0:01

It's one thing to be a

0:03

big company. It's entirely another to

0:05

stay a big company. From

0:09

American Public Media, this

0:11

is Market Place. In

0:22

Los Angeles, I'm Kai Rizdahl. It is Thursday

0:24

today. This one is the 20th of June.

0:26

Good as always to have you along, everybody.

0:30

If there has not been yet,

0:32

there will soon be a business

0:34

school case study written about NVIDIA,

0:36

the AI chip design company that,

0:38

depending on the day, is

0:40

either the first or second most

0:43

valuable company on the planet. Second

0:46

today, worth a shade less than three and

0:48

a quarter trillion dollars. And

0:50

yes, sure, the case study will look at

0:52

how exactly NVIDIA got to where it is,

0:54

but also how it's maintaining its

0:57

dominance in the AI chip market, estimated to

0:59

be somewhere between a 75 and 90 percent

1:01

market share. Market

1:05

Place is Matt Levin. Gets us going today. Big

1:07

breaking news here. It's not easy to

1:09

compete against one of the richest companies

1:12

in the world. It is hard. It's

1:14

a fantastic company. It is very well

1:16

run. Sid Shade is the

1:19

co-founder of Dmatrix, an AI chip

1:21

startup. When he tries to

1:23

sell big tech companies like Meta on

1:25

his AI chips, he leans into small,

1:27

or at least small compared to the

1:29

three trillion dollar gorilla in the room.

1:32

We are a nimble, small

1:34

company that will work with you. The

1:36

leverage is a lot more balanced. Maybe

1:38

you at Meta have more leverage than we do. So

1:41

we'll be a lot more flexible. Right now,

1:43

all the leverage lies with NVIDIA. They

1:45

really are the only game in town

1:48

for certain types of crucial AI training

1:50

chips. That doesn't just mean NVIDIA

1:52

can set prices. It can

1:54

also make it harder for competitors to

1:56

break into long-standing relationships with big tech.

2:00

not, right? They should. If I were them, I would do the

2:02

same. Companies like Amazon and

2:04

semiconductor firms like AMD have

2:06

designed their own AI chips.

2:08

Problem is almost all of

2:10

those chips are physically made

2:13

by one company, the Taiwan

2:15

Semiconductor Manufacturing Company or TSMC

2:17

for short. Todd Achilles is

2:19

a public policy lecturer at

2:21

UC Berkeley. And because

2:23

of Nvidia's market power, they're really

2:25

in the lead position with TSMC

2:27

to get what they want built.

2:30

And built first. Achilles also

2:32

says the federal government's effort to bring

2:35

chip making to the US won't really

2:37

help competition all that much. If

2:40

this all sounds kind of monopolistic

2:42

to you, the Biden administration is

2:44

reportedly looking into Nvidia antitrust issues.

2:46

But Dan Ives at the investment

2:49

firm, Wedbush Securities doesn't expect immediate

2:51

regulation. I mean, regulatory is

2:53

essentially going 40 miles an

2:55

hour in a minivan the right lane,

2:58

but the technology is in a Bugatti

3:00

going 100 in the left lane. And

3:02

there's no sign the Bugatti is slowing

3:04

down anytime soon. I'm Matt

3:06

Levin for Marketplace. On

3:08

Wall Street today Nvidia shares off about 3.5% if

3:10

you're keeping track. It was

3:13

a split decision on the major indices. We'll

3:15

have the details when we do the numbers.

3:25

All right,

3:28

here's a

3:31

perhaps unexpected

3:34

trifecta inflation,

3:38

climate change and zoning laws.

3:41

They come together in a report from

3:43

Harvard on rental costs and why they

3:45

are so high. Some

3:47

apartments have been built over the past couple

3:50

of years, yes, and that has helped stabilize

3:52

rents a bit. But numbers out today from

3:54

the Census Bureau shows the number of permits

3:56

issued in May for new buildings with five

3:58

or more units. was down 6% from

4:01

the month before and 31% from a year ago. Marketplaces

4:07

Dan Ackerman looked into why in the middle

4:09

of a housing shortage, it is so hard

4:12

to get new apartments up and running. It's

4:15

basic economics that when demand and

4:17

prices go up, like say for

4:19

rental housing, supply should go up

4:21

too and bring prices back down.

