
Kim Kardashian saves the day & Meta goes Under the Sea
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This President's Day, upgrade the look of your home without breaking your budget. Save up to 50% site wide on new window treatments@blinds.com blinds.com makes it easy with free virtual consultations on your schedule and samples delivered to your door fast and free. With over 25 million windows covered and a 100% satisfaction guarantee, you can count on Blinds.com to deliver results you'll love. Shop Blinds.com's PresidentsDay Mega Sale now for up to 50% off site wide. Blinds.com, rules and restrictions may apply. Good morning Brew Daily Show. I'm Neal Freyman.
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And I'm Toby Howell.
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Today, how did everyone manage to survive the upside down plane crash in Toronto?
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Then a move over Michael Jordan. Kim Kardashian is Nike's newest partner. It's Wednesday, February 19th. Let's ride.
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Remember that asteroid they found that has a very small chance of hitting Earth seven years from now? That very small chance is now a small chance. 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. If this thing does impact Earth, still a remote possibility. It could wipe out a city. The asteroid would make impact at 38,000 miles per hour with the equivalent of around 8 million tons of TNT, or about 500 times the power of the atomic bomb dropped on Hiroshima. 3.1%, Toby. It keeps climbing.
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Geez, Neal, get the heart rates going early in the morning. Just to put that 3% in perspective, if we are playing poker, Earth currently has aces. The asteroid has the four or five of spades, and the flop is ace, eight, nine, no spades. So yes, technically a six and a seven could come out next to give the asteroid a backdoor straight. But more than likely the set of aces is going to win. That being said, Tom Brady and the Patriots did come back from 28 to 3 down when the Falcons had a 99.8% chance of winning. Based on ESPN's When Probability chart, Leicester City did win the Premier League at 5,000 to 1 odds, which is a 0.02% chance. So stranger things have happened. Now, a word from our sponsor LinkedIn Ads About I was cooking dinner last night, Neil, and I got a little high on my own supply. Thought I could make a coconut rice curry soup without really looking at the recipe.
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Let me guess, your broth to rice ratio was way off.
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Yes, I put way too much rice in. It sucked. Everything up and I was left with more of a pilaf dish than an actual brothy soup. Almost made me want to throw it away and start again.
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Hey, I didn't burn anything. But you're right, I need to be more thoughtful.
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Ads 45 years to the month after the first Miracle on Ice, they just released the sequel. On Monday afternoon, a Delta Airlines regional jet crash landed on the frozen tundra of Toronto's Pearson Airport, clipping a wing, flipping upside down and skidding down the Runway to a full stop. 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 and 19 of the 21 people sent to the hospital with injuries have been released. Canada's Aviation Safety Agency has begun an investigation into how this plane ended up belly up. The conditions were not good at the airport. Toronto got dumped with a ton of snow over the weekend and wind gusts topped 30 mph. However, no other pilots reported problems braking on the Runway. Aviation experts credited the aircraft's design and the training of the crew for getting all the passengers out safely. The plane, an Embraer Air CRJ900 regional jet, was designed with features to be, quote, survivable in case of an accident, such as having seats that lock into tracks that can withstand 16 GS of force. The flight attendants were also hailed by local officials as heroes for their composure under duress. Toby it's been an ominous start to the year for the US Aviation industry. As people pointed out on social media, it's no longer cringe to clap when your plane lands.
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Yeah, it has been ominous. But also, let's just zoom out here and that it is pretty amazing how everyone fared in this accident. The survivability was extremely amazing. When you think about the actual accident that occurred, it looks like the plane touched down, maybe with one wheel first, which may have caused the landing gear to collapse, which, you know, caused that right wing to hit the Runway and then eventually for it to flip over. But let's dive into some of these safety features. You mentioned, the seats. The seats not only have that high impact 16 GS of force that it can withstand, plus, but they also have legs that are allowed to pitch to either side 10 degrees, so they don't snap off. That's when things can get really bad. If these, if these seats do snap off, then you end up, you know, falling onto the roof of the plane. So the seats were a bit. A big aspect. It also, the way that the plane did eventually break was how it was supposed to break. I know it sounds ridiculous to say this is how planes should break, but wings are designed to snap off, so the fuselage so the body of the airplane doesn't come apart. So everything did kind of go to go to plan, even though obviously the landing did not go as planned.
