Morning Brew Daily - SoftBank Dumps Nvidia for OpenAI & Reward Cards No Longer Accepted?

Episode Date: November 12, 2025

Episode 712: Toby and Kyle dive into SoftBanks big move to sell its stake in Nvidia to re-focus its investment to OpenAI. Then, Visa and Mastercard reach a settlement over a 20-year dispute with merchants that will now allow stores to reject certain credit cards if the merchant fees are too high. Plus, Toby looks into the trend of trains and buses that have become reliable modes of transportation whenever the US air travel system craps out. Meanwhile, Netflix bets big on the physical entertainment space with its new location out in Philadelphia, challenging the likes of Disneyland and Universal.  Learn more at usbank.com/splitcard  Get your MBD live show tickets here! https://www.tinyurl.com/MBD-HOLIDAY  Listen to Kyle on Per My Last Email here: ⁠swap.fm/l/pmle-show⁠ 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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Today, is this the top? SoftBank just sold its entire stake in NVIDIA. And why Netflix might be launching a Disney World of their own. It's Wednesday, November 12th. Let's ride. Happy Wednesday, everyone. Deal is still out on vacation and the government is still shut down. After the Senate managed to pass a bill on Monday to reopen much of the government through January,

the bill now heads to the GOP-controlled. House who planned a vote on it later this evening. And what a rare sight that will be. The House of Representatives getting down to work. Since the House casts its last vote on September 19th, the Dodgers have won the World Series. Taylor Swift has released Life of a Showgirl. Nicole Kidman and Keith Urban filed for divorce and Neil traveled all the way to Portugal. Kyle, when is this long national nightmare going to be over?

And I don't mean Neil being gone. One, I just found out live about the Nicole Kidman divorce. So that's news to me. I have a bit of a conspiracy. I don't think Neil's in Portugal. He goes out for a week. He never goes on vacation. All of a sudden things start moving in the government.

I think he's in D.C., secretly working on behalf of the American people. So thank you for that, Neil. Tonight, as you said, the House is going to vote. There's a slim GOP majority, so it should pass in time, hopefully to get holiday travel back up and going for the people. And now a word from our sponsor,

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your ocean front room, just steps from the water. The Hilton sale is on now. Book on Hilton.com or the Hilton app and save up to 20% to get the stay you expected. When you want savings, not surprises. It matters where you stay. Hilton for the stay. SoftBank and its enigmatic leader, Masayoshi's son, just sold its entire $5.8 billion stake in Nvidia, shocking many by cashing out on the world's hottest AI stock. SoftBank's position began as a small $180 million investment back in 2020 before growing into a nearly $6 billion winner. But believe it or not, it's a bittersweet victory,

as the sale is also a painful reminder of what could have been. SoftBank once owned 5% of Nvidia in 2016, only to sell the position in 2019, ironically to plow money into startups like WeWork right before the stock took off. If you're doing the math back home, that original stank would be worth. over $210 billion today.

But it also prompted questioned, why is Sun suddenly sowering on the world's most prominent AI stock? Remember that scene from Toy Story when Andy drops Woody in favor of his newer toy buzz light year? Well, SoftBank is Andy, and rather than toys, they're ditching Nvidia for Open AI.

And a move that echoes 2016 all over again, SoftBank is selling Nvidia to put more funds into a private company, partially because Sun is obviously bullish on Open AI, but partially because they have to. SoftBank is scraping together cash to make good on its $30 billion investment commitment to Open AI,

which it pledged to send Sam Altman's way pending their conversion into a for-profit entity. It's already deployed $7.5 billion of that total, and we'll use the Nvidia funds to up that total. Kyle, hope Masayoshi Sen knows what he's doing. Selling it video once, okay, selling it twice, takes a lot of nerve to do that. It's right.

And there's that saying, like, when there's a gold rush, you invest in the companies that sell, and shovels and not the people actually going to try to find gold. Many people think Nvidia is the picks and shovels in this analogy. And so it's very interesting that Masa is actually pulling out of Nvidia and plowing it into Open AI, which in this decent analogy might be the people searching for gold. But Masa is very known for big visionary bets. One of his most famous investments was turning a modest $20 million investment in Alibaba in 2000,

into billions. He also was a big winner with DoorDash. However, as you mentioned, not all of his big bets have paid off. WeWork being the prime example. But taking a big profit from their Nvidia bet here and plowing it more into OpenAI, seems to be the strategy. And as you mentioned, they had commitments to Open AI. What I think is also interesting here is looking at Open AI versus Anthropic and how they're running their businesses.

