Morning Brew Daily - Stylin' Pope is actually AI?, TikTok debuts new app, Crypto war hits Binance

Episode Date: March 28, 2023

Episode 26: Neal and Toby discuss the drippy Pope image that has taken the internet by storm... but it's actually just AI. And the guy who made it was on shrooms? Plus the war on crypto continues as Binance faces a lawsuit from the CTFC. Uber Eats cracks down on virtual restaurants. And TikTok is rolling out a new app amidst rumors of it being banned - what's the deal? Learn more about our sponsor, TaxAct: https://www.taxact.com Learn more about our sponsor, Fidelity: https://fidelity.com/stocksbytheslice Listen Here: https://www.mbdailyshow.com/ Watch Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash US slash brew AI. That's pwc.com slash us slash brewaI. Good morning brew daily show. I am Neil Fryman. And I'm Toby Howell. All right, Toby, before we get into the meat of our show, I just want to run down some of the biggest headlines from yesterday's news. And as most of you know, there was another school shooting in the U.S. Three children, all aged nine, and three adults were fatally shot at the private covenant school in Nashville by a 28-year-old former student.

It's the U.S.'s 29th mass shooting this year, which is defined by the gun violence archive as an incident where four more people are shot. And that's equivalent to about 10 mass shootings per week or almost two per day. So most of these you don't even hear about on the news. But this one obviously is just so powerful because we can't become numb to the fact that elementary school kids are getting gun down in this country while they're going to class. And you see these images of, it seems, every few months of kids walking out. holding hands and with their hands, you know, held over their head out of school, out of elementary school. So we had to lead the show at that. Plus, we spent a lot of time talking about the mass protests in Israel that froze the economy yesterday over the government's proposed overhaul of the

judiciary and facing what he called a potential civil war. Prime Minister Benjamin Netanyahu delayed that push to get the overhaul done this week and said he's taking a time out for dialogue. So that seems to have subdued the protest yesterday. But yesterday, none of the departures from Bangarian Airport were leaving. No one was working. Universities all canceled classes. So he's kind of delaying this push. We'll see whether, you know, that amounts to anything or it's just kind of kicking the can down the road.

So what are we going to talk about for the actual meat of the show? Well, there's another target of the crypto crackdown. This one could be the biggest yet. Uber Eats is trying to declutter its platform. This was news to me because I'm a seamless guy. And there's another celebrity trial that's taking over the internet. Pack show, you mentioned you had cold brew to start the morning, so I think it's going to be a spicy one.

I'm ready to go. But to lead off our show, I want to talk about a little bit of a lighter story that's been unfolding on the interwebs over the last few days. Drippy Pope has taken the internet by storm. So we mentioned this picture yesterday that was making the rounds, but for anyone listening who isn't terminally online like we are, there's this image of Pope Francis wearing this epic puffer coat that makes them look straight out of like a Milan runway model.

It's really cool. People have been going nuts saying, wins the album dropping, calling him the Balenciaga Pope, and it went absurdly viral, multiple tweets with multi-million impressions. So unfortunately, the reason why we're talking about this is the image is totally fake. It was generated by an AI

tool called Mid Journey that can create these crazy hyper-realistic images. And Neil, this fooled you yesterday. That's why we brought it up on the show. What is your take on this ever-growing phenomenon of deep fake images kind of hitting the internet? Yeah, you said, you prefaced this by saying it was a light topic. And I was just thinking, maybe for these, you know, the Pope image is definitely lighthearted. But for me and I think a lot of other people, I was reading a bunch of articles about this. And it was the first sort of wake-up call moment that even our generation could get fooled by AI images. You know, we often make fun of boomers or older people who may not be as, you know, online as us or in tune with technology. and the fact that, you know, I could, someone who, you know, reads about this all the time and is very skeptical of everything could get fooled by it.

