Author: openjargon

• Retrieval-augmented generation is enhancing large language models' accuracy and specificity.
• However, it still poses challenges and requires specific implementation techniques.
• This article is part of "Build IT," a series about digital tech trends disrupting industries.

The November 2022 launch of OpenAI's ChatGPT kicked off the latest wave of interest in AI, but it came with some serious issues. People could ask questions on almost any topic, but many of the large language model's answers were uselessly generic — or completely wrong. No, ChatGPT, the population of Mars is not 2.5 billion.

Such problems still plague large language models. But there's a solution: retrieval-augmented generation. This technique, invented in 2020 by a group of researchers at Meta's AI research group, is rewriting the rules of LLMs. The first wave of vague, meandering chatbots is receding, replaced by expert chatbots that can answer surprisingly specific questions.

RAG isn't well known outside the AI industry but has come to dominate conversations among insiders — especially those creating user-facing chatbots. Nvidia used RAG to build an LLM that helps its engineers design chips; Perplexity employs RAG to construct an AI-powered search engine that now claims over 10 million monthly active users; Salesforce used RAG to build a chatbot platform for customer relations.

"For a long time we were looking at databases, and we had a lot of excitement for AI. But what was the unique use case? RAG was the first," said Bob van Luijt, the CEO and cofounder of the AI data infrastructure company Weaviate. "From a user perspective, there was a simple problem, which is that generative models were stateless." (Meaning they couldn't update themselves in response to new information.) "If you tell it, 'Hey, I had a conversation with Bob,' the next time you use it, it won't remember. RAG solves that."

The innovation that's sweeping AI

"Every industry that has a lot of unstructured data can benefit from RAG," van Luijt said. "That ranges from insurance companies to legal companies, banks, and telecommunications." Companies in these industries often have vast troves of data, but sifting through it to gain insights is a difficult task. "That's where RAG adds a lot of value. You throw that information in, and you're like, 'Make sense of that for me.' And it does."

That's accomplished by adding a step when an LLM generates a reply. Instead of offering a response rooted only in how the model was trained, RAG retrieves additional data provided to it by the person or organization implementing RAG — most often text, though the latest methods can handle images, audio, and video — and incorporates it into its reply.

Nadaa Taiyab, a data scientist at the healthcare IT company Tegria, offered an example from the chatbot she designed, which uses RAG to answer nutrition questions based on data from NutritionFacts.org. The nonprofit has highlighted studies linking eggs and type 2 diabetes, a correlation that most LLMs won't report if asked whether eggs reduce the risk of diabetes. However, her RAG-powered chatbot can retrieve and reference NutritionFacts.org's published work in its response. "And it just works," Taiyab said. "It's pretty magical."

But it's not perfect

That magic makes RAG the go-to technique for those looking to build a chatbot grounded in specific, often proprietary data. However, van Lujit warned, "Like any tech, it's not a silver bullet."

Any data used for RAG must be converted to a vector database, where it's stored as a series of numbers an LLM can understand. This is well-understood by AI engineers, as it's core to how generative AI works, but the devil is in the details. Van Lujit said developers need to adopt specific techniques, such as "chunking strategies," that manipulate how RAG presents data to the LLM.

Fixed-size chunking, the most basic strategy, divides data like a pizza: every slice is (hopefully) the same size. But that's not necessarily the best approach, especially if an LLM needs to access data that's spread across many different documents. Other strategies, such as "semantic chunking," use algorithms to pick out the relevant data spread across many documents. This approach requires more expertise to implement, however, and access to powerful computers. Put simply: It's better, but it's not cheap.

Overcoming that obstacle can immediately lead to another issue. When successful, RAG can work a bit too well.

Kyle DeSana, the cofounder of the AI analytics company Siftree, warned against careless RAG implementations. "What they're doing without realizing it, without analytics, is that they're losing touch with the voice of their customer," DeSana said.

He said that a successful RAG chatbot could carry its own pitfalls. A chatbot with domain expertise that replies in seconds can encourage users to ask even more questions. The resulting back-and-forth may lead to questions beyond the chatbot's scope. This becomes what's known as a feedback loop.

