Wall Street News Roundup: Amazon Broke the Internet, Student Loan Forgiveness and Bryan Cranston vs Open AI

Speaker 1 I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab.

Speaker 1 All right, let's get into it. It's time for a roundup of the biggest stories on Wall Street and how they're going to affect you and your wallet.

Speaker 1 Now, the headlines this week were truly all over the place, truly, truly chaotic.

Speaker 1 But behind the tech glitches and the AI drama, we've also also got a major update that could change the financial future for millions of Americans.

Speaker 1 And if you've got student loans, you're going to want to hear this first headline. So here's what we have on deck.
I'll talk about the real progress being made on student loan forgiveness.

Speaker 1 Yes, it's back in the news. Then we'll get into why Walter White is stepping into the AI ethics debate.
And finally, we'll unpack what happened when Amazon Web Services basically broke the internet.

Speaker 1 All that and more when we come back. For the holidays, my family and I are headed to Florida to visit my in-laws.

Speaker 1 It is super important to to me that my daughter knows her extended family and has the opportunity to spend time with them.

Speaker 1 While we're leaving one warm zip code for another, I know we'll still be getting that cozy holiday feeling of being with loved ones.

Speaker 1 The not-so-cozy part is the cost of flying three people across the country. I know a lot of us are feeling that this time of year.
The costs add up fast. That's why I love hosting my home on Airbnb.

Speaker 1 It's an easy way to bring in some extra income while we're away, and that extra cash can help fund our next trip.

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Speaker 1 This year, it's easier than ever to host your home thanks to Airbnb's co-host network.

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Speaker 1 So if you've been thinking about hosting but you don't know where to start, find a co-host at airbnb.com slash host.

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Speaker 1 First up, student loan forgiveness is back on again.

Speaker 1 Kind of. For years now, we've been living in a bit of a limbo with student loan forgiveness.

Speaker 1 Legal battles, political grandstanding, and bureaucratic delays have left millions of borrowers stuck wondering whether the debt they've been chipping away at for 20 plus years would ever actually be wiped away.

Speaker 1 Well, we finally got some clarity. The Department of Education is back to processing cancellations for people in long-term repayment plans.
Here's the background.

Speaker 1 Borrowers in income-driven repayment plans, or IDR plans, make monthly payments based on their income and household size.

Speaker 1 The rationale here is that your income should be a determining factor in your monthly payment. So if your take-home pay is $2,000, your monthly payment should not also be $2,000.

Speaker 1 And then after 20 to 25 years of payments as part of one of these plans, any remaining balance is supposed to be forgiven. Key words here, supposed to.

Speaker 1 But this year, that cancellation process was temporarily frozen for many borrowers.

Speaker 1 This happened through a combination of legal challenges and a complicated court order that the Trump-era Education Department interpreted a little too broadly.

Speaker 1 NetNet, legal red tape blocked forgiveness for people who had already qualified.

Speaker 1 Thanks to an agreement between the Education Department and the American Federation of Teachers, loan cancellations for eligible borrowers is turning back on.

Speaker 1 And not just for one plan, this covers borrowers in multiple IDR programs, including pay-as-you-earn, income-based repayment, and income-contingent repayment.

Speaker 1 But notably, not the saving on a valuable education plan. This is a big deal, but there's an even bigger one.
Canceled student debt is normally taxed as income.

Speaker 1 So generally, if you have student debt canceled, you might be hit with a big tax bill.

Speaker 1 However, there is currently in effect a temporary tax break that makes canceled student debt exempt from federal taxes. But that tax break was set to expire at the end of this year.

Speaker 1 So even though some borrowers were going to be eligible for student loan forgiveness, there was this anxiety around the trade-off between getting debt forgiven and then getting hit with a big old tax bill.

Speaker 1 But critically, this new agreement says that borrowers in IDR plans who have made enough qualifying payments this year will not have to pay those taxes, even if the cancellation isn't processed until next year.

