• Markets: Stocks did their best pancake impression yesterday, closing mostly flat, with investors bracing for Nvidia’s earnings after the bell (more on that below) and digesting the news that the Fed’s favorite inflation gauge showed sticky inflation in July.
• Stock spotlight: Yesterday was a good day for mall lovers: Abercrombie & Fitch raised its outlook for the year as it reported rising profits and sales. That gave the chain even more of a boost than a teen gets at the school dance for overapplying its cologne.

MINOR ADJUSTMENTS

Benjamin Fanjoy/Getty Images

Meta agreed to pay as much as $18 billion to settle a federal lawsuit brought by California and other states that accused the company of using practices intentionally designed to keep children addicted to its platforms and of collecting data from children under the age of 13 without parental consent.

“As much as” means that Meta will pay the 47 states involved in the settlement $12.7 billion over the next 10 years. Meta will only pay the remaining $5.3 billion if its rivals TikTok and Google’s YouTube also implement similar safeguards to the ones Meta agreed to as part of its deal to resolve the suit—and kick in a matching $5.3 billion of their own. Meta did not admit wrongdoing as part of the settlement.

Here are some of the Facebook and Instagram changes Meta agreed to make:

• Time limit: Users aged 13 to 17 will only get two hours per day for brainrot on its platforms.
• Night mode: Teens will be blocked from the apps between midnight and 6am.
• School mode: There’ll be no push notifications for teen users during school hours of 8am to 3pm.

Meta will also hide likes and reactions from minors on posts by default and block “extreme makeup filters,” although adults will still be able to yassify themselves and their pets.

The impact on Meta’s business

Fewer kids spending time on Instagram looking at reposted MrBeast content at 3am could impact Meta’s ad business. Yesterday, the company said it expects to “accrue a legal expense of approximately $10 billion in the third quarter of 2026 related to the agreement.”

But the deal takes away the existential threat Meta was facing from the trial, as the states were seeking up to $1.4 trillion, which is close to Meta’s whole market cap.

Investor reaction: Meta shares had an up-and-down day yesterday, but ultimately finished slightly up when the market closed.

There’s still litigation to come…Florida’s attorney general, James Uthmeier, is not part of this deal and has sued the company separately. Meta is also facing other lawsuits from individuals and school districts. Meta plans on fighting those cases, saying it sees them as weaker than the one it settled yesterday, according to the Washington Post.—DL

      

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Their process produces hydrogen, diesel, jet fuel, fertilizer, and more from the same ton of coal without burning any of it. And with nine patents, no competitor could likely replicate it.

They’re currently building an $850m production facility in West Virginia. Everything that plant will produce has already been sold, locked under 10-year agreements. Today’s your last chance to claim a piece.

One rock, six markets, totaling $2.1t. Invest before Frontieras’ midnight PT deadline.

World

Tour de headlines

Philip Fong/Getty Images

📈 Nvidia predicts 70% revenue growth in 2028. The AI chipmaker told investors yesterday it expects to keep growing—a lot, and that quieted their AI bubble fears enough to send the stock up 4.71% in after-hours trading last night. Nvidia’s earnings report is widely viewed as a proxy for the AI industry as a whole, and the company’s $96.22 billion in Q2 revenue trounced expectations. Still, Nvidia’s stock initially dipped in response, that is until CFO Colette Kress said during a post-earnings conference call, “We expect to grow revenue by approximately 70% in fiscal 2028.” That’s compared to analysts’ expectations of 45% growth, and Kress said that demand was even stronger but the forecast reflected supply constraints.

💔 At least 160 dead and hundreds missing after flash floods in Nepal and China. The massive flash floods that hit the border area yesterday were likely triggered by an ice avalanche from a glacier in the Himalaya region, experts said. The flooding and mudslides that resulted swept away buildings and roads, leaving many dead and hundreds more missing as of last night. Locals, workers, and foreign tourists, including many pilgrims traveling to a sacred site, were among those still unaccounted for yesterday, with the death toll expected to rise. You can see the latest updates here.

💊 FDA approves groundbreaking pancreatic cancer drug. In a move that experts expect to transform care for one of the deadliest cancers, the Food and Drug Administration yesterday approved a pancreatic cancer treatment that in clinical trials extended some patients’ lives nearly twice as long as standard chemotherapy. The daily pill from Revolution Medicines will be sold under the brand name Rasonque for $39,800 a month, which is expected to be covered by insurance. It was approved for patients with metastatic pancreatic cancer who have already tried chemotherapy. Though the pill is not a cure, it’s considered a major advancement, as it targets a genetic mutation found in pancreatic cancers, as well as some other cancers, that scientists have been working for years to address.—AR

MICRO-LOST

Kent Nishimura/Getty Images

One of the world’s greatest tech innovators just rang one of the loudest AI alarms yet. “AI will either be the greatest equalizer ever invented, or the worst source of injustice,” Bill Gates wrote in an essay yesterday, saying he doesn’t “see evidence that leaders, experts, and communities are confronting the challenges adequately. There is no plan to ease the entry into the AI era.”

“We need time to prepare for the social, political, and economic upheaval,” the Microsoft co-founder and former AI optimist wrote in the nearly 6,000-word essay. According to Gates:

• The threat that AI and robotics present to blue- and white-collar jobs isn’t comparable to previous technological transitions, which happened over generations and resulted in tech that required—not replaced—human cognition.
• “This would be the worst possible time for humans to lose their critical thinking skills,” Gates wrote, referencing the rise of deepfakes and chatbot sycophancy alongside AI’s burgeoning capabilities for cyberattacks and bioterrorism.

