Marketers, say you invest in something that seems incredible like millions of views, but then don't see any revenue that's not going to make your CFO happy. Instead invest in LinkedIn ads, they generate the highest row ads of all major ad networks. Spend $250 on your first campaign on LinkedIn ads and get a $250 credit. Just go to LinkedIn.com/MBD, that's LinkedIn.com/MBD, terms and conditions apply. Good morning, Bird daily show, I'm Neil Freiman, and I'm Toby Howell. Today, Nvidia is reeling after its CEO admitted to an affair with a Chinese spy. Then, RIP to the Cybertruck, there are more memes about you than actual cars sold. It's Monday, November 9th, let's ride. Good morning and happy Monday. The stock market is coming off a pretty brutal week, but there's one company that did not crumble. Krispy Kreme. After reporting its turnaround is gaining steam, the Donut chain popped 31% in a single day on Thursday. Krispy Kreme's quest for global domination continues a pace. It opened 98 new shops around the world so far this year, all franchises, and has cut its capital expenditures by almost 65%. At least for now, Donut's one ozemic zero. I do remember scrolling around the stock market on Thursday when everything was going to haywire. We were just looking for any oasis of green, and we found it in Krispy Kreme. It's outperforming Nvidia over the past year. If you think about what industry is the most opposite to AI chips, it probably is a fried dough, but it's not just Krispy Kreme. Over the past six months, we've seen Cheesecake Factory go up, 75% wingstop go up, 28% and Krispy Kreme up now, 24% meanwhile Nvidia is down 15%. So food is bringing better returns than chips. Hey. Thank you, Neil. And now we're from our sponsor Runway. Neil, you know what's better than creative that performs well? World peace. No. Multiple pieces of creative that perform well. And with Runway, the company helping people bring their biggest creative ideas to life, you can get multiple variants from your top performing ads. Runway ads makes new creative from scratch, or variants from your best ads, publishes the ones you approved to meta, Tik Tok and Google, and tells you which ones work so you know what to ship next. Take and automate everything from ad creation to buying. So whether you're solo or part of a team, you can produce content that's true to your brand. Sign up for free at runway.com/morningbrew and get 25% off paid plans with the code Morning Brew. Okay, what if I told you that 2026 would bring us another cold-play style of fair scandal, but with the most enormous consequences you can imagine. Like technological supremacy in the age of AI, yesterday Nvidia dropped in absolute bombshell. It said it was opening investigation into its CEO and co-founder, Jensen Huang. After Huang admitted, he had an extra marital affair with a woman who US intelligence has deemed to be a Chinese spy. So just to put a point on it, one of the most powerful and richest people on the planet who controls the technology, many consider the key to the next era of global domination, an ally of the American president was having a fling with a Chinese secret agent. And a letter to the company, Huang admitted to his infidelity, writing, "I was unfaithful to my wife, my actions hurt her and our children. There's no excuse for what I did. I am deeply sorry." Nvidia's board wrote, "No reason to believe that either national security or Nvidia secrets were compromised, but added the board's inquiry will examine all available information." There are a ton of things to unpack here, but let's start with this. Who was this woman, this spy, who targeted Jensen Huang? Her name is Alice Huang, no relation to Jensen, and she's an executive at a company called Megaspeed based in Singapore, US intelligence knows Megaspeed well. It has a reputation for buying Nvidia chips and smuggling them to Chinese AI companies that aren't allowed to buy them under US export controls. It's become a huge customer of Nvidia, scooping up more than $4.8 billion worth of its chips in total, and now we learn that one of its top brass has been sleeping with Nvidia's CEO, the guy at the center of everything, to try to influence him to loosen US restrictions so China can get its hands on Nvidia's best chips. Toby, this company, the second most valuable in the world, is in crisis mode. Yeah, Jensen Huang has always been in favor of giving chips to China, essentially. He's argued that restricting Nvidia in China actually undermines America's tech advantage, and that argument has merit on its own. There are distinct camps that say, yes, we should allow China to have these chips so we can assert our technological dominance there. But the fact that now you're canoeing with the Chinese intelligence operative, that's going to make that argument much more toxic in Washington where it needs to be received. There are just so many question marks around this story, too. Apparently, this memo was circulating almost a year ago. If intelligence