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And the crew, the flight attendants, you know, we think about them as people who serve us peanuts and pretzels and take our drink orders, but their number one mandate is safety. And they are trained and trained and trained to get people off the plane in an event like this in 90 seconds or less. They're also trained when. When panic happens like this, people are in a state of shock. And you're supposed to tell them simple instructions like unfasten your seatbelt. And so videos show them shouting simple instructions, which is what people need to hear to get out of the plane safely. They can't handle anything more in a state of shock. So it was an absolute textbook response from this crew as well.
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And then also the background kind of underlying tension to all this is that a lot of cuts have been affecting the FAA. Transportation Secretary Sean Duffy said that 400 FAA employees were fired recently. Of those 400, those zero air traffic controllers or critical safety personnel were let go. So it's unlikely that those two, you know, instances are related in any way. That being said, though, while all this is happening, while we're seeing just an increased amount of air incidences, you do see the FAA under scrutiny right now for, you know, trimming its workforce. Then the other aspect, too, is that Space X, Elon Musk's startup, is also coming in, trying to look at how to overhaul the FAA's air traffic control systems. People are seeing that as a conflict of interest. But Space X is saying we're trying to modernize these programs. They've been far too, you know, heavily leaned on. They haven't been staffed up properly. They're working with outdated technology. So that is just kind of the background context to these accidents that we have been seeing pop up.
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And those accidents, I mean, there's been four this year already in United States, and Toronto is just across the border. January 29th, that American Airlines regional jet collided with a US army helicopter, killing 67 people on both aircraft. And then a few days later, there's a medevac plane that crashed in northeast Philadelphia, killing seven people. And then on February six, there was a plane crash in Alaska, killing 10 people. So there. This is the fourth major incident. So, you know, obviously, amazing, remarkable, very thankful that no one, no one ended up dead on this particular crash. But it's certainly been a spooky few months for air travel.
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Kim Kardashian is here to save Nike. No, she can't suddenly win a dunk contest or have a VO2 Max in the mid-60s, but she does have stretchy, affordable and fashionable leggings that Nike wants a piece of. Yeah. Yesterday, this sportswear giant that has been going through a bit of a rough patch recently announced a rare fashion collab with Kim's brand, Skims, called Nike Skims. The combo marks the first time that Nike has ever joined with an outside existing company to introduce a new brand. The team up will be geared less towards the everyday wear that Skims currently offers and more towards those sweaty hit sessions or Pilates classes that you drag yourself out of bed for in the morning. The goal is to position Nike to be more competitive in the activewear category that has been taken over by the likes of Lululemon and Alo. Nike's struggles are well documented at this point. It reported an 8% drop in sales in its most recent quarter and recently bought its first super bowl commercial in 27 years. As it tries to regain its mojo, this collab seems like a step in the right direction.
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Neil, I think you missed one word in your intro, Toby. Women. This is absolutely key for Nike to get more customers as women. Right now, 40% of its client base is women. Most apparel brands want that to be way over 50% because women shop more, they spend more money. So if you're an apparel brand and you're seeing 40, 60 breakdown and 40 is women, that's not in a position where you want to be. So linking up with Kim Kardashian and Skims is a way to get that over the 50% mark. And that super bowl commercial, their first in decades, was also geared towards women. Women's sports, which are having an absolute moment right now. Nike said they're seeing double digit growth in that particular area. So this is a bold move into that space, banking a, you know, a brand partnership that has never done before.
