Morning Brew Daily - Microsoft Will Pick Up its Data Center Tab? & Your Groceries Got More Expensive

Episode Date: January 14, 2026

Episode 757: Neal and Toby look into December’s inflation rolled out, which showed slight progress but ultimately didn’t change anyone’s concern on affordability.   Speaking of Microsoft, the company’s president, Brad Smith, has pledged to build more AI data centers without the American taxpayer picking up the bill on electricity. A direct shot at Microsoft’s Copilot. Meanwhile, Anthropic’s new Claude AI-powered Cowork tool for general computing with no coding required. Finally, greenhouse gas emissions are going back up again…but why?  Explore Indeed’s full findings at https://www.indeed.com/2026hiringtrends Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here:⁠ ⁠⁠https://www.swap.fm/l/mbd-note⁠⁠⁠  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. Today, as data center blowback grows, Microsoft promises to be a better neighbor. Then what's this new anthropic tool that all your tech friends are going wild over? It's Wednesday, January 14th.

Let's ride. Toby, we've been talking about some trends that could pop off in 2026, and I've got another one for you. Analog rooms. This is a space in your house with zero digital distractions, zero screens,

Just you and your family may be a musical instrument, some books, a jigsaw puzzle, and sure why not, of vintage record players. People are desperate for a break from their phones. According to the Wall Street Journal, searches for how to reduce screen time reached an all-time high last year. And on TikTok, videos tagged analog life have gotten more than 76 million views. Toby, maybe the antidote to the smart home is the analog room. I'll go a step further as everything from your TV to your toaster has become a smart, I think dumb design is coming back. So I'm not going to call my screenless room and analog room.

That is the dumb house. Game night in the dumb house, everyone. However, this whole movement falls apart when it comes to analog clocks. No one knows how to tell time anymore. So game night is starting a little bit behind schedule in the dumb house. All right. Now a word from our sponsor, indeed. Toby, have you ever been to the Swiss Alps?

No. But I once ate a bunch of Swiss cheese with a guy named Alp. Does that count? It does not, but we're going together for the World Economic Forum's annual meeting in Davos next week. Indeed will be there also giving business leaders the inside scoop on all things hiring. With real-time insight into the global labor market more than 20 years of hiring expertise, Indeed is bringing a data-driven perspective to the conversations shaping the future of work. Those insights come together in reports from Indeed's hiring lab,

like the newly released 2026 Jobs and Hiring Trends Report, which offers a forward-looking view of the U.S. labor market. what's shifting, what stabilizing, and what business leaders need to prepare for in the year ahead. Explore Indeed's full report at Indeed.com slash 2026 hiring trends. That's Indeed.com slash 2026 hiring trends. 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.m.m.m.m. The inflation report for December dropped yesterday morning, and it came in more mild than Austrian cuisine. U.S. consumer prices rose 2.7% for the year and 0.3% from the month before, about in line with expectations. It shows an economy that's pulled back from the inflation brink, but still has steady, higher than typical price increases. That's frustrating many Americans. A major contributor to inflation last month was groceries, which posted their biggest monthly gains since 2022. Beef prices have jumped 16% from a year ago to a record high, and fruits, veggies, dairy, and coffee all got a bit more expensive. On the flip side, gas got cheaper,

as did used cars and trucks. Prices for household furnishings fell 0.5% after President Trump held off on his plan to hike tariffs on furniture imports. So now that the December numbers are in, we can close the chapter on inflation in 2025. The TLDR is inflation did slow down slightly from the beginning of the year. A major concern was that tariffs would send prices in certain categories soaring once they took effect. But even in those industries like apparel, inflation wasn't as bad as feared throughout the summer and fall.

The bottom line, inflation is still above target level, still hitting people's wallets. but at the same time, it's not code red. Yeah, it's a good time to have a little inflation wrapped, a little retrospective on the year. And it was kind of a year of fits in starts. Inflation is not re-accelerating, but it's also kind of moderating a little bit more gradually than maybe economists are hoping for.

Tariffs were the lingering risk throughout this entire year. And it never quite impacted inflation the way a lot of people were expecting. A lot of people thought that tariffs were going to cause this big one-time price increase. but there wasn't any sort of circa 2020 price inflation surge that we were expecting. Really what happened is businesses found ways to mitigate a lot of the effects of tariff. Some of the price impacts were delayed and uneven. That being said, we did, if you go back, we did see it in the household items like coffee, like furnishing, toys, window coverings, tableware.

