US-Iran Reach Tentative Peace Deal & The Knicks Are NBA Champs

0:28Marketers, tell us if this sounds familiar. Good morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today UFC enters the mainstream with a cage match at the White House. Then it wasn't a dream. The New York Knicks really won an NBA championship. It's Monday, June 15th. Let's ride.

0:56So far, the World Cup has given us amazing scenes of cross-cultural exchange, whether it's Scotland's Tartan Army taking over Boston with 6.30 a.m. bagpipes, or South Korea fans doing tequila shots with their new Mexican friends in Guadalajara. But nothing baffles the American mind quite like Japan supporters, who've become known for leaving their sections spotless after games. Yesterday, Japan fans brought their own plastic trash bags to the stadium in Dallas and were seen on video cleaning up their litter following a thrilling 2-2 draw with the Netherlands. The coach of the 2022 Japan team told The Athletic, this was just a normal thing to do.

1:29When you leave a place, you have to leave it cleaner than it was before. Japanese fans are undoubtedly the stars of the World Cup so far. Did you see this one fan encountering free chips and salsa for the first time? He wrote a post that's been viewed on X more than 16 million times. He says, my friend warned me, don't fill up on the chips, dude. Too late. I had accepted three baskets. Honor demanded each one be finished. By the time my actual food arrived, I was a ruined man. I was not hungry. I had been defeated by a courtesy. Just incredible stuff. Of course, Japan played in Dallas too, which means lots of interviews with Japanese fans fresh off of eating Texas barbecue.

2:08They're beaming as they recount tales of eating steak, of eating Terry Black's, of eating burgers. So just everything that the World Cup should be is embodied by this sort of cross-cultural pollination. It also helps that Japan's team is awesome, too. We'll be rooting for them going forwards. And now a word from our sponsor, ServiceNow. Neil, a bunch of consultants in quarter zips told me AI would make my life easier and do all the parts of my job I hate. Instead, I have a bunch of suggestions on how to make it work. What gives? Sounds like you're not using ServiceNow's AI specialists. They get work done from start to finish.

2:43Cases get resolved. Loops get closed. No extra work for you. So it'll do the parts of my job I'm best at and let me delegate the rest, just like consultants in the quarter zip said? Sure, Toby. To put AI to work for people, visit servicenow.com. That's servicenow.com. The war in Iran appears to be winding down. Yesterday, the United States and Iran announced they agreed to a framework peace deal that extends their ceasefire for 60 days and sets up further negotiations around Iran's nuclear program. In a social media post, Trump said the Strait of Hormuz would open up again on Friday when a formal signing will take place.

3:16The waterway has been closed for over 100 days, trapping one fifth of the world's oil and natural gas from reaching markets and sending energy prices soaring. Trump declared ships of the world, start your engines, let the oil flow. In exchange for the reopening of Hormuz, Iran expects the U.S. to unfreeze billions of dollars in cash it has abroad and ease punishing financial sanctions. So the economies all over the world are breathing a sigh of relief. Even if the ships do start their engines, though, it's not like the oil will flow. It's not as simple as flipping a switch. There is a huge logistical backlog and checklist that needs to happen before ships can move normally again.

3:53Remember, some of these ships have been sitting for so long they need maintenance. They have accumulated so many barnacles on the hold that it's not easy for them to even navigate the straight properly anymore. And these shipping companies are not ready to declare victory by any stretch. They need to know if insurers will come back to providing coverage for them because they're still very nervous that this is a tenuous ceasefire because they've been burned before. And then also the issue is there are 600 ships now milling about in the Persian Gulf right now. The Strait of Hormuz is not big. It is a straight.

4:27At its widest point, it's only 24 miles wide. Shipping lanes themselves are just two miles wide in each direction. So there is a big traffic jam waiting to happen once the blockade does officially lift. If all hundreds of ships try to go through at the same time, it's just going to be a nightmare. So yes, there's lots of optimism now because this is probably the closest we've come to the war finally winding down. But in reality, if you want to put your pessimism hat on, you got to figure out the logistics to get all these ships through this massive choke point. Yeah, checking the markets. Looks like oil is down 5 % this morning.