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And it's also arriving at a moment where women's sports are absolutely popping off right now. And Nike and Skims both recognize this. Skims is actually already the official underwear partner of the wnba. They're also the official partner of the NBA as well and US Basketball. But you are right, it's not just that it's not just women in general, but it's specifically the apparel business as well. Because Nike had $8.5 billion in revenue from female apparel last year, $21 billion in male apparel. But still, their apparel business as a whole is not as big as its shoe business. And if you look at someone like Lululemon, like an alo, they are currently the apparel of choice for a lot of men and women. And so therefore you say, where can we, where's our growth opportunity? It is in apparel. And then you look deeper and it is specifically in women's apparel.
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And we should talk about Skims. This company is absolutely blowing up. Kim Kardashian, I don't know, but against her. Don't bet against her. She is an incredible entrepreneur. They did $880 million in just direct to consumer sales alone last year. That was up from 725 million a year earlier. They're valued at $4 billion. So what does this Nike partnership mean for them? Looks like maybe they could exit at some point. Kim Kardashian wants to get paid out. She owns 5% of the company. Maybe it's leading to an acquisition by Nike or another company by getting the strategic partner on board. Or it's an ipo. We could see a Skims ipo. They've, the leadership team has hinted at it a little bit. So there's, there's perhaps an end game in sight by getting Nike on board and doing this particular brand partnership with them and saying, look, we've made it, we are a mature company now it's time to take that next step. Yeah.
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Skims is valued at $4 billion in 2023. I would imagine after inking this partnership, it's going to be worth a little bit more.
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Spongebob and Squidward are about to get a new neighbor. Mark Zuckerberg. On Friday, Metta announced plans to build the world's longest underwater cable, a 31,000 mile project that aims to connect the U.S. india, South Africa and other regions across five continents. For context, 31,000 miles of cable is long, longer than the Earth's circumference. Why is matter building under the sea? Because that is the foundation of the modern Internet. For all the images you might have of cyberspace and digital ones and zeros, there are actual physical cables crisscrossing the globe. Think a really long ethernet cord that allow you to log on. An estimated 95% of the world's Internet traffic flows through these undersea data superhighways. For years, telecom companies built these cables in partnership with tech firms. But that power dynamic has shifted. Now it's big tech that's in charge. And this initiative called Project Waterworth is the first subsea cable project Metta is developing on its own without any outside help. Toby, the only thing getting in Zuck's way now is Bikini Bottom zoning loss.
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Metta wants more control over how it kind of manages its own services because TechCrunch found that Metta accounted for 10% of all fix and 22% of all mobile web web traffic across the world.
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As a scrolling on Instagram way too much.
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I know. It truly is. I mean, there are billions and billions of users. So that figure does make sense, especially the mobile figure. So of course it wants more control over how that traffic is being ferried undersea across these cables. But there's a lot of issues with undersea cables, let's be honest. One, there's a lot of damage that can happen. It's the bottom of the ocean. It's a very unforgiving place. But also, geopolitics comes into play a lot more than you'd expect. We already saw Red Sea cables cut last year by Houthi rebels. And then also European officials have said Russia has been sabotaging our cables. Taiwan has said similar things about China damaging its undersea cables. So Metta has thought about this. They're trying to get around those issues by one maximizing the amount of cables that they lay in the deep waters. And we're talking really deep waters, 7,000 meters deep. And they also think that they've cooked up some new burial techniques that they hope will reduce the faults in high risk areas, whether it's high risk just from ocean geography or high risk from geopolitics. So they think they've thought of everything, but still a lot of cable stretching a lot of miles.
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Yeah, Undersea cables have become a vulnerable vulnerability for tech companies, for countries, and they become flashpoints in geopolitical arenas. I mean, if you look at Tonga this was not a geopolitical sabotage per se. But Tonga is this island in the Pacific that was hit by, with this massive volcanic, underwater volcanic eruption and an ensuing volcano and ensuing tsunami in 2022. It was basically blacked out for five weeks because that eruption underneath the water disrupted a cable that was bringing them Internet and cell service. And they were, five weeks, they were in the dark from the rest of the world. So, you know, it really makes you think when you hear news like this about how much our connectivity in cyberspace, things like that, is actually tied together by these undersea cables that matters building right now.
