Morning Brew Daily - Elon Musk’s ChatGPT Rival & The Washington Post's $100M Problem

Episode Date: November 6, 2023

Episode 185: Neal and Toby discuss Elon Musk's new AI chatbot, 'Grok' which he says is set to rival ChatGPT and "loves sarcasm". Plus, can the Washington Post's new CEO fix the media company's $100 million problem and how teenagers are being deepfaked by AI. The guys share who they think won the weekend and which budgeting app is ending business? Finally, what we are watching for this week. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning, Brew Daily Show. I'm Neil Fryman. And I'm Toby Howell. On today's pod, Jeff Bezos taps a literal night to lead the Washington Post turnaround efforts. Then Elon unveiled a new AI chatbot with a sense of humor, but can it compete with the big guns? It's Monday, November 6th. Let's ride. New York City, not exactly known for being the friendliest of places, but we lose our tough guy attitude every year on Marathon Day, which happened yesterday.

everyone comes together for one big block party to cheer on the 50,000 runners who navigate all five boroughs. I snuck out a house for a little to catch the race. Such a great environment. There were bands playing up and down the route, so much positivity and a ton of hilarious signs. To be honest, the main thing I was thinking about was this must be one of the best days of the year for arts and craft stores. Because who has poster board and markers lying around? I love the signs. Two of my favorite that I saw was one that said 26.2 is nothing compared.

to marriage. I hope that was from a husband to his wife. And then also one dude was just holding up a sign that said, we've been trying to reach you about your car's extended warranty. But Neil, going to the marathon makes me want to do it so badly. Next year, you and I were both in and we're both rocking morning brew daily. I will come up with the most ingenious sign. I will play, you know, I will cheer so hard. But I think I'm going to leave the running to you, Toby. Fair enough. Before we get into the news, we have a quick word from our sponsor, Brex. Neal, we're filming a special Shark Tank S show soon where we rate our listeners' business ideas that they submitted. And all I could think about as I read some of these ideas is how much they could use Brex.

You're definitely thinking of the guy who just wrote in ChairPants. Yes, I am. For such a revolutionary idea, you need a revolutionary spend management platform. Chairpants guy could set up a corporate card, manage expenses, pay bills, and use powerful AI assistance to take his business to the next level. So, ChairPanskyi, if you're listening, head to Brex. com today for more info. Study and play. Come together on a Windows 11 PC.

And for a limited time, college students get the best of both worlds. Get the Unreal College deal, everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 premium and a year of Xbox GamePass Ultimate

with a custom color Xbox wireless controller. Learn more at Windows.com slash student offer. While supplies last, ends June 30th, terms at aka.m.m.s slash college PC. Let's jump into our top story. A new chat GPT-esque AI has entered the chat,

and its name is GROC. GROC is the brainchild of Elon's AI company XAI, and it differs from other chatbots in that it has a, quote, bit of wit, a rebellious streak, and can answer spicy questions that other bots may not. Some examples of that.

When asked how to scale API requests, for instance, Grock responded that it's like trying to keep up with a never-ending orgy. So you get a sense of the bit of wit it is peddling. Other than a vulgar streak, Grock's main differentiator is that it has real-time knowledge of the world through accessing data from X. So if you asked it about the SBF trial, for instance,

it will tell you that he's been found guilty on all counts. As for the name Grock, it's a word that hitchhiker's guide to the galaxy author, Robert Heinlein made up, and it means to grasp something so deeply that you just get it. as in hair and makeup GROC not showing up to work. It's still in a beta phase and only available to a select number of users right now, but Neil, is Elon onto something here with GROC?

It's funny to me that Elon is one of the forefront of warning about the dangers of AI and all of its risks to humanity. And with his first chatbot, the main thing he's focusing on is making it funny. And let's be clear, it's really not that funny. It's just not that funny. And so I'm just a little, you know, confused. why you would warn about the risk to humanity of open A.I. And the first thing, all you care about is promoting that it's funny.

When I query Jet GPT or something, and I want to find out, like, an information from a chatbot, the first thing I'm thinking about is not like, oh, my God, you know, just it wasn't that funny. You know, the information is so good, but I wish it came back with, like, a stupid joke. I think it's a way to wedge itself into the market right now. It's a way to make waves is by posting these funny screenshots to let people know it exists. But I think the true differentiator will be its access to X data. And that real-time data that's the biggest kind of setback or drawback of Chat Chabit, is that it was trained on its data sets and post-data set.