5:04Stocks are up big. The NASDAQ is almost up 2%. S &P is up over 100%. Dow's up nearly 1%. So investors on Wall Street thinks that this long, over 100-day war that's sent economic turmoil all over the globe is about to be ending. Trump is now on his way to the G7. It's a big week for geopolitics in France where he'll meet with top leaders from the G7, like from France and the UK. And we'll look for more details on the actual X's and O's of this deal as they come out. Moving on, the White House groundskeeper is in for a long morning today because last night a bunch of UFC fights went down on the south lawn.

5:43UFC Freedom 250 as it was dubbed brought an unprecedented spectacle to the nation's capital. More than 60 million dollars went into putting on the event with UFC's parent company footing the bill and losing roughly 30 million in the process. It wasn't like the public was clamoring for the fisticuffs. A Reuters Ipsos poll found that just 16 percent of respondents say holding UFC fights at the White House is appropriate, while nearly half say it's inappropriate. But Trump pushed back on critics by citing historical precedent. The White House has long been used for public events, supporters argue, with Trump specifically naming Teddy Roosevelt and his participation in previous fights as proof that the workplace of the president could be used for such an event.

6:23The event also commemorated Trump's 80th birthday and brought more bread and circuses to the larger months-long celebrations of America's 250th anniversary. Neil, it was a pretty surreal scene last night. Service members made up a good portion of the 4 ,000 ticketed guests who sat around the temporary arena. Around 80 ,000 people gathered for a watch party outside the White House gates. Fighters walked through parts of the White House, including the Oval Office, to get to the ring. And crypto and light beer sponsors were juxtaposed against the backdrop of one of the most famous buildings in the world.

6:55It was hard to wrap your head around. It was bizarre, but the fights were good. It wasn't the most prestigious card ever, but all seven of the fights on Sunday night ended with a knockout or a TKO. This is huge for UFC and CEO Dana White. 25 years ago, no one knew what UFC was outside of just a very niche group of hardcore fans. Now, this is a$20 billion company. They just signed a streaming deal with Paramount for$7.7 billion, and they just got top billing at the White House. They're fighting on the White House lawn in front of the entire nation, many of whom probably paid for Paramount Plus just to watch this fight.

7:35So for Dana White, he said, this is the most important event in the company's history. They shelled out$60 million, and he thinks that they're going to recoup that easily in publicity. Yeah, that was the big question. Why do it? Because if you did lose$30 million, as was reported, why go through the hassle of doing it? And it is what you were saying. They want to sell subscriptions to Paramount Plus. Executives were saying that this had the same exposure opportunity as a Super Bowl, which may have been overstating their hands a little bit. But then I was kind of reading what some attendees had to say.

8:06Kellen Drury, a 27-year-old for Altoona, Pennsylvania, told the New York Post he made the trip to be there despite not having tickets. He said it was worth the trip just to be here. It's like being outside the Super Bowl. So maybe that comparison does have some heft, at least for the most UFC crazed fans out there. And another person in attendance who was probably smiling from ear to ear was David Ellison, who is the CEO of Paramount. On Friday, the DOJ said it would not block Paramount's takeover of Warner Brothers Discovery, that huge$111 billion deal. Remember, Paramount and Netflix have been going back and forth, very political process.

8:44And on Friday, DOJ said, you guys are good. We don't see any competition concerns here. So now David Ellison is 43 years old. He's gonna be one of the biggest media moguls in the land right now if the deal goes through, which it looks like it probably will. There still has to be some approvals by overseas regulators, but the Geo Day said they can go through with it. So David Ellison will now own two Hollywood movie studios, Warner Brothers and Paramount, two streaming services, Paramount Plus and HBO, and then HBO, I don't even know what HBO is called. HBO Max, I think we're at now. HBO Max or Max, and then also two major news networks, CNN and CBS.

