Meta Recruits AI Superteam & Google’s AI is Killing News Sites
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Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the Smart List guys are launching a company showing that podcaster hubris has no bounds. That Zuck is assembling an ultra-expensive super intelligence team as Meta desperately tries to avoid falling behind in the AI race. It's Wednesday, June 11th. Let's ride. Let's ride.

School is out for the summer, which means it's internship season, the annual rite of passage for students to learn important skills like email etiquette and how to chit-chat your way around an office. But not all internships are created equal. ZipRecruiter crunched the numbers to find the highest paid internships being offered this summer. And at number one on the list is software engineering, where interns can expect to earn between $20 and $29 an hour.

hour. That's followed by internships in architecture, financial advising, process engineering, actuarial roles, and data analysis, which is news to me because instead of having summer internships, I was a camp counselor. Hey, at least they are all getting paid. I also think it's interesting that software engineering is still at the top, even though those jobs are getting

cut from the job market by advances in AI. Maybe this is a lagging indicator and that number will go down or maybe cheap interns will always be valuable. But yes, Neil, I don't see summer camp counselor on the list, nor do I see play for summer soccer team to stay in shape for the season. Not a very lucrative summer internship. So pretty clear we were not rolling in the cash during our intern days.

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Mark Zuckerberg is not happy he is losing the AI race, so he is going full founder mode to try and make up some ground. According to multiple reports, he is assembling his own personal AI Avengers, recruiting a brain trust of researchers that he is calling his super intelligence group. The vision is to reach artificial general intelligence, the holy grail of AI development, before competitors like Google or OpenAI, then weave it into Meta's vast array of social media and physical products.

But in order to beat the competitors, you gotta outspend them, and boy is the AI race expensive. The Iron Man 2 Zucks Avengers is Alexander Wang, the CEO and founder of Scale AI, who is close to joining the Super Intelligence Group after Meta reportedly acquired a 49% stake in the company that values it at $28 billion. So in some sense, that is a cool $15 billion for a single AI leader. Meta is also reportedly offering $7 billion

to nine-figure compensation packages to try and lure top talent. The reason behind the frantic recruitment is Meta is coming off a disappointing model release with their Llama 4 model underwhelming. It also delayed plans to release its most powerful model yet, Behemoth, after it did not sufficiently advance on previous editions.

Hence the founder mode invocation for Zuck, who has been very involved in building out the new team, even rearranging Meta's offices so new hires can sit near him. Neil, Zuck is getting back in the trenches here. A lot to unpack here. Let's first start with the AI talent wars because maybe we should have done internships in AI development because these people are getting paid so much money. I just want to stress the figure. Nine figure pay packages. That's

at least $100 million. It's almost unfathomable, but Meta feels like it needs to spend that amount of money because it's losing talent to competitors. You hear reports in the tech world of Meta offering AI talent to competitors

million per year in offers, but they're still losing them to competitors like OpenAI and Anthropic. This is happening across the industry where Meta is losing out on the top AI talent to the companies that it's competing with. So it feels like it needs to pay up. And Zuck is personally undergoing this recruiting mission to offer, you know,

ridiculous pay packages to these people to scale AI as scale AI employees as well to come on board because this is how important Zuck thinks AI is or super intelligence is to the company's future. And it does seem like Meta has a pretty compelling offer to these people beyond just the money because

He is saying, unlike rivals like OpenAI, who has to rely on fundraising, these massive fundraising rounds, to continue to finance their investments in AI, Meta has a cash cow in its advertising business. It's one of the most profitable businesses in the world, so they have...

Thank you.

the reason why you might not want to join Meta is that it is behind the AI race. Lama 4 has lagged behind other frontier models and they had to kind of walk back some of their claims about Behemoth, which was supposed to be, you know, the most powerful model in the world, hasn't even hit the market yet. So,

That is some of the considerations you have to make. Yes, they have a ton of resources, but right now they are lagging behind the competition. And another piece of intrigue here is this deal with Scale AI. Now, Scale AI is a growing startup that essentially has cut its teeth on cleaning up data so that other tech companies can come in and use that to train their models. This is the currency that AI models use.

in order to produce results like ChatGPT and Cloud for Anthropic. So Meta is taking reportedly a 49% stake in Scale.ai for $14.8 billion. That is a lot of money. That would be the largest stake

private funding event perhaps ever in the world. So why aren't they just acquiring it? Because they're also bringing in the CEO of Scale AI, Alexander Wang. Well, perhaps you could look to antitrust regulators because what is FTC doing right now is trying to spin off Instagram and WhatsApp that

