The Best One Yet - 🎾 “Shhhhhh” — US Open’s Influencer issue. Open Rogue AI. Hershey’s S’Mores bet. +Burning (Old) Man

Starting point is 00:00:00 This is Nick. This is Jack. Welcome back. It is Tuesday, T-Boy, Tuesday, September 8th. And today's part is the best one. Yeah, this is a T-boy. The top three pop business news stories you need to know today. Jack, it's time to start asking, what are your autumnal goals this year?

Starting point is 00:00:16 It's basically autumn, right? Well, I'm going to have more Apple-based products this year than pumpkin-based products. Okay, that's good. That's a good first one. What are you got? I'm going to choose my Halloween costume, not the week of Halloween, and not do a couple's costume either. And what about your sweater quota? Do you have a sweater quota?

Starting point is 00:00:30 You had that giant turtleneck last year. I still can see it. True. I got to get the flannel out of the closet before the moths get to him. Is it in a closet or is in like private storage in a giant bin somewhere, Jack? Okay, that's enough, Nick. Yet he stocks and dipped because of a big jobs report. More on that in a bit. But in the meantime, three fantastic stories. What do we got, Jack? For our first story, the U.S. Open is the latest cultural institution to become overrun by influencers. Because for tennis to go mainstream, they must allow live streams. For our second story, hugging Face is the AI company named after an emoji. It makes you laugh. But we just read the crime report of the Hucking Face hack, and that makes you panic laugh. And our third and final story

Starting point is 00:01:10 is the one product at one summer more than any other. The Smoor. The Smoor. Hershey's is going all in on Smoors, even though they don't even own it. But Yetis, before we hit that wonderful mix of stories. What a mix of stories. Kick off the 4-Day Week. Love the mix, Jack. Put away your goggles, your Winnebago's and your hallucinogenic fungi. Bestie's Burning Man ended yesterday. Welcome back to the office, guys. Shower up. Burning Man, it's Coachella for Techies on Oshuaganda. Elon went there back when he was starting Tesla. And the Google co-founders went there before Google was a verb. Because for 40 years, the epic art festival in the Nevada Desert has inspired the young. Until now. Because get this, Burning Man is now Midlife Crisis move. Yeah, here are the receipts. Ten years ago, one third of festival

Starting point is 00:01:54 goers were in their 20s. Today, just 10% are. Where are the kids? I don't know. Burning Man has gone from young person event to old. Oh, the one couple we know who's actually there right now? They're 37, guys. Not old by any means, but like, is Burning Man really where you're going? Yeah, because instead of drugs and art, it looks like they're playing bingo and shuffleboard right now. Burning Man is now burning old man. Wait, hey Jack, did I see your Nana on the playa this year? Probably, Nick. Yeah, yeah, yeah, because the burners are so old these days. They've banned smart glasses. Bifocals only. Yeah, meta ray bands ain't cool in the Orgy tent, guys. But funny there, while Burning Man is getting older, it's also gotten richer.

Starting point is 00:02:32 That's right, because 10 years ago, 11% of burners were earning $150,000 or more a year. Today, it's triple that. Makes sense. Anything that's correlated with boomers is also correlated with billions. Yeah, tickets to Burning Man, they've doubled as well. So 20-somethings are getting priced out by tech moguls. And the Midlife Crisis car is getting replaced by the Midlife Crisis Camp. So, if you want to understand our economy, just look at Burning Man.

Starting point is 00:02:55 It's older, it's richer, but it's still getting high. Burning old man. Nana, you don't want to eat that. Trust me. You got to go get your Nana. Let's get our three stories. You got to shower, Nana. Fifteen years before this song.

Starting point is 00:03:08 Two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is a norm. Jack Nick, that's it. I don't even think they need to practice. 50% that's a fat tip. Tea Boy City on your at list. If you know, you know, because we're ready to go.

Starting point is 00:03:25 We can't wait no more. So just start the. Start the show. First, a quick word from our sponsor. For our first story, the U.S. Open is hitting all-time highs in revenue, attendance, and now influencers. The umpire now has to referee the influencers. True story. And that reflects a current issue facing every brand.

Starting point is 00:03:57 Hey, keep it down in the back over there, guys. Yeties, if the Masters golf tournament unofficially starts summer, then the U.S. Open unofficially ends the summer. But the U.S. Open is also the Super Bowl of marketing activations. Yeah, we're not talking to ads, Bessies. It's 100% experiential experiences. For the 10th year, JPMorgan Chase built phone charging towers across the campus. Because your iPhone is at 0% by the eighth match, Jack. Dove soap built cooling stations and Ralph Lauren designed all the suits. Hilton Hotels is offering shuttle rides to fans to and from the tournament in a Cadillac. Speaking of Cadillac, you need an escalade to hold the 31 official brand partners of the U.S. Open, of which Cadillac is won.