4:23

And yet, Rents are high. Daniel

4:26

McHugh researches housing at Harvard and he coauthored

4:28

the new report, particularly

4:31

for lower income renters who

4:35

have fewer and fewer options. McHugh

4:38

says in the last decade, we saw

4:40

the number of units with inflation adjusted

4:42

rents of $1,000 or less has gone

4:44

down by 6 million. So we're losing

4:46

the low end rental stock. The

4:49

apartments that have come online tend to

4:51

serve the luxury market, says Priya Jayachandran,

4:53

CEO of the National Housing Trust. No

4:56

one is building B class

4:59

apartments anymore. She says developers

5:01

want higher returns because their

5:03

own costs have gone up. Inflation

5:05

has hit labor and materials and interest

5:07

rates have made financing new construction costlier

5:10

too. It is incredibly

5:12

expensive right now to borrow. And

5:16

when you've got a capped

5:18

income stream and a rising expense

5:20

side of the equation, the math

5:22

makes less and less sense. So

5:25

it's more expensive to rent, it's

5:27

more expensive to build rentals, and

5:30

it turns out it's more expensive to operate

5:32

them too. Insurance for apartments

5:34

rose nearly 28% last year. Darryl

5:37

Fairweather is chief economist at Redfin. Insurance

5:40

is a function of the cost of

5:42

repairing or rebuilding a home along with

5:44

the frequency of how often those repairs

5:46

need to be made. The cost is

5:48

going up because of inflation, the frequency

5:50

because of changes in the climate. And

5:53

all of this means if you're in the housing market.

5:55

Whether you continue to

5:57

rent or you decide to buy a

5:59

home, It's going to be expensive. Fairweather

6:01

says one thing that can help? Looser

6:04

zoning rules. She says places that allow

6:06

for more apartments get more of them

6:08

built. I'm Daniel Ackerman for

6:10

Marketplace. Kemer,

6:24

Wyoming is a coal town, has been for

6:26

more than 100 years. Climate

6:29

change and changing energy market dynamics

6:31

are forcing a new approach. A

6:34

nuclear approach, actually. Almost

6:37

three years ago, Bill Gates and his

6:39

nuclear power company, it's called TerraPower, announced

6:41

that they had chosen Kemer for

6:43

a first of its kind power plant. Gates and

6:45

the Department of Energy are the two

6:48

big backers of that $4 billion project with

6:50

the hopes that it'll pump some

6:52

life back into some struggling energy economies.

6:54

Wyoming Public Radio's Caitlin Tan has the

6:56

story. Should I take my shoes

6:58

off? No, no. Mark Thatcher

7:00

opens the door of his gray

7:03

stucco home in Kemer. Photos of

7:05

his 21 grandkids cover the hallway.

7:08

A granddaughter graduate, like, can I brag

7:10

on this? Thatcher built his

7:12

American dream in this coal town. He

7:14

worked as an electrician in the mine,

7:16

bought a house, raised a family, and

7:18

retired. So you know what I mean?

7:20

Kemer's been good for us. And

7:23

he wants that for his grandkids. If

7:25

Kemer's dried up, it's not

7:27

an opportunity. Kemer and coal

7:30

go hand in hand. So

7:32

for a while, the town

7:34

emptied out, mirroring coal's 16-year

7:36

decline. But now, Thatcher says

7:38

Kemer is feeling more lively, partly thanks

7:40

to another source of energy, nuclear.

7:46

In a nearby sea of sagebrush,

7:48

TerraPower is about to break ground

7:50

on its nuclear power project. Brian

7:52

Muir, Kemer's city administrator, scans the

7:55

crowd of about 300. He

7:58

looks visibly relieved. after

8:00

a lot of uncertainty and getting

8:02

here. That's because the nearby

8:05

coal plant is permanently closing by 2036,

8:09

putting a question mark on the future of

8:11

the camera coal mine that serves it. Muir's

8:13

hope is for those hundreds of workers to

8:16

be absorbed by the future nuclear facility, which

8:18

promises 250 long-term jobs and

8:22

1,600 temporary construction jobs.

