OpenAI Drops $6.5B To Kill the iPhone? & Tariffs and Boycotts Hurt Target

Summary

Morning Brew Daily - May 22, 2025

Hosts: Neal Freyman & Toby Howell
Episode Title: OpenAI Drops $6.5B To Kill the iPhone? & Tariffs and Boycotts Hurt Target

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1. Reflecting on Bitcoin Pizza Day

[00:59] Neal Freyman:
Neal opens the episode by reminiscing about Bitcoin Pizza Day, commemorating the infamous 2010 transaction where Laszlo Hanyecz spent 10,000 Bitcoins on two Papa John's pizzas. At today's valuation, those Bitcoins are worth over $1.1 billion, marking the pizzas as the most expensive ever sold. This day is celebrated annually in the crypto community as a pivotal moment in cryptocurrency history.

[01:35] Toby Howell:
Toby underscores the significance of this event, noting that despite the hefty price tag, the recipient, Jeremy Stu Devant, used the Bitcoins to fund a cross-country road trip with his girlfriend. This anecdote highlights the unpredictable nature of cryptocurrency investments and their real-world implications.

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2. OpenAI's Bold Move: Acquiring Jony Ive's IO for $6.5 Billion

[03:08] Toby Howell:
The discussion shifts to OpenAI's monumental acquisition of IO, the AI device-focused startup co-founded by legendary Apple designer Jony Ive. Valued at approximately $6.5 billion, this deal marks OpenAI's largest acquisition to date and integrates IO's 55 employees into a new hardware division within OpenAI.

[04:36] Neal Freyman:
Neal provides context on Jony Ive's illustrious career at Apple, where he was instrumental in designing iconic products like the iPod, iPhone, and iPad. After leaving Apple in 2019, Ive explored various ventures, and this acquisition represents a significant opportunity for him to shape the next generation of computing devices alongside OpenAI's Sam Altman.

[05:29] Toby Howell:
Toby delves into the strategic implications of this acquisition. He highlights that OpenAI isn't aiming to replicate the iPhone but rather to innovate entirely new form factors for AI interaction. Sam Altman emphasized the ambition to "completely reimagine what it means to use a computer," suggesting possibilities ranging from augmented reality glasses to entirely novel devices.

[06:34] Neal Freyman:
Neal draws parallels between Jony Ive's partnership with Steve Jobs and his current collaboration with Sam Altman. However, he also points out the risks involved, noting that OpenAI is still unprofitable and the success of this hardware venture remains uncertain.

Notable Quote:

"We've been waiting for the next big thing for 20 years," – Sam Altman on OpenAI's vision for hardware. [05:00]

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3. Target's Struggles Amidst DEI Backlash and Tariffs

[07:40] Toby Howell:
Toby transitions to discussing Target's recent performance woes. The retailer reported another quarter of declining sales, attributing the downturn to backlash against its Diversity, Equity, and Inclusion (DEI) policies and the impact of tariffs. Target's CEO, Brian Cornell, cited "five consecutive months of declining consumer confidence and uncertainty regarding potential tariffs" as primary challenges.

[09:26] Neal Freyman:
Neal elaborates on Target's underperformance, noting that the company has lost market share in 20 out of 35 categories in the last quarter. Over the past year, Target's stock has plunged by 40%, and the company forecasts low single-digit sales growth for the upcoming year, marking its third consecutive year of declining sales.

[10:26] Toby Howell:
Toby adds that Target's struggles are compounded by customer boycotts stemming from the rollback of DEI initiatives during the Trump administration. This move alienated long-standing customers who felt betrayed by the shift in the company's values, leading to decreased foot traffic and sales.

[11:41] Toby Howell:
During Target's earnings call, the CEO was pressed for specifics on pricing strategies amidst rising tariffs. However, Brian Cornell remained non-committal, stating, "we're going to pull levers here and there," avoiding any direct acknowledgment of price increases.

Notable Quote:

"We're not putting out items that people want to buy." – Neal Freyman on Target's product strategy. [09:30]

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4. Universal's Epic Universe: Challenging Disney's Dominance in Florida

[12:00] Neal Freyman:
Neal introduces Universal's latest venture, Epic Universe, Florida's first major theme park in over 25 years. This $7 billion investment aims to rival Disney World's long-standing dominance in the region. Epic Universe features five mini-parks, including dedicated zones for Harry Potter, Nintendo, How to Train Your Dragon, and classic monsters in Dark Universe.

