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Good morning for Daily Show. I'm Neil Freiman.
And I'm Toby Howell.
Today, Meta gets creative to keep Zuckerberg from leaving California.
Then someone turned off the internet. Seems like everything was getting hacked yesterday.
It's Thursday, October 22nd. Let's ride.
The millennial renaissance is gathering pace.
Yesterday, Disney Plus and Hulu announced the return of Glee,
eliciting gas throughout our office and from theater kids everywhere.
The series, about a particularly dramatic choir,
at McKinley High School, originally ran from 2009 to 2015,
but has found a second life online with clips of the show's infamous covers circulating widely.
Lea Michele will reportedly reprise her role as Rachel Berry
and be joined by at least a couple other members of the original cast.
Reaction to the reboot was mixed with some very excited we'll get some Chapel Roan covers,
but others asking, who is this for?
I think our colleague Jen summed it up when she wrote in Slack,
I think the reboot is a crime against humanity, but I'm not going to deny the person.
I've been, I was shocked, gobsmacked at how many Gleeks live among us at the brew.
You asked innocently sitting next to you right now, actually.
Yeah. For people's favorite Glee songs, you were just trying to pull the room
and you got like 30 submitted to you in a span of five minutes from ten different people.
But Disney says that Glee still gets four million monthly listeners on Spotify.
So it's clearly resonating to this day.
Sue Sylvester, Halloween costumes are going to be back with a vengeance as well.
Another example of stuck culture, though,
first Girls is coming back now Glee, what's the next show to be rebooted, Neal?
Give me more Monk episodes.
Oh, bring back the USA Friday Night Dramas.
That was amazing.
We used to watch that together as a family all the time.
I love Monks and I would love to see Tony Shalhoub reprise that role.
That's a pretty good one.
All right.
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Remember how researchers have been warning us?
About how good AI is getting at finding cyber security vulnerabilities?
Well, the mother of all vulnerabilities has been unearthed, putting 70% of the web at risk
and setting up a high speed battle between hackers and security professionals straight
out of Mission Impossible.
Two critical security flaws were discovered in PHP, the programming language that powers
huge swaths of the internet, including WordPress, Wikipedia and countless other sites.
The vulnerabilities, known as PHP to Shell, let hackers remotely take control of sites
without any authorization.
Which is bad.
Amy Luttwak, a co-founder of Wiz, the cybersecurity company Google bought for $32 billion, called
it the most severe AI vulnerability that was ever found.
Which brings me to the next part of the story.
A security researcher actually uncovered the flaws weeks ago while using ChatGPT to audit
PHP's source code.
The vulnerability had existed for years, but was considered too complicated to practically
exploit.
AI showed that it wasn't.
That kicked off a secret weeks long repair job.
Where a small team worked to patch before word of the exploit got out.
Then on Tuesday the secret leaked and that set off a mad dash for websites to update their
systems before attackers were able to reverse engineer the fix.
Neil, we're no security engineers, but this story feels like the iceberg we've been warned
about where AI finds a hole, humans scramble to fix it, all while AI helps hackers try
and squeeze through the door before it closes.
Everything was happening all at once yesterday.
I swear, they're inventing new ways for the internet to be taken offline every day.
Like what do you mean a programming language called PHP underpins 70% of the web?
So ironic, funny.
Had it not been for AI, they wouldn't have found it.
Had it not been for AI as well, there wouldn't be a risk of it being exploited.
This ought, this set off a mad scramble all across the globe, from Japan to Australia,
to the United States, all of these government agencies were saying, look, if your website
can't be patched right now, if you don't have this fix ready and we just released it.
Then you just need to take it down.
So we saw a bunch of sites go offline in Finland and the Netherlands.
Other governments were saying, you have, we might need to take this off.
We need to see if our, our website is run by PHP.
If it is, we need to take it down if we can't fix it.
So it was just a huge race between the hackers and the defenders yesterday.
Yeah.
The NSA cyber account said that if an immediate update is not feasible, take your system online
and then you got those announcements cascading down from the UK's national security center.
