Sorry Apple, Microsoft is Now Most Valuable US Co. & Hertz is Out on EVs

Global conflicts and geopolitical tensions can have significant impacts on the economy, specifically affecting industries like shipping and causing disruptions to global supply chains. This was highlighted by the recent US and UK air strikes on Houthi targets in Yemen, which resulted in increased tensions in the Middle East and a jump in oil prices. Meanwhile, in the tech world, Apple and Microsoft continued their rivalry, with Microsoft briefly surpassing Apple as the world's biggest company due to its investments in generative AI and growth in its cloud division. Apple, on the other hand, has faced tepid demand for its flagship products and has been hesitant to embrace AI technology. These events underscore the importance of companies and governments being prepared for unexpected disruptions and the potential consequences of geopolitical tensions.

According to the discussion, Microsoft is currently outpacing Apple in terms of growth and investor sentiment. Microsoft is projected to grow its revenue by 16% in the latest quarter, while Apple is only expected to grow by less than 1%. This significant difference in growth projections has led to a shift in investor sentiment, with more people favoring Microsoft. Additionally, Microsoft's market value has grown faster than Apple's, with Microsoft shares up 63% over the past year compared to Apple's 39% increase. Despite their history of competition and collaboration, both companies now seem more focused on partnerships than competition. Microsoft even played a crucial role in saving Apple from bankruptcy in 1997 by investing $150 million in the company. Looking ahead, Apple is set to release its Vision Pro Mixed Reality headset, which is being seen as a potential game-changer for the tech industry. Overall, the discussion highlights the dynamic relationship between these two tech giants and their ongoing impact on the industry.

Hertz, a major car rental company, is selling off approximately 20,000 of its electric vehicles (EVs) due to their significant cost and weak demand. This decision comes after Hertz's previous ambitious plan to buy 100,000 Teslas, 175,000 GM EVs, and 65,000 from Polestar. The issue lies in the fact that EVs, especially when used for rentals, need to maintain their value. However, due to Tesla's price cuts and weakened demand for EV rentals, Hertz is now facing a loss when selling these vehicles back to the market. Additionally, the high cost of upkeep and repair for EVs, combined with the challenges of renting them out due to range anxiety and the learning curve for inexperienced drivers, has led Hertz to shift its strategy back to traditional gas-powered cars. This move could potentially save Hertz a significant amount of money and free up cash flow. Despite this, rival company Avis has been outperforming Hertz in the market.

The power dynamics between media companies and talent are shifting, as evidenced by the case of Pat McAfee and ESPN. McAfee, a former NFL player turned sports talk show host, has a reportedly $85 million deal with ESPN and a significant following from his time at Barstool and FanDuel. Despite his off-topic comments and controversies, ESPN seems to have given him a longer leash than in the past, likely due to his influence and audience. However, this presents a challenge for ESPN as they struggle to adapt to the new creator-led media environment and balance controlling their talent with giving them the freedom to attract and retain audiences. Additionally, the lack of formal employment ties between ESPN and McAfee and his guest, Aaron Rodgers, adds to the complexity of the situation. Overall, this situation highlights the evolving relationship between media companies and talent in the streaming era.

Both ESPN and the tech industry, specifically the video game sector, are facing significant scandals and layoffs. Pat McAfee accused an ESPN executive of calling him a rat, and ESPN was reported to have submitted fake names for Emmy consideration for decades. Tech companies, including Google, Amazon, Discord, and Unity, have announced massive layoffs due to financial restructuring and a shift in priorities. Google's acquisition of Fitbit four years ago seems to indicate that the Fitbit brand may be fading, while BlackRock, the world's largest asset manager, has also announced layoffs. These events underscore the challenges these organizations face and their efforts to adapt to changing circumstances.

Learning from CES 2023 is the increasing prominence of AI hardware. The event showcased numerous AI-driven devices, with Rabbit's voice-activated neck device being a standout. This product, which costs $199 and operates on its own OS, allows users to accomplish tasks hands-free, bypassing the need for apps. The success of this product indicates a shift in the market, as companies reimagine devices to better sync with generative AI. Additionally, mega companies like Walmart used CES to present their visions for the future, with a focus on AI integration across various sectors, including supply chain and drone delivery. Overall, CES 2023 highlighted the rapid advancement of AI technology and its potential to revolutionize everyday life.

... ...companies are increasingly investing in futuristic technologies, such as drone delivery systems, which have already proven successful on a smaller scale. In 2024, a company plans to expand its drone delivery service to the Dallas Fort Worth area, aiming to reach 1.8 million homes. This represents a significant investment in the technology and demonstrates confidence in its viability. Additionally, technology continues to find innovative solutions to everyday problems, like snoring. An AI-powered anti-snore pillow uses machine learning to adjust the pillow's position and help users stop snoring. On a lighter note, even prestigious institutions like Eton College, with its storied history and high price tag, can be affected by mundane issues. Recent flooding caused sewage problems, leading to remote learning for students. The incident highlights the unexpected challenges that can arise, even for the most renowned institutions. In conclusion, companies are investing in futuristic technologies, and these innovations are making a difference in our daily lives. Meanwhile, even the most prestigious institutions face everyday challenges, reminding us that no one is immune to the unexpected.

The University of Cambridge, which initially only offered Latin courses and didn't add math until the 19th century, has a rich history of producing famous and intelligent individuals. However, it has also faced criticism for being an elite and homogeneous institution. Despite efforts to improve diversity, the university's reputation may continue to carry a negative image. On a lighter note, even faking a smile can improve our mood, a reminder for those feeling the pressure of "adulthood." If you have some free time this winter Friday, consider introducing yourself to our Morning Brew community at morning brew dot com. Our team includes Emily Milliron as editor and producer, Samantha Velez and Raymond Lu as associates, Yuchenawa Ogu as technical director, Billy Minino on audio, and Devon Emery as chief content officer. We hope you enjoyed today's show!