Nvidia Investing $100B Into OpenAI, Starbucks Closing 400 Locations & Amazon's $2.5B Fine For Tricking Prime Members

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0:46Visit a Marshalls store near you or shop online at marshalls.com. Public.com presents this episode of The Rich Habits Radar, a new Friday episode of The Rich Habits Podcast, where every Friday morning, we're coming at you with the biggest headlines impacting you and your money. My name is Austin Hankwitz, and I'm joined by my co-host, Robert Croke. The three things sitting at the top of our Rich Habits radar this week include Amazon's$2.5 billion fine for allegedly tricking people into subscribing to Amazon Prime, Starbucks' closure of over 400 stores, and the elimination of over 900 jobs. And of course, we have to talk about NVIDIA's$100 billion investment into OpenAI.

1:34And be sure to stick around to the end to hear more about the 77 % chance of a government shutdown in the year 2025. So, Robert, let's dig into our first story. That's right. Amazon has agreed to pay$2.5 billion to settle allegations that it tricked millions of consumers into signing up for its Prime memberships. Regulators accused the company of using dark patterns, design tactics that made it easier to join Prime than it is to cancel it. The settlement is one of the largest consumer protection penalties ever imposed on a U.S.-based tech company. Remember when I joined Amazon Prime in college, I wonder if they used those design tactics on me.

2:14Probably. So Prime currently has over 200 million members worldwide, annual fee of about$139 per year. so their service generates more than$25 billion in annual subscription revenue for the company. The case focused not only on the signups, but also on how Amazon made cancellation deliberately confusing, multiple-step process, not easy to do. So while$2.5 billion is only a fraction of their half a trillion dollars in annual revenue, the ruling could set a precedent for how big tech designs subscription services. So Robert, what does this mean for us and our money? Well, it means you and I are still very bullish long-term on Amazon, and we both think it's a great time to buy while they're beaten down a little bit.

2:59Their advertising business seems unstoppable. AWS is trending in the right direction, albeit slower than Azure or GCP. And they're about to surpass Walmart in annual retail revenue. Yeah, for me, this seems kind of like a nothing burger. Y 'all shouldn't get shaken out as investors. For other big tech companies, though, hopefully this could set a precedent to begin to crack down on predatory subscription tactics. And as a reminder, Monday's episode this week was all about subscriptions. So if you want to learn about that and how to sort of audit your own subscriptions, be sure to listen to Monday's episode.

3:33Now, Robert, let's talk about Starbucks's closure of over 400 stores and the elimination of over 900 jobs. So Starbucks announced it will close hundreds of their underperforming stores across North America and cut out about 900 corporate and support jobs as part of a$1 billion restructuring plan. Their CEO, Brian Nickel, framed the move as part of this back to Starbucks turnaround story focused on elevating customer experience while restoring the ever important financial discipline of the business. Yeah, one of the most high-profile closures will be the Seattle Reserve Roastery on Capitol Hill, and it's one of their flagship stores just minutes away from headquarters.

4:19The decision is notable given that Starbucks has long branded itself as a community-driven company, but it's now grappling with slowing U.S. sales and rising labor costs. Now, here's the fun thing. Starbucks has promised to reinvest savings into remodeling over 1 ,000 existing stores into new format designs for mobile orders and efficiency. Let's just hope they don't remodel it in such a way like the Cracker Barrel people did and everyone gets all mad. But I do have a Starbucks here by my place here in Nashville. So if y 'all want to come remodel this one, it is definitely in the need of a nice little refresh.

4:53So, Robert, what does this mean for you and your money? Yeah, I think it can be a learning lesson for everyone listening right now as it relates to a turnaround story. You know, Starbucks is a wonderful example of a turnaround story taking place at the moment right before your eyes. But so is Opendoor. And let's get this straight. For a turnaround to be successful, a few things really need to take place. Number one, existing management is booted and a new CEO and executive team is brought in. Number two, renew the vision for the company's future. And most importantly, the vision has to be executed on.

5:30And I think that this is Starbucks' story right now. And they've just got to get it together and figure out what's next for them and get the stock back up because it's been flat for a long time. Yeah, Brian Nichols, this new CEO of Starbucks, who, by the way, is the ex-CEO of Chipotle and Taco Bell. Now, you know, they're sharing the vision for this company with the world, but they're also sticking to the plan that they had shared six or nine months ago, right? They came out with this back to Starbucks sort of vision. And sometimes, most of the time, whenever you sort of share a vision and you got to do some things to stick to that plan, that involves cost cutting and getting rid of failing sort of branches of a business.

