Morning Brew Daily - Three Mile Island Reopens to Power Microsoft AI & 'Cards Against Humanity' Sues SpaceX

Episode Date: September 23, 2024

Episode 415: Neal and Toby break down the deal Microsoft cut with Three Mile Island to have the nuclear reactor help power their AI. Plus, a possible Intel takeover, and why is 'Cards Against Humanity' suing SpaceX? Next up the WNBA playoffs are under way and movie theaters are putting serious money into revamping for the future. Finally, a look at the week ahead. To learn more about how Wise could work for your business, visit https://wise.com/business Get your Morning Brew Daily T-Shirt HERE: https://shop.morningbrew.com/products/morning-brew-radio-t-shirt?_pos=1&_sid=6b0bc409d&_ss=r&variant=45353879044316  Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - Fall is here 03:00 - Microsoft inks deal with Three Mile Island  08:00 - Intel investment  12:50 - Cards Against Humanity vs SpaceX 18:30 - WNBA Playoffs 21:25 - Movie Theater Makeover  24:20 - Week Ahead  Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning, Brude Daily Show. I'm Neil Fryman. And I'm Toby Howell. Today, how Intel went from the largest tripmaker in the world to a takeover target. Then AI has gone nuclear, why Microsoft is backing a plan to recommission the power plant at Three Mile Island. It's Monday, September 23rd. Let's ride. Toby, I see you're rocking your red fleece, which can only mean one thing.

Fall is here. The official first day of fall or autumn, if you think you're better than us, began yesterday. And if you're not prepared to get cozy, you need to order that teakwood candle ASAP. So obviously, I started looking up fun facts about fall this morning. And I learned the etymology of the word autumn and fall, why there are increased marital engagements during the fall months, and what the number one pumpkin growing state is in the U.S. So, Neil, choose your own adventure. What do you want the people to learn about on this, the autumnal equinox? I think let's go B, the marital engagements.

Why do they spike? It's kind of exactly what you think. Thanksgiving is in the fall, and that time of bringing a lot of family together just leads to maybe some pressure to get engaged. So it really is just that there are more family gatherings during the fall months. All right, can we get a bonus? What's the biggest pumpkin growing state? It's Illinois, which I never would have guessed, which I think is why they call it a fun fact. Now let's take a moment to hear from our sponsor, Wise Business, the app for doing things in other currencies.

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Three Mile Island was the site of the worst commercial nuclear accident in U.S. history, but the Pennsylvania Power Plant is officially coming back online to help a single company power its AI ambitions. Microsoft will be the sole customer of the resurrected plant. That was the site of a partial nuclear meltdown in 1979, signing a 20-year deal with its owner Constellation Energy to purchase power from it. It is a big win for the nuclear industry that is going through its We Are So Back moment. Data Centers serving the AI Boom are the hungry, hungry hippos of the energy. world, so companies like Microsoft need more power to come online. And despite the bad rap, it's attracted in recent decades, nuclear still represents a 24-7 environmentally friendly option

to meet that demand. Clearly, the economics of the arrangement with Microsoft makes sense. Since Constellation is spending $1.6 billion to relaunch the reactor after it was decommissioned five years ago for financial reasons. Three Mile Island is set to become operational again by 2028. Does this mean nuclear is back, Neil? There are a couple of first here. First of all, this is the first U.S. nuclear pant to come back into service after being

decommissioned, or what they call mothballed, and then never before has the entire output of a commercial nuclear power plant been allocated to a single customer. You're right. The nuclear power industry was on its way out,

essentially. Between 2012 and 2022, electric utilities in the U.S. closed 13 reactors and a bunch of other ones were kind of in their golden years just winding things down. And then all of a sudden, November 22, chat cheap ET came along. And there was this arms race for to develop chatbots and AI systems. And all these tech companies need so much energy. At the same time that they need energy, they have all these emissions goals to hit. So they're looking, they're scouring the globe for possible sources of power and clean power, and they're going to places like Three Mile Island, which has such a stigma in

American history, and saying, yep, boot that back up because we need you. I don't think a lot of people realize either that Three Mile Island was actually operational. As recently as 2019, it was creating, was producing power there, but it closed for financial reasons. But you're right, the financial calculus of operating a nuclear energy power plant totally shifted with the demands that AI is putting on the power grid. One aspect of this deal that is interesting, is the government aid that will flow to consolation energy. They will be eligible for federal tax credits from the Inflation Reduction Act for the power it's producing.

