AI Skeptics Trigger Market Jitters & California Will Vote to Tax Billionaires

Are you sucking wind from trying to keep up with AI and its impact? Take a breather and tune in to The Intelligence Shift, Morning Brew's new podcast with PWC. It bridges the gap between big picture AI concepts and what it actually means in practice. Host Dan Priest is joined by expert guests to discuss AI's role in sports, music, HR, and more. Listen to The Intelligence Shift wherever you get your podcasts. Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the Elizabeth Holmes movie has changed the game for documentaries. Ben, California's richest are spending $1 million a day to kill a billionaire tax. It's Monday, October 19th. Let's ride. I'm going to need you to strap on some elbow and knee pads before telling you about Diego Poncele. The 27-year-old Spaniard has just set the world record for fastest skateboard achieved in a standing position, circling down a road in Canada at a top speed of 94.3 miles per hour. And I can barely do a kickflip. Poncele says going that fast on a wooden board with four wheels, unsurprisingly, makes you feel completely out of control. Telling the athletic, the wind becomes stronger than you. Think of going over 90 on a highway and putting your arm out of the window. It's this, but it's a full body experience. No thanks, but I'm happy for him. Poncele made 15 attempts at the record this year before finally nailing it last month. He says he pours over Google Maps looking for the right road to make his attempts, but ultimately settled on the exact same stretch of road that the previous record was set nine years ago. It's in Charlevoix region of Quebec. And the reason he was looking elsewhere though is because that road has deteriorated over the past nine years. I have hit a crack on a skateboard going two miles an hour. I can't imagine what would happen if you hit one going 90. But he said that he mapped the route out in his head and he watched film on himself. To visualize every single inch in his mind, he says it's like high consequence meditation. Feel like the emphasis is on consequence there and less emphasis on meditation, but what a record. And now a word from our new sponsor, Liberty Mutual. Neil, help me with this crossword. Seven letters, the state of being free within society from control, restriction, or oppressive legal limits imposed by authority. Liberty. Okay, New York women's basketball team, last letter is Y. Liberty. Yes, wow, you are so good at this. Now, this is a toughie, a way to customize your home and car insurance. Liberty. See, I knew those glasses weren't just for show. You really are smart. So that's Liberty, Liberty, Liberty. Liberty, hey, that reminds me. That's right, Liberty Mutual customizes your car and home insurance to save you money. Who say my glasses were just for show? Not important. Start your quote at libertymutual.com. That's libertymutual.com. Whether you like it or not, the AI data center build out has been the engine of the U.S. economy. And the stock market this year, but last week brought signals that, like every top-ranked college football team on Saturday, it's at risk of being upset. The S&P 500 had its worst weekly loss since June, and the NASDAQ posted its worst week since April 2025 as Wall Street soured on companies that supply and operate data centers, the same companies lifting markets to record highs this year. The Philadelphia Semiconductor Index, home to big chip makers like Micron, AMD, and NVIDIA, has now fallen for eight straight trading sessions, its longest losing streak since 2008. In the fall of 2006, much of the anxiety has been directed at one company, CoreWeave, the central player that rents out computing power to AI giants. CoreWeave's stock and bonds have collapsed in the past few days, with Wall Street growing increasingly concerned it won't be able to pay back its large amount of debt. And that pretty much crystallizes the main problem here. American corporations are expected to spend $9 trillion to create the data center infrastructure needed to power your chat addiction, and since no one has that kind of money in the bank, they're loading up on debt to fund the business. The world's largest data center is the world's largest data center, and it's the world's largest data center. However, as you've heard us talk about many times on this show, borrowing costs have jumped rapidly this summer because inflation's heated back up, and now the entire proposition is being called into question, hammering AI names. Toby, stocks are dropping faster than the leaves. In addition to the debt issue that you spoke about, there's two other reasons why you're seeing people get nervous around the AI trade. One is actually competition from Chinese chip makers because the global AI data center buildout has created a huge shortage. Of these processing chips, but investors are concerned that China is going to come in and undercut the entire market here by, as they are known to do, just flooding the market with much cheaper alternatives. So that could see names like NVIDIA, Lucene, Micron, these big chip makers. And the other thing, too, is a private company. Anthropic revenue growth is actually more important to the U.S. economy than it probably should be for any one company. The Financial Times report on Wednesday. They said that their quarterly revenue growth was slowing. This is still a company that's generating $17 billion in revenue. But, again, Anthropic needs to be profitable. It needs to show that it can provide a return on all this capital going into data centers. And so everyone is very concerned with how it's looking financially ahead of its IPO later this year. And another headwind is oil prices because the whole problem here is that inflation