agencies knew she was a spy last spring, why didn't they really do anything about it? Why is mega speeds still listed as a partner on Nvidia's website? Why is Nvidia leading this investigation into itself and not the government? These are all questions that are floating around the story as it develops over the past couple of days. Right. Huge questions for Nvidia, but even maybe bigger, more consequential questions for the US government, as you mentioned, the top agencies knew about this for at least a year. Marco Ruby, the Secretary of State in March in the spring, circulated a memo to everyone who was important in the US government saying, we kind of know that Jensen Huang is having an affair with a Chinese spy, yet these chip sales continued, and it also exposes this dark constellation of shell companies set up by China to sell Nvidia's not best chips, but second best chips that are approved conditionally to China. So, we're learning that China basically is still as access to Nvidia's chips, even though there is this export band, mega speed, is just one of a number of companies that the New York Times has exposed as basically being nothing. They went through a bunch of these customers of Nvidia in Southeast Asia, literally went to their offices in Singapore, and there's just nothing there. They asked people around the office saying, hey, have you heard of this company? Have you heard of this company called MAGNFRA, or there are a bunch of them, and people were like, no, I literally have no idea what you're talking about. What they are are Chinese shell companies set up by the Chinese government to buy Nvidia chips, ship them to Southeast Asia, and then rent them out to Chinese companies. So this is, we're learning a lot about how China has been circumventing these export bands to build its AI industry. And that is why the tone from Washington is very confusing, because it's been pretty supportive so far, especially from President Trump, who is a friend of Jensen. He is, he defended Jensen's character. He says, I just know he's a fine person, but you never know what's going on. He's an honorable guy. He kind of downplayed the affair, saying he dealt with somebody, but you know, so does everybody else, which maybe just says more about our country in general. He says on whether Jensen's remain in video CO, I think so for, oh, yes, sure. And then whether he'd bring Jensen to his upcoming trip to China, he said, I would certainly take him. Clearly, President Trump is standing behind Jensen Huang, at least for now, at least in this quick interview he did before jumping on Air Force one, but just a little bit of a confusing position for the government to take as apparently he's been, you know, talking with a Chinese operative. So this is the talking with. Yeah. That's all I call it too. This is, so there's a ton of national security implications, but there's also a ton of business and stock market implications. I mean, many CEOs at the top level of corporate America, CEOs for Boeing, CEOs for McDonald's have been booted over, over not disclosing extramarital affairs they had with, not necessarily their customers, which is, which happened here, but also people within their own company. So you can expect a barrage of shareholder lawsuits focusing on one key thing. And that is there was reporting about potentially Jensen Huang having this affair going back months. And he was asked about it. It was like, what's your relationship with Alice Huang? And he repeatedly and the company have repeatedly said it was a normal business relationship. And clearly now we know, at least Jensen was lying about that, but was in video lying about that. And you can expect a ton of litigation from shareholder saying you did not disclose materially important material that could affect this stock price. We're already seeing Nvidia stock price down 5% and just to put a point in it. This is the second biggest company in the world. This is the sun with which the galaxy, I don't know, solar system. That's the best metaphor of AI revolved right? This is the central banker of AI. If Nvidia falls so many other companies fall, we'll see whether Jensen still has a job in the next few months. Moving on, the Tesla Cybertruck is dead in no amount of plugging it into a super fast charger. We'll bring it back. After just three years on the market, Tesla will stop producing the Cybertruck at its Texas Gigafactory by mid-2027. Elon Musk said the move is meant to make room for the company's autonomous cyber cab, but maybe more critical to the decision is the fact that no one was really buying the hulking slab of metal on wheels. Once Tesla's most hyped vehicle, one that Elon said would kick the most amount of ass as possible, it turned it into a commercial flop hitting just 10% of its sales goals. The factory Tesla set up to produce the Cybertruck was supposed to eventually crank out 250,000 vehicles per year, but just over 70,000 have been sold in total so far. Considering the company spent around $2 billion developing and producing the car, that's not the ROI it was hoping for. It's hard to pinpoint the exact reason the Cybertruck failed because there were so many. Elon sort of
