Morning Brew Daily

Netflix Walks Away From WBD Deal & Why is Everyone Leaving America?

30 min
Feb 27, 2026about 2 months ago
Listen to Episode
Summary

Netflix withdrew from its bid to acquire Warner Bros. Discovery after Paramount raised its offer to $111 billion, giving David Ellison control of a media giant combining major studios, streaming services, and sports portfolios. The episode also covered Block's massive 50% workforce reduction citing AI efficiency, record American emigration particularly among young women, mortgage rates dropping below 6%, Waymo's expanding self-driving operations, and the pizza industry's struggles.

Insights
  • Market rewarded Netflix for walking away from WBD deal (7% stock pop) and Block for aggressive AI-driven layoffs (20% spike), suggesting investors favor disciplined capital allocation and efficiency gains over growth-at-all-costs strategies
  • American emigration is driven by multiple factors beyond immigration policy—healthcare costs, education expenses, political uncertainty, and quality of life—with young educated women leading the exodus, indicating a shift in how talent evaluates opportunity
  • AI is becoming a convenient narrative for necessary workforce corrections, but the real story is pandemic-era overhiring; however, if this spreads beyond tech to other industries, it could validate broader white-collar job displacement concerns
  • Housing market remains frozen despite mortgage rate improvements because underlying issues—affordability, supply constraints, job security concerns, and rising ancillary costs—are structural, not just rate-dependent
  • Waymo's rapid expansion to 10 cities with 400,000+ weekly rides demonstrates self-driving technology is moving from concept to commercial reality, while competitors like Tesla and Amazon lag significantly behind
Trends
AI-driven workforce optimization becoming standard practice with shareholder approval, potentially triggering broader white-collar job displacement across industriesTalent migration away from US accelerating, with young professionals seeking lower costs of living, universal healthcare, and political stability in Europe and other destinationsConsolidation in media and entertainment accelerating, with Paramount-WBD merger creating unprecedented concentration of content, news, and sports assets under single family controlSelf-driving technology transitioning from pilot phase to commercial deployment at scale, with Waymo establishing dominant market position across 10+ major metrosPizza industry experiencing structural decline as consumer preferences shift toward diverse dining options, with market consolidation favoring dominant players like Domino'sProtein fortification becoming ubiquitous across food categories as consumer demand for functional foods drives product innovation in unexpected categoriesRegulatory scrutiny of mega-mergers intensifying at state level, with California AG signaling close examination of Paramount-WBD deal due to concentration concernsMortgage rate psychology remains powerful but insufficient to unlock housing market without addressing supply, affordability, and employment stability concerns
Topics
Media Merger Regulation and AntitrustAI-Driven Workforce OptimizationAmerican Emigration TrendsHousing Market DynamicsSelf-Driving Vehicle CommercializationFast Food Industry ConsolidationFintech Profitability and EfficiencyTalent Migration and Brain DrainStreaming Service CompetitionFederal Reserve Interest Rate PolicyEmployment Market UncertaintyHealthcare Cost ArbitrageFunctional Food Product InnovationRegulatory Scrutiny of Tech and MediaQuality of Life Economics
Companies
Netflix
Withdrew from $111B bid to acquire Warner Bros. Discovery, allowing Paramount to win; stock rose 7% on news
Paramount Global
Won bidding war for Warner Bros. Discovery with $111B offer; David Ellison's Skydance-backed company acquiring major ...
Warner Bros. Discovery
Subject of acquisition by Paramount after Netflix withdrew; combines major studios, streaming services, and sports po...
