Morning Brew Daily - Trump VP's Ties to Silicon Valley & Google’s $23B Bet on Cybersecurity

Episode Date: July 16, 2024

Episode 366: Neal and Toby discuss Trump’s VP pick, Ohio Senator J.D. Vance, who has started as a venture capitalist and has worked closely with silicon valley leaders. Then, Google wants to boost its cloud computer and cybersecurity arm as it nears buying startup Wiz. Next, Amazon Prime Day is this week and it needs to be a home-run of a sale. Meanwhile, Toby looks at the latest trend of doomsday preppers buying up timeshares to prepare for the worst. Plus, Australia is using drones to fend off sharks away from its waters. Lastly, scientists find a cave on the moon that could be a shelter for future astronauts.  Expand your world with Meta AI. Now on Instagram, WhatsApp, Facebook and Messenger. 00:00 - MBD Shirt 2:00 - J.D. Vance’s business ties 7:00 - Google’s big bet on cybersecurity 11:00 - Amazon Prime Day is here 14:30 - Doomsday economy boomin’ 17:30 - Birds v. Drones v. Sharks 20:00 - Caves on the moon 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 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'm Neil Fryman. And I'm Toby Howe. Today, everything you need to know about J.D. Vance, who Trump picked as his running mate. Then Alphabet is planning its largest acquisition ever. But what does it see in the cybersecurity startup whiz?

It's Tuesday, July 16th. Let's ride. Today marks the start of Amazon's Prime Day sale, which you'll hear about later in the show. So we're doing our own prime day sale here at Morning Brew Daily. If you go to your browser and type in shop.mortmortm, then order a new Morning Brew Daily t-shirt. We'll toss in today's episode of the show completely free. That's right, with a qualified purchase of our beautiful MBD Radio t-shirt,

which you can find at shop.mortmorrow.com, you'll get today's business news 100% free. Wow, Toby, you could sell sand at the beach. But yes, if you buy a t-shirt, we'll toss in every, single future episode of the show in perpetuity for free. Neil, you got to string them along a little bit. You can't just give them the whole shabang up front. Fine, though, Neil's deal stands as long as you go to shop.morningbrew.com

and order yourself a beautiful MBD t-shirt. Shout out to everyone who has bought one so far. We appreciate you. Now a word from our sponsor, Meta-I-I. So I was at Neil's house the other day, and I have to admit, I started to have some bookshelf envy. Like my actual bookshelf construction or the books on it? Well, both.

You had a nice IKEA set, but mostly the books on it, I realized I got to set up my literary game. Well, why haven't you asked me for a book rack? Well, because I already asked meta-a-I. I pulled up Instagram yesterday and said, give me a list of great American novels to read. And? Well, the list it created was really big. So many recommendations like Great Gatsby, Moby Dick, Catcher in the Rye. So I amended the question and asked it to give me books from the 2000s only.

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But apparently that's all water under the bridge. Because yesterday, Vance was elected by Trump to be his running mate in the upcoming election. At 39 years old, Vance is the first millennial on a major ticket, and he'd be one of the youngest VPs in American history. He's also a newcomer to politics, having worked in venture capital for many years before first running for Senate in 2020. He's probably best known for his 2016 memoir, Hillbilly Elegy, about growing up poor in Ohio and Kentucky. That, unsurprisingly, is number one on the Amazon bestseller list this morning. So why did Trump pick Vance after all of those mean things he said about him? Well, since those criticisms, Vance has done a complete 180 to go full MAGA and become one of Trump's most loyal allies.

And he thinks Vance can help deliver the Upper Midwest Battleground states like Michigan and Wisconsin. But Vance also has ties to an unlikely but growing area of support for Trump, Silicon Valley. Yeah, Vance's ties to Silicon Valley go back to his time at law school. He attended a talk at Yale by Peter Thiel about tech. technological stagnation. He called that moment the most significant moment of his time at Yale. And then in 2015, after he graduated, he joined Mithril Capital, which was a venture firm founded by Peter Thiel. He then went on to found his own venture film, Naria. He named it after another object from the Lord of the Rings book, which just shows how much he really was, kind of this Peter

Teal stand. And the general consensus is that his relationship with Teal and the broader venture world gives them sway with this new coalition of conservative business people that is forming around the RNC. I mean, last month, Vance helped organize the Silicon Valley fundraiser at the home of David Sacks, who is a big Trump supporter, also hosts of the All In podcast, raised $12 million for the Trump campaign. So clearly, Trump sees Vance as this vector to this new coalition of conservative people in Silicon Valley. Yeah, absolutely. I mean, Elon Musk really is the standard bearer of that. It was just reported last night by the wall.

