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Red Lobster offered customers all-you-can-eat shrimp. That was a mistake

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Red Lobster offered customers all-you-can-eat shrimp.  That was a mistake

Red Lobster promised customers an endless supply of shrimp for $20 — a gamble the struggling restaurant chain hoped would help pull it out of its pandemic doldrums.

But Americans, and their appetites, had other plans.

The beloved yet beleaguered pillar of casual dining abruptly shuttered dozens of locations this week, heightening speculation that the chain is careening toward bankruptcy.

Although its dire financial situation isn’t the result of a single misstep, executives at the company that owns a large stake in the chain, as well as industry experts, said that miscalculations over the popularity of the all-you-can-eat shrimp special accelerated the company’s downward spiral.

The closures, including at least five locations in California, were announced in a LinkedIn post Monday by Neal Sherman, the chief executive of a liquidation firm called TAGeX Brands, which is auctioning off surplus restaurant equipment from the shuttered locations.

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Representatives for Red Lobster did not respond to a request for comment about the closures, which were listed on its website as temporary, or whether it planned to file for bankruptcy.

But company executives have been vocal about the misguided gamble with shrimp and how they misjudged just how hungry Americans would be for a deal on the crustaceans.

In an effort to boost foot traffic and ease the sales slump that swept through the restaurant industry during the pandemic, Red Lobster executives last year decided to relaunch a popular marketing ploy from years past to lure customers: For $20 they could eat as much shrimp as they wanted.

Eager for a deal during an era of stubbornly high inflation, many consumers eagerly embraced the offer as a challenge. People took to TikTok to brag about how many of the pink morsels they could put down in a single sitting — one woman boasted she’d consumed 108 shrimp over the course of a 4-hour meal.

“In the current environment, consumers are looking to find value and stretch budgets where they can,” said Jim Salera, a research analyst at Stephens, who tracks the restaurant industry. “At $20, it’s very possible for a consumer to eat well past the very thin profit margin.”

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During a presentation about sales from the third quarter of last year, Ludovic Garnier, the chief financial officer of Thai Union Group, a seafood conglomerate that has been Red Lobster’s largest shareholder since 2020, cited the endless shrimp deal as a key reason the chain had an operating loss of about $11 million during that time frame.

“The price point was $20,” Garnier said.

He paused.

“Twenty dollars,” he repeated with a tinge of regret in his voice. “And you can eat as much as you want.”

Although the promotion boosted traffic by a few percentage points, Garnier said, the number of people taking advantage of the all-you-can-eat offer far exceeded the company’s projections. In response, they adjusted the price to $22 and then $25.

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All-you-can-eat offers can be effective marketing strategies to get people in the door in the competitive world of casual dining — Applebee’s offers $1 margaritas dubbed the Dollarita, buffet chains such as Golden Corral and Sizzler promise abundance at a flat rate, and Olive Garden, one of Red Lobster’s main competitors, has long lured customers with unlimited salad and bread sticks.

But Red Lobster made a few crucial missteps with the shrimp deal, said Eric Chiang, an economics professor at University of Nevada, Las Vegas, and a self-proclaimed buffet aficionado.

The company not only started with a low price point, but offered a prized and pricey menu item that can serve as an entire meal — not many customers at Olive Garden, he noted, are going to stock up on bread sticks and salad alone.

“Most people will also order the Taste of Italy,” he said, “or something that gives you meat and pasta.”

Chiang said the most effective loss leaders, a term for products that aren’t profitable but bring in enough new customers or lead to the sale of enough other items to make the offer worthwhile, use cheap ingredients. A good example is 7-Eleven’s Free Slurpee Day, he said, as the company gives away about 15 cents of ice and syrup to customers who then pay to fill up their gas tanks.

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Consumers are especially drawn to all-you-can-eat deals and buffets during tighter economic times, Chiang said.

“This is a story of inflation,” he said. “All you can eat for $15? That gives customers a sense of control. Like we’re not being gouged, not being nickel and dimed for every dessert.”

Red Lobster, it turns out, has been in trouble for a while.

In 2003, the chain, which at the time was owned by Darden Restaurants, the company that owns Olive Garden, offered a similarly disastrous all-you-eat crab special for around $23.

So many people came back for seconds, thirds and even fourths, executives said at the time, that it cut into profit margins. Before long, the company’s then-president stepped down.

