reliable Wi-Fi based on OpenSignal Awards USA. Fixed Broadband Experience Report, August 2024. Mean Girls Day isn't for another nine days, but California has already had enough of the plastics. Yesterday, the state's Attorney General Rob Bonta launched a first-of-its-kind lawsuit against ExxonMobil, accusing the oil giant of overhyping its ability to recycle plastic and causing a spike in plastic pollution.

4:13Oil companies have already been hit with dozens of lawsuits from states for their role in climate change. But this California challenge about their role in plastic production presents a whole new set of risks. The state seeks unspecified damages that Bonta said would amount to multiple billions of dollars. So what is this about? California is accusing ExxonMobil of duping Americans into thinking their plastics were being recycled when they were in fact not. Exxon is the top producer of single-use plastic in the world since it makes the petrochemicals from oil that are used to create plastic. Through various tactics, Exxon convinced the American public that this plastic was being recycled, California claims.

4:53But in reality, it wasn't being reused at all. Overall, only 5 % of U.S. plastic waste gets recycled, according to the Energy Department. While plastics production is only skyrocketing, global consumption of plastic is expected to triple by 2060 to 1.3 billion tons. Toby, California trying to hold Exxon accountable for plastic pollution opens a new front in the battle between states and oil companies. Right. One of this suits kind of vectors for attack here is that they say that people are more likely to buy these single-use plastics because of this belief, which they say is a false belief, that it will end up being recycled.

5:29But you look at those recycling numbers, 5 % is not a great rate for recycling there. To be fair, though, Exxon did fire back and say, hey, California, it's not necessarily all on us. It's also on your inefficient recycling program. They said instead of this is a quote from our spokesperson, they said instead of suing us, they could have worked with us to fix the problem and keep plastic out of landfills. And if the goal is to keep plastic out of landfills and create a better recycling system, maybe working together is the way forward rather than suing. But it does open up this can of worms and it does open up more petrochemical companies to maybe future lawsuits like this in the future.

6:07Yeah, one of the claims that California is making against Exxon is that it just misbranded its plastics. It put those chasing arrows on its products. And when a consumer sees chasing arrows, it's those three arrows that go around in a triangle. You think, OK, this is recyclable. And Exxon, according to California, just waged a decades long campaign to mislead consumers. Another vector of attack on Exxon by California is this claim about advanced recycling. Now, Exxon and other oil companies have started to engage with this new technology, which they call advanced recycling, which uses a different process to heat down plastics and lead them to be recycled and used in other products.

6:51And they've touted this across the board. California says this is merely a PR stunt. And when you look at the actual numbers, 92 percent of plastic waste that Exxon processes through this advanced recycling technology at their plant in Texas doesn't become recycled plastic at all. It just goes back into fuel. So that is another line of attack that California is saying, Exxon, you're just misleading consumers here. And I do think this report speaks to maybe a reason why recycling plastic has failed, because there are technical and economic limitations. Even when recycling is possible, it can be more expensive than producing new plastic.

7:30So it's not a very economically viable strategy, which is why you have Exxon maybe touting it more as a marketing thing than actually a viable business plan for them. But yeah, Bontai is going after Exxon on violation of state nuisance, national resources, water pollution, false advertisement, and unfair competition law. So he's kind of throwing the kitchen sink at Exxon, hoping it will stick. Like some legal experts have waited and said that it might be a little tough for this actual suit to to stick because of the can of worms. It might open. So but you're right. It's not just an Exxon problem.

8:02There is a lot of plastic that is produced every year. There's not a lot of it that is being recycled. So I don't think this is probably the last we're going to hear of suits like this. Right. And the first thing you think of with plastic pollution is like, oh, it's going to it doesn't degrade. It's good. Breaks down into microplastics and then it's found in our body, but also is a main driver of climate change. According to the Lawrence Berkeley National Laboratory, the plastics industry is expected to make up 10 percent of global emissions by the mid-century, which is up for 5 percent in 2019 and is the largest source of demand for oil right now, which I didn't really know.

