Monday, April 10, 2023

☕ Plugging the leak

How did top-secret Pentagon docs end up on Discord?
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Morning Brew

Masterworks

Good morning. Hope everyone had a nice Easter weekend, and if it feels like everyone you know was celebrating some sort of holiday…you're onto something. Easter, Ramadan, and Passover were all overlapping, which typically only happens three times a century. Add the Masters to the mix, and you get a once-in-a-millennium concurrence.

P.S. Our New Manager Bootcamp starts one week from today. It'll be an extremely helpful resource for anyone who got promoted to "boss" but isn't quite sure how to wear that badge with confidence. Learn more here about upgrading your leadership skills.

Neal Freyman, Abby Rubenstein

MARKETS: YEAR-TO-DATE

Nasdaq

12,087.96

S&P

4,105.02

Dow

33,485.29

10-Year

3.405%

Bitcoin

$28,444.87

Nvidia

$270.37

*Stock data as of market close, cryptocurrency data as of 12:00am ET. Here's what these numbers mean.

  • Markets: Investors head back to work after the three-day weekend, and today's stock moves will reveal their thoughts on Friday's solid jobs numbers. Checking in on the S&P's 2023 performance: pretty darn good, but it's a lot like a college group project in that a few folks are doing most of the work. Almost 90% of the index's gains this year is accounted for by just 20 stocks, Nvidia, Apple, and Meta among them, the Financial Times notes.
 

DEFENSE

US races to plug embarrassing intelligence leak

US races to plug embarrassing intelligence leak Popeye the Sailor/Paramount Pictures via Giphy

No one wants their secrets posted on social media. But when those secrets are highly classified intelligence documents from the Pentagon…the stakes are a little bit higher.

US defense officials and the DOJ spent their Easter weekend frantically investigating a massive leak of classified documents published on social media, many of which were considered "top secret."

What do the documents show? For the most part, they reveal the Pentagon's analysis of the war in Ukraine, including remarkable insights into Russia's military strategy, such as when and where it was planning missile strikes. But they also expose how the US snoops on its allies, such as South Korea, which could lead to awkward group chat conversations.

Are they authentic? Many of the documents do seem real, defense officials said. But at least in one case—an estimate of Russian casualties in the war in Ukraine—different versions that appear to have been modified have been posted.

So, who leaked them?

This is where the story gets real weird. While the documents recently showed up on social media platforms like Telegram, Twitter, and 4chan, they appear to have been originally published on niche Discord servers in early March, according to the Bellingcat investigative consortium. And we're talking niche: They were allegedly first seen on a server for fans of a Filipino YouTube celebrity named WowMao, then later on a server dedicated to the game Minecraft. Bellingcat says they could've shown up even earlier on a server called "Thug Shaker Central."

Ukrainian officials have suggested the leak was part of a disinformation campaign, but some experts and Bellingcat's founder said that wasn't likely, given the apparent authenticity of the papers. Still, the source of the leak remains a mystery—US officials told Reuters that the enormous scope of the documents suggests that someone in the US was behind it.

Looking ahead…while the US tries to minimize the potentially significant damage from the leak, Ukraine downplayed any impact on its much-anticipated counteroffensive this spring. "As for the real counteroffensive plans, the Russian troops will certainly be the first to get acquainted with them," an advisor to Ukrainian President Zelensky wrote on Telegram.—NF

        

TOGETHER WITH MASTERWORKS

The surprising asset that (handily) beat 94% of the S&P 500

In just 604 days, a $10,000 investment in this opportunity would have secured an eye-popping $4,900 profit. That's a 27.3% net annualized return—beating 470 of S&P 500 stocks over the same time period.

So what was it? A fractionalized painting from Masterworks, the blue-chip art investing platform. (They do say investing is an art, not a science…)

While not every painting will see those gains, every one of Masterworks' 12 exits has returned a profit to investors, totaling more than $30 million in payouts.