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In 2014, after a period of disappointing sales and less foot traffic, Darden sold Red Lobster to San Francisco private equity firm Golden Gate Capital for more than $2 billion, a stake that was eventually taken over by Thai Union.

Despite the turmoil, the company, which until this week touted about 700 locations, remained a brand so beloved that it earned a reference in Beyonce’s song “Formation,” in which she describes post-coital trips to Red Lobster.

After the song’s release, the company said it saw a 33% jump in sales, but that glow was short lived and had faded long before the ill-fated shrimp deal was brought back last year.

“You have to be pretty close to the edge for one promotion to tip you over the edge,” said Sara Senatore, a senior analyst at Bank of America, who follows the restaurant industry.

In January, Thai Union Group — citing a combination of financial struggles it pinned to the pandemic, high labor and material costs and the oft-cited buzzword of industry “headwinds” — announced plans to dump its stake in the company, which was founded in 1968 in Lakeland, Fla. The closures this week hit at least five California locations — Redding, Rohnert Park, Sacramento, San Diego and Torrance — according to the website of the liquidation company, which posted images of available items, including a lobster tank, seating booths, refrigerators and a coffee maker.

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During a presentation to investors in February, Thiraphong Chansiri, the chief executive of Thai Union, expressed frustration with the situation surrounding Red Lobster, saying it had left a “big scar” on him.

“Other people stop eating beef,” he said. “I’m going to stop eating lobster.”

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Five Guys to close two L.A.-area locations

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Five Guys to close two L.A.-area locations

Five Guys will close two Los Angeles-area locations later this month.

The burger chain announced in a recent state filing that its locations in City of Industry and Whittier will close in late May. An outlet in Merced will also close its doors in late June, and one in Hanford will shut down in early July, according to state court filings.

The burger giant is the latest fast-food chain to shutter locations as the industry struggles with rising labor and real estate costs in the state.

The company cited “financial hardship” as a reason for the closures, according to a filing.

Employers are legally required to submit a Worker Adjustment and Retraining Notification, or WARN notice, to alert employers, state and local officials at least 60 days before major layoffs. The initial notices were submitted in late April and early May.

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The chain had steady growth in 2024, but seems to have stumbled in California. It opened 37 new storefronts that year, according to the company’s franchise disclosure document. Yet California stores accounted for eight of the 14 locations that closed that year.

The closures will result in 55 jobs lost across the four locations, according to the WARN notice.

A spokesperson for Five Guys did not immediately respond to a request for comment.

Fast food chains have struggled against rising operational costs and increasingly cost-conscious customers.

California’s economic landscape has further complicated business in the state. While aerospace and defense companies have continued to flock to the state, companies in other sectors, including food, have started to bail out.

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Five Guys ranked 42 in QSR Magazine’s top 50 U.S. restaurants list for 2026 and the number of locations in the country rose by 2% in 2025.

The chain got its start around 40 years ago in Virginia and now operates over 1,900 locations, according to its website.

The restaurant’s website lists over 85 locations in California, including at least 15 storefronts in the Los Angeles area.

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Jury rejects Elon Musk’s lawsuit, sides with OpenAI in bitter feud over AI future

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Jury rejects Elon Musk’s lawsuit, sides with OpenAI in bitter feud over AI future

A federal jury sided with OpenAI and its top executives on Monday in a feud with Elon Musk, who accused them of betraying a shared vision for it to guide artificial intelligence’s development as a nonprofit.

The nine-person jury unanimously found that Musk waited too long to file his lawsuit and missed the deadline for the statute of limitations.

Musk, the world’s richest man, was a co-founder of OpenAI, the company that launched in 2015 and went on to create ChatGPT. After investing $38 million in its first years, Musk accused OpenAI CEO Sam Altman and his top deputy of shifting into a moneymaking mode behind his back.

The jury served in an advisory role, but Judge Yvonne Gonzalez Rogers accepted the verdict Monday as the court’s own and dismissed Musk’s claims.

The trial that began on April 27 in Oakland shed light on the bitter falling-out between the two Silicon Valley titans and the origins of OpenAI, now a company valued at $852 billion and poised to become one of the largest initial public offerings in history.

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The high-profile high-stakes showdown between two of the most powerful companies and leaders in technology was billed as a battle that could change the trajectory of AI.

There were two weeks of testimony from the dueling entrepreneurs and other key players in OpenAI’s history, providing a rare inside glimpse into the company, which evolved from a startup to one of the world’s most influential companies.