It's not up to date with what's going on with the world. But then, again, you ask GROC about SBF, and it comes up with an answer right there. So that, to me, is what will truly differentiate it from everything else, not necessarily the sense of people. How do you know what's reliable on it? I know. seems like it could, you know, these chat bots are prone to hallucinate and tell you wrong information. And now you're training it on a data set that has a lot of misinformation. So it may be up to date, but it may not tell you the right thing.

I hope it doesn't hallucinate more than the other ones out there. Right now, in terms of performance, it claims it falls right in between chat GPT 3.5 and chat GBT4, which is pretty good. It's not exactly top, top of the line. But, I mean, I'm pretty sure this has only been under development for around 4. four months or so. So it's pretty good to debut a bot with that level of performance. And again, it's not that surprising when you consider the team is full of people from deep mind, people from Open AI. So this is a legit team building a legit AI product. And you see that reflected in its

performance. I think this is a little bit of Vengeance for Musk because he co-founded Open AI. And over the past few years, he's taken a step back and has criticized Sal Malton who currently leads Open AI because he wants it to, Musk wanted to be an open platform that was a nice. nonprofit, and now he is accusing OpenAI of taking a lot of money from Microsoft and just being one of the, you know, just another part of the big tech cog. But yeah, we're looking at this arms race where if you get the best talent in the world like Elon Musk can do, you can produce a pretty good product here. So we'll see what XAI does going forward. All right, let's talk about the Washington Post, the 145-year-old paper that is desperately trying to break out of a rut of

declining subscriptions and big financial losses. To lead its turnaround efforts, owner Jeff Bezos, hired Will Lewis, an industry vet who's been the CEO of Wall Street Journal Parenthood company Dow Jones, the editor of the Daily Telegraph in Britain, and a co-founder of the startup, the news movement. He's also a literal night after getting the tap from King Charles III earlier this year. So what's going on at the Post? We talk a lot on this show about how companies being overexposed to certain things. Well, the post is too overexposed to Donald Trump.

So when he's in the news, they do really well. And when he's not, much fewer people read it. The paper reached 3 million digital subscriptions when Trump was in the headlines in 2020. But since he left office, its subscriber numbers have fallen to 2.5 million and its digital audience has fallen 28%. The post is also on pace to lose $100 million this year, which Bezos is not happy about, after spending years focusing more on space than newspapers, understandable. Bezos is beginning to pay attention to the Post again and his intent on reaching profitability.

He's hoping Lewis can figure out a way to get the paper there, but it won't be easy because news isn't exactly a growing industry. Yeah, this is so interesting to me because there isn't an immediate fix that jumps out because a lot of kind of legacy media outlets, their path forward was always to reach a younger audience, maybe like a TikTok forward audience. But Washington Post has already invested a lot of effort into its digital presence. I mean, it has a pretty famous TikTok account while we're on. that subject. So it isn't one of those things that we can just say, let's get more to use involved and that that will save the paper. And especially when you look at the fact that so much of their success was tied to Donald Trump, that's not a repeatable long-term strategy. Except coming up. I know, exactly. It's ironic that it might actually end up working out for

him. So it's definitely an interesting kind of environment that Lewis is stepping into. And their morale at Washington Post is low because who's their big rivals, the New York Times, and employees at the Washington Post have been watching the New York Times go on a big. bit of an acquisition spree to expand their offerings. They bought the Athletic, which is a sports publication. They acquired Wordle. And now they're, you know, it's, you laugh, but, you know, games and food account for a huge amount of their subscriptions.

More than a third, the New York Times has nearly 10 million subscribers. And more than a third of them were now subscribed to more than one Times product. That's helped them be profitable. They made almost $100 million in profit last quarter. So the New York Times has this expansive suite of offering that goes. goes beyond news. The Washington Post has started to lean into that, but not as much. And so I think you're realizing that in this day and age, news company has to be a lot more than just telling you the news to make the business fundamentals work. Yeah. And I mean, Will Lewis,

Will Lewis is a big news guy. One detail that I thought was interesting, that he says he writes a weekly email roundup of news articles to his friends on what to read. Doesn't that sound familiar, Neil? I guess he has to do it every day to earn some credit here. Yeah, exactly. For our next story, we've talked a lot about the potential dangers of AI, especially when it comes to deep fakes, which are hyper-realistic photos or videos that appear legitimate but are actually fakes augmented by AI. Examples of this we've talked about before are sketchy supplement ads featuring endorsements from Joel Rogan, a voice recording of Joe Biden playing video games, and a fake