Solving for the feedback loop

Analytics are essential for identifying shortcomings in a RAG-powered AI tool, but those are still reactive. AI engineers are eager to find more proactive solutions that don't require constant meddling with the data RAG provides to the AI. One cutting-edge technique, generative feedback loops, attempts to harness feedback loops to reinforce desirable results.

"A RAG pipeline is usually one direction," van Luijt explained. But an AI model can also use generated data to improve the quality of the information available through RAG. Van Lujit used vacation-rental companies such as Airbnb and Vrbo as an example. Listings on these sites have many details, some of which are missed or omitted by a listing's creator (does the place have easy access to transit?), and AI is quite good at filling in these gaps. Once that's done, the data can be included in RAG to improve the precision and detail of answers.

"We tell the model, 'Based on what you have, do you think you can fill in the blanks?' It starts to update itself," van Lujit said. Weaviate has published examples of generative feedback loops in action, including a recreation of Amazon's AI-driven review summaries. In this example, the summary can not only be published for people to read but also placed into a database for later retrieval through RAG. When new summaries are required in the future, the AI can refer to the previous answer rather than ingesting every published review — which may span tens or hundreds of thousands of reviews — again.

Both van Luijt and Taiyab speculated that as the AI industry continues its growth, new techniques will push models to a point where retrieval is no longer necessary. A recent paper from researchers at Google described a hypothetical LLM with infinite context. Put simply, an AI chatbot would have an effectively infinite memory, letting it "remember" any data presented to it in the past. In February, Google announced it had tested a context window of up to 10 million tokens, each representing a small chunk of text. That's large enough to store hundreds of books or tens of thousands of shorter documents.

At this point, the computing resources required are beyond all but the largest tech giants: Google's announcement said its February test pushed its hardware to its "thermal limit." RAG, on the other hand, can be implemented by a single developer in their spare time. It scales to serve millions of users, and it's available now.

"Maybe in the future RAG will go away altogether, because it's not perfect," Taiyab said. "But for now, this is all we have. Everyone is doing it. It's a core, fundamental application of large language models."

• Former Facebook director Aditya Agarwal argues weekly 1:1 meetings often do more harm than good.
• Weekly check-ins, he says, lead to nitpicking and inhibit holistic feedback.
• Agarwal suggests quarterly meetings and real-time availability for better guidance.

A former Facebook director thinks the weekly 1:1 meeting with your manager needs a reboot.

In a post on X, Aditya Agarwal wrote that after more than a decade of running these meetings with his direct reports, he determined the weekly check-ins did more harm than good.

"They condition people to do spot checks on happiness and constantly be critical about things that aren't ideal. In practice, 1:1s descend into nitpicking sessions," he wrote as part of a thread.

Agarwal was once the chief technology officer at Dropbox and one of Facebook's early engineers. He's now a partner at South Park Commons, a Silicon Valley group that aims to build community among founders, entrepreneurs, and technologists.

Agarwal suggested bosses give feedback every three to six months rather than weekly. This would, he said, push managers to uncover patterns and offer "holistic" guidance instead of spot checks each week.

"Frankly, I hated it and found it useless. But it's what "good" managers did," Agarwal wrote of the weekly appointments.

The critique of the 1:1 isn't the first. But before you go canceling yours — if you can get away with that — there are ways to improve what is likely the most important meeting on your calendar.

Steven G. Rogelberg, an organizational psychologist and a professor at the University of North Carolina at Charlotte, studies 1:1s. He previously told Business Insider that one of the biggest no-nos in these meetings is when the boss dominates the conversation or runs through a to-do list —a practice Agarwal called "archaic."

Rogelberg said the meeting was designed to address a worker's tactical and personal needs. Going deep on personal requirements means saying things like, "Tell me more," so the boss can better understand where a worker might need help. Too often, he said, bosses gloss over the personal stuff because wading through it can be extra work.

To make 1:1s better, Rogelberg suggests bosses and their direct reports meet every two weeks for perhaps 25 to 50 minutes. He said meeting more often can make workers feel micromanaged.

