Good morning per daily show. I'm Neil Fryman and I'm Toby Howell today how meta uses data centers to avoid billions in taxes Then Ken Griffin just made the single largest donation to a college in U.S. history. It's Thursday, October 1st Let's ride Thank you so much to everyone who voted for us in the Signal Awards best business podcast category Thanks to you, we vaulted to the lead and hope to never look back Speaking of fan votes fat bear week has wrapped up in the winner with more than 100,000 votes was the enormous backpack Who eat out a victory over bear 910 with a little over 50% of the poll now Toby backpack has a very interesting back story Is their little fat bear nepotism at play there is you can't fault back back for winning He's the son of a former fat bear champion Holly so it runs in his blood His name has a very cute origin story too. He used to climb on his mom's back when he was little as she swam Hence the name backpack a worthy champion another great year I'm standing over my boy chunk though who won the last year at an estimated weight of 1200 pounds got eliminated in the first round of this year I feel like people were just looking for a different narrative and backpack was the one that took up the mantle Now a word from our sponsor Roku ads manager deal a $5,000 reward sounds pretty nice What did she say? I think it depends on what it's a reward for if $5,000 is my reward for eating some weird bug I'm in but if it's for getting a misspelled tattoo I'd probably pass all these specific but the $5,000 I'm talking about is for advertisers right now they can get a $5,000 match on their first spend on Roku ads manager Roku is the top smart TV operating system in the US with 100 ad supported streaming channels, so I'd say that $5,000 is a worthwhile reward to cash in on the offer use code brew 5k at advertising dot Roku dot com slash mbd. That's code brew 5k at advertising dot Roku dot com slash mbd Not since the trade of star safety minka Fitzpatrick has a Pittsburgh to Miami move made this many waves Ken Griffin, the founder of Citadel is donating $3 billion to Carnegie Mellon University to help fund a new expansion campus in the Sunsign state The $3 billion is the single largest gift ever donated to a US University and serves as a further example of how all-in on Miami Griffin is The Florida native founded Citadel the market maker in trading firm in his Harvard dorm room before eventually headquartering the firm in Chicago But in 2022 following covid he moved Citadel's HQ to Miami and is now trying to beef up South Florida's educational infrastructure earmarking $2 billion of the gift to belled out an entirely new satellite campus that will serve about 3,500 students Though the gift is philanthropic in nature Citadel will benefit the firm has recruited heavily from Carnegie Mellon in the past So the new campus acts as a talent pipeline in its backyard Griffin has reason to be optimistic that a university of Carnegie Mellon's level can help spur a transformation for Miami because It's worked for Pittsburgh who has gone from a declining steel town to a major tech hub Thanks to Carnegie Mellon's presence there Neil a big gift and an even bigger bet that Miami can metamorphose size into a high tech and high finance butterfly Yeah despite all of the hype over the past few years Miami still is that reputation as being a place for billionaires second homes and just a transient workforce where there may be people go there when maybe they're a little younger And they leave for other cities because they're just better job opportunities are reminded of the succession line You know, I love you, but you're not serious people with this $2 billion gift and putting Carnegie Mellon in Miami in Winwood, which is this arts district, pretty cool place That you know, can Griffin is trying to create a more sustainable job pipeline with a lot of smart younger grads going to Miami for college and then Working and staying in Miami. He said I believe that all great American cities are anchored by great universities And Carnegie Mellon will bring a great university here to Miami complementary to other universities here in the region There is Miami there. There's FIU but something with the stature of Carnegie Mellon and the ability of Carnegie Mellon To generate startups and generate really smart people in AI and robotics and the industries of the 21st century Thanks. This will be a game changer. A lot of people too drew a parallel back to the founding of Carnegie Mellon Originally by Andrew Carnegie who donated $1 million in 1900 to establish what became CMU in Pittsburgh his vision was this practical institution where Working class people could learn skills that help them improve their lives Back then it was like how do industrialized now we're in you know the AI aid show a lot of the same kind of principles are being applied to more modern technology So that was a nice little parallel there one of the biggest winners of this by the way is Moish Manna He is the guy who sold the land for the winwood campus to Ken Griffin for over $1 billion People within the industry says it probably represents the most extraordinary exit on the land assemblage ever in the commercial real estate industry According to the ex-user hit in Samante who runs a CRE newsletter Manna started assembling those properties back in 2009 and all in paid about $70 million for it now he's selling it for 1.1 billion that is Pretty wild that he kind of foresaw that Miami might become this or maybe he didn't He just thought it was a good deal at the time, but that is quite the the pretty penny You know, if you go to Miami It's basically just Ken Griffin everywhere. He's putting this imprint on this particular city after moving from Chicago a few years ago He's given more than 2.4 billion dollars in donations to South Florida