Morning Brew Daily - Nvidia Joins The Trillion $$$ Club & AI Researchers Warn Against 'Risk of Extinction'

Episode Date: May 31, 2023

Episode 71: Neal and Toby are up to break down the biggest headlines ahead of your morning commute! They discuss tech company Nvidia becoming a part of the exclusive trillion dollar market cap club. They also get into why AI researchers are warning against a 'risk of extinction'. Plus Theranos founder Elizabeth Holmes finally reports to prison and Toby explains why smelling good is trendy. And have you ever thought about renting someone's backyard pool for a little summer soiree? Neal explains how you just might be able to. Learn more about our sponsor, Fidelity: https://fidelity.com/trading Listen Here: https://link.chtbl.com/MBD Watch Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

Many employees can't afford a hefty medical bill that pops up out of the blue. But it happens. And employees who are financially stressed are, understandably, more likely to be distracted at work, costing their employers greatly in lost productivity. Luckily, AFLAQ plans help with out-of-pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more at aflac.com slash morning brew daily. That's aflack.com slash morning brew daily.

Good morning brew daily show. I am Neil Fryman. And I'm Toby Howell. On today's show, we're going to keep things super light and talk about how AI leaders think the tech could cause humans to go extinct. And then there's some spicy backyard swimming pool drama as the summer heats up. Then Elizabeth Holmes is reporting to jail this week, so we'll look into what the former Theranos founder's new life behind bars looks like, before jumping into another edition of Toby's trends where I'll tell Neil all about the booming fragrance market. it. Neil, it's Wednesday, May 31st. Let's ride. All right, Neil, it's our first 7 a.m. show. We're

recording this at 6 a.m. right now. I noticed you posted on Twitter, you're a multi-alarm guy. Well, you can't leave anything in a chance. Yeah, but five alarms? How many alarms do you have? I mean, with these phones, you can, you know, you can make one wrong swipe in the direction, and then you're out till 10 a.m. I know, then I'm doing the pod solo. I don't want you to have to do that. So I set, you know, multiple alarms. I usually only only do two or snooze a couple times. And then I shut off all the other ones so they don't come up later. But we got here at the studio. We're all here. I think this is mission accomplished. I know. The rest is gravy today. So hopefully you guys are listening to this bright and early as well. 7 a.m. They're here to stay. And welcome to all the new people who may have started listening

because we move the time up. So East Coast people can enjoy this on their commute. We were releasing this at 10 a.m. And I think it'll be a lot better for everyone, including West Coasters, to listen to it a little earlier. Agreed. All right. Let's dive into the news. Neil NVIDIA finally did it. Yesterday, it stepped foot into one of the most exclusive clubs in the world, Augusta National. J.K., it could only wish. I am, of course, talking about the trillion-dollar market cap club. The chipmaker has been on an absolute tear recently, and after an 180% climb in its stock price this year. It briefly crossed into the four Common Club yesterday before closing just under at $990 billion. Neil, this is some rarefied air. Only six U.S.

stocks have ever crossed the $1 trillion threshold, Microsoft, Apple, Amazon, Alphabet, Tesla, and meta. And right now, just four U.S. companies currently trade at that level. So what's been behind its crazy stock pump? Well, it's ridden the AI wave like Kelly Slater, in his prime. Its graphics processing units or GPUs are critical to generative AI platforms like OpenAI's ChatGBTBT and Google's Bard. So every time you've heard AI mentioned in the news that has typically been followed by Nvidia soon after. So Neil, what has stood out the most to you from an Nvidia's crazy year? That they, this has been a long time coming. They have seemingly ridden every wave like Kelly Slater. Every, every tech trend that comes up,

They seem to, you know, have the components that is required of it. They were integral to gaming and making video games look great and crisp. And then when Bitcoin came on, they are chips. Somehow were also seemed to be a requirement for use in crypto mining rigs. And now the AI is coming. They're like, yep, we have the exact stuff for that. So even over the last 10 years, this recent stock boom has been absolutely insane. But over the last 10 years, there's still the SMP's number one.

stock out of all 500 companies. Their stock has been up over 10,000 percent, which is number one out of 500. So the recent, you know, it's gone parabolic recently, but right, but this has been a long time coming. Yeah. I think you're totally right. It rolls with the punches and adapts so well because honestly, Nvidia wasn't, if you go back to its core business of gaming, which is how it kind of cut its teeth, it's not doing very well. Like there's been a slowdown in PC sales. Nvidia's gaming revenue was actually down 38% in the first quarter of this year. But that's been totally overshadowed by their new data center biz. And yeah, it's just absolutely dominating the data center that used to be owned by Intel.