skipped market research saying customer research, we just made a car we thought was awesome and looks super weird. His foray into politics too, soured people on the car, and drivers frequently reported being flipped off as they rolled around in sconce in its stainless steel cocoon. They'll all never forget the Cybertruck debut when Elon threw a metal ball at the window to show off its impregnable durability and promptly shattered the whole thing on stage. Feels like that was the defining metaphor for this truck, lots of hype, lots of showmanship, but ultimately a big failure. - I mean, this is a classic case, probably the most classic case of Elon Musk over promising and under delivering it, under delivering. He called it Tesla's best product ever, but ultimately they just sold over one quarter of their initial sales goal. And then when you dig even deeper into the numbers, it find out that the sales numbers were a bit inflated because almost one of every five Cybertrucks that was registered, he's storing Q4 of 2025, went to another Elon Musk company. So like most of those went to SpaceX. So he was basically just selling 20% of all Cybertrucks. He was just selling to himself, which just shows to show you how big of a flop this car was. - The crazy part is, is I do remember the hype. Remember for years, like the Cybertruck was going to be this unbelievable thing. There were one million reservations put down, get to put a hundred dollars out. I remember my dad was like, when this came out, he's like, sure I'll reserve a Cybertruck 'cause it was a hundred bucks. The fact that it converted it into just over 70,000 sales, what was the big disconnect there? Why did that hype not actually translate? And the reason was is because the classic over promise under delivered thing, he said that the price was going to be under $40,000. The range would be over 500 miles. At one point it was rumored to be a vehicle that could go on land and water. And yet what actually happened was, it was way above the $40,000 entry price. Most were close to $100,000. The 500 mile range never actually came to fruition. And it just wasn't what was initially expected by customers. So maybe you can read into, did people actually want a truck that looked like this? But more than that, it's just like, they just want to be, buy something that they were promised and they did not get that out. - Yeah, I also think you can't divorce. Elon Musk's foray into politics that happened when before President Trump got reelected. And as New York Times put it, the Cybertruck became a culture war on wheels. Even more than the other Teslas, the Cybertruck is so in your face, it's so obvious that this is a Tesla thing from Elon Musk. And for many people who disapproved of his foray into politics and the right wing positions he was taking, it just became untenable. It just became so toxic. There was no way you were going to buy a Cybertruck, which is such a loud expression of support of Elon Musk, but also in turn, maga in President Trump's policies. So for that reason, I think with all the technical reasons too, and how expensive it was, but for like half or even more than half of the population, this was just a non-starter because they just disapproved of what Elon Musk had been doing. - The jokes were great though. People called it a dumpster, space age doorstop, a fascist Toblerone bar and a mechanical cockroach. Those were all names lobbied at it, or lobbed at it by critics. All right, it is winners of the weekend time, the segment where we pick two stories that have a better weekend than someone who got to bust out their fun coat for the first time this year. I won the pre-show game of knitting with a mean pearl stitch, so I'm up first. And my winner of the weekend is white collar jobs because AI isn't killing them just yet. The October Jobs report showed a surprise increase in the very category that AI was supposed to be threatening. Professional and business services segment in the economy that includes lawyers, accountants, consultants, and other office workers added 70,000 new roles. The biggest monthly gain in years and the largest increase of any sector. Given the relentless fear that AI is replacing people who eat lunch at their deaths and don't need a mouse for Excel, it was a welcome data point, but one that some economists were slightly skeptical of. Brian Batoon and economists at Boston College said the report could be a, quote, "head fake" caused by the midterm elections. Thanks to all the consultants and temporary workers campaigns had to hire. Still, after a week that saw a blue tsunami followed by an AI bloodbath, it's hard to be upset at the economy adding 165,000 new positions as a whole way more than anyone expected. Now, it's too early to declare that AI isn't actually going to replace our jobs. Tech