WEBVTT 00:00:00.960 --> 00:00:04.557 Bring in show music, please. 00:00:04.640 --> 00:00:07.117 >> Hi, I'm CNBC producer Katie Kramer. 00:00:07.200 --> 00:00:11.197 Today on Squawk Pod, Palunteer CEO Alex 00:00:11.280 --> 00:00:13.997 Karp, a big interview that starts with a 00:00:14.080 --> 00:00:16.477 new partnership with chipmaker Nvidia. 00:00:16.560 --> 00:00:20.077 What aligns me with Nvidia and I think 00:00:20.160 --> 00:00:24.397 is what the c [music] technical customers want which is control over 00:00:24.480 --> 00:00:28.477 their compute, their models, their data stack and their alpha 00:00:28.560 --> 00:00:33.117 >> and spans to everything else he's fired up about in artificial intelligence and 00:00:33.200 --> 00:00:36.317 national security. >> Are we really going to outsource the 00:00:36.400 --> 00:00:38.637 battlefield of this country to the 00:00:38.720 --> 00:00:40.527 consensus view in Silicon Valley? 00:00:40.610 --> 00:00:43.757 [music] That is effing insane. 00:00:43.840 --> 00:00:47.997 Then what happens when two daughters of Congress forge a friendship across the 00:00:48.080 --> 00:00:52.237 aisle? New children's book authors, Ellie Godheimer of New Jersey. Just our 00:00:52.320 --> 00:00:53.677 dads [music] have always been friends. 00:00:53.760 --> 00:00:57.597 Forced Sarwell to go to a bipartisan workout group most mornings when we're 00:00:57.680 --> 00:01:01.197 in Washington DC. [music] So we've kind of trauma bonded over that a little bit. 00:01:01.280 --> 00:01:04.717 >> And Laura Mullen, daughter of the Homeland Security Secretary Mark Wayne 00:01:04.800 --> 00:01:07.037 Mullen. >> It was definitely very different than 00:01:07.120 --> 00:01:09.837 what you'd say [music] the normal childhood. A couple times I felt like 00:01:09.920 --> 00:01:14.077 Hannah Montana. Plus a mountain of disclosures about the 00:01:14.160 --> 00:01:17.757 president's finances. >> Ethics watchd dogss obviously are going 00:01:17.840 --> 00:01:20.397 to be all over this. >> Should a sitting president be allowed to 00:01:20.480 --> 00:01:22.557 trade [music] stocks on a regular basis? 00:01:22.640 --> 00:01:25.757 Should a congressman >> showing more than half a billion dollars 00:01:25.840 --> 00:01:28.877 in crypto income and raising some questions. 00:01:28.960 --> 00:01:31.277 >> We've created a system that at the 00:01:31.360 --> 00:01:34.397 minimum allows for the perception of 00:01:34.480 --> 00:01:36.637 effectively bribery. 00:01:36.720 --> 00:01:40.477 >> It is Wednesday, July 1st, 2026. Squawk 00:01:40.560 --> 00:01:42.717 Pod begins right now. 00:01:42.800 --> 00:01:47.757 >> Stand back by in three, two, one. Cue up please. 00:01:47.840 --> 00:01:52.077 >> Good morning everybody. Welcome to Squawkbox right here on CNBC. We are 00:01:52.160 --> 00:01:56.077 live from the NASDAQ market site in Time Square. I'm Becky Quick along with Joe 00:01:56.160 --> 00:02:00.397 Kernin and Andrew Ross Sorcin. And here we are, first day of the second half, 00:02:00.480 --> 00:02:04.317 first day of the third quarter. What a first half it was for the year. At the 00:02:04.400 --> 00:02:09.357 halfway mark for 2026, the Russell 2000 is the standout performer for that first 00:02:09.440 --> 00:02:13.757 half. If year- to- date, it is up by nearly 22%. It closed yesterday's 00:02:13.840 --> 00:02:16.157 session at a record high once again 00:02:16.240 --> 00:02:19.597 above 3,000. The Nasdaq is up by 12.8% 00:02:19.680 --> 00:02:21.357 for the first half of the year. The S&P 00:02:21.440 --> 00:02:24.397 500 is up by 9.5% and the Dow is up by 00:02:24.480 --> 00:02:26.877 nearly 9% closing out its best first 00:02:26.960 --> 00:02:31.437 half performance since 2021. But if you were looking just at the second quarter, 00:02:31.520 --> 00:02:35.357 that's where there were some really phenomenal performances. Uh particularly 00:02:35.440 --> 00:02:39.917 if you were looking at technology stocks, the NASDAQ up by about 21 a.5%, 00:02:40.000 --> 00:02:42.317 but the NASDAQ 100, the largest 00:02:42.400 --> 00:02:46.397 technology companies up by 27 a.5% for 00:02:46.480 --> 00:02:50.397 the quarter. It's unbelievable to kind of watch. We know about the Magnificent 00:02:50.480 --> 00:02:53.277 7 and the performance that they've been putting in. But if you haven't been 00:02:53.360 --> 00:02:57.517 watching the parabolic seven stocks, that was what really took off, not just 00:02:57.600 --> 00:03:01.037 throughout the entire quarter, but even yesterday. All of those stocks up by 00:03:01.120 --> 00:03:03.917 about 6 to 12%. These are the stocks 00:03:04.000 --> 00:03:08.237 that you're watching. AMD, Dell, Broadcom, Intel. Flip that over. You're 00:03:08.320 --> 00:03:13.277 also going to be looking at Micron, Marll, SanDisk. Those seven stocks at 00:03:13.360 --> 00:03:17.437 this point with the gains that they saw yesterday are actually exceeding the 00:03:17.520 --> 00:03:19.437 MAG7's multiples for the first time 00:03:19.520 --> 00:03:22.317 ever. AI's winning and and the war and 00:03:22.400 --> 00:03:27.197 and high oil prices losing. That's the only thing I can say. I don't I don't 00:03:27.280 --> 00:03:31.277 know how you explain it. How long's the war almost covered the entire quarter? 00:03:31.360 --> 00:03:33.997 Didn't not quite but it happened right. 00:03:34.080 --> 00:03:37.037 >> So all this is happening with that as the backdrop and with what did oil 00:03:37.120 --> 00:03:41.357 prices average? They came down recently, but they had to average >> above 90. 00:03:41.440 --> 00:03:45.037 >> I was going to say I was going to say high 80s 90 95. 00:03:45.120 --> 00:03:49.837 >> So go figure. Is it got to be got to be what happened with Yeah, it's got to be 00:03:49.920 --> 00:03:52.717 got to be. >> Yeah. Well, and that parabolic seven, I 00:03:52.800 --> 00:03:56.157 mean, they they have just taken off. It was the Mag Seven that were the first 00:03:56.240 --> 00:03:58.557 gainers for what was happening with AI. 00:03:58.640 --> 00:04:02.237 Now, this is the second iteration of that. And um it's been something. 