8:34Everything from your social media apps to the chips powering the AI boom have become battlegrounds for national security concerns between the U.S. and its international adversaries. But now the fight has reached your car. Yesterday, the U.S. Commerce Department proposed a ban on the sale or import of smart vehicles that use specific Chinese or Russian technology. After an investigation that began back in February found that the fancy screens and sensors that have become ubiquitous in modern cars have also created potential security risks, the Biden administration made the decision that the best way to avoid these risks is to ban the technology altogether.

9:11What has officials so nervous is that the Chinese or Russian governments could use smart cars to track Americans' movements or cause road pileups by sabotaging or shutting down cars en masse. Right now, there aren't a ton of Chinese or Russian vehicles on the roads, but lower-priced EV models, especially from China, have been proliferating around the world. So this decision would effectively ban those cars from ever gaining a foothold in the U.S. Yeah, I mean, if there wasn't a sign already that we are in a technological cold war with China, then this is it. And officials made a distinction between what they're doing on the commercial end to ban Chinese cars from competing with United States manufacturers.

9:55And this particular action, they said, so we've already raised tariffs on Chinese vehicles to 100 percent, trying to trying to prevent them from coming into the market and taking away market share from the Fords and GMs. And they said this particular action is purely national security related, has nothing to do with unfair Chinese subsidies that are flooding the markets of of domestic markets around the world. So they tried to make the distinction that this is purely just because we can't have Chinese malware in any of our devices or any of our critical components that power the United States sort of military or national security apparatus.

10:34And you say this is they're also trying to say that this is targeting a specific type of car, which is a smart car when that's connected to the Internet. But in reality, all cars are smart at this point. They all have these onboard data system. They have those advanced driver assistance features, vehicle operating systems as well. And a lot of those have – if you introduce those to the U.S., it does propose this security risk because if you can see a person's location, you can kind of deduce the pattern of their life. You can see where they drop their kids off at school. You can see – make assumptions about their health information, about where – what hospital they go to.

11:12So the possibilities really are endless. We've spoken about this on the show before, just how much data our cars are collecting on us these days. So that is why this has become the new front, the new battleground for this technological war that the U.S. is waging on multiple fronts. Yeah. But two can play this game, too. And I remember a few years ago that Chinese government banned Teslas from going on certain roads near government compounds or where Xi Jinping was about to go have a conference with his buddies. because they feared the same thing, that Tesla, an American company, could collect data on particular roads and send that back to the United States government.

11:48So this is a tit-for-tat, honestly, technological war that is going on right now. And good thing for American auto manufacturers right now is there is not a lot of Chinese hardware or software in their vehicles right now. It's just kind of getting started. There's a very little amount currently, but the U.S. government said this is a preventative measure because they're looking at what's going on around the world where your Chinese cars are just absolutely taking over. I mean, in Europe, 20 percent of new electric vehicles sold last year were made in China and the United States says we do not want that to happen here.

12:22You ever have a moment and think to yourself, I wonder what Joni Ive is up to? Well, wonder no more because the New York Times recently caught up with the legendary designer, and it turns out he's been working on a lot of projects and bringing in a lot of money for his secretive new company. Ive, if you don't recognize the name, is the former chief designer at Apple, where he spent nearly 30 years becoming probably the most influential designer of the last century. That's because he led design efforts for iconic products like the iPhone, the Apple Watch, the iPad, the iMac, and he doesn't get nearly enough credit for that sound on the click wheel for the iPod.

12:56At the height of his career in 2019, I've stepped down to get off the Apple hamster wheel and explore new areas of interest, like real estate, apparently. According to the Times, Joni bought$90 million worth of buildings on a single block in San Francisco where he lives with the goal of redeveloping it into something much nicer. He's also got a steady stream of high-profile clients for his design studio, Love From, including Ferrari, Airbnb, the luxury brand, Moncler, and even King Charles III, for whom he designed a coronation emblem. The Times reports that Ive is now bringing in up to$200 million in revenue per year from his independent design work, and even Tim Cook would have trouble matching that salary.

13:37Seems like Ive's post-Apple career is working out pretty darn well for him. Yeah, this New York Times profile was extremely interesting. He actually said to the reporter, like, hey, I haven't talked to a reporter in a long time now. He's been very secretive since stepping down, kind of at the peak of his powers. But he's become kind of this industrial designer that's turned into a rare celebrity of sorts. He's the co-chair for the Met Gala. He actually got to help J.J. Abrams design a new lightsaber in the latest Star Wars movie. So the dude kind of does what he wants. And he says he's just followed his intuition recently.