What do we do? Gates urged governments to impose taxes on AI tokens and bots, set aside certain jobs for humans, and cooperate internationally on regulation—especially the US and China.

Tea: “I don’t really know anybody who’s not concerned,” Gates told Axios, saying that many of the largest tech companies are privately worried about what they might create.—ML

      

Reader Poll

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Did AI break the hiring funnel? More applications should make hiring easier. But for many teams, the opposite is happening. That’s why LHH and LinkedIn are hosting a live virtual discussion Sept. 1 on how AI is changing candidate behavior. Tune in to hear strategies for identifying high-intent candidates, reducing ghosting, and more. Register today.

EAST COAST MARGARITAVILLE

Nick Iluzada

If your parents are introducing more Tommy Bahama into their wardrobe, they may not be thinking of heading south. They are probably going east. As traditional 65+ havens like Arizona and Florida get more expensive, Delaware is catching the eye of many retirees. Delaware’s 65+ crowd has grown more than any other state since 2020, jumping 23%.

It’s not just the miles of sandy beaches attracting Baby Boomers—Delaware is financially attractive because it has no state taxes on social security or a sales tax. Property taxes are also among the lowest in the country, especially compared to neighboring east coast states.

But the rapid growth in areas like the oceanside Sussex County—which has gained more than 40,000 people since 2020—has stretched resources in the once quiet area thin, straining the supply of labor, housing, and healthcare. The traffic can be bad thanks to outdated road systems, doctors appointments take forever to make, and there isn’t enough housing, residents told Bloomberg.

On the plus side, at least 100 new restaurants have opened in the county in the last six years, so there are plenty of dinner options.

Looking ahead…Some businesses are attempting to court younger workers from outside of the region, especially since the number of Sussex County residents aged 80+ is expected to double by 2040, according to Delaware Population Consortium projections.—MM

      

Molly explains the internet

Golf cos. thought shoving woman was a good ad idea

Screenshot via @Skulledwedge/X

The online world can be a beautiful yet confusing series of tubes. On Thursdays, the Brew’s Molly Liebergall untangles them for you.

You know a company really stepped in it when they have to clarify that they’re “unequivocally against discrimination, domestic violence, or threatening behavior.” One of the world’s biggest golf equipment manufacturers, Callaway Golf, released that statement this week after an ad for its new driver was slammed online as “generationally stupid” and “aggressively misogynistic.”

ICYMI: In a promo produced by Good Good Golf, one of Good Good’s co-founder tackles a former Division I women’s golfer to the ground and warns her not to touch his new Good Good x Callaway driver. The video was posted last Thursday and triggered an internet firestorm, leading both companies to take the ad down on Friday, remove the driver’s online listing, and publicly apologize.

But that wasn’t good good enough to keep the backlash from spreading:

• Golf Channel postponed Tuesday night’s scheduled premiere of a reality TV show featuring Good Good after a sponsor wanted its name removed.
• Golf Galaxy and parent company Dick’s Sporting Goods shelved Good Good’s products.
• The PGA Tour’s CEO called Good Good’s title sponsorship of an upcoming event a “fluid situation.”—ML

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News

What else is brewing

• Iran said it has agreed to deal terms with Oman for the Strait of Hormuz, including sharing revenues associated with administering the vital waterway for trade, but that the US is standing in the way. But President Trump later said ships were already moving through the strait.
• Chinese hackers breached the DOJ, the Federal Reserve, the Senate, and NASA, the US said.
• The US paused all visa appointments globally for “in-depth training” for consular officers.
• LIV Golf, the once promising, now struggling upstart rival to the PGA, laid off most of its staff. The league has been flailing since losing its Saudi backing.
• Tim Curry, the actor known for such roles as Dr. Frank N. Furter in The Rocky Horror Picture Show, the butler in Clue, and Long John Silver in Muppet Treasure Island, has died at age 80.
• Rupert Grint will step back into the role of Ron Weasley, this time in the Broadway production of Harry Potter and the Cursed Child.

recs

• The iPhone feature that could save your life in a car crash.
• One thing you can do at meal times to improve your health.
• A collection of Dolly Parton videos for anyone who needs them right now.
• A multifunctional Japanese gardening tool that will replace all your others.**

^{*A message from our sponsor. **This is a product recommendation from our writers. When you buy through this link, Morning Brew may earn a commission.}

Play

Brew Mini: Today’s li’l puzzle is called “Switcheroo.” Once you solve it, you’ll know why. Play the Mini here.

Three Headlines and a Lie

Three of these headlines are real and one is faker than your pledge to stop at one cup of coffee per day. Can you spot the odd one out?

1. The new cure for career burnout: clown school
2. A simple bean is changing beauty pageants
3. Denmark’s PM blasts plastic surgeon for his unsolicited offer to ‘fix’ spot on her nose
4. Wisconsin kitten with 29 toes breaks world record for most toes on a cat

Answer

We made up the one about the beauty pageant bean.

Word of the Day

Today’s Word of the Day is: sycophancy, meaning “obsequious flattery.” Thanks to Kari Bliss from Grand Rapids, MI, and several of our other incredible, amazing, stupendous readers for the suggestion. Submit another Word of the Day here.