6:11Usually what happens in response to layoffs like this, though, and some store closures, depending on how large, is a pop in the stock price. We didn't see that today with Starbucks. Starbucks stock is still down on the week and on the month and on the year. I don't own the stock. Who knows if it's a good stock to own? But I think what's most important to sort of realize here is that as investors, as sophisticated investors, we need to understand how a turnaround story really takes place. and not just the hype around it in the beginning, because there was a lot of hype with Starbucks, Robert. I'm sure you remember when they brought on Brian Nichol, but the long, grueling patience that comes with a turnaround story.

6:52There was a company I worked for. It was publicly traded. The stock was down$20,$30. It was where it was trading at at the time, and they were getting sued by the Department of Justice, and it was all these crazy things they were doing wrong. So they got rid of their old executive team. They brought in the guy that I worked for. His name was Paul Cousero, and he turned the whole company around. Now it took six years, right? But the stock price went from about$25 a share to about$400 a share in that six-year period of time after having a lot of struggle. So it's possible. And I think this is a really good opportunity, Robert, for us to teach our audience that turnarounds in publicly traded companies exist.

7:28They could be successful. They just take time and sometimes include some flashy headlines of store closures and layoffs. Yeah, I mean, we talk about Intel all the time right now because they're in the news and top of everyone's mind. But a year ago, when Intel was really beaten down and written off and everyone was saying they missed the AI party, look at the turnaround story there. I mean, they have been able to really turn the stock around. It's doing very, very well. So you are absolutely right for anyone listening and following along. It's all about patience and finding these turnaround stories at the right time.

8:04And sometimes this is a really incredible way to make really great money. So let's get into our third point today. NVIDIA is reportedly committing as much as$100 billion to deepen its partnership with OpenAI in what could become one of the most consequential investments in the AI arms race. The deal is said to be spread across multiple years and tied directly to supplying AI with access to NVIDIA's most advanced GPUs and custom chips. So to put that number in perspective, that$100 billion investment into OpenAI is nearly equivalent to NVIDIA's entire annual revenue run rate, which over the last 12 months came in at about$120 billion.

8:47So this isn't just a supplier contract. It will literally cement NVIDIA as the backbone of OpenAI's infrastructure at a time when competitors like Microsoft and Google and Amazon are all racing to scale their own AI platforms. I will say, Robert, I did see something posted on X recently how nine of the top 10 AI lab are customers of Google Cloud. I saw that. That was interesting. So be sure to keep that in your back pocket. But my goodness, how interesting is this investment? The$100 billion really underscores just how resource intensive generative AI has become and how much of a moat NVIDIA is building by locking in the most prominent research lab in the space.

9:31And investors will be watching closely to see how this translates into both revenue recognition and NVIDIA's dominance in the years ahead. So here's why it matters for you and your money. NVIDIA has done a really good job of building these types of partnerships with their customers, right? We got OpenAI. They got CoreWeave, just to name a few. However, I want to encourage people to think beyond this generative AI training, right, a lot of this hardware. But now to also think about the inference side. I think it was Larry Ellison, a recent earnings call from Oracle, he talked about how inference is going to be bigger than gen AI training, right?

10:07So think robotaxis, humanoid robotics, and other AI-heavy technologies. NVIDIA remains the AI play of the decade for us, hands down. So this headline, this whole news story just solidifies that. Yeah, I agree with you. NVIDIA has been a real player for years and years, and it just continues to grow. And I think they've done a tremendous job with all these partnerships and really solidifying their status as the number one. I'm not saying we shouldn't be investing in other companies. There's a lot of other companies we like and we think have a long growth period ahead as well. But NVIDIA is definitely our top dog in this space.

10:46So, Robert, let's now jump into our rapid fire headlines. This segment of the show, I bring three interesting headlines that caught my attention. Robert brings three of his own, and we just kind of get into it. So my three here, the first one is there's a 77 % chance that the government's going to shut down in the year 2025 as soon as even September 30th. The second one is Elon Musk's XAI has now been approved for use by the U.S. government. And three, the auto industry sharing some warning signs for us. So let's talk about this government shutdown. The Senate recently rejected a stopgap measure that would have kept the lights on through November, in part because Democrats insisted on adding new funding for Medicaid and ACA subsidies.