There were pockets of the economy that definitely were affected by tariffs. Yeah, even if you look at this December inflation report, you can find. the impacts of tariffs. Jewelry and watches rose 4.7 percent. Tools, hardware and supplies increased 5.2 percent compared to December 2024. And those are some categories that have been hit with tariffs. Now, going into 2026, I think a big conversation is going to be had around groceries and food because that was the big number here. It was the biggest monthly increase since July 2022. Other food at home soared 1.6 percent. Now, that is a category. that encompasses things like spices, seasoning, sauces, and condiments.

So your hot sauce is, you know, you might have to just stick with Syrac. You can't go anything. That fancier. And then also coffee prices up 1.9% from the previous month. And then if you go back to the previous year, December 20, 24, coffee prices are up nearly 20%. So grocery, your supermarket bill is still getting more expensive, except for one category, which we have to mention, egg prices. Egg prices are in free fall.

They fell 8.2% over the month. So at least the egg scare inflation is over, but the rest of the supermarket aisle is getting more expensive. I feel bad for eggs. We used to talk about eggs all the time. Now it's just an afterthought in the inflation report, which is probably good if you like an omelet in the morning. Finally, I do want to talk about shelter data because shelter data is one that's still a little bit wonky coming out of the government shutdown. Remember, because the government shutdown, the November inflation report didn't have, they assumed shelter inflation was zero because they just carried the same. prices forward from the previous month to the next month, which is obviously not necessarily true.

Some rent prices probably did go up. So if you're coming off of a month where there was zero percent increase in shelter costs, then we might see bigger bumps in shelter costs going forward in these next few months as it kind of normalizes and stabilizes. So that is something to keep an eye on. Some of these unresolved data distortions coming out of the government shutdown that are probably going to manifest in shelter costs. And shelter costs are just housing costs, rent costs, and they make up the bulk of the CPI, the Consumer Price Index report. So it's a big one that

economists watch. All right, let's move on. You know when you go out to dinner with friends and everyone hems and haze about who's paying? Well, Microsoft is making it clear that it's picking up its own tab. Yesterday, the company released a five-point plan promising to pay more when it builds a new data center to ensure jacked up electricity costs aren't passed on to consumers. The primary concerns it and the rest of the tech world are facing is that data centers create very few permanent jobs outside construction, lead to higher electricity bills for residents, and put strain on the environment given their heavy water usage. So, according to Microsoft Plan, it will foot the bill and not rely on any taxpayer subsidies. It also pleds to replenish more water than its data centers use, focus on the local job creation and fund AI training programs. Trump is tapping into the data.

center trepidation swirling around communities. He posted on True Social on Monday that while buildouts are essential to USAI dominance, Americans should not pay higher electricity bills because of them. Neil, it seems like the initial move fast and break electricity brills approach to data center construction is coming under more scrutiny, especially ahead of midterm elections where affordability will feature prominently. Yeah, Microsoft isn't doing this out of the goodness of its heart. It has a plan to double its data center footprint in the next two years. And it can't do that based on what communities are telling it right now. Between April and June of last year, 20 projects valued at around $98 billion of planned

data center projects were rejected by communities across the country. And it even happened to Microsoft in Caledonia, Wisconsin and wanted to have this big data center project. The local community came together and said, we don't want Microsoft coming here with their data centers because it's going to drive electricity rates higher. We don't see any of the positive economic benefits from these data centers. And so they had to scrap the plan. So Microsoft and a bunch of other tech companies need these data centers to be built to fuel their AI ambitions.

It's almost as important as whipping out a flashy brand new model, just building these brick and mortar data centers. But they can't do it right now unless they change tack. And Microsoft is trying to pave way with a new strategy that engages the community a little bit more. Yeah, it's turned into a public affairs issue, not necessarily a tech issue at this point because some public affairs consultants said that tech companies failed to do the dirty work and the groundwork. early and engaged community members. Now, as they're opening their bills and seeing their electricity prices, it's almost too late to play nice with them. So that is why you're seeing kind of as this a five-point plan come out.

It is scrambling from Microsoft's point. They are saying that, like, hey, this is not charity. We feel like we are doing our civic duty here. We should be having to pay for our own electricity bills. But absolutely, it is a hot point issue at the state level, especially ahead of all these elections coming up. Yeah, we got Bernie Sanders. calling for a new data center moratorium, Elizabeth Warren, another Democrat.