Block
Fintech company cutting 50% of workforce (4,000 employees) citing AI efficiency; stock surged 20% on announcement
Waymo
Self-driving company expanding to 10 major US cities with 400,000+ weekly paid rides; raised $16B at $126B valuation
Skydance
David Ellison's media company that acquired Paramount, now acquiring Warner Bros. Discovery through Paramount
Papa John's
Pizza chain closing 300 underperforming stores; profits fell 42% YoY; stock down 75% since 2021 peak
Pizza Hut
Closing 250 US locations; parent company Yum exploring sale amid pizza industry depression
Domino's Pizza
Gaining market share from competitors with 4% same-store sales growth and product innovation like stuffed crust
Amazon
Testing self-driving vehicles through Zoox subsidiary in select US cities; competing with Waymo
Tesla
Has only 44 robo taxis in Austin with safety drivers; significantly behind Waymo despite Elon Musk's 2025 promises
Oracle
Larry Ellison (founder) now owns stake in US TikTok; part of Ellison family's expanding media and tech influence
Google/Alphabet
Parent company of Waymo; speculation about potential IPO spin-off of self-driving division
Freddie Mac
Reported 30-year mortgage rates dropped to 5.98%, below 6% psychological threshold for first time in 3+ years
Lowe's
Home improvement retailer experiencing stagnant growth due to frozen housing market and lack of home sales
Home Depot
Home improvement retailer stuck in slow growth as housing market remains frozen despite lower mortgage rates
Redfin
Real estate platform CEO monitoring housing market for signs of recovery from years-long slump
Rocket Mortgage
Mortgage lender CEO watching for housing market recovery as rates decline below 6% threshold
PepsiCo
Launched Doritos Protein snacks with 10g protein per serving in nacho cheese and barbecue flavors
Burger King
Rolling out AI chatbot 'Patty' in employee headsets to evaluate friendliness and provide coaching
People
David Ellison
Skydance CEO winning Warner Bros. Discovery acquisition through Paramount; becoming major media titan
Ted Sarandos
Netflix co-CEO who met with White House staff regarding regulatory concerns about WBD acquisition
Jack Dorsey
Block CEO announcing 50% workforce reduction citing AI efficiency; former Twitter co-founder
Larry Ellison
Oracle founder and David Ellison's father; now owns stake in US TikTok, expanding family's influence
Elon Musk
Tesla CEO who promised half of US population could hail robo taxi by end of 2025; significantly behind Waymo
Barry Weiss
Brought to CBS by David Ellison; part of leadership changes raising regulatory concerns
Quotes
"We're already seeing the intelligence tools we're creating and using paired with smaller and flatter teams are enabling a new way of working, which fundamentally changes what it means to build and run a company."
Jack DorseyBlock workforce reduction announcement
"If CEOs get comfortable that this is OK and they will be shareholders will reward them for it, it could set off a stunning layoff wave."
Dan Pramak, AxiosDiscussion of AI-driven layoffs
"This isn't a cop-out answer. I genuinely think the answer is it was probably a combination of the two, right? CEOs, when there is an opportunity to make difficult change and actually have something specific to point to, it just makes their life, frankly, a lot easier."
Anne BarryBlock layoffs analysis
"It is expensive to be here. And I got to say, some of the other things, if you go to somewhere like Europe or the UK, there is universal healthcare. You pay for it out of your tax dollars for the most part."
Anne BarryAmerican emigration discussion
"Waymo is zooming ahead. This is happening in many, many different cities. This is that's kind of one of the thing I want to drive home. This is happening in many, many different cities."
