Starbucks Competitor Opens First US Stores & The Dollar Keeps Sliding

Summary

Morning Brew Daily: Episode Summary Title: Starbucks Competitor Opens First US Stores & The Dollar Keeps Sliding
Release Date: July 1, 2025
Hosts: Neal Freyman and Toby Howell
Platform: Available on all podcasting platforms and YouTube

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1. Introduction to the Episode

Neal Freyman and Toby Howell kick off the episode by highlighting two major stories shaping the business landscape:

• Luckin Coffee's US Expansion: The Chinese coffee giant Luckin Coffee has launched its first two stores in Manhattan, challenging Starbucks in its home market.

• Decline of the US Dollar: The US dollar has experienced its worst first half since 1973, influenced by various economic factors and policy decisions.

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2. The Rise of Luckin Coffee in the US

Luckin Coffee's Strategy and Challenges

Luckin Coffee, founded in 2017, rapidly expanded in China by targeting young consumers with app-based payments and innovative beverage offerings that blend coffee with elements of boba tea. By 2019, it surpassed Starbucks in the number of locations and revenue, boasting over 22,000 stores in China alone.

US Market Entry:

• First Stores: Recently opened in Manhattan, strategically placed in areas frequented by tourists and Chinese college students, such as Greenwich Village near NYU.
• Product Line: Offers a diverse menu with 119 different items launched in 2024, including mango and green grape-based drinks, aiming to capture the social media-driven youth market.

Competitive Landscape:

• Price Advantage: Luckin's lattes are priced around $2, significantly cheaper than Starbucks, which has seen a 51% increase in average order prices since the pre-pandemic era.
• Menu Customization: Unlike Starbucks' highly customizable app, Luckin offers more streamlined options, focusing on basic sweetness levels without the extensive range of add-ins. As Toby Howell notes, “[...] Luckin has no problem with digital ordering. [...] you can only make orders via its app” (05:58).

Challenges and Opportunities:

• Previous Scandals: Luckin overcame a major setback in 2020 when it was embroiled in an accounting scandal, leading to CEO firings and SEC fines. However, the company has since restructured and aims for global dominance.
• Market Reception: The podcast discusses whether American consumers will embrace Luckin's fusion of coffee and boba, contrasting it with the more traditional preferences in the US market.

Strategic Positioning: Neal Freyman emphasizes Luckin's focus on value and variety, stating, “Luckin is going to have to compete not just on variety but also on price” (07:43). The hosts also compare Luckin's approach to the new strategies employed by Starbucks under CEO Brian Niccol, who is streamlining the menu and enhancing in-store experiences to encourage customer linger time.

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3. The Sliding US Dollar and Economic Implications

Dollar's Downturn:

• The US dollar has depreciated over 10% in the first half of 2025, its worst performance since 1973. Factors contributing to this decline include:
  • Tariffs and Trade Policies: Stop-start tariffs have negatively impacted the dollar’s standing as a global reserve currency.
  • US Debt: A proposed $3.2 trillion bill has raised concerns about the growing national debt.
  • Fed Independence Doubts: Questions over the Federal Reserve’s autonomy have further eroded confidence in the dollar.

Economic Impact:

• Travel and Investment: A weaker dollar makes international travel more expensive for Americans and less attractive for foreign investors to invest in US assets.
• Exports and Imports: US exporters benefit as their goods become cheaper abroad, while imports become costlier for American consumers.
• Foreign Investment: A declining dollar may reduce foreign investment in US Treasury bonds, exacerbating the national debt issue.

Stock Market Performance:

• Despite the sliding dollar, US stocks have reached record highs recently, driven by expectations of future rate cuts. However, when adjusted for currency value, the S&P 500 still trails behind European stocks. Neal Freyman notes, “Despite the S&P 500 inching up 5% so far this year, your portfolio could very well be down when adjusted for currency value” (10:34).

Cryptocurrency Market:

• Bitcoin has thrived under a crypto-friendly administration, while altcoins have suffered, losing over $300 billion in market value. The mixed performance presents a complex landscape for investors.

Key Quotes:

• Neal Freyman on Dollar Weakness: “When the US Dollar gets weaker, it makes imports more expensive for us. So there are all these trade-offs going on” (10:34).
• Toby Howell on Investment Risks: “[...] if the dollar gets too weak, maybe there's less demand for these long-term treasuries” (11:43).

