When does AI become a spending suck?

Neuroscience, chemistry. But, but, we do also like to get into other kinds of stories, stories about policing. Or politics, country music, hockey, sex, of bugs. Regardless of whether we're looking at science or not science, we bring a rigorous curiosity to get you the answers.

And hopefully, make you see the world a new. Radio lab, adventures on the edge of what we think we know. Wherever you get your podcast. Congratulations, Chairman Worsh. I guess from American public media, this is Marketplace.

In Los Angeles, I'm Kai Riznall. It is Friday today, this one is the 24th of April.

Good as always to have you along everybody.

We have seven minutes at the top of the program today to talk about the week gotten by. And I got to tell you, I am not sure it is going to be enough. Katherine Rempel is at MS now, also at the Bullirk David Garret is at Bloomberg. Hey, you too.

Hey, Kai. Katherine, you get to go first. The news of the day, of course, in our wheelhouse, as it were, is that the US attorney for the District of Columbia, Janine Piro, is dropping and you can't see me, but that's in air quotes.

The investigation into the Fed and Chair Powell.

“I guess I wonder, first of all, what you make of that?”

Well, it seems like the White House is White House/DOJ.

I know that they're supposed to be independent from each other, but it seems like all of the above have recognized that they are getting in their own way, or Trump is getting in his own way, that the way to get his pick for the next Fed chair, Kevin Worsh, through, is to find an off-ramp for what certainly appears to be a political, politically motivated, criminal investigation into Jerome Powell, and that the way to get Kevin Worsh cleared is

to abide by Senator Tom Tillis's request to drop this investigation, because Tillis says he likes Worsh, but he's not going to move forward any of Trump's picks for the Fed until this investigation is done, and to my knowledge, we still have not heard from Tillis to know whether this satisfies that demand, because it's not totally clear that Powell is out of the woods.

Right. Right. Right.

So David, let's keep going with that.

The last line of Piero's tweet this morning, because that's how we do government policy nowadays is by tweet or truth through social. For last line was, I reserve the right to reopen this investigation, and I guess, to Catherine's point, is that enough for Tillis who we think is looking for an off-ramp, but also what about Powell, right?

Because let's remember his term is up as chair on the 15th of May, but he does have the statutory right to stay on the board for another two-ish years. It's a great point, so we haven't heard from Senator Tillis. We haven't heard from Jay Powell, and remember what he said a little while back, he said he was going to stick around until this probe was resolved with transparency and finality.

Those were his words.

“So I think the question is, does this mark a resolution of that?”

So in that tweet that you referenced in that post, Janine Piero passing the buck over to the Inspector General with the Federal Reserve, calling upon Inspector General to do this investigation of the renovations and what Powell said to Congress, I should note, back in July, Fedcher Jerome Powell called for the same thing. So this work has been underway by the Inspector General already, but I think that's really

the key question here. If this is simply moving from one investigator to the next, is that going to satisfy the Fedcher that this investigation is over with, and I, like Catherine, like you, waiting to see what we hear from the Senator who's been withdrawing to block all of this end from the chair, and we'll see if anything, and we're just here over the course of the

weekend. Catherine, with complete awareness of what happens when one assumes, let's assume that this all works out as it were for the way the president wants it to, and Mr. Worsh does get the actual job.

“What did you make of his confirmation hearing this week?”

To be honest, I found the whole thing a little bit frustrating, because the elephant in the room is this criminal investigation of Powell, which may or may not be dropped, right? And to the extent that that came up, the question for Worsh was, would you, do you agree with Powell that this was politically motivated, because of a disagreement over policy, he was also asked about whether he would stand up and defend Lisa Cook, who is a board

member, whom Donald Trump has been trying to fire, that case is before the Supreme Court, and Worsh punted on both, and nobody asked Worsh, well, what would you do if, in fact, you had a disagreement with the president, and he wanted you to cut interest rates,

What would you do if he threatened you, smeared you, launched a criminal investigation into

you, tried to fire you, and nobody asked that.

