¶ Intro / Opening
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¶ Opening Headlines and Sports Controversy
Good morning, Brew Daily Show. I'm Neil Freiman.
I'm Toby Howell today.
How Google may have saved lives in the Venezuela earthquake.
Then Apple is raising prices and it's blaming AI. It's Friday, June 26th. Let's ride.
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The US men's national team closed out their group stage campaign with a last-minute loss against Turkey last night. But no matter, after two previous victories, we're on to the round of 32, facing Bosnia and Herzegovina on Wednesday night. Pretty unfair. We have to play both of them, if you ask me.
But as the other countries wrap up their group play today and tomorrow, I want to draw your attention to a bizarre situation unfolding on Saturday in Kansas City. There, Austria will play Algeria in a game nobody wants to win. Basically, through a quirk in the tournament, the team that wins this game will likely have to play the juggernaut Spain in the next round, while the loser will face a less formidable opponent.
So we may be about to watch a World Cup game in which you are disincentivized to score. Could be thrilling television.
The World Cup has run into this problem before the infamous example came back in nineteen eighty two when West Germany and Austria entered their final group match knowing that a one goal German win would send both teams through. Obviously Germany scored early and then both sides literally just.
casually passed the ball around in front of an increasingly angry crowd. The match became known as the disgrace of Gijón, which was the Spanish city where it occurred. And FIFA literally changed the rules after this. Forty four years later, Algeria and Australia f or in Austria, excuse me, find themselves in a very similar situation. And I say Algeria because ironically, Algeria was the team eliminated.
Because of the disgrace of Hijon in nineteen eighty two, history doesn't repeat itself, but it certainly does.
Right.
So then we might get a d both teams trying to lose to each other, which would be not a disgrace actually. All right. Now a word from our uh sponsor, ServiceNow. Neil. I feel like we're getting a lot of promises about AI taking over the work we hate doing, but lately it feels like I'm doing more work rather than getting any help.
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¶ Google's Role in Venezuela Earthquake Alerts
Two powerful earthquakes rocked Venezuela Wednesday evening, killing at least two hundred and thirty-five people, while many thousands more are feared dead. The twin cakes struck thirty-nine seconds apart. Magnitude seven point two west of the capital of Caracas at six PM local time, the next a seven point five, less than a minute later, just three miles away.
Rapid back to back earthquakes is an unusual phenomenon known as a doublet, and is particularly dangerous. The earthquakes were already the strongest hit the country in more than one hundred years. And they could end up being the deadliest and costliest in Venezuela's history, according to the US Geological Survey.
President Trump, who ousted leader Nicholas Maduro at the start of the year, said the US was quote ready, willing, and able to help and had instructed federal agencies to move quickly. We will be there for our new and great friends, he wrote on social media. After years of economic downturn, Venezuela will need all the resources it can get for recovery, and many other countries, including Colombia, Mexico, Chile, and Qatar, have pledged help.
Rescue efforts are ongoing this morning amid the rubble of collapsed buildings focused in the northern coastal state of La Guayra. This region is typically home to a population of 500,000, but was bursting with even more people when the quakes hit because it was a national holiday on Wednesday and everyone was at the beach. Toby, lots of attention on rescue efforts now, but I want to focus. on preparation because Google played a surprising role before the earthquake struck.
Yeah, I did not know this, but billions of Android phones are actually a global earthquake detection network. Every Android phone contains an accelerometer. It's the same sensor that kind of measures the physical orientation of your phone. When that accelerometer detects shaking consistent with an earthquake, It sends the data and location to Google and then Google uh broadcasts that likely earthquake uh alert.
two phones more than two billion android devices worldwide have this feature built in and users in Venezuela did receive warnings sometime seconds before the quake actually hit they were posting screenshots
on social media. In total, about four million people got notified in. Again, seconds matter in a situation like this because it can get you enough time to move away from windows to maybe stop driving or something like that. So it's just a fascinating aspect of the technology that most of us have in our pockets, it's actually a life-saving technology when it comes to earth.
Right, and I also about earthquakes. There's different types of waves that come with earthquakes. You have P waves first, which are travel the fastest but caller s but cause smaller vibrations in the earth. Then S waves comes next and then L waves finally. Those are the most destructive. But often we can't detect P waves. It you just wouldn't be able to tell before the bigger ones.
come and that's what Google's technology, this accelerometer in your phone can do. It's the same technology that when you flip your phone sideways or horizontally, like it du it changes the screen and that's exactly the what they use. for this earthquake detection technology. Obviously they don't rely on one phone. They rely on the fact that there are billions of people and often millions of people in a certain location like Venezuela with Android phones.
