Morning Brew Daily: Episode Summary

Title: Can Skims Rescue Nike? & Meta Reveals Globe-Spanning Undersea Cable
Host(s): Neal Freyman and Toby Howell
Release Date: February 19, 2025

1. Increasing Asteroid Collision Risk with Earth

The episode opens with Neal Freyman raising alarms about an asteroid previously deemed a minimal threat now posing a slightly higher risk of impacting Earth. He states, "Yesterday, NASA upgraded the probability of a collision by 2032 to 3.1%, or 1 in 32, up from just 1% in January. It's the highest probability given to an asteroid strike since 2004" (00:53). While emphasizing that the chances remain low, the potential consequences are severe, with the asteroid capable of delivering the energy equivalent to 500 Hiroshima atomic bombs.

Toby Howell responds by putting the probability into perspective, comparing it to a poker game scenario: "Earth currently has aces. The asteroid has the four or five of spades... more likely the set of aces is going to win" (01:36). Nonetheless, he highlights historical improbabilities, citing the Patriots' comeback and Leicester City's unexpected Premier League victory, suggesting that "stranger things have happened" (01:36).

2. Miracle Survival: Toronto Plane Crash

Neal transitions to aviation safety, discussing a recent incident where a Delta Airlines regional jet crash-landed at Toronto's Pearson Airport without any fatalities. He remarks, "It was a shocking image seeing this plane flipped on its head. But even more shocking was that there were no fatalities among the 80 people on board" (03:23). The plane, an Embraer Air CRJ900, endured harsh weather conditions with significant snowfall and high winds. Experts credit the aircraft's robust design and the crew's effective training for the miraculous survival rate.

Toby delves deeper into the safety features that contributed to the outcome, detailing how the seats are engineered to withstand extreme forces and pivot to prevent snapping during such incidents. He comments, "The fuselage is designed to hold together even if the wings break off, ensuring the body of the airplane doesn't come apart" (05:51). Additionally, both hosts discuss the broader context of aviation challenges in 2025, noting a series of crashes earlier in the year and scrutinizing the FAA's reduced workforce and potential technological overhauls led by companies like SpaceX (06:30; 07:34).

3. Nike's Strategic Partnership with Skims

Transitioning to the business sector, Toby Howell introduces a significant collaboration between Nike and Kim Kardashian's brand, Skims. He explains, "Yesterday... announced a rare fashion collab with Kim's brand, Skims, called Nike Skims. This is the first time Nike has ever joined with an outside existing company to introduce a new brand" (08:13). The partnership aims to bolster Nike's presence in the activewear market, which has been dominated by competitors like Lululemon and Alo. Neal adds that focusing on women's apparel is a strategic move, citing Nike's current client base where women comprise 40%, aiming to surpass the 50% mark for higher profitability (09:17).

Toby emphasizes the potential growth in women's activewear, noting Nike's substantial revenue from female apparel and the rising popularity of women's sports: "Women's sports are having an absolute moment right now. Nike is seeing double-digit growth in that particular area" (10:07). The hosts also discuss the possible long-term outcomes for Skims, including potential acquisition or an IPO, given the brand's impressive direct-to-consumer sales and valuation (10:57).

4. Meta's Ambitious Undersea Cable Project

Neal shifts focus to the tech industry, highlighting Meta's (referred to as "Metta" in the transcript) announcement of building the world's longest undersea cable, a 31,000-mile project connecting the U.S., India, South Africa, and other regions across five continents (11:54). He explains the critical role of undersea cables in global internet infrastructure, mentioning that approximately 95% of the world's internet traffic relies on these physical data superhighways.

Toby analyzes the strategic motivations behind Meta's Project Waterworth, including gaining more control over data traffic and addressing vulnerabilities such as geopolitical tensions and physical damages to existing cables. He notes, "Meta accounted for 10% of all fix and 22% of all mobile web traffic across the world... they're looking to connect India's rapidly growing AI and cloud services industry" (12:58; 15:08). The hosts also discuss the challenges of maintaining undersea cables, from environmental hazards to geopolitical sabotage, underscoring the project's complexity and significance in the modern digital age.

5. Restaurant Reservation Wars: OpenTable vs. Resi

In Toby's Trends, the hosts explore the competitive landscape of online restaurant reservations. Neal discusses OpenTable's efforts to regain market dominance over platforms like Resi, owned by American Express. He cites aggressive strategies, including lucrative offers to restaurant owners: "There are reports that OpenTable paid one restaurant owner $1 million to move over from Resi to OpenTable" (19:03). This move is part of an "all-out arms race" fueled by partnerships with credit card giants Visa and Amex, aiming to attract premium customers seeking exclusive dining experiences.

Toby adds that while OpenTable is successfully luring high-profile restaurants through programs like Icons, challenges remain in maintaining these partnerships and ensuring sustained customer engagement: "After we made the switch, it suddenly became a lot quieter on OpenTable side, and sometimes the checks took a while to arrive" (20:14). The hosts emphasize the booming demand for restaurant reservations post-COVID, noting a significant increase in reservation searches and the intensified competition among booking platforms to capture a larger share of the market (21:20).

6. Tech Headlines: AI Race and Start-Up Struggles

The episode also covers several noteworthy tech developments:

• Grok3 by X AI: Elon Musk announced Grok3, a new AI model outperforming competitors like Google's Gemini and OpenAI's GPT-4 across various benchmarks (22:10). Toby highlights its integration into X's (formerly Twitter) subscription model, offering early access to users who pay for premium services (23:32).

• Humane's Downfall: The Sam Altman-backed startup Humane, which aimed to replace smartphones with innovative AI pins, is shutting down its project and selling parts of its business to HP for $116 million, a significant drop from its previous valuation of $850 million (24:00). Toby remarks on the harsh reality facing entrepreneurs when high-profile ventures fail despite substantial initial investment (24:51).

• Coca-Cola Enters Prebiotic Soda Market: Coca-Cola announced the launch of Simply Pop, a prebiotic soda, positioning itself against niche brands like Olipop and Poppy. Neal cites skepticism from Olipop's CEO regarding Coca-Cola's ability to compete effectively due to its vast distribution network and marketing prowess (25:59). Toby adds doubts about Coca-Cola's brand alignment with health-focused consumers, suggesting it may struggle to resonate with newer, health-conscious demographics (26:45).

7. Historical Artifact Auction: George Washington's Letter

Neal concludes the content segments with a fascinating tidbit about a historical auction. A letter written by General George Washington on May 7, 1777, during the Revolutionary War, is set to auction for $150,000. He describes it as "a unique reflection on the essence of the war" (27:22). Toby provides context about the letter's content, including Washington's defiance despite a battlefield loss and efforts to combat smallpox within the army (28:10). The hosts note the growing interest in historical documents, referencing previous high-profile sales like the Constitution for $43 million.

Conclusion

Neal and Toby delivered a comprehensive and engaging podcast episode, covering a diverse range of topics from imminent space threats and aviation safety to strategic business partnerships and cutting-edge technological advancements. Their insightful discussions, complemented by relevant quotes and real-world examples, provide listeners with a well-rounded understanding of current events shaping the business, tech, and lifestyle landscapes.

Transcript Reference:
All quotes and timestamps refer to the provided transcript sections marked in square brackets (e.g., [00:53]).