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4. WNBA Expansion and the Revival of the Rust Belt

League Growth:

• The WNBA announced the addition of new franchises in Philadelphia, Cleveland, and Detroit, expanding the league to 18 teams—the highest in its history.

Historical Context:

• Philadelphia will host its first WNBA team, while Cleveland and Detroit have previous teams that either folded or relocated:
  • Cleveland Rockers: Operated from 1997 to 2003 with modest attendance.
  • Detroit Shock: Played from 1998 to 2009, winning three championships before moving to Tulsa.

Economic and Cultural Impact:

• Expansion Fees: New team owners are paying substantial fees, with Philadelphia's fee reportedly around $250 million, a significant increase from previous expansions.
• Market Valuations: Existing teams have seen explosive growth in value, such as the New York Liberty now worth $420 million compared to $10 million in 2019.

Growth Drivers:

• Record Viewership and Attendance: The league has experienced spikes in visibility and fan engagement, driven by stellar performances and rising stars like Caitlin Clark.
• Youth Engagement: The influx of new teams into major cities is seen as a strategic move to tap into urban youth markets and rejuvenate the league’s fan base.

Host Insights: Toby Howell highlights the financial success of expansion franchises, stating, “Clearly the demand is there. Clearly the valuations are spiking enough to justify those franchise fees” (15:38). Neal Freyman echoes this optimism, mentioning the league’s collective worth has surged to $3.5 billion.

Notable Quotes:

• Toby Howell on WNBA Momentum: “This league has a lot of momentum. We haven't. I have spoken her name. Caitlin Clark is a big reason why it wants to continue reloading with talent” (16:34).
• Neal Freyman on Team Valuations: “The current 13 franchises that make up the league, they jumped in value by an average of 180% over the last year” (15:38).

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5. Additional Market Insights

Stock Market Highlights:

• Top Performer: Palantir has surged by 80% year-to-date, driven by its role in AI-driven warfare technologies.
• Worst Performer: Deckers, known for brands like Hoka, has plummeted nearly 50% due to stiff competition from Adidas and others.

Cryptocurrency Evolutions:

• Robinhood's Growth: The platform experienced a 13% stock increase following its expansion into tokenized securities, allowing European users to trade blockchain-based assets linked to private companies like OpenAI and SpaceX.

Final Thoughts on the Market: Neal Freyman summarizes the market's mixed performance, highlighting the strong stock rebound against a backdrop of a weakening dollar and a volatile cryptocurrency sector.

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6. Closing Remarks and Final Headlines

Microsoft's AI Medical Tool:

• Microsoft unveiled the AI Diagnostic Orchestrator, an AI-driven tool that outperforms human doctors in diagnosing complex ailments, achieving an 85% success rate compared to 20% by humans.

Cruise Industry Tax Changes:

• Mexico introduced a new cruise tax starting at $5 per passenger, increasing to $21, aimed at capturing more revenue from cruise operations. This follows Royal Caribbean's successful resort model, inspiring similar investments in Mexico.

Netflix's Partnership with NASA:

• Netflix is expanding into live entertainment by partnering with NASA to stream live space-related content, aligning with their broader strategy to diversify programming beyond traditional streaming offerings.

Notable Exchanges:

• Toby Howell expresses enthusiasm for the WNBA’s growth, while Neal Freyman discusses the potential and challenges of new technologies and market shifts.

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7. Notable Quotes with Timestamps

• Neal Freyman on Bobby Bonilla Day:
  “Every July 1, retired All Star third baseman Bobby Bonilla receives a $1.2 million check from his former team, the New York Mets...” (02:09)

• Toby Howell on WNBA Expansion Fees:
  “But Mark Davis bought the Las Vegas Aces for $2 million in 2021. That team is now worth nearly $300 million.” (15:38)

• Neal Freyman on Dollar Impact:
  “When the US Dollar gets weaker, it makes imports more expensive for us. So there are all these trade-offs going on.” (10:34)

• Toby Howell on Robinhood's Vision:
  “Robinhood is on a heater right now... it looks like this is just one more step to total financial dominance.” (25:33)

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Conclusion

In this episode of Morning Brew Daily, Neal Freyman and Toby Howell delve into the competitive dynamics of the US coffee market with Luckin Coffee's ambitious entry, analyze the multifaceted decline of the US dollar and its broader economic implications, and celebrate the WNBA's strategic expansion aimed at revitalizing key American cities. Additionally, they touch upon significant movements in the stock and cryptocurrency markets, Microsoft's advancements in AI healthcare, and innovative shifts within the cruise and streaming industries. The hosts provide insightful commentary, backed by notable quotes and real-time analysis, offering listeners a comprehensive overview of current business trends and their potential impacts.