But that is a little controversial because those tax breaks are crucial to making this deal economically feasible. But you could make an argument that data centers are straining or you could make the argument that should they be eligible for these tax credits if the power is going to a single customer in Microsoft, because is that really benefiting the community if just one single entity is purchasing the entire power output from this? That being said, though, you could make the argument that data centers are straining power supplies across the nation. So by removing some of Microsoft's power hungry needs from the grid at large, it is benefiting the community.

So I've seen both sides here, but it is just an interesting thing to look at is how government money is flowing into this product. Yeah, it does seem to be playing. big part because this project is going to cost Constellation $1.6 billion. In general, the amount of pressure that AI is putting on the power grid and just these data centers in general is quite stunning. So currently, data centers account for 3% of all U.S. power needs. In just 2030, which is what, for six years from now, that is expected to more than double, according to Goldman Sachs, to 8% of U.S. power.

and then around the world, AI is expected to make up 0.5% of all worldwide electricity use in just three years. That's roughly what Argentina uses in a year. So you might see more of these deals coming into the four Amazon signed a deal with Talent Energy, which operates a nuclear plant. Also, in Pennsylvania, you have Bill Gates, who's starting up this modular nuclear reactor startup in Wyoming. In California, they reversed the decision to shut down the Diablo Canyon plant and then in western Michigan, there's this project called Palisades nuclear plant, which was decommissioned in 2022, and they're looking at bringing that online again. So a pretty stunning reversal for the nuclear industry. And I just want to point out about three mile island,

they have two reactors. One is the one that melted down. That is not coming, partially melted out. That one is not coming back online. The other one, which didn't have a malfunction. And just close for economic reasons in 2019 is the one that Microsoft will be using. So we're going to watch this project closely and it might be replicated across the country. The saga of Intel just had an M-night-Sharmelon-worthy plot twist when multiple outlets reported on Friday that it was the subject of a takeover attempt by Qualcomm. If a deal happens, and that is a major if, it would be one of the biggest acquisitions of all time and represent a stunning downfall for what was at one point, the largest chipmaker

in the world. Listeners of MBD know all about Intel's recent struggles. It's getting lapped by Asian chip makers. It completely missed the boat on the AI boom, and its stock price has been cut in more than half this year alone. The challenges it's facing are some of the greatest in its legendary 56-year history. Into this dumpster fire, it steps Qualcomm, the San Diego-based tech giant that makes the chips that power your smartphone. Unlike Intel, Qualcomm is on a heater this year, with its stock popping more than 50% to give it a market cap of nearly $200 billion. Despite Intel's struggles, Qualcomm thinks, there's a lot to like about the company that literally put the silicon in Silicon Valley.

So how much would Qualcomm need to pay for Intel? Well, Intel's market value is right now at $93 billion, which probably means a takeover would reach well into the $100 billion range. Toby, thoughts on this potential blockbuster deal? It would be a blockbuster. It comes down to a couple of things. One, antitrust regulators will definitely be looking at this because you would be combining two of the biggest chip makers in the United States, but also it's kind of a pride thing

for Intel as well, because it used to be the largest chip maker in the world, but now it's had this stunning fall from grace. It has been just a tough time for Intel. They've been trying to kind of separate parts of their company into their chip design and their chip manufacturing. Their chip design is going okay, but their chip manufacturing is money losing at the current moment. So it's manufacturing arm just kind of stinks when you compare it to the rest of the world. So I do think that potentially you could see this as an opportunity to strengthen the U.S.'s competitive edge in the chipmaking business, or you could see it as this big sticking point for antitrust regulators that these are two behemoths. We do not want them to combine forces here.

Right. There is a national security component here because the U.S. has spent all this money trying to bring chip makers to start producing domestically because of how critical chips are into military and other applications that are very sensitive. You mentioned that Intel has multiple things going on. So if you look at the chip world, I know it's pretty confusing. There's a lot of chip makers from Nvidia to TSMC to Samsung to Qualcomm. Most of them separate into two camps. You have the chip designers, which is invidia.

So think of Nvidia as a company that designs chips and makes chips, but does not actually manufacturing them. They source them to what are called foundries like TSM in Taiwan. And then you have TSM, Samsung. Those are essentially contract manufacturers. They are called foundries, and they make chips that they take orders from companies like NVIDIA and make chips. The thing about Intel, it does both. It designed chips and makes them. So it's got its hands in a lot of different areas here.