00:04:02.320 --> 00:04:06.637 >> We got a guy coming on in a second who is calling him the lag seven 00:04:06.720 --> 00:04:09.437 >> instead of the mag seven. >> We'll see what he means. Parabolic. 00:04:09.520 --> 00:04:12.797 >> See what he means by that. They haven't done quite as well, but we'll see what 00:04:12.880 --> 00:04:17.197 he means. >> Look at look at those gains. Micron up 202%, SanDisk up 24. 00:04:17.280 --> 00:04:21.677 >> Not lagging yet. Maybe in in recent uh >> just in the last quarter perhaps. Um if 00:04:21.760 --> 00:04:24.157 you look at Treasury yields this morning, because remember we do get that 00:04:24.240 --> 00:04:27.917 big jobs report tomorrow, a day early because of the July 4th holiday on 00:04:28.000 --> 00:04:29.837 Friday. You'll see right now the 10-year 00:04:29.920 --> 00:04:35.197 is yielding 446. The 2-year is at 417. 00:04:35.280 --> 00:04:37.197 Anthropic now saying the US Commerce 00:04:37.280 --> 00:04:39.437 Department has lifted export controls on 00:04:39.520 --> 00:04:43.117 its Clawude Fable 5 and Mythos 5 models. 00:04:43.200 --> 00:04:47.117 uh it had disabled access to those models in mid June to comply with the 00:04:47.200 --> 00:04:49.917 government's national security restrictions. Anthropic said that Fibble 00:04:50.000 --> 00:04:52.397 5 will be available to global users on 00:04:52.480 --> 00:04:54.957 the cloud platform beginning today and 00:04:55.040 --> 00:04:59.597 it says it has restored access to Mythos 5 for some US organizations to continue 00:04:59.680 --> 00:05:03.357 to work with the US government to expand access for more domestic and 00:05:03.440 --> 00:05:08.397 international partners and that's a big move in terms of uh the next stage of 00:05:08.480 --> 00:05:11.437 all this. Having said that, we talked on Monday just about how there was this new 00:05:11.520 --> 00:05:16.157 Chinese model which apparently is as good if not better uh than the fable and 00:05:16.240 --> 00:05:20.077 mythos model. And so there's >> at some >> we've heard that we've heard that before 00:05:20.160 --> 00:05:22.797 you know at certain things. Yeah. Yeah. 00:05:22.880 --> 00:05:26.717 I read it and it said it it very specific, right? Do you know you know 00:05:26.800 --> 00:05:29.757 that all this stuff uh much better than I do. But 00:05:29.840 --> 00:05:32.877 >> I've been, by the way, trying to see even as I'm looking I was trying to see 00:05:32.960 --> 00:05:36.397 whether I could get back on Fable right now, but I can't yet. Says it's still 00:05:36.480 --> 00:05:38.477 disabled on me. I saw it ask me. It 00:05:38.560 --> 00:05:43.437 asked me whether I wanted it the other day. My friend called, but uh then it 00:05:43.520 --> 00:05:47.197 said it wasn't available. >> It's not I mean I mine still says 00:05:47.280 --> 00:05:49.517 currently unavailable, >> but I had a choice of like three other 00:05:49.600 --> 00:05:53.357 things that I didn't know if I wanted any of those. I >> the other models. 00:05:53.440 --> 00:05:55.037 >> Yeah, you weren't reachable. No, I think 00:05:55.120 --> 00:05:57.037 they want money for some of them, don't they? 00:05:57.120 --> 00:05:59.037 >> Oh, I'm pay I'm a paying customer. So, yes, 00:05:59.120 --> 00:06:03.757 >> I know you are. I know you are. You're going to end up having to need one of 00:06:03.840 --> 00:06:07.277 those programs that looks at everything that you've paid for. You know what I 00:06:07.360 --> 00:06:09.757 mean? Saw something the other day. I wanted to read an article and it says 00:06:09.840 --> 00:06:14.077 you can get >> um 14 days free. And I was like, "Okay, 00:06:14.160 --> 00:06:17.357 so I can see the article, but then it said >> it automatically charges. You have to 00:06:17.440 --> 00:06:20.237 put your credit in ahead of your credit card ahead of time." The only thing that 00:06:20.320 --> 00:06:24.077 ever saves me is that my credit card every once in a while either I lose it 00:06:24.160 --> 00:06:28.157 or it gets stolen and then I cancel it and then all of the subscriptions have 00:06:28.240 --> 00:06:32.557 to track me down to say, "Give me the new credit card." And I think to do cancel it. 00:06:32.640 --> 00:06:35.997 >> All right. Separately, Anthropic is starting an internal drug discovery 00:06:36.080 --> 00:06:40.237 program as part of an effort to develop AI tools for drug makers. The company's 00:06:40.320 --> 00:06:43.117 head of life sciences said yesterday that the company will focus on 00:06:43.200 --> 00:06:46.717 discovering treatments for what they call neglected diseases that would be 00:06:46.800 --> 00:06:50.477 considered attractive targets for traditional pharma companies. A 00:06:50.560 --> 00:06:52.317 spokesperson told CNBC that the effort 00:06:52.400 --> 00:06:54.157 was just beginning, that they would 00:06:54.240 --> 00:06:58.397 share more as their work progresses. 00:06:58.480 --> 00:07:02.077 Shares of Nike uh falling to levels that 00:07:02.160 --> 00:07:06.237 uh we haven't really seen much recently from this company. It was a high flyer 00:07:06.320 --> 00:07:08.157 company reporting adjusted earnings of 00:07:08.240 --> 00:07:12.077 20 cents uh a share beating estimates 39 00:07:12.160 --> 00:07:15.597 of 13 cents. That adjusted number does 00:07:15.680 --> 00:07:18.077 uh not include 52 cents a share of 00:07:18.160 --> 00:07:22.797 tariff related uh gains, refund related gains. Analysts didn't include that in 00:07:22.880 --> 00:07:26.637 their estimates. The company said it collected more than $300 million in 00:07:26.720 --> 00:07:29.677 tariff refunds, revenue of about 11 00:07:29.760 --> 00:07:32.797 billion, topped estimates of 10.9 00:07:32.880 --> 00:07:35.357 billion, and North American sales of 00:07:35.440 --> 00:07:38.317 $4.8 billion. That was uh apparently 00:07:38.400 --> 00:07:43.357 below expectations. Um, China sales dropped 12% but still 00:07:43.440 --> 00:07:47.917 topped analyst estimates as for guidance. Nike expects earnings for to 00:07:48.000 --> 00:07:49.997 be flattish for the next two quarters. 