Good morning for your daily show, I'm Neil Fryman. And I'm Toby Howell. Today, OpenAI suspects that China's deep-seek was ripping off its models. How rich. Then it was a tense three and a half hours in DC as RFK Jr. interviewed for the nation's top health job. It's Wednesday, January 30th. Let's ride.
A tragedy is unfolding in Washington, D.C. this morning after a regional jet operated for American Airlines collided with a military helicopter as the plane attempted to land at Ronald Reagan National Airport around 9 p.m. local time. 64 people were on the flight, 60 passengers and four crew members, and many are feared dead.
A massive search and rescue operation was launched overnight in the Potomac River with about 300 responders scouring the freezing water in tough frigid conditions as of 6 a.m. Eastern at least 19 bodies had been recovered. And among those members on the flight were some members of the U.S.
figure skating community as well as two former world champion Russian skaters. They were returning from a training camp that follows the US figure skating championships in Wichita, Kansas. I also just want to stress how rare this is. This was the first major commercial air crash in the United States in the last 16 years. So we'll be keeping an eye on things as more updates come in throughout the morning and our thoughts go out to the figure skating community and anyone else affected by this crash.
Now a word from our sponsor Yahoo Finance Neil big earnings day yesterday met up Microsoft Tesla. Oh my have ever told you about my idea for covering big tech earnings. I want to host a college game day as show where we get a panel of analysts together to react when the earnings drop hosted in front of the New York Stock Exchange. I see the vision. It would be electric.
I do too, but until you spin that up, Yahoo Finance can fill the void. Instead of Neil's panelists, you can head to its research tab to get investment ideas or give its dedicated earnings pageskin to see how the market is digesting the news. Still want to make my idea thing though. Hey, you go set up shop in front of the New York Stock Exchange and people will come, Neil. I am sure of it. In the meantime, though, you guys can head to yahoofinance.com to get your daily market digest.
OpenAI has decided that it doesn't really like the taste of its own medicine. The AI leader and its largest investor, Microsoft, are investigating whether the Chinese AI startup DeepSeek stole OpenAI's data to build the buzzy R1 model that caused a $1 trillion wipeout in US stocks this week. Microsoft said its researchers detected large amounts of data we're leaving via OpenAI developer accounts late last year.
OpenAI allows devs to use its API to integrate its model within their own applications. For instance, the AI-powered search engine perplexity allows you to search the web using chat GPT-4. But you are not allowed to train one model on another
a technique called distillation that goes against OpenAI's terms of service. Neil, the irony is rich here. Critics have pointed out that OpenAI built its whole company on scraping the internet of information without consent. The fact that it is now using DeepSeek of stealing is pretty hypocritical. All this news was breaking as big tech companies like Meta and Microsoft reported earnings yesterday. The week of DeepSeek just keeps carrying on.
It does. And I just want to hone in on what distillation is. It's where a tech company uses and outputs from a larger model to train smaller, more efficient AI models. It is a common practice among researchers and smaller companies.
And usually, it's not a big deal. They do this. This is a common industry practice. The problem is for OpenAI, where it violates its terms of service, is when you use distillation on its model to create a rival model, which is exactly what DeepSeek appears to have done. It raises some really interesting questions around DeepSeek's quote-unquote breakthrough. Remember this, obviously,
was an earthquake for across the US tech industry to see a Chinese startup competing with our top tier models that were spending hundreds of billions of dollars on it raises questions about was this as impressive as it seems if they're training their model on open AI model at the same time it also
raises other questions around whether these US tech companies are taking security precautions to protect others from infiltrating these proprietary models.
President Trump's AISAR, David Sachs, that he named said, it is definitely possible that IPF had occurred. He said, there's substantial evidence that what Deepsea did here is they distilled knowledge out of OpenAI models. There's that distillation that you were describing. So it is a little bit of a red flag here because it's a red flag for Deepsea potentially that maybe that their breakthrough was too good to be true. They were doing something that goes against OpenAI's terms of service. But I do think it is funny too that Microsoft
security researchers were looking through the data like, wait a second, why is so much data being exfiltrated through these developer accounts, which, again, OpenAI allows you to set up developer accounts. They want other companies to build on top of their models, but they don't want you training another model directly on their own outputs.
It is kind of this trail of breadcrumbs that they think leads to deep-seek. And it's just another layer in this big China vs. US AI race that has really come to the forefront in the last week or so. Let's talk about those earnings that you mentioned. Meta Tesla and Microsoft reported.