Moss is betting big on Open AI, which is kind of shooting for the. the moon and investing more in chips, investing more in data centers, going for broke. It makes Anthropic almost look like a lifestyle business that is focused on profit. Anthropic expects to break even by 2028, according to internal documents. By contrast, open AI expects operating losses to its $78 billion in that same year. And so you're seeing two very different strategies played out by two of these large AI companies. Yeah. As soon as this news dropped, there was an alternative report from the Wall Street Journal saying, like, hey, Anthropi actually might be the horse to bet on here because opening eye is going to obviously burn through tons and tons of cash. Let's go back to

what the heck is SoftBank doing here. What is Masseyoshi-San thinking? That's what investors kind of mirrored as well, because SoftBank's shares actually plunged more than 10% when the company disclosed that had sold its InVIDIA holdings. Because, again, that is potentially a symbol of the top. when you have someone like SoftBank saying, all right, I'm taking my chips off the table when it comes to Nvidia. That's not necessarily a bullish signal. Now, of course, once the news broke

that it was going towards opening eye, that's still a very bullish signal for AI in general. But you started to see some of, hey, is this the top? Are we reaching a moment where even Sun feels uncomfortable with the valuations we're currently sitting at? And then you also factor that into news

that Michael Burry, you know, of big short fame on Monday this week, said that AI firms were understating depreciation of their chips, they were inflating profits. He's been kind of preparing for this bearish thesis on the AI trade right now. So all of those news combined made investors a little bit uneasy with the state of the AI trade right now. Now, of course, stocks have been up on news that maybe the government shutdown is ending here. But some wrinklings, some whisperings of potentially bubblishes activities from a lot of these major players in the AI space. That's right. In Altman, we talked about this

on Monday, had tweeted out about their big spend commitments, $1.2, $1.2, $1.4 trillion over the next, I think, $5, 10 years. And that has people worried about maybe this is a bubble, but Altman also, you know, in a previous life was running YC, very used to the growth at all cost playbook, which is like get so big, so fast, and then focus on profitability. Going back to this anthropic comparison, they're more focused on incremental profitability in the short term. So it'll be really interesting to see which strategy ultimately pans out here. A new perk might be dropping soon for those with premium credit cards, the opportunity to be turned away at the register of your local convenience store.

Now, what do I mean? Well, Visa, MasterCard, and Merchants came to a settlement over a 20-year legal battle, which would now allow stores for the first time to accept, for example, some Visa credit cards, namely the basic no frills credit cards, which are cheaper for stores to process, and reject other Visa credit cards like those with crazy rewards and high annual fees, which cost more for stores to process. Or if the merchant still chooses to accept all Visa cards, they will now be permitted to adjust prices based on the cost of accepting different cards.

For context, every time you swipe your credit card to purchase an item, the merchant pays an interchange fee with Visa and MasterCard set and often range around 2% of the purchase price. Now, while that might seem minuscule, merchants paid $83 billion in swipe fees in 2024, which is up 71% from 2019. These fees allow banks to invest more into credit card rewards, which get more people to use the cards, which then get them more money in interchange fees, repeat ad nauseum. The settlement also requires an average 0.1 percentage point reduction in the interchange fees

phased in over five years. The settlement does not go into effect right away as it still needs court approval, and it's likely to actually be contested by some groups representing merchants who still think the deal is not good enough. Toby, dropping that premium credit card down on the table used to be a flex, but now pulling it out at the convenience store might cost you. What do you think here? Yeah, will retailers really reject premium cards? That's the question that this settlement introduced to people, because in theory, if you go to your local cafe and they say these premium credit cards are costing us too much money, they could say, Uh-uh, X, we're not going to accept your AMX platinum. We're not going to accept your Chase Sapphire Reserve, but that is a lot easier said than done because, one, you risk disappointing your customers because these are very popular cards right now. Also, what's the alternative?

People are paying less and less in cash right now. So they're basically every consumer is using, every customer is using a credit card. Cash transactions have fallen to fewer than 20% of overall transactions. So there's not that many alternatives anymore. And also a Fed survey recently found that 16% of consumers said that they were discouraged from using their credit card at least once in the past year. That is a layer of friction that you don't necessarily want to introduce. Like, why would you want to make your customers angry about or confuse about which cards they can actually bust out? So you can see why it's in theory it makes sense for them to save money on these interchange fees.