Facebook then Facebook purchased many like a decade ago so Zuckerberg is looking at all this stuff happening in the court system saying they want us to break off all those acquisitions well they're probably not going to let us buy another company because they don't want us to have these other companies

these other subsidiaries to begin with. So doing some creative corporate engineering here by taking a 49% stake, saying, hey, we're not buying it. We're just investing it and taking all of the talent as well. It's something that we've seen other big tech companies do, like Google with another startup character, AI, just kind of actualizing

We're hiring all of the talent to come over because they see antitrust regulators bearing down and they just want to avoid all of that. Moving on, coming into the 2020s, economists were hopeful this decade would usher in a new roaring 20s, a century after the first one. Five years in, it's looking more like the 60s, just with fewer Jesus sandals.

In a major report yesterday, the World Bank warned that the 2020s were shaping up to be the weakest decade of global economic growth since the 1960s. And this year, 2025, would mark the slowest pace of growth in 17 years out of recessions in 2009 and 2020.

That's because the World Bank slashed its growth projections from January, blaming the trade war launched by the United States for diminishing living standards for people across the globe. Global output is forecast to slow 2.3% this year from 2.8% last year, 0.4 percentage points below its earlier projections. World Bank chief economist Indermit Gill said, quote,

has upended many of the policy certainties that help shrink extreme poverty and expand prosperity after the end of World War II. The country that will be hurt the most by this, the United States. U.S. output is projected to slow to 1.4% this year from 2.8% last year and receive the biggest downgrade of any country in the World Bank's report. Toby, so far this year, the U.S. has raised tariffs on other countries to their highest level in a century, often through chaotic on-again, off-again announcements, and the World Bank is expecting

is expecting it to take a steep toll. Yeah, it looks like the theme here is just a loss of confidence. And when you don't have confidence in what policies are coming down the pipeline, it's very hard for just an economy to function. And when you have the biggest superpower in the world, in the United States,

projecting that sort of loss of confidence, that is when you start to see these cracks form in the world economy, hence the downgrade of the World Bank here. But you also have to remember that who's going to be hurt the most? Obviously, the United States, but also...

Gil said that the poorest countries will suffer the most. He said by 2027, the per capita GDP of high income economies will be roughly where it had been expected to be before the COVID-19 pandemic, but developing economies would be worse off with per capita GDP levels, 6% lower. So again, the rich are going to stay right around where they were on the,

in the trajectory that kind of ignores the COVID-19 pandemic, but the lower income countries are going to be in a much worse off place because of all the uncertainty surrounding it. And it's something that the World Bank slipped into this report, which was kind of interesting. They effectively supported President Trump's complaint about other countries'

having higher tariffs on the United States than the tariffs that the United States has on other countries. You have to remember, the World Bank is this development lender. They have long promoted free trade. They want barriers to trade reduced around the world. They think an economic cooperation and everyone kind of trading with each other is

the unlock to global prosperity. So they said, you know what? Trump is right that other countries have a lot of tariffs on the United States in a way that the United States doesn't have on the other countries. So, hey, you guys should bring your tariffs down. It didn't endorse the trade war specifically, but it said everyone should be lowering their tariffs here. President Trump has an actual grievance that

the United States is getting tariffed up the wazoo. So everyone needs to lower their barriers and we'll all grow together. Right now that isn't happening and that's why it downgraded its economic growth schedule. And then maybe the scariest part of this whole report, though, is that this forecast assumes that the reciprocal tariffs that Trump announced on Liberation Day will not go into effect. And so if that...

is the case, then obviously that report is outdated and that probably you'd have to revise growth numbers even lower. So they're making a rather hopeful assumption here that, you know, the pause will be extended and these tariff rates will come down. If that isn't the case, then who knows what will happen? The situation could deteriorate even further, impacting growth even more. Right. We were right now on day 63 of the tariff pause. Remember that

pause is lasting 90 days. We were promised 90 deals in 90 days. We have essentially one framework established with the UK. So that's 89 more deals left. And we have, let me do some math, 27 days left. So the trade team better get on it.

