• Markets: With tensions in the Middle East worrying investors, stocks fell as oil rose yesterday and 30-year Treasury yields reached their highest level since June 2007. However, chipmaker Micron managed to avoid the dip following reports that the US has discouraged Apple from buying Chinese chips.

FINITE SCROLL

Morning Brew Inc.

Meta is in a higher stakes situation than someone prepping an Instagram summer photo dump after not posting for three years. The social media giant is heading to federal court in California today for the start of a trial that could upend how users scroll on its platforms and leave it financially ravaged if it loses.

California, Colorado, Kentucky, and New Jersey are suing Meta for up to $1.4 trillion, claiming that the company intentionally got young people hooked on Facebook and Instagram through addictive product design. They also allege that Meta misled the public about product safety and broke a federal child privacy law. Meta has called the claims “unsubstantiated” and maintains that it implemented youth safety features.

Doomscrolling might be doomed

The plaintiffs aren’t just seeking damages that could bankrupt the company if it is found liable, given its $1.5 trillion market cap. They also want the court to force Meta to nix features central to its apps:

• These include the infinite scroll enabled by autoplaying videos, ephemeral content like Instagram stories, and beauty filters.
• The states also want Meta to crack down on kids making multiple accounts and for it to create parental verification for underage users.

In a similar but smaller case, a New Mexico court recently fined Meta $942 million after finding that its platforms were designed to be addictive and ordered it to implement safety features for users in the state. Today’s case demands more sweeping product changes that would potentially have to get implemented nationwide.

Will Meta have to cough up $1.4 trillion? Maybe not, even if it loses. A judge hearing the case said the payout demand is “unreasonable” in a recent pretrial hearing. But she said that Meta’s estimate that it would owe just $4 million “is also unreasonable.” A ruling against Meta could also spur some users to cut back on scrolling its products—imperiling the ad dollars funding its massive AI buildout—and inspire even more lawsuits.—SK

      

Sponsored By PwC

PwC CEO and US Senior Partner Paul Griggs notes that AI is creating a workforce dividend. The question is, are you tapping into yours?

In this article, Griggs shares his POV on the debate about AI and jobs and how AI, when leveraged thoughtfully, can actually boost performance and enable capabilities that make new frontiers possible.

Together, AI and the human workforce have the potential to create a new springboard of capacity and resources. Not messily, not in place of, but symbiotically.

Read his take here and see what organizations can ask themselves to understand where they stand.

World

Tour de headlines

Ali Saeedi/Getty Images

🇮🇷 Iran ceasefire deal expires. The 60-day deadline set in the ceasefire agreement between the US and Iran passed yesterday, with no formal negotiations ongoing and both sides making conflicting demands for a peace deal—particularly as it relates to control of the Strait of Hormuz. President Trump said that Iran must agree not to develop nuclear weapons and that the US was not in a rush to make a deal. He also threatened to attack Oman if it interferes with the US blockade of Iranian ships, saying in an interview with Fox News, “If Oman gets in the way, we’ll bomb the shit out of them.” Meanwhile, an Iranian official told Reuters that Iran was ready to go on the offensive and “must be prepared to escalate tensions.”

🎬 Paramount wants states challenging WBD deal to put up $1.88 billion bond. The movie studio’s $110 billion takeover of Warner Bros. Discovery has been delayed by an antitrust lawsuit brought by a California-led coalition of 12 states—and now Paramount Skydance wants them to pay for the delay. Paramount is taking an aggressive stance in the litigation and asking the court to require the states to provide a bond to cover the hefty fees it’ll owe Warner Bros. for the delay, with the money going to the company if it wins the case.

💔 Actress Hayden Panettiere dies at age 36. Panettiere, best known for her roles in Heroes and Nashville, died on Sunday in Greenville, SC. Earlier this year, she published a memoir in which she discussed her difficult relationship with her mother and her mistreatment as a young girl in Hollywood. She had also been candid about struggles with addiction and postpartum depression. Authorities said yesterday that a preliminary investigation into her death found no signs of “foul play or suspicious circumstances,” and that emergency responders had found Panettiere in cardiac arrest before her death.—AR

ZERO TO SIXTY

RM Sotheby's

This is the part of the rom-com when the bullied nerd stuns at prom: A custom model of Ferrari’s first electric vehicle, the Luce, sold for $40 million over the weekend, becoming the most expensive new car ever purchased at auction. It’s quite a recovery after it debuted as a laughingstock less than three months ago.