Wall Street Journal that Musk plans to commit around $45 million a month to a new Super PAC backing former President Trump's presidential run. That is an insane amount. I mean, he has the world's richest person, but the largest known donation of the 2024 election so far is $50 million. And Musk is pledging $45 million each month. So there really is this bashed and represented by Vance's VP pick of support for conservative candidates in Silicon Valley.

Let's talk about Vance's policies. Where does he, where does he stand on various things? Well, there's very little daylight between Vance and Trump on really anything. Vance has completely come over to the MAGA movement. He's seen as the natural successor to Trump in that area on abortion. He generally opposes abortion rights, but says each state should craft its own laws. January 6th, he says the election agrees with Trump that the false assertion that the election was stolen from. This was seen as a major litmus test for who Trump was going to pick on immigration.

He's very much for building a wall and not granting amnesty to immigrants who arrived here illegally. He's against the U.S. support for the war in Ukraine. He agrees with Trump that we should apply broad-based tariffs on a lot of goods. And also, like Trump, he's praised authoritarians all over the world like Hungarian Prime Minister, Victor Orban. So he's very much in the magamol of Trump, which some critics of this pick say, look, you guys don't have a lot of daylight between you. What are you complimenting him with?

On environmental issues, he falls kind of where you'd expect. He's a big proponent of the oil and gas industry. And during his first year and a half in the Senate, he's consistently voted against Biden's environmental policies, especially relating to the hybrid and electric vehicle push. Yeah, in a radio interview in July 22, he said the whole EV thing is a scam in introduced legislation last year to repeal a $7,500, the consumer tax credit for election.

vehicles, which makes you wonder why, you know, Musk would be so behind this ticket. Definitely a pick that a lot of people saw coming from a while. Polymarket definitely had the prediction markets had J.D. Vance as one of the favorites to be named. So yesterday wasn't exactly a surprise, but now we have the ticket. Now we know exactly kind of what the platform Republicans are putting forth of this upcoming election. And you're starting to hear some of the criticisms that will be lobbed by Democrats. And Biden came out saying that Vance, who wrote his...

Hillibilly Elogy and talks about his upbringing in a poor working class family as only pretending to be a champion for ordinary Americans while hobnobbing with the Silicon Valley elite and wanting to cut taxes for the wealthy. And then Mitt Romney has lobbed, you know, from the centrist Republican coalition, they consider him a sellout for doing this complete 180 and going to Trump side. He says, I don't know any, I don't know that I can disrespect someone more than J.D. Vance. That's what Mironi has said about Vance's complete pivot to back Trump. Google is famous for some savvy acquisitions over its 25-year history.

YouTube Android, the list goes on, but none have been bigger than the one it's currently closing in on. According to the Wall Street Journal, it's in advance talks to acquire WIS, a cybersecurity startup for around $23 billion. It would be Alphabet's largest acquisition ever, nearly doubling its 12.5 billion purchase of Motorola back in 2012. From a strategic perspective, the move would signify a significant investment in the cybersecurity and cloud security space, where it currently lags behind rivals like Microsoft and Amazon in a cloud services business. As for WIS, its growth has been staggering.

It's only four years old, but recently raised a billion dollars at a $12 billion valuation. It hit $100 million in the annual recurring revenue after just 18 months. It's one of the only startups outside the AI space to raise money at a higher, evaluation this year in 2024. Neil, Google has been relatively quiet compared to its big tech brethren when it comes to these splashy acquisitions. What does it see in WIS? It sees the way the winds are shifting, which is toward the cloud as, you know, they don't say this is a AI acquisition, but it really is about AI because as these companies use more models, they need more computing pattern and they're going to the cloud to do it. And Google sees this as a major growth area. I mean,

It dominates online search. It dominates advertising. But as you said, it lags behind its peers in terms of the cloud. And it thinks that if it can go to companies and say, hey, we have a cloud that is backed, that is so secure. You're seeing all those hacks out there. You're going to be under lock and key with us and whiz. You should come to our platform and use this for your cloud services. And Wiz is very ubiquitous across the Fortune 500 now at this point.