9:20So this is also kind of a celebration for him. I think he had a champagne toast. Of course, the politicalness of it was embodied by the fact that he was sitting on the White House lawn. Because remember, David Ellison's father is Oracle co-founder Larry Ellison, who's a big Trump ally. Trump attended a Paramount-hosted dinner during the review process for this merger. And of course, David Ellison was sitting ringside by Trump at his 80th birthday. So of course, that's the undertone to this entire merger getting approved. Plus, a lot of onlookers were saying it was an unusually specific endorsement of the merger because the takeaway from the DOJ was that this is, quote, not likely to harm competition or American consumers.

10:03A lot of industry watchers, including former anti-tush chief Bill Baer, said the agency statement was unusually detailed for the decision to not sue. So many read it as an explicit endorsement, which is just not something the DOJ necessarily does. So fascinating undertones around this, you know, massive spectacle of UFC event that, you know, this media mogul was minted right before our eyes as, you know, people were beating each other up on the South Lawn. Moving on, as if the SpaceX IPO World Cup NBA finals weren't enough to keep you occupied this weekend, there's been a wild development in the already wild world of AI.

10:38On Friday, the U.S. federal government banned foreign nationals, companies, governments, and individuals from using Anthropic's latest and greatest AI models, Mythos 5 and Fable 5, over national security concerns. A stunned Anthropic then decided to shut off access to everyone for both of those tools, saying that was the only way it could comply with the rules. In fact, Anthropic mentioned it has many foreign-born employees who could no longer use the models they developed. In a statement, the company said, quote, we believe this is a misunderstanding and are working to restore access as soon as possible.

11:10Misunderstanding or not, the White House clearly has it out for Anthropic, which recently topped OpenAI as the most valuable AI startup in the world. The government already tussled with the company over Pentagon access, and this latest move is the biggest blow yet. Remember, Anthropic is racing against its rival OpenAI to go public and wants to put on its best financial face for investors in the lead up. But in one right hook to the jaw, the government just knocked out its flashy new models. As for the models, a quick reminder, in April, Anthropic launched Mythos, but didn't release it to the public, saying it was too dangerous, too good at hacking for the public to get their hands on.

11:44Then last week, it released Fable, which is basically Mythos and a straitjacket to prevent the most damaging use cases. Toby, we've never seen this before. The US government seems to be neutering one of its most powerful tech champions. You want to talk about irony? on Wednesday of last week, Anthropics CEO Dario Amade wrote this long essay arguing that government should have the power to block the deployment of AI models based off of testing. And the US was like, all right, Ben, be careful what you wish for. You are blocked. And there also is this kind of Game of Thrones-esque subplot to this whole thing because Amazon appears to have been very influential in this decision being handed down.

12:24A lot of tech companies were reportedly discussing these securities concerns by so-called jailbreaking these mythos models. But a message from Amazon CEO Andy Jassy was reported to be among the most influential, which is weird because Amazon is a major investor in Anthropic committing$25 billion. So it's very similar to like tell Daria, I want them to know it was me vibes like that scene from Game of Thrones. So it's just fascinating that at the very upper echelon of the tech world, it seems like one of the biggest investors in Amazon kind of backstabbed it and got this model kind of in the bad graces of the US government.

13:01My reading of the situation is that Amazon researchers tried to jailbreak this like many other tech companies did. And Andy Jassy, the CEO of Amazon and Amazon were just like raising general concerns about this. I don't necessarily think that they were like, you need to cancel, you need to stop Anthropic in his tracks right now. This is way too dangerous. They were just like, hey, this is something that we found. And then the White House took and ran with it. And I think that because if you just look at what cybersecurity experts were saying about this particular jailbreak, they're saying like, you know what, it's actually not that huge of a deal.