Tom Cruise TikTok account. But the latest epicenter for the Deep Fake epidemic is a New Jersey high school where police are investigating sophomore boys for spreading AI-generated images of their female classmates' faces on naked bodies. This is such a complicated case because even though it's clearly wrong, it's unclear how or if the perpetrators will be punished. That's because neither federal nor most state laws have anything specifically referencing deep fake sexual content. Neil, one estimate from image detection company's Sensity AI says that 90% of deepfakes online are pornographic. in nature. So this is a massive problem that needs to be addressed. Yeah, as if social media wasn't already tough enough to navigate for teens and especially girls, all of a sudden this new technology

comes along AI, which can cause exponential damage than what we're used to. We all talked about how Instagram maybe was bad for teen mental health, and all of a sudden, AI is just pouring lighter fuel on all of these problems. You can go to any website and create any type of image, any type of deep fake, there are big image generation platforms like Dali from OpenAI and Adobe's Firefly, and they do have content guardrails that prevent this kind of thing from happening. But for every one of those big platforms, there are so many others that populate the web. And it just seems like a very scary and traumatic thing that this town is going through, but it's not going away.

Yeah, stable diffusion is one of those big platforms that made its code public. So that's what's allowed like this plethora of other, they call them. like undressing apps that you can like very it's free and it's just available online so yeah as you mentioned all of the big companies do have these guardrails in place but that does not stop you from accessing this type of software if if you're if you're looking for it and yeah you mentioned the fact that this totally disproportionately affects young women especially 99% of deepfakes target women so again if you look at just the whole amount of deepfakes hitting the web and how much they affecting specifically young women, it's a problem that you really want regulated at a federal

and state level. Which it is not currently, lawmakers are completely behind the ball on this one. There are no rules, at least at the federal level, that govern this kind of thing. A few states have stepped in. There's been Virginia, California, Minnesota, and New York have created laws around the distribution of fake pornography, given victims the right to sue their creators in civil court. But these are just stepwise things that it needs to be addressed at a much bigger level. Lawmakers are like, they're literally looking at all of the regulations on the books.

Like, how can we address this? No, no, no. So the New Jersey state senator is like, I, you know, after seeing what happened here, I need to take action. So we'll start to see those coming through. But it still is not going to be easy. Thanks to Section 230, which is this law that shields social media companies from the content that's on their platforms. All right, now, before we jump into our next story, we're going to take a quick break. Okay, let's hit our winners of the weekend where Toby and I hand out, trophies to two things that partied hard Saturday night and woke up Sunday morning without a hangover. I won the pre-show quidditch match, so I get to go first. My winner is the Hansen Tigers,

a baseball team in Osaka, Japan, that just won the Japan series, the equivalent of the World Series over there. This wasn't a normal victory. This was a curse-breaking victory that snapped a 38-year title drought. Because while most of us have heard of the Red Sox and the Curse of the Bambino and the Chicago Cubs and the Curse of the Billy Goat, you may not have heard of the Curse of the Colonel, which the Tigers snapped this weekend. To make a long story short, this team has been haunted by Colonel Sanders of KFC. When the Tigers won in 1985, the fans were so euphoric that they started jumping into a local canal in celebration. It was choreographed where individual fans who looked like each player on the roster, jumping in as their names were sung.

but when they got to MVP Randy Bass, no one knew what to do. He's American and no one looked like him. So what did they do? They ripped a plastic statue of Colonel Sanders from a nearby KFC and tossed it into the canal because he was the only white guy around.

But as the losses and misfortune piled up in subsequent years, fans in the media pointed to this chucking of Sanders into the canal as a curse on the team, but now the curse of the colonel has been broken. I love this story on so many levels. Weirdly enough, I was on TikTok over the weekend and got on canal TikTok

and it saw people jumping into the canals again and I had no context for it so I'm glad that we now have context around it so yeah I just love a good curse but Neil I was also doing some digging I have some trivia for you. So the Tigers hadn't won since 1985 do you know which US city that has four major sports team

that has had the longest title drought so across NFL MLB, NBA and NHL teams zero titles Oh, God. Seattle? It's not Seattle. It's Minneapolis. So the Vikings Twins Wild and Timberwolves have not won a title since 1991, which is the last time the twins won.