It's a big thing for the EU, Singapore, Australia, Japan's prime minister Sine Takahashi actually
part personally tweeted out a similar warning, just showing how global this phenomenon was.
And it did seem like the headlines were extremely dire at first, but then we were sort of reassured
that actually a coalition led by open AI has been on this issue since August.
But then it seems like the timeframe that played out here, which was, you have the initial
discovery, then you have months of work to patch it, and then you have deployment that
might not be.
It might not be viable for that much longer because I was reading the briefing by the
information and Leo Swartz wrote for months, open AI has been harping on what it calls
the defender's window.
The critical period of time when cybersecurity experts armed with AI models can identify
and patch vulnerabilities before attackers exploit them first.
Basically that window has been shrinking dramatically.
And this was the first time that we saw it playing out across something that affects
so much of the internet.
That timeline is only going to shrink going forward.
They kept it secret for so long.
For months, they were working on a patch behind closed doors, did not want this to leak out
to the public.
They were all ready to release the patch today, Thursday, October 22nd.
But then the website Hacker News got their hands on this.
It became public on Tuesday night.
And so they had to release the patch a little bit early, which set off the mad scramble
yesterday.
It also shines a spotlight on what these quote unquote defenders like open AI, Google, wiz,
all of these companies are doing behind the scenes to use AI.
To find all these vulnerabilities in decades old software.
This was found by an initiative by open AI called the patch the planet.
They have their top end model GPT 5.6.
So they released it to researchers saying go ham on all of the software that has ever
been creative and find vulnerabilities so we can issue patches.
And that's what exactly they found.
This thing was from 2004.
This is, this is when these two vulnerabilities in PHP were created in the version of that
software that was released in 2004.
They didn't find it.
This is what we found.
All right, let's move on.
Meta is brandishing a financial wand to conjure up a creative way to fund its massive investments
in AI and also keep Mark Zuckerberg happy.
So voting power, meaning they are essentially sacrificial lambs to raise capital in order
to pay for acquisitions and other expenses.
Part of the reason Meta is putting even more chips on the table when it comes to AI is
it feels like it's making progress.
Our investments are paying off, as Zuck said, simply in Wednesday's report.
One of those investments is Muse, Meta's viral AI agent the company rolled out last month.
Zuck touted that the app has amassed 10 million users since launch and that more than 25%
of them use it daily.
He also highlighted the most common use case for the app.
The agent is shopping, which is music to the ears of analysts waiting to see how Meta is
able to recoup the billions of dollars of compute it takes to run the app.
Speaking of pricing compute costs, Meta's free cash flow went negative for the first
time ever since it became a public company and it raised the floor of its capital expenditures
this year to $135 billion, hence the new stock issuance.
But Neil, all in all, Meta looks to be in this holding pattern that investors are uncomfortably
comfortable with.
The ads business rakes in money at an ungodly rate.
Zuck takes all that money and more and plows it into AI also at an ungodly rate.
What Meta is doing with these two different shares of stock, this is like the Picasso
of financial engineering.
I mean, I need somebody from the University of Delaware who specializes in this to explain
it because it is just extremely creative, unusual in order to keep Zuckerberg from leaving
California.
And here's what's going on.
We know that there's Prop 40 coming in California, perhaps in November, which would tax billionaires
one time.
Net worth of 5%.
A lot of billionaires have already left the state of California.
Meta does not want Zuckerberg to leave as well.
So what they're doing is they're issuing another class of stock because if Zuckerberg stayed
in California and Prop 40, this wealth tax did pass, then he would have to sell a lot
of stock to be able to pay that tax bill, which would amount to billions, tens of billions
of dollars.
Currently, Zuck owns voting control of 61% in Meta.
That would reduce it to 58%.
63%.
It's a very unusual situation at Meta where Zuckerberg just has insane control over this company.
It's very atypical.
Usually founders, when they sell stock, they just have less voting control.
But Zuck has this ironclad power over Meta, and he wants to keep that.
So what they're doing is they're issuing this new class of shares that Zuckerberg will have,
and he can sell them without losing voting control to pay this particular tax bill.
In exchange, Zuckerberg says he's going to stay in California or wherever Meta is headquartered
for the next eight years.