It was kind of like a pinch me moment for AI and its potential to fool us all, even, you know, as we're just going about our daily basis and spreading misinformation. I mean, yeah, Chrissy Teagan tweeted that she saw the image and didn't even give it a second glance. She totally thought it was real. Ryan Broderick, who writes Garbage Daily, which is this awesome. some kind of internet-based culture newsletter, called it the first mass-level AI misinformation case because it just went so viral and it fooled so many people. And yeah, we're dealing with the fallout right now. And some of that fallout is the word in here, I'll segue into another kind of misinformation

imaging that was going viral, which was images depicting Donald Trump getting arrested, like on foot police chase after him. amid talks of a potential indictment. And so in response to that, Mid Journey actually banned the word arrested on its platform to kind of try to throttle this thing before it gets out of hand. But it's really, really a can of worms,

as you mentioned, of how are you supposed to deal with these images on, is it the social media platform's responsibility? Or is it Mid Journey, the tool that's used to make these images? Are they responsible? It's really hard to regulate right now. Yeah, but so it should be regulated. according to the guy who made the image.

And we didn't mention it, but he gave this interview to BuzzFeed. It's just 31-year-old, who made the Pope image? Sorry. He's this 31-year-old construction worker from Chicago, the Chicago area. He gave an interview to BuzzFeed. He said he came up with this idea while he was on shrooms and thought it would be funny. Love that. And then kind of, I mean, not surprising.

Yeah. And then he sort of saw it go viral and didn't think much. Before that, he didn't think much of the power of AI to create, you know, fake images and then when it went viral he told BuzzFeed that these things need to be regulated and you see a little more calls for it though I'm not sure exactly what they're going to do after you know they after they showed their lawmakers showed a little ignorance during the TikTok CEO hearing it's kind of you're kind of doubtful about you know their ability to get ahead of the potential harms here yeah I think watermarking is probably the way for it is like you have to have some sort of watermark that

indicates that it is an AI-generated image. But yeah, slippery slope for sure. We're only going to see more of these, so I know we're going to be talking about it in the future. This is the tip of the iceberg. Yeah, for sure. Okay, Neil, now let's jump into the world of crypto. This story is a bit complicated, so I'll do my best to break it down as quickly as I can. So the headline news is the CFTC is suing Binance for evading U.S. regulations

and letting U.S. customers trade crypto derivatives. So the first part of that, the CFTC is the Commodities Futures Trading Commission. It's kind of a bad Mammajama when it comes to regulating financial institutions. So it can expel people from participating in the U.S. derivatives market or trading crypto, which actually qualifies as commodities under U.S. law. So basically, they gatekeep the U.S. markets. Why are they mad at Binance? They are alleging that Binance has been secretly coaching and encouraging these VIP customers within the U.S.

how to invade compliance controls. We're talking explicitly walking, like, big trading firms through how to use a VPN, which is a virtual private network that makes it look like you're accessing the internet from a different country than the one you are in to connect to Binance because it's actually illegal to do some derivatives trading on U.S. soil. And so Binance would literally coach companies through how to set up this VPN, how to set up these off-source accounts. and the CFTC didn't like that at all, and now they're kind of coming for Binance.

It's a big deal in the crypto world. Right. So why is this big deal? Because Binance is the biggest crypto exchange by far. You know, in the world. We knew about FTX. We know about Coinbase. But it, Coinbase, or no, sorry, Binance accounted for 70% of all spot trading volumes in the crypto market so far this month. Coinbase accounted for 6%. Yeah. So it is absolute dominant player. It's the Caitlin Carc. of Caitlin Clark of crypto. I know you like that reference. Yes. And not just the company, but CZ,

Chang Ping Zhao, who's the CEO and co-founder of Binance, is seen as the last crypto leader who kind of has his stuff together. Right. After he, you know, after FTX went imploded. Imploded. You know, Binance was seen as the possibility to take over FTX as it was teetering. And SBF, who is his arch rival, had to kind of beg him to save FTX and he said no.

So the fact that they're going after CZ, who's the biggest person in the biggest company in the crypto space shows that there's been this crypto crackdown that is only growing. Yeah, and I mean, I guess we'll talk about that for a little bit. So just in general, crypto is supposed to be having its moment right now as all the banks failed and it was going pretty well for a while, up 20%, but now on this news, it's back down. Bitcoin's down around 5% Ethereum the same over the past few days.