13:34This is not necessarily new to Fable or Mythos. Other companies, AI tools can do this as well. So they were not so concerned with the particular jailbreaking that Amazon was doing. So I'm not sure Andy Jassy knew what he was getting into when he called up the White House and said, hey, I just want to let you know what we found. Yeah, it is certainly the subtext of Anthropic versus U.S. government being a massive feud is probably what's going on here. It is just annoying if you're an AI company too because you just had the Trump administration seemingly signal that they were going to take a lighter approach to AI regulation.

14:10Remember, earlier this month, Trump signed that executive order to encourage companies to voluntarily let the government review AI models before release, but it seemed to stop short of giving the government the authority to block or approve releases. And yet just a few weeks later, a few days later, they did exactly that for Anthropics Mythos model. So you just want, if you are a frontier AI model company, just give me what the regulations actually are. We will try to follow them. But if you change them underneath our feet every few days or so, that makes it annoying to try to, you know, win this technological race that is becoming the most important thing in the world right now.

14:47So Anthropik's annoyed. Maybe it'll get worked out. But in the meantime, it's just kind of hung in this liminal state. It doesn't know if it can release this model to the public. I was on Anthropik. It has a little indication when you try to use a Fable model saying like, hey, it is currently under review by the U.S. government. So they have to figure it out if they want their most powerful models to actually make it in the hands of researchers around the world. Both sides have no idea what they're doing with their messaging because the U.S. government at the same time is trying to restrict Fable and Mythos is allowing AI chips from NVIDIA, high-end AI chips, to go to China, which could ostensibly build their own model.

15:26So they're trying to have it both ways. And then you have Anthropic as well saying, it would be good for the world to have the option for governments to slow or temporarily pause frontier AI development, and then they complain when it actually happens to them. So we're in the wild west here of dangerous AI models, and people don't really know how both sides, I mean, some people have ideas, But at least Anthropic and the government are in a state of chaos right now because both their policies and their messaging is incoherent. All right, we're going to take a quick break and come back with our winners of the weekend right after this.

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18:08would break the financial machinery that keeps markets humming. But things went as well as they possibly could. SpaceX began trading on the NASDAQ a little before noon at 11 % above its IPO price of$135 a share. By the end of the day, it had risen 19 % to close at a valuation of$2.1 trillion, making it the sixth largest public company. It is sweet, sweet vindication for Elon Musk, who in 2002 was mocked for starting an experimental space company with the proceeds of his PayPal sale. On Friday, Musk's net worth rose above$1 trillion to become the first human in history worth that much, and no one else is even close.

18:44Musk is now richer than the next four wealthiest people in the world combined. SpaceX will ultimately be judged on whether Musk can execute his sci-fi vision to build AI data centers in orbit and establish a colony on Mars. But at least for one day, he can claim victory. So I was reading Bloomberg's Matt Levine, and he was talking about the interesting way this IPO was priced. So normally when a company goes public, bankers spend a lot of time gathering orders and tweaking the IPO price based on the demand that they are seeing. But SpaceX skipped much of that process. Elon basically said the IPO is$135 a share from the start.

19:20One hedge fund executive told the Financial Times, Elon just came in and said what the price was. There was no price discovery. And he turned out to be pretty dead on. A 20 % pop is exactly what you're looking for with an IPO because you're making money for investors without leaving too much money on the table. That's exactly what happened here. But also, this is what happens when a company stays private for 24 years like SpaceX did. SpaceX shares have been trading on private marketplaces for basically the entirety of that time. One marketplace, Hive, had SpaceX trading at around$136 a share. Another had$128 a share.

19:56So in other words, the IPO price landed exactly where the private markets were indicating that they were. So just a fascinating look into how IPO price discovery might go looking forward, because traditionally the IPO was the moment where people are like, what is this private thing actually worth? Now it looks like we know what it was worth far before it ever reaches the private market. So it might change how these pops happen on the first day of trading. Yeah, OpenAI and Anthropic are about to go public in the fall. They're looking at what SpaceX did and saying, we want to execute that playbook because it worked out so well.