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For more detailed discussions and updates, listen to the full episode on your preferred podcast platform or visit Morning Brew's YouTube channel.

Transcript

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[Neal Freyman]

Good Morning Brew Daily Show I'm Neal Freyman.

[Toby Howell]

And I'm Toby Howell.

[Neal Freyman]

Today the coffee wars are heating up. With luck in coming for Starbucks on its home turf.

[Toby Howell]

Then first half of the year, report cards are in and stocks got a gold star while the US dollar is in time out. It's Tuesday, July 1st. Let's ride.

[Neal Freyman]

Good morning and Happy Bobby Bonilla Day to all who celebrate have no idea what I'm talking about. Here is the gist. Every July 1, retired All Star third baseman Bobby Bonilla receives a $1.2 million check from his former team, the New York Mets, even though he hasn't played in a baseball game for over 20 years. And that's because back in 2000, the Mets owed Bonilla $5.9 million. But instead of taking that cash up front, Bonilla requested a contract that spreads out $30 million in guaranteed payments through annual installments from 2011 through 2035. And so July 1st has become an annual celebration of Bonilla's forward looking financial planning and an opportunity to make fun of the Mets for having to pay a 62 year old retired player for.

[Toby Howell]

Another 10 years, our deferred income king. Here is the funniest part about this whole deal. It worked out really well for the Mets. They used the money saved on the Bonilla deal to bring in a pitcher who had a great year, then flipped him for a draft pick they used on David Wright, who by the time he retired was the Mets all time leader in basically every offensive category. So yes, history actually shines brightly on the Bonilla deal, despite it being a very funny opportunity to make fun of the Mets, which thank you for taking advantage of. Now a word from our sponsor, Taco Bell. Excuse me, Neil, I need to refresh.

[Neal Freyman]

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[Toby Howell]

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[Neal Freyman]

I'm partial to Agua Refrescia is a Taco Bell twist on the beloved Mexican beverage mixed with real freeze dried fruit pieces and green tea. Sometimes I need the Rockstar Energy Refresca for a delicious boost of energy.

[Toby Howell]

I am fully team Refresca Freeze. It's basically PTO in a cup.

[Neal Freyman]

Head to taco bell.com/morning-brew to learn more. That's taco bell.com/morning- brew legal disclaimer at participating Taco Bell locations for a limited time only while supplies last. Agua Frescas are made with artificial colors and natural fruit flavoring and contain less than 1% juice. Rockstar Energy or Frescas contain 200 milligrams of caffeine and are not recommended for children, pregnant or nursing women or persons sensitive to caffeine. The people of New York City don't exactly lack options when it comes to coffee, but a new chain has arrived from out of town and it's hoping to shake up the morning brew pecking order in New York and across the U.S. luckin Coffee of China opened its first two locations in the United States in Manhattan yesterday, in a high stakes bet it can replicate its stunning success in its native country on Starbucks's home turf. Luckin was founded in 2017 and needed no luck finding its niche catering to young people with app based payments and cheap, wildly inventive drinks that blur the line between coffee and boba tea. By 2019, it overtook Starbucks in China by number of locations, and by 2023 it surpassed it in revenue. Luckin now has more than 22,000 locations in China, opening a new one every 90 minutes last year and a few others in Singapore. But its road to the US has been rocky. In 2020, after the company went public on the Nasdaq, it got caught up in an accounting scandal and admitted its earnings had been fabricated. Lincoln's chairman and CEO were both fired. It was delisted from the Nasdaq and hit with a $180 million fine by the SEC. Many analysts thought it was done so for Luck in at the time, but it cleaned up its house, regrouped and is back to plotting worldwide domination. Toby, as they say, if you can make it here, you can make it anywhere you can. You think Luckin will find success in the crowded American coffee market?