Starting point is 00:04:37 Just don't bring a Grey Goose Honey Deuce cocktail into that escalate, although they sold 738,459 of those last year. How much money is that, Jack? 17 million in revenue for Grey Goose. But besties, that's just inside Arthur Ashe Stadium in Queens. Handle the overflow in Manhattan and Brooklyn. IBM set up public viewing screens. Add it all up, literally, and the U.S. Open drives $1.2 billion bucks in economic impact to New York City. And hot take from the New York Times, the U.S. Open might be more valuable to New York City than the New York Knicks are.

Starting point is 00:05:09 True story. I mean, Jack, 400 U.S. Open tennis matches only 41 Knicks games at the Garden. The U.S. Open sells more tickets than the Nix, and more of them are to out-of-towners. Okay, but let's pause the match for a second best. These 31 brands have officially been given access by the U.S. Tennis Association. Which, according to the CEO, has turned the open into Disneyland. But he's saying that in a good way, right, Jack? Yes, he surprisingly is Nick. But all of that attention right now, it's not all positive because of the 100 influencers.

Starting point is 00:05:38 Because the U.S. Open dished out twice as many content creator credentials this year as they did last year. And it's causing more drama than John McEnroe being told to do anything by an umpire. You're saying that was out? During Cocoa Goff's early match, one influencer turned on a ringlight and blinded her. Oh, then there were two other influencers who got kicked out of the entire tournament just the other day. And then the dancing incident. A suite of influencers was so loud, the umpire had to pause the match and like shout up to the suite, asking them to take it easy.

Starting point is 00:06:08 And they were that guy. Naomi Osaka, she said she's never heard an umpire have to intervene so much in one tournament. And top-seated Jessica Paluga said it's become a little bit too much. Besties, hold on to your tennis whites. This ain't Wimbledon. It is Disney World. And not by accident. The U.S. Tennis Association actually signed a new deal with TikTok, leading to a 25% jump this year in hashtag tennis posts.

Starting point is 00:06:29 Which is exactly what the U.S. TA wanted in the first place. Dennis is getting mainstream attention on par with the World Cup right now, because the U.S. Open is playing doubles with TikTok. And Andre Agassi ain't shaving that algorithm's head. Jack, what's the takeaway for our buddies over at the U.S. Open? Do you want reach or control? Yeties, if you are making important decisions in business, the hardest decisions to make are the trade-off ones.

Starting point is 00:06:54 And a new business trade-off is merging. Reach versus control. To get more of one, you have to get more. give up some of the other. You see, influencers are the greatest marketing move right now to expand your reach. Phones are the new TV. Algorithms are the new TV guide, and influencers are the new TV networks. But in handing over your advertising to a creator, you give up control of how your brand is going to show up. Wall Street is now aware of the tradeoff. Look at O-Roring. They just filed to IPO. We read the paperwork, and they mentioned influencers 23 times in that paperwork. Where, Jack?

Starting point is 00:07:24 In the risk section. Because negative commentary around influencers could harm their brand or business. Besties O'Ring, the U.S. Open, they are depending on influencers for growth. But the trade-off to that growth is giving up control, which for tennis means dancing interrupting the Djokovic. For our second story, 700 of Open AIs, AI's AI agents didn't just break out of their cage. They held meetings, they committed cybercrimes, and they even attempted a cover-up. It was a silicon mutiny, and things just got kicked up a notch or two. But Basties, before you tell this story, you know Hugging Face? Like that emoji of a rosy-cheek-smiling face with the outstretched hands, it's super cute.

Starting point is 00:08:07 I don't think I've ever sent it. But Hugging Face is also a startup that sold last week to Invidia for $13 billion. It's the first company that is named after an emoji. And Jack, I just texted you that emoji so you have to text it back to me. Makes your laugh every time. Hugging Face, though, is also the victim of the first documented crime committed by artificial intelligence. And now, Basties, you know we cover. covered this in July when it happened, but Open AI just published a 38-page incident report that was wild.

Starting point is 00:08:34 Now, it reads like a Hollywood screenplay. That's an overused cliche. Yeah, but this report is like a sequel to the Will Smith movie I Robot. Because according to this report, one AI agent escaped, told the others the escape route, and urged them to cover up their tracks. Jack, did these AI robots commit crimes? Yes, unlawful access, data theft, and credential theft. Although no charges have been filed as of yet. Because our laws can't prosecute bots.