New offerings can sell out fast, but Morning Brew readers can open a free, no-obligation account with this exclusive link.

WORLD

Tour de headlines

Tesla Gigafactory in Shanghai Xiaolu Chu/Getty Images

Tesla is expanding in China. The company already has a Gigafactory in Shanghai that produces cars. Now, it's planning to build a Megafactory in the same city that will make Megapack batteries—its large-scale energy storage units that serve a growing market as the world shifts to renewable energy. CEO Elon Musk, who was reportedly in China over the weekend, has promised to make Tesla's battery division just as big as its car business. Tesla's Shanghai auto plant churned out almost 711,000 vehicles last year, accounting for the majority of its global production.

Biden administration pushes back against abortion pill ruling. The Biden administration filed an appeal after a federal judge in Texas on Friday suspended FDA approval of the abortion pill mifepristone, according to Secretary of Health and Human Services Xavier Becerra, who called the ruling "reckless." The 5th US Circuit Court of Appeals in New Orleans, which leans conservative, will hear the case. But the legal status of the abortion pill (the most common method of abortion in the US) could make its way up to the Supreme Court before long.

Jon Rahm won his first Masters, but it was a slog. The Spaniard pulled away on the sunny final day of the world's most famous golf tournament but the stormy weather dominated storylines (and downed three towering pine trees) during the first three rounds. It was the first Masters in which players from LIV Golf, a Saudi-backed rival to the PGA Tour, competed against their old colleagues. LIV's Brooks Koepka and Phil Mickelson finished in the top 3.

TECH

Can AI defame you?

A computer with the ChatGPT logo under magnifying glasses Francis Scialabba

We're about to find out whether AI's hallucinations are more than just a bad trip. A mayor in Australia is gearing up to file the world's first defamation lawsuit over statements made by ChatGPT.

What happened: ChatGPT claimed the mayor of Hepburn Shire, Brian Hood, served time in prison over a bribery scandal linked to the Reserve Bank of Australia. And, well, *he did not*. Not only has he never been to prison, but Hood was the whistleblower who helped take down the actual guilty parties in that bribery scandal.

So Hood lawyered up, and his lawyers sent a letter of concern to OpenAI late last month. Under Australian law, the company has 28 days from receiving the letter to fix the issue, or Hood can take the company to court for defamation.

He's not alone: If Hood's suit (or another like it) is successful, it could create major liabilities for OpenAI and other bot backers since this is hardly an isolated incident. For instance, ChatGPT recently invented a sexual harassment scandal involving George Washington University law professor Jonathan Turley (very much a real person, who was not amused)—and cited a nonexistent Washington Post article as evidence for its claims.

Big picture: These episodes raise thorny questions about whether you can be defamed by someone who's…not a person—and whether companies like OpenAI can be held accountable for the demonstrably false things their chatbots say.—AR

        

TOGETHER WITH MICROSOFT

Microsoft

Get (A)Inspired: The workplace is changing—and it's getting smarter, too. Join Microsoft leaders and industry experts on April 20 for Microsoft's Viva Summit to get the scoop on how AI empowers workforces. Attend expert-led panels and see Microsoft Viva's smart tech innovations for yourself. Register here.

CALENDAR

The week ahead

Coachella festival

Inflation continued its march higher. That's the expected takeaway from Wednesday's inflation report (the consumer price index for March, technically speaking). The Fed has signaled it will end its interest rate hikes imminently, but that could get tricky if inflation doesn't start dropping…fast.

Missed reading corporate earnings reports? Well, they pick back up this week and will influence the direction of the stock market for the next several months. Big banks, including JPMorgan and Citigroup, will drop their Q1 results on Friday, so we'll learn how the collapse of SVB impacted them.

Music festival season begins with Coachella. Prepare for a lot of TikToks coming from the California desert because this weekend Coachella will kick off the summer music festival season. Bad Bunny, Blackpink, and Frank Ocean (in a rare performance) are headlining.