Neil FreimanSelf-driving car expansion
Full Transcript
Good morning Brew Daily Show. I'm Neil Freiman. And I'm Anne Barry. Today a Hollywood plot twist. Paramount will buy Warner Brothers after Netflix bows out of the race. And Americans are leaving the United States at a record pace. So where are they heading? It's Friday, February 27th. Let's ride. Good morning and happy Friday. Anne Barry, host of Brew Markets, is back with us today. And Well, I think we just need to skip the small talk and get right into it because a couple business news haymakers arrived last night. Netflix has walked away from its deals by Warner Brothers Discovery after Paramount submitted a more generous offer, leaving David Ellison's media company the winner to take over the storied Hollywood giant. For months in this drawn-out saga, Netflix had the upper hand. But this week, the ever-persistent Paramount budged up its offer to $111 billion, and Warner Brothers deemed it the superior bid. Instead of countering with even more money, Netflix decided to fold, and Wall Street breathed a sigh of relief because it wasn't convinced this was a smart move for Netflix. Netflix shares popped nearly 7% following the news yesterday evening. And David Ellison gets his prize. He gets his prize, and it looks like Paramount shareholders are pretty happy too. Stock was up 5% and extended trading hours last night. Got to tell you, you've been talking about this, right? The roller coaster, the drama and the marathon this turned into. But there were signs this was coming. I don't think anyone could really say they were surprised. Netflix did give Warner Brothers a seven-day waiver, you remember this, saying, look, you can go re-engage with Paramount. The fact that they did that was a sign that perhaps this thing was going to go in a different direction. And I've got to say, they've decided to walk away pretty quickly. They had another four days, I think, to decide to do something differently. hit Netflix. Ted Sarandos, the co-CEO, was actually at the White House yesterday meeting with staff because, remember, this potential merger of Netflix and Warner Brothers Discovery faced a long regulatory road ahead. Let's talk about what's being combined here. So what do Paramount and Warner Brothers Discovery bring together? Well, this combined company will own two major movie studios, Warner Brothers and Paramount, two major news operations, CBS and CNN, two major streaming services, HBO Max and Paramount Plus, and then a massive sports portfolio, NFL, MOB, NHL, UFC, March Madness, Golf, UEFA Champions League. I could go on. So that is all going to be owned by David Ellison. The Ellisons are on a hot streak right now. David Ellison, he's kind of reverse Pac-Man, this whole media business, because he, remember, he was running a company called Skydance. Skydance bought Paramount last year, and now Paramount is buying Warner Brothers discovery is just getting bigger. And then meanwhile, his father, Larry Ellison of Oracle fame, now owns a piece of US TikTok. So the Ellisons are the new media titans in the room. There are questions remaining about the regulatory process ahead. California's attorney general came out last night and said, this deal is not over. Both of these companies are in my jurisdiction, and we're going to give it a long, hard look. The great irony there being, of course, that a lot of Hollywood stalwarts, based, of course, in California, were actually opposed at first, remember this, to Netflix, saying that they wanted to buy Warner Brothers, concerned that, you know, that was sort of the fast food version of making movies, versus David Ellison has been really vocal about how he wants to keep, like, the grand tradition of the silver screen going. So the idea that it's California that ultimately pops his head up and says, you know, we've got words on this, would be sort of an interesting one to track. Well, I think they might be concerned about the concentration in the Ellison family, who is very close to President Trump, and David Ellison has made a lot of big changes at CBS by bringing in Barry Weiss there. And now if CBS is sister companies with CNN, I just think there's a lot of sort of concern or a lot of uncertainty about what might happen to these big news organizations, especially with one billionaire family controlling a lot of the pie. Well, I said there were two business news haymakers. The other one was a move that is creating shockwaves around Silicon Valley and the wider labor market, Block, the fintech company run by Twitter co-founder Jack Dorsey, said it was going to reduce its workforce by nearly half because of AI cutting about 4,000 people. In a long post on X, Dorsey explained his rationale. We're already seeing the intelligence tools we're creating and using paired with smaller and flatter teams are enabling a new way of working, which fundamentally changes what it means to build and run a company. And that's accelerating rapidly. I had two options cut gradually over months or years as the shift plays out, or be honest about where we are and act on it now. I chose the latter. What's perhaps even more surprising and ominous than the layoffs was the market reaction. Block shares spiked nearly 20% after Dorsey's announcement. Now, Anne, I