So they work together they work together, they go to the server and the algorithm says, okay, it looks like a bunch of these phones are jostling in this same exact area, and then they send out this alert as fast as they can.
Sort of information arbitrage or at least like speed arbitrage because data travels at the speed of light. So they can get the alerts to phones faster than the waves can travel through the earth. So literally Waves P waves tra uh travel at six kilometers per second, which you know is fast, but you know, data is literally the speed of light. So that's why you can get this second advantage on um the earthquake. And this is a system that has been employed before.
Back in twenty twenty four, there was a earthquake. A million Android users received alerts as well. In the US, they actually have underground sensors buried as well to go along with uh the accelerometers that are in Google's phone. So It's a relatively new field, earthquake detection and earthquake notification, but it's growing more complex and this was one of the biggest examples of it potentially saving lives.
Yeah, yeah, there's no way to predict an earthquake. That Google, every every seismologist says we have no idea when an earthquake is coming, but if S if the earth starts to tremor a little bit, that is when we can get the word out. A bunch of countries do have government-run early earthquake warnings. And Google takes pains to say, look, this is not a replacement for those, it's a supplement. So in the United States, Mexico, Japan.
Taiwan, these places that have a lot of seismic activity, have these existing government-run programs. So people in California might have an existing uh app called My Shake, and so they might be very familiar with this that goes off before uh an alert in addition to the Android system because a lot of people also have iPhones. Venezuela, other countries with less fewer resources that maybe aren't as seismically active, don't have these government programs, just don't have as many resources.
So that's where maybe an Android system could fill in the gap.
All eyes now turn to the rebuilding costs as you know you try to clean up after this. Uh estimates from the US Geological Survey put economic losses between 10 and 100 billion for Venezuela. That high end estimate is roughly the size of Venezuela's entire economy. So there is going to be a long road back.
¶ Apple's Price Hikes and AI's Inflationary Impact
Moving on, it is stock of the week, dog of the week time, this segment where we pick one stock that is overreacting to last night's USA game and one stock that trusts Pachatino. I won the pre show Timothy Chalamet lookalike contest, so I'm up first. And since I'm feeling a bit pessimistic after last night's result, I'm starting with our dog of the week, which is Apple. A week ago, we were warned that Apple was going to raise its prices as the company could no longer absorb soaring memory costs.
Well, that day has come and the increases are significant. Its cheapest computer, the MacBook Neo, jumped$100, the MacBook Air$200, the MacBook Pro$300. Increases also hit the iPad, HomePod, and Apple TV. Tim Cook has called the memory shortages caused by AI a 100 year flood. I've never seen anything like it in any area over 40 years, Cook followed up. Parts of Apple's ecosystem did remain untouched. The iPhone did not get more expensive, neither did the AirPods or Apple Watch.
Seems like Apple made the deliberate decision, at least for now, to protect its most popular products, despite shortages affecting every part of its lineup. So the bottom line is prices are going up, and it's not hard to point the finger at the AI build-out. The infrastructure boom is so big with over$740 billion in spending committed by big tech this year that it's pushing up prices across the economy.
All these input pieces, memory, storage, servers, everything is so in demand that things are just going to get pricier. Neil, investors did not like seeing Apple capitulate here. Shares fell more than six percent, setting the stock to its worst day in over a year.
Year. I like the way the Verge put it. Like when it comes to prices, Apple is kind of a reverse canary in the coal mine. It's not necessarily the harbinger of a crisis. It's an indication that a crisis is already full-blown. I mean, think about how standardized Apple prices are. You go into an Apple store, you go online. Uh AirPods are$2.99. IMAC is this. It's just the standard until they release a new model, and then you figure out what that price is, and then that's the price.
seemingly forever. So for Apple to raise prices like this, I mean it's up to twenty five percent too, is certainly an indication of where we are in what they're calling Ramageddon. It's not just Apple, electronics prices are going up across the board because of What Elon Musk also chimed in and said, This is a I've never seen anything like this price increase. Analysts from Gartner say estimate that this year we're gonna see.
Hardware price increases ranging from about 10% to 20% laptops, PCs, and smartphones.
I think this was very strategic though. Obviously the input. cr prices forced Apple's hand here. But the fact that they made Tim Cook do it, he's an outgoing CEO. He did not want to lay the responsibility of that unpopular decision at incoming CEO John Turnus. So So he kind of got it out of the way, taking the fall, if you will. But then the other purpose that it uh served is that Apple is equipping their devices to be more AI native.