8:24

I think the eyes of the world are upon us to see

8:27

how soon we can get this done. It

8:29

is a pilot project. Some parts still need

8:32

to be permitted by the federal government. Conventional

8:35

nuclear power plants are massive and require

8:37

a lot of water. TerraPower

8:39

has figured out a way to

8:41

make them smaller, safer, more climate-friendly,

8:44

and cheaper, in theory. It's

8:46

working really well inside the computer. Speaking

8:49

at the podium, Bill Gates looks

8:51

on brand. Blue sweater and

8:53

black-rimmed glasses. He motions to the

8:56

leveled dirt behind him. A little

8:58

bit harder to make it work

9:00

out there, but that's what

9:02

we're starting on, starting today.

9:05

TerraPower still needs to secure a

9:07

domestic source of fuel, a highly

9:10

enriched uranium. Right now, it's

9:12

only made in Russia. Gates'

9:14

vision is for these plants to be

9:16

the future of America's growing energy demands.

9:19

And you're the pioneers that are gonna

9:21

make that happen. And

9:23

with that, Gates grabs a shovel and

9:25

plunges it into the dirt. Three. Whoo!

9:32

But not everyone feels the camaraderie. Across

9:34

the highway are about 10 trucks with

9:36

flags that say things like, Make America

9:39

Great Again and Trump 2024. Ashton

9:42

Anderson breaks away to explain. Well, we

9:45

just don't like the idea of liberals

9:47

coming into our state. It's

9:49

that simple. And while many

9:52

agree Gates' politics don't align with

9:54

Wyoming, Kemmers downtown is bustling,

9:56

even just compared to a year ago. Two

9:59

bakeries. a law office and a

10:01

home goods boutique recently opened up.

10:04

And many say business is good, like

10:06

here at Tinskey's Fossils, a

10:08

little downtown storefront where tourists can

10:10

buy local fish fossils. Cody

10:15

Tinskey is using a small power tool

10:17

on a fossil. So most of

10:19

these fish are covered with rock, so we have to

10:21

uncover it. Four years ago, she

10:23

didn't know if she could keep the doors

10:25

open. The town was slow, partly because of

10:27

COVID. That was our first year of business,

10:30

so it was very scary. Business

10:32

is good now. Tinskey says she thinks

10:34

it'll only get better with the nuclear

10:36

project. I think it'll bring

10:38

in new people and hopefully, so

10:40

Cameron doesn't become a ghost town

10:42

again. Construction on the nuclear

10:44

project is expected to take six years.

10:47

So for that time at least, she

10:49

expects lots of foot traffic and hopefully,

10:52

business. In Cameron,

10:54

Wyoming, I'm Caitlin Tan for Marketplace.

10:58

Coming up. I

11:11

don't think it's beyond the pill that we could be over

11:14

400,000 Japanese visitors. Why?

11:17

Well, we'll tell you. But first, let's do

11:19

the numbers. Dow

11:22

Industrial is up 299 points today. Eight

11:25

tenths percent, 39,134. The

11:27

Nasdaq off 140 points, about eight tenths percent

11:30

there. The

11:32

S&P 500 gave back 13 points a quarter percent, 54 and 73. Dan

11:39

Ackerman was talking about the costs associated

11:41

with building and operating apartment buildings. Well,

11:43

in related stocks, Essex Property Trust lost

11:46

1.6 percent. Toll Brothers

11:48

dropped about one and a half percent.

11:51

Meritage Homes dropped seven tenths percent. It

11:53

might just be Meritage instead of Meritage.

11:56

Caitlin Tan was telling us about Terra Powerbreaking Ground

11:58

on a nuclear power project out in Wyoming. filming

12:00

so some nuclear power stocks, shall we? Camico

12:03

Corporation down 3 tenths percent, new scale power

12:05

dimmed 3 tenths of 1 percent, bonds down,

12:07

yield down the 10 year T-Net up 4.626

12:09

percent, you're

12:12

listening to Marketplace. This

12:14

is Marketplace, I'm Kai Rizdolm. The

12:16

summer solstice arrived at 4.51 Eastern

12:20

Daylight Time this afternoon,

12:22

which lets me be astronomically accurate

12:26

when I say we are in the summer travel season,

12:28

when among other things, demand for gasoline grows as

12:31

road tripping families take to the highways and byways. The

12:35

summer solstice is a very important time for

12:39

the community to be able to get their jobs

12:42

done. But even

12:44

though gas prices are down from last year, yes,

12:47

people still just aren't filling up their tanks like

12:49

they used to. Marketplace's Elizabeth Trowball is in the driver's

12:52

seat for this one. The U.S. is

12:54

the number one market for gasoline in the world, but

12:57

energy analyst Tom Kloza says demand has been slogging along.