They've launched an investigation to the link between data centers and rising electricity prices. And then even on the right, a bunch of Republicans are also, including Marjorie Taylor, Green, are also opposed to data center expansion. And a big reason why is these things just don't create a lot of jobs. If you're going to have this big economic development project in a community, you can really sell the locals on it if you're saying, I'm going to create 2,000, 3,000 jobs and we're going to be a part of your community and we're going to employ people. The problem is these things just don't have a lot of people working there in Abilene, Texas. Open AI is building one of its first Stargate data centers,

and they got 1,500 people working to build it on construction. But once it's completed, the facility is going to have fewer than 100 full-time employees. So you just see this big negative externality in the community and saying, I'm not sure how you're going to make my place better. I thought that was funny. Microsoft was like, they emphasize in their plan that construction phase can last 10 to 15. years. That's the part that only employs a lot of people. Right, exactly. But it is ironic to say, no, we're going to drag this things out, guys. You will have jobs for those 10 to 15 years for sure. All right, moving on. Greenhouse gas emissions are going back up. After two years of declines, the amount of greenhouse gases, the U.S. plowed into the atmosphere, climbed 2.4 percent,

according to an analysis from the Rhodium Group, an independent economic research firm. It was the first time U.S. emissions climbed since 2022, when the world was coming out of the pandemic and people and industry, we're back on the move. The studies co-author Ben King said it plainly, seeing upward emissions levels in the United States on the whole is not great. It is problematic for the prospects of meeting long-term decarbonization. So why after two decades of broad declines did emissions perk back up in 2025? Well, one factor, we have no control over. It was cold last year. Colder temperatures boosted demand for heating, requiring more buildings and homes to burn natural gas and fuel oil. Another driver was the topic we just talked about.

Good old data centers. Power-hungry operations like AI data centers, crypto mining, and other large load customers also generated more demand for electricity. And when utilities needed to meet that demand, they turned to a fuel source that's the opposite of clean energy, coal. Electric utilities burned 13% more coal in 2025 than they did the previous year, which is only the second time in the last decade that coal generation has increased annually. Toby, a setback for keeping climate warming gases in check.

I think I know you're thinking, why is coal stepping in? to fill this gap. Isn't renewable energy supposed to do that? And renewables did, you know, put the team on their back. They only have a small back, though. Solar generation grew 34% in 2025. Wind generation power also grew modestly, but with just the sheer amount of extra demand that came online in the form of EVs becoming more popular, in the form of data centers coming online, there's only so much that solar and wind can actually do to, you know, help close the gap, which is why we saw coal rise in popularity again. This isn't all bad news, though, because emissions barely increased despite a lot of the factors

that you just mentioned, especially there was record travel last year as well. So I'm just going to put a little bit of optimism here and say that certain parts of the, you know, climate industry have gotten more efficient to methane leak when you are storing barrels of oil actually got a lot better. Methane is a massive polluting greenhouse gas. and leakage per barrel of oil fell 62% over the last decade or so. So we are making these incremental improvements, which is why maybe we saw a dollar spike

than you would expect given all the excess demand. All right. Let's take inventory of where we stand in terms of greenhouse gas emissions. Greenhouse gas emissions in the United States are down 18% from 2005. President Joe Biden, former President Joe Biden, had a plan to cut emissions 66% by 2035 from 2035

from 2005 level. So we are far away from that. And Rhodium and others now project that we are going to reduce emissions by about 35%, potentially less by 2035. So as our sales team would say here, off track to goal. Off track to goal for sure. And you just look around at what governments are doing around the world. It's a much different tune that they were beating than even just a few years ago. Mark Carney, new Canadian PM, used to be a very big climate advocate. Has Canada rolling back some of their climate policies. Ford has pulled back on their EV ambitions as well. And then you even go to Hollywood. If you look at a few years ago, what was the biggest movie in 2020? It was, don't look up. Now, oil-centric shows are dominating TV screens. Landman is the biggest show that people are talking about.

So there's just small things that show how the attitude has shifted towards climate policy over the last even half decade or so. All right, we're going to take a quick break and come back with a story about Claude. Good Sleep is Everything. That's why Ali's science back support is made with a blend of melatonin and L-thianine for both kiddos and grown-ups. So when your mind won't switch off, you've got something that can help. You're racing thoughts and restless nights won't stand a chance. Find Ollie's sleep solutions for the whole family at ollie.com.