“And so I found that a little bit frustrating, because I think that that's really what matters”

more than anything else, even if Kevin Worsh has indicated that he would cut interest rates, or at least try to encourage the rest of the FOMC to cut interest rates to can't do it solo. It's going to become increasingly difficult for the Fed to do that, because inflation has been so stubborn, and so that question will arise, should there be a chair, Kevin Worsh?

Right. So David, let's keep going with that. You had a great conversation with Michael McKee, who covers the Fed from Bloomberg earlier this week, and what I want is an understanding of walking in the door now, what is Worsh

going to be like as a Fed chair, because this has been a tricky process.

It's been a tricky process. And he's somebody who is applying for a very long time about what he would like to see the Fed become, how it should operate, how much it should communicate, how much it shouldn't, how it should approach inflation.

“I think that's another element of frustration to Barrow Catherine's word here is that he was”

very unwilling to engage with what he has spent his whole career talking about during the course of that hearing, and he had a very cute way, and I say that respectfully, of dealing with this, he said, "I'm not a believer in forward guidance." So he used that as a way to shut down any questions that were hypothetical in nature. As we've talked about before on the show, his job is going to be to rally this committee

behind him, we're to try to do so.

It's not just his decision alone, emphasizing that again for everybody who doesn't

have an intimate knowledge, how the Fed works. I think that is going to be a huge challenge for him going forward, whether he wants to cut rates or the President's telling him to cut rates, he has to work with his committee to convince them that that would be the thing to do even if, in fact, it is not the right thing. Catherine, yeah.

Catherine, they meet next week the Fed does, and just to bring it to current events, we're still in the middle of an energy shock. The mantra at the Fed has been, we're going to try to look through this energy shock to see what's going on.

“But we also had the International Energy Agency this week saying, "You know what?”

This energy crisis is going to last two years." How then does one run a central bank when you're trying to do that? They are in a very difficult position. They were in a difficult position before, obviously, given that inflation had been hotter than they wanted, and the economy seemed to be slowing down.

Is maybe the right way to describe it, you know, not in a bad space, but, you know, unemployment was creeping up, etc. So they already had this very difficult set of constraints around them. And now there is this question of, "Is this a one-time shock or does this feed into trend inflation?"

And if you listen to some of the things that Fed officials have said recently, they have suggested that they are very worried about this feeding into trend inflation. So not something that they would quote unquote look through. I think it was Christopher Waller, who said recently, that he was worried that kind of the one-two punch of tariffs plus the energy shock/everything shock would could potentially

create conditions similar to those experienced in the aftermath of the pandemic. I certainly hope we are not in that circumstance, but, you know, there is good reason to worry about that, if you look at inflation expectations that came out today in the, you know, it's a gentleman from the University of Michigan. Yes, exactly.

So there is reason to worry that this is not just about energy, this is not just about a one-time shock, that this could potentially cause expectations to become on an anchor, which is exactly what the Fed does not want. David Real quick, like 15 seconds, how do you read the TV's for the meaning this week? They hold, right?

They hold, but I mean, I think everything, they add plant is, is that the window I expect to robust to be able to take place there, but yeah, I think we don't see anything kind of moving. David Garra, Bloomberg, Catherine Palamaz, now the boardwork as well. Thanks, you too.

Thanks, guys. Wall Street to end the week that was war or what? May we worry? We'll have the details when we do the numbers. I think we mentioned meta and Microsoft yesterday, almost 25,000 positions between the

two of them that are either going away or aren't going to be filled so that those two companies can spend more on artificial intelligence. A lot of that spending is building physical AI infrastructure, all those data centers, computer acts and GPUs, the hardware of it, but it turns out that actually using AI is turning

are going to nearly double their AI usage spend in the next year to the point where it

“might start to rival employee salaries in some cases.”

Marketplaces of Megan and Cardi Carino has that one. At a fire side chat at the Federal Reserve last year, open AI CEO, Sam Altman Mews, about the future of AI economics. It does, in fact, look like we're about to deliver on intelligence to cheap to meter. But for now, it's definitely metered and it's not all that cheap.

