Betting coins on the conclave

Summary

Marketplace Morning Report: "Betting Coins on the Conclave" Summary

Release Date: May 6, 2025 | Host: David Brancaccio

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1. OpenAI's Transformation: Navigating Non-Profit to For-Profit

Time Stamp: [00:01]

David Brancaccio opens the episode by addressing a significant development in the artificial intelligence sector. OpenAI, renowned for creating ChatGPT, is encountering challenges in shifting from a non-profit organization to a for-profit entity.

Nova Safo elaborates on the complexities behind this transition:

"OpenAI has needed tens of billions of dollars in investments to get there and the investors who footed the bill have wanted to secure a stake in future profits and to have more of a say in OpenAI's governance." [00:22]

Originally established a decade ago with the mission to "benefit humanity," OpenAI's transformation was met with resistance. In December, CEO Sam Altman announced the conversion to a for-profit corporation, intending to have the original non-profit board become shareholders. This move triggered a lawsuit from Elon Musk, an early backer and current competitor in the AI landscape.

Nova explains the new structure:

"The nonprofit board will remain in charge. The part of OpenAI that takes in investor money and runs ChatGPT is to become a subsidiary structured as a public benefit corporation." [01:10]

This model aims to balance public good with profitability, ensuring that OpenAI continues its mission while accommodating investor interests.

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2. Market Movements and German Political Turmoil

Time Stamp: [01:22]

Brancaccio shifts focus to the financial markets, highlighting a downturn in the key stock index in Frankfurt, Germany, which is currently down by 1.1%. This decline follows a significant political event in Berlin where Friedrich Merz, leader of the Conservative Party, failed to secure the country's leadership in the first round of parliamentary voting.

"It's a first for Germany since the Second World War and an embarrassment for Merz, but he could still become chancellor in subsequent rounds." [01:35]

This political uncertainty has repercussions on the bond market, which remains steady as the Federal Reserve prepares to meet over two days to deliberate on tariffs that present both inflationary and recessionary risks. Brancaccio notes:

"S&P futures are down 0.10% now." [01:50]

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3. Global Betting Markets on the Papal Conclave

Time Stamp: [01:22] – [06:44]

A unique segment of the episode delves into the burgeoning global phenomenon of betting on the outcome of the papal conclave. With 133 Catholic cardinals set to convene in the Sistine Chapel to elect the next Pope, millions worldwide are placing wagers on who will secure the required two-thirds majority.

John Holden from Indiana University provides historical context:

"People have been betting on who becomes the next pope for centuries." [02:24]

Victor Matheson from the College of the Holy Cross observes the expansion of this trend:

"We've seen a much bigger expansion of betting on the Pope globally as technology's gotten better and allowed word to spread quickly." [02:31]

In the United States, where traditional sportsbooks prohibit such bets, platforms like Kalshi offer a financial exchange and prediction market alternative. Victor Matheson suggests:

"Kalshi could be a good predictor." [02:40]

Father Tom Daly of St. Charles Barromeo Seminary offers a spiritual perspective:

"Betting markets and prediction markets actually do a pretty good job at estimating what's going to happen, though." [02:55]

"A really big factor that no one talks about... is the role that the Holy Spirit plays because cardinals are meant to elect the person God wants to be the successor." [03:02]

Despite the analytical insights, Father Daly emphasizes the divine influence that transcends market predictions.

Brancaccio highlights the creative engagement surrounding the conclave with initiatives like Fanta Papa, a fantasy football-style platform that encourages global participation in predicting the next pontiff.

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4. China's Struggle with Declining Birth Rates and Incentive Measures

Time Stamp: [03:25] – [06:44]

Transitioning to demographic challenges, the episode examines the declining birth rates in both the United States and China, with a particular focus on China's proactive measures to encourage larger families.