00:07:50.080 --> 00:07:52.157 I'm doing all this trying to see if this 00:07:52.240 --> 00:07:55.677 is uh Yeah, it's a new low. Uh and we 00:07:55.760 --> 00:08:00.157 have to go all the way back to God, >> it's down sharply this 00:08:00.240 --> 00:08:02.397 >> probably like an 8 year low last year, >> isn't it? 00:08:02.480 --> 00:08:05.437 >> Yeah, it's down sharply just this last year too if you're watching. 00:08:05.520 --> 00:08:08.637 >> But look at the high. >> I don't know what the high looks like it 00:08:08.720 --> 00:08:11.437 got us somewhere around 150 >> 50 or 60. 00:08:11.520 --> 00:08:15.517 >> Yeah. In the market cap now for the >> Dow Dow component. 00:08:15.600 --> 00:08:17.197 >> I was thinking about that this morning. 00:08:17.280 --> 00:08:22.077 um it's going to be like under like around 45 billion and at one point it 00:08:22.160 --> 00:08:25.597 had to be well over 100. >> Three years down 64%. I mean they 00:08:25.680 --> 00:08:27.517 they've just said that their customers around the globe are 00:08:27.600 --> 00:08:31.037 >> they lo when they when you lose Sorcin you lose Have you bought any Nike 00:08:31.120 --> 00:08:33.037 sneakers? When's the last time you bought some Nike sneakers? 00:08:33.120 --> 00:08:34.957 >> I haven't bought any Nike sneakers in a while. 00:08:35.040 --> 00:08:39.837 >> I'm rooting for them. I I mean I love Nike more than anything. And that ad, I 00:08:39.920 --> 00:08:43.677 don't know if you remember that ad um right after the Knicks won [snorts] was 00:08:43.760 --> 00:08:48.477 one of the great sports ads >> in someone who doesn't watch, you see it 00:08:48.560 --> 00:08:52.397 online. You don't see it on TV cuz you've been see any of these ads cuz you 00:08:52.480 --> 00:08:56.077 saw some other ad you really like too for uh >> Oh, for Poly Market. 00:08:56.160 --> 00:08:58.317 >> Yeah. Where are you seeing these online? 00:08:58.400 --> 00:09:00.877 >> Well, that one I saw. No, the that one I saw. 00:09:00.960 --> 00:09:03.357 >> You're not watching TV. >> It was I do watch I was watching the the 00:09:03.440 --> 00:09:06.397 the game at the time. >> How many times can you watch Billions? I 00:09:06.480 --> 00:09:09.597 I don't understand it. Don't you know every line that's that's coming? I mean, 00:09:09.680 --> 00:09:11.757 and there's no commercial. >> I'm watching other things. 00:09:11.840 --> 00:09:14.157 >> Really? >> Yes. I'm watching. 00:09:14.240 --> 00:09:18.317 >> But anyway, let's root for Nike because they need to get back. What do we have to 00:09:18.400 --> 00:09:19.677 >> You don't have to root for Nike. 00:09:19.760 --> 00:09:22.237 >> And you know, I'm not I'm rooing against 00:09:22.320 --> 00:09:24.957 I don't have to like so many things. 00:09:25.040 --> 00:09:27.437 I've been rooting against I have not 00:09:27.520 --> 00:09:30.317 bought a Nike product in years. I won't. 00:09:30.400 --> 00:09:35.357 Still mad about those the cops that were like pigs on those socks. I'm still mad 00:09:35.440 --> 00:09:38.877 about that. Still mad about that. I'm sorry. Mad about kneeling. Mad about all 00:09:38.960 --> 00:09:42.157 that. >> Um, 00:09:42.240 --> 00:09:46.557 young man. [laughter] >> I'm I don't like that cloud. I'm 00:09:46.640 --> 00:09:49.277 shaking. >> Okay. Well, tell me what you [laughter] 00:09:49.360 --> 00:09:52.157 >> tell me what you think about this next story because there are people 00:09:52.240 --> 00:09:53.117 >> I need to know what you think. 00:09:53.200 --> 00:09:56.717 >> There are people who are who are making that that who are doing that about where 00:09:56.800 --> 00:10:00.237 I'm going. >> You have to tell me what how to think because I don't know. I I 00:10:00.320 --> 00:10:03.917 >> that's what I I've thought about this and my answer is 00:10:04.000 --> 00:10:07.277 >> there's a lot of Okay, I will but there's a lot of questions. I don't have 00:10:07.360 --> 00:10:10.317 the answers. You need to tell me how to think about this. 00:10:10.400 --> 00:10:11.677 >> Okay, tell the story first. 00:10:11.760 --> 00:10:15.837 >> So, no, here's the story. The Office of the Government Ethics released President 00:10:15.920 --> 00:10:17.677 Trump's annual financial disclosure 00:10:17.760 --> 00:10:19.597 report yesterday. It revealed that the 00:10:19.680 --> 00:10:22.877 president pulled in at least $2 billion 00:10:22.960 --> 00:10:26.317 in 2025. of his crypto-related income in 00:10:26.400 --> 00:10:29.917 2025 included about $515 million from 00:10:30.000 --> 00:10:32.237 the sale of tokens uh from the World 00:10:32.320 --> 00:10:34.157 Liberty from World Liberty Financial and 00:10:34.240 --> 00:10:37.197 another 65 million from sales of equity 00:10:37.280 --> 00:10:39.677 in World Liberty's holding company. He 00:10:39.760 --> 00:10:43.277 also received $635 million in royalties 00:10:43.360 --> 00:10:47.597 from Celebration Coins. It wasn't immediately clear what those coins are, 00:10:47.680 --> 00:10:51.597 though Bloomberg is reporting that the royalties are related to Mr. Trump's 00:10:51.680 --> 00:10:53.837 memecoin business. Now, he earned more 00:10:53.920 --> 00:10:56.877 than $86 million in legal settlements as 00:10:56.960 --> 00:10:59.117 well. Those included the $24.5 million 00:10:59.200 --> 00:11:02.237 from Meta, $16 million a piece from 00:11:02.320 --> 00:11:04.477 Paramount and Disney. And President 00:11:04.560 --> 00:11:07.117 Trump's biggest stock holdings include 00:11:07.200 --> 00:11:11.437 Amazon, Meta, Nvidia, and Tesla. 