Everyone wanted to hear what Mark Zuckerberg, Satya Nadella, would say about deep-seek and whether it would affect those spending plans. And remember, those spending plans are all influenced by, those are dedicated to NVIDIA. And so NVIDIA's share price very much depends on people like Mark Zuckerberg spending $60 billion on chips and building AI models. And Mark Zuckerberg said that, you know, it's too early to tell how deep-seek
model will affect its spending plan so far, keep calm and spend on his pledge to spend $65 billion this year. And he said nothing that he's seen recently would change that. Yeah. Meta expects its total expenses for 2025 to come in between 114 billion.
and 119 billion. The bulk of those obviously going towards infrastructure costs, which are those chips that you described. Pretty crazy, though, to think that we're talking hundreds of billion dollars in capital expenditures here as well. Meta also dropped that its chatbot surpassed 700 million monthly active users. And Zuckerberg did say, hey, when something reaches a scale of that source, it's usually a pretty durable thing that we built here.
So meta low key is doing just fine in the AI race. That is almost a billion users of its chat bot, more than any other assistant out there as well. So pretty solid earnings call, even when you consider all the drama going on with deep seek.
Robert F. Kennedy Jr. Trump's pick for health secretary had his first Senate confirmation hearing yesterday, and it was as controversial as his views on vaccines and raw milk. In his opening remarks, RFK tried to assure lawmakers that he was not anti-vaccine, but instead pro-safety, arguing that his stances have been misinterpreted, though senators did read several of his own anti-vaccine comments back to him.
RFK also seemed to struggle when asked about Medicare and Medicaid, the two most important insurance programs he would oversee as health secretary. In recent month, Kennedy has shifted his focus away from controversial ideas about vaccines and towards more popular talking points like combating chronic disease and ditching highly processed foods that make up the American diet. Those views have made corporate America skittish about his nomination, giving his longstanding criticism of big food, big pharma,
and Big Ag for contributing to the unhealthy lifestyles of Americans. Neil, his nomination teeters on a razor's edge. If all Senate Democrats vote against his nomination, as is expected, then he can afford to lose only three Republican votes.
This is a huge position. He would be the nation's top health official. He'd run a sprawling bureaucracy, 13 divisions, 80,000 employees, a budget of $1.7 trillion. The agencies under his purview would be the CDC, NIH, FDA, things like that.
And what would he be in charge of? Well, agencies that decide which drugs are safe and effective. The agencies that investigate food board illnesses, prepare for pandemics, funnel tens of billions of dollars into scientific research. So you can see why the senators, especially Democratic ones, has had a lot of sharp questions about his past views often with baseless claims that vaccines caused autism. Raw milk was safe too.
drink. Those, those are views that fly in the face of the agencies that he would oversee. Right. So that is why he kind of tried to steer the conversation towards this idea of this objective of making America healthy again. But he did kind of stop short of saying, I'm going to take unhealthy foods off the shelves. He did say that he would do more to explore the link between unhealthy foods in disease, but he doesn't want to actually take those foods away from everyone. And one of the reasons why is because he said, if you like a cheeseburger, a McDonald's cheeseburger or a Diet Coke,
which my boss loves, his boss obviously presuming to be Donald Trump. You should be able to get them so that cause kind of a laugh to ripple through. But it does show kind of the juxtaposition of his healthy initiative and maybe some of the things that Donald Trump has been famous for eating. Another thing that
people and the, um, senators definitely wanted to press him on was his knowledge of Medicare and Medicaid because again, Medicare and Medicaid affect a hundred million people in the United States. And he was pressed on, uh, just his familiarity with the organization. And he said some things about premium and deductibles that didn't really apply to many of the enrollees that he was speaking of. So there was a former doctors of America president that was sitting there in the first row. And she said it was
clear from watching that he did not know basic facts about Medicare and Medicaid. And he argued that a lot of the things he was describing wasn't even his purviewed together. So definitely some criticism of this, but the first of another hearing, it's just the first confirmation hearing. So there will be more to come.
And another moment of levity during a very tense hearing was when Bernie Sanders held up a photo of a onesie, a baby onesie that was made by Children's Health Defense, which was the nonprofit that Kennedy founded. And on this onesie, it says no Vax, no problem. Sanders asked Kennedy, are you supportive of these onesies? And he said, I don't have anything to do with this nonprofit anymore. I am supportive of vaccines.