companies have been shedding roles consistently over the last three years while Microsoft offered byouts to tens of thousands of employees just two weeks ago. But the data is showing that as of now, AI hasn't had the massive effect unemployment people have been warning of. - They don't tell you in those text messages, right? The political candidates, hey, we want your money so we can hire a ton of consultants, I don't know. That would be less effective than already, but zoom out this jobs chart. It's looking really good. The economy has added an average of 137,000 jobs per month over the past three months. That is a pretty good clip. We also saw the jobs reports over the summer get revised upward, which is a nice surprise. And then zooming out to five years, this has been a really hot job market. The unemployment rate has now been below under 5% for about five years. Now we're just short of this one stretch from 1965 to 1970 as the longest stretch in the history of the United States with unemployment rate under 5%. So this job market, while it has been a bit wobbly, especially in the white collar sector professional services, AI jitters, AI concerns, at least for now, those are going poof because for a long time now the job market has been very, very steady. Still low laughs don't necessarily mean the healthiest of jobs market. You need a little layoffs and you need a little hiring, just action in general for really two segments of the population to feel like it is a good job market. New college graduates, for instance, if you have fewer job openings, it makes it really difficult for people to actually enter the workforce and existing employees may be holding on to the positions very tightly because they don't want to enter the job market and look for a new job. And then yeah, if you are an employee looking to switch a job, there's fewer opportunities to do that as well. So just because we are seeing low quits rate and low unemployment, it doesn't necessarily mean that it is the healthiest place for people who are looking for entry level positions or to get out of their current roles. - Yeah, the few warning signs in this particular poor are the low wage growth. For the seventh straight month, hourly wages came in below inflation. I think that speaks directly to the lack of what you call action happening in the stock market. There's just not a lot of turnover. And the way you get a raise is you leave your job and you go get a new one that typically coincides with a pretty hefty raise and just no one's doing that because a lot of things are frozen over. And then you look at long term unemployment. That's also somewhat concerning. The average jobless workers length of unemployment was over 27 weeks in October. That is the highest level since the end of 2021. And then that was during COVID, but if you go past that, that's the highest level since 2016. So if you are unemployed, one of the few people who are unemployed, it's really, really tough to find a job right after you lose that one. The average length is now seven months. All right, we're going to take a quick break and come back with Niels, one of the weekend, right after this. Man, Niels, bonds sure are tricky, huh? You can say that again, not to mention the market is huge rate shift and risk-high in plain sight. That's why having a partner with scale and expertise matters. Luckily, Vanguard can bring both. That's right, Vanguard bonds are institutional quality. Their lineup includes over 80 bond funds. They're actively managed by a 200 person global squad of sector specialists, analysts, and traders. So, advisors out there, if you're looking to give your clients consistent results year-in and year-out, go see the record for yourself at vanguard.com/audio. That's vanguard.com/audio. Disclosure, all investing is subject to risk. Vanguard Marketing Corporation distributor. Quarter zip. Crew neck. Quarter zip. Crew neck. We're not getting anywhere here, but maybe. Just maybe both sweaters make for timeless first-tile pieces that feel special to unwrap and become everyday favorites long after the holidays. That's because both my organic cotton ribbed crew neck and Toby's 100% organic cotton ribbed quarter zip sweater are from Quince. They focus on high quality staples made with premium materials. They help you give luxury quality pieces without the luxury price tag. Give the gift of quality this holiday season. Download the Quince app for app-exclusive offers or head to quince.com/brew. That's quince.com/brew. This Black Friday, I'm looking out for my number one. Your wife? Nope. Me. I got myself advanced lab testing from function. That comes with insights across the whole body. I'm trying to get back in three hour marathon shape. So I want to be sure Casa del Toby is running out 100%. They can provide you access to over 160 lab test members can access each year. This Black Friday and Cyber Monday, the real deal is health. Join function now at functionhealth.com and get your first year of membership for $295. Normally $365. And don't wait, this expires at midnight on Cyber Monday. My winner is underwater real estate. Because in a couple of days, fish will be able to move into the aquatic version of the four seasons. This week, the massive ocean liner SST United States is slated to be sunk in the Gulf of Mexico. Create.