But in practice, it's very difficult to actually wean people off of their premium credit cards. That's right. You hit on the point of some of these retail groups that actually aren't. happy about the settlement, that is one of their main points of concern is that basically you've allowed us to do this thing, but the thing is going to piss off our customers. And we're kind of like the first line of defense. The customer is not going to go home after and write to Visa, hey, it's because of you that I got charged more.

They're going to be mad at the cashier and then never come back to the store theoretically. So that is why a lot of people are mad. They are happy about the interchange fees coming down. But in essence, this is a perceived monopoly or duopoly, Visa and MasterCard, owning so much the payment rails, that they have a lot of power here. And that's what this lawsuit is trying to get at. There is examples of stores, just outright rejecting cards based on them being a certain type. Costco, for example, only accepts Visa cards, and that's it. I've tried to pay with an American Express. And they're like, what are you doing here, sir? So there is examples of stores,

but that is Costco. They're big. They have a lot of market power. Your local bodega is not anywhere near a Costco. Little flex there. Little American Express flex right there. I didn't say which one, Toby. Exactly. All right, moving on. Welcome back to Toby's trends, the segment where I take a deep dive into the business world to emerge with the trend. Now, make your grandma say, wow, where'd you learn all that? Usually this is a Tuesday segment, but the brew was off yesterday because of Veterans Day. So you get a special Wednesday edition. And today's trend is how buses and trains are so back, baby. Nearly six weeks into the government shutdown, the national air travel system is still in full on a meltdown mode, with passengers facing, over 6,000 cancellations and 20,000 delayed flights over the past few days, bus and train bookings have jumped 12% year over year, according to Wanderoo. If you live near a hub like D.C., New York, or St. Louis,

booking traffic has risen as much as 30%. Megabus and Greyhounds say that sales are trending higher than any recent holiday period, while Amtrak is preparing for what it thinks will be a record-breaking Thanksgiving, having already seen double-digit growth in bookings compared to last year. On the flip side, airlines have seen a total reversal in what was supposed to be a strong year for travel. As recently as Halloween, flight bookings were up 2.2% year over year. That trend has now totally flipped in just a week later, bookings were up barely 1% over last year. Kyle, call up Steve Martin and John Candy because planes, trains and automobiles is turning into buses, rental cars, and I guess still train.

I love it. I mean, I feel like this is just people realizing how us Midwesterners always get around. A 17-hour car ride from Minnesota to Montana for me growing up. Totally normal. I took an Amtrak from New York to Toronto. That was 13 hours. Loved every minute of it. So this is just showing and highlighting the power of like a very dynamic transportation network that like you don't always have to use planes.

There's other great ways to get around that sometimes are a lot more scenic and enjoyable. Marjorie Taylor Green, someone who doesn't immediately come to mind as a big public transportation advocate, it had to ride an Amtrak because of the flight situation, tweeted like, oh my gosh, this is amazing. Amtraks are lovely. Like, yes, Amtraks are awesome. Amtraks are awesome. The other thing that we've been seeing a massive rise in bookings is rental cars, specifically one-way rental car journeys. Turro, which is, you know, kind of the Airbnb for cars startup reported a 30% jump in rentals on Friday as they turn to like, you know, like this peer-to-peer car sharing platform. Avis confirmed that they've seen an increase in one-way rental.

activity and then Avis Hertz as well have said they've been flooded with one-way bookings as people had their flights canceled and you're like, all right, I guess we're jumping in the rental cars. A little travel update as of this morning. As of 4 a.m. Eastern on Wednesday, actually things look like they're improving a little bit on the travel front. Just 878 U.S. domestic and international flights have been canceled according to Flight Aware. That's actually the lowest number of cancellations since the administration imposed these flight restrictions. So it's a potential sign that the system is stabilizing a little bit. Now, again, part of that is the flight volumes themselves have decreased. Right now, there's 2,500 fewer on average flights departing per day

than in like normal time. So maybe the fact that there's less cancellations, less delays, is just the fact that there are less flights in general. So we are expecting flight disruptions to increase throughout the week because the administration said that they were going to reduce 10% of airline traffic. So we'll see if that 878 number actually starts to rise. But for as of right now, as of this morning, it looks like things are coming a little bit to a equilibrium. Yeah, bad news for people who didn't want their uncle to show up for Thanksgiving.

It looks like they are going to find a way. All right. We're going to take a quick break and come back with a story about Netflix. Not loving your AT&T or T Mobile Bill? Yeah, we've been hearing that a lot. Good news. Bring your AT&T or T Mobile Bill to Verizon and we'll give you a better deal. So get away from that unfortunate phone bill and get to Verizon.