Maybe the first time in congressional history that a baby onesie was held up during a during testimony. The more things change, the more they stay the same and ain't it true for the federal reserve, the central bank met for the first time of the new year and of the Trump presidency, but maintained its poker face amid the tumult outside. Chair Jerome Powell opted to hold interest rates steady and signaled rates would hold at the same level for a period of time. Call it Powell's wait and see era.
There's plenty of reason to wait and see because things are in a solid place at the moment. Even with elevated interest rates, the US has had strong economic growth, brisk hiring, and low unemployment. There are no warning signs flashing that would cause Powell to cut rates and stimulate growth.
is still hovering above where the Fed would ideally like it to be, but it appears to be coming down slowly, but surely. Another reason to wait and see the new administration. As we saw from his first week in office, Trump is intent on dramatically shaking things up in DC, potentially causing the Fed to make in-game adjustments like Andy Reid. Powell stressed patience of Trump's plans. He said, we need to let those policies be articulated.
before we can even begin to make a plausible assessment of what their implications for the economy will be. So, Toby, no interest rate cut, no hot takes on Trump's presidency. You said that Powell wanted to have a ho-hum, no drama day mission accomplished. Mission accomplished. They are in no rush to lower interest rates. They want to see more progress on inflation. They don't necessarily think that the string of reductions need to continue at a
at the same pace that they were. Remember, the economy has shown it's demonstrated that it can support a much higher neutral rate. And remember that neutral rate is something that it's neither juicing the economy nor is it necessarily dampening it in any way. The officials have kind of constantly revised that rate upwards because they're like, wait a second, we can support interest rates at the current levels right now. So that so-called neutral rate is something that they're keeping a close eye on. And right now it looks like we're kind of at it.
maybe a little above. That's what they say. But what could lead to ray cuts and they will be coming at some point. So you need one of two things to happen. One is progress on inflation. They want to see inflation go down even more closer to that 2% level. The other this would be
worse is weakness in the labor market. We start to see hiring numbers go down and employers just stopping hiring, which hasn't happened yet. But if that were to happen, that would also spark Jerome Powell to say, okay, I think it's time to lower rates. So until one of those two things happen, it looks like we're stuck at this rate for the extended future. We'll see what happens. We know the Fed has penciled in two rate cuts. A lot of investors think that that is a couple
too many. But when you have rates this high, it does sprinkle throughout the economy. The economy is going strong and things are happening. There is a lot, a lot of activity, but in certain sectors, it has frozen things over like, you know, home sales. We just came off the year in which there was the slowest home sales since 1995 mortgage rates remain around that 7% number. So, you know,
If you're in the real estate industry, you're looking to buy a home, you're like, pal, please come on, let's go, let's go, let's go. Everyone else is like, okay, I think the economy is in a good place, so why don't you just keep on with this wait and see. The Super Bowl isn't until next week, but this is my Super Bowl. It's Neil's numbers coming up next.
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Listen to this fresh take on cruises. Let's hear it. Virgin Voyages is NOT your average cruise line. Let's start with the food. You get access to more than 20 eateries on board with menus curated by Michelin star chefs. Yeah, that does NOT sound like your average cruise experience. Plus, everything is catered to adults on these kid-free cruises, whether it's the entertainment, parties, or relaxing spaces throughout the ship.
It's all superlucks. Virgin Voyages also hits so many interesting destinations. On top of exotic ports throughout the Caribbean, they're launching themed summer cruises to the British Isles, Iceland, North America, and the Mediterranean. They've got the accolades, too. They were just voted the world's best cruise line by travel and leisure and Conde Nast readers for the second year in a row. Book now at virgin voyages.com or contact your travel advisor.
Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will make you go, wait, really? My first number is $8 million, which is how much it'll cost you to buy 30 seconds of airtime during the Super Bowl, a new record for the priciest marketing real estate around. Reports out yesterday claim that a few ad spots sold north of $8 million showing how tight demand is to get in front of a massive audience. Fox, which is airing the game, said it sold out of Super Bowl commercials in November,
But typically leaves a few spots open for last minute jostling, leading to these astonishing prices. So why would any company pay $8 million for 30 seconds? Because events like the Super Bowl don't come around very often anymore or ever.
You're getting a captive audience of more than 120 million people, all watching the same thing at the same time, a concept that our splintered entertainment world has obliterated. As for who is buying these spots, expect the usual suspects like Trink, Snacks, tech companies, telecoms. You won't see as many car commercials this year, and movie promos and streaming services are also toning down their Super Bowl presence from years past. Toby, what kind of commercials do you think will get this year besides expensive ones?
