Morning Brew Daily — Episode Summary

Title: OpenAI Inks Massive Deal with AMD & French PM Steps Down After 27 Days
Date: October 7, 2025
Hosts: Neal Freyman & Toby Howell

Episode Overview

Today's episode dives into two headline stories shaping global markets and political realities:

1. OpenAI's massive multibillion-dollar chip deal with AMD, signifying shifting alliances and raised stakes in the "AI arms race," and
2. The political crisis in France after its prime minister resigns in less than a month, sending economic shockwaves.

Additional segments cover AI hiccups in consulting, the decline of craft beer, notable business deals, and cultural moments including Tesla and LeBron James’ cryptic announcements.

1. OpenAI & AMD: A Monumental Deal in the AI 'Game of Thrones'

[02:41 – 08:28]

• OpenAI announced a massive partnership with AMD. OpenAI will both buy a vast quantity of AMD chips (6 gigawatts' worth—potentially a $300 billion commitment) and acquire a 10% stake in AMD.
• The news sent AMD stock soaring 24% in a single day—seen as a huge win in AMD's long struggle to compete with industry leader Nvidia.
  • "OpenAI continues to spend more cash than a legacy college freshman with their parents' credit card." — Neal Freyman [00:40]
• Financial Circularity in AI:
  • The hosts break down a complex, circular flow of investments:
    • Nvidia recently invested $100 billion in OpenAI.
    • OpenAI buys chips from Nvidia.
    • AMD grants OpenAI warrants for equity.
    • OpenAI’s purchasing boosts AMD’s valuation.
    • Oracle finances OpenAI’s cloud capacity.
  • "There's just this financial circle circularity underpinning the entire AI trade... If anyone drops the ball... things start to get a little bit shaky." — Toby Howell [04:26]
• Unprecedented Spending, Bubble Talk:
  • The scale of investment dwarfs historical industry buildouts (like railroads or electric grids).
  • OpenAI’s recent deals total ~$1 trillion in computing power this year.
  • Major voices are noting bubble risk:
    • "Last week, Amazon founder Jeff Bezos... called AI a kind of industrial bubble that will mint winners and losers." — Neal [07:34]
    • Goldman Sachs’ David Solomon predicts a drawdown coming in the next 1–2 years.
    • AI capital expenditure could reach 2% of GDP in 2025 or $1,800 per American.
• OpenAI’s outsized market influence:
  • "We’re entering uncharted territory when it comes to one company’s influence over the market." — Toby [06:32]
  • Example: OpenAI's feature launches spike share prices for Shopify, Etsy, and now AMD, despite OpenAI still being private.
• Quote Highlight:
  • "We are in a phase of the buildout where the entire industry has got to come together and everybody’s going to do super well. You’re going to see this on chips, you’re going to see this on data centers, you’re going to see this lower down the supply chain."
    — Sam Altman (via Neal) [05:35]

2. France: Political Instability & Economic Fallout

[08:28 – 11:57]

• Another Prime Minister Down:
  • France's PM Sébastien Lecornu resigns after 27 days, becoming the shortest-serving PM in modern French history and the third to fall in a year.
  • Lecornu’s new cabinet mirrored the previous, failed government—instability persists.
• Economic Ramifications:
  • France runs deficits well above EU limits (~5.8% of GDP).
  • Leadership efforts to trim spending or raise taxes end in fierce opposition from both political left and right.
  • News of resignation hit markets hard:
    • Main French stock index dropped 1.4%
    • Bond yields spiked, making French debt riskier.
  • "We are witnessing an unprecedented political crisis." — French lawmaker, cited by Neal [09:59]
• Global Financial Impact:
  • Yield on France’s 10-year bonds has risen above Greece’s—"never good to be in the same sentence as Greek bonds" [10:58].
  • Ongoing gridlock threatens Eurozone stability.
  • Macron faces three choices:
    1. Appoint a new PM
    2. Call another snap election (which led to current chaos)
    3. Resign (unlikely, but pressure is mounting)

3. AI's Growing Pains: Deloitte's 'Human Intelligence Problem'

[11:57 – 16:30]

• Deloitte caught using AI to 'cheat' on government homework.
  • Australian government to be partially refunded after Deloitte’s $300,000 report found to contain "hallucinated" footnotes and sources generated by ChatGPT-4o.
  • "Deloitte has a human intelligence problem. This would be laughable if it wasn't so lamentable." — Labor Senator Deborah O’Neill [13:52]
• Consulting in the Age of AI:
  • Big consulting firms face a paradox: they sell clients on their AI expertise, but are hastily using (and misusing) genAI, risking trust.
  • "They're proving that they're using it far more than they're probably telling you. And two, they're using it very sloppily." — Toby [14:14]
  • Consulting spend on generative AI soared from $1.3bn in 2023 to $3.75bn in 2024; but clients complain consultants are "learning on our dime." (CIO of Merck, as cited by Neal) [15:20]
  • Trust is essential to the business model; AI mishaps erode it.