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And then one final X factor in this announcement is India, actually. Because if we go back to last week, Trump had this sit down with India's Prime Minister, Narendra Modi. They listed this big list of, of different areas that the US Would collaborate with the United States. And in that announcement, they actually had just kind of a throwaway line about this, you know, Waterworth project. And I think a big kind of factor that you have to include in this is that AI data centers and cloud services in India is a massively growing industry. Metta is looking at that industry and saying, what if we are the ones that connected India to, you know, the rest of the world connected all these data centers coming online? So I do think that is kind of something that Mark Zuckerberg is looking ahead in the future and saying, where is the growth capability? It looks like it is positioned in India, which is why you heard this project actually tease last week in a sit down between Trump and Modi. Up next, we have a surprise edition of Toby's Trends coming your way.
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Neil, you've had the chance to work with plenty of strong leaders in your career. What traits do you think are the most important?
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In my experience, a few things do stand out, like leading by example, taking risks and being passionate.
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That's definitely a match made in heaven.
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Each model strikes an ideal balance between on road performance and world renowned off road capability of sophisticated refinement and visceral. And you can build a Range Rover Sport that matches your leadership style at Range Rover Sport @Land Rover USA.com that's Land Rover USA.com President's Day on Monday turned this into a shortened week for some, but since I like the sound of my own name, I couldn't let it go by without getting a Toby's Trend in. So my special Wednesday Toby's Trend is all about Open Tables Planned to Become Cool Again if you've gone online to try and snag a reservation at a hot new restaurant, you've likely ended up on Resi. It's owned by American Express and was, at least for the last few years, the preferred place to look for a tough table to book. OpenTable, on the other hand, has far more choices 60,000 compared to Resi's 20,000. But it's been around since 1998, has never quite gotten the senior places to bite. That is, until recently. It's been luring the coolest restaurants across the country back into its open arms with a combination of newly launched credit card perk programs and some fancy marketing promises for chef Ian Gray, based in Philly. He told the Philly Inquirer that they basically gave the platform to us for free and wrote us a check as well. A tough deal to say no to. Thanks to hustle like that, OpenTable is suddenly back in the buzzy restaurant game, using cash from a recent Visa deal to lure big names that are helping revamp its image from run of the mill restaurant booker to a platform for more exclusive finds. Neil it is a brawl out there in the dining industry, an all out arms race in the two sided marketplace of restaurants and customers. And OpenTable is making up ground.
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There are reports that OpenTable paid one restaurant owner $1 million to move over from Resi to OpenTable. That's how desperate they want to be. Cool. And you said it's a, it's an arms race, which is very true. I think it's an arms race, one industry in particular, and that is Credit cards. The Philadelphia Inquirer had this really nice line. They said it's a dining industry arms race where restaurants are commodities and luxury credit card holders enjoy the spoils of war. So Amex bought Resi in 2019. The idea was to offer its credit card holders, those premium ones who are paying hundreds and hundreds of dollars each year for these gold and platinum cards, access to exclusive reservations, late breaking reservations. And then OpenTable said, okay, let's probably do the same. And they inked this partnership recently with Visa. So when you go on OpenTable, I just did this morning, the top hit that they're flashing across their site is, you know, this is our Visa sponsorship. You get access to these restaurants with Visa. So Visa and Amex are going toe to toe in this war. And the. And the arena on which it's fought is OpenTable and Resi.