Agarwal made a similar point in his post: "Excessive 1:1s are a distraction," he wrote. Instead, Agarwal suggested that bosses should save themselves and their direct reports' time to focus on getting work done and making the company successful.

On the other hand, Rogelberg told BI, that meeting too infrequently can make people feel as though their boss doesn't care.

But, Agarwal suggested that rather than holding frequent meetings, mangers be available so workers can go to them with questions. He added that managers can have a deeper conversation about a worker's career development once a quarter or so over a meal.

"This is a more effective cadence," Agarwal wrote.

Rogelberg, the author of "Glad We Met: The Art and Science of 1:1 Meetings," suggests managers ask about hurdles workers might be facing, how the manager can better help, and what's working and what's not. He said it's possible to reserve periodic 1:1s to focus on longer-term issues so they don't get overlooked.

Agarwal noted that if a worker is having a hard time, it's wise to have more regular check-ins.

"But for most folks, quarterly big picture conversations and real-time availability are sufficient," he wrote.

Agarwal said he wanted the people under him to be resilient.

"Not every week or month will be happy and pleasant. I want them to deal with it without constantly feeling bad. Weekly 1:1s undermine this," he wrote.

• Over the years, CEOs and business leaders have shared their thoughts on the idea of work-life balance.
• Some aren't a fan of the phrase and think workers should take a different approach to navigating work and life.
• Jeff Bezos, for example, thinks the relationship between work and life is a "circle" instead.

You wouldn't necessarily think the phrase "work-life balance" would be controversial.

But while some people view it as an important equilibrium to maintain, some CEOs outright hate it or call it a "lie."

Here are some of top business execs' hottest takes on work-life balance:

Jeff Bezos says work and life should make a circle, not a "balance"

In 2018, Amazon founder Jeff Bezos said that workers should aim for work-life harmony, not "balance," at an event hosted by Business Insider's parent company Axel Springer. Bezos also called the concept of work-life balance "debilitating" because it hints that there's a trade-off. 

Bezos said that it's not a work-life balance, but "it's actually a circle." 

Bezos said that if he feels happy at home then it energizes him and makes him more productive at work, and vice versa.

Satya Nadella thinks you should focus on "work-life harmony"

Microsoft's CEO also thinks that "work-life balance" isn't the goal. Instead, he says to focus on work-life "harmony." In 2019, he shared his thoughts with the Australian Financial Review, saying he used to think that he needed to balance relaxing and working. But, he's since shifted his approach, aligning his "deep interests" with his work.

TIAA's CEO thinks the entire concept is a "lie"

"Work-life balance is a lie," TIAA CEO Thasunda Brown Duckett told Fortune CEO Alan Murray in 2023. Brown Duckett has previously said she used to struggle with guilt and balancing her demanding job with being a mother.

Brown Duckett says that she views her life as a "portfolio," and that she takes time to perform different roles like mother, wife, and business executive. Though she may not always physically be with her children, she says she strives to be fully present during the time she is able to spend with them. 

Arianna Huffington says you shouldn't have to choose between work and life

Arianna Huffington, founder of Thrive Global and HuffPost, told Great Place to Work that we shouldn't view productivity and relaxation as two opposing forces. Huffington said that when one area of your life improves, the other does as well. 

According to research from Oxford University in 2019, happy employees are 13% more productive compared to those who aren't happy. Huffington told Great Place to Work that employees should focus more on "work-life integration" since "we bring our entire selves to work."

Still, Huffington believes that your personal life should always come first. 

"While work is obviously important and can give us purpose and meaning in our lives, it shouldn't take the place of life," she told Great Place to Work. "Work is a part of a thriving life, but life should come first."

Don't expect work-life balance if you work for Elon Musk…

Elon Musk is a known workaholic, and he expects those who work beneath him to be as well.

In 2022, just after Musk took ownership of X, formerly Twitter, he sent out an email to employees telling them to either dedicate their lives to working or leave the company. Musk reportedly made X employees work 84 hours a week. While some people think remote work improved their work-life balance, Musk has often criticized it and called it "morally wrong."

