Issue #84

Taco Bell reconsiders AI drive-throughs, Will Smith uses fake crowds, Costa declines due to matcha, and more. 

News from 28 August - 4 September 2025

Taco Bell Reconsiders AI Drive-Throughs

Taco Bell is reevaluating its AI-powered drive-through technology after viral videos revealed the system's spectacular malfunction. 

One customer appeared to crash the system by ordering 18,000 water cups, while another grew increasingly frustrated as the AI repeatedly asked him to add more drinks. This comes after the fast-food chain deployed the technology at over 500 U.S. locations since 2023, aiming to reduce errors and expedite orders.

Chief Digital and Technology Officer Dane Mathews admitted the rollout has faced challenges, telling The Wall Street Journal the company would now think carefully about where to use AI. For example, the chain won't use voice AI at busy drive-throughs. Dane Mathews: "Sometimes it lets me down, but sometimes it really surprises me."

Source

Costa Declines Due to Matcha

Coca-Cola is reportedly exploring a sale of Costa Coffee, with analysts suggesting the chain could fetch £2 billion, roughly half what the drinks giant paid in 2019. 

This move comes after Costa reported a £14 million operating loss in 2023. Analysts the spiralling cost of living and lifestyle choices, with Gen Z preferring independent artisanal coffee shops over chains, and healthier alternatives like matcha lattes. 

Rival chains, including Starbucks, Pret, and newcomer Blank Street Coffee, have capitalised on this trend, while Costa has struggled. Retail analyst Claire Bailey: "I feel like businesses that don't reimagine themselves and don't respond to consumer behaviour, and perhaps get a little complacent, are the ones who end up in trouble.”

Source

Data Centres Built to Lose Billions

New AI data centres built in 2025 will suffer $40 billion in annual depreciation while generating just $15-20 billion in revenue, according to analysis by Praetorian Capital. 

Data centres consist of three main components: buildings, chips that become obsolete within years, and connecting systems that last about a decade. The rapid depreciation means facilities have a tiny window to achieve profitability before maintenance costs spiral.

To break even, AI companies would need revenue increases of tenfold. For standard business-level profits, American data centres would require $480 billion in 2025 revenue alone – more than twelve times Netflix's annual income from 300 million subscribers. Praetorian Capital CIO Harris Kupperman: "I recognize massive capital misallocation when I see it. I recognize an insanity bubble, and I recognize hubris."

Source

Bulletin Board

• Anna Wintour’s Reign Ends. Condé Nast appointed 39-year-old Chloe Malle as head of editorial content at American Vogue, marking the end of Anna Wintour's 37-year reign as editor-in-chief. Wintour will step back from day-to-day operations, while retaining ultimate control. Malle, a longtime Vogue insider since 2011, edited Vogue.com, co-hosted The Run-Through podcast, and gained attention for securing exclusive access to Jeff Bezos’s wedding. Anna Wintour: "I am so excited to continue working with her, as her mentor but also as her student.” Source
• British Fintechs Consider Buying US Banks. Revolut and Starling are considering acquiring US lenders to fast-track their American expansion. By purchasing nationally chartered banks, they could instantly secure banking licenses and operate across all 50 states without years of regulatory delays. Revolut has engaged Bank of America as advisers to explore potential deals, while Starling is weighing both acquisition and license application routes. Source
• AI Persuades Police to Arrest the Wrong Man. New York police wrongly arrested Trevis Williams after facial recognition software identified him as a suspect in a public lewdness case, despite being eight inches taller and 70 pounds heavier than the actual perpetrator. Williams was held in jail for two days before charges were dismissed in July. The NYPD has spent $2.8 billion on surveillance technology since 2007, but lacks safeguards for facial recognition use. Source
• Will Smith Uses Fake Crowds. Will Smith's team used AI to digitally enhance footage from his "Based on a True Story" tour, creating fake rapturous crowds to mask limited attendance. The video shows AI-generated fans with distorted faces holding signs about Smith's impact on their lives. According to a concertgoer in Frankfurt, the show was "a little more than half full". Social media user: “Just a mess of blurry half-faces, hands with 7 fingers." Source
• BYD Profits Drop 30% in Price War. Chinese EV maker BYD reported a 30% profit drop to $900 million as a brutal price war among Chinese electric vehicle manufacturers squeezed margins. Average car prices in China have fallen 19% over two years, prompting Beijing to urge automakers to stop aggressive discounts. BYD shares fell 8% on Monday despite the company maintaining its position ahead of Tesla in annual revenue. Source

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