11:33Now, from a market and public impact perspective, the risks are real. OK, delays in economic data releases could happen, think inflation and jobs. That could leave the Federal Reserve in a spot that's even trickier than where they are right now, kind of flying blind. They don't really see the data and what's happening in the economy. harder to calibrate interest rates to where they should be, which in our opinion is much lower than where they are today. Travel and tourism, you know, analysts project that$1 billion could be lost per week in economic activity from park closures, museum shutdowns, and airline disruptions.

12:07So I don't care what side of the fence you're on, no one wants a government shutdown. It impacts everybody in a very negative manner. And hopefully this doesn't happen, but definitely something to keep an eye on if you are an investor. Up next is Elon's XAI being approved for use by the U.S. government. So federal agencies can now gain access to Grok 4 and Grok 4 Fast for 42 cents per organization for the next 18 months. And there's a quote here. The quote is, XAI's Frontier AI model is now unlocked for every federal agency, empowering the U.S. government to innovate faster and accomplish its mission more efficiently than ever before.

12:47We look forward to continuing to work with President Trump and his team to rapidly deploy AI throughout the government for the benefit of the country. It's a quote from Elon. Seems like Elon and Trump are friends now. What happened there, man? They're back and things are happening. You can see that by how quickly some of Elon's initiatives have been back at it and added to the U.S. government's playbook. So I like it. I think progress is always good to make the government more efficient because they waste more money than anyone I've ever seen, any organization on earth. I could not agree more that the government's very inefficient and we need to do something about it.

13:23It's just so funny how someone can go tweeting that the president is on a specific list and then now they're buddies again. So who knows what's going on there, but definitely funny to say the least. And now my last call out about the auto industry warning sign. So the auto industry is flashing a couple warning signs on the state of the U.S. economy as automaker profits are getting squeezed by tariffs. Prime auto lender recently collapsed and filed bankruptcy. And car dealers like CarMax are warning of a consumer pullback in spending. High vehicle prices and high interest rates have weighed on shoppers who are already facing high food prices and feeling less secure in their own jobs.

14:01new vehicle prices are up 3 % since last year to an average of$45 ,795 in September. Here's what I'm not doing. I'm not spending$46 ,000. I remember when you can buy a new car for like high 20s, low 30s, and you go that Toyota RAV4 that your uncle just bought, and you go, oh man, how much you pay for that? You know, I got$32 ,000. Now it's 46. What kind of a world do we live in, Robert? Yeah, and it's crazy. You know, I talked a long time ago with you, Austin, and I said we should launch a truck company to offer affordable trucks to everyone in the U.S. because the average truck price now is over$50 ,000.

14:40And I saw that Toyota has a model, a basic model, awesome truck for workers and anyone that wants a truck for$10 ,000, but it's not allowed to be sold in the United States. And that really bugs me because a lot of people just need affordable trucks just like they need affordable housing. and it doesn't exist in the U.S. market. So the automakers are going to see a big downturn, in my opinion, with a lot of inventory. And I look to see a world where we see this 2.9 financing again very soon because they're going to have to unload a lot of inventory that's sitting. So let's get into my three rapid radars today, starting off with Morgan Stanley launches cryptocurrency on the E-Trade platform.

15:25They just announced this, and they're joining the crypto party by adding cryptocurrency to E-Trade, which I think is awesome. They're only going to begin using Bitcoin, Ethereum, and Solana up for sale for their clients. But they currently have 5 million active users. And as a reference against competition, Robinhood has about 11 million active users. But E-Trade is still very big. And I'm glad that Morgan Stanley has joined the party because I think this is great for adoption and growth in the crypto space. because seeing further institutional adoption and allowing more people, especially with E-Trade because it's an older audience, get involved in crypto easier is great for the space moving forward.