Going forward, they're putting more RAM into their iPhone to support their upgraded Siri. So rather than making those AI-enabled products. seem pricier. They're kind of blaming it on Cook and then blaming it on the memory shortage. So consumers are sort of warmed up to the idea that the iPhone might get more expensive. You probably have a two thousand dollar foldable iPhone coming as well. So I think it was a very strategic move.
Buy Apple to do this right now outside of their normal product cycle so they can pre prep consumers for what's coming.
I'm glad you brought up AI. I mean it's been so we haven't brought it up on the show yet, this and it's been about ten minutes, which it must be a record because there's a raging debate about whether AI will be inflationary or disinflationary among economists or artists. Is AI is this revolution going to raise prices or is it gonna lower prices? In the long term, at least in the short term, we're seeing evidence of AI inflation. All this data center build-out you mentioned,$741 billion.
spent this year. They're all going after the same components. The stu same stuff that goes in your phone and your laptops also goes into a data center. And the fact that they're spending so much money on these components is raising prices, not just for data center stuff, but for the stuff that goes On our desks and in our pocket. And at least in the short term, it seem seems like the AI inflationary predictions are going to be true because.
We're we're expecting these companies through twenty thirty-two to spend eight trillion dollars on AI infrastructure, which is five times the market value of New York City property market. So this is just an insane amount of money going after a certain amount of components. So it looks like There might be AI inflation going forward for these particular devices. Now, in the long term, it's a bigger question because in hit history shows us.
that when you have a technical revolution, yeah it's really expensive to build the infrastructure and that causes inflation in the short term, but over the long term, increased productivity means prices go down.
¶ Oil Price Drop and Lagging Gas Prices
Okay, my stock of the week is oil, which, like Bilbo Baggins, went there and back again. Yesterday, the international benchmark Brent Crude erased all of its wartime gains. falling to below seventy three dollars a barrel for the first time since the war in Iran began in late February.
Yes, usually stock of the week means price go up, but oil prices going down is unequivocally good news for the global economy, which was dealt the largest energy shock in decades when Iran closed the Strait of Hormuz. Choking off twenty percent of the world's oil and natural gas supply. At their peak, oil prices shot up to$125 a barrel, causing all kinds of problems in East Asia and raising gas prices for American drivers.
Because of higher fuel prices resulting from the war, US inflation has reached a three-year high. But the worst appears to be over, with the US and Iran reaching a truce to stop the hostilities. The Strait of Hormuz is tentatively, shakily back open for business. Drenching the world in much needed oil. On Wednesday, seventy-eight tankers sailed through the strait, representing fifty-seven percent of traffic levels before the war.
Toby, while it wasn't pleasant at all, it looks like the global economy was able to absorb this once in a generation energy shock without too much permanent scarring. Yeah.
How did they Escape. Basically, a lot of different factors came into play. Countries started releasing their strategic petroleum reserves. They had the rainy day fund and they tapped into that for sure. Saudi Arabia kind of came in clutch too. They started doing pipeline shipments. That again isn't enough to replace the oil going through the Strait of Hormuz, but it was five million barrels per day. That's a third of the Hormuz's normal traffic.
Uh m the US military did start to escort some ships through. They they managed to get five hundred ships carrying two hundred and fifty million barrels of oil. Through the Gulf, which is again not nothing. And then also there just wasn't quite a strong demand right now. That's a big component as well. Specifically over in China, there wasn't a massive increase. If that had if China had put too much pressure on the global o oil markets, we might be
talking about this in a very different way right now. So it wasn't just one thing. It was just a bunch of little things that helped paper over the crack that was, you know, the Strait of Hormuz being closed. All right.
So you got this vacation come up. You have a road trip, it's almost July fourth. Uh, next weekend you're thinking, okay, great, oil prices are going down. Gas prices are also gonna come down because they've been so high recently. Not quite. So oil is down about 36%, but gas prices are down just about 12.5% from their peak. So, what is going on? Why aren't gas stations lowering their prices in conjunction with oil? It's because of this phenomenon known as rockets and feathers. Well,
Gas prices go up very quickly like a rocket, but they come down like a feather. So it's going to take some time for uh the price at the pump to come down. President Trump. is not happy. Actually he's taking out a page out of President Biden's book by blaming major oil companies saying you have to lower prices. Look, the oil oil prices are down to seventy three dollars a barrel from before the war, but your gas prices
are still much higher. So he's ordered the DOJ to investigate uh these oil companies. Chevron C CFO gave a interview to CNBC saying, look, President, we're doing all we can to bring down prices, just doesn't come down as quickly as you want.