Well, I think you'll actually see longer ones because even though it costs $8 million for 30 seconds, a bunch of advertising exits around the industry said that some of these companies have fallen in love with their creative. They want to tell these longer narrative stories. Think, you know, those heart wrenching commercials you see from
Budweiser stuff like that where it does tell a story over the course of 60 seconds. So even though we are seeing a record prices for 30 second ad spots, I do think you'll expect to see a couple of longer ads this Super Bowl and expect AI to be a big theme as well, especially for those tech companies. Meta is going to do an ad with Chris Hemsworth and Chris Pratt around its smart
Glasses, we're also going to have a reunion of Meg Ryan and Belly Crystal of when Harriet met Salty. Do you know what company that's for? Hellman's Mayonnaise, of course. Of course. Because you obviously think of mayonnaise when you think of them. Actually, they're going to recreate the famous scene in Cats is Delly. For my next number, a musical artist has hit a milestone 150 million monthly listeners on Spotify, which has never been done before. Can you guess who it is?
It is the short king himself, Bruno Mars. He may stand five foot five, but he is a giant in streaming as the number one artist on Spotify currently. Now, the most interesting part about the stat is Bruno hasn't released a solo album since 2016's 24K Magic nearly a decade ago. That makes me feel really old.
He's been dominating the music scene instead through ultra successful collaborations, first with Anderson Pack to create Silk Sonic, then teaming up with Lady Gaga for Die with a Smile, Smash It, followed that up with APT, a collab with K-pop star Rose, and on Friday released his latest collab called Fat Juicy and Wet with Sexy Red, which I'm not sure I'm allowed legally to say on air, Toby. For a guy who wrote the lazy song, Bruno Mars is anything but
It is pretty electric that he reached this milestone without really releasing any of his own solo music. I mean, the collabs do slap. Like, let's be honest, the man has not been just sitting back on his hindquarters here. He has been releasing banger after banger. I mean, die with a stop with a smile.
already has 1.7 billion Spotify stream since it was released last summer. It is pretty insane. He's just been chilling in Vegas too. He's been at this residency for so long that they're starting to become rumors that he must have like a gambling debt or something. The number that was tossed out is that he owes Vegas $50 million that he was paying off through performing there because he's been in the in residency at the park MGM for so long that they're like, there must be something else here. But
All he does is, you know, live in Vegas, perform in Vegas, release incredible collab and make a lot of money and make a lot of streams. My final number is 2340, which is how many degrees Japanese snowboarder Hiroto Ogiwara rotated in a single jump at the X Games on Friday, becoming the first person ever to land a 2340 in competition. To spare you the math, that's spinning around six and a half times in the air. It easily won him the gold and the big air competition.
But that's not even the craziest part. The next day, Italy's Miro Tobinelli strapped on his skis and matched Ogiwara with a 2340 of his own in a skiing-big air competition. So in less than 24 hours, both a snowboarder and a skier
landed 2340s for the first time in sports history. Afterward, Ogiwara was on cloud nine. I am the first person in the world to do that. I've never been as happy as this. He said, it was really the greatest moment. It felt as if I used every ounce of energy I had.
You know, unfathomable, six and a half rotations. This is where I actually feel very badly that we are mainly a podcast medium, not a visual medium because you have to see this to believe it. I highly encourage you guys either go on social media and look this up or go to our YouTube channel and watch it because the man just keeps on spending every time you think, oh, surely this is the last spin. There's one more rotation to go with it. And oh, you are has been
a phenom for a long time. In 2022, when he was 16 years old, he landed a 2160, which is six full rotations. It took him three years to add that extra half rotation, but the man is absolutely just a stunning athlete. And one of the I am.
Yeah. So I guess the next frontier here, I just added 90 to 2340, which you get 24 to 30. So that is the next milestone to be reached. And I wonder whether it'll happen on skiing or snowboarding.
What's crazy though is that he got a score of 97.33, 100 is obviously perfect. I'm like, what else does the man have to do? I guess get the seven full spins to get that 100. Now let's sprint to the finish with some final headlines from yesterday's news. The memo Trump's budget office sent out earlier this week to freeze all spending on federal loans in grants
was rescinded yesterday after two days of confusion and legal challenges. Officials said the pause was put in place so the administration could review whether the spending that flows out of Washington aligned with Trump's goals related to climate change and DEI programs. But then Trump's pause was paused itself by federal judge until at least this upcoming Monday before being rescinded altogether yesterday.