20:30It's went smoother than anybody could have ever imagined. So Anthropic and OpenAI, these other huge$1 trillion plus tech companies are looking at what SpaceX did, and they're probably going to use that as a model. It's going to be very interesting to see what SpaceX does on its third, fourth, fifth, 100th day of trading because obviously it had a great day on Friday. It's up 6 % so far this morning. We are not going to see. We still debate this about Tesla, and it has been public for over a decade, and we're going to do this with SpaceX. We got the bulls and the bears. The bears are out in full.

20:59Four CFRA research senior analyst Keith Snyder said on Friday, even after this good IPO, that the revenue growth that SpaceX would need to achieve to back up this$2 trillion valuation is, quote, borderline comical. And then you had Elon Musk, on the other hand, on X this weekend saying that they're going to reach, he expects to reach$1 trillion in annual revenue by 2030, which is four years from now. People are like, maybe you should have put that in the IPO prospectus because that's kind of a material change that you're making. So it'll be interesting to see what SpaceX does going forward. Elon Musk is very rich and he could become even richer.

21:33He has this compensation package at SpaceX worth up to$1 trillion, but that is entirely contingent. He will see zero of it unless SpaceX becomes a$7.5 trillion company and there is a permanent human colony on Mars with at least 1 million people. I'm done doubting anything we hear out of Elon at this point. I do feel like I need to read the exact quote from Elon where he says, I think SpaceX might be able to reach approximately$1 trillion in revenue by 2030. That approximately might be doing some heavy lifting if it comes in a little short of that lofty goal. my winner of the weekend is your new york knicks 53 years of pain and heartbreak came to an end in cathartic fashion on saturday when the knicks defeated the spurs to win an nba championship it turned new york city into a scene from a movie hundreds of thousands of real fans and bandwagoners alike mingled in the streets singing frank sinatra lighting off fireworks and climbing onto any elevated surface they could find every fire escape was laden down with delirious onlookers blasting music after many used their unique vantage points and projectors to host impromptu watch parties on the sides of buildings.

22:44The team itself evoked the spiritual resilience of the city of New York. The Knicks led for just 23.6 % of the series, the lowest time spent leading by a champion since 1971, according to Elias Sports Bureau. Their star player, Jalen Brunson, channeled that underdog nature. Drafted in the second round, he was allowed to walk by his previous team, the Mavericks and had been continually overlooked as an undersized guard. But Brunson had a plan leaving over$100 million on the table in his last contract negotiation to give the Knicks the roster flexibility to bring on a supporting cast that included two of his teammates in college at Villanova.

23:21The gamble by Brunson and on Brunson paid off and now they are champions. Neil, even if you're not a Knicks fan, not a basketball fan, or even a sports fan, you can't deny that a half century title drought ending in the biggest media market in the world is a fun storyline. Yeah, Knicks in five. They manifested it. It's the first, you know, so-called major professional sports championship in New York in 14 years. The Liberty have won in the WNBA and the New York City FC have won for the MLS Cup in 2021. But in terms of the big four sports, the Knicks are the first in 14 years. And as some have pointed out, they don't really share a fan base with another team.

24:00I'm sorry, Brooklyn Nets, but in New York, there are so many teams that the fan bases are generally split. There's the Jets and the Giants. There's the Yankees and the Mets. And for one night and for one playoff run, all of the city came together and it was just euphoria. I've never seen anything like it. I was having a pinch me moment because I could not believe that I was actually in the city when you see one of these massive celebrations break out. So I was watching it at a restaurant, but as soon as like the fire buzzer sounded, you just ran out into the streets because you knew everyone else was going to do the same.

24:31And it was sort of kind of like this zombie herd mentality where no one really knew where to go, except all of a sudden everyone just started moving towards Madison Square Garden because what are you supposed to do? You just move towards the Mecca at this point. People were trying to climb stuff like I've never seen. Again, I've never been part of kind of like this championship atmosphere. I didn't know that as soon as someone sees a light pole, they try to go up it. It absolutely happens. My fiance and I were wandering around. She got duped by a Zoran Mamdani lookalike. That guy was a celebrity in the crowd, even though he was just a guy with a beard.