The way it's metered is with tokens. The way that I like to think about it is sort of like the number of turns you're interaction with the AI sort of takes. Max Kan is a tokenomics analyst at Samai Analysis. He says a basic conversation with a chatbot takes a handful of turns.

You ask the ask and question, it gives you an answer, maybe you ask like two or three more hallwalks and that's about it. But new AI agents might analyze hundreds of documents, talk to other agents and keep doing these things around the clock. It is easily like 100x, 1000x, like maybe even 10,000x more tokens.

And some companies like Meta are reportedly token maxing, says Daniel Newman at future group. That's being encouraged to consume as many AI tokens as possible. The idea is there's this direct correlation between token consumption and productivity. A recent Goldman Sachs survey of large companies found many are overrunning their AI budgets

by orders of magnitude, an AI spending could equal engineer salaries in the near future. This doesn't really make economical sense. Exitron is a tech critic who hosts the podcast better offline. I don't think a lot of businesses are actually aware of how much this really costs. He says tech companies had been subsidizing AI, now they're increasing prices.

And most businesses aren't really measuring return on their investments, says Brian Jabarian and economists at the University of Chicago.

“How do you prove without coded data that AI has been fruitful for your business?”

The bigger the AI bill, the bigger the benefits needed to justify it. I'm Megan McCarty Carino from Marketplace. We were talking yesterday about the government's tariff refund website having opened up this past week.

Businesses mostly looking to get back their share of the $166 billion of the Trump administration

collected illegally. Today, another occupant of those trade and tariff trenches, Gretchen Blow, she's our Customs brokerage manager at logistics plus in eerie Pennsylvania. I've been spending my week working in the Cape Portal. The Cape Portal is where you apply for the IEPA refunds.

So my week's been spent a lot with importers making sure that they're registered for those electronic refunds. Our smaller customers were a little bit dented by the process. So rather than do a basic help desk for them, we decided to just do it on their behalf. There are 11,600 some entry numbers.

The files I'm uploading, I just use the analogy of the old school's Christmas lights. If one bulbs out, they're all out. The entire file fails.

“So if there's a problem with one line number, you have to find that particular line number”

and see what the problem is and then go from there.

IT says I might be killing my computer. The sound stopped working, I have two additional monitors and they started strobing like they were at a rave because the computers overheating, or IT guy looked at me and said, "Yeah, you might need a new laptop after this is over." I'm hoping to see that everything is appearing in ACE as promised.

That's the automated commercial environment for customers and border protection where our importers, our customers, can run reports and see the status of their refunds. And I'm hoping that people start getting money in their bank account and start getting happy again for that. Gretchen Blau, she's ID's favorite customer.

I'm sure logistics plus in ERIP.

We slept maybe two to four hours a night for a whole straight month. Running a women's sports bar is definitely not all fun and games, but first, let's do the numbers. Down Duster was off 79 points today, 2/10 of 1% 49,230, and as deck, grabbed 398 points 1 and 6/10, finished at 24,836, yes, and P500 rose 56 points, 8/10%, 71 and 65. And renewed AI optimism as what's going on with an as deck.

More the week though, the Dow dipped 4/10 to 1% than as deck added 1 1/2%, yes, and P500 increased 6/10%, bonds up yielded down 10 years at 4.30% your listening to marketplace.

“If you're a business leader, Intuit QuickBooks payroll is an essential tool that completely”

integrates payroll, time tracking, HR, and your financials in a powerful all-in-one command

center. No more juggling platforms or switching between vendors. Your data sink into one platform offering clarity and confidence to make smarter decisions and focus on what matters. This summer QuickBooks payroll evolves to support the entire team life cycle, HR, time, benefits

and payroll all working together in one connected system that fully integrates with your books. You'll be able to one board employees in one seamless flow that feeds directly into payroll, configure automated HR workflows for things like promotions or off-boarding, and track performance time off and benefits alongside payroll.