40% of Fortune 500 companies, including Amazon, including Microsoft, actually uses WIS's software, use WIS's software, that's a tongue twister right there. So it definitely would boost its cloud security features because you're right. When it comes to, I'm a company, I'm surveying the landscape of what cloud provider I want to use to support my business. If one is more secure than other, that could tip the scales in favor of Google, for instance. And Google has been focused on the cloud because you're right, that's where the growth is. That's where it sees a bunch of growth opportunities. It's one of the fastest growing segments within Google, especially when you see maybe the advertising market is how much bigger can it possibly get? I mean, Google

clearly thinks it can continue to grow, but this is definitely a growth area for Google. But the big question here is whether this deal will get past antitrust regulators. The DOJ and the FTC have been cracking down maybe harder than ever in history on any acquisition, especially tech. They block JetBlue's acquisition of Spirit Airlines, Pegman Random House's potential bid for Simon & Schuster, Adobe's bid of Figma. So, I, you know, this is just, it's very unclear whether Google will be able to actually complete this acquisition. But if they do, it's a windfall for these four founders who already sold another company for $350 million. And they each own 9% of WIS. And so they'd be running off with a check of $2 billion if Google is able to complete this.

So they're going to go, you know, to the ends of the earth to convince Lena Kahn to let them get this deal through. Truly not a bad haul for just four years. I mean, they found it in 2020. It's only $2024 now. $2 billion, not a bad haul. If you like to shop online while pretending to work, and let's face it, who doesn't, today is your Super Bowl. It marks the start of Amazon Prime Day, the annual shop till your phone battery drops summer extravaganza, where the discounts are steep and the hit-to-your-bank account is steeper. This year's Prime Day is the 10th edition of Amazon's made-up holiday, and it's expected to be the biggest one yet. Shoppers are expected to spend 7% more on 2024's Prime Day than last year when they shelled out $12.5 billion in the largest single

sales day in company history. But has Prime Day lost its spark? Is it, dare I say, passed its prime? After all, Amazon is far from the only retailer offering sales this week. Everyone from Target to Macy's to TikTok to Tamu have all launched Prime Day copycats to ride on Amazon's coattails. And if you can't beat them, join them strategy has been successful. Amazon's market share of online purchases made between July 16th and 17th, its prime days, is projected to shrink for the third year in a row. Toby, when I say prime day, does it even get your heart rate going faster anymore? It gets a little bit because I have some things on my wish list, but you're right, July has just been this absolute blur of sales at this point. I mean, we're coming off of Target

Circle Week, which was last week. Walmart has been running sales. all of July. TikTok shop has something called Deals for You Days. Doesn't quite roll off the tongue. Temu has Temu Week, which runs through July 18th where they're dropping prices as much as 90%. All of those deals are reaction to the center of

gravity that is Amazon Prime Day, the mother of all sales. So it's not, it's time to shop because it's never not time to shop these days, because think about just all the great deals that are out there across all the different e-commerce platforms, and it all started with Amazon Prime Day. It all started back in

2015 when Prime Day was launched in order, it was the 20th anniversary of Amazon's founding, and they really wanted to juice sales of Prime, their subscription, which only 40 million people had at the time. And this has been a wild success. I mean, people are paying, what is it, over $130 a year for two-day shipping and other perks. So 40 million back in 2015, and now there are 180 million prime members in the U.S. That's more than half of the total population of this country. So we are a nation of Amazon shoppers. And I think the goal now is to keep with so much more competition from those low-cost Chinese retailers to even social media companies like TikTok is to keep those people spending on Amazon when there is just so many

options out there for people to shop and at very low prices. Do you remember the first Amazon Prime Day back in 2015? It has seared into my memory because they build it up as this huge, huge sale. And then it kind of stunk the first time because all they did was try to push at that time the Amazon Fire TV sticks, which everyone logged on and were like, wait, are you really just shilling Amazon Fire TV sticks? It's obviously expanded now to include lots more different brands out there. I wish I had a list of all the great deals out there. The one tip that I saw about shopping Amazon Prime Day is that prices fall throughout the week. And so if you have your eye on something on the first day, chances are it's going to fall in price a few more times. Amazon loves cutting prices time and time again for certain items.