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All rights reserved. It must provide a recent consumer mobile bill in the name of the person who gave me the deal. Additional terms, conditions, and restrictions apply. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179, like the next grill,

three-burner gas grill, or get $50 off a select Weber 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. Netflix, the company that started by mailing DVDs to your house is now inviting you to theirs. That's right, the inaugural Netflix house, a flagship 100,000.

square foot destination opens today at the King of Prussia Mall in Philadelphia. The house is all things Netflix, including a 200-seat theater called Taddam Theater. Netflix Bites, a restaurant featuring Netflix-inspired cuisine, a grand entrance that resembles the red envelopes Netflix DVDs used to come in, and a variety of rooms and experiences built around Netflix IP, like a recreation of Wednesday Adams dorm room. And Netflix has no plans to stop with just Philadelphia. The company will open up another Netflix house in Dallas next month, featuring Stranger Things and Squid Games experiences, and in Las Vegas in 2027, with CEO Ted Sarando saying he envisions over 60 houses globally in the future. Fortunately, it is free

to enter Netflix house. So if you're still using your cousin's ex-girlfriend's Netflix password, there will not be bouncers checking if you're a legit Netflix subscriber. However, the costs of the experience inside the Netflix house will cost you. start at about $15 each. Toby, when are we making a morning brew house? This has me very excited. It does have me excited. And how did you know I'm still using my cousin's ex-girlfriend's Netflix password? Why build a Netflix house? Right now, Netflix is not a very, you know, distributed or varied business model. They draw 95% of its revenue from subscription. So they're looking to diversify a little bit. So who do you look to? You look at the entertainment giants of yesterday. Disney,

B.C. Universal, they have had this park ecosystem that is started as a way to, you know, drive a lot of love for their characters and their stories, but also is a bottom line revenue generator as well. So Netflix is saying, how can we diversify a little bit? Let's get into the experiences a little bit because it does make a lot of sense. You want people to be able to, you know, interact with Wednesday Adams, with these characters and these ecosystems that you've built. And so they're looking at the Disney playbook and saying, work pretty well for them. Let's see if it works well for us too. 100%.

And what's really cool, they built this house to be very, like, interoperable and flexible. So, like, K-pop demon hunters popped off while they were building this. So they couldn't fully integrate it, but they were able to put some K-pop elements into it. And the idea is that this would change

as new IP gets very popular. They could swap things in and out. The other thing I really love is this theater. They have now live, some live TV. They have a deal with WWE. They have a deal with NFL to stream some NFL games. They're actually going to stream those in the theater, which is a little bit of a,

full circle moment that Netflix disrupted malls. Now they're in a mall. Netflix disrupted a lot of this like cable TV and now they're kind of doing the same thing. So a full circle moment for Netflix. I think this is a really good move. It's free too. So their pricing strategy with this Netflix house is interesting because free to

enter but then once you're in there's mini golf in there that you can get $15 for. And then there's also these premium interactive experiences kind of like interactive theater. I don't know if you've been to sleep no more here in New York City, but it's basically you step into Wednesday's Adams dorm room and then you see the characters moving around you

interact with props from it you have to solve a mystery in the world of you know Wednesday so I think that is what they're thinking is like get people into the door blow them away with these sets that you're seeing and then you start to charge them a little extra for these additional experiences so they're stepping into theme park territory if you brought a family of four you did the experiences you did the food that's around 160 bucks total so a lot more affordable than something like a Disney World outing. But it is something that can hopefully be a revenue generator if you start to scale it across 60 cities as, you know,

they've floated that they will. And the through line through this all is, as the streaming wars heat up and people consider dropping Hulu or Netflix or Peacock or Paramount Plus, which one are you going to stay with? And I think this is trying to drive brand love for Netflix the brand. So the actual subscription is more sticky. And we'll see if it works out.

I might have to go to Philadelphia soon. I know. Crazy that it's in a mall, too. It is a kind of full circle moment, but they're kind of saying, hey, where do we have the space to do these things? It looks like there's a mall. I guess the only negative I would see here is there was a squid games experience in New York City for a couple months, right near our office, actually, and I walked by it all the time. I had zero desire to step into a world of, you know, squid games like that. I don't know. When you go to Disney, it's a full day out, and you know you're going to ride roller coasters. I don't know if this is halfway or if the experience is going to be enough, to make people, you know, go out of their way to go to, you know, a mall in Philadelphia.