is going up. The Fed needs to raise rates to combat inflation. Ten-year treasury yields are following that movement. And oil is on its way up. It just hit $110 a barrel for the first time since May. There's more attacks going on in energy infrastructure in Russia and Ukraine, not to mention the ongoing conflict in Iran with the Strait of Hormuz. So if you're looking at any companies that are going up in the stock market, it is energy companies. Energy was the best-performing S&P sector on Friday. Exxon mows up 2.5%. Chevron was up 2.5%. So those names have been boosted by higher oil prices. The issue with the AI build-out is that it's the entire engine of the economy at this point. Nearly half of the U.S. economic growth this year has been attributable to tech-related spending. And then the other thing, too, when you talk about consumer confidence, the wealth effect is something you have to think about. The AI boom does mainly affect stocks. But again, if stock portfolios are going up, wealth. Your consumers feel better about their financial health, and they continue spending. And that spending helps support businesses. It helps employment. It helps overall economic growth. The problem with the wealth effect is that it can switch on a dime because if a sell-off comes, then the wealth effect starts to weaken. Those same consumers don't feel as good financially as they did maybe a month or two months ago, and you start seeing consumer spending slipping a little bit. So that is how a boom in the stock market can actually trickle down to the economy itself. The question is, Will. Will investors buy the dip? Because for every stumble in the AI trade that's happened this year, people have immediately swooped in and bought the dip and lifted the S&P 500 and the Nasdaq to new record highs. I mean, it was just two weeks ago we're talking about the S&P is at a record high, and right now it's only 1% off. Looking at futures this morning, the Nasdaq, home to all of those AI names we said were getting whacked last week, is up over 1%. So that will be something to watch this week, whether this market can rebound. Let's move on. The fight over one big Venmo request. A request from California billionaires is heating up to the point where those opposed are spending $1 million a day to strike it down. The controversial Proposition 40 seeks to impose a one-time 5% tax on California's billionaires. Crucially, it would tax net worth, not just income, meaning all the wealth tied up in assets like stocks would be factored in. That has spooked the state's roughly 200 billionaires and led to a fundraising effort that has amassed the war chest of more than $340 million, making it one of the most expensive political battles in the state. The report says, The reason California is looking to tax its wealthiest residents is to make up for a healthcare shortfall that supporters say is a crisis in the making. What we're trying to do is restore $100 billion worth of healthcare cuts, said Workers' Union leader Dave Reagan, blaming the shortfall on cuts included in Trump's one big, beautiful bill. On the other side is, unsurprisingly, the billionaires being targeted. California, sadly, has become a state that doesn't value success anymore, Michael Moritz, a billionaire venture capitalist, told the New York Times. The fear is that, Some of those fears have already been manifested, with several prominent tech billionaires, from Peter Thiel to Google co-founders Larry Page and Sergey Brin, relocating since the tax was proposed. Neil, as California is geared up to go to the polls, the fight over Prop 40 is heating up. Yeah, Bernie Sanders, who is in support of Prop 40, of this wealth tax, said, The whole country and, frankly, people from around the world. Are paying attention to what is happening here. He called it the most important ballot initiative in the country. And you know he means it, because I don't think there's a direct flight from Vermont to California. So, that's quite a journey that he had to make. And he wants to show off the fact that this is really just the starting gun on what could be a huge wave of things. And I think people on the other side would also agree with that. We saw this happens all over the world. Where one country, one state does something, and you have these cascading effects. Thinking about Australia's ban of social media for people under 16. You had all these other countries following that ban, saying we're going to use this as a template. They think this is going to be the same in California if it does pass. And I just want to quote Milton Friedman, who said, "There's nothing as so permanent as a temporary tax." I mean, if you look at the United States, the first federal income tax was used to fund the Civil War. It was supposed to be temporary. In Britain, the same thing to fight Napoleon. So, the fact is that this is considered a one-time tax on billionaires. But supporters and detractors agree that whatever happens could foundation for something a lot more permanent and it's why you're seeing billionaires spending a million dollars a day this is that number came from a report from the guardian is it working prop 40 is actually still leading if you look at late september uh university of california poll 45 support the billionaire tax 42 oppose it it's a three percentage point lead but one month earlier that proposal had a seven point lead so clearly that gap is closing a little bit the way that they are trying to frame the messaging around this is that it's not just uh going after billionaires it's going after just your neighbors your wealthy neighbors like doctors and lawyers and normal people as normal in question mark so it looks like that political strategy is working a little bit right now but yeah there are other