[Toby Howell]

I think that Starbucks has to watch its back all you have to do is look at the company's approaches to their apps to see how these two coffee houses differ. Consummation is the name of the game. At Starbucks. You can supercharge your customization. On the Starbucks app. You can add any number of toppings, syrups, foams. And now baristas are being forced to make these complex streams that owners have just made up on the fly. That has led to these mosh pits during key commuting hours. Then you look at Luckin. Luckin has no problem with digital ordering. In fact, you can only make orders via its app. And they don't have these crazy lines or crazy mosh pits that Starbucks ads because the customization is a lot more basic. All you can do is simple things like optimize for the level of sweetness, but you can't add foams and syrups and whatnot galore. So it's a very interesting approach. Luckins is a lot more scaled down, a lot more, less custom focus compared to Starbucks, which is you can do all sorts of bells and whistles.

[Neal Freyman]

But Luckin can afford to do that because it has so many different kinds of coffee that it offers. I mean, this company launched 119 different items in 2024 alone. The coffee market in China is so cutthroat. Luckin is not the only game in town. It's also going against another chain that's growing like a weed, Cody Coffee. And they are releasing new products nearly one every two day things like Mango based drinks or green grape based drinks. Starbucks is also getting in on the game in China with a salty and sweet pork flavored latte. So you have this wildly inventive market in China. We'll see whether the American tastes are more attuned to that. We're more used to just black coffee or espresso drinks or coffee with milk and sugar. Here in the United States. We'll see whether consumers will go for that mix of Boba tea fruity coffee that Luckin has, you know, been so successful with in China.

[Toby Howell]

Yeah, and Lucky. And it doesn't necessarily expand its menu. What it does is periodically introduce limited time menu items, which, you know, gets people out in droves because again, they're catering to the same kind of social media obsessed youth that Starbucks is trying to capture as well. Yeah, Last summer took advantage of Milk Tea Crazy sold more than 44 million cups of jasmine tea in the first month that they released this new limited time option. And then also we have to talk about value for money. Here in the US the average order at Starbucks costs 51% more than it did pre pandemic. At Luckin, a latte costs just $2. So Starbucks is going to have to compete not just on variety but also on price. So yeah, I do think that they have their work cut out for them. And then you also mentioned that the placement of these two locations was very wise for Luck in too.

[Neal Freyman]

Yeah, they're going after tourists and they're going after Chinese college students. So what they did for their first two locations is put them in those areas. One of the locations is in Greenwich Village right next to NYU and we'll see how it works out for them. Cody, that rival that I talked about is already in the United States. It has a few locations in New York, it has a few locations in California. Will be very interesting to see to these two very different strategies from Starbucks and Luckin work out because right now the new CEO of Starbucks, Brian Nicholl, is doing the exact opposite of what Luckin's value prop. He's streamlining Starbucks his menu and very much enhancing the in store experience. He wants people to linger into Starbucks. I went to into a Starbucks the other day and there was a lot more seating than had been in the past few years. Reminded me of the Starbucks of old, which is exactly what Brian Niccol is trying to do. It may just come down to price. As you mentioned, Starbucks is very expensive. They're leaning into premier premiumization and Luckin is going. We'll see how much the these coffees actually cost in the United States, but they're going for two to three dollars. Then again, Starbucks has a has a lot as a big advantage. Obviously it's been here for 50, 50 has two stores as of yesterday we.

[Toby Howell]

Are nearly 50% through 2025, which means it's time for a halfway check in on the markets. The starting 5 of stocks, bonds, cryptocurrencies and my sanity have all had varying levels of success and failure so far. But no one has put in a shift quite as putrid as the US Dollar. The good old greenback is off to its worst first half of the year since 1973 as Trump's economic agenda has. Global investors rethinking their exposure to the world's reserve currency. The potent mix of stop start tariffs, a big beautiful bill that would add $3.2 trillion in debt, and doubts about Fed independence have all sapped the currency's safe haven appeal and caused the dollar index to fall more than 10% so far. Meanwhile, stocks are doing just fine after suffering their largest two Day loss in history. Post Liberation day expectations of future rate cuts turned on by Trump have powered U.S. stocks to record highs again in both of the last two trading days. But again, the weaker dollar means The S&P 500 still trails European stocks on a currency adjusted basis. In fact, despite the S&P 500 inching up 5% so far this year, your portfolio could very well be down when adjusted for currency value. Cryptocurrencies, meanwhile, have fallen somewhere in the middle, with bitcoin thriving under the crypto friendly administration, but most of the rest of the industry struggling. More than $300 billion in market value has been wiped out from altcoins so far this year. So overall, Neil, six months into 2025, we have a sinking dollar whipsawing US stocks, a suddenly resurgent Europe in a middling crypto market, and it's only July.