It kind of feels like a moment in the race where like the leader is celebrating right before the finish line, and then someone might come from behind and nab them at the end. US screwed inventories are still at their lowest level since nineteen eighty-four. We really drained, you know, the tanks, the strategic pro petroleum reserves. So if something flares up again in the Strait of Hormuz, we don't have that cushion anymore. So
Literally no gas left in the tank.
Right. That was a much better metaphor right there. Son of a gun. Okay, no gas left in the tank, so don't celebrate too early. There still might not be uh the end of this a crisis playing out. Alright, we're gonna take a quick break and come back with a story about Grand Theft Auto right after this. Neil, it feels like every week there's a new AI model making headlines.
And somehow I'm expected to keep up with all of them.
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¶ Grand Theft Auto VI: Digital-Only Release Sparks Debate
Gamers have been waiting over a decade for Rockstar to finally release Grand Theft Auto 6. Over 13 years to finally taste that sweet sensation of sliding the disc into their gaming console. But they might not get that moment ever. Now don't panic. There is a release date for the off-delayed game, November 19th, but there's no physical disc. When you order the most anticipated video game of all time for$79.99, you get a box.
with a download code inside. This won't be all that new to gamers. Digital game sales have long since overtaken physical copies. A lot of new consoles don't even have slots for discs anymore. But for a game whose previous edition sold over 225 million copies, this so-called code in a box model is being tested at the very highest levels of hype.
Why go digital? There's clear upsides from instant downloads to easier updates, but consumers aren't the biggest fans because you don't actually own the game. You can't loan it to a friend, and if your hardware hits the fritz, You might lose your game too. Neil, after all this anticipation and all this buildup, would you be let down if your actual game box came with nothing in it?
Personally, I would not care because if I was waiting twelve years for something you could serve it to me on a steaming pile of doo-doo. and I'd play. Just to put this in perspective, how monumental of a development cycle this was. It took less time and was cheaper To build the Burj Khalifa, the tallest building in the world in Dubai, than GTA 6. So the Burj Khalifa took cost about$1.5 billion, took six years to build. Well, GTA 6 took
12 years since its earliest development. And some estimates, we don't know for sure, some estimates put this cost of development in the two to three billion dollar range. Insider called it the stake. For this are among the highest of any product release this decade, and I don't think that's hyperbole.
The Burj Ghalifa being easier to build than a video game is crazy. But again, let's go back to why the heck that they're not doing a physical disc here at all. Some of the reasons too is just that leaks have been a massive issue for this. And if you only have uh access to the game when the servers unlock.
It hypothetically cracks down on leaks. Also, when it takes that much money and that much time to develop a game, it's going to be very large. And some people are like, I don't even know if GTA 6 could fit on existing PlayStation and Xbox discs. That's how big it is.
That being said, your device now is gonna have to eat that memory as well. It is ironic too,'cause it relates back to our our previous story. The Xbox has ha seen their price hiked multiple times over the past few months because of the memory shortage. So I'm sure Xbox is X are going, come on, Rockstar. Like you're giving one of the biggest games in history to us now, right when we're having a memory crunch. But
Gamers are a little bit split on this. I was asking one of our coworkers who games, and she's like, for games that I really care about. uh like Legend of Zelda. I want to get a physical copy. One for archival purposes. I want to have this. I want to be able to pass this down. And then two, I just don't
I won't lose it. Like she says, I'll just leave it on myself versus digital. You never know what can happen. Maybe your your device, you know, goes uh dead and like you don't have the game anymore. So definitely not the most popular decision amongst gamers.
So this thing is actually coming out, which is crazy. It seems like it's been forever. This was originally scheduled for the fall of 2025. Then it was delayed till May 2026. But now we have a date, November 19th. It's gonna be available for pre-download or pre-purchase on November 12th, so you can have it ready to go on November 19th. This has been a long time coming.
¶ Amble Buggy and Celebrity Wedding Rumors
Let's bring to the finish with some final headlines. Remember when Apple spent years trying and ultimately failing to build a car? Well, it turns out some of the people behind that project never got transportation out of their system. One of Apple's top former designers, Julian Hainig, just launched a company called Amble, and its first product looks like what would happen if Apple designed a golf cart.
It's an open air electric buggy with no doors, barely any buttons, a cork steering wheel it that tops out at forty miles an hour. People who have seen one in person have likened it to a moon rover. The target market is not golfers despite looking sort of like a golf cart. Each model costs twenty-five thousand dollars, but their first production line is completely sold out with the initial customers being almost entirely luxury hotels.