According to Walter Isaacson's biography about Musk, Musk held an even tighter working schedule for himself. The billionaire would stay at the office overnight and shower at the YMCA when he joined the workforce in 1995, Isaacson wrote. Musk has continued the habit while working at Tesla and buying Twitter, often spending the night at work.

In 2018, Musk said that he works 120 hours a week, amounting to 17 hours a day.

Jack Ma has also actively endorsed long work hours

One of China's richest men, Alibaba cofounder Jack Ma in 2019 expressed his support for the controversial "996" work system in many Chinese workplaces, which refers to working from 9 a.m. to 9 p.m., six days a week. He's called "996" culture a "huge blessing" for younger workers.

"Many companies and many people don't have the opportunity to work 996," he said in 2019. "If you don't work 996 when you are young, when can you ever work 996?"

"If you find a job you like, the 996 problem does not exist," he added. "If you're not passionate about it, every minute of going to work is a torment."

China's government called the grueling 996 schedule "illegal" in 2021, though it's believed to continue be an expectation at many Chinese companies.

• Royal Caribbean Group and Norwegian Cruise Line Holdings aim to source their foods more sustainably.
• Experts say goals such as purchasing more food locally are a step in the right direction.
• This article is part of "The Future of Supply-Chain Management," a series on companies' manufacturing and distribution strategies.

The hardest decision you make on a cruise vacation is what to eat for dinner.

In 2023, the cruise giants Royal Caribbean Group and Norwegian Cruise Line Holdings accommodated more than 10.3 million travelers.

That's a lot of mouths to feed — and to do so, their floating hotels have around-the-clock kitchen operations and nearly endless onboard dining options, from buffets to steak houses.

The question is: Where are the companies getting all this food from? And are their promises for more environmentally friendly food sourcing truly sustainable?

Both companies have been increasingly shopping local

Norwegian reported that 37% of its food and drink sourcing in 2022 was local to its global destinations.

Similarly, Linken D'Souza, Royal Caribbean's senior vice president of food and beverage, told reporters in January that the company had spent the past two years shifting its supply chain to Europe to stock its cruises there with less food from the US.

As a result, 86% of the food for Royal Caribbean's European cruises was sourced locally in 2023, its sustainability report from that year said. Last year, the company also stopped supplying its Seattle- and Vancouver-based ships with frozen food shipped from Florida, opting to buy locally instead.

Bambi Semroc, the senior vice president of sustainable lands and waters for the nonprofit environmental group Conservation International, told Business Insider that increasing destination-based sourcing is a step in the right direction, especially if it helps stimulate a developing country's local economy and demand for its sustainably-produced foods.

But it's not always the best choice for the environment — it depends on how the goods are shipped.

Take American wine versus European wine. If you're drinking a California-made wine while in New York City, that bottle was delivered via truck and therefore has a higher carbon footprint than European-produced wine delivered via ship, Ravi Anupindi, a professor at the University of Michigan's Ross School of Business, said.

Both companies have similar animal-welfare goals

By 2025, Norwegian wants to buy all its seafood from suppliers certified by groups like the Marine Stewardship Council and the Aquaculture Stewardship Council. Royal Caribbean has the same deadline for a similar goal: Source 90% of wild seafood and 75% of farm-raised seafood from fisheries certified by the same nonprofits.

Back on land, both cruise giants aim to buy cage-free eggs, gestation-crate-free pork, and chickens exclusively from Global Animal Partnership-certified suppliers by 2025.

However, switching from a trusted supplier to a new, albeit more environmentally friendly, one can be "humongously challenging," Anupindi told BI.

So it should be no surprise that at least one of the companies has had to tweak its deadlines. According to Royal Caribbean's previous sustainability reports, the company has had to push its goals for cage-free eggs and gestation-crate-free pork back by three years and its seafood goals by five years.

Royal Caribbean did not respond to an inquiry about the delays.

Beef sourcing remains a missing sustainability puzzle piece

Beef generates about eight to 10 times the greenhouse-gas emissions as chicken does and has been noted as a cause of deforestation in Brazil's Amazon rainforest.