And it's just totally surpassed that. And it's right in the AI wave. They're going to have to retrofit all of the data centers for the new computing era, which is we can talk about the CEO and co-founder Jensen. a little bit. And the most recent stock pump, we should mention, is related to last week's earnings report where they gave this forecast that, like, no one on Wall Street could believe. Like, they were like, in my 30, analysts were saying in my 30 years covering the tech sector, I've never seen anything like it. And it showed that AI was giving them sales currently.

This wasn't some, like, something two, three, four years in the future, like the Metaverse, Navidia is raking in the cash right now because companies are investing in AI. Yeah, although there's still people out there that think it's a little overvalued, which obviously from its recent pumps you could see. I mean, one of those people is Kathy Wood. She said that Nvidia stock is priced ahead of the curve, so she thinks it's overpriced. But there's definitely some regret there because her ETF, ARC, innovation, dumped all its Nvidia shares in January.

Right before the stock rallied 500. $60 billion. Right. I would probably say something similar if you're in her position. A lot of regret coming from Kathy Wood. I also have a little quiz for you, Neil. Okay. What was the fastest company to ever reach the one trillion dollar valuation? The fastest company, um, I think Apple has been around for forever, so definitely not Apple. Is this U.S.? It's U.S.? It's U.S. It's U.S. Sorry. Not U.S. I will say Amazon alphabet. Google. Not Google. Facebook. Oh, Facebook. I'm busy. Like 17 years and then Tesla right behind it at 18 years.

And then the slow pokes are Microsoft at 44 years. Applet 42. And then Nvidia kind of comes in right in the middle. It took it 30 years to become a trillion-dollar company. So honestly, what a rise. What a run for Jensen Huang. Before we go, yes, Jensen Huang is the CEO. He started Navidia from Nvidia from a conversation at a Denny's in San Jose, California 30 years ago.

And the thing about him is he kind of zigs where other people zag, especially in the fashion department. Yeah. So he has not been, this is an actual fact. He has virtually not been photographed in anything but his patented leather jacket since 2013. And it's created this, you know, buzz and online community around his leather jacket and Redditors are going and searching for any photo of him that is not in this leather jacket. It is the new black turtleneck. I know.

All I want in life is to have a signature look. And I mean, maybe... You dyed your hair blonde. That is fine. I'll take it. But never been photographed. I need to not be photographed with my normal hair going forward. All right.

So I do want to move on, but I want to ask you one question. What is the next company to hit a trillion? I have that written down as well. And I have my answer prepared. I think it's TSMC, Taiwan, semiconductor manufacturing company. Same idea. Same ideas. We'll ride the same shipwave.

Currently, it's at $528 billion, so it's got a long way to go, but I mean, Nvidia showed you can do it in a year, basically, so that's mine. Okay. Let's move on. I know it is still a little early, so if anyone isn't totally awake yet, I'm about to give you a jolt of energy that might get your heart rate going a little bit. A group of major AI leaders warned yesterday that the technology could lead to human extinction, period. They signed this statement that's only 22 words long, but it gets the job done, and I'm going to read. it, mitigating the risk of extinction from AI should be a global priority alongside other societal scale risks, such as pandemics and nuclear war. Or in fewer words, let's take this very, very

seriously. So who signed this warning that AI could lead to civilizational collapse? Just the people who created AI. There's Sam Altman, frequent guest, not guest on this episode, but we mention them a lot on this podcast. He's the founder of Open AI, which created chat GPT. You have Google DeepMind CEO, superstar AI researchers like Jeffrey Hinton and Stuart Russell. Hinton is that godfather of AI who made waves a couple weeks ago when he quit Google, so he could Paul revere it around the wrists of AI. What do you make of this? I mean, honestly, first of all, great branding by making it just 22 words so we can say,

ah, 22 words that will warn us about the dangers of AI. It kind of feels like it was written by AI, too. I just want to mention that. It's very succinct. I know. But honestly, so we were looking into what is the worst case scenario for AI, because you always hear these things like AI poses an existential threat. And generally what we've been seeing is that an AI that outperforms humans in various domains but doesn't share humanity's values.