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Yeah. And OpenTable also did something called the Icons program, which is they would go to a restaurant and say, hey, do you want better billing? Do you want to not be lost in the sea of other restaurants? You can be an icon restaurant on our platform. So that's. We also saw you opened up the platform this morning. I don't know how many other people are booking restaurants at, you know, 5:30 in the morning, but the Icons program was there. We saw what the icons were in New York City. That being said, though, some chefs have said that in the courting process when they were trying to get us to move over from, from Resi to open table, they were very responsive. They were showing up at our door every day. They were ushering us through it. They were giving us huge, some lumps of cash. But then after we did make the switch, it suddenly became a lot quieter on OpenTable side, and sometimes the checks took a while to arrive. So maybe it's not something that they're doing this all out marketing push, you know, convert people over, but it's whether you can keep them on your platform, whether, you know, those tables are being filled by these Visa cardholders or they're going empty. That is what will truly come down to what platforms restaurants will kind of, you know, choose going forward.
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And in the background of all of this is just a booming market for restaurant reservations. After Covid between 2021 and 2022, restaurant reservation searches on Yelp rose more than 100%. It's becoming much more in demand to book these very fancy, see you said sceny restaurants. And that's why this, this tur become even more profound because there's just a lot more. There's a lot more attractive customers now that are spending lots of money on these platforms, so they want a piece of the pie.
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It's insane what people do to get reservations these days. Our good friend and founder of the company, Austin Reif has told me that he has used LinkedIn before to, you know, message the restaurant hosts to try to use his clout as a morning brew CEO to, you know, say, hey, let me, let me have a seat here. So people go a long ways because it is just, you know, this battle to get the best spots in town. Now let's sprint to the finish with some headlines you may have missed. Up first, Grok3 is here and Elon Musk thinks the latest model out of his startup X AI is the new big man on campus. In an announcement event live streamed on X, Elon claimed that Grok3 outperforms competitors like Google's Gemini, OpenAI's GPT4 oh, and anthropics clod across various math science encoding benchmarks. It also outperforms China's deep seq R1 model, which threw everyone into a tizzy last month for its cheap performance that caused a US equities a wipeout. Grok3 also ventured into research assistance territory with a new feature called deep search that is X AI's answers to OpenAI's deep research. It can troll the Internet and build you an abstract response to a question you have. Neil. Grok 3 shows that Xi is still very much in the thick of the chat bot races.
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It is and it's another chapter in the melodrama playing out between Elon Musk and Sam Altman. Remember earlier this month Elon Musk submitted a $97 billion bid to buy open AI. Sam Altman dismissed that and said I wish he would just compete by building a better product. Here he did.
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Here he is. I also think this is huge for X because remember, Elon Musk has completely changed X's business model to subscription base and one of the things that it folds into the subscription is access to this GROK AI model. So now if you pay $50 a month, you will get access to Grok 3 first. So it is twofold. One, he wants to compete with X AI but or with open AI. But also it's a very nice financial boost if you offer a state of the art model within your, you know, subscription.
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X AI, this company that really no one ever thinks about is about to raise money at a $75 billion valuation. Oh, the humaneity, humane. The buzzy Sam Altman backed startup that made an AI pin intended to replace smartphones is shutting down the project and selling parts of its business to HP for $116 million. That is far lower than the $850 million it was valued at before it released the product last year, leaving investors like Altman and Salesforce's Marc Benioff in the red. Despite enormous hype, the product never took off as expected. Of 10000 pins, Humane hoped to sell in its first year. It only shipped 10,000. Now Humane's leadership and employees will be absorbed into HP, where they'll be working on, quote, building an intelligence ecosystem across HP's product and services. Sounds thrilling.
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I can't think of a worse outcome for a company whose founders, you know, came from Apple, were kind of larping as Steve Jobs. The way they dress, the way they talk, the way they design their product, then to end up integrating your tech into printers at hp. Truly a brutal outcome if you are an entrepreneur, especially an entrepreneur who raised more than $230 million to create the Viso. Yeah, just they were getting dragged all across the Internet when the pin was released, and now they're continuing to get dragged now that they finally sold off for parts to hp. Another good for your gut soda has hit the market, this time from a legacy player tired of Olipop and poppy attracting all the headlines. Coca Cola threw their hat in the microbiome ring, announcing a prebiotic soda called Simply Pop that will debut this month. The timing is conspicuous. Last week, Alipop closed a $50 million fundraising round that values the company at $1.8 billion. Pepsi, too, reportedly has a healthy gut pop in the works that it aims to launch in the spring. This section of the soda aisle is growing and heating up big time.