And Meta says that's important because what they saw during COVID was that Zuckerberg
was away from the management team, and that didn't exactly work so well.
So they want him to stay on site in California, and they're doing this very creative maneuvering
to make sure that happens.
Yeah, it's like locking in your star QB for a long-term deal.
He literally signed an eight-year deal with the company that he founded.
It is fascinating, though, to see how Prop 40 is affecting earnings calls of the biggest
tech companies in the world.
Let's talk quickly, too.
About Muse, a lot of people were curious to see how it is doing since it was such a buzzy
debut, and I think people were pretty pumped with what Zuck was saying.
He said that Meta's forecasting that Muse will eventually bring in more revenue per
user than its family of apps users.
So that's Instagram and Facebook.
He's saying that people love shopping using this thing, and that is going to be a major
vector of which that we can monetize it.
He says the goal is to create a large-scale Muse network where billions of Muse agents
work together to get more.
He's saying that he's not going to be able to do it all by himself.
Basically, that's a two-sided marketplace.
He's shopping Muse around to someone like Walmart and saying, like, hey, people are
not going to interact with your site anymore.
They're going to interact with your AI agent.
So let's get you set up there.
Humans will say, hey, buy me cereal.
Your bot will say, here are the cereals you have typically looked for in the past, and
that's how commerce is going to go down.
Again, that's kind of the pie-in-the-sky vision, but was pretty pumped with what the future
could look like when it comes to this new technology.
But it also shows you how much pressure Meta is into.
He says the goal is to monetize Muse to pay for all these AI investments because they're
spending $130 billion each year building out AI infrastructure.
Zuckerberg in the past has said that a product can't be aggressively monetized until it hits
1 billion users.
Think about WhatsApp.
WhatsApp's had more than 1 billion users for a long time, and they're still figuring out
how to monetize WhatsApp.
Muse is popular, but it's only been downloaded 10, 11 million times.
It's a far cry from a billion.
And now you're already hearing executives talking about aggressively monetizing it.
It shows you how.
The turntables have turned a little bit when it comes to how much Meta is spending and
that it needs to pay up for it right now.
Moving on, speaking of wealth taxes, a few days ago, United CEO Scott Kirby said he supported
the idea of a national wealth tax on the richest among us.
Little did he know he would ignite a firestorm that has conservatives calling him a hypocrite
and even pushing for a boycott of the airline.
In an interview with The New York Times published on Sunday, Kirby was asked about the public's
widespread distrust of CEOs and if he felt the need to counteract them.
He replied, we should have a national wealth tax.
It won't work by state because people will just move.
I would pay them.
It apparently wasn't a one-off on the heels of United's earnings report yesterday.
Bloomberg asked Kirby about his wealth tax proposal, and he defended it 100%.
I just think that the basic concept is one of fairness.
He said, if you're wealthy enough, you can have passive income.
You can just make an investment and the laws are set up that you literally never pay taxes
on all that growth that can happen.
That just feels unfair to me.
Kirby's comments lit a match that burned through.
Conservative media, The Wall Street Journal, editorial pages, and even state capitals.
Louisiana Governor Jeff Landry posted on X, how audacious from a guy that didn't even
build United and makes $32 million a year.
Let's see you step up and place your money where your mouth is.
Last year, according to Fortune, Kirby's total compensation was $32.3 million, while
his company's median employee received total comp of around $97,000.
Yeah.
Speaking of Louisiana Governor Jeff Landry, he also said that, hey, if you want Americans,
wealthy Americans to contribute more, just cut a check yourself.
And Bloomberg did ask Kirby whether he would personally redistribute some of his wealth
to United employees who do earn significantly less than he does.
And Kirby's response was, of course not.
And you have to add some color to that.
He said, even if Elon Musk decided to do it and he's a trillionaire, it's not enough to
make a difference.
Basically, he's saying that it's not enough to just point out individuals and say, hey,
you give all your money away.
It needs to come via the tax system.
It needs to come.
It needs to come via a federal tax.
So everyone is, you know, dinged equally.