thought the reaction to this was very interesting. On the one hand, you had people saying, yep, this is it. The AI jobs apocalypse has begun. If you work a desk job, you are not safe. But there was a strong pushback as well, with others arguing Dorsey was just using AI as an excuse to trim a workforce that had become far too bloated during COVID. Where do you stand on that? I think this isn't a cop-out answer. I genuinely think the answer is it was probably a combination of the two, right? I just think CEOs, I spend a lot of time on brew markets, talking to them, analyzing them, I've sort of been one, when there is an opportunity to make difficult change and actually have something specific to point to. It just makes their life, frankly, a lot easier. The reaction, though, the share price was interesting as much as 27% up last night in extended trading, which tells you, number one, people were surprised, right, because that was a big reaction. And number two, it tells them that they're expecting this to be a boon for Block's profitability. Something pretty interesting, Block's been investing heavily in AI tools to run more efficiently. It's been building its own tool called Goose. The market's probably going to call it Golden Goose at this point, given that reaction. And others we know have been doing it. Every tech company has been building its own internal tools. So you look at this and I bet the rest, honestly, I think the rest of big tech are going to say thank you to Jack Dorsey for now giving them permission to do something similar. Right. Axios' Dan Pramak said, if CEOs get comfortable that this is OK and they will be shareholders will reward them for it, it could set off a stunning layoff wave. So that's one side of the camp where basically CEOs have license now. They will get rewarded for laying off people, citing AI. The other camp is saying, well, look, Block is not doing well. The stock is down 80%. They had a 10,000-person workforce. And when you compare that to other fintech companies, that's just a much bigger workforce. Robinhood has 2,500 employees. They have a market cap more than twice that of Block. Coinbase has 4,500 employees, a market cap of $50 billion, $20 billion more than Block itself. And now Block is going to be 6,000 employees. So I think the skeptics are coming out and saying, this doesn't necessarily validate that Cetrini research paper that was the talk of Wall Street earlier this week, which said that we're about to see a white collar jobs apocalypse because of AI. No, this was just Jack Dorsey. It's not overhiring during the pandemic and is now trying to correct it. I think also that Cetrini research report, which, by the way, is so worth reading in its entirety. It feels as though the expectation for tech and fintech and these kinds of layoffs, where I think folks are saying it not quite fair game but tech knows that it on the table they going to get disrupted particularly if they been a disruptor themselves Where it gets I think really nerve for people is other kinds of white or service jobs right outside tech itself So I agree with you. I think blockers, you know, this is probably a little bit overdue. Again, a convenient message to use to do something really difficult. It's hard to lay off 50% of your people. But if this spreads to non-tech industries, then I think people are going to pull out that Citrini research report again and start saying, oh gosh, was this really a crystal ball? Okay, let's move on. The United States is experiencing something that it hasn't seen since the Great Depression. More people are leaving than are coming. According to the Wall Street Journal, the US experienced net negative migration in 2025, and that's only going to accelerate this year. It's a pretty staggering role reversal. For centuries, America was seen as a country that people around the world yearn to live in for its dynamic economic growth, freedoms, and opportunity for upward mobility. But for many, the American dream doesn't just ring true anymore. Some of the departures stem from intentional policy by the Trump administration to crack down on immigration. The U.S. deported 675,000 people last year, while 2.2 million others self-deported, per the Department of Homeland Security. But that doesn't reflect a broader trend of Americans' own citizens heading to foreign shores. While comprehensive stats on out-migration are difficult to come by, residence permits, home purchases, and student enrollment analyzed by the journal indicate that American citizens are heading overseas in record numbers. When surveyed by the Journal on why they're leaving America, expats cited a buffet of reasons, lower healthcare and education costs abroad, safety in the wake of school shootings, distaste for Trump's chaotic politics, and the search for a better quality of life. And what do you make of this great American exodus? Well, I sort of came in the other direction, right? So very interestingly, one of the destinations for folks leaving is the United Kingdom. Americans are applying for British citizenship at the highest rate since records began, which actually only started recently in 2004. 