16:10My second point today is that the Commerce Department upgraded their second quarter GDP. What does this mean? It means they upgraded it to 3.8%, and this is mainly due to U.S. companies loading up on inventory in Q1 ahead of the Trump tariff tantrum, causing imports to fall dramatically in Q2. So depending on each country's tariff agreement, how that shakes out in the coming months, we will keep a close eye on this, but a lot of people were smart. A lot of these companies got ahead of it, and that is what's causing the GDP to improve in that situation with less imports in Q2 of this year. And number three for me is CleanSpark just secured a$100 million Bitcoin facility.

16:56So they've secured this facility and it's a credit facility with 2Prime, that's their partnership, and the company plans to use these funds for its Bitcoin mining hash rate improvement and invest further into more high-performance compute. This will help CleanSpark grow its data center portfolio to over$400 million, which I think is great news for CleanSpark, which is already up 58 % in the past six months. We've been buyers of CleanSpark now for about two years. So I still think there's a lot of room to grow ahead for CleanSpark. And those are my three Rich Habits radar points today. So here's my question for you, Robert.

17:35I saw a video. Stevie Sells is the guy who posted it. He's so funny. He's great. I saw it on Facebook Reels, which yes, I watch Facebook Reels. And he bought a single Bitcoin miner. and i'm not talking about like you join a pool of bitcoin miners and you get the he bought this it's the size of my iphone right so it's this little thing you plug it in you do the internet and it's it's like a one and bajillionth chance that you that this thing ever actually mines a bitcoin because it's like one thing part of this whole but if it was somehow some way mine a bitcoin like it completes the hash it will get 3.125 bitcoin as a reward and there's a headline that happened, I want to say about six or nine months ago, where one of these single miners, like some guy plugged this thing in and it worked.

18:23And like he was able to get three Bitcoin as a reward for completing the hash or whatever the technical term is there. Have you ever heard of this thing? And is this something I should just go plug into my lamp or my little charger here and just have it running just in case is a little bit of schmuck insurance? I think so. We had a bunch of them back in the day. And then even as recent as four or five years ago, I had these little Asics miners that I was mining Solana and some other coins and they didn't do as planned. But here's the key. If you live in an area where you have a low cost for electricity and your home has a really good rate on electricity, it can be profitable.

19:05Just buyer beware. Don't go out and buy $20 ,000 worth of miners and put them in your house because they're loud. They run really hot and they will eat you alive in electrical cost but if you wanted to try one and see if it can out race the electrical cost it's a lot of fun and i love it for you because you can have some fun with it and try to beat the schmuck insurance but yes they do work it just depends on what you're trying to mine and what your electrical cost is i found it here uh if you're watching on spotify open up your eyes and look we're sharing it here on the screen this is the one that he had it's 40 bucks new solo miner nmm miner v2 whatever low power bitcoin 2.8 inch display and wi-fi like it's the size of your iphone you plug it in and it's just like if you get lucky you get a bitcoin if not it's like no impact on power right because it's like the size of your iphone it's like charging your iphone So I don't know.

20:06I'm going to get one. Maybe we should get a couple, roll the dice, see what happens. And maybe we can turn it into CleanSpark 2.0. There you go. I mean, it's fun. I mean, I used to have them in my office and it was fun watching them do their thing and produce, you know, all these different coins. So it's definitely could be a side hustle, especially if you catch it at a time when crypto is moving upwards and not stagnant. So you can actually make money. But yeah, I think you should do it. It'll be a blast. And I'll go ahead and buy the miner that I used to have. And I'll test that one versus the$40 one.

20:42And we'll see which one does better. Well, if the$40 one actually does end up being the solo miner and completes the hash. Because the thing is, how this works is you can either join a mining pool and you get a pro rata share of the Bitcoin, or you could just do it yourself. And so these solo miners, they just do it themselves. They don't join the pools. So you try and be the one to complete it. And if you don't complete it, then you don't get anything at all versus you could have got a little something in a mining pool. But if you do complete it, you get all 100 % of that three plus Bitcoin. All you need is one.

21:13All you need is one. I'm excited for you to try it. I love it when you get excited about these little side hustles and fun. And that's why we do what we do. But you got to definitely order it. All right, y 'all. Let's now jump into our Q &A section of the episode. As always, if you have a question to ask us, you can email us at richhabitspodcast at gmail.com. You can DM us on Instagram at richhabitspodcast. And the questions we like to answer on these episodes are more related to entrepreneurship, side hustles, just earning money, right? Being a small business owner, all in between. So if you have a question for us as it relates to earning more money, making more money, starting that business, anything related to that, be sure to ask it so we can answer it on these new Friday episodes.