But it was very funny to hear him just go, oh, absolutely not.
I'm not giving my money away to my employees.
And I think what was so controversial about him saying this specifically is that he is
the CEO of an airline.
And if you want to look at wealth inequality and which companies maybe perpetrate or endorse
inequality, it is the airline street.
It is the airline industry.
We've talked about how they're going.
So they're really leaning into premium and building out amazing.
lounges and first class suites while stuffing everyone else in the back in an economy.
And he was also asked by The New York Times if he was OK with United's policy where basically
you ask passengers to pay $70 to sit in an aisle or window seat if they aren't a frequent
flyer with United.
Everyone else gets perhaps put in a middle seat if you don't pay $70.
And he got really capitalist when he was responding to that question.
He said the way to give everyone what they want is to charge for the services and products
that those customers want.
They're customers that pay more and get more.
So you had a bunch of critics calling this virtue signaling and pointing out that airlines
are perhaps the microcosm of all of the inequality ills that he's talking about.
And then just thinking back to Zuck and his potential to leave the state because of the
wealth tax, another major tech CEO weighed in on the potential way of tax, and that was
Jensen Huang, NVIDIA CEO.
He was asked if he would potentially leave if California started taxing his fortune.
He goes, I haven't even thought about it once.
And he went on, the fact that I can afford to pay $8 billion in taxes over five years
is a privilege.
I'm not afraid of paying taxes.
I'm afraid of being poor.
So that kind of showed another potential viewpoint on this wealth tax that may or may not be
coming down the pipeline.
I think we're going to talk more about it as we draw near to this vote.
All right, we're going to take a quick break and come back with Neil's numbers right after
this.
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Welcome to Neal's Numbers, the segment where I share three stats in the week's news that
will have you singing like a Glee cast member.
My first number is $50 million, which is the cost of the bra worn by Kylie Jenner at the
Victoria's Secret fashion show on Sunday.
While it has a 75.5-carat yellow diamond and 4,400 other diamonds, its most important feature
was attention.
With the fashion show regaining the cultural relevance it lost almost a decade ago.
The fantasy bra is symbolic of this renaissance, a gimmick that began 30 years ago but retired
in 2018.
The bra returned this year as the most expensive one in the brand's history, and the internet
couldn't stop talking about it, specifically the choice of Kylie as the model.
It's been quite a comeback for Victoria's Secret.
Back in 2019, the lingerie brand retired its televised fashion show amid reports of sexual
harassment at the company and ties between executive Les Wexner and Jeffrey Epstein.
The products and the marketing, too, didn't resonate with customers, depicting an outdated
version of femininity.
Not to mention, this was a mall brand, and malls were dying.
But under new leadership, the giant has awakened.
Victoria's Secret has reported year-over-year revenue growth for five consecutive quarters,
pulled back on discounting, and seen more foot traffic.
The fashion show is back and buzzy.
Its stock is up 180% over the past 12 months.
And speaking of its stock, a ticker change may reveal how Victoria's Secret wants to
portray itself in this new era.
Earlier this year, the company swiped.
Swapped its ticker to VSXY, very sexy, to quote, celebrate sexy in all its forms, not
as one look or one definition, but as a feeling every woman owns for herself.
This bra was a marvel of art and engineering.
There was no fabric involved in it, which kind of blows my mind.
It was only gold and diamonds, and it weighs nearly four pounds.
It took over 1,000 hours of work and more than 15 people to put it together.
And $50 million.
I mean, you said it's more expensive.
than the previous one, but it blew it.