00:11:11.520 --> 00:11:16.157 >> Right. Okay. >> So, lots of questions. Tell tell me what 00:11:16.240 --> 00:11:19.597 the answers are to the questions because we don't have answers to the questions, 00:11:19.680 --> 00:11:21.597 right? I I will tell you I'll tell you 00:11:21.680 --> 00:11:25.757 one other thing. He made uh 4.7 million 00:11:25.840 --> 00:11:28.717 from I almost contributed to that uh 00:11:28.800 --> 00:11:31.517 Trump watches. Okay. Trump branded 00:11:31.600 --> 00:11:33.437 watches. I was going to buy you one. I 00:11:33.520 --> 00:11:35.757 can't remember which one. Mag me, you 00:11:35.840 --> 00:11:39.277 know, as a so 00:11:39.360 --> 00:11:42.557 this is I say this a lot and and as his 00:11:42.640 --> 00:11:47.277 other you know people say this is how Trump rolls and it is how President 00:11:47.360 --> 00:11:51.037 Trump roll. He's selling watches. He's selling Trump brand watches while he's 00:11:51.120 --> 00:11:55.197 president. >> I think that's different than some of the >> well 00:11:55.280 --> 00:11:57.037 Bitcoin and other issues that his 00:11:57.120 --> 00:11:59.197 administration is having an impact. 00:11:59.280 --> 00:12:03.037 >> You have to and ethics watchd dogs 00:12:03.120 --> 00:12:04.557 obviously are going to be all over this. 00:12:04.640 --> 00:12:06.877 Democrats if if Democrats retake the 00:12:06.960 --> 00:12:11.917 House going to be all over looking at this. The the people in charge of some 00:12:12.000 --> 00:12:13.837 watchdog groups are saying there needs 00:12:13.920 --> 00:12:17.917 to be reform across the board in in the 00:12:18.000 --> 00:12:19.917 president be allowed to trade uh stocks 00:12:20.000 --> 00:12:21.997 on a regular basis. That's the 00:12:22.080 --> 00:12:25.117 discretionary. His is supposed that they 00:12:25.200 --> 00:12:27.837 emphasize that that's discretionary. 00:12:27.920 --> 00:12:32.717 >> The journal points out he he has a vast and sunundry business that Donald Trump 00:12:32.800 --> 00:12:36.317 does. There's there's no doubt about his sons are running it. They're not stupid, 00:12:36.400 --> 00:12:38.717 I don't think. and 00:12:38.800 --> 00:12:41.917 to go from making investments to being 00:12:42.000 --> 00:12:44.877 able to prove that there was quid proquo 00:12:44.960 --> 00:12:50.797 or influence pedalling or whether people just think if I do this I'm going to be 00:12:50.880 --> 00:12:52.957 in >> but is barisma the same thing with Biden 00:12:53.040 --> 00:12:54.957 >> that's what I mean 00:12:55.040 --> 00:12:59.117 and okay how about this question 00:12:59.200 --> 00:13:01.997 if he was not president 00:13:02.080 --> 00:13:04.797 would his businesses have gone up more 00:13:04.880 --> 00:13:07.757 or less than than what happening. 00:13:07.840 --> 00:13:10.637 >> Well, you tell me. Do you >> I don't know. These are my questions. 00:13:10.720 --> 00:13:13.357 That's why I'm asking you for the answers. 00:13:13.440 --> 00:13:17.597 >> So, let's start on the world uh liberty business. 00:13:17.680 --> 00:13:21.117 >> Yeah, because that was 15 billion, it's now 400 million or something or one of 00:13:21.200 --> 00:13:22.957 them. >> Okay. So, that business wouldn't I don't 00:13:23.040 --> 00:13:26.077 think first of all crypto regulations would have been different probably under 00:13:26.160 --> 00:13:30.157 a different president. The So, the opportunity for all those crypto would 00:13:30.240 --> 00:13:35.517 be different. Does that mean that they should not have tried to make the the the 00:13:35.600 --> 00:13:36.717 >> No, it's just can you benefit? 00:13:36.800 --> 00:13:38.797 >> The spokesperson says that the president 00:13:38.880 --> 00:13:42.477 has made crypto or made the United States the leading 00:13:42.560 --> 00:13:44.477 >> country. I understand that. I'm I'm just 00:13:44.560 --> 00:13:47.517 all I'm look the thing that I care about 00:13:47.600 --> 00:13:50.717 as an American is I would love for for 00:13:50.800 --> 00:13:54.797 all of this to just be no money involved with anything so you are not raising 00:13:54.880 --> 00:13:58.157 these questions because invariably what happens is you sit here and you say to 00:13:58.240 --> 00:14:01.037 yourself, are certain people making decisions for a reason? And by the way, 00:14:01.120 --> 00:14:06.237 it may not be that the president is making uh specific decisions to enrich 00:14:06.320 --> 00:14:09.037 himself, but it may be that there are other people who think that they can 00:14:09.120 --> 00:14:10.797 influence him. Maybe they're influencing 00:14:10.880 --> 00:14:13.437 him and maybe they're not. But either 00:14:13.520 --> 00:14:16.797 way, you then it it we sit here and we 00:14:16.880 --> 00:14:18.557 have to say to ourselves, what's going 00:14:18.640 --> 00:14:20.637 on? The UAE 00:14:20.720 --> 00:14:23.997 made a massive investment in world 00:14:24.080 --> 00:14:28.237 liberty. Would would would the UA you just said, what would have happened if 00:14:28.320 --> 00:14:33.197 he wasn't the president? Would the UAE have made an a massive investment uh in 00:14:33.280 --> 00:14:36.637 Liberty Financial? >> You have question. That's what I said. 00:14:36.720 --> 00:14:39.597 Questions, but no. You know what is good that there is all this disclosure? 00:14:39.680 --> 00:14:42.317 >> Sure. >> Amazing. >> Disclosure is good. I I think it it it 00:14:42.400 --> 00:14:44.797 kind of raises the question though. I think of it more of like when you were 00:14:44.880 --> 00:14:49.037 allowing the railroad to expand, if you had known about that, if you were going 00:14:49.120 --> 00:14:51.917 to make some of those changes in advance and you could buy the land along the 00:14:52.000 --> 00:14:54.397 way, right, >> before anybody else knew about those 00:14:54.480 --> 00:14:58.237 things. I I don't know. I I don't know exactly how this worked out, but those 00:14:58.320 --> 00:15:02.317 those are the types of questions if you have regulatory control and you also 00:15:02.400 --> 00:15:04.557 have the [clears throat] first mover advantage of knowing. 