Jennifer Pak, Marketplace's China correspondent, reports from Dongguan City:

"China used to have a one-child policy. Now up to three are allowed. But Mo Guilan says even with one child, her family's already taken a financial hit." [04:20]

Mo Guilan, a mother from Dongguan, shares her personal struggles:

"There was nobody to help me take care of the baby after maternity leave, so I had to quit my factory job." [04:46]

Irene Yang, a Human Resources executive, discusses workplace anxieties:

"Once I took that long maternity leave, my work was given to another person and I worried that I could be replaced." [05:09]

Despite government initiatives offering subsidies to families with three children, many, including Peng Lu, remain hesitant:

"I won't give birth to a child just for a few thousand dollars." [06:34]

Jennifer Pak highlights the broader economic implications:

"Fewer people working and paying taxes to pay for populations getting older." [04:00]

The segment underscores the significant societal and economic barriers that discourage family expansion, despite governmental efforts to mitigate these challenges.

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5. Federal Reserve's Upcoming Meeting and Market Expectations

Time Stamp: [06:44]

Brancaccio concludes the episode by reminding listeners of the ongoing Federal Reserve meeting, which is set to address interest rates over two days. This event is crucial as markets anticipate decisions that could influence economic trajectories amid current global and domestic challenges.

"Listen to the half-hour edition of Marketplace with my colleague K. Rysdal on many public radio stations, of course, later today or streamable from our homepage marketplace.org." [06:44]

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Conclusion

In this episode of the Marketplace Morning Report, listeners are provided with a comprehensive overview of pressing issues ranging from the strategic transformations within AI giants like OpenAI to the intricate dynamics of global betting markets on significant events like the papal conclave. Additionally, the episode sheds light on China's demographic challenges and the socioeconomic factors influencing family planning decisions. Throughout, notable insights from experts and stakeholders enrich the narrative, offering a multifaceted perspective on each topic.

Transcript

[David Brancaccio]

Artificial intelligence for humanity, for profit or something else? I'm David Brancaccio in Los Angeles. One of the biggest firms in artificial intelligence, has hit a roadblock in its campaign to become a for profit company. OpenAI, maker of ChatGPT, has hit the hurdle. Marketplace's Nova Safo explains OpenAI's nonprofit board.

[Nova Safo]

Is a vestige of when it was created a decade ago to build artificial intelligence to quote, benefit humanity. But OpenAI has needed tens of of billions of dollars in investments to get there and the investors who footed the bill have wanted to secure a stake in future profits and to have more of a say in OpenAI's governance. So in December, CEO Sam Altman said the ChatGPT maker would convert itself into a for profit corporation with its original non profit board becoming a shareholder. That prompted a lawsuit from Elon Musk, who was among OpenAI's early backers and its current rival with his own AI company. Now a new plan, the nonprofit board will remain in charge. The part of OpenAI that takes in investor money and runs ChatGPT is to become a subsidiary structured as a public benefit corporation. Those are certified to have a mission to do public good while also making a profit for shareholders. I'm Nova Safa for Marketplace.

[David Brancaccio]

The key stock index in Frankfurt, Germany is down 1.1% right now after a political thunderbolt today from Berlin. The leader of the Conservative Party there, Friedrich Merz, was not elected the leader of the country in a first round of voting by members of Parliament. Merits needed to cobble together a coalition, but no. It's a first for Germany since the Second World War and an embarrassment for Merits, but he could still become chancellor in subsequent rounds. The bond market is steady here now as the Federal Reserve meets today and tomorrow to consider what to do about tariffs that can be both inflationary and recessionary at the same time. Our coverage will be in the Marketplace morning podcast. S and P futures are down 6. 10 of a percent now. 133 Catholic cardinals are expected in the Sistine Chapel tomorrow to start choosing the next Pope. And people around the world are placing millions of dollars in bets over who they think will get the two thirds majority required to be the Catholic Church's next leader. Marketplaces Elizabeth Trovall has more on the papal betting markets.