There's also the crypto-friendly banks in America. We talked about signature. We talked about Silvergate. Those two banks no longer even exist. So that's a bad thing. Last week, we talked about how the SEC went after in this big class action lawsuit, targeted celebs, Lindsay Lohan, Soja Boy, other ACON was on the list for kind of promoting crypto irresponsibly.

And then, yeah, we mentioned Coinbase a little bit too. they were just served a Wells notice by the SEC, which is kind of a precursor to potential legal action against them. So for a while we were rolling our eyes on like, oh, the war on crypto. But now it does seem like, oh, my gosh, on all fronts they're getting attacked by regulators. The crackdown is here. And Disney started laying off 7,000 workers yesterday as part of its cost-cutting venture. And then not surprisingly, the Metaverse Division was cut. So all 50 people there are no longer working on those, you know, digital experiences.

It's a tough day for buzzy buzzwords that grip the world over the past few years. I just think it's not, it's extremely hard not to be super bearish on crypto right now. For sure. Because we have a very simple AB test going on with AI, generative AI, chat GPT, mid-journey, visual AI, and crypto. And people are actually using the AI tools in their daily life to help them. And despite all of the talk for the past few years, I haven't seen that many people actually use crypto in their daily life other than to commit crimes and launder money. Neil, you kind of hit the nail on the head. But here's the one thing we'll say before we toss the break is so Bolly G, who we have talked about, he's this big person in the Bitcoin space who bet that Bitcoin will hit $1 million per Bitcoin in 90 days.

we're going to do a quick update on that bet. There's 80 days left. He has $973,017 to go before Bitcoin hits $1 million. So we'll keep you updated. I believe in him. Yeah. Okay, before we head in the next story, we're going to take a quick break. It's time to refresh your yard during spring backyard days at the Home Depot.

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Learn more at Windows.com slash student offer. While supplies last ends June 30th, terms at a.k.m.m.S. College PC. All right, Toby, I mentioned at the top of the show that I'm a seamless guy, but apparently Uber Eats has been flooded with listings that offer the same exact menu under different brands. So it's throwing away everything that doesn't spark joy. According to the Wall Street Journal, Uber Eats is removing 5,000 online-only brands from its app this week. Over concerns, its platform is getting clogged by restaurants that offer the exact same menu. So I have a few examples of this.

That was listed in the Wall Street Journal article. Twelve virtual brands are selling the same breakfast burrito from a Colorado sports bar. There are 14 brands serving the same sandwiches from a New York City deli here at home. and then there are online only options from a San Francisco-based Pakistani restaurant that replicated its menu 20 times. So have you heard and seen any of these virtual brands? I have not. I've heard about them, but I have not come in contact with them on the app so far.

And yeah, the reason why Uber is doing this is to kind of, it's a bad look for consumers if they get on and they're not sure if what the brand they're seeing is a real brand or it's someone posing or they're literally like SEO ab testing different names and brandings for for food stuffs um that's the first time we've used food stuffs on this on this show for sure the one thing i have come in contact with is the idea of ghost kitchens which are these i don't know what you want to call them but virtual brands of they have no physical footprint they're their delivery only i mean mr beast has mr beast burger which they have no physical locations they're all you order them through the app and they are delivered to you from a ghost kitchen which is like an

industrial kitchen dedicated just to cooking and I'm all on board on that because it's just so much more convenient and it reduces overhead but this idea of restaurants like we we saw denies was rebranding some of their food and passing it off as a different brand that does feel deliberately misleading and not a very fun experience for a consumer yeah that seems to be a different issue so what I think Uber is trying, Uber Eats is trying to get rid of is the explosion in replicative, replicative menus that exploded over the pandemic. So virtual brands quadrupled basically from 10,000 in 2021 to more than 40,000 this year. And there's all these smaller restaurants that just want to know whether an image of a taco is going to work or if they should go with an image of a scrambled eggs or an image of a deli