[13:20] Toby Howell:
Toby discusses the initial positive reception of Epic Universe, citing glowing reviews from influencers and travel agents who praise its modern theming and attractions. However, he questions whether Universal can significantly impact Disney's market share.

[14:23] Neal Freyman:
Neal draws a comparison to other industries, suggesting that Universal and Disney can coexist and even benefit from a "one plus one equals three" dynamic, where the presence of both parks attracts more tourists to the region. However, he acknowledges that Disney's current lead is substantial, with Walt Disney World attracting nearly 49 million visitors in 2023 compared to Universal's 20 million.

[15:32] Toby Howell:
Toby reflects on the sustained success of Universal's Harry Potter World since its 2010 launch, which has been a consistent revenue driver. He remains optimistic about Epic Universe's potential to draw new visitors without cannibalizing Disney's audience.

Notable Quote:

"In a world where every brand is fighting over your attention, this is what themed parks should be." – Influencer's take on Epic Universe. [13:25]

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5. Neal's Numbers: Intriguing Statistics and Insights

a. The Rise of the Stealthy Wealthy

[17:43] Neal Freyman:
Neal introduces the concept of the "stealthy wealthy," business owners who accumulate significant wealth through essential but unglamorous enterprises. He cites Derek Olson, owner of National Flooring Equipment in Minnesota, whose company is projected to generate $50 million in revenue. Olson's business, which manufactures machines for removing carpet from elementary schools, exemplifies how niche markets can sustain high earnings.

[19:11] Toby Howell:
Toby attributes the rise of the stealthy wealthy to favorable tax policies and low-interest rates, which have bolstered the valuations of such businesses. He highlights that these entrepreneurs often run "boring but essential" companies, contributing increasingly to the wealth held by America's top 1%.

Notable Quote:

"National Flooring Equipment ... makes machines that remove flooring from places like elementary schools." – Neal Freyman on Derek Olson’s business. [17:50]

b. Employment Prospects: Humanities vs. STEM

[20:02] Toby Howell:
Toby discusses a Federal Reserve Bank of New York study revealing that majors in nutrition, art history, and philosophy have better employment prospects for recent graduates compared to STEM fields like computer science and engineering. This counters the common perception that STEM degrees always offer the best job security.

[21:09] Toby Howell:
He suggests a disconnect between students' perceptions of "employable" majors and the actual job market demands. The changing hiring strategies of firms like BlackRock, which now seek graduates from humanities backgrounds, indicate a shift in the skills valued in the workforce.

Notable Quote:

"Majors in nutrition, art history and philosophy outperform STEM fields when it comes to employment prospects." – Federal Reserve Bank of New York study. [20:05]

c. The Decline of the Semicolon

[22:19] Neal Freyman:
Neal presents a cultural analysis of punctuation, highlighting a significant decline in semicolon usage in British text. Studies show a 47% drop in semicolon usage over the past two decades, with only 11% of respondents admitting to frequent use.

[23:40] Toby Howell:
Toby connects this trend to changes in digital communication, where emojis have replaced semicolons in emoticons, further reducing their usage. He reflects on the evolving nature of language and punctuation in the age of instant messaging.

Notable Quote:

"The semicolon remains a bulwark against civilizational decline." – The Spectator's take on the semicolon. [23:30]

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6. Final Headlines: Market Movements and Record-Breaking Feats

[24:45] Neal Freyman:
Neal wraps up with a roundup of major headlines:

• GOP's Tax and Spending Package: The Republican tax bill is causing market turbulence, leading to the worst stock performance in a month and surging bond yields. The bill is expected to add trillions to the deficit over the next decade by extending tax cuts. This has shaken investor confidence, especially following Moody's credit rating downgrade.

• Everest Climbing Innovation: Four British explorers, all former special forces soldiers, set a controversial record by ascending Mount Everest in under five days using xenon gas to pre-acclimatize. This breakthrough could revolutionize mountaineering and impact Nepal's tourism industry by reducing the time and resources needed for acclimatization.

[25:23] Toby Howell:
Toby provides additional insights:

• Market Reaction: Traders are reacting negatively to the GOP bill and other factors like weak retailer earnings (e.g., Target), which combined with higher bond yields, are pulling investors away from stocks.