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We all have that dream trip. We've been wishing we could go on. But too often life or usually price gets in the way. That's why price line is here to help you turn your. dream trip into reality. With up to 60% off hotels and up to 50% off flights, you can book everything you need for your next adventure. Don't just dream about that next trip. Book it with Priceline. Download the Priceline app or visit Priceline.com and book your next trip today. Anthropic just launched a new tool called Co-Work that's either going to make your job a lot

easier or take it all together. Co-work is an agentic AI, meaning it can take control of your computer to execute tasks you've specified. Some multi-step examples in Co-Works Wheelhouse that Anthropic highlighted, turning a folder of receipts into a completed expense report, and reorganizing your messy desktop with a single prompt, aka it will do all the annoying, busy work you chose to put off. Co-work is especially designed for non-technical people like you and me, even though it's powered by the same bones as Claude CodCode, the equally powerful agent from Anthropic geared more towards developers. Cloud code is able to complete a lot of the same tasks, but scared off normies because it requires some technical know-how. Co-work, on the other hand, looks a lot like the normal

LLM interfaces you've become accustomed to, with more capacity to rummage around your computer to get stuff done. Neil, the reactions in my little tech bubble on X range from someone calling it devastatingly good, saying it will 100x people's productivity to others saying, Gigi, it's over for knowledge workers since this renders them obsolete, but a lot of people were talking about it. Totally. And what happened here was very interesting. So Anthropic released Claude, I think back in 2024, four coders, software engineers. People were using it, but people were using it not just for coding, but just to make apps and do a bunch of different things that kind of escape from the software engineer bubble that maybe you were in. And so what they did

was they created Claude Co-work after they saw how successful Claude Code was because they wanted to make co-work available to the masses, normies like us who aren't so technical. And what was interesting is they actually built co-work in about a week and a half, largely using Claude Cod code itself, which sent more jaws dropping. Toby, you played around with Claude code. What is it like and how powerful is it? Yeah. So by the way, this is part of the paid tiers of Anthropics.

So I was not a subscriber before this, but in my due diligence for the show, I was like, all right, I'm going to buy the $20 a month tier to get out. access to Claude code. And you're right. I felt like I was kind of a, you know, Luddite looking at this interface because I don't really feel comfortable operating in a terminal. I don't feel comfortable operating in that environment. So even though apparently it's this very popular tool and very powerful and can execute all these tasks across my desktop, I just don't speak the language, the technical language to make it do what I want it to do. So that's why cowork was invented, basically for people like me.

That is part of right now they're $200 a month tier, so I actually did not spring for that. So I did half of my due diligence in order to do this, but I can totally see the thought process of how do we get Toby more comfortable using a tool like this?

It's get him out of this terminal environment, get him into an environment where he can just use natural language to prompt it to do what I wanted to do. And if I'm Microsoft, you know, I have co-pilot trying to be this big enterprise software, AI software, for businesses across the country,

I'm a little worried because I think this co-work is going directly there. And Anthropic already's had a lot of success. It has more enterprise adoption among software engineers and businesses than OpenAIs, chat, GPT. So it's already embedded in boardrooms and offices across America. It just raised money at $183 billion valuation. It wants to raise even more at a $350 billion valuation. And you know what?

It has people paying $200 a month and companies on the corporate card for this tool. So if I'm Microsoft, I'm a little nervous at how fast anthropic is growing and how powerful the tools it's whipping out for enterprise customers is. I'm nervous if I'm Microsoft, but I'm also nervous if I'm a smaller startup because whenever a AI lab releases a tool like this, what the inevitable reactions you see from people is that this just killed a bunch of startups because there are specific startups geared towards receipt processing geared towards file cleanup towards note synthesis, desktop automation, document drafting. These are all kind of one-off startups that focus specifically on this one thing because it is a very helpful thing. Anthropic just says, hey, baby, we'll do it all for you in this one tool, which is why you have the big boys scared in Microsoft, but also the little guys are scared as well because it looks like Anthropic just ate their lunch once more. Well, it's under Claude Co-work to do list because I want to go into my Google Maps. My Google Maps, I've saved a ton of places. I have a lot of want to go, but that is not organized at all.

I want to be a better trip planner. So I think I'm going to have Claude Co-Wort go, if I pay $200 a month, that is, I want to go in and kind of clean up my Google Maps and have a better sense of where I've been, where I want to go, what I liked, what I didn't like. So that's my number one to do list. It's a perfect example because you could do that.