[Neal Freyman]

This dollar sinking has been a dark cloud over what had been a remarkable recovery. Buy stocks. In practical terms, what does 10% weaker dollar mean for you? It is more expensive for you as an American now to travel abroad. It's less attractive for foreigners to invest in the United States because their currencies are stronger. On the flip side, the weaker dollar should help US Exporters. If you make good here, if you're a manufacturer here, it is now cheaper for you to sell it abroad and your exports become more attractive. It does make imports more expensive for us. So there are all these trade offs going on. When the US Dollar gets weaker, I should mention the US Dollar is still very strong. It came from a position of huge strength to start the year, and it was expected to only increase because Trump's tariffs were expected to hurt other countries more so than the United States as the year has progressed. As we've gone on for these past six months, that has not turned out to be true. US Economic growth is seen to have faltered more than all the countries we're putting tariffs against. And that's why you're seeing one of the reasons that the dollar has had such a putrid start to the year.

[Toby Howell]

And then one more aspect of this dangerous game of devaluing the dollar is that the US does depend on foreign investors to kind of buy its debt and fuel this monstrous debt pile that we've accumulated. And a weaker dollar erodes the return on those bonds. So that is one aspect of this. If the dollar gets too weak, maybe there's less demand for these long term treasuries that we've talked about, actually, and less foreign investors are piling into those specific vehicles. So that is one potential danger of the dollar getting too weak. Let's also just zoom out to the market as a whole this year. We've talked about it a lot, but let's just give you the high level winners of losers. The best performing stock in S and P 500 is Palantir. It's up 80% already this year as kind of ongoing geopolitical conflict has made this company even more central to shaping AI driven warfare. On the flip side, Deckers is actually the worst performing stock so far this year is down nearly 50% as it just hasn't.

[Neal Freyman]

What is Deckers?

[Toby Howell]

Yeah, Deckers makes shoes, makes brands like hoka, and it just hasn't competed very well with with Adidas and the like. And then also, yeah, crypto's been all right. The IPO pipeline is something that we have to shout out as well because a lot of people going in thought maybe there'd be an IPO boom. It didn't look like it for a little bit, but now all of a sudden we have Core Weave Chime and Etoro in circle have all had these massive IPOs and done very well. So kind of a mixed bag overall, but definitely some spots of of highlights.

[Neal Freyman]

We'll give it a B or a B minus I think. Okay, moving on. Dear people of Philadelphia, are you, like me, fed up with rooting for a basketball team that underachieves every year? Would you like to break out of a cycle of endless mediocrity? Do you want a fresh start? Well, it's on the way. Philadelphia, along with Cleveland and Detroit, are getting WNBA expansion teams in the next few years, the league announced yesterday as it tries to seize on its booming popularity by adding new franchises in new markets. Combined with the Golden State Valkyries, a new team that debuted this season, and two other expansion teams at Portland and Toronto on deck, the WNBA will grow to a league record 18 franchises, two more than the previous peak of 16 teams in 2022. While Philadelphia will be getting its first WNBA franchise, Detroit and Cleveland have been here before. The Cleveland Rockers hooped it up from 1997 to 2003, but folded after ranking 10 out of 14 in attendance and never turning a profit in seven seasons. The Detroit Shock played in the WNBA from 1998 to 2009, won three championships and set records for attendance, but moved to Tulsa in 2010. One side of how far the WNBA has come from then, the expansion fee. The new team owners paid the league A reported $250 million fee, roughly five times what the Golden State Valkyries paid just two years ago. Toby. With Caitlin Clark in Indiana and new teams coming to Cleveland and Detroit, is the WNBA single handedly revitalizing the Rust Belt?