out of the water because the previous record was 15 million dollars from the year 2000 and it mogs
the last fantasy bra in 2018 which cost only 1 million dollars the reason why it was noteworthy
not only did the fantasy bra come back after a hiatus but also it broke from the typical tradition
of who got to wear the fantasy bra historically it was reserved for contracted Victoria's Secret
angels as they are called so it'd be the Heidi Klum's of the world the Adriana Lima's of the
world but Kylie Jenner was just a mainstream celebrity she's not actually affiliated with
the company so that ruffled some feathers some angel wings if you will but they knew exactly
what they were doing they were trying to regain the attention that they feel like they've lost
over the previous year so they went 50 million dollars big and they brought Kylie Jenner in to
wear it that seemed to have worked all right for my next number if you showed up to a neighborhood
and looked at the retail shops the presence of what store would you say most indicates that the
market is going to be like the answer according to a new analysis is Club Pilates a report by the
newsletter home economics showed that homes within three miles of a Club Pilates location
are worth 64 more than comparable places up next is Whole Foods with 56 greater home values and then
Trader Joe's at 54 home economics says that more than any other type of amenity nothing tracks home
prices as precisely as the type of retail there not the size of the house nor the presence of tree cover
and it goes in the opposite direction too the stores most correlated with lower home values
are dollar stores homes near family dollar are 23 percent lower than comparable places dollar
General 28 percent lower than Dollar Tree 21 percent Toby for a while this was known as the
Starbucks effect you could tell that a certain neighborhood was bougie or about to become that
way just by counting the number of Starbucks there that's a bygone era with Pilates now a
symbol of a neighborhood's core strength I thought an interesting takeaway from this piece
was that a store's meaning changes depending on where you are and Duncan is a great example here
so in New England a Duncan correlates with home values 13 percent lower than comparable neighborhoods
but if you go south to Kentucky Tennessee Alabama Mississippi a nearby Duncan correlates with home
values 32 percent higher so the same chain can represent something totally different depending
on where it is located Culver's also has this same phenomenon in Wisconsin Culver shows essentially
no home price premium because you know that's kind of where it's from but if you go further
south in the Midwest it actually means that you get 30 32 percent more uh valuable compared to
other zip codes so I just think it's funny that these certain chains that are regional actually
mean completely different things depending on where you go in the country I don't remember
much about your bachelor party or what happened but I do remember our trip to Culver's because
that was that was a religious experience that was so fun you make it sound like we had a crazy day we
played a lot of sports it was good that's why I got banged in the head too many times all right my
final number is an ambitious sports promotion gone wrong back in 2015 as the Milwaukee Brewers were
suffering through a miserable losing season they launched a marketing stunt unprecedented in North
American Sports a timeless ticket a fan could buy a timeless ticket for one thousand dollars
and redeem it to attend a single home game of their choice at any point in the future
one thousand people scooped up a timeless ticket holding out to see their team as a
World Series contender well if there's any time to cash in your timeless ticket it's now on Friday
night the Brewers will host the Rays in their first World Series since 1982 and secondary ticket prices
have climbed astronomically to nearly three thousand dollars but some trying to redeem
their tickets bought more than a decade ago say the Brewers aren't living up to their word the
initial deal stipulated that timeless ticket holders would have access to the best available
seat locations subject to availability at the time of redemption but frustrated fans say they're
getting stuck in the nosebleeds or worse standing room one told the Wall Street Journal I'm still a
Brewers fan but I'm actually disgusted I'm not taking my kids up to the 400 level you need
binoculars facing backlash the Brewers acknowledged they messed up the president of business operations
said the team quote did not live up to the spirit of the program and aired in our internal
communications on the logistics of fulfilling the request as an olive branch they're allowing
timeless ticket holders to attend a World Series game and receive another ticket to a regular season
game of their choosing in the future
what a scandal Toby it feels like they got actually a better deal at the end of the day
because I would argue that even the fact that you get to go to a World Series at all is enough for
most fans I mean there is the vocal minority saying like oh I don't want to sit in the upper
deck but the fact that you get to go to a World Series at all for a ticket that you bought 10
years ago is probably a thousand dollars I know but then you get to go to another game so you
actually get more bang for your buck there I I am curious though do you think that this is a good
deal would you have even bought a timeless ticket to begin with because I think you're hoping for
this exact scenario to come to pass which it often doesn't for a lot of ball clubs I think it depends