6,600 applied in the year to March 2025. So as someone who came here, came in the other direction, I'm just going to say, I still believe in the American dream. I think the dynamism here is amazing. I think the opportunity, if you want to go after it, it's really exciting. But it is expensive to be here. And I got to say, some of the other things, Neil, that you touched on, if you go to somewhere like Europe or the UK, there is universal healthcare. You pay for it out of your tax dollars for the most part. You can supplement it, but it's a very different setup. Education tends to be less expensive, which explains why actually more families, interestingly, are relocating. That's been a tick up in that trend. But also some people just want an adventure for a phase of their life. So that doesn't come to light in the numbers. But you do see people saying, I can be a digital nomad. I can take my laptop. I can still work from anywhere in some industries and some roles. And I think they're going after it. Yeah, they call the University of St. Andrews mini Nantucket, actually. I do know a lot of Americans that did go there. But the march across the Atlantic is pretty staggering. How many Americans are moving to Europe? The total number of Americans living in Portugal is up more than 500 percent since the COVID pandemic in the past 10 years. The number of American residents has nearly doubled in Spain and the Netherlands. There are now more natural born Americans living in Norway than Norwegian born residents in the United States. Maybe they want to get really good at cross country skiing. And then last year, more Americans moved to Germany than Germans moved to America. The one stat that I thought that shocked me but may not shock people is what cohort of people is really driving this trend. And it's young American women. A Gallup poll last year found 40 percent of American women aged 15 to 44 would like to permanently move overseas. And now by comparison, in 2023, nearly as many sub-Saharan Africans, 37 percent, they are living in the poorest part of the world, wanted to do the same. The demographic you just laid out, right, they're better educated than ever. they're earning more money than ever. I mean, things aren't still perfect, but in terms of the work and the jobs that they've been getting. So it kind of makes sense, perhaps, that they've now got the freedom and they've got the financial means to go and do something a little bit different. And now this is another fun stat. What was the last time I said, since the Great Depression is the last time that more people left the United States than came? Well, this was in 1935. This is the last time more people left the US than moved in. And where they were going might surprise you. The biggest destination in 1935 was the Soviet Union. More than 100,000 Americans applied to work in tractor plants, steel plants, factories of the Soviet Union, and they were playing baseball over there in Moscow. Very interesting trend. It looks like it's only going to accelerate as we head into 2026 and 2027. All right, up next, I'm not sure this next bit of news will keep people from fleeing America, but it is a start. For the first time in more than three years, U.S. mortgage rates fell below 6%. Please clap. Yes, according to Freddie Mac, the average rate for a 30-year fixed mortgage dropped to 5.98% this week, hitting its lowest points since September 2022. The hope is that by crossing this psychological threshold, more buyers will enter the housing market to wake it up from a years-long slumber. Last year was the slowest year for home sales in three decades, and it couldn't have come at a better time. I know it doesn't feel like it, but spring is coming. And that's the busiest season of all for homes changing hands as families with kids typically try to move in over the summer before the school year starts. Mortgage rates have been on a steady decline since peaking near 8% in January 2023. Pushing them lower is a number of factors, lower inflation, general economic jitters, and the Federal Reserve cutting its benchmark interest rate three times. But so far, lower mortgage rates haven't really moved the needle in the housing market, despite saving homebuyers hundreds of dollars on their payments each month with each tick down. Last week, when rates were a hair over 6%, purchase mortgage applications fell to their lowest seasonally adjusted level since April. Moving forward, Anne, we'll see just how important that round number threshold is to home buyer psychology. That 6% threshold, which still feels so high. And just to put that in context, if you look at all the mortgages that are outstanding right now, so if you're lucky enough to have bought a home previously, 50% to 60% of those mortgages have an interest rate of under 4%. So even if we're seeing this drop to 6%, doesn't that still feel painful for you? That's 200 basis points more than you're looking at right this moment. Yeah, I mean, it's not enough to make me look for a house because there are a number of other headwinds facing homebuyers besides high mortgage rates. Prices, the thing that is the headline number, are still up 50% since 2019. Electricity bills are higher. Home insurance costs are higher. And then many housing experts say, Yeah, mortgage rates can come down all you want. But if the labor market is shaky, if you don't have job security, if you're