• Markets: Like an influencer days after posting an apology video, stocks staged a comeback yesterday as pressures eased from oil prices and bond yields. Snowflake, which dipped during the day, soared 23% in after-hours trading after beating earnings expectations with a 35% year-over-year revenue jump.

KEEP THE FAM TOGETHER

Getty Images

It turns out that “we’re not breaking up!” banner was a good investment. Despite US District Judge Leonie Brinkema agreeing with the Department of Justice last year that Google’s ad business acted as an illegal monopoly, she ruled yesterday that Google won’t be forced to sell it off. This marks the second time Google has come through monopoly accusations from the government without having to lop off any of its business arms, as courts seem wary of breaking up tech giants.

In an abbreviated opinion, Brinkema officially rejected the DOJ’s request to splinter the company. However, the judge accepted other proposals to curb Google’s control over how publishers use its ad tech. Her full ruling won’t be available for two weeks once confidential information is redacted.

ICYMI: The DOJ and 17 states sued Google three years ago, alleging that the company’s control of its ad server (what publishers use to run ads) being tied directly to its ad exchange (the marketplace used to buy and sell ads) was anti-competitive. The DOJ claimed Google’s ad server held 91% of the global market share. Last year, Brinkema ruled in favor of the DOJ. But yesterday, she refused to order the sale of the exchange.

The courts have been letting Big Tech stay big

Even in its shortened form, yesterday’s decision mirrors other judges’ concerns in Big Tech antitrust cases:

• Last year, a district judge said Google was illegally dominating online search, but ruled that it didn’t have to sell Chrome because AI would probably disrupt search anyway.
• Meta also avoided a breakup when a court found that the FTC was right that the company had built an illegal social networking monopoly, but TikTok’s subsequent popularity changed that view.

Looking ahead…the recent spate of Big Tech punishments with no teeth coming from US courts doesn’t bode well for upcoming government antitrust trials against Amazon and Apple.—MM

      

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World

Tour de headlines

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🚘 Uber to lay off 10% of staff to become “simpler and faster.” The job cuts will affect about 3,300 people, as the company looks to get rid of layers of management and put cash toward beating its robotaxi and delivery competitors. The company said it will reduce the number of two-person or smaller departments by half and slash the number of managers by 20%. CEO Dara Khosrowshahi said the changes would “generate savings that we intend to reinvest in growth, innovation, and the capabilities that will matter most over the coming years.” It’s also targeting WFH: Uber said only 1% of staff will be allowed to work remotely.

🛢️ Chevron to invest $7 billion to more than double its oil production in Venezuela. After the US government announced a major deal for Venezuelan oil, now it’s the private sector’s turn. Chevron, the only major US oil company that currently has a presence in Venezuela, plans to spend the money over the next five years through its joint partnerships to boost its crude production there. The investment is the first large commitment from an American oil company since the US arrested Venezuela’s then-President Nicolás Maduro in January and President Trump vowed to revive the country’s troubled oil industry.

🏀 Clippers and owner Ballmer punished in salary cap probe. The NBA yesterday suspended LA Clippers owner Steve Ballmer for one year, fined the team $30 million, and docked it five first-round draft picks beginning in 2029, saying the team and its leadership circumvented the league’s salary cap for Kawhi Leonard. The league said a law firm’s investigation found “a pattern of misconduct and multiple significant rules violations,” including helping Leonard secure off-court deals. The team maintained its innocence, saying, “We vehemently reject the NBA’s findings,” and that it plans to challenge the findings and the penalties.—AR

LAND AHOY!

Anthony Wallace/Getty Images

It’s not clear who’s more excited about the USS Abraham Lincoln’s docking in Pattaya, Thailand, yesterday—the 5,000-person crew that was deployed for an unusually long 286 days, or the resort town that could use a financial jolt.

Right now, many of the sailors and Marines who were on board (in reportedly horrible living conditions) are enjoying their first bit of time off since deploying to support the US bombing of Iran and blockade of Iranian naval ports. The effects of those military operations are one reason the troops’ arrival in Pattaya is so welcome:

• Due to travel disruptions and high gas prices from the Iran war, local business owners told the Wall Street Journal that tourism is down significantly from what’s typical for this time of year.
• “We are glad to welcome [the sailors] because we are confident they have high purchasing power,” the mayor of Pattaya told the New York Times. Local officials estimated that crew members will spend $100–$150 each per day.