• Everest's Future: The successful use of xenon gas by the climbers may lead to more expeditions utilizing this method, posing challenges and opportunities for Nepal's existing tourism framework.

Notable Quote:

"Nepal's tourism industry will have to grapple with this." – Neal Freyman on the implications of the new Everest climbing method. [26:00]

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Conclusion

Neal and Toby provide a comprehensive overview of the day's significant events, ranging from groundbreaking moves in the tech and theme park industries to insightful statistics on wealth accumulation and employment trends. Their analysis offers listeners a deep understanding of the current economic and cultural landscape, enriched with engaging anecdotes and expert commentary.

Key Takeaways:

• OpenAI's Acquisition: A bold bet on hardware innovation with the potential to redefine human-computer interactions.

• Target's Decline: Multifaceted challenges from DEI policy changes, tariffs, and shifting consumer behavior highlight the volatility in the retail sector.

• Universal vs. Disney: The entry of Epic Universe into Florida's theme park scene introduces healthy competition, though Disney retains a dominant market position.

• Stealthy Wealth and Employment Trends: Insights into unconventional pathways to wealth and the evolving value of humanities degrees in the modern job market.

• Cultural Shifts: The diminishing role of traditional punctuation like the semicolon reflects broader changes in communication practices.

Stay informed and start your day with the latest insights from Morning Brew Daily.

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Notable Quotes Compilation:

• Sam Altman on OpenAI's vision: "We've been waiting for the next big thing for 20 years." [05:00]
• Neal on Target's product strategy: "We're not putting out items that people want to buy." [09:30]
• The Spectator on the semicolon: "The semicolon remains a bulwark against civilizational decline." [23:30]

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End of Summary

Transcript

[Toby Howell]

Hey, Fidelity.

[Neal Freyman]

How can I remember to invest every month? With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs. Huh. That sounds easier than I thought. You got this? Yeah, I do. Now, where did I put my keys? You will find them where you left them.

[Toby Howell]

Investing involves risk, including risk of loss.

[Neal Freyman]

Fidelity Brokerage Services, llc. Member nyse, SIPC Good morning, Brew Daily Show. I'm Neal Freyman.

[Toby Howell]

And I'm Toby Howell.

[Neal Freyman]

Today, Universal opens Florida's first major theme park in 26 years. And Disney isn't exactly saying be our guest then.

[Toby Howell]

Sam Altman wants to build hardware for the AI age, and he just got Apple's best ever designer to help him do it. It's Thursday, May 22nd. Let's ride.

[Neal Freyman]

Today is the anniversary of one of the worst fund financial transactions of all time. Maybe even worse than the French selling the Louisiana territory to Thomas Jefferson. On this day in 2010, a programmer named Laszlo Hyena spent 10,000 Bitcoin to buy two Papa John's pizzas. At today's prices, those 10,000 Bitcoin would be worth over $1.1 billion, making those pizzas the most expensive pizzas ever sold. The pizza purchase is considered a seminal moment in the history of crypto and celebrated every year as Bitcoin Pizza Day. Happ. Bitcoin Pizza Day, Toby.

[Toby Howell]

Thank you, Neal. This day is always circled on our calendars because for as bad of a Thursday as you think you may be having, at least you didn't pay over $1.1 billion for some pizza. By the way, poor Lazlo gets all the heat for this pizza purchase. But the recipient of the 10,000 bitcoins was Jeremy Stu Devant, a 19 year old who facilitated the pizza delivery. And he later used those bitcoins to fund a road trip with his girlfriend across the US Also unaware of its future value. So that was undoubtedly both the most expensive pizza of all time and also the most expensive road trip of all time. And now a word from our sponsor, Iterable. Neil, you ever get a call from someone who clearly thinks you're someone else?

[Neal Freyman]

One time this guy left me a three minute voicemail thinking I was his plumber. He really wanted me to swing by and snake the drain.

[Toby Howell]

Yikes. Have you ever snaked a drain? Nasty stuff. Anyway, that's what bad marketing feels like. Nothing worse than blasting the wrong message to the wrong person at the wrong time. Like calling a podcast host to fix a leaky sync.

[Neal Freyman]

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[Toby Howell]

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[Neal Freyman]

Find out more at and the Campaign.com.

