This week in emojis:  

🍿 It’s blockbuster szn, so we’ve got updates on Max, Netflix, and MoviePass.

🤖 Artificial intelligence is only as good as its GPU (and we’re about to enter a gold rush in the tech industry).     

🚕 For good or bad, the gig economy is taking center stage.  

🏠 Short-term rentals are facing a reckoning.  

✈️ Gen Zers are packing their bags for some soul-searching. 

Buckle up, it’s gonna be a busy summer.   

— The Editors  

PLAY

Call of Duty, calling the shots: Regulators are worried that Microsoft’s $75 billion acquisition* of Activision Blizzard might game the system. Activision owns Call of Duty (COD) – one of the most successful video game franchises ever with $30 billion in lifetime revenue – and a merger would make Microsoft the world’s third-largest gaming company by revenue. Microsoft wants to add Activision’s blockbuster games to its subscription service called Xbox Game Pass, which could dominate the cloud gaming space if the brand doesn’t license COD to rivals. The U.K.’s Competition and Markets Authority rejected the deal, while the U.S. Federal Trade Commission is trying to block the buyout. In May, the European Union approved the deal.*  

It’s just Max: Entertainment giant HBO has rebranded its streaming platform as "Max" in an effort to give the flagship service a more family friendly feel. The newly merged Warner Bros. Discovery company (following a $43 billion mega deal* last year) said HBO Max had a male skew with a focus on scripted shows, while Discovery+ had a female skew with unscripted content. The new Max experience offers the best of both worlds and is designed to take on Netflix and Disney+. It certainly feels like one streaming chapter is closing, with HBO’s award-winning series “Succession” fading to black over Memorial Day weekend to mixed feelings.*   

Netflix, not so chill: After estimating that 100 million people* worldwide were accessing their streaming service without paying for it, Netflix’s password crackdown has commenced to cut back on account sharing outside of individual households. The streamer is serious about slashing moochers by checking IP addresses, device IDs, and account activity in order to bump up revenue (in fact, this writer had to verify her household last night, losing access to her parents’ account – guess it’s time to grow up 😢). Households can add an additional person outside the home for $7.99 – otherwise, users will need to sign up for their own account.   

Pass the popcorn: Summer blockbusters are back (“Fast X,”* anyone?) and in a surprise sequel, MoviePass has also returned following a service shutdown* in 2019. The brand is back at 4,000+ theaters nationwide with a service that allows users to cash in their credits for movie tickets. The $10 basic plan gives subscribers 34 credits, which roughly translates to up to three movies per month, according to MoviePass. Time will tell if the demand-based credit system will prove worth it.  

MONEY

Artificial intelligence is eating up the computer chip industry 

A computer chip shortage may be on the horizon. The graphics processing units (GPUs) powering artificial intelligence applications – like those at Google, Microsoft, and OpenAI – are almost all made by Nvidia, whose stock recently surged to a $1 trillion market cap.*  

Lots of GPUs mean sales are way up for Nvidia, which is forecasting $11 billion in revenue* during the current quarter, aided by the viral success of ChatGPT (its early version required about 10,000 GPUs, and the current version runs on five times as many, according to Elon Musk).  

Demand is outpacing supply, as AI developers need GPUs to operate their increasingly complex models. GPUs aren’t cheap, either: one Nvidia H100 can sell for $40,000 on the secondary market.* According to a recent Wall Street Journal article,* the shortage of GPUs is “like toilet paper during the pandemic.” 

To help with the shortage, Nvidia said it’s expanding its supplies and offering companies the chance to rent access to its supercomputer called DGX (it has eight GPUs) for  $37,000 per month.*  

WORK

Is the gig economy turning into a gotcha?   

According to the New York Times,* recent data shows that 10% to 15% of U.S. workers make up the gig economy, with some studies suggesting as many as a third of Americans occasionally dabble in gig work. Over the past decade, gig work has been popularized by the likes of Uber, Lyft, DoorDash, and Instacart, though workers for online platforms make up a small percentage of the gig workforce, and less than 1% of the overall labor force.  

For some, the gig is up. Detractors say contract work often means unreliable hours and pay, or less access to benefits. The recent writers’ strike has brought these issues back into focus, as streaming giants try to turn writing into another gig à la “mini rooms”* that hire talent as part of day-to-day arrangements instead of guaranteeing weeks of work at a time.  

Advocates point to the freedoms of flexible work, putting people in control of the times and ways they can earn money. Recent Empower data shows half of Americans (52%) are turning to a side hustle to generate more income, with 78% of Gen Z and Millennials picking up a second gig. 

LIFE

A reckoning for short-term rentals on the horizon  

When mortgage rates were at an all-time low,* investors were buying up homes in attractive locations and riding the wave of vacationers and remote workers seeking out short-term rentals. The average number of short-term rentals on the market reached nearly 1.3 million in 2022, up by roughly 19% from the previous year.  

Now the pipeline of short-term renters has dried up in some markets with hosts facing empty booking calendars* and stiff competition,* sparking whispers of what Business Insider is calling “an apocalyptic Airbnbust.”*

The change in demand has ignited fears of a bubble and a broader economic slowdown, but last year’s numbers are telling a different story: according to AirDNA,* the number of nights booked at U.S. short-term rentals reached a record high in 2022. A bifurcated market – a bust for some, a boon for others – is a sign that the short-term rental market has reached a turning point. 

Some cities have capped the number of permits* for short-term rentals, crafting their own rules to keep hosts happy and their neighborhoods protected, which may explain the variation in markets.  

The results are in: it's a summer soulstice ☀️

According to a recent Empower survey, Gen Zers plan to find themselves this summer by opting for a “soul-searching” trip (21%).¹ Nearly a quarter (24%) say they're packing their bags for a romantic getaway.¹  

And, in last week’s newsletter poll, our readers (47%) say they plan to spend between $1,000 - $3,000 on vacation. 

For fun in the sun, check out these affordable vacation options.  

¹ Based on survey responses conducted by Morning Consult on behalf of Empower from May 19 to May 21, 2023, surveying 2,201 Americans ages 18+.  

*Empower Retirement, LLC and its affiliates are not affiliated with the author or responsible for the third-party content provided from links to external material. 

As of May 31, 2023, EAG holds shares of NFLX, WBD, DIS, INTC, NVDA, MSFT, GOOGL and UBER in advisory client accounts and does not hold AMD, HMNY, ATVI, LYFT, DASH and ABNB.

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