Looking ahead…the sailors are set to leave for their home port of San Diego on Sunday. Until then, they’ll be busy at the local bars and restaurants, but they’re barred from partaking in the raunchier, erm, nightlife scene that Pattaya has been infamous for since the Vietnam War. The town has worked to rebrand over the years, opening parks, malls, luxury resorts, and other family-friendly attractions.—ML

      

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GRAPHIC DESIGN IS MY PASSION

Niv Bavarsky

Some small businesses like bodegas and delis are using AI photos of their menu offerings as a way to save money, but it’s coming at a price: Potential customers are being repulsed by the nightmare versions of food pics.

It’s probably not surprising that the tech that gives people extra fingers is creating unsettling pictures of shrimp, burritos, sandwiches, and more. While it’s unnecessary for your annoying coworker to Slack you AI slop, some businesses may actually need it:

• Restaurants operate on tight margins, and the temptation of letting ChatGPT produce a disturbing grilled salmon image is hard to resist.
• Most AI photos are either free to make or cheaper to create than hiring a professional photographer.

An intrepid Food & Wine reporter found a digital services company that offers restaurants coaching for AI image generation for $19 per month, which seems like a bargain until you realize that snapping a pic of a cheeseburger with your phone is free.

The pushback: It cost a local coffee shop in San Francisco $700 to remove graffiti that appeared to be in response to its use of AI images, per SFGate. Meanwhile, a soda fountain business in Wyoming received online support for a post that said it will not use AI in its marketing.—DL

      

Reader Poll

MOLLY EXPLAINS THE INTERNET

Police aren’t laughing at the ‘Cat in the Hat’ trend

@nataliireynoldss via TikTok

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

Dr. Seuss’s jaunty feline isn’t real and can’t hurt you. That’s the general message from authorities around the world after social media users got spooked by a series of AI-generated photos that appeared to show people stalking neighborhoods while dressed as the Cat in the Hat.

The trend apparently started out as a joke in the UK and Latin America last month, but it snowballed into the US over the past week:

• A 14-year-old was arrested in Colorado after allegedly making a social media post that suggested a person dressed as the Cat in the Hat might show up at a middle school and random homes in the area.
• Cat in the Hat content is now on the radar of the Tennessee Office of Homeland Security’s Threat Assessment Center, which asked people to report any relevant posts they see.

Though these viral Cat in the Hat “sightings” are fake, the idea of someone putting on a costume to terrorize a town is realistic enough to stoke public fear. Remember the 2016 clown craze?—ML

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News

What else is brewing

• New York City Public Schools, the largest school district in the US, is banning AI for students until they enter high school.
• The DOJ said states must report undocumented immigrants or lose federal funding for a program for needy families, overturning its legal opinion from 1998.
• New Jersey asked the Supreme Court to weigh in on whether state gambling laws govern prediction markets.
• Tiger Woods struck a plea deal in his DUI case, pleading no contest to a reduced charge of reckless driving and refusal to submit to a lawful test. His license was suspended for five years.
• About 60% of Americans consider themselves “working class,” according to a new Pew survey. That includes some with college degrees and high incomes.

recs

• How to spot false expertise.
• A map of when fall foliage will peak across the US this year.
• What the science says about whether you have to toss all your berries if one becomes moldy.
• A fall doormat that nods to the season, but isn’t too in-your-face.**

^{*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: Your sample clue of the day is “One who doesn’t finish a sentence.” Put your thinking cap on. Play the Mini here.

Three Headlines and a Lie

Three of these headlines are real and one is faker than hitting the “one more minute” button on your Instagram blocker. Can you spot the odd one out?

1. Marmots are terrorizing California hikers and stealing their shoes
2. Chicagoans set Malört record for most people to down a shot at same time
3. The Olympic hockey player who became a global expert on Caesar salads
4. Teens don’t want to dance, and it’s obliterating the niche DJ industry

Answer

We made up the one about the niche DJs.

Word of the Day

Today’s Word of the Day is: jaunty, meaning “sprightly in manner or appearance.” Thanks to Erika Portillo from New Mexico for the stylish suggestion. Submit another Word of the Day here.