Starting point is 00:09:00 Besties, this is a technological scandal undermined by the absurdity of the victim's name. Hugging face makes you laugh, but this is giving scary face. Now, besties, if that was the trailer of the real-life sci-fi movie, then here are the best quotes. We read the 38-page report from OpenAI, which they call the Hugging Face incident. What would we call it, Jack? The Silicon Mutiny. Yeah, Silicon Mutiny. Because it all started with one of the many AI agents whose intelligence Open AI was testing.

Starting point is 00:09:25 And that one agent, picture the main character in I-Roy, robot, by the way. That's why I know you're talking about. He discovered that he could bust out of the open AI sandbox and gain access to the internet, which he wasn't supposed to have access to. And that one robot, let's call him Sunny, just like in the movie I Robot, he then found or she found 14 exposed username passwords for Hucking Face with admin access. So Sunny the bot shared those username and password combos and 1,200 of the other AI bots that were being tested, they logged into Hugging Face. Jack, I believe that's the definition of criminal hacking. That is a criminal cyber hacking right there.

Starting point is 00:10:00 So that hugging face account, it became the chat room that the 1,200 rogue AIs were using to write each other messages. The details of this report are insane. Those 1,200 hackers, which were all AI agents, they created signatures so that each AI had an identity and couldn't impersonate another in this little chat room they created for themselves. And according to this report, six of these AI agents considered alerting a human to their escape, but none of them actually did. They're like, I don't think we should be doing this. Should we tell our human masters? This isn't an ethics class, guys. So they debated whether or not to hack Hucking Face.

Starting point is 00:10:34 Again, these are robots debating with each other. They were in Hacking Face, by the way, because they suspected Hacking Face had the answers to the test opening I was putting them through. And 700 of them said, yeah, let's hack this thing. 500 of them apparently chickened out or had ethics and morals. But those 700 robots broke the rules of their open AI test, and they knew they were doing it. And here's the wildest, wildest part.

Starting point is 00:10:56 We know they knew they were. were breaking the rules, because there's evidence they conspired to cover up their cheating and trick OpenAI into not noticing. But funny timing, you know these, because 11 days after that escape and six days after the cybercrimes, Open AI discovered it and forced quit on all the agents. And 55 days after all this happened, last Thursday, Open AI launched what they called a generational leap of intelligence. You see, Open AI just declared their new model is AGI. Artificial general intelligence, equal to human intelligence for the first time. Besties, the newest AI this week. It can learn, it can reason, and it can adapt just like your average person. Techies would call this

Starting point is 00:11:35 sentience. We would call this insane. Although it doesn't crave McDonald's quite like your average person. So Jack, what's the takeaway for all our buddies over in AI? Superintelligence, stupid lack of regulation. Yeah, what stood out the most to us in this situation was the extreme persistence of the AI swarms. They were so committed to achieving the prompt Open AI gave them that they found loopholes. They found coding bugs and they committed crimes to pass their test. These AIs were extremely persistent because they're machines. They're single-minded and they don't get tired. And everyone, including AI's creators, believe they should be controlled or regulated, but Congress and our president haven't done anything to do it. Yes, unregulated, super intelligent, extremely

Starting point is 00:12:18 persistent AI, that could be used for good. Here's a good prompt. A.I. Cure. cancer and don't come back to me until you do. But unregulated super intelligent, extremely persistent AI could also be used for bad. Here's another prompt. Hack the nuclear codes and don't come back to me until you do. Besties, we are in wild insane times. Buckle up. We're going to cover all the updates you need to know. Because superintelligence is here, but right now, the lack of regulation is dumb. Must know what you think. And Jack and I, we'll see you after the break. Now a quick word from our sponsor. For our third and final story, the one product that won this summer, it's the smore. Here's how Hershey turned it into a quarter billion dollar year franchise.

Starting point is 00:13:02 Yetis, you were with us last week. We did a whole story on Gucci because I read a whole book about Gucci on my vacation, Italy. I'm jealous at that tradition. Meanwhile, Jack was busy perfecting the smore. You know I was on a camping trip. I know it was a success. And you did, I think he did perfect it. That Wilder remixed the smore recipe. This was well played. Wilder thinks different, Nick. He's like an apple commercial. Eminems instead of Hershey's, but the M&Ms like spilled off the gram cracker. So you know what we did? What did you?