So maybe just exercise little patience. You might get a better deal. Up next, Toby's Trends coming in hot. 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 3-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 Street. lights that bring it all together.

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It matters where you stay. Hilton, for the stay. In 2012, National Geographic rolled out a reality series called Doomsday Preppers. At the time, it felt more like comic relief, people capitalizing on the supposed ending of the Mayan calendar, than a serious faction of society. But things have changed in the year since. And so on today's edition of Toby's trends,

we are going to dive into the doomsday economy and the rise of preppers. The doomsday economy is alive and well because there are lots of people who are gearing up for the apocalypse. According to data from FEMA, almost 20 million Americans are around 7% of all households now identify as, quote, preppers. And over half of Americans have taken three or more steps to prepare for a disaster according to a recent national survey. That level of interest has led to the rise of companies like Fortitude Ranch,

which operates essentially timeshare survivalist properties with all the food, guns, and bullets you need to ride out the collapses society in style. The New York Times talked to its founder, Drew Miller, who's a retired Air Force colonel about what's driving interest in his properties. First, Miller is not happy about that Nat Geo show saying it's set the survivalist movement back years. But now with the rise of AI, increasing threat of climate change and geopolitical uncertainty, he says business is good again.

Neil, this feels like a lucrative industry to be in right now. It is definitely growing. I love the slogan of Fortitude Ranch. It's called Prepare for the worst. Enjoy the present. So they have these bunkers all over, these properties all over the country. And what they do is they rent them out to members and they say, okay, well, you can come here when the apocalypse happens or if everything goes to crap.

But for now, why don't you come for two weeks? We'll give you two weeks where you can come with your family and enjoy a vacation here. So they're basically renting timeshares at bucolic places all over the country. And then you can go there and get your full year of food and ammunition and crossbows should the end times come. Yeah, he's actually using a franchise model. And business is not bad. The company employees around 20 people. And they brought in about $2 million in revenue last year, about a gross profit of $400,000.

So he's not making bank. But this is a passion project for him. It's something that he's been, the industry he's been in for a long time, so he wants to make a business around it. And there have been plenty of other businesses that have popped up around it. I mean, there's companies like American Reserves, which offer prepper essentials, which are these 12-month supply of foods that will run you, almost $3,000, an emergency crank rodeo, radio for $60.

There's fieldcraft survival, which is offering survival classes for $250 across the country. And of course, you can go very, very high end and get these luxury bunkers that we've seen. The Silicon Valley elites, Mark Zuckerberg, has built a bunker out in Hawaii. You can get them as, get these built, but also get membership to them for $55,000. So there's various stages and various levels of preppers, but clearly prepping is something that you see a lot of Americans kind of indulging in right now. All right, everyone. I think it's time we have the talk. I'm going to ask you to sit down so you can learn about the birds.

the drones. Yeah, this talk is a little bit different than the other one. Instead of coexisting like birds and beads, birds and drones have been locked in an aerial dogfight high above the skies of Rockaway Beach, New York. The turf war began back in May when the city deployed a fleet of drones above the popular beach to scan for sharks and pinpoint swimmers in distress. The shorebirds who called Rockaway Beach home, especially the American oyster catcher, do not like their new neighbors. In the past few months, these birds have been attacking the drones, which they see as a threatening raptor to defend their nests. No oyster catcher has been hurt yet, but experts warn that if the combat continues, they could get themselves injured.

Worse, it could trigger a stress response that causes the birds to flee the beach entirely and abandon their eggs. Toby, New York hyped up this fleet of drones ahead of the summer to protect swimmers against shark attacks and dangerous currents, but it's having some unintended consequences. The food chain is all mixed up here in jungle, entangled, because You're right. What makes this so complicated is that these birds, these shorebirds, these oyster catchers, are highly endangered. And you do not want them to elicit this stressor response where they just fly away and abandon their nest. So city officials have said they've seen these swarming incidents where they all surround the drones because the drones are noisy.