14:13and one thing that his intuition has led him to is this kind of partnership with Sam Altman. They're trying to make this physical device, this physical representation of AI in the world. We've seen a lot of people try it so far. Maybe if you were a betting man, you would put your money on Joni Ive because he has just created so many beautiful products in his lifetime. So he is doing a little bit of this, a little bit of that, a little bit of product design for Ferrari, but at the same time, he designed a garment for Montclair. So he really is spreading his wings and doing whatever he wants. And it sounds like he's having a good time.

14:45Yeah, we'll see what happens with this AI device because many of those products have failed completely. We talked many times about Humane, which was also a project from other former Apple employees. They are looking to sell after getting more returns on their pin than they've sold this summer. There's also this Rabbit device that did not work out well at all. So Sam Altman actually was asked about this yesterday. And he said that it is not going to be a phone, but it is going to be a gadget and that anything will be a long ways off. But this project is actually happening. We learned that they bought office space in this area where Joni Ive lives in San Francisco.

15:25They spent 60 million dollars on it. They've hired 10 employees, including former leads on the iPhone. They're working in partnership with Laureen Powell Jobs, who has a who has Emerson Collective, which is a company. So there is movement there. They might raise a billion dollars in startup funding by the end of this year, according to the Times. So we'll see what happens there. But also, yeah, Joni just seems to have his hands in a lot of different things right now. He's designing the new interior for the Ferrari EV. He's worked with Airbnb. So if you've seen updates to their app, that is his work.

15:56So it's pretty cool seeing what he's doing in his post Apple career. I highly recommend you go Google the Montclair Joni Ive collaboration jacket because you say, how could a jacket really be that revolutionary? but they really focused in on the buttons. They are these magnetic, it's a new type of button that is magnetic that fastens multiple layers together. And it's kind of, imagine like the MagSafe for your laptop charger, but on a jacket now. One thing that made me a believer though, because I was saying, how could it possibly be worth$2 ,000? How could Montclair justify the price that they're paying to work with Joni Ive?

16:29But Joni Ive nailed in on the Sonics of the buttons. So it's this mixture of bronze, aluminum, steel that he wanted to get the sound right when it clicked together. So it just shows the level of detail that I've goes to and why he is considered one of the most legendary designers of all time. Up next, you're going to learn about fridge scaping. 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.

17:35Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with EpGliss. Before starting EpGliss, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EpGliss and visit epgliss.lily.com or call 1-800-LILY-RX or 1-800-545-5979. Tuesday on NBC, Jimmy Fallon and Bozema St. John host the highly anticipated new competition show. I hire 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.

18:10This 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. While some Goldman Sachs bankers have no doubt spent a night or two sleeping under their desks at work, The bank's old office building has a lot more people crashing there these days. That's because its former headquarters on Wall Street in New York have officially reopened as a residential building, where having a corner office now means you probably just have a bathroom with a view. It's emblematic of a broader trend sweeping through New York's financial district.

18:48As office traffic remains below pre-pandemic levels, more and more buildings are finding new life as residences. In fact, half of all new developments in Manhattan in the first six months of the year involved office to residential projects, according to Aerial Property Advisors. Now, before you start daydreaming about life in FIDI, studio apartments are priced at$4 ,000 a month, while a three-bedroom will set you back$10 ,000. But, Neil, Goldman Sachs' old HQ reopening as apartments is definitely a symbolic shift. It is symbolic. I wonder if you can actually extrapolate this to the across the country, because this is the holy grail of what's been going on for the past couple of years in the commercial real estate industry, because you have all these offices that people aren't coming to.

19:35Not everyone is Amazon and bringing their workers back five days a week. New York's vacancy rate is 14 percent. Other cities across the country have even higher vacancy rates. And it would be ideal to convert those empty offices to apartments. It's not as easy as it sounds. This one particular project seems like this particular building seemed amenable to an office to apartment conversion. But since 2016, across 40 U.S. metros, only 37 office buildings a year have been converted on average. So this is not a—I wouldn't say this is a huge trend. I think this is—we're trying to do this here and there where the buildings are possible.