00:15:04.640 --> 00:15:06.637 >> Look, I think that I've I've I've spoken 00:15:06.720 --> 00:15:11.037 about very on the show with you about Nancy Pelosi and the trades and how I 00:15:11.120 --> 00:15:13.437 would tell you that that is I think I've 00:15:13.520 --> 00:15:15.597 used the word shameful. So, if you if I 00:15:15.680 --> 00:15:19.517 can say that about trading, 00:15:19.600 --> 00:15:24.237 >> what would you say about this? I don't I I'm just I'm I'm asking. That's why I 00:15:24.320 --> 00:15:28.557 told you that you need to tell me how to think about it because I I don't I have 00:15:28.640 --> 00:15:30.557 questions but I don't have answers. 00:15:30.640 --> 00:15:32.637 Here's >> I think the answer ultimately is that we 00:15:32.720 --> 00:15:35.037 have to find a way to make it such that 00:15:35.120 --> 00:15:39.357 our politics are somewhat immune from 00:15:39.440 --> 00:15:42.637 money and we've created a system that at 00:15:42.720 --> 00:15:46.397 the minimum allows for the perception of 00:15:46.480 --> 00:15:50.317 effectively bribery. That's >> what's what what what is al it's 00:15:50.400 --> 00:15:53.357 unprecedented. There's no doubt. What's also unprecedented, you know, I had a 00:15:53.440 --> 00:15:56.877 guy take office that was worth billions and billions of dollars that has a bit 00:15:56.960 --> 00:15:59.997 that had a business a successful business with golf courses and all this 00:16:00.080 --> 00:16:01.757 crap all around the world. And that's 00:16:01.840 --> 00:16:04.397 not going to go away either. So I I 00:16:04.480 --> 00:16:07.197 think the question of whether 00:16:07.280 --> 00:16:11.917 I mean I think definitely after his first term that that hurt his businesses 00:16:12.000 --> 00:16:15.437 it hurt his brand it hurt and then all the litigation and everything that came 00:16:15.520 --> 00:16:19.357 from and the other thing Andrew January >> if there okay there's smoke all right 00:16:19.440 --> 00:16:22.157 and there's whether there's fire I would 00:16:22.240 --> 00:16:26.877 think that there would be a zealous pursuit of any of the things that you're 00:16:26.960 --> 00:16:30.877 talking about especially if if Democrat >> well we also have an amalments clause I 00:16:30.960 --> 00:16:34.797 mean there are laws and rules rules that are supposed to prevent these. 00:16:34.880 --> 00:16:36.157 >> It's impossible to make these sticks. 00:16:36.240 --> 00:16:40.237 Someone's going to do it with this guy because he's got so many enemies. 00:16:40.320 --> 00:16:45.117 >> I I I wonder whether the rules have to be not just enforced, but are going to 00:16:45.200 --> 00:16:47.197 ultimately have to be changed, >> right? 00:16:47.280 --> 00:16:49.437 >> And the question is, is there going to be an appetite for that? 00:16:49.520 --> 00:16:53.357 >> That's what that's what the ethics guy said that we got to we got to look at 00:16:53.440 --> 00:16:58.317 the way everything is right now and we got to like make sure that all these loop. 00:16:58.400 --> 00:17:00.797 >> Well, look, we've had basic conversations. is it goes back to the 00:17:00.880 --> 00:17:05.357 the the trading story and we've not, you know, here we are sitting around saying 00:17:05.440 --> 00:17:07.117 that we're not investing in, you know, 00:17:07.200 --> 00:17:09.917 doing what we do or the folks at the SEC 00:17:10.000 --> 00:17:13.517 uh don't don't uh invest in stocks. 00:17:13.600 --> 00:17:17.597 >> I bought like a couple of Bitcoin seven years ago and you're still telling me 00:17:17.680 --> 00:17:22.477 that that my opinion is based on me buying that and it isn't. I mean, 00:17:22.560 --> 00:17:26.877 >> look, the the the point is >> I s actually I didn't say that. I sold 00:17:26.960 --> 00:17:29.197 90% of it below where it is now. 00:17:29.280 --> 00:17:33.917 >> Okay. The point is that most people at companies around the country have very 00:17:34.000 --> 00:17:37.277 significant restrictions on what they're able to do. If you are the CEO of 00:17:37.360 --> 00:17:40.557 Goldman Sachs or JP Morgan, you're limited about what you're able to do. If 00:17:40.640 --> 00:17:45.517 you we have lots of restrictions in most of corporate America, frankly, and lots 00:17:45.600 --> 00:17:49.677 of parts of the regulatory world as well. And yet, for whatever reason, you 00:17:49.760 --> 00:17:51.037 we're saying in the White House is different. 00:17:51.120 --> 00:17:54.477 >> Are you up to speed on the Ro Kana stuff? I've been seeing this stuff on on 00:17:54.560 --> 00:17:56.717 Twitter. I mean, he's How much is he worth? 00:17:56.800 --> 00:17:59.437 >> He's worth an extraordinary amount of money. I mean, it's through his his 00:17:59.520 --> 00:18:01.757 wife's family, but >> a lot of trading, too. 00:18:01.840 --> 00:18:04.957 >> But there's a lot of trading. And the question is, how how how would you like 00:18:05.040 --> 00:18:07.037 to limit that? I And by the way, I think 00:18:07.120 --> 00:18:11.997 we should try to try to limit those things or at least create systems that 00:18:12.080 --> 00:18:15.597 make you feel better about how how those things work. I don't, by the way, we 00:18:15.680 --> 00:18:20.077 should have people who have wealth uh in in Washington. 00:18:20.160 --> 00:18:22.157 >> Exactly. Because you don't want people who are completely unsophisticated. 