However, neither of the companies' food-sourcing goals touch on cattle.

Norwegian told BI in a statement that its "net zero [emissions] by 2050" goal "applies to our shipboard and shoreside operations (Scopes 1 and 2) as well as value chain (Scope 3)," adding that beef would be part of Scope 3.

To address this beefy problem, Semroc said, cruise companies could choose beef suppliers that promote more sustainable practices or have committed to "no deforestation, no conversion."

Or, ideally for sustainability, they could replace steak dinners with more plant-based dishes.

It seems Norwegian has already been following this advice. Its upcoming Norwegian Aqua ship is expected to debut in 2025 with the company's first-ever plant-based-food restaurant. Over the past few years, the cruise giant has rolled out more than 200 vegetable-based meals across its Oceania and Regent Seven Seas fleets.

Royal Caribbean did not respond to an inquiry about its beef initiatives or plans to expand its plant-based offerings.

Evidently, "beefing up" sustainability in the food supply chain can be a complex and nuanced topic, especially for companies that feed as many people as Royal Caribbean and Norwegian do. That's not to mention all the heat that cruise companies already take for operating ships that are bad for the environment.

But it's "admirable that they're beginning to think about this," Anupindi said.

• Ukraine's president abruptly canceled foreign trips in the face of critical threats to his country.
• Russia's new assault on the Kharkiv region has put further strains on Ukraine's defenses.
• The situation could become desperate — at least until Western aid arrives.

Ukrainian President Volodymyr Zelenskyy has postponed all of his upcoming international trips, in a further sign that Ukraine is at a critical moment of jeopardy in the war with Russia.

Zelenskyy's press secretary, Sergii Nykyforov, made the announcement in a Facebook post on Wednesday, saying new dates would be worked out in the future.

Nykyforov did not provide any reason for the postponements, but unnamed diplomatic sources told Spanish news agency EFE that arrangements to meet King Felipe VI of Spain had been canceled due to the complexities of Ukraine's military situation on the front.

Zelenskyy had also been due to visit Portugal, the outlet reported.

The situation for Ukraine right now appears bleak.

In a comment piece for The Telegraph on Wednesday, former British tank regiment commander Hamish de Bretton Gordon said that Russia could defeat Ukraine within a matter of months.

"In the worst case scenario, Russia could make significant gains this summer and terminally unsettle Ukraine's defense," he wrote.

Zelenskyy's hasty travel cancellations only point to the seriousness of the situation, he added.

De Bretton Gordon blamed the US and NATO's "indecision and procrastination" for emboldening Russian President Vladimir Putin in his offensive.

For months, Ukraine has defended 620 miles of front line on what Institute for the Study of War analyst George Barros told Business Insider in April is a "starvation diet" of military aid.

Ukrainian rear defensive lines are thinned almost to nonexistence in some parts of the Donetsk frontline hotspots of Avdiivka and Chasiv Yar, the Associated Press reported earlier this month.

This has given Russian forces the chance to make small but steady gains.

And Russia's newest push — in the northern region of Kharkiv — adds a new headache for Ukraine.

"All of our forces are either here or in Chasiv Yar," Ukraine's head of military intelligence, Kyryo Budanov, told The New York Times this week of the Kharkiv offensive.

"I've used everything we have," he added. "Unfortunately, we don't have anyone else in the reserves."

Earlier this week, a Ukrainian commander told the BBC that key fortifications had been missing in the Kharkiv town of Vovchansk, and blamed the shortfall on negligence or corruption. "The Russians just walked in," he said.

Vovchansk is not far from the border with Russia and is about 25 miles from Kharkiv city's outer limits.

It's one of 30 settlements that have seen heavy bombardment by Russian forces, Kharkiv Governor Oleh Syniehubov said on Monday. More than 5,700 civilians have been evacuated from the region, he added.

Zelenskyy wrote on social media on Thursday that he had sat down with his commanders to discuss the region's situation — described as extremely difficult — which he nonetheless said Ukrainian forces had begun to stabilize.