concerned about getting laid off, then that's going to prevent you from buying a house as well. So this is one data point, one good data point for maybe thawing out this frozen over housing market. But it's not the complete picture. And it's also not always your choice as the borrower. Let's talk about what the lenders are doing. OK, the lenders have made it harder to get mortgages. The standards have become a lot tougher. and to your point, if there's uncertainty around the labour market, you as the borrower perhaps don't want to take out a hefty mortgage. If you're the lender too, you're going to make sure that you've got real certainty around that person's employment profile. So I think there's two sides of that coin too. The other thing too, like property taxes have gone up. There's also the closing costs no one talks about the legal fees the broker fees It all stacks up It all been going increasingly higher So there just so much going on here The other thing too Neil because I know that you been following this it just the number of homes that are being built, right, that people can actually afford. That stock isn't rising as much as people want it to. So there's a supply issue here, not just the mortgage piece of it. A lot of people want this housing market to become unstuck because it's not just a housing problem. It is an economy-wide problem because when the housing market gets going, that frees up so much economic activity elsewhere. We just had earnings from Lowe's and Home Depot this week. Their businesses are stuck in the mud unless people are moving into new homes and buying new appliances. So they say, yeah, growth is fine. It's pretty stagnant. There's nothing we can do. People aren't moving into new homes. So it kind of unleashes this economic boom when the housing market gets going. So pretty much everyone from Home Depot CEO to the Redfin CEO to the Rocket mortgage CEO to all of us are just wondering when people will start buying homes. Maybe this 6% threshold will be a little bit of a kick in the butt. A little bit on the margin, but also the prospect maybe that will come down lower because we do have a new Fed chair coming in who's vocally been quite focused on making sure that interest rates are coming down. And so maybe that will ultimately lead to something getting unstuck too. All right. Up next, a self-driving car is coming to your neighborhood. Movement's not about numbers. It's about intention. Been reading those inspirational sports quotes again? Oh, every day. But I'm talking about things like our Davos trip or early call times. Basically, daily essential movements that we could be more thoughtful about. Whoop's wearable tech helps with that. 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DisneyCampaignManager.com. it's time for stock of the week dog of the week the segment where we pick one stock that's the first one on the wedding dance floor and another that sits at their table picking at their overcooked steak my stock of the week is waymo because if you can't already hail a robo taxi to take you home from the bar it's probably not too far off the self-driving company is barnstorming the united states like a 19th century baseball team announcing it had opened limited public rides in four more cities in Texas and Florida, Dallas, Houston, San Antonio, and Orlando. For those counting at home, that means Waymo now has a self-driving fleet of cars in 10 major U.S. metros, with those four joining Phoenix, the San Francisco Bay Area, Los Angeles, Miami, Atlanta, and Austin, Texas. And look out Midwest, Waymo is coming for you. On Wednesday, it said it's laying the early groundwork for operations in Chicago, the first time Waymo would be venturing into a cold weather city that has complex, often snowy driving conditions. It's pretty clear that a quiet self-driving revolution is now underway with Waymo leaving its rivals in the dust. Go back to last year and the Google owned company was doing 200,000 paid rides per week in just three cities, SF, LA and Phoenix. At the end of last year, it was 400,000 in six cities. And by the end of 2026, it's aiming for 1 million rides per week in at least 10, probably more. The money has followed earlier this month. Waymo raised $16 billion at a valuation of 126 billion, leading to speculation that at some point, Google's going to spin this giant off. Yeah, maybe it's going to hit the IPO market. That sort of slowed down a little bit. We all thought this was going to be the bumper, bumper year. It was all going to come back. 2026 was the year of going public. And there's a different narrative now, which is companies actually want to stay private longer. So we'll see who ends up benefiting if Waymo does get spun out from Google's ultimate parent company that's Alphabet. I've got to ask you, though, Neil, a question. You said this was like the first dance and everyone getting on the dance floor. So what is the tune? What gets you out there? What's the Neil Fryman jump on? Well, OK. Wedding. I love weddings, loves wedding songs. And this might be a I don't like Cake by the Ocean. I think that is overplayed. OK. But there's another overplayed song that I really do love gets me out there. And this is just off the top of my head. Uptown Funk. Yeah. Bruno Mars. It's