Musk had fallen out with his fellow co-founders, then, after OpenAI became arguably the most important company in AI, he decided he was not happy with how the trailblazer was managed after he left.

Musk claimed Altman, the startup’s chief executive officer, and OpenAI President Greg Brockman “stole a charity” by exploiting his early support for an altruistic research project so that they could later get rich by turning into a regular for-profit company.

OpenAI and its leaders said Musk was suing them to gain a competitive advantage for his own startup, xAI.

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Musk was seeking more than $100 billion in damages — to be awarded to OpenAI’s nonprofit arm instead of to himself — as well as the removal of Altman and Brockman.

The case was seen as an existential threat to OpenAI. If the decision had gone the other way, it would have sparked a shakeup that would have destabilized the company just as it is working to ensure the U.S. takes the lead in AI and prepares for a public offering with a valuation approaching $1 trillion.

Associated Press and Bloomberg contributed to this article.

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Why this Hollywood director thinks AI can save L.A. film jobs

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Why this Hollywood director thinks AI can save L.A. film jobs

In 1926, director Cecil B. DeMille hired hundreds of workers to build a set of Jerusalem inside the DeMille Studios in Culver City for the classic silent film “The King of Kings.”

A century later, Jon Erwin filmed his biblical epic ‘The Old Stories: Moses,’ starring Ben Kingsley, on the same studio lot now owned by Amazon MGM Studios.

Except now, much of the architecture, desert location, and supernatural parts of the three-episode miniseries were generated through artificial intelligence. The prequel to ‘The House of David’ series debuts on Amazon Prime on Thursday.

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A production that traditionally would have taken months to shoot and require multiple locations was filmed entirely in one week with a crew of just 100 people — who never left Los Angeles.

“We did this massive sword-and-sandal epic, and we never left a soundstage, very similar to how James Cameron does Avatar or how Jon Favreau does ‘The Mandalorian,’” said Erwin, the director of the series. “When you preserve the performance and the work of the crews and the department heads, then you can do things that are incredibly cost-effective for studios.”

As Hollywood grapples with rapid technological change, a growing number of filmmakers and companies in Southern California are using AI tools to radically rethink how films and TV shows are made.

“Some are still resisting, but many are recognizing that, for better or worse, AI is here and not going anywhere and it is important to reimagine what film creation can look like in light of the new possibilities AI creates,” said Victoria Schwartz, director of the entertainment, media, and sports law program at Pepperdine Caruso School of Law.

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A curved screen with a man standing in the middle.

A screen of LED panels called “the Volume” is used to film scenes for director Jon Erwin’s series “The Old Stories: Moses.”

(Genaro Molina / Los Angeles Times)

Erwin is among the first working directors at a major streaming platform to fully integrate AI into a commercial production.

Last month, he launched Innovative Dream, a Manhattan Beach production services company backed by Amazon. The company will rent its virtual production facilities to other studios and develop training programs for emerging filmmakers.

Although much of Hollywood is bracing for AI to hollow out jobs, Erwin argues the opposite: that AI, applied ethically around human performances, can return at least some production jobs that have been outsourced even as other positions are eliminated.

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“I think the greater threat of job loss in our industry is actually just how expensive things have gotten and how long they take to make,” Erwin said. “If you can make things quicker, and you can make things at a price point that studios will say ‘yes,’ you can employ more people in aggregate and create jobs.”

Although computer graphics have been essential to Hollywood since the 1990s, they traditionally required hundreds of artists and months of post-production work to place actors or crowds in digital worlds. Much of the labor-intensive visual effects work known as rotoscoping was outsourced to shops in India and other countries with much lower labor costs than in California.

By 2019, productions such as Disney’s “The Mandalorian” series advanced this further by using massive LED screens to project images of photorealistic digital worlds — “Star Wars” ships, forests, or deserts — as actors’ performed in costume in front of them. A virtual art department spent months designing the digital environments, and then loading them onto the large screen on the day of the shoot.

AI takes the process a step further.

Through “Moses,” Erwin is championing what he calls “hybrid” filmmaking: a workflow that marries live-action with AI-enhanced workflows in virtual production. The process combines what used to be separate phases — filming with actors and visual effects — to occur almost simultaneously. Scenes shot on set is made available to multiple editors and AI artists within minutes on the production floor, as they show near-finished sequences back to the cast and director.

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“You can create assets in three or four days, not 10 weeks. And that means you can actually kind of generate the environment while you’re shooting,” he said.