[Toby Howell]

Yeah, it absolutely is. And I will say it's coming at a great time for the league. I mean it just came off record, viewership, record intendance, record, merchandise sale. Everywhere you look things are on the come up. And that expansion fee is crazy because I mean you mentioned just a few years ago what the Golden Valkyrie, Golden State Valkyries paid. But Mark Davis bought the Las Vegas aces for $2 million in 2021. That team is now worth nearly $300 million. And then the New York Liberty was bought from James Dolan for $10 million in 2019. Now the New York Liberty are worth $420 million. So insane valuations that we're seeing here. And a lot of lead sources are saying when you factor in all the equipment and expansion or facility fees, the real fee is closer to $300 million. So clearly the demand is there. Clearly the valuations are spiking enough to justify those franchise fees. So things are on the up and.

[Neal Freyman]

Up for the W. Yeah, valuations have absolutely exploded and that's due to viewership increases of WNBA games on ESPN networks were up 170% last season to an average of 1.2 million. And that has led to surging valuations. The current 13 franchises that make up the league, they jumped in value by an average of 180% over the last year. The teams are collectively worth $3.5 billion worth now. And each franchise is worth on average $269 million compared to 2024. Each franchise was worth $96 million. This league has a lot of momentum. We haven't. I have spoken her name. Caitlin Clark is a big reason why it wants to continue reloading with talent. And we'll see what happens when it brings brings these teams to Detroit, Cleveland and Philadelphia. I know Philadelphia for one is, is absolutely desperate for a basketball team it can root for and be proud.

[Toby Howell]

I am so happy for you because you have suffered so much as a 76ers fan over the last few years. So hopefully you know, the 76 year equivalent will be better in the WNBA. Up next we got Toby's Trends.

[Neal Freyman]

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[Toby Howell]

Are you a man who likes to read a good book? Is that good book a work of fiction? And if you answered yes to the above, then you might be a rare unicorn in today's literary landscape. A unicorn that we are going to try and pin down. On today's edition of Toby's Trends, a lot of ink has been spilled asking the question, are men reading enough fiction? The New York Times just published a piece titled why did the novel Reading Man Disappear? But did he actually disappear at all? Granted, the book industry skews female, with a 2023 study from Lian Lowe's finding that 71% of publishing's workforce are women. There is also the infamous stat cited in many an op ed and industry report that men account for only 20% of the fiction market compared to 80% for women. But it turns out that stat is basically made up, according to Vox, and the gap is not nearly as yawning as you might think. The closest thing they could find was a 2017 study from the UK that found UK women bought 63% of fiction while men bought 37%. It's hardly the Grand Canyon in Terms of readership. And while celebrity book club culture and book talk are mostly geared towards women, men have their fair share of literary role models making books for them. In fact, men won the national Book award for fiction in four of the last five years. So the reality is women probably do read a little more than men and probably read more fiction due to how the industry is set up. But Neil, this is one of my murkier trends, the great case of the mysterious novel reading men. And I can't wait to talk to a novel reading man about it.

[Neal Freyman]

I mean, I do read fiction. I almost exclusively read fiction. But at least anecdotally, when I read these headlines saying men read fiction a lot less than women do, that certainly speaks to my experience. Just talking among my friend group and whether that's bad or good or something to be alarmed about is a question we can explore maybe in another Toby trend, but certainly my experience that men do read less fiction. The architecture of book discovery right now is certainly set up for women. There's a lot more women at the highest levels of publishing. Perhaps there is a supply shortage of stories that are told that speak to the male experience. And some would say, hey, this is a long time coming. Thank goodness that the power structures have been inverted, because for the 20th century, there was, you know, this, this world was dominated by male literary figures. Philip Roth, Jonathan Franzen, Kurt Vonnegut. You could go down the line. Everyone, every guy had infinite jest on his, on his bookshelf. And the fact that women are getting their chance to shine here and are dominating this industry is perhaps welcome. So I would say the numbers back it up. I know you're saying it's not 8020 as popular cited, but 6337 is a big gap.