They are very stressful. They do appear to be a predator that are threatening their chicks. So it's a normal response from the birds. But you're trying to keep people safe. You're trying to protect them from sharks. but at the same time you're trying to protect these endangered species. It is an interesting case of unintended consequences. And these are no ordinary drones.

I mean, these are pretty substantial. They're three feet long, and they carry an inflatable raft that can be dropped into the ocean to rescue a struggling swimmer. New York has been really adamant that this can improve safety around shark and human interactions. And New York is not, by far, is not the only sort of coastal city or community to deploy drones. Australia has the largest commercial drone operation shoreline drone operation going right now because there are a lot of great whites off the coast there. And so this is an exciting new technology that cities and local areas think they can protect beachgoers, not just from sharks, but people

who may be drowning under ripcorns or things like that. But there are also the local wildlife to contend with. So in New York, at least, they've changed their flight plans a little bit to take off away from nesting areas because they're listening to wildlife experts and trying to make things safer for the birds. I am glad, though, that we are innovating around shark technology because Australia has relied on nets for a long, long time, mostly because it gives you a sense of security as a swimmer if you have these shark nets surrounding kind of the swimming areas. But a lot of people say it's an imperfect solution. Most of the sharks are actually found on the swimming side of the nets. And then it also causes just lots of other wildlife to be caught up in

the nets as well. So I'm glad that these drone programs are growing. Obviously, you want it to coexist with the nature that you want to protect as well. Neil, a new Airbnb just dropped, and it's tranquil, private, a little bit dusty and out of the way, but you're guaranteed to feel the weight of the world lift from your shoulders as soon as you step foot in it. It's a moon cave. Yes, scientists have found a cave on the moon not far from where Neil Armstrong and Buzz Aldrin landed 55 years ago, and they think it, and hundreds more like it, could be the perfect abode for future astronauts. It's located in the Sea of Tranquility, just a short 250-mile jaunt away from Apollo 11's landing site. Radar data shows that the cave, which was likely created by the collapse of a lava

tube, is around 100 meters deep and 130 feet wide, which, with Manhattan rent prices, would go around 4K a month. Other than just being very cool, these caves could serve as natural shelter for astronauts, protecting them from cosmic rays, solar radiation, or in the event that the moon is haunted from other stuff, too, as we push forward towards setting up human outposts on the moon. We've come full circle, Toby. We started life in caves as cavemen on Earth, and now when we go and inhabit another planet, we're going back to becoming caveman.

But this seems to be an actual huge discovery. I mean, building habitats from scratch on the moon, when we go and creating our economy there in our civilization or community. Building something from scratch would be so expensive, so time-consuming. So if we already found these habitats in caves, it seems like it could, but it's a potentially huge breakthrough for habitats on Mars. One of the issues is that the caves are really, really deep. So a lot of scientists are saying you probably have to repel down.

And then to get out, how are you going to get out of a 100-meter deep cave? They're talking seriously about jet packs or a lift or some way to get out. I think about anyone who's seen Dune 2, you know those jetpack scene, just ascending out of a lunar crater. Very, very cool. But yeah, most of these caves were probably formed millions, billions of years ago when lava was actually flowing on the moon, creating a tunnel through the rock. And then these tunnels eventually cave in, resulting in these lunar caves. And you're right, it is just a beautiful, full circle moment of we started in caves maybe when we go to a new planet, a new, what's a, I guess it's just a moon. It's just a moon. It's just a moon. We would live in caves once more.

All right. That is a wrap on today's show. Thanks so much for starting your morning with us and have a wonderful day. For any questions or feedback, send an email to Morning Brew Daily at morningbrew.com. And don't forget to snag a new MBD t-shirt at shop.m.mornedmorrowbrue.com. Let's roll the credits. Emily Miliron is our executive producer. Raymond Liu is our producer. Olivia Graham is our associate producer. Uchenawa Ogu is our technical director. Billy Menino is on audio. Hair and makeup is so thankful for air conditioning because it is absolutely blazing out there. Stay cool, everyone.

Devin Emery is our chief content officer and our show is a production of Morning Crew. Great show today, Neil. Let's run it back tomorrow.