And that is what will be prone to catastrophic accidents or misuse. And so that's like the big thing is if an AI comes that is, Obviously, smart. I mean, basically already is smarter than humans, but doesn't, isn't aligned with humans. That's where you get into existential threat. So as long as we avoid that, then I think we're good. How are we supposed to know? I know.

It's tough. So, yeah, that's what they call it. They call it an alignment problem. Yeah. So you have critics who are saying, what are you guys talking about? Like, we have no idea what AI is going to do. Let's focus on near-term risks. Yeah.

I mean, this thing is spitting out misinformation. We earlier this week, we talked about this lawyer who used chat GPT and it spit out. It made up completely wrong cases. And we have this election came up coming up and there's going to be deep fakes everywhere. And there's, you know. Yeah. I think there's like a two-year timeline that we're looking at where, yeah, you're right. Like the copyright violations, the privacy concerns.

But then there's the 10-year timeline of like how advance is this going to be become. So you kind of have to regulate both at the same time. Yeah, I think there's room for kind of, there's a lot of worry to go around. You can worry about both. I was digging into, like, is this actually an existential risk? And there's this organization called Risk Frontiers, which specializes in catastrophic loss modeling. And in 2020, they put unaligned AI as its top threat to humanity, which was, I mean,

they called their shot because think back to 2020, we really were not talking about AI at all. But then you look at the World Economic Forum and the World Economic Forum. They publish a global risk report every year. And AI isn't even in their top 10. Only at eight do they have widespread cyber crime and cyber insecurity. Their top five is all about climate change. So there's lots of different school of thoughts.

And technically, I mean, humans aren't necessarily great at predicting the future and judging future risks. So I guess it's good we're getting out ahead of it. If you consider this an innovation, like the paradigm shifting innovation like fire or the printing press. Yeah. You have these people who say, we had no idea once those were created, what they would lead to. So the printing press led to incredible sharing of information, but it also allowed, you know, Hitler and Stalin to write their things and cause mass destruction. Yeah. Same with fire, creating whatever, electricity and also, you know, weapons and, I mean, literally everything we have today.

So, yeah. So some people say the thing we should pay. the thing we should focus on is agnostic, agnosticism. Like, we are, we have no idea what is about to happen. Yeah. But you have these leaders warning, like, if AI becomes smarter than, right now, we are the smartest, we are the most intelligent beings on earth right now. Well, those orcas that are attack.

Those orcas are pretty smart. Yeah. But eventually, AI could come and it might just not care about humans. It could have us race around a track like we do horses. Yeah. All right, Neil, actually, let's head to prison of all. places to move on, where Theranos founder Elizabeth Holmes began serving her 11-year sentence yesterday inside a minimum security female-only federal prison camp in Bryan, Texas. So most people

know Elizabeth Holmes's story, but just as a quick refresher, she's the former Silicon Valley prodigy that is serving her sentence for multiple charges of defrauding investors related to her blood-testing startup Theranos. In addition to her sentence, she also has to pay restitution of roughly 452 million to the victims of her and her then boyfriend Sunny Belwani's crimes. So, Neil, we've been talking about morning routines. We're waking up early these days. So I want to quickly take you through what Holmes's routine will be. She has to wake up by 6 a.m. sleeping in.

And report to work at 6.30 after she has breakfast. She'll work either in the cafeteria as a cook or in the factory with other inmates, making just 12 cents to $1.15 per hour. and that money will mostly go towards paying off her restitution bill. Other than that, she'll have limited access to the outside world, no real access to the internet. It will pretty much be wake up, go to work, and go to sleep for Lizzie Holmes. So, Neil, what do we make of the fall from grace of what was one Silicon Valley's golden child?

My takeaway is that after reading about these restitution payments, she's going to be in really tough financial straits. Yeah. Because she can't buy anything or the feds will seize it because she has to pay. back. Yeah, you said $450 million. Yeah. So like she can't do, she can't make any money because they're going to take it back right away. Yeah. And experts say that she can't really file for bankruptcy to get rid of these debts. I mean, she owes Rupert Murdoch $125 million. That's a bad place. She got money. Yeah. She got money from the Waltons, Henry Kissinger, the former Secretary of State. Uh, so like she is in

not good financial standing right now. But we all know that previously wealthy people and wealthy people can kind of finagle. You have Alex Jones, right? So he also was ordered to pay $1.5 billion to families of the victims of Sandy Hook because he defamed them. And apparently he's been funneling money through his friends and family. So they, or you can like set up a trust. So there are ways around it. But it is kind of interesting that she's like, well, I'm getting paid, you know, $25 a month right now.