and has slapped his name on literally every Medical or academic building. There's the Kenneth C Griffin Center at a neuroscience institute There's the Kenneth C Griffin gallery at the Perez art museum There's the Kenneth C Griffin cancer research building at the University of Miami There's the Kenneth C Griffin urban trail where you can walk or bike on this particular trail And now there's going to be this Carnegie Mellon campus He grew up in Boca lived in went to Harvard lived in Chicago And now he's absolutely turning Miami into his own image There's a little bit of a arms race happening within Florida's education system though Because Steven Ross who's a developer and also the owner of the Miami dolphins He recruited Vanderbilt University to West Palm Beach So now you have Carnegie Mellon and Vanderbilt within you know a couple hundred miles of each other It's just a completely different sort of educational system we're in right now where these satellite campuses are becoming Vible ways for cities to leave their mark but also for universities to spread their brand far and wide All the way down to South Florida And we should mention that this is not a conventional University or college the Carnegie Mellon campus. There is going to be four Challenge areas that they focus on including things like climbing and robotics and things like that It's not going to be oh, I'm going to go get a regular degree here This is the University of the future. We saw it and recent Horowitz The VC firm do this two-year program that will get people prepped for the AI future It looks like something is you know something that Can Griffin is doing here is not particularly that radical But it's in that direction of saying you're going to go here to learn technical skills to get a job in this AI world Going forward. Okay moving on I'm going to need the lawyers at meta to start doing my taxes A new report from the New York Times reveals that Mark Zuckerberg's company is saving billions of dollars on its tax bill per year By questionably claiming its AI data centers are one a giant experiment Potentially doomed to fail the move has reportedly caused some anxiety within meta's own finance department Because there's a decent chance the IRS decides to crack down Essentially, there's this tax credit established early in the Reagan era called the research and experimentation tax credit Designed to encourage companies to take bold technological risks that might not pan out About two years ago according to the Times meta started claiming the chips that power its data centers under the research credit Implying that these massive structures were just one big test despite them being proven reliable projects The idea is to ask forgiveness rather than permission or in other words move fast and break things And the strategy has been incredibly lucrative Because of the tax credit meta saved $3.9 billion dollars off its bill in 2025 and $2 billion dollars the year before that Meta's response everything it's doing is above board Spokesman Andy Stone said over the last five years meta invested $200 billion into R&D $57 billion the last year alone advancing frontier research building new technology and supporting American jobs Like other companies that invest at this scale We use the tax incentives congress established decades ago to encourage this type of domestic investment The question is how long can meta run this scheme until the feds start knocking There's essentially two narratives that meta has to give to two separate groups about its AI Build out two investors they have to say oh AI is this sure bet it's absolutely going to Have returned for us AI is a working. It's in the core of everything we do And then for tax purposes they have to say whoa these are really experimental projects We don't know if it's going to pan out. We are doing like unresolved technical architecture here We need to expense these as a research tax credit So it's very interesting to see the bifurcation of what they are doing here They're not the only company to Claim this tax credit. Let's be clear on that apple amazon alpha bit microsoft Every one of those companies reports more than one billion dollars annually in its research credits But what they are doing is applying it a little bit further than anyone has before specifically
simply to the hardware going into these data centers because typically this tax is applied to the researchers and their salaries because they want to incentivize, you know, things that may not be commercially viable but the hardware portion is where it gets a little bit of a gray area. - But you can see why Meta's lawyers came up with this because data centers are extremely expensive. They're spending hundreds of billions of dollars every year and if you can shave a couple of billy off of that, you know, it helps. Meanwhile, Meta's stock just wrapped up its best month since 2022. This company's on an absolute tear right now. It jumped 27% from the first of September to the NPE investors are super hype about mues and the fact that it might actually return, see a return on all these hundreds of billions of dollars of AI investments that is taking place. So Meta, I guess we're not doing stock of the week till tomorrow but we can, you know, maybe give it an honorary stock of the week for having a 27% jump over the course of September. - Let's move on. Next time you ask your couple friend how they met and they start being a little cagey, it might not be because they met on the apps but because the government set them up. Singapore just launched first date, a government built dating platform for public sector workers, age 21 to 35. The reason the government is stepping in to play cupid is no one is having kids. Fewer than 30,000 babies were born last year while Singapore's fertility rate is the second lowest in the world at