21:56So our first question comes from Claire F. Claire says, nobody talks about how isolating it feels to run a business. My friends work nine to five jobs and don't understand, and I can't really vent to my employees about stress, cashflow, or uncertainty. It often feels like I carry the whole way to the company by myself. How do business owners find community or support systems where they can be vulnerable and honest? Is it worth joining masterminds, networking groups, or even getting a coach? Or is that just another distraction from real work? This is probably the most important, most impactful, but no one talks about it parts of small business ownership.

22:37The absolute mental gymnastics that I'm sure you've gone through, that I go through on everything that happens with my mental health because I'm a business owner that works 16 hours a day. and five families depend on me to show up and do like, you know, my dad died two months ago, but I've got this podcast, a hundred thousand people like depend on me every week to come here and like talk. And so it's like, like that is mental warfare in itself. So it's like, there's a lot of like battles that go on in your brain when it comes to being a business owner, that it's like eating glass. Sometimes it's, it's pretty, it's pretty intense.

23:12So my advice for you, Claire F, would be a couple things. The first thing is, I don't know about getting a coach, but I do know about joining those communities and support systems. How do you do that? I was going to say, join our community. Hell yes. Rich Habits Network is filled with business owners. Yeah. So yeah, to Robert's point, Rich Habits Network, we have tons of business owners in there that I'm sure can support, but more specifically, like tactically speaking here for you, I would look and try and join a Facebook group of like entrepreneurs in my state or entrepreneurs that are selling on Etsy or like niche down into what you're doing specifically to give you a little bit of like relatability, you know, entrepreneurs that have trucking businesses or maybe, you know, Etsy sellers literally are a great example.

23:56Like, oh, you sell on Etsy, like, or maybe you, you know, whatever, but I would start there. The other thing I would do is I'd talk to somebody like an actual, you know, therapist BetterHelp, I'm sure, is great. I've heard good things about them. I don't really do this part of it, but I've heard really good things and good feedback from people that do need to have that communication. Luckily, I guess my, you know, Ireland is my therapist. And so are you, Robert. But yeah, it's just like one of those things where it's the dark side of entrepreneurship. It's depressing. It's lonely. It is very scary knowing that if you do something wrong, you can't make payroll.

24:29And now someone can't pay their mortgage and their kids can't go on the field trip. or you do something right and you can't share it with your employees because you don't want them to think you're bragging, right? It's this really weird part of your life where you have to be so like to yourself until you find the support system. And also, Robert, and I'll let you jump in here in a second. Talk about the importance of finding a support system that's not driven by envy and jealousy, but instead of true support. Yeah, 100 percent. I'm going to start by piggybacking what you said. And it's very difficult because money and success in business and in entrepreneurship is very difficult.

25:06Because if you're crushing it, you can't share that because then there will be jealousy and envy from your friends, your family, your employees. But if you're struggling, you can't share it either because then you lose the culture. The employees will start to look for other jobs. They'll start to doubt you and wonder where the company is headed. So it is a very, very slippery slope. And I remember when Silly Bands, prior to Silly Bands, we had two really down years. But I kept every employee. I paid everyone. I did everything right. And then six months after Silly Bands blew up, then all of a sudden, I wasn't giving enough.

25:42I wasn't sharing enough. I didn't give big enough bonuses. And it really broke my heart because here I was. I couldn't tell people how much I was struggling during that two-year period, but they got their paychecks on time every time. And then as soon as you start really making money and become successful, then you all of a sudden are back against a different wall because people are up against you. So my recommendation when it comes to you for a support team is get outside of your normal circle. Like Austin alluded to, join places like the Rich Habits Network where a lot of business owners are.

26:16Engage with them. Ask them, how did you get through the tough times? What did you do in these instances? Because anyone that has owned a business has gone through it. Nobody just has hockey stick growth and it's easy. And that's the part that is the most difficult because you're right. Those 60, 70, 80, 90 hour weeks can be very lonely when you're doing well or when you're struggling. Because at the end of the day, it's hard because you can't really share with people inside your network. You have to get outside your network and say, hey, I'm struggling right now. Cash flow is not there. I'm receivables aren't coming in.