And I owe people $450 million. So I'm just going to sell all of my assets. She should throw a fire festival with Billy. Also, one concern is that other famous inmates have been held in this very same prison before. There's actually a reality star from the Real Housewives of Salt Lake City. Don't act like you don't know who that is. I mean, I'm not going to. I've watched a few episodes specifically of Salt Lake.

She was photographed within the prison somehow, and it was sold to TMZ in a tabloid magazine. And so there is this real fear of safety of these inmates in. Elizabeth Holmes is pretty dang famous. And so the reality star felt very unsafe because she saw the angle that the picture was taken from. And it's someone probably from within the prison, maybe a guard, maybe another inmate somehow. And so that's definitely something that I think we should watch out for is what happens to these super famous inmates, even in these minimum security prisons. Yeah. Just her name was Jen Shaw, by the way.

Jen Shaw. It seemed overall, this seems relatively chill for prison. you can take classes, you can read. One really interesting fact is that the library and the prison contains bad blood, which is the book about Theranos and documenting the rise and fall. So I wonder if she will check that out and maybe relive the glory days. All right, before we jump into the next story, let's take a quick break. It's time to refresh your yard during spring backyard days at the Home Depot.

Get low prices guaranteed on propane grills, starting at 100,000. $179 like the next grill three burner gas grill, or get $50 off a select Webber Spirit Grill, and bring big flavor to your backyard. Then set the scene with Hampton Bay string lights that bring it all together. Shop spring backyard days for seven days at the Home Depot.

Now through May 6th. Exclusion supplies to homedipo.com slash price match for details. 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.S. College PC. All right, Neil, we are back with another edition

of Toby's Trends, the segment where I, a young and youthful Gen Zier, educate you, a wise and seasoned millennial. Oh, well, I thought it was going to be like way worse than that. You're wise and seasoned on some trend that I've observed recently with the youths. And I want to start off today's trend by asking you a personal question, Neil, do I smell good?

Actually, on the second about, don't answer that. Let's leave it up to the audience's imagination. But your most likely answer would have been yes, because perfume and fragrances are so hot with the youth right now. Cody, the beauty conglomerate that bought Kylie Jenner's makeup brand back in the day and also owns fragrance brands like Mark Jacobs and Gucci had a fantastic quarter powered by big growth in its prestige fragrance division. Its CEO Sue Nabi said that sales in the category are booming in the U.S. and are up 60% from pre-pandemic levels. She went on to say that Gen Z men in the Hispanic community in the U.S. are driving most of the growth. So, Neil, have you been smelling more perfume out and about lately? I have not.

I don't go up to people. I don't think I, like, get close to people that often. You're sniffing. I'm not a hugger. Well, I am a hugger, but I don't necessarily hug people nonstop. But it is kind of cool to see a pandemic trend that actually stuck around. Yeah. But our whole, you know, the whole time we've been doing this show, we're like, oh, Peloton is sinking and Zoom is sinking and all of these other pandemic trends are like coming back to normal.

and then people stayed at home got really into perfume and fragrances, watching these stuff on TikTok, and then it seems like it's at 60% is a really crazy number. Yeah, absolutely. And yeah, you're totally right. It's not a new trend. There's actually this psychological thing called the lipstick effect where even in times of economic hardship, people tend to splurge on little luxuries like perfumes or lipstick, what it's named after. And then also, if we do want to go back to the pandemic even further, there was this rise of sensory

beauty. So things that target your touch, your scent, and your sight in order to trigger this emotional response. And smell in particular is really great at triggering memories. So while people were stuck inside in the pandemic, spraying a little perfume could help you evoke images of brighter, more social times. So I would get a subway scent. Oh, yeah, of the bread. That would be delicious. I like that. So yes, Neil, as you said you're a hugger, so maybe start sniffing as well and see if the youths are wearing perfume more. Okay. Finally, let's move on to perhaps my favorite genre of story,

which is a neighborhood brawl. Love a good cul-de-sac scuffle. So what is pitting neighbor against neighbor these days? Backyard Swimming Pool Rentals. The Washington Post published a piece this week about how Montgomery County, Maryland, which is a wealthy county outside of D.C., and Maryland's most populous county,

is all a buzz over swimming pool rentals and the disturbances they bring to their quiet, suburban life. How do you rent out your swimming pool? Well, there is this company named Swimply. That's like the Airbnb of private pools. It allows people to rent out their pools in the summer and hosts charge anywhere from $25 to $100 an hour to let people deprived of swimming pools come and take a dip or have a party.