Upgrade your workflow with QuickBooks payroll today, and get ready for the brand new tools

coming soon. More at QuickBooks.com/workforce, that's QuickBooks.com/workforce.

“This is Marketplace, I'm Kai Rizdall, try to count for me now, would you?”

How many Proctor and Gamble products you have in your house? Not even specific brand names, but just categories. Someone off the top of my head here, it's like five or six in my house, easy, so you will not be surprised to hear that the OG consumer products company reported better than expected earnings this morning, net sales up 7% year on year.

And the thing is that wasn't just because of higher prices, PNG says there was an increase in volume to the straight up amount of stuff that we bought.

The place is Carla Havier, has more on what that might tell us about already squeezed consumers

and their appetite for spending. Consumers and investors see the maker of pamper's, bounty, sharmine, tampax, dawn and so much more as a litmus test says Robert Moscow at TD Cowan. If Proctor's doing well, the consumer must be doing well too. The company's 2% growth in volume Moscow says is encouraging.

Big-tied laundry detergent as an example. It's purported to be a times more effective than the prior formulation. And the message is resonated with consumers, they're buying more of it. He says that's because the higher performance improves the value equation for potential customers.

Innovation matters too, says Aaron Lash at Morningstar. It's about things that make a consumer's life easier or enhance it in some way, whether that's a smaller pack size, a larger pack size, something that's easier to open, a more favorable scent.

“Lash says that's why the tide maker says it's still uping its investments in research”

and development and marketing, despite cost headwinds. If you are a consumer that is really pinching pennies right now, you want to make sure that your clothes are getting clean each and every wash cycle and that they're not becoming tarnished. Because a new wardrobe is expensive.

That all said Katie Thomas at the Carnegie Consumer Institute points out that budgets are really tight these days, pressured by raising prices, food, gas, so product quality will only get companies so far. Or maybe some loyalty there, but we've also seen brands discounting, so consumers may be chasing the discount and not being as loyal as perhaps we think they are.

Which is why she says companies, including Frito Le, are rolling back prices and retailers including Walmart, Amazon and Target are leaning into their own loyalty programs and promotions. Because she says consumers will still spend if they feel like the prices they're paying are fair. I'm Carla Havier from Marketplace.

Good to see you Stephanie. Hi I'm Jamie. How are you? I'm Jamie. Tell me where we are.

Untamed Spirits is the first women's sports bar in the city of Los Angeles. Any Ellen Wood and Jamie trends started it back in June of last year. There's a big inside bar, tons of TVs of course, and a great back patio with string lights and hanging plants and also more flat screens. We were there one morning about three or so weeks ago, a couple of days after the women's

march madness final. Well, I'm super excited to be here because number one women's sports is cool.

New bars are always good.

Let's go on the courtyard for like two seconds and I want to ask you about something. So here's this sign. It says Untamed Spirits, grateful you came, can't wait to see again. Ellie's first home for women's sports. Correct.

Awesome idea.

“How did you come to decide that you guys were going to be the ones to do it?”

We actually were the first. There's a few others before us and we're Ellie City's first home for women's sports. There's other ones around too. There's just this movement in women's sports. And I don't think it's a fact, I think this is the moment in history where things are

going to grow. And before a few years ago when we go out to sports bars because we are huge sports fans, we cannot find women's sports on the TV. And on top of all of that, we couldn't even find audio for women's sports. So I thought, you know what, if there is a potential if there is a market for this, we're

going to do it. We're going to create a home for women's sports. How heavy was the lift? We both lost 15 to 20 pounds each. Really?

Really? Seriously? Oh yeah. This is radio, so people can't tell, but you guys need to look out on that before it leaves 50 to 20 pounds.

Oh yeah, that's, it was insane. We slept maybe two to four hours a night for a whole straight month. And we kept working for half a year, non-stop before we finally were able to take a day off of the work. And then you kept this place open, right?

This used to be a different bar and you kept it open while you were doing the changes. Correct. Yes. Yes. How did your bootstrap yourselves, did you, I mean you've got a side hustler too, right?