Neil, Haining's thesis is that there's a transportation gap between a Tesla and an e-bike, one that Amble can amble into.
Yeah, I know most people can't see what it looks like right now, but it looks like something you would use to get around Jurassic Park. Though I'm not sure with a top speed of 40 miles per hour, you would be able to uh to outrun the T-Rex, not the Verge, but it well, it's cross between a Rivian and a Land Rover shrunk to adorable dimensions. And it feels like there is a need here based on the demand from these hotels.
We're golfers. Golf carts are ugly. And when you think about when you think we don't really think about it because it we're just use it to get around, but if you're a higher end resort, you're shuttling people, you wanna give off this air of luxury and you're using you know, a standard golf car, uh it looks like this this industry, this particular vehicle, this this short range mobility is ripe for disruption.
It's definitely one of those things that sounds really dumb on the surface, but then you start digging into the use cases, getting around communities. Again, most people use golf carts, but the thesis is that golf carts are suited for grass. They're not necessarily built for
moving to pavement and well, I guess they're kind of belt for moving to pavement. They're mainly just ugly and they're mainly just slow. So why don't you beef it up, make it a little bit more roadworthy, make it a little easier on the eyes and maybe it can start to fill in those micromobility situations that you don't think about, but definitely do exist.
Imagine rolling up to the buffet in the villages with one of these.
That's what I'm talking about.
You'd be the coolest person there. All right, finally, Taylor Swift is marrying Travis Kelsey over July fourth weekend. And the celebrations will take place at Madison Square Garden. Thanks to some sleuthing by the New York Times, it sure looks like the home of the world champion Nyx will be the venue for America's version of a royal marriage, the biggest pop star of her generation with a three-time Super Bowl champion football player.
While there's been no official announcement, the tea leaves all point to an MSG wedding. The Times found that a permit was filed with New York City to close the streets around the arena from July 2nd to midday, July 4th. Several Chiefs players have already booked hotel rooms in Times Square, and Amtrak police officers have been told to expect a swift wedding that weekend.
It should be another massive A list celebration in a city that's been partying in the streets for a month straight already. Toby, I personally hate this, but then again, I'm not marrying T Swift, so I've no say in the matter.
So I was polling my Swifty friends and saying, what do you think about this? And most of them are in a little bit of denial. That was the general consensus on social media, because they can't quite wrap their head around that Taylor Swift would want to get married in Madison Square Garden. But then
The argument I heard from them is if we think she's getting married there, that probably means she's not, because she's the queen of deception, she's the queen of Easter eggs, and we're probably thinking exactly what she wants us to be thinking right now. And she's leading us on a breadcrumb trail.
That dunno. That seems a little bit like Coke to me, but that is potentially one reading here. It is fascinating though that this is probably America's royal wedding, which is just a little sad, but also very fun to think about that uh Singer marrying a football player is our version of the royal wedding. And when you put it in that regard, then yeah, make it the biggest spectacle possible, put it in Madison Square Garden.
Well actually when you think of the logistical considerations it starts to make sense versus an open air venue because think about m what what is a better venue for Getting a bunch of celebrities in surreptitiously than Madison Square Garden. That I mean, it's probably A tier we've as we saw from the Knicks playoff run. It's an enclosed environment. You're gonna be shut out from the outside world and people taking pictures of you like a open air wedding wood. So and also I mean there's a stage.
that she's probably gonna perform at and a bunch of her friends or musicians want to perform at during her wedding. So when you actually think about just the nuts and bolts of what someone at her level of fame would need in a wedding in terms of privacy and security, it starts to make a little sense, even if it's not the most romantic venue.
would be cap off a generational run for New York this summer. I mean, we have the World Cup, we have the fact that the Knicks made the playoff run. Add in a Taylor Swift wedding on top of that, New York City might explode. That is just truly a generational run that you might never see again.
Alright, that is all the time we have. Thanks so much for starting your morning with us and have a wonderful Friday and an even better weekend to share your thoughts on the episode or anything else. Send an email to morningbrewdaily at morningbrew.com or DM us on Instagram at embedaily show. Let's roll the credits. Emily Milliron is our supervising producer. Raymond Liu is our senior producer. Our producer is Olivia Graham, and our associate producer is Olivia Lake.
Technical direction by Nina Miller. Heron Makeup's invite for Taylor's wedding must have gotten lost in the mail. Devin Emery is our president and our show is a production of Morning Brew.
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