[Toby Howell]

Yeah, but one thing that we do have to say too, is that American adults in general just don't read that many books. According to Pew Research, from 2011 to 2021, the average American read 14 books per year. And you're probably thinking 14 books a year. That is a lot of books. But those numbers are skewed by the power readers. I mean, we all have the friends who have just bookshelves on bookshelf work of books. If you go to the median number, that is the number drops to just five. So you see how on average, five is still a little bit higher than I was expecting. But the book industry as a whole are saying that we're not actually competing with other publishers at this point. We're competing with screen time. We're Competing with Netflix. There are so many things pulling your attention away from reading right now. So in general, are men reading less? Probably. But a lot of people and a lot of adults in general are reading less. So maybe that's the real story. Here is the great case of the mysterious novel reading people that are just are falling to the wayside.

[Neal Freyman]

All right, for all the dudes who are listening to this, who are, who hear, you know, the stats, that they're not reading as much fiction as women and want to start on their novel reading journey, let's give them some, some recommendations. Toby, what is a good novel you've read?

[Toby Howell]

I mean, I just read Project Hail Mary, which they're coming out with a movie too, which I probably shouldn't say because we're gassing up books right now, but one of my favorite reading experiences, it's science fiction, but still fiction. A great time. Neil, I know you have one as well.

[Neal Freyman]

Whenever, whenever guys come to me and they're like, I want to start reading fiction, I always tell them one book, which is Pillars of the Earth by Ken Follett. You will never look at a 12th century cathedral the same way. And I have a bunch of other recommendations. If you just hit me up, I'll help you.

[Toby Howell]

All right, let's sprint to the finish with some final headlines. Microsoft thinks it can outdoctor your doctor. It announced yesterday that it built an AI medical tool that claims it's four times more successful than human MDs when it comes to diagnosing complex ailments. Called the Microsoft AI Diagnostic Orchestrator, it works as a symphony of five AI agents all acting as separate, quote, doctors. Together, they team up to come up with hypotheses, debate, and run tests to eventually choose the best course of action. As a test, this AI doctor hive brain was fed 304 complex medical studies from a peer reviewed journal. It correctly solved 85% of them, compared to just 20% for human doctors. Neal. We'll have to see how its handwriting is. But for now, researchers are calling the AI Orchestrator a landmark step towards medical superintelligence that could help ease staffing shortages, slash costs, and upend traditional diagnostics.

[Neal Freyman]

I mean, holy cow, this is crazy. And it speaks to the AI talent wars that we've been talking about over the last few weeks with Zuckerberg going after these, you know, very important AI researchers. Because the guy who did this, Mustafa Suleiman, was the co founder of DeepMind, which Google bought and then he left. DeepMind is now at Microsoft and he is, you know, Sort of spearhead, spearheading these initiatives for Microsoft. One part of this, which I think is maybe under and under discussed is the cost. Because when you're trying to figure out a very tough diagnosis, you often have to run so many tests and that can add up to hundreds of thousands of dollars in some cases. By sticking the AI on this, it might take a lot fewer studies because it was programmed to be more cost conscious than human doctors. Really cool initiative. Very excited to see where this goes. Among the stocks hitting record highs yesterday was robinhood, which soared 13% after announcing its biggest push yet into crypto with a slew of new products. The highlight was its release of tokenized securities for private companies like OpenAI or Space X, which means that European users, sorry, Americans, can trade tokens in fast growing companies that aren't on the public markets yet. Tokenized securities, which are blockchain traded assets whose value mirrors their underlying equity, give their owners similar benefits of owning a stock, including things like dividends, and could offer more transparency because their trade clears instantly. But to reiterate, this is only available to European users because of America's tighter restrictions on trading, and it will likely remain that way for the time being. You don't hear that a lot. The US has tougher regulations than Europe. Still, investors clearly saw Robinhood's product launch as a sign it was on its way to becoming an all inclusive financial services firm.

[Toby Howell]

Yeah, Robinhood is on a heater right now. And you are totally right. Vlad Tenev, the CEO of Robinhood, has this vision and it wants to be the one stop shop for your entire financial life. And to him that means pushing much deeper into the crypto world and just basically expanding its market share on all levels of wherever you're investing or trading. So fascinating to see the turnaround that Robinhood's had. I mean, during the pandemic it had this big surge in usage, it went public, got a gaudy valuation, lost a lot of that, and now is very much back to record highs. So they've been executing at a very high level on that vision. It looks like this is just one more step to total financial dominance.