As industries grapple with the disruptive effects of AI, perhaps no one is shaking in their boots quite as much as news publishers. That's because more and more people are heading to ChatGPT to figure out which new cutting board to buy instead of going to New York Times Wirecutter or skimming Google's AI overviews to find out who won the Tonys, cutting out link clicks to news orgs in the process.

As a result, outlets from the HuffPost to Business Insider have seen their organic search traffic fall by over 50% in the past three years. It's caused the whole news industry to rethink their business models, with the CEO of The Atlantic telling staff recently that the publication should assume traffic from Google would slowly drop to zero, a major shakeup of what used to be a clicks-based business.

It's also led to a rash of layoffs at media companies. Business Insider cut 21% of its workforce last month, citing massive traffic drops. It's also forced news orgs to pivot once more, this time towards pursuing direct relationships with readers through subscriptions, events, and newsletters.

as companies figure out how to survive in a post-search era. Neil, this is beyond just an algorithmic tweak. It's an entirely new ballgame. The warnings are stark. Nicholas Thompson of The Atlantic said Google is shifting from being a search engine to an answer engine. The Washington Post CEO said we are moving quickly and urgently to a post-search

search era so the news business that did rely on organic search traffic from Google people searching clicking those blue links are under the assumption now that at least in the next few years Google will be taking those a sort about all that traffic will be drying up

because Google wants to promote its AI overviews. It's even launching an even more comprehensive AI search feature, which is called AI mode, which is essentially a chatbot, and there is no room for links there. So once again, the news business is going to have to pivot. It's having to do that for the past few decades. So nothing new for the news business, which has been sort of struggling under the weight of competition

constant platform shifts, and looking for a new distribution model. Yeah, I mean, first the internet totally decimated print publications. Then social media took over and started to funnel traffic towards sites. But then social media sites pivoted away from giving priority to news.

Search seemed to be like this last bastion of traffic over the past decade, despite some algorithmic tweaks here and there. But now AI is rewiring again how the internet is used altogether. So yeah, the news orgs can just not catch a break right now. Google does think that they are still going to give a life to news organizations. They're trying to say that they're committed to sending traffic to news

these web pages and that people who do click on links after opening AI overviews end up spending more time on those pages. So Google is trying to have its cake and eat it too in some sense. Still cater to, you know, businesses that rely on link clicking, but also trying to say that, hey, we are an AI forward company. So building the plane, whatever platform

metaphor you want to use. They're building the plane while landing it. They're having their cake and eating it too. Basically trying to do two things at the same time. Who knows how successful it will be or what carnage will be left in their wake. But they have no incentive to. I mean, their whole game plan is to keep people on Google properties as long as possible. And the data shows that it's working according to BrightEdge.com.

Impressions on Google were up nearly 50% since AI Overviews launched. Because if you Google, how long do I need to bake salmon in the oven? And you don't have to click on a link to get there. And Google just tells you that's 14 minutes and 3:75. Yeah, I just did this last night.

You're not going to go anywhere. You don't need to go to any of those lifestyle blogs. You don't need to go to Wirecutter or Washington Post lifestyle section or wherever you would go typically for that. Google wants to keep you there. So it can say that it wants to send traffic to other publishers that really were the lifeblood of Google search for so long.

It really has no reason to want to do that. Still, you need people to click links, though, because in order for them to attract those ad dollars and for people to spend on Google ads, you need to incentivize people to click. So, again, it still needs to support that business and it still needs to incentivize some clicking. It's just how the user behavior is going to change now that that AI overview is popping up above most search results. Up next, we're going to talk about another podcast.

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Will Arnett, Jason Bateman, and Sean Hayes are comedic actors who host the popular SmartList podcast, an interview show that aims to humanize other celebrities and make you laugh along the way. So naturally, they're starting a phone company. Yesterday, the SmartList guys announced SmartList Mobile, a wireless provider that aims to offer cheaper plans than leading players Verizon, AT&T, and T-Mobile, who convince you to buy pricey unlimited data plans even though you don't really need all that data.

SmartList Mobile said its plans will range from between $15 to $30 and offer 30 gigabytes of high-speed data. Will Arnett said his company could cut your phone bill in half. Wait a sec, what is going on here? What am I even saying? Will Arnett, Job from Arrested Development, is pledging to lower your wireless bill by 50%.