[Toby Howell]

OpenAI is diving headfirst into hardware and it got the best in the biz to take it to the promised land. Yesterday the company announced it is acquiring I O, the AI device focused startup co founded by the legendary Apple designer Jony I've. The move brings the mind behind Apple's most iconic products, including the ipod, iPhone and iPad, all under OpenAI's orbit, where I've will have the chance to shape a new generation of computers. With its first design set to debut sometime next year, the deal, which values IO at just shy of six and a half billion dollars, is OpenAI's biggest acquisition ever and folds IO's 55 employees into a new Open Air hardware division. The collaboration also unites Silicon Valley royalty and marks a major bet from Altman that the future of AI is not just a software or a chatbot, but but something you can hold. We've been waiting for the next big thing for 20 years, Altman said. We want to bring people something beyond the legacy products we've been using for so long. That not so subtle dig at the status quo in a declaration that I've and Altman are working to replace. It is something investors notice as well. With Apple's stock turning negative on the day after the announcement dropped, I believe everything I've done in my career was leading to this, I've said yesterday in a launch video. And as someone who helped design the core of Apple's product line that turned it into the biggest company of all time. That is a lofty claim.

[Neal Freyman]

Neal first of all would love to start a company and then sell it one year later for $6.5 billion without having made a single product. That's what Joni I've did and I'm not him. And that's why he's getting paid 6.5 billion from open Air. He designed the iPhone, he designed the ipod, iPad, Apple watch. He left Apple in 2019 looking for new things. The past five or six years he's kind of wandered around looking for what he would do next. It finally Feels like he's found something he has he can sink his teeth into and he's linking up with Sam Altman. And you can't help but think of the parallels between Jony, I've working in close partnership with Steve Jobs for so many years, another visionary and now Sam Altman who perhaps in the in the minds of some people is the next Steve Jobs.

[Toby Howell]

Yeah, I've AI journey is wild and probably a lot more lucrative than a lot of us. Two years ago ago one of his 21 year old sons was playing around with Chat CBT. I've came over and then immediately reached out to Altman. After using the product they became friends and now he just sold his friend, his company for six and a half billion dollars. Classic friend move. Am I right Neil? Find me better friends or no offense to yourself but you're not buying my stars or six and a half billion dollars. So yes, that seems like a lot of money and it is a lot of money. But. But if you build the iPhone for AI then no. So it's a bet from OpenAI with asymmetric upside here. They think that Johnny still has his fastball and he can rethink basically how we interact with technology in computers today because that is what they are after. I don't think that we're going to see something with a normal form factor. They're not trying to make the next iPhone. They are trying to pursue something that is completely different. Sam Altman said I think we have the opportunity here to kind of completely reimagine what what it means to use a computer. I don't know what that means. Is it glasses? Is it something else? Yeah.

[Neal Freyman]

Do you have many have tried to do this already and we've talked about it on this show. There was the humane AI pin. They thought that wearing a pin on your shirt would be the next form factor that you could interact with AI and move beyond the iPhone. That was a complete disaster. There was the rabbit R1 device that was super hyped that also flopped. Perhaps the only company that's kind of figured it out and it's a marginal step forward is Metta with the Ray Ban glasses. They have these eye glasses that you can talk to and sort of have this augmented reality vision of the world overlaid. The exciting thing here I think is we don't know what they're going to come up with. And Jony, I have such an amazing track record of building and designing this really world changing products and that's why he's worth the money. According to OpenAI. But it is a huge bet. It is a risky bet and is expensive bet and OpenAI is still not making any money. It's unprofitable. And so we'll see what happens with OpenAI. OpenAI's finances because they're outlaying a huge amount of money on a very unproven hardware bet.

[Toby Howell]

Yeah, and I have to say too pretty big fumble for Apple here because six years ago Apple said that, hey, we're going to continue working with you, Jony. I've, we're going to come up with some new project that never happened and instead he's going to be designing devices for a company that wants to basically kill the iPhone. So if you're looking, if you're an Apple exec kind of looking at this deal go down, one, you're a little nervous and two, you're just kicking yourself under the table because you had Jony, I've like he was your guy and now you lost him to open AI For a company called Target, it's sure been missing the mark a lot these days. The embattled retailer reported that sales fell again last quarter as the company struggles with backlash to its DEI policies as well as tariff headwinds. Target CEO Brian Cornell blamed the macro environment for issues, saying that five consecutive months of declining consumer confidence and uncertainty regarding the impact of potential tariffs were the major roadblocks the brand was facing. The stock is now down 40% over the past year and is forecasting low single digit sales for the year ahead, which would be Target's third straight year of declining sales. Target struggles stand in stark contrast to other retailers like Walmart and Home Depot, who showed climbing revenue and reaffirmed their full year sales outlooks this past week. Part of the divergence stems from the fact that Target relies more on discretionary spending on items like toys and electronics. So it's taking a bigger hit as people prioritize necessities like groceries, which plays into a company like Walmart's hands. Plus, around half of its products are imported, leaving it especially exposed to tariffs and having to choose between absorbing higher costs or passing them on to consumers. So, Neal, things have gone from bad to worse to worser for Target, who just can't seem to turn things around.