Erwin, 43, grew up in Alabama and built his career around faith-based films such as ‘I Still Believe’ and ‘Jesus Revolution.’ He had spent years trying to tell biblical stories at the scale portrayed in the source material.

When he pitched “House of David,” a drama about the life of King David, studio executives were initially skeptical. “I was told to just come up with a smaller idea,” he said.

To portray Goliath’s origin story, actors were filmed on green screens and AI was used to generate a mythical sequence involving dark sky, rain, mountains and angels with wings.

It marked one of the first integrations of generative AI in a major commercial production. The series, which premiered last year was viewed by 44 million viewers worldwide and reached No. 1 on Prime Video in the U.S.

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By Season 2, the team used 30 different tools, both traditional and AI, to generate images, sounds and video. They pivoted from shooting solely on location in Greece to filming some parts in L. A. in front of an LED wall.

AI was used to generate battle scenes and expand the background crowd size to thousands of people in a fraction of the time traditional CGI required. The use of AI-generated scenes jumped from 70 in Season 1 to 400 shots in the second season.

Jeff Thomas, a generative AI filmmaker who directed two episodes of Season 2, said each episode was made for less than $5 million, defying studio consensus that the show required a “Game of Thrones”-level budget of $12 million to $15 million per episode. Erwin declined to disclose the budgets for the “House of David” series or the “Moses” prequel..

“The Bible describes that battle as there was 100,000 people on each side. Well, it’s never been portrayed like that because we’ve never had the resources,” Erwin said. “We’re finally able to show that scope and scale.”

Erwin conceived of the idea of “Moses” over Christmas, wrote the script in January and created a four-minute trailer entirely created by AI. Amazon greenlighted the series later that month.

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Kingsley had a short window before his next commitment, so Erwin prepared and shot all three episodes on a soundstage in a week — a project that would have previously taken six months to prepare.

For the pivotal Red Sea scene, Erwin generated the water volumes and tidal waves in less than hour using AI models from Chinese company Kling AI and Palo Alto-based Luma AI, which would have taken weeks in the traditional process. They wrote text prompts that explored 18 different variations of the sea parting and discarded the ones that didn’t work, enabling Kingsley to react to a tidal wave projected onto a 360-degree LED wall screen.

“‘Moses’ really represented a whole new method of filmmaking for me,” Erwin said.

Jon Erwin stands in front of a screen of LED panels he used to film "The Old Stories: Moses"

For “The Old Stories: Moses,” director Jon Erwin used AI for wide shots, stunt-heavy battle sequences and to generate large crowds to showcase the grand scope of biblical stories. The red line he said he wouldn’t cross is using it in place of actors.

(Genaro Molina / Los Angeles Times)

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For crucial scenes portraying the palace hallway in Egypt, where Moses talks to the Pharaoh, they built cardboard boxes as the columns in the palace, and “reskinned” them with intricate carvings using AI. Although the set could accommodate only 20 extras, they used AI to create hundreds of background actors.

Erwin also used generative AI to synthetically expand partially built sets featuring sand and rocks and to “de-age” Kingsely to appear as a young Moses.

But some things were off limits for AI, including Kingsley’s performance.

“I just think our faces are so intricate and the micro expressions are so intricate, so that’s always real,” he said.

Instead, AI was used to co-design the character: Erwin originally imagined a bald Moses, but based on Kingsley’s feedback, they fine-tuned the look with weathered hair and mustache.

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“The line in the sand for me is replacing an actor,” Erwin said. “I don’t want to be in the industry if I can’t work with actors.”

The "hybrid" production creates AI-generated environments such as forests, deserts and battle sequences.

Jon Erwin’s “hybrid” production involves generating a variety of environments such as forests, deserts, or battle sequences using AI, and projecting them on the LED screen.

(Genaro Molina / Los Angeles Times)

When asked about the background extras displaced by AI crowd generation, Erwin said that’s the wrong way to think about it.

“It’s not a comparison of what would “Moses” have cost otherwise. It’s a comparison of “Moses” would have never been made otherwise, and that’s the way you have to think about it,” he said.

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Overall contraction in Hollywood has led to fewer films being shot on location in Los Angeles, and a 30% drop in entertainment industry jobs since its 2022 peak.

“I think you can do those things three to five times faster, at less than 30% the cost,” he said. “I actually see this tool set as an antidote to the job loss problem in our industry.”

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