uh ways on the ballot too that uh prop 40 could get struck down even if it does pass proposition 41 actually that directly targets the billionaire tax designed to prevent prop 40 from taking effect and if that fails then there's proposition 42 which is a broader proposal intended to protect individuals from certain new taxes so they're trying to pull out all the stops here because obviously they don't want this to pass all right welcome to winners of the weekend the segment where toby and i pick two things that remember to bring in their overnight oats to the office i win the pre-show matchup of risk the game of global domination so i get to go first and my winner is everyone involved in making you can see everything the new film about elizabeth holmes that's shattering norms for the business of documentaries the film created by nathan fielder and lance oppenheim and distributed by a24 brought in over 15 million dollars in its debut weekend which marks the best opening for any documentary since 2013 and the second best opening for a non-music documentary in history only behind michael moore's fahrenheit 9-11 in 2004 what makes the 15 million even more impressive is that the movie was shown on just 855 screens the only other documentary that got a wide release this year melania was shown on almost double the screens and brought in less than a million dollars than half the opening weekend receipts it was the biggest premiere for any movie showing on under 1 000 screens since borat the film's success owes a lot to its marketing strategy it was a complete secret until just two months ago when it was announced at telluride film festival in a surprise fashion in promoting you can see everything fielder and oppenheim made sure you can't know anything about the movie's unpredictable twists and turns deliberately avoiding spoilers that sent audiences flocking to theaters so they could see what happens for themselves and they absolutely showed up a24 reported more than 2 000 sellouts across the weekend including the friday evening showing i attended in brooklyn okay so obviously i want to hear your thoughts on it but first i want to talk about a24 for a little bit because everyone has been loving a24 recently but you don't actually have to go that far back to find some flops in their uh in their archive remember a24 raised 75 million dollars from thrive capital giving an evaluation of three and a half billion dollars back in 2024 and then the studio kind of put out a bunch of duds there is the smashing machine which had a big production budget of 50 million dollars it featured dwayne johnson and yet it only brought in 21 million dollars and there was eddington didn't quite uh light the box office on fire and then it heated up it just went marty supreme brought in 192 million dollars back rooms brought in 400 million dollars and now it's got uh it's grooved back with this awesome documentary as well so for a24 is establishing itself as the place to fund artists and their big swings but also make uh commercial success they've been doing both really well recently i also want to talk about the legend of elizabeth holmes like we have had so many fraudsters across american history sbf most recently uh but nothing seems to capture the popular imagination like elizabeth holmes for even people who don't even remember the original fraud which happens back in you know 2014 2015 2016 that's when elizabeth holmes was really you know the the the the the the the the the the the in in the spotlight as as she was being investigated over theranos 70 of opening week weekend crowds for this documentary were under 35 years old people who were maybe even elementary or middle school when all of this happened you're seeing an explosion from this movie across the holmes ecosystem the dropout which was a hulu documentary show a few years ago uh hulu not documentary actual show from a few years ago saw more than 220 percent jump from august to september when this movie was announced so people are revisiting that story which is a fictionalized story and then john kerry who is the wall street journal who broke this entire story in the first place in the mid-2010s is seeing a huge surge in book sales for his book bad blood which i encourage everyone to read if they actually want to find out exactly what happened here at theranos and elizabeth holmes audiobooks are up 715 on spotify in the u.s he's seeing a huge surge in book sales as well so the elizabeth holmes ecosystem continues to sustain himself and it itself and the question was why do we need another three this is a three-hour documentary on elizabeth holmes there's been the hulu show there's been a documentary there's been all these books there's been the audiobooks why do we need more but people just can't get enough of her so how was it it was great that's all i'm gonna say i'm gonna borrow the marketing tactic that they did and i'm saying that it's really helpful not to know anything about it but i will say i was just sitting on the edge of my seat like it was a thriller for three straight hours and so just go to the movies and see it i mean i'm looking at the ratings it is the highest rated feature film of all time on the letterbox right now at 4.8 and it is certified fresh and raw tomatoes at 99 this could be the biggest endorsement though brian johnson the dude who doesn't want to die who values his sleep above everything said he got four hours and 41 minutes of sleep to go see a showing of this so that just shows you how excited people are all right we're gonna take a quick break and come back with my winner of the weekend right after this neil let me tell you a thing or two about bond markets go over it they are confusing so just one thing then but yes capturing value in fixed income is not