00:18:22.240 --> 00:18:25.277 >> I'm not suggesting that we don't want that. I'm just suggesting that there are 00:18:25.360 --> 00:18:27.357 rules. By the way, when Jake Clayton 00:18:27.440 --> 00:18:30.797 went to the SEC, you know, his uh his 00:18:30.880 --> 00:18:34.957 his wife had worked at Goldman Sachs, stopped working at Goldman Sachs. I 00:18:35.040 --> 00:18:37.917 mean, I'm just saying >> cheese will be next. 00:18:38.000 --> 00:18:40.397 >> Coming up on Squawk Pod, Palunteer is 00:18:40.480 --> 00:18:43.357 teaming up with Nvidia and Palunteer CEO 00:18:43.440 --> 00:18:48.077 Alex Karp is fired up about the way technology works right here at home. 00:18:48.160 --> 00:18:50.317 >> You sound pretty angry. [music] No, the 00:18:50.400 --> 00:18:53.737 this is the voice of American business 00:18:53.820 --> 00:18:58.077 [music] that is being channeled through me. And I'm telling you, it is it is 00:18:58.160 --> 00:19:00.077 absolutely a problem for this country. 00:19:00.160 --> 00:19:04.217 >> It's the type of conversation you'll only hear on Squawkbox and the kind of 00:19:04.300 --> 00:19:06.637 [music] passion you'll only hear from Alex Karp. 00:19:06.720 --> 00:19:09.117 >> And I'll tell you, uh, we're off camera now. 00:19:09.200 --> 00:19:15.000 >> We're still going. >> Stay with us through this quick break. 00:19:18.160 --> 00:19:21.117 This is Squawk Pod from CNBC. Here's 00:19:21.200 --> 00:19:25.117 Andrew Ross Sorcin. >> Palanteer expanding its partnership with 00:19:25.200 --> 00:19:29.757 Nvidia to build custom AI systems for the US government. That stock uh 00:19:29.840 --> 00:19:34.637 shooting up. It's up again this morning, up almost 6% uh this week. And joining 00:19:34.720 --> 00:19:37.997 us right now exclusively at the table, Alex Car, Palanteer's co-founder and CEO 00:19:38.080 --> 00:19:41.277 and CNBC's Simodi, who covers Palunteer 00:19:41.360 --> 00:19:46.157 uh joins us. and uh tell us about tell us about the deal with inv there's so 00:19:46.240 --> 00:19:49.357 many things I think we all want to talk about but but let's get to the Nvidia 00:19:49.440 --> 00:19:51.597 deal first >> because because I have so much respect 00:19:51.680 --> 00:19:53.757 for Nvidia and Jensen Wong I'm going to 00:19:53.840 --> 00:19:58.797 try to keep this more adult than I usually do but the truth is if you want 00:19:58.880 --> 00:20:03.037 to know how this came together from my perspective it was uh it there's there a 00:20:03.120 --> 00:20:06.157 lot of technical issues who controls the models who controls the weights who 00:20:06.240 --> 00:20:08.717 controls the value of your business um 00:20:08.800 --> 00:20:13.277 but um you know we're on we're we're sitting on critical infrastructure 00:20:13.360 --> 00:20:15.597 across America, Ukraine, Israel. 00:20:15.680 --> 00:20:17.437 Everyone who uses LLMs on the 00:20:17.520 --> 00:20:19.917 battlefield runs on top of our ontology. 00:20:20.000 --> 00:20:23.677 Um, and our clients are just to say 00:20:23.760 --> 00:20:27.677 they're unhappy with the Frontier Labs is to say I'm welcome at the Berkeley 00:20:27.760 --> 00:20:30.157 faculty. It's like there's just a level 00:20:30.240 --> 00:20:35.517 of discomfort and loss of trust that also made it it really really 00:20:35.600 --> 00:20:39.837 >> Okay, unpack that. What do you mean by that? Well, you have Okay. So, when 00:20:39.920 --> 00:20:44.477 you're on when you're using large language models, they are it's like a at 00:20:44.560 --> 00:20:48.957 this point everyone technical realizes they're like a critical resource to make 00:20:49.040 --> 00:20:52.877 them valuable in an enterprise like battlefield context or regulated context 00:20:52.960 --> 00:20:56.477 or manufacturing. You have to have what's called an application layer. We 00:20:56.560 --> 00:20:59.677 we have this thing called ontology that now everyone's copying. But de facto it 00:20:59.760 --> 00:21:01.357 takes a large language model. It makes 00:21:01.440 --> 00:21:05.437 it safe and useful and precise. So safe 00:21:05.520 --> 00:21:08.797 because it doesn't touch your unluring data. Safe because it prevents the large 00:21:08.880 --> 00:21:13.117 language model from caching your data and replicating your business. Uh uh 00:21:13.200 --> 00:21:15.517 safe because it doesn't transfer your IP 00:21:15.600 --> 00:21:17.917 of how to fight secret data, top secret 00:21:18.000 --> 00:21:21.197 data or in in a clinical context. So the 00:21:21.280 --> 00:21:23.277 the general way these things were sold 00:21:23.360 --> 00:21:25.997 and again these people are I Sam and and 00:21:26.080 --> 00:21:30.717 and Daario you there's nothing more fun than debating Daario in private. So this 00:21:30.800 --> 00:21:32.797 is I'm not throwing shade at them, but 00:21:32.880 --> 00:21:35.277 something has gone completely wrong. And 00:21:35.360 --> 00:21:38.397 the basic view among enterprises in this 00:21:38.480 --> 00:21:41.677 country is I'm going to chill lax uh and 00:21:41.760 --> 00:21:45.437 waste my time with tokens. I'm going to get no value and they're going to get my 00:21:45.520 --> 00:21:49.597 IP. >> That sounds like shade though. And not just shade. It sounds like if you're 00:21:49.680 --> 00:21:52.077 saying these >> No, no, no, no, this is reporting. 