You've got to, you do other stuff? We saved up from our previous businesses, which is from real estate development.

And we thought, you know what, it's now or never, we've got to go bigger, go home and pray

and we don't go home. So this is now our home. Yeah, we also had some friends and family who were super supportive of us and trying to help us in any way that they can. I mean, they came up here Sunday morning at 9 a.m. to help trim all the plants.

Wow. And we should say there were a lot of plants. Sunday was the, you guys must have been packed for the, for the women's final. Absolutely. It was spectacular.

“At the game, that's what we should have gone, actually.”

Oh yeah. The game is live in two lads or a quarter. Oh, that's true. Well, good, right? Well, it was kind of a blowout, right?

I mean, honestly. Yeah. I'm glad you see L.A. one, whatever. Yeah. I was expecting 30 noon.

Everyone was out having a blast in the patio was hot. People are inside outside. We couldn't have asked for anything better than that. Other than the big days, right? Which, you know, you got the women's final four.

You've got Angel City, right? You guys are affiliated with them or you support them. Absolutely. Other than the biggies, how's like day to day business, right? Because that's what you live and die.

Yeah, definitely that's something that we focus on a lot.

Because we always make sure that during the week we have other types of events.

We have a trivia over Thursday. That's usually pretty busy. People love it. We have Taco Tuesdays, $3. Taco's, $3.

It's yellow shots. The dollar margaritas. What could possibly go on? Yeah.

“But one thing that I think we've also curated is a lot of people like to spend their”

anniversary. Here, birthdays here. They'll bring their group of 15, 20 people that can all get together, have an inexpensive meal, and just like have a good time and watch sports. At the same time.

It occurs to me that this bar could not have existed like 8, 10 years ago. Probably not. Honestly. Absolutely not. The hardest part about that is women sports weren't playing on TVs.

You couldn't actually find it unless you're on YouTube or trying to find it from some place else, like it was an accessible now in the last like five years. You can turn on ESPN and actually see women's sports, which was not definitely not happening 10 years ago. Yep.

Are you, are you profitable yet? Can you guys pay yourselves? Not quite. Not quite. But we'll get there.

We'll get there. We'll get there. We're almost, almost a year. Yeah. Yeah.

Our one year anniversary is coming up real soon, so we can't wait for that. Oh, yes. Absolutely. We throw it down. We throw it down.

Yeah. Yeah, I'm not kidding. You're ok. So in five years, where are you with this place, with an expansion?

This is funny.

“Stephanie just asked me this question the other day and we had a crazy day at the bars.”

So I said, please, don't ask me this question.

Just answer it. Oh, no. So it's a good answer. So, um, our goal that I'm going to convince her to do as well. Great.

Our goal is to have five locations in five years. That's, that's. You grow too fast. It's really dangerous. You know that.

I totally get that.

But we also want to be the first, everywhere.

Thanks, you guys. I appreciate it. Thank you. Thank you. This final note on the way out today, we're going to go out on Petroleum.

“Liam, since the straight is still closed, negotiations are, I think, set for this weekend”

and the unknown unknowns do keep piling up.

Brent Norse, the global benchmark, back over $100,000,000, 1.0642 to be precise, gas says triple A 405, a gallon. That's within a couple of cents actually either way of where it was, both yesterday and a week ago. Our theme music was composed by BJ Leaderman, Marketplace's executive producer is Nancy

Fargolly. Chris Griffith is the chief content officer, Neil Scarborough's the vice president and general manager. And I'm Kyle Rizdall. Henry sells a great weekend, everybody.

We will see you back here on Monday, all right? This is APM.

“The economy moves fast and when headlines turn on a dime, it is essential that you”

feel informed rather than overwhelmed. Hey, I'm David Brent Catcho, a special correspondent from Marketplace and an avid reader of the Marketplace newsletter, not that I'm partial. Every Friday Marketplace curates must read stories from the week and delivers explainers right to your inbox.

So if you want the latest from me and our team of award winning journalists, head over to Marketplace.org/Newsletters and sign up today.