easy thankfully vanguard bonds are institutional quality that means top grade products across the board vanguard can invest across all kinds of sectors maturities and geographies which means they can spot and act on opportunities that others might miss if you want to give your clients consistent results year in and year out go see the record for yourself at vanguard.com slash audio that's vanguard.com slash audio all investing is subject to risk vanguard marketing distribution distributor neil would you consider yourself someone who follows trends that depends when it comes to marathon running yes but when it comes to toe socks no well you're not alone because advertisers are mixing trends too 70 of advertisers are raising ctv budgets in 2026 and much of that budget is being pulled straight from social yes and social cpms have increased pretty significantly a lot of advertisers just see their dollars working harder on streaming and they often end up on roku it's easy to see why roku's self-serve platform helps you go live in minutes and reach over 100 million logged in households plus roku is offering a five thousand dollar match on your first spend with roku ads manager use code brew 5k to access the offer at advertising.roku.com slash mbd neil black friday and cyber monday are coming up so retailers gotta make ship happen excuse me retailers need to get every one of those orders out the door and ship station helps make it happen ship station is an end-to-end order fulfillment platform built to handle the order surge of peak season and bring all of your orders into one place even during volume spikes peak season doesn't wait and neither should you get ahead of it today with ship station and get 60 days free at shipstation.com with code mbds that's shipstation.com code mbds taxes and fees apply my winner of the weekend are onion futures traders because they might actually get a chance to show off their skills this morning university of chicago students are planning to protest outside the chicago mercantile exchange demanding congress appeal a nearly 70 year old law that makes it illegal to trade onion futures it's a very serious movement that will feature a giant inflatable onion and a student leader who calls himself the group's general alismo the backstory as to why they're busting out the inflatable onion is a fascinating one in 1955 two traders cornered 98 percent of chicago's available onion supply roughly 30 million pounds before manipulating the market so aggressively that onion prices collapsed to the point where the bags holding the onions were worth more than the onions themselves congress responded by banning onion futures trading in 1958 a prohibition that still remains in place today meaning onions are the only agricultural commodity in the u.s where futures trading is explicitly prohibited but the students argue that the government actually made things worse futures contracts allow farmers to lock in prices and protect themselves from market swings supporters argue and without them onion growers have lost an important financial safety net neil such an odd quirk of the financial markets but it's a cause i could see you suiting up as a vidalia and making your voice heard if only you chicago accepted me i would absolutely be there i do love these guys they're going all out adam ash who is that leader the generalissimo at a previous protest back in the spring he wore a fedora black overcoat and scarf like full 1950s regalia he had socks embroidered with the portrait of harry truman and you're probably wondering why harry truman he was the final u.s president before the passage of the onions futures act and he seems very animated i'm talking about the student not harry truman by onion futures and just the fact that it's a bad public policy and then we haven't changed he said it's always filled me with fury that we accept such odd minuscule policies that really are just odd market distortions even if one specific issue seems minute or minuscule and trivial what What matters is a combination of all these it's death by a thousand cuts to our agricultural policy. And it's not a surprise that this is happening at UChicago. I just mean Chicago in general. We can talk about UChicago later. But Chicago is the historic and global center of commodity derivatives and futures trading. It has CME Group. So the fact that this is taking place at UChicago and within the proper city of Chicago is not a surprise. So for 52 years, onions were the only commodity specifically banned from futures trading in the U.S. But in 2010, Congress expanded that to include futures based on movie box office receipts as well. That followed a lobbying by the Motion Picture Association of America. Hollywood is basically arguing that if you allow investors to bet on box office performance, you could incentivize manipulation of movie attendance. Basically the same reason why they wanted to ban onion futures in the first place. So onions used to stand alone within, you know, the broader commodity. Business now. That's why I said agricultural commodity, because technically the box office is has the same restrictions as well. Weirdly enough, prediction markets get involved in this as well, because Polly Market has offered contracts tied to ticket sales for movies, but only through their offshore account. So onions is not the only place where this fight is taking place. It also is taking place around Hollywood as well. Onions and box office receipts. I mean, I do have a UChicago story. So I did did apply. I did not get in, but my friend from high school did. So I was at my freshman year of Maryland where I ended up going to, and I visited him at UChicago. And they say this is a place where fun goes to die. That's their slogan because they're all just super