sandwich for their particular brand. So they're just testing the crap out of this. And then you mentioned this earlier with Denny's. So basically there are big food chains or restaurant chains like Denny's, IHop, Chucky Cheeses, Chucky Cheeses. And I had no idea this was happening, but they are rolling out various sub-brands that cater to a specific clientele and offer specific food products. So IHOP, I was reading, has this virtual brand called a super megadilla and thrilled cheese. So those are its virtual brands. Deniz has the burger den and the meltdown, which kind of offer burgers and I assume meltdown is grilled cheese. So I guess this could be seen as misleading because if you're ordering from, you know, super megadilla and they say, okay, come and pick it up from this

location and then you go in and it's an iHOP. This is the most classic, sir, this is a Wendy's example I've ever heard. But I can see how consumers might be misled being like, I thought I was ordering from Super Megadilla. And then it turns out it's just IHop's kitchen churning out a little different product. Yeah. No, it's definitely, I don't blame the restaurants for doing it. Oh, it's smart. Yeah, it's smart on their part. But I also definitely don't blame Uber Eudes for kind of cracking down a little bit. So next time you hop on on your order delivery. Make sure you do your research and make sure it's an actual... Valenciauga Pope's on Uber Eats.

Exactly. Okay, Neil, now let's go to my favorite segment of the week, Toby's Trends. So there's a bit of a conspiracy going around TikTok right now. And first, I just want to say, have you heard of the app Lemon 8? No. Before this, I know not many of us had. So it's made by TikTok's parent company, ByteDance, and actually launched over a month ago in the U.S.

to relatively little fanfare. People have been describing it as Pinterest meets Instagram. It looks like a static Instagram feed where you kind of are scrolling through, you have pictures, you have videos, but it's definitely oriented more towards overt influencing. And so, for instance, you can label each item in your photos

by like drawing an arrow to it and saying where you got it from. So if I posted a picture, I would draw a little arrow to my morning brew shirt and say, like, you can buy this on the morning brew store. So yeah, it's definitely a more influencer e-commerce shopping forward app. But the reason I'm talking about it is for some reason people have been noticing a rash of

videos from creators kind of overtly promoting Lemon 8 on TikTok. And we have a kind of a little compilation of what I'm talking about that we'll play for you here. So the creators of TikTok have launched a new app and it's called Lemon 8. And if you haven't heard of it, I would definitely suggest you run over to the app store and download it really quick. Instagram and Pinterest had a baby. And the baby is called Lemonate. I know y'all have heard this news about how TikTok is about to be banned.

So it's time to start connecting on different apps. So that last creator, the point that she made of, I know you've heard about TikTok getting banned, let's go to Lemonate. That's where a bunch of TikTok users have been saying, okay, what's going on here? Why am I seeing so many videos telling me maybe leave TikTok go to Lemonate, which is owned by ByteDance? So it is, it is, it's not even a conspiracy theory. Like it is TikTok kind of hedging its bets a little bit if it gets bet, if it gets banned, and sending them to their other app that they want to kind of grow.

This is pretty wild. Yeah. I think from what I'm gathering, it seems like ByteDance, which is this Beijing-based company, is creating the BightDance cinematic universe through apps because it has Capcut, right, which is a TikTok video editor that is owned by ByteDance, that's consistently in the top five most popular app. And then it has TikTok and then it's creating this other whatever it said Instagram Pinterest hybrid to hedge its bets against TikTok and create maybe a different niche, right? It sounds like it's a little more e-commerce shopping influenced.