[Neal Freyman]

This is a company that is not executing well at all right now. Kind of like the Knicks down the stretch last night. I mean, I'll just run down some numbers. Target lost market share in 20 out of 35 categories during the last quarter. Its annual revenue has been flat for four Years in a row, it's not growing at all. And then when you talk about its competitors, it's getting its lunch eaten, especially by Wal Mart. It's comparable sales growth has lagged behind Walmart's for 13 straight quarters. So the CEO can blame all sorts of external factors, but that's exactly what every retailer is dealing with. They are just not putting out items that people want to buy. People go to Target for cheap, chic, like, cool stuff that will go look good in your house. They don't need to buy it, but they want to because it is cool and Target is just not putting those items on the shelves. And they said that their turnaround plan involves going back to that Target brand and literally this. The execs were like, we need to just put out more interesting products. And I was like, duh.

[Toby Howell]

Yeah, I mean, it does seem simple on the surface, but they just can't seem to figure it out. They've also been contending with some boycotts as well that led to declining sales because kind of early on in Trump's presidency, they rolled back some of its diversity, equity and inclusion initiatives, eliminated minority hiring goals. And that move sparked a lot of backlash from customers who felt like it was a betrayal of what the brand stood for for a long time. So that rollback in January was just a 180 for a lot of people and felt jarring, especially as someone, as a brand that you thought you knew for a while, and then this relationship totally changed with them. So that's also led to declining foot traffic, which, you know, doesn't help when you're also contending with all these other factors.

[Neal Freyman]

The one thing that was maybe positive in this earnings report was that Brian Cornell said, the CEO said they're not going to raise prices broadly because of tariffs. Walmart irked the president when they announced that last week. They said prices are going up at the end of the month. Target said, look, we constantly adjust prices. Some are going up, some will be reduced. This is just an ongoing effort that takes place each day. So they are sort of getting out of the way of the president's fire by saying, we're going to hold down prices. Maybe it'll lead to them recouping some market share that they lost.

[Toby Howell]

It was very funny on the earnings call, reporters kept asking, analysts kept asking, like, please provide specifics around the company's plan for pricing. And he kept dodging and weaving, saying that we're going to pull levers here and there, so we don't necessarily know exactly what they're going to be doing despite being pressed about it. So yeah, he knows that he doesn't want that sound bite escaping that we are raising prices.

[Neal Freyman]

Central Florida is about to turn into a battleground, pitting Mario, Harry Potter and Dragon trainers on one side versus Mickey, Elsa and the Guardians of the Galaxy on the other. That's because this morning, Universal is cutting the ribbon on the fourth park of its Orlando portfolio with the opening of Epic Universe, the first major theme park to open in Florida in over 25 years and the biggest threat yet to Disney World's dominance in the region. Epic Universe cost parent company Comcast over $7 billion and took eight years to build. But earlier reviews say it's epic enough to live up to its name and price tag. The park itself consists of five mini parks, one entrance area called Celestial park, which splits off into four others, a park devoted to Harry Potter, another two characters from Nintendo Games, another based on the how to train your Dragon franchise, and finally Dark Universe, in which you'll find classic monsters like Frankenstein. Why is Universal making such a coloss investment in a new theme park? For one, roller coasters and highly caloric foods are maybe the one area of the media world that's not being eaten by tik tok and YouTube. To the company really thinks it can swipe some market share from Disney in Orlando, where it's been the leading player since Walt first opened magic kingdom in 1971. Toby, you think Mario and Harry have enough firepower to draw people away from Disney's machine? Or is it just too small of a world after all?