nerds and they don't go and party. So I went there. I had the best time of my life. Like, they were having so much fun. I have also never felt so dumb in my life. Like, these people were so smart. My friend goes, here's my other friend. He took a gap year to run Obama's campaign in New Jersey. And here's my other friend who already wrote, like, a feature film in his spare time. And what were you doing over the summers? Yeah, I was just like, yeah, camp counselor. But also I was just like, oh, I like going to football games and basketball games at Maryland. So it was a very impressive. You would have done great there, Dale. It was a very impressive collection of people at UChicago. And I'm not surprised that they're spending their time going to protest to demand the revocation of an Onion Futures bill from the 1950s. It's Monday, so here's what you need to know. To stay ahead in the week ahead, Wall Street has been taking on water recently. But maybe this week's earnings slate can help right the ship. Meadow will be the first big tech company to report, with all eyes on whether its heavy AI investments are actually translating to revenue. Tesla of flying car fame and down-to-the-dumps Netflix are also the names to watch this week. SpaceX tomorrow as well. So maybe we get an update on the potential Tesla merger. Also, Elon just posted on X literally a couple hours ago saying he'll give every child in America a share in SpaceX. So he's going to have to wait and see if he's going to get paid by next year. So I guess if you're a kid, you've got to be dialed in on these earnings, too. This could be your future that you're talking about. France is on edge after the worst public unrest in years erupted over the weekend. Frustrations over cost of living spiraled into looting and rioting across the country by what President Macron labeled "ultra-left fringe groups," leading to nearly 2,400 people arrested. The violence adds another major challenge to a country that's been reeling from fiscal mismanagement and overspending. Tomorrow, the government will vote on the first part of a budget that aims to save $61 billion. Next fiscal year now with a lot of added pressure, French assets were all down this morning after the shock of the weekend. French schools are starting a two-week holiday this week. So according to the New York Times, they think that the high school movement is expected to lose a little bit of steam. They did say, too, it's kind of a split screen between the mostly peaceful marches from students and teachers and people who are taking more opportunistic, you know, stabs at looting. So it's not necessarily that everyone was riding looting. It's just that there's a lot of people who are taking more opportunistic, you know, stabs at looting. It's just that mostly peaceful, but a fringe group were taking advantage of the situation. The midterm elections in the U.S. are just over two weeks away. But one of the more fascinating votes anywhere in the world is happening today just over the border in western Canada. There, residents of the oil-rich province will decide whether to begin the process of potentially separating from Canada. It's basically a referendum on a referendum. Albertans will vote on whether to create a referendum for them to leave Canada. In last-minute speeches, Prime Minister Mark Carney has been trying to get a referendum on whether to create a referendum for them to leave Canada. He's also trying to present separation as a self-defeating idea, suggesting Canadians need to rally together as one to counter the threat from the U.S. According to the AP, the biggest cheers Carney received at rallies this week came when he spoke about diversifying Canada's trade away from the United States. So, ironically, this trade war and the 51st rhetoric, 51st state rhetoric that Trump is kind of putting out there amped Canadian nationalism up to an extent that it might help Carney kill this referendum. And finally, lots going on in the sports. In the world, after sweeping the Dodgers, the Milwaukee Brewers are waiting to see who will join them in the World Series, which begins on Friday. The Guardians or the Rays, whoever clinches the trophy, it'll end a long drought. The Brewers and Rays have never won a World Series, and the Guardians' most recent championship was in 1948. And in basketball, one season wraps up while another begins. The WNBA Finals has tipped off between the Atlanta Dream and the Golden State Valkyries, while the NBA regular season tips off on Tuesday. The marquee matchup, LeBron and the Sixers. Can't believe I'm saying this. Visit the world champion Knicks at Madison Square Garden. So good to be a Knicks fan, right, Neil? You love being a Knicks fan. Are you going to be a Knicks fan now this year? I'm a Rays fan, Neil. It's different sports. I'm going back to the baseball. I'll be a Rays fan, and then I'll figure out my fandom once this season actually starts. I would say yes, though. I mean, we're on the bandwagon. It was a great time last summer, so we might as well have a great time this year as well. Champion Knicks. Go Knicks. All right. That is all. That is all the time we have. Thanks for starting your morning with us, and have a wonderful start to the week. To share your thoughts on the episode or anything else, send an email to morningbrewdaily at morningbrew.com or DM us on Instagram at mbdailyshow. Let's roll the credits. Emily Milliron is our supervising producer. Raymond Liu is our senior producer. Our producer is Olivia Graham, and our associate producer is Olivia Lake. Technical direction by Nina Miller. Hair and makeup is at the Onion Futures Protest, and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. We'll be right back. the findings, go to contentful.com slash morning brew.