And that is very expensive, especially the manufacturing part. So let's take a look at these two businesses. Intel spent $26 billion on CAPX last year, which was nearly 50% of its entire revenue. That's because it has to build these huge fabs to make chips. Qualcomm's capital spending last fiscal year was $1.5 billion, just over 4% of its sales. So when you're looking at the various business models here, you see Qualcomm spending 4% on CapEx and Intel on 48%. Maybe that's one reason why Qualcom has just leapt ahead of Intel in this race. Also, Qualcomm is licking its chops here because it mainly focuses on supplying chips to smartphones.

A lot of Apple's devices run on Qualcomm chips. It is a critical supplier for Apple's iPhones. But if this deal happens, it would absolutely broaden Qualcomm's kind of horizons. It would not just be a mobile phone chip-making business. Intel mostly makes chips that are you find in personal computers, in servers. So they are definitely looking at this saying like, all right, this is our chance here. We're going to approach it with a friendly takeover. This same thing, by the way, happened to Qualcomm a few years ago where Broadcom

tried to bid $1,17 billion in 2017. And that was when I was saying like it's kind of a pride thing because at the time Qualcomm was like, absolutely not. Like we think we are not a takeover target. So to have Intel kind of be on the auction block almost or just having these talks happen whatsoever just shows the fall from grace that Intel has recently had. In a headline, that sounds like it is straight out of a game of cards against humanity. Cards Against Humanity is suing Elon Musk over alleged trespassing in Texas.

Yes, the adult party game is going toe to toe with the richest man in the world because it bought land near the Mexican border way back in 2017 as a joke to stop then President Trump's border wall and it still owns it to this day. According to the suit, SpaceX has been trespassing on and damaging the plot of vacant land by turning it into a work site and destroying vegetation over the past six months. The company said that before SpaceX arrived, the land was a place where wild horses galloped freely in the Texas moonlight and spun up a website to show before and after picks of what SpaceX has done. Despite the humorous approach, Cards Against Humanity is asking for $15 million in damages

that it plans to redistribute to the people who crowdfunded the original purchase of the land. This is a real headache for Elon in SpaceX, Neil. Yeah, I mean, this speaks to what SpaceX has been doing in a very remote tip of Southern Texas. I don't think cards against humanity. They were trying to go toe to toe with Trump back in 2017. I don't think they had any idea that Elon Musk would come into the picture, but he's built out this massive development called Star Base near Brownsville, Texas, which is near the Mexican border.

That's where they launched Starship. They've poured 2,100 jobs, billions of dollars, into investment in the region, and they're just gobbling up all of the land, and there's been tension with neighbors. And that is how Cards Against Humanity actually found out about it, because a local guy there saw that they were moving gravel

and basically setting up this staging area on a parcel of land, and he was like, what's going on here? So he called up SpaceX, didn't get a response. And then he called up, I guess he found out Cards Against Humanity owns this parcel. So he called them up, And then I guess that alerted Cards Against Humanity to what was going on there.

And they, this company, which started on Kickstarter, by a way, has done a bunch of stunts before. So this is nothing new to them. But they are certainly relishing this fight with Elon Musk. They must be thanking their lucky stars because you're right. They originally the plan was to go against Donald Trump. But now they have this other billionaire that is knocking on their door trying to use their land. And they must have said, what great fortune for this. We can make a very big deal.

out of this. They have spun up a website called Elon owes you $100.com where they kind of lay out their big vision and mission for pushing back against Elon Musk. If they win, each person would get, each of the original donors would get around $100, which is a 700% ROI on the property

because most of the people originally donated $15 in the crowdfunding effort. So it is tongue in cheek, but also at the same time, they do own the land. So I don't think this is going away anytime soon. especially because they can milk this for the publicity. Totally. We're talking about it right now.

Speaking of headaches for Elon, he has another headache that he's been contending with in Brazil. Remember, he made this big stink about a judge asking him to remove some accounts in appoint a local league representative to handle future requests relating to his company, social media company X. Elon said no. He called the judge a tyrant, but then Brazil responded by blocking X in the country. in for three weeks. Everyone's been kind of wondering who's going to blink first here. And it turns out Elon Musk blinked first. X agreed to appoint that legal representative in Brazil to pay their fines and to remove the accounts ordered by the court. Brazil is simply just too big a market for X, 40 million monthly users. So I think Elon Musk saw everyone was kind of fleeing to other

social media platforms and said, all right, we'll give in to your request. So that was the other kind of headache Elon was dealing with over the weekend. And it looks like Brazil came out on top of that little tiff. Up next, it's Monday, which means you got our winners of the weekend coming your way. Spring is the season everyone refreshes everything except their blinds. People put it off because they think it's complicated. But at blinds.com, we've spent 30 years proving it's not. Right now, you can save big during the Spring Cyber Monday sale. Whether you want to DIY it or have a pro to handle everything from measure to install, we've got you. Free samples, real design experts, and zero pressure. Just help when you need it. Shop up to 50% off site.