The Institute for the Study of War earlier assessed that Russia would need a significantly larger force to take Kharkiv, Ukraine's second-largest city, and that the offensive there may simply be a way to draw Ukrainian capabilities away from their positions in the east.

Holding on until Western aid comes

Meanwhile, chronic delays in Western support has left Ukraine badly under-supplied in ammunition.

Months of prevarication in Ukraine over the passing of a new conscription law has also thinned out its fighters.

Unable to move aggressively on the front line in recent months, Ukraine has had to "think in more 3D terms about the battle space," RAND analyst Ann Marie Dailey earlier told BI.

A ferocious drone strike campaign — largely conducted with a homegrown device — has been waged on Russian oil refineries since the start of the year, and shows signs of pressuring the country's oil economy.

Ukraine has also seen success in subduing Russia's once-feared Black Sea Fleet with drone and cruise missile strikes.

But these successes have little immediate, direct impact back on the front.

The current situation has led to increased calls for Ukraine's allies to contemplate crossing long-held red lines.

Ukrainian officials have renewed their pleas to be allowed to use US-supplied weapons on Russian soil, saying they had watched helplessly without being able to strike when Russian forces massed at the border for their Kharkiv advance, Politico reported.

And some observers are echoing French President Emmanuel Macron's assertion that NATO countries should reconsider their hardline stance against the possibility of sending troops to Ukraine, even if it's simply to dent Putin's confidence.

"Too many Western leaders have ruled this out," de Bretton Gordon wrote.

This critical moment for Ukraine may also be short-lived.

US officials, speaking anonymously to The New York Times, said that once the US military aid package starts to filter through — estimated at around July — it's possible Ukraine will be able to reverse some of Russia's gains.

"This year represents a window of opportunity for Russia," military analyst Michael Kofman told the Times.

"But if the Russian military is not able to turn these advantages into battlefield gains and generate momentum, there's a fair chance that this window will begin to close as we enter 2025."

• After nearly a decade, the USS Ronald Reagan is leaving the Pacific.
• Originally deployed in 2015, the carrier supported US allies and interests in the Indo-Pacific.
• USS Ronald Reagan has served in other roles, providing air support in Afghanistan and aiding Japan after its 2011 disaster.

The USS Ronald Reagan, the only aircraft carrier in the US Navy forward deployed, or permanently stationed in another country, is leaving Japan after spending nearly a decade in the Pacific.

"For nearly nine years, thousands of Ronald Reagan Sailors have lived and worked here in Yokosuka, and have deployed throughout the region to uphold the international rule of law and maintain a free and open Indo-Pacific along with our allies and partners," Capt. Daryle Cardone, Ronald Reagan's commanding officer, said in a press release Thursday.

Originally deployed to Japan in 2015 as part of a big three-carrier swap during which three flattops all named after former presidents changed homeports at once, the Nimitz-class nuclear-powered aircraft carrier remained in the Indo-Pacific region and provided support and assistance to neighboring US allies.

The Reagan has been the flagship of Carrier Strike Group 5, CSG 5, and been forward-deployed under US 7th Fleet, "the U.S. Navy's largest forward-deployed numbered fleet," which "routinely interacts and operates with allies and partners in preserving a free and open Indo-Pacific region."

The US military phrase "free and open Indo-Pacific region" generally refers to the US vision for the region and is meant to stand in contrast with competing aims from China.

In 2021, USS Ronald Reagan briefly left its forward-deployed position to provide air support during US withdrawal operations in Afghanistan.

The USS Ronald Reagan already had a history of cooperation with Japan prior to its deployment. The ship was sent to assist the country following the Tōhoku earthquake and tsunami that hit its coast in 2011.

The aircraft carrier, CVN-76, will return to Bremerton, Washington, and be replaced by USS George Washington later this year. The George Washington previously served as the forward-deployed carrier in Japan.

"Our relationship with Japan and the Japan Maritime Self-Defense Force has never been stronger," said Rear Adm. Greg Newkirk, commander of Carrier Strike Group 5, per the Navy. "Whether it's aboard USS Ronald Reagan today or USS George Washington in the future, we will continue to strengthen those ties at all levels, on-shore and at-sea."