It would just take a while to do it and you don't want to spend the time doing it. Claude is expertly tuned to do something like that. Mine is a lot simpler. It really is clean up the desktop because believe it or not, my file management system is not so, good. So if I could literally just say, please put all screenshots in one folder, please put all

memes in another folder, that would go a long way towards decluttering my brain and my desktop. Okay, let's bring to the finish with some final headlines. Tensions over Iran have escalated after President Trump canceled meetings with Iran's government and told protesters, help is on the way without adding any details. More than 12,000 people have reportedly been killed as the regime cracks down violently on what have become the most widespread anti-government protests in years. And as we've seen in other geopolitical hotspots, Elon Musk's Starlink is once again at the center of it all. Iran's government has shut down the internet and throttled phone lines, leaving Starlink satellite internet service as the only way the Iranian people can connect to the outside world. The government has spent the last few days jamming the service and hunting down users in what one digital rights leader told the Wall Street Journal is electronic warfare.

Also, for the first time, oil markets began to react to developments out of Iran, a major producer with crude prices jumping more than 2%. on the day. Moving on, everything's on the table, according to JPMorgan Chase CFO, Jeremy Barnum. That was his response when asked by reporters what the bank's plan was for dealing with Trump's proposed 10% cap on credit card interest rates. As the industry begins to report earnings, the elephant you should look for in the bank lobby is Trump's demands, which only escalated yesterday when he called on lawmakers to support the Credit Card Competition Act, which would target the $200 billion in swipe fees banks make each year. Game plan. are being drawn up on how to deal with the potential cap. Bloomberg reports that some

execs are toying with the idea of offering a card that caps interest rates charged at 10%. But other insiders say aggressive lobbying, ad campaigns, and lawsuits are potential roads as well. In other words, this fight is just kicking off, Neil. We were also keen to hear what Jamie Diamond and other execs had to say about this Fed investigation, Jerome Powell, Fed investigation debacle happening. And he did respond at the during his earnings report. Jamie Diamond, J.B. Morgan, CEO said, I just want to say that I don't agree with everything that the Fed has done. I do have enormous respect for Jay Powell, the man. Everyone we know believes in Fed independence, and so do we. Anything that chips away at that is probably not a great idea. And in my view, it will have the reverse consequences. It will

raise inflation expectations and probably increase rates over time. He's echoing a lot of analysts and other bank executives who said that actually this investigation to Jerome Powell, which could stymie the next Fed chair from being nominated will actually lead to higher interest rates over time. There's a couple of storylines leading into bank earnings that made him a lot more interesting. Usually we're like, all right, bank earnings are usually not that exciting. But now we have, you know, Fed independence at the center of things. We have this credit card fight going down.

So maybe tune into the rest of this week because there's some juicy stuff going on. Yeah. And finally, Toby, I got a unique honeymoon idea for you. The only catch is you have to wait six years after your wedding and it'll cost you like a million bucks. On Monday, a startup called GRU Space opened up bookings for a luxury hotel on the moon that it hopes to build by 2032. The man, or I should say kid behind the project, is 21-year-old Skylar Chan, a recent Berkeley grad who's received seed funding from the famed Accelerator Y Combinator. Chan said that his goal with the company and Moon Hotel is to help

humans become interplanetary. He said our conviction is that the fundamental problem we have to solve to advance humans toward the moon and Mars is off-world habitation. And so it follows that you need to build a hotel on the moon for people to stay in when they arrive there. This won't be a holiday in, though, people interested in a low-gravity minibar need to submit a deposit of between 250K and $1 million. I don't know if I agree with his train of thinking here. Why is a hotel what we need in order to make humans interplanetary? Why is that the next goal? Because his argument was basically that the US government and billionaire funded private companies are the two pillars that are upholding space exploration at this point. He's like, we need a third pillar and it's space

tourism. That kind of feels like it's catering more towards the billionaires, again, who are already going to space. So it was interesting that he was framing it as like, this is the essential next stepping stone for, you know, making humanity interplanetary. I don't know if it is. Maybe bring the cost down a little bit. Yeah. So someone can actually afford to stay there. And also, I was just thinking about imagine if for my honeymoon, I say, hey, we're going to the moon. It does not sound fun. It's inhospitable.

You can die. Like, there's not a lot to do out there. But maybe I just don't have the soul of an explorer. Who knows? Maybe in 20 years a honeymoon to the moon won't sound crazy. Let's go to the holiday inn on the moon, honey. I feel like they got a nice booking available for us right now. All right.

That is all the time we have. Thanks so much for starting your morning with us and have a wonderful Wednesday. If you want to get in touch, send an email to Morning Brew Daily at Morningbrew.com or DM us on Instagram at MB Daily Show. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lute is our producer. Our associate producers are Olivia Graham and Olivia Lake.

I've asked Claude to look for hair and makeup. We'll keep you updated. Devin Emery is our president and our show is a production of Morning Brew. Great. Show today, Neil. Let's run it back tomorrow. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th,

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