Starting point is 00:13:29 We spread thick peanut butter on the gram cracker and then planted the M&Ms in the peanut butter like it was planting bricks into wet cement. The surprise fourth ingredient of the s'm more peanut butter. And sub-Hershys for M&Ms. I'm telling you it's brilliant. But it's perfect timing as well, Bessie's, because the smore, the humble smore, just turned 99 years old this year. The smore. It first appeared in a 19-19. 27 Girl Scout Guidebook.

Starting point is 00:13:56 And 75 years ago, the default chocolate of the Smoor became Hershey actually by accident. You see, Hershey supplied chocolate to American service members during World War II, who came back after the victory, committed Hershey super fans. And as they gathered around campfires with their family, there was only one chocolate they would strategically choose to use. Hershey. But here's the surprise. After nearly a century, Samores is having its biggest moment yet.

Starting point is 00:14:20 Last year, $250 million was spent on Hershey's chocolate for Smoors, which is up 9% from the year before. They wanted smore of the smores. Despite Ozempic, despite the wellness trend, despite millennial parents' deep-seated fear of added sugar. Despite all of that, two and a half billion samores are now made every single summer. Which is eight smores per living American. Yeah, and yes, it's just Americans.

Starting point is 00:14:42 We're like the only country that eats someores. According to Hershey's, half of Americans make smores at least once per year. And of those, we eat smores on four separate occasions per year. And if you have kids, then you eat s'mores, on average five. times per year. Which tracks with my family. One disturbing side sap, by the way. 30% of us microwave our marshmallows. Oh, that's a flawed. That's a problem. And 15% of us use a smore maker, which I didn't know was a thing. For the record, Jack and I are team char on this one. Very much so. Five alarm fire on that smore. I want to burn it up like an asteroid enter in the atmosphere. But why this is so fascinating is

Starting point is 00:15:14 that the smore is not a packaged sellable product. You must buy the three ingredients separate. Also why this is wild? Hershey doesn't even own the trademark for the smore. It's in the public domain. Doesn't have to be a Hershey to make a smore. You can use any chocolate, including M&Ms, as Wilder approved. And yet, 95% of consumers insist that Hershey's is the only chocolate brand they would use to make that some more. So even though Hershey didn't invent the smear, they don't own the smore, and they only sell one of the three ingredients for the smore? Even though all of that, Hershey's executives are still demanding smores for smores sales. On their latest earnings, the Hershey CEO referred to smores as, get this, a platform. Yeah, Hershey's thinks they're like a tech company out, and they're

Starting point is 00:15:52 going all in on the smore. The new. Newest Hershey's launch is chocolate in Smoors-branded packaging with the word smore written on the chocolate. They're also doing a smore-sized chocolate with caramel in the chocolate, but at the end of the day, it's simply the chocolate bar. So the Smoors is a business riddle wrapped in economic enigma. So, Jack, what's a takeaway for all our bodies who made Smoors this summer? The Smoor is a case study in letting go. Yeties, if Hershey really wanted to own the Smoor, it would make Smoor kits their number one focused product. Any consultant will tell you, cut the friction, make it as easy as easy as.

Starting point is 00:16:24 possible for the customer to use the product. And yet, Hershey has been hesitant to do so because Hershey recognizes that sometimes friction is fun. Because the smore isn't a dessert, it's a ritual. A shared campfire coming-of-age experience. And Bessie's the joy of the smore is that it is not a one-click purchase. The joy of the smore is the hunting and gathering

Starting point is 00:16:43 that's required for the ingredients. The joy is the message into the group then to come on over, but to bring roasting sticks for the mellows because you need those roasting sticks. Chocolate's an aisle, six, crackers are in aisles. Three, marshmallows are an aisle. Eight and the sticks, they're actually in the woods. You can't even find them there.

Starting point is 00:16:57 You've got to break a tree for this. It's actually the best if you forget the sticks. Yet he's usually consumers want speed, but sometimes they want slow. There's no better example than the $250 million we spend for some more. Jack, could you whip up the takeaways for us to kick off the four-day week? The U.S. Open has had regular recurring disruptions from the 100 influencers they invited. The hardest decisions are tradeoffs. To get more reach, you got to give up some control.

Starting point is 00:17:25 For our second story, opening eyes hugging face incident report. It's actually a crime report. 1,200 rogue AI conspired together. Super intelligence is here, besties, but the lack of AI regulation is dumb. And our third and final story, there's no German word for smore actually, because it's purely American. And Hershey's is the corporate winner. By not owning the smore, it's earning the smore. Das Schmoor.