on my disposable income right back in 2015 I could not have afforded a thousand dollars for anything
let alone a baseball ticket but if I was someone who these fans were which is 30 40 years long
suffering Milwaukee Brewers fans haven't won a World Series ever then it might be something I
would have lopped down for myself my ticket but I think it just depends on my level of fandom I
don't know if I can like a sports team that much even though I like some sports people called it
like the Willy Wonka Chocolate Factory Golden Ticket it's an awesome promotion until something
like this happens and you kind of have an egg on your face they don't really think so far ahead
where subject to availability perhaps if they get to the World Series and availability would shrink
all right let's bring the fitness with some final headlines it's earning seasons which means we got
a double dose of Elon Tesla reported earnings yesterday bringing in 28 billion dollars in
revenue beating Wall Street estimates but investors weren't impressed sending shares
down more than three percent after hours that's because under the hood automotive revenue fell
three percent and free cash flow dropped 62 percent assess support billions into AI and
humanoid robots everyone was eager to hear Elon talk about the potential Tesla and SpaceX merger
to for the second day in a row on Tuesday during SpaceX earnings must called combining his two
day good idea revealing that both boards have formed special committees to explore a deal asked
about the merger again must said I feel like I'm tap dancing through a minefield then cautioned
that he wasn't taking another step saying I think I said everything that should be said yesterday
yeah fascinating earnings report because Tesla is not like other AI companies when other AI companies
reduce their capital expenditures what they're spending on AI it's usually applauded by investors
because it shows that they're being more
wise about where they spend their money however what Tesla did is also cut its capital expenditures
it's spending less on AI that is exactly what spooked investors they said Tesla said that they
were going to reduce their capex from 25 billion dollars this year to 20 billion this year for any
other company the people would have applauded that they're saying oh great like you're being way more
smart about your money but for Tesla look right now they only have three vehicles they have the
three the Model Y and the
truck which barely sells at all so what they need to do is build humanoid robots they need to build
cybercars they need to get into autonomy and AI and robots and they need to spend money to do that
so when investors see something like Tesla is reducing their capex from 25 to 20 that's an
indication that they're not doing this pivot fast enough and they're still relying on these old
models to sell which they're not doing so well so that's why a they're not so happy about Tesla
spending less money because it just pushes the timeline back and also it just indicates that
they really want this merger with SpaceX because we talked about SpaceX earnings I mean they are
up 161 percent per year so the faster that Tesla can combine with SpaceX the better for everyone
the better for Elon the better for shareholders is what they're thinking so that was the main
general spookiness with with Tesla earnings finally one of the most annoying parts about
staying at an Airbnb is being eliminated and it's updated guidelines the company is restricting what
hosts can ask guests to do when it comes to cleaning up the utter mess you've made in their
house on November 20th at Airbnbs all around the world hosts will not be allowed to quote ask guests
to complete tasks that require significant effort or time or would typically be performed by a
cleaner including stripping the bed taking trash off-site or washing and putting away dishes the
guidelines address a long-standing complaint by Airbnb guests to the point where it's become a
meme that some hosts require visitors to leave the place as if Mary Poppins had stayed there
despite guests paying for a cleaning fee Airbnb seems to be tired of the joke hosts
are not happy they started spiraling out on Facebook groups and Reddit forums one said Airbnb
increasingly expects hosts to accept the risk while limiting our ability to protect ourselves
and then things started to get a little nasty they compared Airbnb to an abusive relationship
and then they started threatening retaliation one host said that they would strip their kitchens down
to the bare essentials another question whether they should increase their nightly rates to offset
these cleaning costs and one host called for a strike Airbnb built its Empire on our properties
I reminded them who actually holds the power this is the inherent tension that has always existed in
Airbnb guests do not like being told that you have to complete chores they call it pre-gaming the
cleaners it is a joke at this point where they're instructed to do all these things strip the beds
whatever but then hosts feel like they constantly get the short end of the stick as well so right
now it seems like they are pretty peeved about it we'll see where it actually shakes out because
Airbnb has to keep both sides of the marketplace happy that is all the time we have thanks for
starting your morning with us and have a wonderful Thursday to share your thoughts
on the episode or anything else send an email to
[email protected] or DM us on
Instagram at MB Daily Show 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 isn't here, too sore from Pilates
And our show is a production of Morning Brew
Great show today, Neil, let's run it back tomorrow
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