[Toby Howell]

I do think that they have the firepower because early reviews have been apparently it's just absolutely amazing. One influencer told Business Insider recently that this is exactly what themed parks should be and could be in the 21st century. Another travel agent said that it's spot on gorgeous with theming that's literal perfection. So these are people literally heaping praise on this new park because it is the most modern park we've seen thus far. But here's the big question. Is it going to hurt Disney? And the one person who doesn't really think it's going to hurt Disney is Disney's parks chief Josh Tomorrow. He said he's not really shaking in his boot. If something is built new in central Florida, he said, like Epic Universe and it brings in additional tourists, I can almost guarantee you that the new tourists coming into the market is going to have to visit Magic Kingdom. So they think it's a rising tide floats all boats here. If Epic Universe actually does attract all the tourists that they think they're going to. Those people are probably going to go check out Disney as well. So that might be an optimistic spin zone from a competitor or it might be.

[Neal Freyman]

I actually think that's right, though. I mean, if you look at any type of business, they set up shop in the same area as other businesses, and that's just generally a one plus one equals three situation. I mean, you've been on. On those roads where there's a million auto dealerships, and that's because people go to that one area of town to hop around. And more people would go to that any particular dealership than they would if they were all alone. And that's something that's similar happening with theme parks. I think he's absolutely right that this is be would be overall good for Disney. However, they might lose some customers at the margins. The thing is, they have such a wide lead right now that they have to really fumble the bag to lose that leadership position to Universal. In 2023, Walt Disney World attracted nearly 49 million visitors, which is more than double Universal's attendance of nearly 20 million that year. So Universal is on the up. I mean, they launched Harry potter world in 2010, and the CEO of Comcast is like, I mean, that just saw a spike in visitorship and then it hasn't come back down. Like, that has been a goldmine for us. And now they're expanding their Harry Potter World with this new park. I'm excited.

[Toby Howell]

I know. Let's book our tickets. I haven't been to a theme park in so long. I'm from Florida, so I really should make a trek back down there to try it out. Up next, we got Neil's numbers.

[Neal Freyman]

Toby, you ever get served an ad that just makes no sense whatsoever?

[Toby Howell]

Yes. One particular platform thinks I'm obsessed with Faberge eggs.

[Neal Freyman]

Maybe because we keep talking about egg prices. That also proves that a lot of the time the best B2B marketing gets served to the wrong people.

[Toby Howell]

I have purchased over 17 Fabrice eggs in the last two weeks.

[Neal Freyman]

I. Wow. Okay. Point is, LinkedIn has a network of over 1 billion professionals and over 130 million decision makers, which makes it stand out from other ad purchases.

[Toby Howell]

You can target buyers by industry, title, company, you name it. Everyone and their mom is on LinkedIn.

[Neal Freyman]

So save money and target the right professionals with LinkedIn ads.

[Toby Howell]

LinkedIn will even give you a $100 credit on your next campaign. So you can try it yourself. Just go to LinkedIn.com mbd that's LinkedIn.com mbd Terms and conditions apply only on LinkedIn ads. This episode is brought to you by Whoop. The all new Whoop is here, the only wearable that turns your health and fitness data into personalized guidance, now 7% smaller and with more than 14 days of battery life. I just ran the London Marathon and Whoop was huge for helping me balance my daily strain while staying on top of my recovery. You can't get faster without proper rest, and Whoop's insights helped me dial in both sides of the equation. Now Whoop includes Heart screener with on demand ECG readings so you can check in on your heart anytime and share results with your healthcare provider. It also includes the Health Span, a new feature that demystifies the aging process and shows how your daily habits impact your pace of aging, as well as hormonal insights for personalized guidance through your cycle or pregnancy. It's the only wearable that gives you a truly comprehensive view of your body designed to help you improve your performance, longevity and overall health. Join now at join.whoop.com brew daily that's join.whoop.com brew Daily.