Aircraft carriers like the Reagan, "when combined with guided-missile destroyers and cruisers, creates a carrier strike group of up to 12 ships and 75 aircraft," according to the Navy's 7th Fleet. "These forces have a higher operational tempo than other Navy vessels, and being forward-deployed cuts an average of 17 days transit time to the region compared to forces based in the continental U.S."

The Reagan's deployment in Japan has long demonstrated US support for allies, as well as American force posture and strength in the Pacific. Aircraft carriers remain a key US element to projecting force and power far away from US soil, often meant to deter enemies and maintain the US-led order in times of tension and conflict.

Last October, following Hamas' deadly terrorist attack in Israel, the US sent the US Navy's newest supercarrier, the USS Gerald R. Ford, and its strike group into waters near Israel as a sign of support, as well as an act of deterrence to prevent other actors, such as Iran and its proxy groups, from getting involved as Israeli forces began engaging Hamas in Gaza.

In the Pacific, the presence of an American carrier is meant to deter China from aggressive behavior, as well as signify strong alliances between the US and its Pacific allies. Having a US carrier based in the Pacific alongside other 7th Fleet warships, is also aimed at keeping Russia and North Korea in check.

• Recent stagflationary forecasts are misguided for this year, Bank of America wrote on Thursday.
• While first-quarter GDP badly missed estimates, the inflation that was seen was driven by strong consumer spending.
• That separates it from the US's last bout with stagflation, in 2022, when higher prices were caused by a supply shock.

Bank of America isn't worried about looming stagflationary fallout, and says recent anxiety around the dangerous economic scenario was based on misread data points.

Fear arose in April when first-quarter GDP missed expectations as inflation figures simultaneously surpassed estimates. This set off alarm bells around possible stagflation, an unwelcome development where prices keep rising amid an economic cooldown — and a situation that can ultimately be worse than recession.

But Bank of America has delved deeper into the data and found that these fears aren't warranted. It uses a stagflationary period in 2022 as a basis for comparison — a period when inflation rose because of a post-COVID supply shock that far outpaced demand.

"It is based on an apples-to-oranges comparison," the bank said in a Thursday note. "The miss in GDP was driven by trade and inventories. Consumer spending, which is related to PCE inflation, has been robust in four of the last five months."

In other words, the catalysts for inflation are different and less ominous this time around, because they're driven by demand. Sure, inflation is rising, but it's doing so because consumers are strong, which isn't normally the case during a stagflation period. 

Fueling the trend are a few possible factors, the note highlighted. They include rising aggregate income from an expanding labor force and increased willingness to spend on services as goods continue to deflate.

BofA doesn't expect the current trend to abate any time soon, saying "the big-picture story of resilient spending growth should remain unaltered."

Further, the firm notes that demand-driven inflation actually makes the Fed's job easier as it assesses the path of future interest-rate hikes. While supply shocks tend to "muddy the waters" for the Fed, the central bank actually welcomes demand disruptions, as they are easier to effectively combat through monetary-policy decisions, BofA said.

• One of Jeffrey Epstein's "little black books" is for sale.
• Business Insider first reported about the 1997 address book belonging to the disgraced financier.
• The book contains entries for 349 people and reveals a snapshot of his social circle.

An address book belonging to the late sex offender and disgraced financier Jeffrey Epstein is going up for sale.

The "little black book" — which was first revealed by Business Insider reporters — is on auction for the first time, according to Maryland auction house Alexander Historical Auctions.

"The history of this criminal relic is fascinating!" the auctioneers say on the book's listing page.

As BI reported in 2021, the book contains hundreds of names connected to Epstein's social circle dating to October 1997. A majority of the 349 people referenced in this address book are not mentioned in a later book from the aughts — one that was unearthed by the FBI as part of investigations into Epstein.

Among the names in the 1997 book are financier Carl Icahn; Donald Trump ally and supermarket mogul John A. Catsimatidis; Suzanne Ircha, the wife of New York Jets owner Woody Johnson and a reportedly close friend of Melania Trump; Cristina Greeven, the wife of former CNN anchor Chris Cuomo.