Look, celebrities using their massive audience reach to launch products is nothing new. George Clooney made a billion on Casamigos tequila. Hailey Bieber also just sold her beauty brand for 10 figures. You could list dozens of other examples. But for a comedy podcast to start a wireless phone company seems like we've entered a new era of celebrity entrepreneurship, one that ventures out of the cozy confines of booze and skincare and into the rough and tumble world of telecommunications. Toby, help me make sense of this. Does this make sense?

It is a little funky. I'm not going to lie. I mean, their train of thought is that, hey, a lot of people listen to smart lists on phones. This is a real idea put forth by Jason Bateman saying that, hey, a lot of people listen to smart lists using their iPhones. Let's give them a data provider plan that works for them, which is amazing.

very tenuous at best because, I mean, people use phones for all sorts of things, sports betting, food delivery. You don't see DoorDash launching a telecom company. You don't see DraftKings doing the same thing. So that seems like a bit of a stretch. But follow the money here. What did Ryan Reynolds just do? He just sold his stake in Mint Mobile for $1.3 billion. That was a telecom celebrity tie-up. So maybe that's where they got some of their inspiration from. But I think you're right. Just like the...

weirdness of these comedic guys launching a very mundane product doesn't seem to jive with other celebrity endorsed brands that are more frivolous like alcohol and beauty products. These are things you buy after you pay all your phone bills, after you buy your grocery bills. They have kind of that

era of celebrity attached to them. And this does not have that because it's such a more meat and potato sort of product, which is why it feels a little weird for some people. Well, here's how it came about. This is according to Will Arnett. He went with his kid to buy a new phone plan and he got sold an unlimited data plan. He has his friend, Paul McAleese, who's the former president of Shredder.

Shaw Communications, which is a Canadian telecom giant. So Will Arnett said, hey, did I do this right? And then the guy from Shaw McAleese was like, no, you got totally ripped off. And then they started talking and decided to start this cheaper phone plan, saying that 90% of people don't use as much data as they need. So that is the thesis here. And

You know, if you think they're actually going to be running this company, well, absolutely not. The Shaw guy is going to be running the telecom company and they are going to be the spokespeople, the marketing people behind this. But you're right. We'll see whether people have any inclination to follow their favorite podcasters into something that's so interwoven to their daily life, like a phone rather than something more indulgent like a tequila brand or or.

beauty like Haley Bieber just showed with her $1 billion sale. And I say good luck to them, but I think more people are a little skeptical for sure. Okay, let's sprint to the finish with some final headlines. Maybe some of those trade restrictions the World Bank was worried about are simmering down just a bit.

Last night, officials from the U.S. and China, who had been meeting in London, announced a framework for preserving their trade de-escalation truce worked out last month and will now take it to the two countries' leaders, Trump and Xi, for their final sign-off. Remember, the U.S. and China had agreed to lower tariffs on each other in May, but then tensions ratcheted back up after each side accused each other of reneging on the pact last

The U.S. slammed China for curbing access to those crucial rare earth minerals, while China complained about the U.S. withholding chips for its tech companies. So now, according to Commerce Secretary Howard Lundick, the two largest economies in the world have reached a handshake for a framework, which sounds a little Monty Python-esque, but I'm sure markets will be a little pleased this morning. Yeah, is this a long-term deal, a very stable deal? Maybe not, because it's more something that's been kind of forced together by, motivated by the leverage behind

both sides have over each other. For China, that's rare earths. For the US, it's advanced chips. So this wasn't necessarily born of just a sudden seeing of eye to eye, a sudden shared interest and thawing global trade tensions. So it also means that potentially more stops,

More starts are coming down the pipeline since the foundation it was built on is a little bit shaky. And you see that because U.S. stock futures are relatively flat in early morning hours. So you would think there'd be a little bit more celebration for a handshake to a framework, which, you know, yeah, it does sound a little bit made up. But I do think that there is still some

ways to go before the market really believes that the tensions have fully simmered down. President Trump's immigration agenda reached new levels as Kabi Lame, the world's most followed TikTok star, was briefly detained by ICE in Las Vegas for overstaying his visa before voluntarily leaving the country without a deportation order. Lame is a Senegalese-born Italian citizen who is known for his silent comedic reaction videos, racking up 162 million followers on TikTok in the process.