And then also, interestingly enough, New York is fourth on the list, despite having eight teams. Eight teams, it's fourth on the list for longest droughts. My winner of the weekend is the device that reduces the amount of pollution coming out of your car's tailpipe, the catalytic converter. Catalytic converters have been a hot commodity for thieves over the past few years because they are rich in precious metals like platinum, palladium, and rhodium. Thefts especially spiked during the pandemic as less used cars made for easy pickings and the values of those metals skyrocketed. But recent data shows that through the first six months of this year, there have been just 14,500 stolen compared to 23,000 over the same period last year. The reason the price of those precious metals has started to come down a lot. For instance, Rodeum was trading nearly as high as $30,000 per ounce in 2021.

But in recent months, the prices fall into less than $5,000 an ounce. And platinum is down from $1,348 in 2021 to $900 an ounce today. So, Neil, nothing like a good old price wipeout to take down these thieves. The market has just been completely wiped out. There was a lot of law enforcement crackdowns. They created new laws. There were a huge bus. There was one federal bust of $545 million.

dollars of a worth of National, of Catalytic Converters. But, you know, I guess all I have to do is just cut down the price and work out supply chain kinks, and the entire crime ring just falls apart. I feel like economists are loving this because they have this great data set where they're seeing just how much the price of metals incentivizes crime or not. So you have like this very clear span of thefts falling. So I wonder if we're going to get some great reports from economists out of this, just about how market prices affect crime.

I think they know that. But also when you look at other products that are being stolen increasingly now, olive oil, whose price has increased a ton, Pokemon cards. True. I mean, the new Calcutta Converters are Pokemon cards in olive oil. All right, Neil, let's move on. In my opinion, there's nothing sadder than a small disruptive company that gets bought out by a big one, then left to wither on the vine.

But that is exactly what has happened with Mint and Into It. Intuit is shutting down the once popular personal finance app down in shifting its users to credit karma. Flashback to 14 years ago and Mint was an innovative budgeting app that helped people manage expenses, negotiate bills, and keep tabs on subscriptions. But after its acquisition, it received little love despite having nearly 3.6 million monthly active users as of last count. Mint was always the forgotten product under the Intuit umbrella, which also includes

turbotax and QuickBooks and Credit Karma. and it became a clunky and anachronistic to use due to that lack of attention. Back as recently as a few years ago, users were still being told to update to the latest version of Adobe Flash to use some features within the app. The only problem, Adobe had shut down Flash at the beginning of 2020. Neil, you hate to see a once-beloved product meet this type of fate. It seemed like it had a very loyal fan base, too, because a lot of the users that were on Mintz still went to Reddit and started complaining like crazy.

were like, why did I find this out on TikTok? I literally just found this out on Reddit. This is a great product that they're flushing down the toilet. And everyone was like, well, does anyone have any alternatives? They were concerned that they were like, this is a very integral part of my life. It's how I track my budgeting. It's how I plan expenses. It's how I determine my net worth. So it seems like it was a very valuable product for people. And for Intuit, it just wasn't, it wasn't worth investing because I guess they just looked at the business numbers. And they were like, well, we're really not making any meaningful revenue from this. It's probably not worth investing in.

But they did spend $170 million on it at one point. Right. The former co-founder of Mint who actually sold it to Intuit did an interview and said when I was there, TurboTax was doing over 20 times revenue of Mint. So when you see the numbers put side by side, it does show maybe why Mint was left to kind of like wither. But also I was digging through the Reddit, the Mint Reddit subreddit as well. and I saw some CEOs of similar apps.

One of them was called Monarch that was jumping in saying, hey guys, I know you're all looking for a place. Like here's, I was a former product manager at Mint. This is the app I built. So I did love to see some of the hustle of other similar apps out there. But yeah, it was interesting to see just the outcry. And these communities form over, this has been around since the mid-2000s almost. And so it's been one of those big, robust communities.

And now it kind of got the rug pulled from underneath them. It is play a big role in people's lives to learn how to track and do it on your phone and to have all of your accounts kind of filter into one place is very important. So people who are listening to this, maybe you're on mint and you're like, oh, crap, like I don't have mint anymore or by the end of the year. A couple ones I was looking at are simplify pocket guard. You need a budget and good budget. So look into those.