just 0.87 children per woman. While the government has tried its fair share of tax credits to incentivize building a family, it's moving upstream in the baby making funnel and helping them find someone to date. First date works differently from your typical dating apps. Users verify themselves through a digital ID system, answer questions about their interests and values and then receive just one match at a time. Behind that match is the Gale Shapley Stable Marriage Algorithm, the same framework used to match medical residents with hospitals, which won a 2012 Nobel Prize in Economics. The goal is to create stable pairings, avoiding a scenario where two people would both rather ditch their assigned partners for each other. Critics say that the whole thing feels a little dystopian, the government knows your identity, knows your single and is now telling you who you should date, but proponents prefer the one match at a time model since it saves them from the swipe fatigue plaguing traditional dating apps. It's Singapore on to something here. - They better be because Singapore, like other East Asian countries, this is one of the fastest aging countries in the world. They just recorded a record low fertility rate of 0.87 children per woman last year. That's very close to being the world's lowest. The world's lowest is South Korea at 0.8. Meanwhile, just to provide some context there. Demographers say that a threshold of 2.1 is needed to maintain a stable population. So this population is not stable trying everything. Like all these other countries just throwing something at the wall, hoping it sticks last month the Prime Minister on a build, a new measure that would offer parents more than $55,000 per child until the age of 17 still looks like Singapore's odds way to becoming. What is described as a super age society, which is where more than 21% of the population is age 65 or older. So you can see their desperation here. They hold a hackathon to try to find a particular app that might work and they landed on this one. But going maybe back to first principles, which is this stable marriage algorithm that won the Nobel Prize, seeing if they can rely on some math to boost their population. - Yeah, they've seen this framework worked in other parts of the world. I mentioned medical residency matching. That's a big part of trying to get people where they want to be. But also public school emissions use of this. Dating apps have used this in the past as well. Really, the goal here is to have no one eyeing another match saying like, oh, I wish I was with that person. You want both people to be satisfied or at least they don't prefer another person over the person that they are with, which maybe is a vocative of like what dating is in general in 2025. You just want to be satisfied. You don't want to be longing for someone else. But people are having pretty mixed reactions to it because some are very happy because they love the verification piece because everyone verified is a public servant. They believe the likelihood of being scammed is lower. So that is someone who's probably been through the ringer and said, I'm just happy to have verified people that I know are real. But then on the other side of it too, people pointed out the 21 to 35 age cutoff showing that this is really about spurring people to have children not necessarily about helping people find love. So criticism, proponents, you see it before. Singapore has thrown a lot at this problem in years past. If you go back 40 years ago, they created something called the social development unit to organize social events where single university graduates could meet. So this is not the first time they've taken a stab at trying to jack up the birth rate because, as you mentioned, it's an existential problem for this country. We're gonna take a quick break and come back with Niels numbers right after this. Niels, do you know where AI actually creates an advantage when it comes to deals? Finding coupons? Wrong kind of deals. Data site and FD longitude recently heard from 1,000 deal makers to understand how AI changes the way deal makers do deals. More than half of respondents say human-only decision-making is no longer enough for complex deals. The real competitive edge is knowing where AI can have the biggest impact and where human judgements still makes the difference. Go to datacite.com/brew for a full breakdown of the results. That's datacite.com/brew. Did you feel a shift? Yes, I moved everything three centimeters to the left. It's very exciting. No, the shift in how business runs with AI. Rubric helps make sure that shift actually works in your favor instead of against you. With Rubric, you don't have to choose between moving fast and staying secure thanks to their agentic cyber resilience. One, the platform covering a company's data, its identities, and its AI systems. See what it looks like when security and AI operations work together at rubric.com/mb. That's rubric.com/mb. Toby, where would you go with $1,500 to spend on airfare? First class, roundfib to my favorite place on Earth, Bloomington, Minnesota, baby. Well, with Mastercard, Black Card, you can earn up to 75,000 bonus points after qualifying account activity with their limited time offer. That's worth up to $1,500 when redeemed toward airfare with no blackout dates or seat restrictions. They're going to have to drag me out of the mall of America. Visit luxurycard.com/brew for more details. That's luxurycard.com/brew. Offer and soon, Terms and Conditions apply. Welcome to Niels Numbers, the segment where I share three stats in the week's news that will start your October off on a super nerdy note. For my first number, AI is driving up health care spending and there are receipts to prove it. Last week, the insurer group Blue Cross Blue Shield Association said that hospitals