4. Toby’s Trends: The Craft Beer Bust

[18:36 – 21:45]

• Craft beer sales fell 4% last year, their first decline in years.
• More breweries closed than opened in the last 18 months, a first since the ‘red hot’ boom began.
• Causes include:
  • Oversupply: "Too much beer, not enough drinkers." — Toby [19:54]
  • Changing preferences: wellness, low/no alcohol, and alternative beverages.
  • Market effects: Big brewers offloading craft assets, smaller breweries squeezed.
  • "I call this the Froyo effect... eventually, there was retrenchment." — Neal [19:59]
• Economic implications:
  • Tilray’s bargain purchase of four Molson Coors craft brands for $23m (a fraction of earlier valuations).
  • Ballast Point sold for $1 (from $1bn value in 2015).
  • Major local economic risks if towns lose their breweries.
  • "Go to your local brew pub and have a few pints to save this struggling industry." — Neal [21:45]

5. Quick Hits

[21:45 – 29:34]

• Government Shutdown Hits U.S. Airports — Delayed pay for air traffic controllers and TSA agents leads to significant flight delays. Prolonged shutdown could severely impact travel and the economy. [21:45–23:57]
• Regional Bank Merger — Fifth Third Bank acquires Comerica for $10.9B, becoming the 9th largest U.S. bank; emblematic of consolidation among regional banks seeking scale post-2023 "mini banking crisis." [24:48–25:26]
• Tesla Teaser — Cryptic social media posts likely signal a new lower-cost Model Y (~$30k); crucial if Tesla wants to fend off competition from Chinese EVs, but with Tesla, you "literally never know." [26:27–27:43]
• LeBron James' 'Second Decision' Video — Internet buzz about potential retirement vs Amazon marketing stunt. "73% say it’s a marketing stunt for Amazon." — Neal [28:56]
• "Having the same time as the Tesla vehicle reveal. So I will have dual monitors going." — Neal [29:16]

Notable Quotes & Memorable Moments

• Neal, on the AI frenzy:
  "OpenAI continues to spend more cash than a legacy college freshman with their parents’ credit card." [00:40]
• Toby, on risk in the circular AI economy:
  "There's just this financial circle circularity underpinning the entire AI trade... that has a lot of risk." [04:26]
• Sen. Deborah O’Neill, on Deloitte:
  "Deloitte has a human intelligence problem. This would be laughable if it wasn’t so lamentable." [13:52]
• Toby, on consulting and AI:
  "They're proving that they're using it far more than they're probably telling you. And two, they're using it very sloppily." [14:14]
• Neal, on the craft beer glut:
  "I call this the Froyo effect." [19:59]
• French lawmaker, on government chaos:
  "We are witnessing an unprecedented political crisis." (via Neal) [09:59]

Quick Reference — Timestamps for Major Segments

• OpenAI & AMD, AI market overview: 02:41–08:28
• France’s political and market turmoil: 08:28–11:57
• AI consulting mishap (Deloitte): 11:57–16:30
• Craft beer segment: 18:36–21:45
• Quick business/cultural headlines: 21:45–29:34

Tone & Delivery

The hosts maintain their trademark blend of sharp wit and informative analysis, providing clear breakdowns while weaving in accessible humor and memorable takes.

Takeaway

This episode captures a pivotal moment in both technology and global politics. The AI sector’s ongoing financial circularity and unprecedented influence raise as many questions as opportunities, while French political instability puts the Eurozone’s future under the microscope. Elsewhere, legacy industries and household brands adjust to shifting tides—from craft beer’s bust to consulting’s AI reckoning.

If you missed the news this morning, this episode delivers a concise and nuanced digest of business, markets, and the cultural signals driving them.