00:21:52.160 --> 00:21:54.557 >> Okay. And I this is reporting that I've 00:21:54.640 --> 00:21:56.877 I've literally against my own interest 00:21:56.960 --> 00:21:59.197 called these like I'm profiting from 00:21:59.280 --> 00:22:01.917 this right. So the reality is you may 00:22:02.000 --> 00:22:04.637 not like us at my former school Hford or 00:22:04.720 --> 00:22:07.197 Berkeley but enterprises in this country 00:22:07.280 --> 00:22:09.757 trust and love us especially ones that 00:22:09.840 --> 00:22:14.877 are involved in critical infrastructure both public and private. Okay. So I want 00:22:14.960 --> 00:22:16.397 for those countries we're coming up to 00:22:16.480 --> 00:22:19.197 July 4th. I want those c I want for us 00:22:19.280 --> 00:22:24.317 and our our our our our our friends across the globe to have the very best 00:22:24.400 --> 00:22:28.077 tech resources. In fact, the whole secret of challenge here is the forward 00:22:28.160 --> 00:22:31.757 deployed model, the products that have been five years ahead. You know, you've 00:22:31.840 --> 00:22:35.837 been with me for a long time. Everyone everyone everyone said FDEs were 00:22:35.920 --> 00:22:38.877 services. They said we don't even know what an ontology is. That's the only 00:22:38.960 --> 00:22:40.397 thing people talk about now. It the 00:22:40.480 --> 00:22:42.957 secret was we delivered the best things 00:22:43.040 --> 00:22:46.717 for the war fighters. Those war fighters 00:22:46.800 --> 00:22:51.197 have serious trust issues. But it's not just the word visav frontier labs. Then 00:22:51.280 --> 00:22:55.197 you have my enterprises in the private sector who have the same issues. They're 00:22:55.280 --> 00:22:59.597 like, why would they get access to my data if they're going to build my alpha? 00:22:59.680 --> 00:23:02.637 Why wouldn't I control the weights? Why would And that's where you get this 00:23:02.720 --> 00:23:06.077 partnership. What what aligns me with 00:23:06.160 --> 00:23:09.277 Nvidia and I think is what the c 00:23:09.360 --> 00:23:11.277 technical customers want which is 00:23:11.360 --> 00:23:14.557 control over their compute 00:23:14.640 --> 00:23:20.157 their models their data stack and their alpha. They want to know they own the 00:23:20.240 --> 00:23:22.957 means of production. It's not being transferred to someone else. They're not 00:23:23.040 --> 00:23:27.277 interested in some fake deploy code that somehow is deploying tokens that 00:23:27.360 --> 00:23:31.677 transfers the alpha to a third party and the jig is up. So we have to figure out 00:23:31.760 --> 00:23:34.237 a way both pro both our our products are 00:23:34.320 --> 00:23:38.717 agnostic. We we we now sell a product to customers that allows you to switch from 00:23:38.800 --> 00:23:42.957 model to model because and we're completely agnostic but we need to 00:23:43.040 --> 00:23:47.677 rebuild trust and that trust is going to happen where everyone gets to ask ask 00:23:47.760 --> 00:23:52.557 and answer basic questions. Who owns the data? Where is it cached? Are the 00:23:52.640 --> 00:23:56.877 prompts secure? Is this being transferred to you? Are you being comp? 00:23:56.960 --> 00:24:01.117 Okay, if it was so valuable, let's say I can make you a billion dollars tomorrow, 00:24:01.200 --> 00:24:05.437 wouldn't I say, I'll make you a billion dollars and I want 30%. Why are they 00:24:05.520 --> 00:24:07.117 charging for tokens if it's so valuable? 00:24:07.200 --> 00:24:08.957 >> So then, Alex, if the key from what I'm 00:24:09.040 --> 00:24:12.397 hearing you say is a secure Americanborn 00:24:12.480 --> 00:24:17.997 open-source model, how quickly can your model compete with the frontier AI 00:24:18.080 --> 00:24:20.877 and aentic AI >> test? Okay. what what I am claiming 00:24:20.960 --> 00:24:23.357 obviously slightly true but slightly 00:24:23.440 --> 00:24:27.197 self-centered is it's the model plus an 00:24:27.280 --> 00:24:29.997 application layer plus compute it is 00:24:30.080 --> 00:24:33.197 really all three so in our jargon it's 00:24:33.280 --> 00:24:37.437 the value the reason okay just look at our financials the reason why everyone 00:24:37.520 --> 00:24:39.597 is chillaxing with bad financials and 00:24:39.680 --> 00:24:42.237 growth with losing money is the client 00:24:42.320 --> 00:24:45.117 refuses to pay the true cost the two 00:24:45.200 --> 00:24:49.997 places that actually make money like profit free cash flow are our 00:24:50.080 --> 00:24:52.077 application layer called ontology and 00:24:52.160 --> 00:24:54.637 compute. Okay, what I am not just 00:24:54.720 --> 00:24:59.677 claiming we can take an open model and in the classified or non-classified 00:24:59.760 --> 00:25:01.517 context get it to the point of a 00:25:01.600 --> 00:25:05.037 frontier model but a you control the 00:25:05.120 --> 00:25:08.717 weights. So what is the true cost? Not just what you're paying. The true cost 00:25:08.800 --> 00:25:11.917 is not just is what you make minus what 00:25:12.000 --> 00:25:16.237 you lose. Meaning the value of your business. But we can get the the 00:25:16.320 --> 00:25:21.517 frontier application to be exactly the same as a frontier model without the 00:25:21.600 --> 00:25:25.037 risk of transferring the alpha of your business to another. By the way, you 00:25:25.120 --> 00:25:29.117 could do this with a frontier closed model too. But then the clients have to 00:25:29.200 --> 00:25:32.957 be able to ask and answer very basic questions. Are you keeping the data? Are 00:25:33.040 --> 00:25:36.957 you going to enter our business? What do you are in the classified context when 00:25:37.040 --> 00:25:41.837 the do department of war goes to you and says I need this application do they get 00:25:41.920 --> 00:25:45.437 to control the weights to do it or do you get to control the weights? Are we 00:25:45.520 --> 00:25:49.277 really going to outsource the battlefield of this country to the 00:25:49.360 --> 00:25:51.997 consensus view in Silicon Valley? That 00:25:52.080 --> 00:25:56.957 is effing insane. And by the way, every single enterprise in this country in 00:25:57.040 --> 00:26:00.317 private, a lot of them don't want to speak in public because it get out it 00:26:00.400 --> 00:26:03.917 gets outsourced to the neurode divergent crazy person that apparently is on 00:26:04.000 --> 00:26:07.277 drugs. The one thing I don't do uh it it 00:26:07.360 --> 00:26:09.357 okay so that's my role. But I'm telling 00:26:09.440 --> 00:26:12.237 you in this country at every single 00:26:12.320 --> 00:26:14.797 enterprise I deal with they these people 00:26:14.880 --> 00:26:19.277 are livid. They're like I am paying for tokens that create no value. These 00:26:19.360 --> 00:26:22.557 people are stealing the weights and