the world's largest artificial reef. The sinking is planned for Thursday, November 12th, about 22 miles southwest off the coast of Destin, Florida. Purposely sinking ships to create fish condos is not a new practice. In fact, when it's sunk in the Gulf, the S.S. United States will join over 500 other artificial reefs in the area. But this one stands apart. One is its sheer size at 990 feet long. The S.S. United States beats out the U.S.S. or a Scani and aircraft carrier sunk off of Pensacola for the top spot. Second, this is the ship with an iconic history. In its heyday, this was the Rolls Royce of the Ocean. Shuttling the world's 1% between Europe and the United States, it carried four U.S. presidents, celebrities like Marilyn Monroe, and crucially, never got a movie made about it. When it sailed, it's made in voyage in 1952. It set the transatlantic speed record for an ocean liner a mark that hasn't been beat since. Now, it'll head to its final resting place at the bottom of the ocean where officials expect it'll welcome a tremendous array of aquatic life and in turn, a whole lot of divers who want to see that. It has been on a journey to make it to the bottom of the ocean. The ship was retired actually in 1969, which was just 17 years after it made that record setting made in voyage. The rise of commercial jets kind of destroyed the industry of transatlantic passenger ships. So after it was retired in 1969, what did we do with it? And it spent a lot of years trying to find its purpose in this world. In the 1970s, it sat unused in Newport and Norfolk. Virginia people tried to turn it into a floating casino or a hospital ship at one point. Then in 1980, another group purchased it for $7 million. They wanted to convert it into floating condominiums for humans, not for fish. And then 1990s, it spent a couple of years in Turkey, then back in 2011, a nonprofit bought it, and they considered transforming it into a waterfront attraction. Finally, by 2024, after a court battle, it was victed from the Philadelphia port. Another kind of buyer got its hands on it. $14 million later, now they have this idea of sinking it. So what a journey, not only when it was actually operating, but what to do with a big hulking ship after it's no longer useful. It was languishing in Philadelphia for 30 years, and that's not the only thing languishing in Philadelphia right now. But when I was living there, you would go along the waterfront and see this thing, it's just like decrepit, almost, and it looked amazing and huge, and now they're, I guess, not refurbishing it. They're D-D-Furbishing it. But this is a pretty big business because when you have a artificial reef, you can attract a lot of divers to go see the fish that go there and also fishermen as well. And that's what the buyer was. The buyer is Ocalusa County, which is the home of Destin Fort Wolland Beach. They bought it for $1 million, but that was actually pennies for what the total cost of creating artificial reef is, because think about all of the contaminants that are on this ship that you can't put in the ocean. People might be wondering, wait, we're sinking an ocean liner to have fish and all, and this aquatic life around, but isn't this thing like, so toxic, so they spend $1 million on the actual ship, and then $13 million to tow it, and then get rid of all the contaminants, they remove those two funnels, which are going to be used for a land-based museum. Look at these fun, look at pictures of this, 'cause it's pretty cool, those funnels are some of the biggest in ocean maritime history, so a lot of remediation work they need to do before, no one actually sees it again unless you're a scuba diver. - It's pretty deep, too. They're deploying it 22 nautical miles southwest of Destin, but at a depth of approximately 55 meters, yes, the upper decks will be a little closer to the surface, some are between 59 feet below the surface, but that's a tough die for a snorkeler, so it really is gonna be for scuba divers, yeah, I mean. - It's 180 feet, I did one scuba diving thing in my life, I'll never do it again, I went down 40 feet. - Yeah. - It's scary. - It's so scary. So I can't, I mean, a lot of people listen to this start like, well, you're a whist, like I could go down further than that, but it must be just amazing to see, and final piece of trivia, so this is the SS United States, and then I'm thinking, okay, but there's also USS, like what's the difference? Do you know what SS stands for? - We literally were talking about this, and I never did look it up. I'm gonna say, super ship. - Okay, steamship, oh, it's got one word. So SS is steamship, and it indicates a civilian merchant or passenger pre-vex