Here's a summary of the Young Finance's Morning Brief, including all the news and facts discussed:
**I. Introduction & Initial Banter (Blazer & OpenAI)**
* Julie Hyman and Miles Udlin are hosting.
* Miles is wearing a blazer, which is jokingly linked to the "bit" of "main OpenAI talkers" being employed by OpenAI and taking Silicon Valley seriously, contrasting with mainstream news styles.
**II. NVIDIA & Cost of Compute vs. Employees**
* **Source:** A Fortune story from yesterday, aggregating an Axios story.
* **Fact:** Brian Catanzaro, Vice President of Applied Deep Learning at NVIDIA, told Axios that "for my team, the cost of compute is far beyond the costs of the employees."
* **Miles's Take:** It's too early for companies to claim they can replace a significant percentage of workers (e.g., 30%) with agentic AI systems, suggesting companies should be more direct about staff cuts. He believes the rapid changes in AI make long-term predictions difficult.
* **Philosophical Discussion:** Julie notes the discomfort with people being "worth less than machines," while Miles counters it's "just math" regarding salary, benefits, and token costs.
**III. OpenAI's Missed Targets & Internal Tensions**
* **Source:** Wall Street Journal report.
* **Fact 1 (User Target):** OpenAI missed an internal goal of reaching 1 billion weekly active users for ChatGPT by the end of last year. They haven't announced this milestone, implying it wasn't met.
* **Fact 2 (Revenue Target):** OpenAI also missed its yearly revenue target for ChatGPT.
* **Reason for Revenue Miss:** Google's Gemini (released ~7 weeks before year-end) saw massive growth and reportedly "ate into OpenAI's market share."
* **Internal Tension:** Reportedly, there's tension between OpenAI CFO Sarah Fryer and CEO Sam Altman. Fryer is said to be concerned about the timing of a potential IPO this year and the high cost of new computing resources.
* **OpenAI's Statement:** The company issued a statement to the WSJ saying they are "totally aligned" on buying compute and that suggestions of conflict are "ridiculous."
* **Market Impact:** Companies in the "OpenAI web" (e.g., Oracle, SoftBank) are seeing their stocks down this morning due to this news, indicating concerns about OpenAI's core business.
* **IPO Discussion:**
* OpenAI expects to burn $122 billion over the next three years.
* Miles suggests OpenAI might be "soft selling" the idea of delaying an IPO beyond this year, as the AI world's rapid changes (12 weeks can alter annual forecasts) make managing quarterly public reports challenging. Sarah Fryer, as a former CFO of Square, understands managing "the street."
* Julie questions the impact on fundraising and the perception of ego/milestones if the IPO is delayed. She also wonders if Altman could replace Fryer without significant negative sentiment.
* Miles argues that if they can access sufficient capital privately for operations and employee/investor liquidity, taking on the "headache" and scrutiny of being a public company (daily stock price swings, new rules, etc.) might not be worth it.
* **SoftBank:** Reportedly pledged $10 billion of its OpenAI stake as collateral to raise money.
* **Hyperscaler Earnings:** Upcoming earnings calls for hyperscalers (Microsoft, Google, NVIDIA) will likely address these demand and CapEx issues, with Miles suggesting these companies are "thrilled" by the continued demand for compute.
**IV. Federal Reserve, Inflation & Oil Prices**
* **Fed Meeting:** The Federal Reserve is meeting, with no cuts expected.
* **Inflation:** Underlying core inflation is still "well above 2%" and has been for several years, according to Miles. He notes the Fed's mandate shifted to *averaging* 2% inflation, rather than targeting it directly.
* **Oil Prices:** Pushing higher this morning.
* **Miles's Hypothetical:** A "Kevin Warsh Fed" would have a bias towards cutting rates, potentially using oil prices as a "headline" to "look through" and argue they don't reflect underlying inflation dynamics.
* **Julie's Observation:** Kevin Warsh has reportedly stated that the Federal Reserve is the main driver behind inflation.
* **UAE & OPEC:** The UAE reportedly pulled out of OPEC, which could have long-term implications for oil prices if they increase production independent of OPEC quotas. (Julie defers further discussion to "Jake Conley").
**V. Jimmy Kimmel vs. Donald Trump**
* **Event:** Jimmy Kimmel performed a "fake roast" of President Trump before the White House Correspondents' Dinner (which featured a mentalist instead of a comedian this year).
* **Criticism:** President Trump and Melania Trump criticized Kimmel and called for him to be fired.
* **Disney CEO:** Josh D'Amaro (new CEO tomorrow) will inherit this issue.
* **Miles's Take:** The "meta story" of Trump and Kimmel feuding feels like "2016" due to public desensitization to calls for firing and pointed late-night jabs.
* **ABC's Stance:** ABC (Kimmel's network) has historically "held the line" more than some peers (e.g., CBS) in dealing with the Trump administration, even settling with them.
* **Miles's Advice for D'Amaro:** "Do nothing" and "let it wash over" as the news cycle moves on quickly. The decision comes down to the "headache" versus the "franchise" value Kimmel brings (YouTube, Oscars, etc.).
* **Julie's Observations:** Watching the monologue likely boosted Kimmel's viewership. His comments were not violent, focusing on age and a "future widow" joke.
* **Kimmel's Contract:** Runs through May 2027 (at least one more year).
**VI. Electric Air Taxis (EVTOLs)**
* **Company:** Joby Aviation is mentioned.
* **News:** Electric air taxis are flying around New York City.
* **Acronym:** EVTOL (lowercase 'e' Electric Vehicle Takeoff and Landing).
* **Description:** Hybrid helicopter-plane, like a "giant drone."
* **Miles's Sentiment:** Expresses motion sickness concerns ("No chance" he'd get in one) and wonders about crashes (none known). He sees them as "really freaking cool" and a "version" of flying cars. He questions the Total Addressable Market (TAM).
* **Julie's Sentiment:** Believes they will become much more common and sees this as the beginning of such travel.
* **Example Use Case:** JFK to West Side Highway in 7 minutes.
* **Future Considerations:** Discussed how autonomous vehicles might impact the TAM for air taxis by offering a comfortable, productive alternative to driving. Miles questions the car sickness in autonomous Waymo vehicles.