13:02

There's no question that people aren't

13:05

feeling it. Especially lower and middle

13:07

income people, because while gas prices may be lower,

13:09

hotel fees and eating out is so expensive that you can

13:11

save 10

13:15

cents on gasoline, but it's not going to make a

13:17

difference to your lifestyle. While some may

13:19

be sensitive to travel costs, there's

13:21

also fewer gas guzzlers on the road, Kloza says,

13:24

so each gallon is going further. The

13:27

efficiency of the fleet is really having an impact out there.

13:32

And some travelers aren't really using gasoline

13:35

at all. Amelie

13:37

Carlton is with Rice University. The

13:40

slowing and U.S. demand for gasoline is due to

13:42

the substitution

13:44

effects from shooting air travel and

13:46

choosing to travel or

13:48

choosing to travel on the road with EVs

13:50

or more efficient vehicles. And with

13:53

work from home flexibility, not as many people are driving. driving

14:00

into the office, all of

14:02

which is good for gas prices. The

14:05

refineries rammed up production, expecting increased

14:07

demand over the summer. Their expectations

14:10

have not been met with the

14:12

demand from the American consumer. As

14:15

a result, higher supply and lower demand have

14:17

led to lower prices at the pump. And

14:20

as for producers of gasoline, many of

14:22

which are concentrated on the Gulf Coast,

14:24

Jesse Thompson with the Dallas Feds says

14:26

refiners here are in a

14:29

better spot to deal with a lackluster

14:31

gasoline market than those in Europe or

14:33

Asia. So if demand

14:36

here is weak and

14:39

margins are in negative or very

14:42

low territory abroad, then

14:44

I would expect you to see those

14:46

refineries abroad cut run rates first.

14:49

And cutting production would make more

14:51

room for refiners in the United

14:53

States to ship gasoline abroad. I'm

14:57

Elizabeth Troval for Marketplace. Are

15:02

you a physical

15:05

book person or

15:07

an e-book person?

15:18

It is very much a matter of personal

15:20

taste, of course, but it is also a

15:22

very real business dilemma for libraries. Books

15:26

books are limited by the actual number of

15:28

copies, right? Makes sense. But

15:30

e-books available through apps like Libby

15:32

and OverDrive are limited too by

15:34

the number of licenses any given

15:36

library system has bought. Librarians

15:39

from a number of states are pushing for

15:42

more lenient licensing terms and costs

15:44

as well. Sarah McCusker is

15:46

the president of the Connecticut Library Association. Welcome

15:48

to the program. Thank you. Happy

15:51

to be here. For those who are unfamiliar, how does the

15:53

business end of e-books work

15:56

for a public library? So a

15:58

lot of people have this misconception

16:01

that we just have access to every

16:04

ebook that's out there. We don't. We

16:06

have to purchase copies of it, just

16:08

like we purchase copies of regular print

16:11

items. We have to

16:13

purchase them from the publishers.

16:16

We don't have any opportunity

16:19

to do any comparison shopping.

16:21

We're basically tied into what

16:23

the publishers charge

16:25

us. So

16:28

speaking of charges, let's say you want, I don't

16:30

know, pick your New York Times best seller. How

16:33

much is a license going to cost you? How long do you

16:35

have it for? So

16:38

when we buy print copies, we get

16:40

substantial discounts. So we can get a

16:42

print copy of your average hardcover

16:45

for best seller for $15. If

16:49

we get the ebook, it might be $100, $120. And

16:54

we only have that for two years or

16:56

26 checkouts. Sorry,

17:00

26 checkouts? So if I'm

17:02

number 27, I'm out of luck? If

17:04

you're number 27, you're out of luck. If

17:06

you're waiting for that item and our license

17:08

has expired, we need to purchase it again.

17:11

And generally speaking, when we purchase it

17:13

again, we're paying the same inflated price

17:16

that we paid initially. We don't get

17:19

like a renewal price or anything like that.