Since his rise, Lame has made cameos in movies and even starred in a TV show called Kabi is Coming to America. He also attended the Met Gala earlier this year. But Neil, this incident paired with the continued protests in LA will bring even more attention to the larger immigration crackdown being carried out by the current administration. Absolutely. And we'll see what happens to

business empire because he really has created one by just not talking at all. His properties are just through his endorsement deals. He grows $16.5 million in 2023. That's from partnerships with Google, State Farm, and Pepsi. He has a partnership with the

clothing brand, Hugo Boss. He was at the Met Gala. So he is a big influential player. And he told Business Insider a few years ago that literally all of his deals happen in the United States. He doesn't have any sort of business going on in Italy, but now it looks like he won't be able to come to the United States through these immigration crackdowns. So we'll see what happens to this. Apparently he's still posting. He's in Brazil. And so you can't keep him off social media. You can keep him off the United States, but you can't keep him off TikTok.

Whole Foods is looking more like partial foods after a cyber attack on its main supplier has left shelves empty in some stores. Last week, United Natural Foods, a Providence-based distributor to Whole Foods, said it shut down its IT systems and pulled back on shipping after finding that hackers had infiltrated its network. That shipment halt has led to customers finding shelves empty of white bread, yogurt, and ice cream at least twice.

at one Whole Foods in Manhattan. UNI said it plans to bring its systems back online by June 15th, four days from now, but it's another concerning sign of how a cyber attack can majorly disrupt carefully calibrated supply chains. Yeah, it really is. You have customers and employees posting these pictures of literally barren freezers, which has also led to, we started the show talking about spring cleaning. It's led to a lot of spring cleaning at Whole Foods because they say usually our freezers are

are completely filled with food, they never get a chance to actually clean them. So they've been using this opportunity to deep clean their freezers. Again, that is a very small cherry on top of what is a very bad situation. You do not want empty freezers when you are Whole Foods. And yeah, a lot of analysts are semi-discriminating

doubting the timing of this disclosure, because if you go back to UNFI's stock chart, you start to see some kind of unexplained drops, maybe letting people say that someone knew about this cyber attack before it actually happened. So some analysts were questioning executives about that. So maybe an investigation is coming, but right now Whole Foods just wants to have their food back right now because it's not good to have these empty freezers and shelves.

Starbucks wants you to drop the s'mores frappuccino to get more swole. The coffee chain is rolling out a protein cold foam test as it tries to boost falling foot traffic to its stores. Protein is the macronutrient of the moment right now with social media awashing content promoting its beneficial effects.

But CEO Brian Nichols said the protein idea didn't come from scrolling TikTok. I was watching people coming to our stores, and in some cases, they pull their own protein powder out of their bag, or in other cases, they have a protein drink like Fairlife, and they pour that into their drink.

Neil, this particular trial features a sugar-free vanilla latte topped with banana cold foam, but will also let customers add it to any cold foam flavor to get 15 grams of protein in your morning drink. Is this the right trend to be hitching their wagon to as it tries to remake its menu? It's been working for Dutch Bros, which is the fast-growing rival of Starbucks. They have protein drinks that are very popular, so Starbucks is trying to take a page out of their book and maybe repositioning itself as more of a health and wellness brand. You know what? I have no

idea whether it's going to work. One thing I do think will work is another initiative launched by Nichols that Starbucks is maybe going to start baking its pastries in store. Honestly, nothing looks more sad than the pastry selection at Starbucks. I mean, it looks fake. It looks, you know, in real life, AI generated stuff. So if they can start making those in-house, I think that would work

well for them. We'll see whether this protein push is also smart for Starbucks, which is maybe branded itself more as more of an indulgent drink rather than something that you go into and you feel good about yourself.

afterwards, but maybe that's the key to a turnaround. Okay. That is all the time we have. Thanks so much for starting your morning with us and have a wonderful Wednesday. I appreciate all your guesses about the two States. I haven't visited yet. No one got them both together, but they are drum roll, please. Toby.

Kansas and Alaska. Yeah, hard to knock them both out in one trip. So I'm probably not going to do that. I think I'm going to save Kansas for the end because that is kind of ironically funny. Anyway, if you have thoughts on today's episode, send an email with questions, comments, or feedback to morningbrewdaily at morningbrew.com or

You can also give me a reason to go to Kansas. That would be very helpful. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair and Makeup is looking for a summer intern. Applications are now open. Devin Emery is our president and our show is a production of Born & Brew. Great show, Daniel. Let's run it back tomorrow.