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Exclusion supplies to homedipo.com slash price match for details. Welcome to our winners of the weekend, this segment where Toby and I picked two things that had a weekend worth bragging about on LinkedIn. I won the pre-show Fitted Sheet Folding Contest, so I get to go first. And my winner is the WNBA. The playoffs started yesterday, capping a record-smashing regular season that could prove transformative for the league and signal a new era for women's professional sports.

Coming into the 2024 season, expectations were through the roof for the potential business boost provided by Iowa's Caitlin Clark, LSU's Angel Reese, and the rest of a star-studded rookie cast. Well, we can confidently say

it lived up to the hype and more. It was the most viewed WMBA regular season in its 27-year history. Much of the growth did come from the Caitlin Clark effect with her games for the Indiana fever, drawing huge teeth, ratings and selling out arenas around the country.

Get this, 21 of the 24 WMBA broadcast that topped 1 million viewers this season featured Clark. Not a single WMBA broadcast had reached 1 million viewers since 2008, and there were 24 this year. Meanwhile, average attendance at fever games in Indianapolis was a league record 17,035, which is a 319% jump from a little over 4,000 this last year. To no one's surprise, Clark was the unique. unanimously awarded rookie of the year yesterday. But Toby, this season wasn't all the Caitlin Clark show.

There were big jumps across the board. Yeah, it was definitely a rising tide, floats, all boats sort of thing. ESPN said TV audiences for all WMBA regular season games were up 170% over last year. Attendance for every single team grew by double digits. Indiana Fever did lead the pack with a 319% increase, but you literally saw every single team in the league at least see a double digit growth in their attendance. It was league-wide attendance was the highest it's been since 1999. And the best part is it is starting to translate into money as well.

Remember, in July, the WMBA signed this big 11-year media rights deal worth $2.2 billion dollars goes in effect, 2026. Recently, the contract triples the yearly payout. So it was making $60 million over its previous media rights deal. Now it's bringing in over $200 million, which should translate to higher salaries. So you are right. Caitlin Clark did change the game, but everywhere across the league, you're seeing more money flow in and more eyeballs paid attention to these teams. Right.

And shout out to Adja Wilson, who won the MVP, only the second unanimous pick for MVP. Yeah, the playoffs started yesterday. I don't know how much longer we're going to see Caitlin Clark, to be honest, because the fever got kind of frowned. I know. We were looking at each other this morning saying, ah, it's a bit tough.

We're doing this story in the Connecticut Sun, absolutely blew the fever out. So it's a best of three series, though, so they do have two more games. And it should be a good playoffs no matter what. Yeah, no matter what. My winner of the weekend is movie theaters because they are getting a miscingeniality-level makeover. An industry group called National Association of Theater Owners that represents the eight largest theater chains like AMC and Cynemark, announced a $2.2 billion plan to spruce up nearly 21,000 screens across North America

to make the theater experience more appealing to customers. With so much content available through streaming services these days, the group decided they need to get their act together to convince viewers to leave their comfy couches and shell out cash to go to the movies. Some of the big improvements include better projection and sound systems, taste your concessions, and adding non-movie entertainment options like bowling alleys to some theaters. But the plan also zeroed in on the small details of the movie experience, like improving air conditioning, creating new signage, and even putting in different carpeting.

Neil, we all know the movie industry has been going through it. Is new carpet the way. to get out of this lump? I think it's better than zip lines, and they're saying they're putting in pickleball courts and bowling alleys that are somewhat adjacent to movie theaters. I think that people want to go to the movies, to go to the movies.

So putting in better screens, better air conditioning, better carpets, better concessions, just making that experience better is probably a little bit more effective than all these side quests that a lot of the theater chains are doing with dinner and, you know, all these other recreational options. options. But this is a, I think, a bullish sign for movie theaters. The past five years have been absolutely insane for them. There was COVID, which they got absolutely wrecked during. And then

last year was, last summer was the strikes. And now finally, I think they're coming out of that emergency mode and finally thinking about the future for the first time. They're saying people stuck with us throughout this whole time. They could have left. Movie theaters could have died. But right now, we're still making money. There have been a few billion dollar movies this here inside out too. Deadpool and Wolverine did really well. Twisters did really well. So they're saying, oh, people still want to come to movies. After all, this happened. It's time to put our foot on the gas pedal and really rev up here. I do think, too, you mentioned kind of increasing the projections and the sound quality.