ICYMI: Co-designed by former Apple design chief Jony Ive, the Luce was highly anticipated but failed to impress many Ferrari fans when it was unveiled in May. The internet compared the car to a Nissan Leaf, and Ferrari’s former chairman said it didn’t deserve the Prancing Horse badge.

But there’s a buyer for everything. The custom Luce sold for 36 times its original estimate of $1.1 million, according to Sotheby’s. The auction house didn’t name the bidder but did say that…

• The personalized model is finished with a pearl-like gloss that reflects green or violet in different lighting. So maybe the buyer is the Joker.
• Proceeds from the sale will go to The Ferrari Foundation’s educational programs. So maybe the buyer isn’t the Joker.

The Luce is selling: Ferrari already hit its annual target for regular sales of the $626,000 Luce, thanks to strong demand in China, the Financial Times reported.—ML

      

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Dalian Jingyuan Culture Film and Television Media

Did you hear about the movie having box-office success despite poor reviews and a bad script? No, it’s not an Adam Sandler project featuring Rob Schneider—it’s Niu Lai, an animated film about a cartoon bull that’s drawing people to theaters in China.

Niu Lai, which translates to “Here Comes the Cow,” was reportedly made for just $47 by a mother/son team, who provided all of the movie’s voices and released it through a production company that was formerly an interior decorating business. The online community mocked it over the weekend, calling it “worse than AI.” But not being made with AI eventually endeared it to viewers:

• In the first 10 days after its Aug. 5 release, the film grossed only $1,140.
• But it’s earned $1.7 million since the viral negativity. Chinese ticketing platform Maoyan predicts Niu Lai can make ~$3 million within 30 days of its release.

The budget was so paltry that cinemas didn’t have posters to display, so theaters drew their own (and as you can see, AI wasn’t used to make them, either).

If you want to watch Niu Lai but don’t want to make the trip to Beijing, the full movie is currently available on YouTube.—DL

      

Matty’s work-life balance

Don’t write off job hoppers

Niv Bavarsky

On Tuesdays, the Brew’s Matty Merritt brings you the news you need to make life a little easier during your 9-5, 5-9, or OOO.

Sure, constant job changes might yield higher salaries and a better arsenal of fun facts, but many employers still see it as a red flag. However, new research published in the Academy of Management Journal suggests there’s actually a benefit to your new boss: Job hoppers are quicker to adapt in their new role once they get there.

Hitting the ground running: Human resource professors from Rutgers and Cornell analyzed the performance of 8,700 hedge fund managers from 1992 to 2019. The researchers found that 72% of managers showed a decline in performance when starting a new job, and most new hires needed five months to get up to speed. But the managers with a job-hopping past only needed about two months to adapt. Figuring out who to sweet talk to get the AC lowered might take longer, though.—MM

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News

What else is brewing

• Nvidia is backing $105 billion in financing for OpenAI’s data center in Ohio. Another day, another multi-billion-dollar circular AI deal.
• President Trump is scaling back joint military exercises with US ally South Korea, citing its reluctance to support the US in Iran and his “very good” relationship with North Korea’s Kim Jong Un.
• Luigi Mangione’s state murder trial has been postponed indefinitely as his lawyers argue it would be double jeopardy after he pleaded guilty to federal stalking charges in connection with the killing of UnitedHealthcare CEO Brian Thompson.
• The Trump administration is pausing the controversial construction of a border barrier in Texas’s Big Bend National Park amid bipartisan concerns.
• The Supreme Court rejected President Trump’s appeal of a jury’s decision that he must pay E. Jean Carroll $5.6 million for sexually abusing and defaming her.
• Spider-Man: Brand New Day has taken in more than $2 billion in global ticket sales.

recs

• See where your favorite football team ranks in Nielsen’s new NFL fandom index.
• A quiz that helps you find what kinds of books you like to read.
• Get your eggs across America at these cool—but not classic—diners.
• Stainless steel nail clippers that are a pleasure to wield.**

^{*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 “_____ dream (dream where you know you’re dreaming).” Play the Mini here.

Name that combo

In today’s trivia, we’ll give you an item that’s composed of two parts, and you have to identify the components that make up the whole.

1. Steel
2. A griffin
3. The island of Hispaniola
4. Brass
5. A Bellini cocktail

Answer

1. Iron and carbon
2. Lion and eagle
3. Haiti and the Dominican Republic
4. Copper and zinc
5. Peach puree and prosecco

Word of the Day

Today’s Word of the Day is: gainsay, meaning “to declare to be untrue or invalid.” Thanks to Beverly Fox from Canada for a suggestion sure to make you sound like a boss. Submit another Word of the Day here.