for those kind of vessels. So this is a commercial or passenger ship. USS stands for United States Ship, and it designates a, you know, a warship that's an active service with the Navy. - Can you have a USS, a United States steamship? - I think so. - Can we just keep going? - This is not my area of expertise, so I'm just gonna have to look it up and get back to you, Toby. All right, it's my day, so here's what you need to know to stay ahead in the week ahead. UFC boss Dana White will meet with his friend, President Trump in Washington today, not to discuss an upcoming bout, but to potentially chat about white, becoming White House press secretary. Kinda on Saturday, Trump, who's on the hunt for a new press secretary, posted on social media that he offered the role to quote, the great Dana White, a violent fighter and warrior, and people kinda took this seriously because of Trump, you never really know, when asked whether he would take the role, white replied, yeah, I got a lot of jobs already. Trump later clarified he was joking about making White press secretary and this meeting had already been on the books about something else. - There was also some speculation and memes that Trump may have been presented the wrong Dana White. There is a woman by the same name who formerly worked as a Pentagon spokesperson during Trump's first term. The rumor is someone suggested her and Trump thought they met. You have seen precedent, Dana White, and ran with it. It became a big joke that the other Dana, the woman, wrote on LinkedIn to everyone texting me, "Congratulations, thank you, but you have the wrong Dana White." In the meantime, the press secretary role is still empty after Katie Zachary, I quit, less than five days under the job. - Do you think Dana White would make a good press secretary? - No, the man's, he's not very nuanced. It's a pretty brash guy and I don't know if we need more, brash guys and being the mouthpiece of the government. - You would be combative. - Yes. - Next up, let's turn to a group of folks who definitely had the Sunday Scaries yesterday Wall Street investors. They are logging on to their Bloomberg terminals this morning, shell shocked after last week's post midterm tech sell-off or raise $3.7 trillion in US market value in a single day. And that was before NVIDIA CEO was found canoodling with a Chinese spy talking with. This week, the market will have to navigate more tech earnings, including CoreWeave, the beaten down poster child of AI jitters, plus an inflation report tomorrow that could solidify a Fed interest rate hike next month. Toby, I would advise not checking your portfolio. - History says though that we are in a midst of a buying opportunity. Not only did we get a little bounce back on Friday already, but there have been 56 one-day declines of at least 4% since 1952. This data comes from the KBC letter. Following those drops, the SP500 has gained 1% on average the next week, beating out its typical weekly return of 0.2% across all periods. And if you zoom out further, it's gained an average of 6.7% over the following three months. That beats the historical average of 2.2. So if we're going based on history, the dip buyers come in and we are in for a rebound. - Not financial advice, not advice. And finally, a few other dates to know this week. Wednesday, November 11th is Veterans Day honoring all who have served in the US Armed Forces. Our office is closed that day, but still to tune in for a special interview episode. And then two days later, it's Friday the 13th, the third and final Friday, the 13th of the year. - Okay, I did not know this. All years have at least one Friday the 13th, but there cannot be more than three Friday the 13th on any given calendar year. It really is just a weird quirk. The fact that we have months that have 28 days, 30 days, and 31 days, that shifts. Further to be at Friday the 13th, you need the month to start on the Sunday. That's just like the baseline and why it happens. And that cycle eventually gets you one Friday the 13th, but it never gets you more than three. I didn't actually look into the leap year of this all. Maybe someone can correct me there, but there's always going to be at least one. There's never going to be more than three. - I think that's good. Not too many. - Yeah, I know exactly. - That's just the right amount. All right, that is all the time we have. Thanks for starting your morning with us and have a wonderful start to your week to share your thoughts on the episode or anything else. Send an email to
[email protected] or DM us on Instagram @mbdailyshow. Let's roll the credits. Emily Milliron is our supervising producer. Raymond Lou is our senior producer. Our producer is Olivia Graham. And our associate producer is Olivia Lake, technical direction by Nina Miller. Her and makeup is getting scuba certified and our show is a production of MorningBrew. - Great show today, Neil. Let's run it back tomorrow. (upbeat music)
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