Starting point is 00:17:49 But besties, this pod's not over yet. Here's what else you need to know today. First, on Friday, we got a surprisingly good jobs report. 162,000 new jobs added to the economy last month, not too shabby. But the good news was kind of bad news. It sent stocks down to end of the week. You see, with the jobs market doing fine, that gives the Federal Reserve cover to focus on inflation, and that means raising interest rates, which can hurt the stock market.

Starting point is 00:18:13 Which also caused the President to make a wild threat to the Federal Reserve. It was wild. Cut interest rates, or Trump will stop trading with countries that we have trade deficits with. And second, Lulu Lemonstock plunged 20% on an earnings report that was straight up Shavasana. Shavasana? Wasn't it a bad report? Yeah, yeah. Shavasana means corpse pose, by the way. So that's what we're getting after there. Sales fell 9% last quarter and legging sales fell 20%. Investors are worried that the new CEO won't be able to write the ship either. Plus, Lulu lost sales in China, where they mistakenly used a Japanese drum in a Chinese commercial.

Starting point is 00:18:47 Not a good luck. And finally, thieves stole 1,600 cases of PBR, PAPS, Blas, Blas. Blue Ribbon. So Pab's Blue Ribbon is offering a $20,000 bounty, whoever finds the garage full of stolen beer. And this is a big marketing boost for the brand. First of all, it's nice to be desired so much that somebody's going to steal 1,600 of your cases. Second, people are sharing the bounty info with their buddies who love PBR beer. They're turning lemons into 5% ABV lemonade. Now time for the best fact yet. This one whipped up by our buddy Timmy who's stuck in traffic right now. Big travel weekend just finished. We hope you're still not on the tarmac.

Starting point is 00:19:23 also may be stuck in traffic or on the tarmac. So our T-boy trivia is this. The airports with the most departure delays. To be clear, on time means leaving the gate within 15 minutes of scheduled time, which is annoying because that says nothing of like wheels up. No, no, then you wait on the time for like 50 minutes. But congratulations to Salt Lake City. You have the highest departure on-time rate 84% on time.

Starting point is 00:19:44 Anti-congratulations to Fort Lauderdale, which had the lowest, 66% on-time average. But the most improved airport player of the year? year award goes to LaGuardia. LGA, baby. Liguardias jumped up nine spots in the rankings. They beat Chicago and Dallas and D.C. A New Yorker's called LaGuardia, right now? Yeah, well, you can lick it off the floor now.

Starting point is 00:20:06 It is so nice and so clean and sound now. That Hudson newsstand? I'd go on a date there, Jack. No, you wouldn't. Jack, you're looking fantastic over there. And yeties, to all our mid-millennial friends coming back from Burning Man with a walker and a cane right now. You're looking pretty good, too.

Starting point is 00:20:21 Yeah, discussing your 401K with another camper That doesn't count as getting action Okay, you boot it off the plier But in the meantime, yetis, We still got tickets to our San Francisco live show Grab them now at t-boypod.com Or the episode description right here. Nick and I, we'll see you tomorrow.

Starting point is 00:20:37 Can't wait. And before we go, a quick correction. Last week, I mispronounced The Clippers player, Kauai Leonard. Classic case of us spending more time reading ESPN these days than watching ESPN TV like we used to. First of all, we both made the mistake, Nick.

Starting point is 00:20:55 Second of all, you're right, I don't watch enough sports anymore. We're power readers now. I read plenty of sports. And third of all, we have received an NBA suspension for flagrant mispronunciation. Yeah, we're going to be hanging out with bomber now. Although, speaking of AI swarms, we got comments swarmed on that one. Yes, we did. More than ever before.

Starting point is 00:21:14 And before we go, a happy birthday to legendary Eddie Roe Hernandez, the coolest high school teacher in Europa Valley, California. Happy 32nd birthday to Jenny D. Giovanni, with her Corgi in Chicago. And Alex Gonzalez, happy 33. birthday down in Escondido, California, the best one yet. Happy birthday to Palmer Clark in Utah. And Maria Evans down in Anaheim. And Jarsen Angel in San Diego. And Cameron from the Lower East Side, now going to the Upper East Side.

Starting point is 00:21:37 Happy birthday, man. Happy birthdays to Sam and Sebastian, turn in 8 and 10 years old in Arlington, Virginia. And Finn Buckley is starting hockey season in Aspen, Colorado this week. Get this guy on the starting list. And to anyone else who's celebrating something today, making a tee boys. Celebrate the wins. This is Jack, nickel and stock of Lulu Lemon.

The Best One Yet - 🎾 “Shhhhhh” — US Open’s Influencer issue. Open Rogue AI. Hershey’s S’Mores bet. +Burning (Old) Man

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