17:22

Authors who have taken

17:24

on this case as you and other states present

17:27

bills to try to do something about

17:29

this basically say you're depriving authors of

17:31

copyright and fundamentally you're interfering with interstate

17:35

commerce. What do you say? So

17:40

because the copies that we circulate

17:42

have digital rights management on them,

17:45

we don't feel that we are violating anything

17:47

having to do with copyright. Basically

17:50

all that we're saying is that the authors

17:52

get paid based on the number of

17:54

copies that they sell. They get

17:56

the same amount in their contract regardless of

17:58

whether an individual purchase it or a library

18:01

purchases it. Right. I

18:03

don't suppose the public libraries are a civic

18:05

good argument, does you, any good in this

18:07

case? It doesn't seem to,

18:09

no. So where do you go

18:12

from here? Because if you don't have

18:15

any opportunity to pass legislation or if it gets overturned

18:17

in court, as at least one of these laws has

18:19

been, it seems library

18:21

patrons are on the losing end. Correct.

18:25

The demand for downloadable materials just keeps

18:27

going up and up and up. But

18:29

on the other hand, fortunately, our

18:31

ability to purchase those items does not go

18:33

up. You know, we liken it to if

18:35

your town puts in a playground, everyone loves

18:38

the playground, everyone wants to use the playground.

18:41

But then imagine that that playground had a two

18:44

year expiration date on it. And so

18:46

at the end of two years, there might be people

18:48

lined up to use that playground, but

18:50

they can't use it until we pay

18:52

again. And like I say,

18:54

we're paying the same amount for that playground we

18:57

paid the first time around. Meanwhile, people are standing

18:59

there, they can see that it is available, but

19:01

they can't actually access it. There

19:04

is a middleman here right between the libraries

19:06

and the publishers. It's the ebook, you know,

19:08

apps or what have you, Libby Overdrive. I've

19:11

used them both. Where do they play

19:13

in this? Because they, you know, they kick in a little

19:15

markup of their own too, right? Right,

19:17

they do. The big

19:19

thing on our end is that, you know, we

19:22

don't have any other alternatives.

19:24

And ultimately, we aren't looking

19:27

for kind

19:29

of unfettered access to these

19:32

materials. We just want to be able

19:34

to negotiate with the publishers to

19:36

get terms that allow us to better serve

19:39

our patrons. It's a

19:41

seller's market, right? I mean, they kind of got you. Yeah,

19:44

absolutely. Because that's our only option. We buy

19:47

them at their prices or we don't have them at all. Sarah

19:50

McCusker, she's the president of the Connecticut Library

19:52

Association. Ms. McCusker, thanks for your time, ma'am.

19:54

I appreciate it. Yep. Thank you. We

20:00

did ask the Authors Guild for comment. They sent

20:02

us a statement that said in relevant part, authors

20:05

and publishers invest massive amounts of time

20:08

and resources to create books. They also

20:10

work diligently to ensure that libraries have

20:12

broad access to the materials they create.

20:14

You can read the whole thing if you like at

20:17

marketplace.org. The

20:32

latest data from the National Travel and

20:34

Tourism Office, it's part of the Department

20:36

of Commerce, if you're curious, it

20:39

shows there were 66.5 million international visitors to

20:42

the United States last year. That is a third,

20:44

again, more people than came in 2022. But

20:48

it is still just 84% of the

20:50

total number that came in the last year of

20:52

the before times. And cities

20:54

are taking whatever opportunities they can

20:56

find to lure tourists back. Here

21:00

in L.A., a gift has come in the form of

21:02

Shohei Otani, the $700 million two-way superstar

21:04

for the Los Angeles Dodgers. He

21:07

was already a star in Japan before he came to the States in

21:09

2018 to play for the Angels just

21:12

down the road from us. But now Japanese

21:14

fans are coming by the thousands to see

21:16

Otani play for his new team. From

21:19

LA-ist, Josie Huang has more. Near

21:22

Dodger Stadium, a new 15-story mural

21:24

of Shohei Otani covers one wall

21:26

of the Miyaka Hotel. Inside,

21:28

employees are selling Japanese-style pastries

21:31

shaped like blue Dodgers helmets

21:33

and getting to practice their

21:35

Japanese. Over

21:39

in the lobby, one of the guests, Megu

21:41

Adachi, is checking in at the front desk

21:43

with several other friends from Japan. They

21:45

can't wait to see the Dodgers play the

21:47

Colorado Rockies, especially Otani

21:49

or as Adachi fondly calls

21:52

him, Yaku Shonen,

21:54

a boy obsessed with baseball.