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Neal Olipop CEO Ben Goodwin was asked about Coca Cola entering the market, and he struck a defiant tone. He said it's a massive honor that the largest soda brand in the world has decided that the category I invented and the alipop team has brought to life is a great place for them to seek growth. And so he's, he's, he's projecting confidence. But I think on the inside, I probably would be a little worried because, you know, the Coca Cola marketing machine is truly insane. You can press a, but Coke can just press a button and get this Simply Pop in front of hundreds of millions of people in a second. They have distribution. They're so much bigger than these smaller companies. So that's why the beverage space is so tough, because Coke and Pepsi kind of have this scale to extinguish you.
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Yeah, I don't like the branding though. You can all those. What you said is true. Absolutely. Coke's distribution network is just a massive advantage. But if the branding is kind of, I don't know, I'm calling. The word that comes to mind is cheugy. It just seems like too millennialized or two. I don't know. Corporate ties compared to poppy compared to Alipop that definitely have a better finger on the pulse of, you know, their Gen Z customers. So I think this could be them playing catch up. They said that they've put a lot of time and effort to developing something that tastes good, but if the branding isn't there, then I don't even know if that marketing machine or that, you know, distribution machine is as big of a leg up as you're saying.
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On May 7, 1777, in the heat of the Revolutionary War, General George Washington wrote a note to a subordinate on both sides of a single sheet of paper, roughly 8 by 12 inches. And now it can be yours for just $150,000. Last Wednesday, a firm that buys and sells historical documents said it had acquired the letter and was putting it up for auction on President's Day. Experts said to call this note rare doesn't go far enough because it represents a unique reflection on the essence of the war, which you simply can't find anymore. This won't be record breaking for a GW letter, one that he wrote to Thomas Jefferson sold for 2.4 million in 2022, but it is a grand sum for a discolored piece of paper with a grimy fingerprint on it. Toby, I totally bid on this, but unfortunately I can't read cursive.
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That's what I was thinking too. We did that story about no one can read cursive anymore. So Washington does have a very nice penmanship. But this letter was very interesting one because Washington was also striking a defiant tone, saying, yes, we may have lost this battle, but I'm feeling good about where we're at in the war right now. He also talks about an inoculation campaign that they are running against smallpox because smallpox had decimated the fledgling U.S. army during that time. So to hear him talking about the first real inoculation campaign in American, or I guess it wasn't even American history at that point was very interesting. So lots of interesting tidbits about, you know, that time in the war, that time in, you know, just the young country that was soon to be America. So very cool historical documents. Are having a moment too. I mean, constitution sold for $43 million a few years ago. We are seeing just a lot of interest in these very rare artifacts.
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Let's wrap it up there. Thanks so much for starting your morning with us and have a wonderful Wednesday. For any questions, comments or feedback, send an email to Morning Brew daily at Morning Broadcom. And if you're enjoying the show, share it with a friend, family member or co worker. Toby who should everyone listening share it with today.
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I want you to share the pod with someone you've been meaning to get dinner with recently. OpenTable Resi it doesn't matter. Just use this as an opportunity to put some time on the schedule. But then maybe tell us which platform you ended up booking with let's roll the credits.
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Emily Milian is our executive producer. Raymond Lu is our producer. Olivia Graham is our associate producer. Uchenawa Ogu is our technical director. Scoop Scardaris is on audio, hair and makeup. Lives in a very stylish Pineapple under the Sea. Devin Emery is our Chief Content officer and our show is a production of Morning Brew.
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Great show today, Neil. Let's run it back tomorrow.
Title: Can Skims Rescue Nike? & Meta Reveals Globe-Spanning Undersea Cable
Host(s): Neal Freyman and Toby Howell
Release Date: February 19, 2025
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).
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).
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).
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.
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).
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).
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.
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]).