And so it seems like bite dance is just kind of taking over the app market right now. There's so many articles out about how Chinese apps that are many of which are owned by ByteDance are consistently at the top of the app store. So correct me if I'm wrong, but that sounds exactly like what's happening. Right. Well, it's just smart by them. If you have all these users on the app, why don't you send them grow, yeah, grow the cinematic universe, grow the pie. But it is, it was weird to kind of see these out in the wild of it. They feel very overtly promotional. Like they're being, they're not disclosing that these are paid promotions, but they have to be right? Well, I don't know. It just feels it, they feel like they're paid promotions because if you go through, you search Lemonade, you'll see a lot of like the same verbiage. You'll see a lot of the same kind of points be brought. outing up that language of Pinterest meets Instagram. Do we have any data on how many people are downloading this or whether it's popular? It's very not popular in the U.S. as of now. It originally is based off a Chinese app that is, again, geared towards e-commerce on social

media. That has 200 million users in China. Lemon 8 launched in Japan and has accumulated around a million users. In the U.S. and the UK, though, it's still very slept on. It was launched over a month ago, and we've never heard of it. It's not making any charge, but now it feels like maybe the charge is coming. So that will be very interesting. I wonder if hopefully this would be good for Toby's Trends brand if this skyrocketed up the app store,

and I've front-loaded another trend, so keep an eye on it. All right. We hope Toby Trend's investment in this in Lemonade actually takes off. Yeah. All right. Finally, there is another celebrity trial that has been taking over, at least my social media feeds, concerns Gwyneth Paltrow, who is on this business show, we know as the founder of the wellness giant Goup, is in court over a ski collision with a man who says Paltrow ran into

her while skiing at Deer Valley in Utah, severely injuring him. He's seeking $300,000 in damages. Paltrow is denied these accusations, and she said that guy ran into her, so she's He's countersued for $1 and attorney's fees. So basically we've had this eight-day trial that is full of soundbites and crazy episodes that is just made for social media. We do have one of those clips that kind of shows why it has gone viral. May I ask how tall you are?

I'm just under 5.10. Okay. I am so jealous. I think I'm shrinking, though. You and me both. I have to wear four-inch heels just to make it to 5-5. They're very nice. Oh, thank you.

And he has deterred you from enjoying the rest of what was a very expensive vacation. Well, I lost half a day of skiing. Uh-huh. I was yelling at him. Pretty loud. Pretty forceful. I was pretty upset. Right?

You're small but mighty. Actually, you're not that small. I literally cannot stop laughing because that is the opposition attorney who's supposed to be like grilling Grand of the Palo just like clearly getting a little starstruck and just kind of gassing her up and say like wow you're so tall and you're you're small but mighty i just could not stop laughing at this it seems like that but i did a little reading and it's seen and i don't watch many you know law and order court shows but it seems like uh attorneys often do this to kind of disarm they do they employ flattery to disarm the person that they want to extract information

from. So it's, I think there probably is some of that because this person hopefully is a pro and knows they're going to be on YouTube. Yeah, on every social. Yeah. No, definitely the theme throughout this trial has been like rich people problems. Yeah. Yeah. You hear say, I lost half a day of skiing. Yeah. But I've been seeing relatively people are on Palo's side a little bit because it's just such an absurd case and they're like, yeah, she's kind of coming off as relatively down to earth for someone who has a brand called Goop and is a multi-millionaire movie star. We were looking to Goop because I have to say Toby and I are not the target customers of Goop. I haven't bought anything to Goop.

Maybe I should. But we asked around the office about what was the vibe of Goop. And it's kind of a powerhouse. I think it's worth over $250 million right now. I did a quick scan of the website, found a toothpaste squeezer for more than $200, some psychic vampire repellent spray. And you know what? I think, you know, Celia might have a birthday coming up.

I want to get some goop. All righty. And yeah, we clearly don't know what we're talking about with goop, which is fine. But good for going with Paltrow. I guess we'll keep an eye on that case. We probably don't have a choice because as we're scrolling through social media, it will keep popping up. That's all the show we have. Toby, let me get into these credits.

First of all, you can email us. Our inbox has been a little quietly lately. Make sure you email us at morning brewdaily at morningbrew.com and giving a shout out to our amazing crew in the back. Our producer and editor is Emily Miliron. The show's technical director is Elias Alba. Our supervising producer is Bryce Belloff. Queen of the Ones in twos is Kelsey Jones. Hair and makeup got removed by Uber Eats.

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. 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

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