But as we know with Airbnb, this can come with some negative externalities, as they say in economics. And neighbors are fed up with the host. who are bringing sometimes rowdy crowds and noisy stuff to their area, and they're complaining to officials about regulating them. So this is just the talk of Montgomery County right now, all these swimming pools. I was actually, I was getting into the tea of this and reading the quotes that were flying back and forth, and one of the big complaints was the noise of parties arriving has often forced the person complaining to close her windows.

And I was like, bust out the tiniest violin, because it's so loud you might have to close your windows. I mean, people are the most protected of their home. That's why there's all these neighborhood fights. People bought their home thinking it's going to be this perfect place, not going to be disturbed. And when their neighbors do something that pisses them off, they will let people know about it. Like your home is your safe space. No, I'm actually totally on the Swimpley's. That's a good point, but I'm on the Swimpley owner's side because she said that the lack of regulations meant that the act itself was illegal.

and she said, that's mind-boggling, because as such a mindset would mean anything the county does not explicitly regulate would be disallowed. So she's basically saying, like, yes, we know there's no rules around governing, sharing your pool. But like, if that's how we lived in this county, then we wouldn't be able to do anything. So I'm totally on her, the Swimply owner's side. And I was also wondering, like, how big of a problem is this actually? and Montgomery County showed more than 100 Swimpley listings over Memorial Day weekend.

So this is kind of a big widespread phenomenon of renting your pool out. A hundred is a lot. I think so. I mean, if you, it's pool maintenance costs so much money. And if you can offset that cost by having, it's probably like a family of four coming over like a couple of kids.

Yeah, they said the most, the most types of renters were families who just wanted to have their, kids take a dip or community groups. But obviously, it's just like Airbnb on it. Right, right. The problem is, uh, it is outside. And loud.

Because it's outside and loud. So if Airbnb, if you have a party, you can contain it inside and there's no, you know, riffraff that goes outside of the house for the most part. But a swimming pool, if you have a party there, everyone is going to hear it and they're going to get mad. So this is inevitably going to be regulated just like Airbnb. Maybe there will be a curfew. Maybe you have to register your pool.

Maybe you have to pay a license fee. So I feel like that's the way this is going to go. But last thing on Swimply, they were on Shark Tank in 2019, and no shark gave them an offer. And Barbara Corcoran said she didn't like the entrepreneur because he talked too fast. Interesting. Maybe we should slow down a little bit, Neil, in case Barbara's listed. That's some feedback. Yeah, we could slow down.

All right, we did it. That is our show, our first show early in the morning. First of many. Easy. Easy. Adrenaline is a powerful drug. I have to say that. Feel free to write us at Morning Brew Daily at MorningBrew.com with any questions or feedback.

Huge shout out to our entire crew who is getting up with us at the buck crack of dawn to make this show happen. Emily Milliron is our editor and producer. Samantha Velas and Raymond Lou are the associate producers. Euchenna Wa Ogu is our technical director. Billy Minino is on audio, hair and makeup, slept through their alarm. Classic. Devin Emery is our chief content officer. on our show is a production of Morning Brew.

Great show today, Neil. Let's run it back tomorrow. And let's hit the sauna right now. Yeah. All. Pay off your home, travel for life, drive a Ferrari. In celebration of the world premiere of the Monopoly Big Board Buckslot Machine by Aristocrat Gaming,

Yamava Resort and Casino at San Manuel is giving one person a $1.6 million dream package. The biggest prize in Yamava's history. Club Serrano members can earn daily instant prizes and secure a spot in the finale May 29th. Don't pass go and own it all. Only at Yamava, celebrating its 40th anniversary. You win?

Details at yamava.com must be 21 to enter. Please gamble responsibly. Monopoly is a trademark of Hasbro. Hasbro is not a sponsor of this promotion.