[Neal Freyman]

Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will make you the most interesting person at your Memorial Day weekend barbecue. For my first number, if you want to get really rich in today's America, quit your desk job and start a company making machines that rip up flooring. That's what Derek Olson did, and now he's part of the top 1% of earners in the United States who made at least $550,000 per year. Known as the stealthy wealthy, Olson and other owners of really boring but essential companies account for an increasing share of American 1 percenters. According to the Wall Street Journal, the largest source of income for the top 1% in the US behind a paycheck, is owning a medium sized regional business. Think beverage distributor, car wash, residential lighting company or manufacturer of car floor mats. 35% of the wealth for the top 1% of earners comes from these kinds of businesses, up from 30% in 2014. And Olsen story is a fascinating example. He owns National Flooring Equipment in Minnesota, which makes machines that remove flooring from places like elementary schools. The average elementary school in the United States has seven miles of carpet and children are disgusting, he told the Journal, meaning that schools have to replace their carpets every year, providing him steady business. His company will bring in $50 million in revenue this year, and he's got two Land Rovers, sends his kids to private school and takes a month long summer vacation in Europe. Toby, why build in public when you can be stealthy wealthy?

[Toby Howell]

Stealthy wealthy is just fantastic branding for this class of people. And a lot of things have been kind of flowing in their favor over the last few years that power these business owners into the upper echelon of earners in this country. One just a lot of tax cuts in recent decades have supported business owners and then low interest rates as well have led to, you know, surging company valuations. So Even at the 0.1%, that's where you're seeing a lot of these extremely rich entrepreneurs who founded these businesses that, you know, sound AI generated like national flooring company doesn't sound like a real place, but that's exactly where a lot of the money is coming from here. So just fascinating to see how much of wealth in America is accumulated by people who run really, really boring businesses.

[Neal Freyman]

But really, really lucrative.

[Toby Howell]

Lucrative, yes.

[Neal Freyman]

For my second number, you know that woman who is looking for a man in finance? Well, maybe she should be looking for a man in philosophy instead of. A study by the Federal Reserve bank of New York found that majors in nutrition, art history and philosophy outperform STEM fields when it comes to employment prospects. And by employment prospects, we're talking unemployment rates for recent college grads. For computer science and computer engineering majors, the unemployment rate was 6.1% and 7.5% respectively, much higher than the national average. On the other hand, the unemployment rate for nutritional sciences was just just 0.4% and for art history majors, 3%. And in a head to head matchup of finance versus philosophy, I think therefore I have a job. Finance majors have an unemployment rate of 3.7% compared to philosophy majors of 3.2%. Now, if you do snag a job in finance or stem, you'll earn more than if you studied art history, computer science and engineering students have a median wage of $80,000 coming out of school, the most of any major. Still, these numbers point to increased demand for students with backgrounds in the humanities.

[Toby Howell]

Yeah, this was very surprising. It probably shows that there's a fundamental disconnect between what student ideas of employable majors are and what the job market is actually giving them. And it probably stems back to the fact that our concept of a good job are meaning like recent college grads probably comes from your parents and your parents idea of a good job probably comes from the job market 30 years ago. So it's creating kind of a little bit of not of not symmetry between grads and what jobs they're actually getting. Again, these numbers are probably pretty small in different so it's not like every philosophy major has a job and every STEM major doesn't have it. We're talking like 2% here and there. But who would have thought that nutrition, art history and philosophy would outperform the stem fields? Maybe BlackRock would expect that, though, because their CEO recently just said that the firm is adjusting its hiring strategy for recent grads because they said we have more and more conviction that we need people who majored in history and English and things that have nothing to do with finance or technology. So that's the biggest ass money manager in the world saying those things. So clearly there's been a shift in how the job market and how prospects are being valued on it.

[Neal Freyman]

For my final number, no one uses semicolons anymore A new study from the Learning Platform Babel found that usage of the semicolon in British text has plunged by 47% over the past two decades. While one appeared in every 205 words in 2000, today it's every 390 words. Meanwhile, another study found that 67% of British students never or rarely use the semicolon, while just 11% of respondents said they were frequent users. Depending on who you are, you're either dancing on the semicolons grave or mourning the demise of an elegant punctuation mark. Plenty of famous writers have weighed in on both sides of the debate. Kurt Vonnegut urged do not use semicolons. All they do is show you've been to college. Lynne Truss, author of Eat, Shoots and Leaves, went even further, saying, many writers hooked on semicolons become an embarrassment to their families and friends. But the semicolon has its defenders too. Abraham Lincoln once said, I have a great respect for the semicolon semicolon. It's a very useful little chap, though I should note there is not a single one in his Gettysburg Address. And in its eulogy for the semicolon, the Spectator writes markets we must resist this decline. Like napkins, black tie, and having a glass of champagne before lunch, the semicolon remains a bulwark against civilizational decline. Toby the semicolon has elicited is a hot dog a sandwich level of divisiveness.