deploying AI had led to nearly $1 billion in additional expenses from 2023 to 2025. And the most damning part of it is patients weren't necessarily receiving more treatment as a result of these costs. The health care industry has embraced artificial intelligence in the hopes it can be transformative for the sector, lowering the time spent on paperwork, streamlining payments, and in general, lightening the load on clinicians. But what makes AI so good at that busy work also means it's really, really good at finding more things to bill for. Basically, you can scan a patient's records and spot additional secondary diagnoses that qualify for higher payments, no matter if a patient will be treated for that. Insurers are ticked off about it, laying the blame at hospitals and the perverse incentives that drive billing. The senior VP at Blue Cross said, the disconnect between diagnoses and treatments suggests that AI is identifying more billable conditions, not sicker patients. While the technology's boosters say AI will ultimately drive prices down in healthcare, it looks to be spurring inflation, at least for now, at a conference last week, CMS administrator Dr. Mehmet Ah said, short term, AI is going to be inflationary because it's going to turbocharge the ability of the current billing systems to work more effectively. Toby, when it comes to healthcare billing, AI is a mess. The big fear here is that you end up with bots fighting bots. Consider this scenario, a provider AI finds reasons to increase a claim. And then the insurer, AI searches for reasons to challenge it. Then the provider, AI, generates an appeal, the insurer, AI generates a system review of the appeal. And then you just go around in circles forever and forever. When you lower the cost, both the actual cost and the time cost of fighting over these individual claims, you might just have bots fighting bots forever, spiraling into never ending claim processes. The other side though, is AI could lower cost. There is an optimistic scenario here. Harvard Health Economist David Cutler argues that AI could actually eliminate a lot of the human administrative work. That's kind of the grand promise of AI because one of healthcare's major expenses is just administration. So there is maybe a brighter path that this could go down, but right now it looks like it's going down the inflationary path. My next number is four Gs, which is a couple Gs too many while riding one of the world's most extreme roller coasters. This week, Six Flags Magic Mountain retired its X2 roller coaster that had come under legal assault for links to catastrophic brain injuries. The coaster, a premier attraction of this park outside of Los Angeles, opened in 2002 as X and got a rebrand as X2 in 2008. it is well was one of the three roller coasters in the world that employs a
so-called fourth dimension, meaning it seats rotate 360 degrees independently of the direction of the trains creating a very disorienting sensation, combined with track speeds of up to 80 miles per hour, riders pulled four G's, which is greater than the gravitational force astronauts felt when lifting off on the space shuttle. For more than a decade, X2 has faced allegations that it was unsafe, but scrutiny ramped up the summer when CNN published an investigation, documenting more than a dozen hospitalizations and serious injuries associated with the roller coaster, including at least two deaths. Just last week, more than 100 new victims came forward with fresh allegations. Six flags maintained that X2 was safe claiming it passed industry standard acceleration tests in three different years, but ultimately they decided to shut it down with the company president saying when we see guest confidence affected, we take it seriously. This ride sounds terrifying. In addition to this fourth-dimensional design, it also includes two raving turns, and I had to look this up on Coast Repedia. It is a specialized half-inversion element that resembles half of a vertical loop followed by a very steep drop right after it that Coast Repedia says leaves riders inverted or transitions them between positions very quickly. So, in addition to the fact that you're spinning all around, it does have two of these elements that are thrilling, but also potentially dangerous, hence why we saw this investigation uncovering all of these brain injuries over the last couple of years. And for my final number, the snow forecast out west is looking better this winter, but the financial forecast for Vale keeps getting worse. In its recent earnings report, the mountain resort giant said it sold 12% fewer epic passes through September 18th compared to last year, and it doesn't expect to make up the shortfall before the ski season starts. For the fiscal year, skier visits were down 13.4%, and profits were chopped nearly in half. The epic fail points to another rough winter for Vale, which in the past couple of years have struggled with bad press, labor unrest, and a tapped out skiing consumer. But you can't discount the impact of the snow, or should I say, lack of it. No doubt you heard from your ski friends that Colorado had its worst snowpack year on record during the 2025-2026 season. From the looks of it, memories of half-close mountains and dirtline runs are still lingering in people's minds for the upcoming winter. To turn around this leaking ship, Vale is trying a few different ideas. One is courting the youth by making epic passes 20% cheaper for skiers and snow borders ages 13 to 30. Another is diversifying revenue away from lift tickets, investing more in lessons geared dining in a hospitality. Epic has spent a lot of years pushing customers towards epic, and it actually helped them in this down snow season because they had "meaningful stability" from their executive team talking. Because the snow was terrible, they already