20:18And city governments across the country are trying to spur this conversion by offering tax breaks and offering various other incentives. But it is nice to see it happening in certain respects. Yeah, the only reason why this is happening at all is because it is cost effective in this specific case. Estimates put it around 60 % of what it might cost to construct a new building, which is why they're going forward with turning this building into office apartments. But you're right. A lot of these offices that are vacant are because they're kind of old. They're not class A offices. They're more class B, class C office buildings that are sometimes often worse, less than the land that they are built on because they were just built so long ago.

20:57maybe even in the 30s, 40s, and 50s. So it makes more sense to knock them down. That being said, though, there are developers that are plowing ahead with them. Pfizer's old headquarters on the east side of Midtown Manhattan is being redeveloped into actually more than 1 ,500 units of housing. And then recently there was this 29-story office property in FIDI that sold for$116 million to do the same as well. So you are right that maybe it's not a countrywide thing, But at least in certain pockets of New York's, sometimes it does make economic sense. Yeah, it does. But would you live in an old office building?

21:34There is a huge problem where there's huge interior spaces where there's no windows. That's one of the main problems. And the elevator bay is just not even close to certain apartments. So that's why it's not economically feasible. But if you could. I mean, at a certain point, if anyone's ever looked for an apartment, sometimes beggars can't be choosers. And you're like, I don't care. As long as it's got four walls and a roof, I am in. And so, yes, I think I'd be amenable to it. OK, it is time to pay our last respects to another American retailer that couldn't translate big box to big bucks in the Internet era.

22:07On October 20th, Kmart will close its final full size store in the mainland United States, a location in Bridgehampton on Long Island. Kmart does have one smaller convenience store version in Miami, as well as stores in Guam and the U.S. Virgin Islands. But the closure of the Hamptons location all but ends Kmart's decades-long run as the U.S.'s do-it-all discount retailer. And what a run it was. Like me, Kmart peaked in the 90s when its product lines were endorsed by celebs like Martha Stewart. It sponsored NASCAR races, and Eminem and the Beastie Boys name-dropped it in their verses. At one point, Kmart had 2 ,300 stores and 3 ,500 ,000 employees.

22:46Then, like the 49ers on Sunday, things started to take a turn for the worse. Kmart got out-discounted and out-qualitied by Target and Walmart. Its merger with Sears was an epic failure, and in 2002, it became the largest retailer in U.S. history to file for Chapter 11 bankruptcy. It's been lipping along ever since, and soon Kmart will be just a memory. And I'm not even sure a pleasant one. I know. I don't have many memories of it. But also, Neil, how old were you in the 90s, by the way? I was nine. I hope you peaked a little later than that, but you're right. Right. Kmart was just doomed by they got out big bucks.

23:23Like you said it very well. It's not that most retailers fail because people just stop wanting to buy their products. But actually, Kmart didn't fail for that. People just started buying the products they sold at other places, at Target, at Walmart. They couldn't compete with Walmart on price. They couldn't compete with the wave of e-commerce that hit as well. Also, you have to mention private equity in this equation, too, because there was this big merger in 2005 that married Sears and Kmart. under this private equity giant. But what we saw actually was more of asset stripping happening. The person who did it was less interested in investing in Kmart stores and making them better and more interested in really the land that they sat on.

24:03So it started just kind of selling off their properties for pieces, which led to just this long, slow decline of this once great American institution. But yeah, I do not have a ton of memories from Kmart other than seeing them closed down in various places across the country. Right. Yeah, that's what we've been hearing about the last few years, a few decades. Eddie Lampert is that hedge fund guy. And yeah, he has been very notorious for, you know, essentially plunging Sears and Kmart into bankruptcy. I guess the one thing that Kmart will be remembered for is those flash sales, those blue light specials.

24:35But they had this blue light in the store and they would just ring and say, attention shoppers, you know, 15 minutes. You can go grab some some sales that are happening in the children's department or whatever. So maybe that'll be one of Kmart's legacy in terms of introducing dynamic pricing for the first time. I guess so. They also started layaway programs too, which are customers who don't have credit, you can reserve items, pay for them in installments. So it did innovate, but it just couldn't out-innovate the times and the competitors. You've heard of landscaping. You might have heard of tablescaping.