a really I like it. You can you can say you don't like it. But that is a song that always gets me out on the dance floor. I love it. I love it. You've got to resist the foot tap. And so let's talk about Amazon own Zooks. Right. So if that were, OK, that could be a cake by the ocean for you, perhaps, because it's the runner up on this one. Amazon still, as you said, testing its vehicles in a few U.S. cities. But Amazon's pretty determined to get there. And it's worth just talking about some of these other competitors, because there are some folks overseas as well. You've got WeRide in China that's going after this market pretty aggressively. So, you know, we'll have to sort of figure out how far behind also Tesla is. No one's talking about Tesla, but we know that they've got to do something. It's not just this sort of regular way consumers buy cars anymore. They're doubling down on robotex. I would love to talk about Tesla. I think there's a reason that we're not talking about Tesla is because last year, Elon Musk said that half of the U.S. population would be able to hail a Tesla robo taxi by the end of 2025. It is almost the end of February 2026. There are 44 robo taxis just in Austin, Texas. and there's a human safety driving monitor in the front seat. Waymo has 3,000 cars now in 10 cities, and Tesla has 44 with a driver in the front seat in Austin, Texas. They haven't even filed a permit to start doing testing in California, so I am unclear what is going on at Tesla. Waymo is zooming ahead. Zooming ahead. Have you been in Waymo? I have not. You have not? Have you? No, and I want to. Can we go and do a field trip? I would love to. What I think is crazy about this is I know many people who have been in a self-driving car. This is that's kind of one of the thing I want to drive home. This is happening in many, many different cities. But not here. But not here in New York. But but there are many people who have taken self-driving cars. And it's something that we thought was a pure fantasy as recently as five years ago. And then by the end of this year, who knows how many cities will will be able to to hail a Waymo. So I mean it going to just change everything So I think it a pretty remarkable revolution that happening that maybe we not talking about even enough Yeah Maybe it not if it when And also look I just would want people got very mixed feelings about Elon Musk He does have a tendency to get the timing perhaps a little bit wrong on some of these things. But when that team sets their mind to it, they do have shown they've got the wherewithal to catch up to deadlines and get there eventually, even if it's not quite end of 2025. We'll have to look out for the latest in terms of timing that Elon Musk and the Tesla team have been indicating. They just got, you know, 3,000 cars to go. OK, my dog of the week is Papa John's. Things are not going well for the pizza father facing slowing business. The chain said it's going to be closing hundreds of stores, cutting back on menu items and laying off about 7% of its corporate staff. Changes are certainly justified because last quarter profits fell 42% year over year and revenue dropped 6.1%. Papa John's said it's going to close down 300 stores by the end of the year, most of which were not profitable and generated measly sales. It's not the only pizza company going through it right now because the U.S. is in a pizza depression, a pizza depression. As a category, pizza has gone from second place on the restaurant packing order in the 90s to sixth now. There's been virtually no growth in U.S. fast food pizza sales in the last two years. And as a result, there's going to be fewer of them. Earlier this month, Pizza Hut said it would close about 250 underperforming U.S. locations, while its owner Yum is exploring a sale. And rumor is Papa John's is shopping itself around as well. The stock fell nearly 9% yesterday, extending a years-long slide to the bottom. Since peak COVID pizza delivery in 2021, Papa John's stock is down 75%. Have they tried putting pineapple on it? I hope so. I like pineapple on my pizza. Actually, Neil is shaking his head and rolling his eyes right now. I like the Hawaiian pizza. So to your point, Neil, it's interesting. We look at these numbers. It's a war of gaining share, right? So if people aren't eating as much pizza, can we talk about Domino's? Let's talk about Domino's. I'm always down. Let's always talk about Domino's Pizza. It's gaining market share from its competitors, especially from those two. So Pizza Hut and Papa John's suffering at the hands of Domino's dominance. They had actually reported same-store sales growth of just under 4%, better than its peers. And product innovation is one of the things I was very excited to see. I love stuffed crust pizza. I have very happy childhood memories of stuffed crust pizza at Pizza Hut. Domino's has been going there. The uptake has been going really well. And just this broader shift, too, McDonald's and Starbucks are also trying to figure out what to do when it comes to menu changes to try and get after the consumer, who's now getting really, really picky about where they get their pizza and other food. Some of the mistakes at Papa John's were pretty shocking. This is crazy to me. Different locations, different