Neil, I think this shows that even with immense control of Washington, there are limits to what Trump can do when it comes to remaking the federal government. It does, but I think this is just the starting gun that he's going to continue to try to push the legal limits of what a president can do to clawback spending that has been approved by Congress, whether it is this particular memo freezing loans and grants or another one that will be incoming. It appears that his administration will absolutely
push the limits between congressional power and executive power on how to spend taxpayer money. The world is getting ever close to annihilation. At least that's according to the Bulletin of Atomic Scientists, a nonprofit that created and manages the doomsday clock.
This week, the organization said it moved the clock's hands one second closer to midnight from 90 seconds to 89 seconds to reflect the increased threats on humanity posed by nuclear weapons, climate change, bio weapons, and AI. The last time the clock was changed was in January 2023, when it was moved up to 90 seconds from 100, mostly due to the war in Ukraine. Tell me, what are you going to do with your 89 seconds remaining?
I mean, it is better that we only moved one second this time instead of the 10 seconds the previous time. But I was digging into who the Bolton of atomic scientists are. Why are they the ones that are controlling the doomsday clock? And it was actually a nonprofit that was founded all the way back in 1945 by Albert Einstein and the former Manhattan Project scientist shortly after we dropped the atomic bond. They wanted to be this nonprofit that focuses on
issues that pose a risk to humanity. You can see why Albert Einstein and the Manhattan Project was involved with that. So they've created this very apt metaphor for visualizing how close we are to disaster. You never want to see it moving forward. You never want to see it moving closer to midnight, but they look at the main factors of climate change, nuclear proliferation, and disruptive technologies. What's the big tech disruptive technology we are living through right now? It is AI. So you can see why we are inching closer to that midnight number.
Now it is widely mocked. Right. It's, again, it's a metaphor. It doesn't, it's not something that is based off of, you know, hard in fact evidence, but the fact that it's called the doomsday clock, the fact that you have this clock metaphor, I do think is something that, yeah, yeah, I don't know, people kind of look at at least.
The number one golfer in the world is returning to action today at Historic Pebble Beach after recovering from an unconventional injury. Scotty Scheffler missed the first two tournaments of the year because he hurt his hand making ravioli with his family. Scheffler said he and the fam got a hankering for pasta made from scratch so they rolled the dough out but didn't have the right tools to
cut the pasta, enter a fateful wine glass. Scheffler was using the top of the glass to carve out the pasta before it broke and thrust the stem into his hand. It could have been a lot worse, Scheffler said. I actually talked to someone who did the exact same thing and the stem went straight through their hand, but Scheffler has healed up and is now back in action, ready to build on the best season we've seen on the PGA tour since Prime Tiger Woods. No more ravioli for him though.
No more ravioli, Scotty. We want you back playing golf. Just buy it. Just order takeout. You're not going to make better ravioli than the local Italian place. This is just one of a long line, long list of injuries suffered by athletes that make you go.
Really, like Jason Pierre, Paul back in 2015 kind of blew his hand off doing fireworks. And he was set for a massive contract and that he didn't get. Another instance was Bill Gramatico was a kicker in the NFL. He made a 42 yard field goal and was jumping up in the air. And then he came down and tore his ACL celebrating. There are dozens of these stories. So Scott Shuffle, you don't, this is a list you don't want to be in.
I know you want to live your life and make homemade pasta. Just do it with the right tools. Keep your hand safe.
Okay, that is all the time we have. Thanks so much for starting your morning with us and have a wonderful Thursday. For any questions, comments or feedback, send an email to morningbrewdailyatmorningbrew.com. And if you're enjoying the show, share it with a friend, family member or co-worker. But which one should get the gift of MBD today? Toby's here with some inspiration.
I want you to not listen to Neil's advice and share the podcast with someone that you would want to make ravioli with. It's not the same as getting it from your local takeout place. Go get the right tools though, make some pasta and share the pond.
Emily Milliron is our executive producer. Raymond Lue is our producer. Olivia Graham is our associate producer. Yuchena Waugu is our technical director. Scoop Scarteris is on audio. Heron Makeup is not afraid of no doomsday clock. Div and Emory is our chief content officer. And our show is a production of Morning Brew. Great show today, Neil. Let's run it fast tomorrow.