21:57

This one only. Aqira

22:00

Yuhara says when the Dodgers are playing

22:02

at home, half of the 170-plus rooms

22:04

are occupied by Japanese tourists in town

22:07

to see Yotani. He says they had

22:09

little reason to come to his hotel

22:11

in the historic neighborhood of Little Tokyo

22:13

before. It's a few city blocks

22:16

downtown and seen by some as... It's

22:18

very dangerous here, especially

22:21

this area. They

22:23

don't want to come. Yuhara

22:25

says a sister hotel he manages

22:27

a half-hour drive south of L.A.

22:29

in the beach city of Torrance

22:31

is more popular with Japanese travelers.

22:34

The South Bay is where SoCal's

22:36

Japanese-American population center shifted to from

22:38

Little Tokyo after World War II.

22:41

Scores of Japanese companies like Honda

22:44

and All-Nupon Airways have operations here,

22:46

and it's where many of their

22:48

employees live, eat, bank and shop.

22:50

But hotel manager Yuhara says Yotani

22:52

has generated interest in parts of

22:55

L.A. that have not been top tourism

22:57

draws for the Japanese. Even

22:59

we don't have a game today.

23:01

They go to the stadium and

23:03

buy everything. At

23:06

the stadium, visitors can pick up Yotani's number

23:08

17 jersey, concession stand cell,

23:10

chicken katsu sandwiches and fried octopus.

23:13

Signs in kanji characters dot the

23:15

stadium, where tours are now given

23:17

in Japanese several times a week.

23:20

You can refer to it as the Yotani effect.

23:23

Adam Burke is president and CEO of

23:25

L.A.'s tourism board. Don't think it's

23:27

beyond the pill that we could be over 400,000

23:29

Japanese visitors. That

23:31

would be up from 230,000 in 2023. That

23:35

would absolutely make it one of our

23:37

top four international markets. Alongside markets

23:39

like China and the U.K., Osuke

23:42

Ishiguro manages the L.A. office of

23:44

top Japanese tour operator JTB. He

23:46

says even though the yen is

23:48

weak right now, visitors from Japan

23:50

are paying to see not just

23:52

one Dodgers game. His

23:58

agency is booking customers in around

24:00

Little Tokyo. Like at

24:02

the Miyako Hotel, where just outside Tadashi

24:04

Onaka is taking photos of the Otani

24:07

mural. He had planned a trip

24:09

to Arizona to visit family, but took a

24:11

detour to L.A., so he could go to

24:13

a Dodgers game. He got to see Otani

24:15

smack a single in the first inning. Now

24:21

he finds himself in Little Tokyo, a place

24:23

he's surprised to learn has been around for 140 years. Very

24:27

small, he adds. And

24:32

very different from Japan. Rather,

24:34

it's its own thing that now legions

24:37

of Otani fans are starting to discover.

24:40

In L.A., I'm Josie Wong for Marketplace.

24:52

This final note on the way out today offered

24:54

really as a cautionary tale. You might have heard

24:57

already today that the Bank of England has decided

24:59

to keep its key interest rate right where it

25:01

is, 5.25%, even though inflation in the UK has

25:03

indeed hit that

25:07

hallowed 2% mark. I'm

25:09

paraphrasing here, but the bank said it wants

25:12

to make sure inflation is well and truly

25:14

dead. All

25:16

of which I mentioned because when we get

25:18

to 2% here, it's not like

25:20

the Fed's going to cut rates right away either.

25:23

And honestly, people ought to be ready

25:25

for that. John

25:27

Buckley, John Gordon, Noya Carr, Diana De

25:29

Parker, Amanda Petra and Stephanie Seek are

25:32

the Marketplace editing staff. Amir Bibaoui is

25:34

the managing editor. And

25:36

I'm Kai Rizdahl. We will see you tomorrow, everybody.

25:52

This is APM.