Everything else…

  • The US is expected to propose much stricter auto emissions limits on Wednesday to spur electric vehicle adoption.
  • This week President Biden will travel to Ireland, his ancestral home, to commemorate the 25th anniversary of the Good Friday Agreement.
  • The world's greatest water fight, Songkran in Thailand, is on Thursday. It marks the Thai New Year.

GRAB BAG

Key performance indicators

TikTok logo formed via boats on a lake Francis Scialabba

Stat: Even as the US demands ByteDance to sell TikTok, fresh numbers show why it's determined to hold on for dear life. The Chinese tech giant posted record underlying profit last year (known as EBIDTA) and is now more profitable than fellow Chinese tech giants Alibaba and Tencent, per the Financial Times. ByteDance grew sales 30% in 2022 to $85 billion, and its profits surged 79% to $25 billion. Worth $300 billion last year, ByteDance is the world's most valuable private company.

Quote: "The organization, they made this decision…we have to go by that."

When asked why the Dallas Mavericks made the inexplicable decision to sit star players in a game with big playoff implications, coach Jason Kidd suggested he was ordered to by the Mavericks higher-ups, including owner Mark Cuban. Well, the decision isn't so inexplicable—the Mavs wanted to lose the game (which they did) so they could have a chance at drafting prodigy Victor Wembanyama. The NBA said it was investigating the Mavericks for sitting those players. In other NBA news, the playoff matchups are set, and James Harden still hasn't missed the postseason in his 14 years in the league.

Read: The fortune cookie industry is in upheaval. (Wall Street Journal)

NEWS

What else is brewing

RECS

Monday to-do list image

Spicy interview: Watch a tense exchange between Jon Stewart and Deputy Secretary of Defense Kathleen Hicks.

Don't put it all on red: Here's how one guy cracked roulette.

Gain a new perspective: This is what life looks like when you're colorblind.

DIY naan: Here's a step-by-step guide to a homemade tandoor oven.

Fuel your progress: Whatever your fitness and wellness goals, Gainful is here to help you crush 'em with personalized performance nutrition. Take the quiz and get 50% off your first order with code BREW50.*

Home help: Wondering whether you're better off buying or renting these days? You're not alone. We're sitting down with Zillow to unpack the current housing market so you can make smarter decisions. Register here.*

*This is sponsored advertising content.

GAMES

The puzzle section

Turntable: You'll have some fun with X, T, Y, and a bunch of vowels in today's Turntable. Play it here.

Brothers and sisters trivia

On National Siblings Day (today), each of the answers to the following clues will contain some form of "brother" or "sister." How many can you get?

  1. We're suckers for these former Disney Channel stars from New Jersey.
  2. A movie set in 1930s-era Mississippi that's loosely based on "The Odyssey." It was also made by two brothers (bonus points if you can name them).
  3. That ukulele-infused Train song they used to play nonstop on the radio
  4. The '90s sitcom starring Tia and Tamera Mowry
  5. Emily Blunt, to Stanley Tucci
  6. The movie that contains the quote "Listen, gang, don't be mad at Dale for ruining the story…and possibly the evening."

AROUND THE BREW

It's in the numbers

A meme of a woman trying to figure out confusing math problems Senhora do Destino/Rede Globo

Keeping track of everything going on in your business is hard. To make it easier, check out Data Storytelling, our one-week online course that teaches you how to leverage data to identify and communicate trends.

Learn how software is transforming the healthcare industry—and what challenges it hasn't solved yet. Read it here.

Tech Brew explains how the world's most innovative companies are using technology to bolster their businesses. Sign up today.

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ANSWER

  1. The Jonas Brothers
  2. O Brother, Where Art Thou? (Joel and Ethan Coen made the film.)
  3. "Hey, Soul Sister"
  4. Sister, Sister
  5. Sister-in-law
  6. Step Brothers

✢ A Note From Masterworks

See important disclosures at masterworks.com/cd.

         

Written by Neal Freyman and Abigail Rubenstein

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