So we'll see how the overall strategy plays out, but you can see where their heads at here. Like, let's drive some affinity. Let's try to make a little revenue along the way. Now, let's sprint to the finish with some final headlines. A buzzy Airbnb competitor suddenly shut down operations this week, leading to chaos for guests. Sonder, a sort of centralized Airbnb, managed properties in 40 cities across the world, and was once valued at over a billion dollars. Eventually went public before attaching itself to Marriott hotels through a licensing and distribution deal.

But a variety of issues were lurking in the background, starting with the pandemic obliterating occupancy in revenue and compotted by growth pressure post-IPO leading to some overextension. A heavy load of leases combined with a sharp decline in revenue led Marriott to break off the deal earlier this week, forcing Sonder to abruptly wind down operations and file for bankruptcy. When I say abrupt, Kyle, I mean abrupt. Guests were notified literally overnight sometimes that their stays were canceled

with no staff help or alternatives provided. Nightmare stuff. Let's hope Neil didn't book a Sonder. Yeah, I mean, not to kick Sonder while it's down, but it kind of feels like they combine the worst part of Airbnb and the worst part of hotels into one offering. And we're kind of seeing that play out now. The other thing that was tough is they actually owned all of the leases.

Very, you know, dissimilar from Airbnb, B, which is much more of a platform play. And so they had a big, big risk if occupancy ever dropped. That's what we're seeing here. Also, a tough move for Marriott, which has, I think, a great reputation in the hospitality worlds. A lot of people are mad at Marriott for putting them in the situation. They put their stamp of approval on it, not shortly thereafter.

The company goes out of business. And it was just horror story after a horror story when this shut down because imagine you book what you think is a hotel. You arrive there sometimes do notes on the door saying this hotel is closed and cannot honor your reservation. What do you even do in that? And that literally is everyone's horror story. What if I get there in my hotel doesn't actually exist? That started happening. One person was in Miami for a one night stay before they jumped on a cruise and their digital key code failed. A staffer eventually let them in manually. But then minutes later, an email arrives saying like,

hey, Maronaut deal was terminated. We're out of business now. The Stafford left. So the person stayed locked in the room all night because they're like, if I leave, I won't be able to get back in. So Just imagine that compounded across thousands of reservations, and you see why this was just an absolute debacle of a situation. Yeah, an absolute nightmare, but a savvy move by that traveler. If you missed out on the Starbucks barista, don't worry, there's another limited edition product you can try to get your hands on. The Mick Rib, that's right.

McDonald's announced that starting yesterday, the Mick Rib will be back at select U.S. restaurants in a few cities across the country, including Dallas, L.A., Seattle, Miami, and Atlanta. McDonald's Senior Marketing Director, Guillem A. Hwin, posted on X on Monday, saying the Mick Rib was, quote, the chain's most mentioned limited time product on line. Toby, I don't see New York City on this list, which is a bit of a bummer. Ah, the Mick Rib. Really, we just shoehorned the Mick Rib in the show so I can talk about my favorite stock market predictor. The Mick Rib effect. The premises does the McRib coming back influence markets? And our friend Nick McGilley from Dollars and Data went through and looked at historical McRib availability. from 2010 to 2017 and mapped those dates against S&P 500 daily returns. And here's what he found. When the McRib was available, the S&P 500's daily return was 0.07% higher than when it wasn't. Doesn't sound like much, but that equates to a roughly 19% extra return per year.

So when the McRib is back, you are making more money than when it is not back. Now, of course, you used it as an example to show that sometimes correlation and causation are not necessarily the same thing. Mick Rib's magic is basically indistinguishable from chance, but it is very funny. Every time the Mick Rib comes back, we have to bring up the Mick Rib effect because it looks like it is something.

So maybe we're all making some more money so you can go buy a McRibb. I think we got to tell Masa about this Mick Rib effect. He's going all in on that. That sounds like something he would do. All right, that is all the time we have today. If you have thoughts on our show or want to send at Neela Rex on places to eat in Portugal,

which, by the way, like 500 of you guessed correctly when I gave that hint. Shoot us a message on Instagram at M.B. Daily Show. Let's roll these credits. Emily Milliron is her executive producer. Raymond Lou is our producer. Olivia Graham and Olivia Lake are our associate producers. Hair and makeup is elbow deep and a mic rib right now. Devin Emery is our president and our show is the production of Morning Crew.

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