Speaker 1 So this new agreement gives a little more breathing room. The big takeaway here, keep checking your status on studentaid.gov and don't assume forgiveness is off the table just because of the delays.

Speaker 1 The system is catching up slowly, but this time it might actually be moving. Next up, Brian Cranston versus OpenAI's newest video generation tool, Sora, has been getting some major buzz.

Speaker 1 It is pretty unbelievable. I've played around with it and it's wild how realistic it looks.

Speaker 1 My husband used it to create a video of him riding a line, which is pretty much the most boy thing I have ever seen.

Speaker 1 And I used it to punk him which honestly is maybe the funniest thing i've ever done i captured it on my instagram i will link that in the episode description if you're curious

Speaker 1 But with any powerful tool, it needs to be used for the right reasons.

Speaker 1 Since its latest update, users have created AI-generated clips using the voices and faces of real people without their permission. And some of those people include very high-profile actors.

Speaker 1 Enter Brian Cranston, the actor who played Walter White in Breaking Bad and Malcolm's Dad on Malcolm in the Middle.

Speaker 1 Cranston recently spoke out after unauthorized AI clips featuring his voice and likeness popped up online. And he wasn't alone.

Speaker 1 Zelda Williams, daughter of the late Robin Williams, also called out the app for generating creepy AI versions of her dad. In response, OpenAI is trying to get ahead of the backlash.

Speaker 1 This week, the company announced that it's partnering with Cranston himself, SAG AFTRA, that's the actors union, talent agencies like CAA and UTA, and advocacy groups to tighten the rules around around likeness and voice replication.

Speaker 1 To be fair, OpenAI has already required users to opt in for using someone's voice or image, but enforcement has been spotty at best.

Speaker 1 After an outcry from estates like Martin Luther King Jr.'s, OpenAI had to manually take down some pretty offensive AI videos.

Speaker 1 But now the company says it's implementing more granular controls so people and rights holders can better manage who and what gets replicated.

Speaker 1 They're also promising to respond faster to complaints and reaffirm their support for the No Fakes Act, a federal bill that protects people from unauthorized AI versions of themselves.

Speaker 1 So, why does this matter? Because this is about more than just celebrity faces.

Speaker 1 The rules we set now about what's okay and what's not okay when it comes to AI impersonation are going to define how all of us are protected or not in the future.

Speaker 1 This affects digital privacy, the value of creative work, and your rights to own your own image and voice. The open question is how enforceable any of these rules will actually be.

Speaker 1 But it is a step forward that some of the biggest names in Hollywood are forcing these companies to take it seriously. Last but certainly not least, Amazon broke the internet, and not in a good way.

Speaker 1 If you tried to order a Big Mac on the McDonald's app, if you tried to scroll Reddit or check in for a United Flight on Monday and nothing worked, you were not alone.

Speaker 1 Amazon Web Services, also known as AWS, the largest cloud infrastructure provider on the planet, went down hard on Monday morning and it took a huge chunk of the internet with it.

Speaker 1 The outage affected Disney Plus, Lyft, the New York Times, Venmo, Snapchat, Canva, even the UK government's websites. And it wasn't just consumer apps.
Amazon's own systems were offline.

Speaker 1 Some warehouse workers reportedly had to hang out in break rooms because they could not scan inventory or get work assignments. Amazon drivers couldn't access their paycheck apps.

Speaker 1 Third-party sellers couldn't log in. My team was also affected by this.
We use a software for editing that stores video in the cloud, and we could not access any of it yesterday, which is not ideal.

Speaker 1 Anyway, it was traced back to a DNS issue. That's the system that tells your browser where to find websites.

Speaker 1 In this case, AWS's version of DNS had an operational issue, and when that breaks, it's like every GPS system on the internet gets lost.

Speaker 1 Services started coming back online within hours, but the ripple effects lasted into the evening. AWS now says all systems are back to normal and they have promised a full post-mortem.

Speaker 1 This isn't the first time something like this has happened. In 2023, AWS had a smaller outage.
In 2021, it had a bigger one. And it's not just Amazon.