Yeah, really not creative names, but those are possible alternatives that do something similar. Not all over them are free. They have like a free version for a month. month and then you have to pay a little fee, but maybe that's the reason mint doesn't exist anymore because you don't have to pay. Yeah. Okay, let's get to our week ahead preview. It is busy, busy, busy.

As we mentioned on the show on Friday, WeWork is expected to declare bankruptcy this week. It could be a major blow to landlords that have leased a large portion of their real estate to the company, as if that sector needed more challenges. And we'll definitely use the opportunity to talk about that time. WeWork invested in a company that makes artificial waves. Oh, the WeWorker. I'm keeping an eye on if any WeWorks close down nearby to me because hopefully they'll dump some of their office furniture out there. And we all know, WeWork office chairs are just the best in the game. So I'm going to be stooping a little bit. All right. So we'll see what happens with WeWork that's expected to come through the pipe in the next few days. Also, today, Donald Trump will take the stand in his civil trial that will determine the future of his real estate empire. Remember, a judge found that Trump, his sons and the Trump organization committed fraud by exaggerating the value of their assets. assets. What's left to be determined is how much they'll owe and whether Trump can continue doing business in New York. So this is a high stakes testimony today with billions of dollars at

stake. Very high stakes. Again, could be a furniture banana, though, if they liquidate some of the assets. So big furniture we get. Let's see if you can make furniture reference with this next item. Tomorrow is election day across the country. It is an off-year election, but there are important races that analysts are looking at. One of them is Virginia's statewide election in particular that is often considered a bellwether of how the country will vote in 24. And speaking of 2024, yesterday was one year until election day, if you can believe it. The New York Times and Sienna College came out with a poll that showed Biden is trailing Trump, his likely opponent in five of six battleground states that could determine the election.

So Biden's team probably woke up earlier than we did this morning because they have a lot of work today. Yeah, they're stressed out. I got nothing on the furniture front here. That's fine. You stumped to me. All right. Well, we have a few more things to go through. I'll give you another option. What else we got? Another busy week for earnings. We got Disney, Warner Brothers, Discovery, and Uber. So far, it's been a very good earnings season.

Profits across all companies are on pace to rise for the first time in a year. I think Disney is the one I'm most eager to see because, I mean, I think they're going to beat expectations because they've raised prices at their parks, but also they have this cruise line business. And as we know, the boomers are loving going on cruises right now. So maybe their cruise and their parks and experiences division will drive. have a solid quarter. I wonder what the seasonal distribution of cruises are. Yeah.

Like, do people go mostly in the winter or the summer or is it just kind of a wash? Yeah, I would assume it's summer, but you can go to places like Alaska. Right. Depends on where Disney has most of their ships, like they're in the Bahamas or if they're probably the Norwegian cruise lines do better, I guess, in the summer because they're in the northern climbs. The highly anticipated PlayStation 5 Slim will be available Friday and come with a copy of Call of Duty Modern Warfare 3.

I never knew this was coming out. Yeah, I'd never heard. Dave Lozo, who helps me write the Monday newsletter. It was like, this is a big deal. But slim. I never heard of it. The Marvel starring Brie Larson and Samuel Jackson opens Friday. That's a sequel to 2019's Captain Marvel. That topped $1 billion at the global box office.

But as we talked about last week, the Marvel studio is not in a great place right now. Again, had no idea it was coming out, too, because the Rider Strike, you haven't been able to do this promotional thing. So, yeah, hopefully it does well. for them though. All right, today, college hoops returns to action. It is remarkable how much I used to care about college basketball, and now it's kind of falling off for me. You're aging out. Maryland basketball in a little bit of a dry spell. Terps are going to the final four this year. And then finally, Veterans Day is Saturday, but it is observed as a federal holiday on Friday. And we still will have a show on Friday. We still have a show. It'll be a special episode.

That is our show for this Monday. I hope you enjoyed your extra hour of sleep, but dang, it gets dark really early now. Just going to have to get used to it. Remember, you can always hit us up. at our email address, Morning Brew Daily at MorningBrew.com for thoughts, questions, concerns on the show. Let's roll the credits. Emily Miliron is our editor and producer. Samantha Velas is our associate producer. Euchenna Ogu is our technical director, and it's his birthday. Happy birthday, Eugenia!

Philly Minino is on audio. Hair and makeup is lost without mint. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.