franchisees were cooking pizzas at different temperatures. I thought this thing was completely standardized. This would never happen at Domino's, but Papa John's, their ovens are set to different temperatures. And this pizza that's supposed to be the same in San Francisco as it is in Atlanta as it is in New York City. So I thought that was pretty surprising. They're also shaking up their menu, too. They are ditching Papa Dia's sandwiches and Papa Bites pizza rolls, which why would you even get into pizza rolls? You can never compete with Totino's in the first place. But I think what you said is very accurate. This total pie, we should say, is not growing at all. And Domino's, yes, Domino's is gaining market share. And their CEO says, we are actually very bullish. We are aiming to double our market share. And all of their competitors, Pizza Hut, Papa John's, those are the top two. They're aiming to sell themselves because things are just not going well. Meanwhile, pizza is overall in a pizza depression because there's so many other choices for people to eat. And when it comes to opening Grubhub or DoorDash or any sort of delivery app, you got Thai. you got Mexican. There's just any sort of number of competitors that are competing with pizza right now. So I wouldn't want to be a pizza CEO at this point. Okay, let's sprint to the finish with some final headlines. In today's edition of Is This Real Life or Black Mirror, Burger King is rolling out an internal AI chatbot that will evaluate employees friendliness, such as whether they say please and thank you to customers. Known as Patty, the chatbot is part of a broader BK assistant platform that lives in employees headsets and will help them with meal prep, provide alerts for maintenance or inventory issues. And yes, check on their politeness levels. The chain's chief digital officer told The Verge that this is all meant to be a coaching tool, saying that BK is iterating on capturing conversational tones to more precisely measure friendliness. There was a lot of backlash to having AI police burger employee friendliness, but at the same time, Squidward could probably have used this. I actually love this. I think politeness is great. And the idea that this is going to become embedded in our ears. Here's a question for you, Neil, do you think this is going to make its way into smart glasses and we're all going to end up walking around being prompted to say please and thank you to each other? Oh, that's interesting. I would turn that setting off. You would? Yeah, I think I think politeness is perhaps in saying please and thank you is perhaps in the domain of parents instructing rather than some tech companies, AI telling us whether to say please or thank you or to smile or to make eye contact. I would if that setting comes by default, I would probably turn it off. Maybe it'll keep people from leaving the country because there'll be just a friendly set of interactions that prevent people from going to Lisbon. All right. Finally, a new post-workout snack just dropped, Doritos. Yesterday, PepsiCo decided nothing was sacred anymore and announced Doritos protein in two flavors, nacho cheese and sweet and tangy barbecue. A one ounce serving of these will contain 10 grams of protein compared to two in the standard version alongside zero grams of shame. Because at this point, what else is there to put protein in? Starbucks has protein cold foam. Chipotle has protein bowls. Dunkin' has protein milk. Subway has protein pockets. The good news, Anne, is gym bros and potheads used to have nothing in common. Now they can bond over Doritos protein. Yeah, heading to the gym this March, getting back on the wagon, I can see sweet and tangy barbecue Dorito protein chips in my future, Neil. It's just crazy how much protein has infiltrated the food supply. Doritos said that 86% of Americans are actively adding protein to their diets. 70% want protein and salty snacks. So you can understand why executive would look at these numbers and say, well, might as well just turn every single thing we have into a protein type, a protein product. I think there might be a tipping point at some point where everything becomes infused with protein. And we're saying, OK, maybe we're getting too much or we don't necessarily need it. Maybe our bodies actually can't even handle it. We obviously have to do a taste test to see how this takes. Yes, I love that. Nacho cheese for you, sweet and tangy barbecue for me. We'll switch it out. Love it. Okay, that is all the time we have. Thanks for starting your morning with us. Have a wonderful Friday and an even better weekend. And thank you so much for stepping in these past few days. I know you are very busy, but it's been a lot of fun. And remember, if you want more, Ann, she has Brew Markets, recapping the day's Wall Street news each afternoon, wherever you get your podcasts. And if you'd like to reach us, send an email to morningbrewdaily at morningbrew.com or DM us on Instagram at mbdailyshow. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair and makeup is enjoying a pasta sanata in Porto. Porto. Hair and makeup is enjoying a pasta sanata in Porto. Devin Emery is our president and our show is a production of Morning Brew. Great show. Stay, Neil. Have a great weekend.