All you have to do is look at the success of IMAX recently to show that people do want something different than what their experience is at home. And usually that means just a really big screen, really high fidelity audio, really high-fi videography as well. IMAX's annual box tax revenue reached over a billion dollars last year. Remember, we talked about it with Oppenheimer. A big chunk of their opening weekend sales came from IMAX screens. Ticket sales for premium formats accounted for 14% of all box office sales dating back to June 2024. So it does seem like people do want that experience that kind of blows them away. So maybe it's not pickleball as much as I do love pickleball.

It is just a bigger and better movie screen that will get people to the movies. And comfy chairs. And coffee chairs. It's Monday. So here is a rundown of the major events to know about for the week ahead. The annual UN General Assembly begins today in New York City with 140 leaders from around the world coming to town to solve the world's problems. Or at least try all the locals listening to this just grown. protecting hundreds of heads of state,

typically makes getting around town a nightmare. The average speed of vehicles in Midtown Manhattan during the UNGA is four miles per hour. That is not fast, and this is going to sound like a very specific complaint here, but if you're on the east side of Manhattan, just be warned, you might get trapped over there because that's where the UN building is. So maybe take your towns to the west side highway for those runs. Absolutely. Then over on the other coast in San Francisco,

meta will hold its big developer conference beginning on Wednesday. During MetaConnect, the company is expected to release new AR and VR products, including a cheaper successor to the MetaQuest 3, updates to the popular Rayban meta smart glasses, and maybe mixed reality glasses that go head to head with snaps spectacles. Zuckerberg will deliver the keynote on Wednesday. Yeah, I mean, everyone's talking about AI right now, but remember, Mehta's company's name is still meta,

so it is still invested in the Metaverse. I think anything that meta rolls out will look better because we talked about this last week. Snap rolled out their spectacles and they were kind of widely panned. So they set a very low bar. So it does seem like Zuck will be able to limp over that. But yeah, excited to see both their AI and their ARVR advancements. I think the thing anybody is going to be talking about, though, is Zuck's fit. Because he has turned into this fashion icon somewhat over the past year as he's transformed his look.

So I think his keynote address will be a big deal. I think there's going to be some leather involved if I had to guess. Okay. And then the 50th season of Saturday Night Live begins on Saturday, of course. Hackstar Gene Smart gets the historic season underway as host, while Jellyroll will serve as the musical guest. One casting note, former S&Ler Meyer Rudolph is returning to the show to play Kamala Harris ahead of the election. And I am still waiting for my call, Lauren Michaels. Neil, I think you and I could out daily update Colin Jost in Michael's Shay, but maybe we'll stick to MBD.

Okay, and then SpaceX is sending a crew to the ISS on Thursday, and this is notable because there's going to be two empty seats on board, and those two empty seats are reserved for those marooned astronauts, Butch Wilmore and SUNY Williams, who will come back with that same spacecraft, but not till February. They're calling it the world's longest distance Uber ride. I hope that they have settings to adjust the AC and the music, because that is quite the long trip. And then finally, if you're looking for something to binge watch, Mr. McMahon drops on Netflix. this Wednesday, and it's going to focus on the reign of long time, W.W.E. Boss, Vince McMahon, and they've been promoing this heavily. Yeah, I have never watched the WWE, but I think I might have to watch this because it's just been plastered over everything recently. Okay, let's wrap it up there. Thanks so much for starting your morning with us,

and hope you have a great start to this first fall week. For any feedback, questions, or comments on the show, send an email to Morningbrewdaily at Morningbrew.com. And don't forget to share Morningbrood daily with your friends, family, and coworkers. So you don't have to explain why a card game is suing SpaceX. Drawing a blank, Toby is here with a suggestion. I want you to share today's podcast with someone who loves the show Friends. Yesterday was the 30th anniversary of when the show debuted, so love it or hate it.

It was actually still the eighth most streamed show last year. So send this pod to someone who will be there for you. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lou is our producer. Olivia Graham is our associate producer. Nuchenwa Ogu is our technical director. Billy Minino is on audio.

Live from New York, it's hair and makeup. 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. All. Pay off your home. Travel for life. Drive a Ferrari. In celebration of the world premiere of the Monopoly Big Board Bucks slot machine by Aristocrat Gaming,

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