OpenAI’s First Device is a Speaker? & Permanent Daylight Saving Passes The House

**SPEAKER_1** (0:01)
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.

**Neal Freyman** (0:26)
Good Morning Brew Daily Show. I'm Neal Freyman.

**Toby Howell** (0:29)
And I'm Toby Howell.

**Neal Freyman** (0:30)
Today, is the US done with switching our clocks?

**Toby Howell** (0:33)
Then OpenAI wants to put a smart speaker in your house. It's Thursday, July 16th. Let's ride.

**Neal Freyman** (0:50)
It is so great to be back with you all, and huge thanks to Ray, Kayla, and Kyle for filling in with pure class. Jeez, Toby, we've been in the UK for too long. Didn't know we were returning to Arrakis, but that appears to be the case. Three years after wildfire smoke blanketed the Northeast in an apocalyptic orange haze, stay javu all over again, as the Midwest, Northeast, and Mid-Atlantic are suffering through smoky conditions expected to last throughout the week. The culprits this time, more than a dozen fires in Western Ontario and Northern Minnesota are sending smoke eastward and could cause around 100 million people in the US to face unhealthy air quality. While officials suggest you take precautions, it's not going to be as bad as last time. In 2023, the air quality index reached a record high of 465 in New York City. Yesterday, it ranged between 101 and 150 Still, combined with a brutal heat dome, be careful out there. And if you need tips, ask the Freyman.

**Toby Howell** (1:43)
So I checked this morning the three cities with the worst air quality in the world right now are Detroit, Minneapolis and Toronto, followed by Kinshasa in the DR Congo and Delhi, India. New York is 12th, which is hard to believe because when we flew in yesterday, it literally looked like we were descending into a campfire smoke cloud. It was so hazy. We were also asked to play a soccer game yesterday for Morning Brew FC, walked outside, immediately started coughing and sneezing, just going to the subway. So we put the Ixnaya on that, but everyone stays safe out there, especially if you're in Canada or Minnesota or anywhere affected.

**Neal Freyman** (2:19)
And now a word from our sponsor, Ultra Running. Toby, what size shoe are you?

**Toby Howell** (2:24)
We don't have to get into that. They're definitely not small or anything.

**Neal Freyman** (2:28)
Good to know. And good for our listeners, Ultra actually makes shoes shaped like feet. And the Ultra Fit is designed to give you room for your toes for comfort, balance and strength.

**Toby Howell** (2:37)
So most running shoes are narrow at the toe, but Ultra has more room for your toes to fill, so they can spread out and your feet can stay in a natural position.

**Neal Freyman** (2:45)
No matter how petite your feet. And that's not mean, just rhymes.

**Toby Howell** (2:49)
Sure. Use promo code and morningbrew10 for 10% off your first pair of Ultra running shoes at ultrarunning.com/morningbrew.
That's a-l-t-r-a running.com/morningbrew.
IBM stands for International Business Machines, but it might as well stand for it is bad man. After the performance it had in the market this week, it started on Tuesday when the company pre-announced disappointing Q2 results eight days before its normal earnings, an unusual move that ignited fears about AI spending cannibalizing its bread and butter software sales. The market reacted swiftly with shares falling 25%, their worst one day slide since 1968 CEO Arvind Krishna said, We did not anticipate the magnitude of the CapEx reprioritization. Basically, IBM customers shifted their budgets towards AI servers, storage and memory chips, and away from software consulting in the boring mainframe systems that IBM specializes in. It wasn't just IBM either. Software stocks in general have been getting dumped all week, including Salesforce, ServiceNow and Adobe, with consulting firms like Accenture and Cognizant getting caught up in the crossfire too. It's giving shades of the so-called SaaSpocalypse from earlier this year, when every anthropic feature drop caused the market to freak out that AI would eventually replace specialized software. Neal, this is a different version of the SaaSpocalypse that has to do with budget. Companies simply don't have enough money for everything, and when push comes to shove, CFOs are saying, see ya to IBM software and hello to AI.

**Neal Freyman** (4:20)
IBM isn't building something that goes into a data center, and that's the main problem. If you're any company that is building software or anything that just doesn't go into a data center, whether it's a chip or a server, then you are going to be vulnerable, as IBM's 25% plunge shows. And compounding the problem is that the things that are going into data centers, the thing that companies are actually buying right now and prioritizing with their budgets, is getting insanely expensive. Memory, servers, they're all going through the roof, which is benefiting companies like Micron and Dell, but it's not benefiting companies like IBM because its customers, like banks, are a huge customer of IBM. They're looking at their budgets right now and they're saying, okay, well, we want to devote all of this stuff to AI data centers and our AI initiatives. But the problem is these things are getting even more expensive. We want to lock in prices now before they get even pricier, and that's coming at the expense of IBM.