[John Holden]

People have been betting on who becomes the next pope for centuries, says John Holden with Indiana University.

[Victor Matheson]

But we've seen a much bigger expansion of betting on the Pope globally as technology's gotten better and allowed word to spread quickly.

[John Holden]

Though people bets are not allowed in U.S. sportsbooks. Many Americans are on Kalshi, a financial exchange and prediction market. Cardinal Pietro Parolin is the front runner there, which Victor Matheson with College of the Holy Cross says could be a good predictor.

[Father Tom Daly]

Betting markets and prediction markets actually do a pretty good job at estimating what's going to happen, though.

[John Holden]

There's one thing markets can't account for, says Father Tom daly with the St. Charles Barromeo Seminary.

[Father Tom Daly]

A really big factor that no one talks about because it's hard to talk about and you certainly can't bet on, is the role that the Holy Spirit.

[John Holden]

Plays because, he says, cardinals are meant to elect the person God wants to be the successor. I'm Elizabeth Trovall for Marketplace.

[David Brancaccio]

There's even a kind of fantasy football thing getting lots of global interest. Fanta Papa. If you go to the site, it reads, Quisara il prossimo Pontefice. Who will be the next pontiff? It goes on in Italian. Take up the challenge to bring out the Vatican expert within you. One thing in common with US and China Slowing birth rates. That may stress the environment less, but that's fewer people working and paying taxes to pay for populations getting older. China is offering cash and more parental leave to encourage people to have more kids there. Marketplaces China correspondent Jennifer Pack has been spending time with families in southern China's Dongguan City.

[Jennifer Pak]

It's a hot afternoon at a public square in Dongguan. This toddler and his mom, Mo Guelan, are taking a stroll.

[Mo Guilan]

I won't consider a second child for health and financial reasons.

[Jennifer Pak]

China used to have a one child policy. Now up to three are allowed. But Mo Guilan says even with one child, her family's already taken a financial hit.

[Mo Guilan]

There was nobody to help me take care of the baby after maternity leave, so I had to quit my factory job.

[Jennifer Pak]

A lot of women worry about being able to keep their jobs after giving birth, Human resources executive Irene Yang says when she gave birth back in 2011, she was nervous about taking the three months maternity leave that she was entitled to.

[Irene Yang]

Once I took that long maternity leave, my work was given to another person and I worried that I could be replaced.

[Jennifer Pak]

To make sure she didn't miss out on too much, she would go to the office during her maternity leave. Now she's in a senior HR role and a proud mom of a teenager.

[Irene Yang]

After having one child, I didn't want more. It's like mission accomplished.

[Jennifer Pak]

Because employers bear the cost of benefits like maternity leave, women can be discriminated against in the hiring process, says mum of one Peng Lu.

[Mo Guilan]

At interviews, employers would ask my age, if I'm married yet and if I have any children.

[Jennifer Pak]

China's government officially bans such lines of questioning, but it still happens. Luckily, Peng Liu landed a job in the public sector, where women's rights are better protected. But even with that, she decided to quit after having her son and move back closer to her family so she wouldn't have to pay for expensive childcare. Now she's planning a second child. Some cities are offering thousands of dollars in subsidies to anyone having three children. Does that tempt Peng Lu? Probably not, she says. Ex factory worker Mo Guilan feels the same.

[Mo Guilan]

I won't give birth to a child just for a few thousand dollars.

[Jennifer Pak]

Raising kids, she says, costs way more than that. In Dongguan City, I'm Jennifer Pak for.

[David Brancaccio]

Marketplace with the Federal Reserve, starting its two day meeting on interest rates today, concluding tomorrow. Listen to the half hour edition of Marketplace with my colleague K. Rysdal on many public radio stations, of course, later today or streamable from our homepage marketplace. Org. In Los Angeles, I'm David Brancaccio with the Marketplace Morning Report from apm, American Public Media.