[Neal Freyman]

All right, your cruise to Mexico is getting a little bit more expensive after the country imposed a new cruise tax. Starting today, cruise passengers will be assessed a $5 fee when their ship stops at a Mexican port, and that will eventually rise to $21 per passenger. It's part of the Mexican government's push to get more of the cut of the billions of dollars cruise operators are spending on creating private Resorts in Mexico. For instance, Royal Caribbean is building a 200 acre resort in the Mexican seaside village of Ma, known as Perfect Day Mexico that will feature the world's longest lazy river and largest swim up bar. It's expected to be completed in 2027, welcome 15,000 people a day and add $125 million to profits.

[Toby Howell]

Yeah, Royal Caribbean actually did this first. In 2019, they made this resort a destination in the Bahamas. And at first the industry was very skeptical about this strategy. Like why are you building your own resort? These places already have tourist destinations. Just let your passengers off and go frolic. But it's been a big financial winner and now a lot of companies are trying to do the same thing here. So yes, the Mexican government wants a little cut off the top, but I think this is going to be something that you're seeing more and more of from cruise industry. Netflix is slowly dipping its toe into the old fashioned TV game as it aims to bolster its live entertainment options. But it's doing so with an atypical partner, NASA. With the streamer looking to add more live feeds to its current content offerings. And it announced a deal to link up with the US Space Agency to offer some of its NASA plus content this summer. Two things to unpack here. One, Netflix is looking to expand from its in house exclusive sports related live events to offer more broader viewing options. And two, yes, NASA already has a streaming division called NASA Plus. Earlier this month, Netflix also signed another deal to stream France's TF1 live channels, which will bring a much wider variety of on demand programing to French audiences than just rocket launches. So there's clearly a concentrated push here. Neil, Netflix is becoming more and more.

[Neal Freyman]

Like regular TV and NASA wants to flood the zone with its content. It says actually that the National Aeronautics and Space act of 1958 calls on NASA to share their story of space exploration with the broadest possible audience. So they've inked various distribution deals, they put free content up on their website. My only question is, is space content good?

[Toby Howell]

I don't know either. I mean, rocket launch, rocket launches are.

[Neal Freyman]

Incredible, but SpaceX has launched 81 rockets so far this year. Do you think it's going to become more commonplace? It'll just like be like watching a plane take off of a Runway and it won't become such appointment viewing?

[Toby Howell]

I don't know. I'm sure they have other stuff because you're right, they already do have. You know, they're putting content out on YouTube, so maybe we just haven't watched what else NASA has to offer. I'm sure they have more stuff than just rocket launches, although rocket launches probably are the coolest thing.

[Neal Freyman]

I think they need to add more production pizzazz to what they're doing. Because if you watch a spacewalk, I mean that, that camera footage, understandably is very grainy. It's very hard to see what's going on. So I think we need to send maybe James Cameron or Christopher. No. Well, he will, he will go up there, but I think we just need some better camera angles, like what they've been doing with sports, so we just have a better understanding of what's going on. I think when it comes to rocket launches, they will never get old because that is just one of the coolest things to watch. That is all the time we have. Thanks so much for starting your morning with us. Have a wonderful Tuesday. If you have thoughts on today's episode, 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. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair Makeup gave Toby a ginger shot and he's sounding a lot better. Devin Emery is our president and our shows are production production of Morning Brew.

[Toby Howell]

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

[Sponsor]

Oh man, I am fading. I either need an iced coffee or vacation or both.

[Neal Freyman]

Toby, what if I said you could get the benefits of both in one cup?

[Toby Howell]

What?

[Neal Freyman]

That got all over the studio. But yes, Taco Bell's new lineup of refresco drinks are like a little out of office in a cup.

[Sponsor]

So I am to believe that Agua Refrescia with Green Tea and Freeze Dried Fruit, Rockstar Energy Refresca with Extra Energy and the new Refresca Freeze are all handmade to order?

[Neal Freyman]

That is correct. He left. Anyway. Head to taco bell.com/morning-brew to learn more. That's taco bell.com/morning- brew at participating taco Bell locations for a limited time only while supplies last ago. Refrescos are made with artificial colors and natural fruit flavorings and contain less than 1% juice. Rockstar Energy Refrescas contain 200 milligrams of caffeine and are not recommended for children, pregnant or nursing women or persons sensitive to caffeine.