Speaker 1 You remember a few months ago, a bad update from cybersecurity firm CrowdStrike took down Microsoft systems worldwide and cost businesses millions.

Speaker 1 When the CrowdStrike crash happened, the stock price crashed too. But oddly, during this huge dumpster fire of a day for Amazon, the stock surged 1.3%.

Speaker 1 The primary explanation is that Amazon handled the outage expertly well. They resolved the issue within hours.

Speaker 1 And sure, this is comforting, but CrowdStrike also resolved their outage pretty quickly as well, but their stock fell more than 11%.

Speaker 1 My guess is that CrowdStrike is well known for their work with government agencies like the Department of Homeland Security. and banks like Chase, Bank of America, and Capital One.

Speaker 1 So a tech vulnerability there causes more panic than a tech vulnerability within Amazon, which has more of a reputation for moving fast and breaking things.

Speaker 1 Investors love that ethos if you're a tech company, but they love it less if you are more integrated into government agencies. But here's the scary part.

Speaker 1 A massive portion of our digital lives depends on just three companies, Amazon, Microsoft, and Google. So what can we do about that?

Speaker 1 Not a whole heck of a lot at this moment, but it is a good reminder that having backups matters, whether it's a second bank account, a paper copy of your travel itinerary, or just knowing how to reach customer support offline, redundancy is your friend in this digital world.

Speaker 1 For today's tip, you can take straight to the bank. This week's stories have one common thread here.
Systems breaking down.

Speaker 1 Whether it's student loan forgiveness getting frozen, actors having to police their own likeness, or the entire internet going dark because one cloud provider choked.

Speaker 1 These are all signs that centralized systems are vulnerable. So here's the takeaway.
decentralize your financial life. Don't put all of your data, or money, or income streams in one place.

Speaker 1 Spread your risk around, whether that's across banks, platforms, or income sources. That way, if one system goes down, your life doesn't go down with it.
That's it for today's money rehab.

Speaker 1 If you've got student loans, please go double-check your payment history. If you're a creator, start thinking about how to protect your digital rights.

Speaker 1 And if you've ever laughed at a TikTok of a fake Morgan Freeman giving life advice, maybe, well, actually, don't share that one.

Speaker 1 Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin.
Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes.
Do you need some money rehab?

Speaker 1 And let's be honest, we all do.

Speaker 1 So email us your money questions, moneyrehab at moneynewsnetwork.com, to potentially have your questions answered on the show or even have a one-on-one intervention with me.

Speaker 1 And follow us on Instagram at MoneyNews and TikTok at MoneyNews Network for exclusive video content. And lastly, thank you.
No, seriously, thank you.

Speaker 1 Thank you for listening and for investing in yourself, which is the most important investment you can make.

Speaker 1 For the holidays, my family and I are headed to Florida to visit my in-laws. It is super important to me that my daughter knows her extended family and has the opportunity to spend time with them.

Speaker 1 While we're leaving one warm zip code for another, I know we'll still be getting that cozy holiday feeling of being with loved ones.

Speaker 1 The not-so-cozy part is the cost of flying three people across the country. I know a lot of us are feeling that this time of year.
The costs add up fast. That's why I love hosting my home on Airbnb.

Speaker 1 It's an easy way to bring in some extra income while we're away, and that extra cash can help fund our next trip.

Speaker 1 Let's say you have a big trip planned or are escaping to a warmer part of the world to work from the beach. Why leave your home sitting empty and dark when it could be making money for you?

Speaker 1 This year, it's easier than ever to host your home thanks to Airbnb's co-host network.

Speaker 1 With the co-host network, you can hire a local co-host to take care of your home and your guests while you're away.

Speaker 1 A co-host can do it all: create your listing, handle check-ins, provide on-site support, and give you peace of mind that your home and guests are being taken care of while you're away.

Speaker 1 So, if you've been thinking about hosting but you don't know where to start, find a co-host at airbnb.com/slash host.