[Toby Howell]

I don't think I've ever used one incorrectly, by the way. I literally had to go back and look up what is the proper usage of it. And it's just between it's separating two separate clauses. And so technically you could replace it with a period, it would still have two coherent sentences. But. But yeah, I have not necessarily upped my semicolon usage since leaving high school. What is interesting though is that the semicolon occupies a unique place in modern culture as well. Because when texting first came out and you had to compress your messages into much smaller and smaller packages because, you know, you didn't want to, that's all early phones could support. Emoticons became a very popular use. You know, the winky face of the semicolon. So, so it started being used that way, but then emojis came along and started like basically taking emoticons beyond the behind the woodshed because they can convey a much wider range of emotions. So even emojis have killed a semicolon usage in its emoticon function. So it's just getting it from all sides here literarily and then also just emoticonally as well.

[Neal Freyman]

Okay, let's sprint to the finish with some final headlines. You might have noticed your portfolio looking a little bruised this morning and that's because the GOP's tax and spending package, that one big beautiful bill, is causing more concern about America's fiscal situation. Stocks crumpled to their worst day in a month while bond yields surged even higher, a sign that investors are demanding a higher premium to hold U.S. bonds. Republicans in the House will attempt to pass the bill today which is expected to add trillions of dollars to the deficit over the next decade by extending tax cuts. And traders are still angsty over the Moody's credit rating. They're throwing a tantrum.

[Toby Howell]

Yeah, if you looked at your portfolio yesterday and go what the heck happened? It probably was this bond sale. And then yeah, there is just a confluence of the bunch of, a bunch of factors because you are still coming off this downgrade. You are still seeing this bill progress through Congress as well. Toss in some weak retailer earnings like we just saw with Target and the fact that higher bond yields can pull investors away from other assets like stocks. And of course things are going to turn ugly pretty quickly there. So this is just basically a PSA saying if the stocks look fine early in the day and then they did not look fine later in the day. Now you know why. Finally, the four British explorers who tried a high speed summit of Mount Everest, controversially aided by xenon gas, pulled off their record setting climb early yesterday. Remember these guys, former British special forces soldiers who pre acclimatize themselves to low oxygen by inhaling xenon gas, allowing them to skip the typical six to eight week period that your body typically requires to adjust to high altitude. In total, it took the four men just under five days to go from Base Camp to summit. Not the fastest time ever to reach the summit, but the fastest ascent without acclimatizing first. They think inhaling xenon gas to boost production of a specific protein in their blood that fights off hypoxia helped bring Base Camp to them and power the record breaking summit. Neal, I can't believe it, but they actually went and did it.

[Neal Freyman]

They did it. And the implications are actually huge for the mountaineering community in Nepal. So what if now you can go up Everest without having to chill at Base Camp or in Kathmandu for a long time, getting used to the altitude that is a huge moneymaker for Nepal and its tourism industry. What if you can? What if you just inhale xenon in Europe and then just travel straight to Base camp, go up four days, come back and then leave? You know, I think Nepal's tourism industry will have to grapple with this, especially if more people use this method because it was demonstrated to actually work, at least with these ex military guys who are probably in pretty good shape. The expedition leader who led this and pioneered the use of xenon for climbing said, guys, this is actually overall a net positive because we're spending less in carbon emissions. We are trashing the nature less because we're just spending less time on the mountain. And Everest has had a huge overcrowding problem. So we'll see where this goes. But I don't think we even expected them to work. And it did.

[Toby Howell]

It did work. And I think I'm inhaling xenon before tomorrow's podcast. If it increases performance in the podcasting realm as well. That is not. It is medical advice.

[Neal Freyman]

It is a noble gas and you.

[Toby Howell]

Are very noble guy. Yeah.

[Neal Freyman]

All right. That is all the time we have. Thanks so much for starting your morning with us and have a wonderful Thursday. If you have any thoughts on the show, send an email with questions, comments or feedback to Morning Brew daily at Morning Broadcom. Let's roll the credits. Emily Milian is our executive producer. Ravenlou is our producer. Our associate producers are Olivia Graham and Olivia Lake. Scoop Sardaris is on audio, hair and makeup is dreaming of being stealthy wealthy. Devin Emery is our president and our show is a production of Morning Brew.

[Toby Howell]

Great show today, Neil. Let's run it back tomorrow.