Insider Today: Bad times for big cities

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Welcome back to our Sunday edition, a roundup of some of our top stories. Fed up with the cost of life in the US? An increasing number of Americans are turning to "geoarbitrage."

On the agenda:

• It's not just you — Reddit is taking over Google's search results.

• America's big cities are about to run out of money.

• A McKinsey associate left a $200,000 salary to salvage their mental health.

• Microsoft's astounding plan for the AI boom: Triple data-center capacity.

But first: Netflix added millions of subscribers. Wall Street balked.

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This week's dispatch

Netflix's Wall Street worry

Netflix announced last week that it had added 9.33 million subscribers in the first three months of the year, far surpassing Wall Street expectations.

It now has almost 270 million subscribers, which is comparable to the populations of Russia and Mexico combined.

However, those kinds of comparisons will be harder to make in the future, as Netflix also announced that starting next year, it will stop releasing subscriber numbers and will instead announce milestones as it passes them.

Wall Street did not react well to the news, sending the stock lower.

Netflix's password-sharing crackdown has been a great success. That's good news for other streaming platforms like Disney that are looking to launch their own crackdown. But the boost will likely fade over time, and some on Wall Street worry the new level of secrecy on subscriber numbers is a sign that growth is decelerating.

Plus, Netflix's stock had increased 50% in the six months before earnings. It's possible some investors saw an opportunity to book some of their profits.

What's not in question? Netflix's supremacy in streaming.

Reddit overruns Google Search

If you've noticed more Reddit posts popping up in your Google Search results, you're not alone. Posts from sites like Reddit and Quora are overrunning the search engine.

In part, Google's shift to promoting more human, helpful sites has helped bring on a surge in Reddit traffic. And already, spammers are using the new trend to their benefit.

How Reddit took over Google.

Also read:

• Read Google's memo warning employees to 'think again'

• Google just made a huge company shakeup. Here's who's gaining power.

Bad times for big cities

Across the country, the rise of remote work has led to a decline in commercial real-estate prices and falling property-tax revenue. Cities from San Francisco to Boston are weighing whether to slash budgets.

At the root of these cities' woes is the struggle to figure out what the new normal budget is and how to deliver the services and investments citizens depend on without breaking the bank.

Things could soon get even worse.

Leaving McKinsey

When this employee started at McKinsey in 2021, they knew they were there "for a bad time, not a long time."

The employee said they worked from 7:30 a.m. to 11:30 p.m., and received no mentorship or guidance. They ultimately took a mental health break after a year, and left soon thereafter.

What they learned from their time at McKinsey.

Microsoft's big plans for the AI boom

A leaked presentation revealed that Microsoft significantly expanded its data-center capacity recently, and plans to ramp up growth to astounding levels going forward.

In the first half of Microsoft's 2025 fiscal year, the company aims to "achieve 3x growth" in new data-center capacity.

Read more from the leaked presentation.

Also read:

• Microsoft has a target to amass 1.8 million AI chips by the end of the year, internal document shows

• Electric grids need upgrades thanks to data centers. Guess who helps pay for that.

This week's quote:

"Only the very wealthy are going to have any dignity in their old age."

— Pam, a 57-year-old worker, on the looming retirement crisis.

More of this week's top reads:

• It's easy to bash tech, but I've started taking robotaxis — and they're awesome.

• More and more Americans are becoming "ALICEs."

• Remote workers are about to get a rude awakening.

• Harry and Meghan are terrible at business. So why do companies keep offering them millions?

• America's young men are blowing their money like never before.

• More and more Americans are deciding that the only way to get ahead is to leave.

• Goldman Sachs wants its coders to have studied philosophy.

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  The Insider Today team: Matt Turner, deputy editor-in-chief, in New York. Jordan Parker Erb, editor, in New York. Dan DeFrancesco, deputy editor and anchor, in New York. Lisa Ryan, executive editor, in New York.