collected a lot of their revenue because you pay up front for these epic passes. So it helped them get through this year, but then the flip side is that now after experiencing that terrible season, a lot of these customers don't want to get burned again, so they don't want to invest in the epic pass. The silver lining, if you are Vale, is that if the snow comes out to be awesome, which it looks like it could be because a super El Nino is forming, people just could just show up and buy daily lift tickets, which Epic are, sorry, Vale also makes money off of, so it's kind of a win-win scenario for them. Maybe lose-lose if you are the consumer who are going to have to buy, you know, price your lift tickets instead of just taking the epic pass. All right, let's put it to the finish with some final headlines. An unbelievable story of bravery in the skies when passengers and crew on a flight from Dubai to Tel Aviv subdued a pilot who allegedly was intent on taking down the plane and its 174 passengers. The flight, a fly Dubai Boeing 737, was headed to Israel on Wednesday when all of a sudden it took a nose dive, plummeting more than 16,000 feet in under a minute, reaching nearly the speed of sound. According to Israeli Prime Minister Benjamin Netanyahu, one pilot had stabbed the other pilot in the cockpit in an attempt to hijack and crash the plane. The pilot who was injured managed to unlock the cockpit door. Some passengers and crew rushed in to subdued the attacker and took the plane out of its nose dive before it was landed safely in Saudi Arabia by other pilots who had been on the aircraft. The injured pilot who was identified as Indian citizen's sweet match char, and the passengers who neutralized the attacker are being held as heroes who prevented a mass casualty event. Netanyahu said it was too early to know the precise motive or who was ultimately behind the attempted hijacking. Maybe the craziest part is that while the passengers were wrestling with the attacker, a guy who is a plumber by trade jumped behind the controls and in his words, started pulling back on the handle the way he had seen in television shows, then eventually other crew members took over. But pretty crazy that literally he's like, I think I've seen this in the movies and you just pull back on the yoke and it ended up arresting the plane from its steep nose dive and you know, kind of saving everyone. Finally, Mike Tomlin is a legendary head coach in the NFL who spent 19 years with the Pittsburgh Steelers and shockingly never recorded a single losing season. But that might be the second most interesting fact about him. Tomlin took to YouTube yesterday to show off a city that he's built in Minecraft and nearly 20 minute deep dive where he showed off his high rise building and urban planning acumen in a project that has taken him 12 years to construct. Tomlin said that he likes to build stuff and also appreciated that the game let him spend time with his kids, but admitted their participation became less and less over the years while his participation at times increased the amount of detail Tomlin put into this thing was staggering. He put the appropriate number of restrooms inside any public building and was view conscious when building high rises to make sure the high end departments had good sight lines just goes to show you how you never really know these people you cheer for or against on TV. How many other hidden Minecraft cities are out there just waiting to be broken down in a 20 minute video. Extremely awesome and just the duck juxtaposition of seeing this guy who we saw prowl the sidelines like with this scowl and he's in these huge and all you think all he thinks about is football and it no turns out he's a huge urban planning nerd and had bonded with his kids over this game and I think that was really the most wholesome part is I saw a lot of parents say, yeah, my kid is so into Minecraft like I completely see what Mike Tomlin is doing here with how he how he cultivated this relationship with his kids through Minecraft. Yeah, the same thing is happening in my household. So I'm sure there were watch parties all over the country with parents and their kids watching Mike Tomlin and and I think it blew everyone away the level of detail in his level of thoughtfulness and putting this, you know, thought into his Minecraft city. His former players though, Lavian Bell was running back for the Steelers quote, tweeting goes, we were trying to win Super Bowls and you were building a Minecraft city and obviously I got to have a side quest. Yeah, the NFL hive mind wanted to dig into how his performance was pre Minecraft city and post Minecraft city and it's kind of damning evidence because before Minecraft there were seven seasons that Tomlin coached the Steelers one Superbowl win two Superbowl trips in a five and three overall record in the playoffs. Once Minecraft came out and he started building the city, which was 12 seasons, zero Superbowl wins, zero Superbowl trips and just three playoff wins, three and nine total record. So maybe it was through the detriment of the Oregon State. I mean, I'm just all right. He lost more football games, but he won our hearts. True. There you go. And now I'm looking forward to the second episode. Exactly. Okay, that is all the time we have. Thanks so much 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 MBDailyShow. Let's roll the credits. Emily Milliron is our supervising producer. Raymond Lu is our senior producer. Our producer is Olivia Graham and our associate producer is Olivia Lake Technical Direction by Nina Miller. Her makeup is just going to ski for a month this year who needs the West. Devon Emory is our president and our shows a production of Morning Brew. Great, Saturday nail. Let's run it back tomorrow.
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