The book also contains names referenced in the later address book, such as Donald Trump himself and Alan Dershowitz. It also includes a listing for the White House's main information line; Bill Clinton was president at the time.

A woman in Manhattan's East Village told BI she found the book on the sidewalk and later sold it on eBay to a graduate student in Vermont. BI hired a forensic document examiner to authenticate the document as part of a monthslong investigation.

Bidding on the little black book is now live and will remain open until June 15, Alexander Historical Auctions wrote. The auctioneers said they reserve the right to reveal how much someone paid for the book, but won't disclose the buyer.

The auction house's owner, Bill Panagopulos, told the New York Post that he estimates the book could sell for $200,000 or more.

"There are NO comparables, nothing so far-reaching in its effects on politics, society, royalty, finance … it goes on and on," Panagopulos said, according to the Post.

Epstein pleaded guilty to soliciting sex from an underage girl in 2008 after getting a cushy deal from prosecutors at the time, serving just over a year in jail.

Years later, federal investigations began probing Epstein's dealings, and he was arrested in 2019 on charges of running a sex trafficking ring. Epstein was taken into custody but died in prison months later; his death was ruled a suicide, and a later Department of Justice report revealed jail officials botched security that could have prevented his death.

Epstein's associate, Ghislaine Maxwell, was also arrested, tried, and convicted on sex trafficking charges. She was sentenced to 20 years in prison.

• Netflix announced a three-season deal with the NFL.
• The streamer will show two NFL games on Christmas this year.
• There's a simple reason Netflix now wants to get into live sports programming.

No more wondering whether Netflix is going to show real live sports: The streamer now has a three-season deal with the most popular sports league in America — the NFL.

Netflix will show two NFL games on Christmas Day this year, plus "at least one" game on Christmas in 2025 and 2026, the company and the NFL announced Wednesday.

The deal will cost Netflix about $75 million per game, Bloomberg reported.

As we've discussed before, the logic for Netflix is simple here: While Netflix spent years insisting it didn't want to be in live sports, that was before it had an ad business, and live sports — particularly for the NFL — are considered the best way to aggregate an audience of ad watchers. Not coincidentally, Netflix is making its pitch to advertisers Wednesday in New York as part of the annual "upfront" pitch cycle.

And if you don't care about Netflix's ad sales and care only about watching NFL games, this simply means you need to have yet another network to watch games this fall. The league, which has become an expert at getting multiple media companies to pay it for games, already had deals with CBS, Fox, NBC, Disney/ESPN, and Amazon. Add another to the list.

Update: May 16, 2024 — Netflix will pay the NFL about $150 million to broadcast two NFL games this year, according to a Bloomberg report, not $150 million for each game.

• Uber is offering new perks for Costco lovers as it looks to expand into the suburbs.
• Members and non-members can now shop Costco on Uber Eats for delivery of groceries and more.
• Costco members will get better pricing, plus a 20% discount on an Uber One membership.

As Uber looks to expand its reach beyond cities, the company is forging an alliance with the veritable king of suburbia: Costco.

"The Uber name is kind of an urban brand and we believe our most significant growth opportunity in the US is in the suburbs," CEO Dara Khosrowshahi told CNBC earlier this month.

The ride-hailing and delivery service on Wednesday announced a new partnership with the wholesale club that will bring Costco groceries and merchandise to customers via Uber Eats.

Costco members and non-members alike will be able to purchase products, but the pricing for members will be be roughly 15% to 20% lower. No hotdogs or pizza, unfortunately, as food court items are not listed in the app.

Costco currently offers same-day delivery through Instacart, with members-only pricing through its website. Non-members can shop through Instacart's site for a higher price, while the lowest pricing is almost always in the warehouse.

Uber also recently partnered with Instacart in a bid to take on DoorDash, especially among higher-income suburban shoppers.

"The over 10 million Instacart customers who tend to live in the suburbs tend to be highly affluent, shop with big basket sizes," Khosrowshahi told CNBC.

Costco members will also get a 20% discount on an Uber One membership, which offers free deliveries, discounts on certain purchases, and member pricing on rides.