alpha of my business and they're 00:26:22.640 --> 00:26:26.717 creating a wealth tax that does not help the poor. It just punishes starts with 00:26:26.800 --> 00:26:29.677 the billionaires. Every single person at this table is going to be paying a 00:26:29.760 --> 00:26:32.237 wealth tax only to punish us. And the 00:26:32.320 --> 00:26:34.797 reason for it is because these models 00:26:34.880 --> 00:26:39.677 have been completely over irresponsibly overs. And the sale is it's dangerous 00:26:39.760 --> 00:26:43.037 for everyone, which is why I can give it to all your adversaries, but I can't 00:26:43.120 --> 00:26:46.717 give it to the Department of War or I can't safely give it to an enterprise in 00:26:46.800 --> 00:26:50.957 this country without being certain that the alpha of that business could 00:26:51.040 --> 00:26:53.757 transfer to this model tomorrow. I.e. I have no business, no job. 00:26:53.840 --> 00:26:56.477 >> You sound pretty angry. No, the this is 00:26:56.560 --> 00:26:59.997 the voice of American business that is 00:27:00.080 --> 00:27:04.477 being channeled through me. And I'm telling you, it is it is absolutely a 00:27:04.560 --> 00:27:06.237 problem for this country because we are 00:27:06.320 --> 00:27:08.957 on the cutting edge of every single AI 00:27:09.040 --> 00:27:11.677 technology. But if you're going to 00:27:11.760 --> 00:27:16.477 triply oversell something and the and by the way, the enterprises are just tired 00:27:16.560 --> 00:27:19.197 of it. >> But by the way, just a minute. I want 00:27:19.280 --> 00:27:23.437 you everybody watching this to test what I'm saying, especially investors who 00:27:23.520 --> 00:27:25.677 think somehow this is working. Pick up 00:27:25.760 --> 00:27:29.197 the phone and call a CEO in private, not 00:27:29.280 --> 00:27:31.197 in public. Every single person here can 00:27:31.280 --> 00:27:36.237 do this. Call two or three and say, "Mad Man Karp is on TV saying we're livid." 00:27:36.320 --> 00:27:39.117 I'm not going to quote you. You know, I won't quote you. You have a history. And 00:27:39.200 --> 00:27:42.157 see, they're twice as liid as me. Like, 00:27:42.240 --> 00:27:46.557 >> so if you're right though, does that mean that we are living in some kind of 00:27:46.640 --> 00:27:50.077 terrible AI bubble and that we're going to in in a quarter or two or three 00:27:50.160 --> 00:27:54.957 quarters from now, we're going to hear that big enterprises are canceling their 00:27:55.040 --> 00:27:59.597 subscriptions to these products or that the buildout is going to slow because 00:27:59.680 --> 00:28:01.597 >> this is this is the tragedy of it. The 00:28:01.680 --> 00:28:06.317 reality of compute plus ontology plus 00:28:06.400 --> 00:28:08.797 model changed the is changing the course 00:28:08.880 --> 00:28:12.237 of history. it. Ask the Ukrainians, ask 00:28:12.320 --> 00:28:15.917 the Israelis, ask our Department of War, ask the enterprise that are working. We 00:28:16.000 --> 00:28:18.637 do not have to oversell what we have. We 00:28:18.720 --> 00:28:23.037 have and it's all being built in this country basically except for the open 00:28:23.120 --> 00:28:26.077 models, which is a real thing coming from China, except for Nvidia open 00:28:26.160 --> 00:28:28.557 models, which are world class basically. 00:28:28.640 --> 00:28:33.197 Um, that it's all being built here. We do not have to overhype. We do not have 00:28:33.280 --> 00:28:36.637 to overhype it to the point where we're going to have wealth tax punishing, 00:28:36.720 --> 00:28:39.677 >> right? If if they're charging the enterprise three times as much as they 00:28:39.760 --> 00:28:42.397 should be >> and then and then they have to pull back 00:28:42.480 --> 00:28:44.637 on that that changes the math of all of this. 00:28:44.720 --> 00:28:47.997 >> Who's the they >> like >> they are the the large language models 00:28:48.080 --> 00:28:51.037 which by the way impacts your partner Nvidia because they 00:28:51.120 --> 00:28:55.117 >> sorry I'm talking about the they the enterprises that power this country as 00:28:55.200 --> 00:28:59.277 the most important thing. You're talking about the they as Frontier Labs and 00:28:59.360 --> 00:29:03.117 Silicon Valley. That's great. I'm focused on the enterprises of this 00:29:03.200 --> 00:29:07.037 country. hyperscalers following this I well you know I it it it depends what 00:29:07.120 --> 00:29:10.157 they're selling that's very very downstream from us we're completely 00:29:10.240 --> 00:29:12.557 agnostic we prefer a world where there 00:29:12.640 --> 00:29:15.037 are more hyperscalers where there's all 00:29:15.120 --> 00:29:19.757 sorts of new hyperscalers Elon Nvidia we like that world why do we like the world 00:29:19.840 --> 00:29:23.357 the same reason when you go online and there's you know there's 50 times kinds 00:29:23.440 --> 00:29:27.277 of coach you get to pick the one you like but what is happening among the 00:29:27.360 --> 00:29:29.757 most technical players is they're saying 00:29:29.840 --> 00:29:32.717 I want something I own this is my 00:29:32.800 --> 00:29:37.277 business. I want to own the GPUs. I want to own my data. I want to own the model. 00:29:37.360 --> 00:29:40.717 I want to control the alpha. >> So, is that creating more more 00:29:40.800 --> 00:29:43.997 opportunity for Palunteer? Are you already seeing the government cancel 00:29:44.080 --> 00:29:46.237 contracts with Anthropic and Open AI and saying we want to work? 00:29:46.320 --> 00:29:48.957 >> I'm not here. I'm literally not here to 00:29:49.040 --> 00:29:53.277 talk about what's going to happen to a very important business in the country 00:29:53.360 --> 00:29:55.357 except for obviously to some extent 00:29:55.440 --> 00:29:58.397 mine. In my business, we have much more 00:29:58.480 --> 00:30:01.117 demand than we can supply. That's like 00:30:01.200 --> 00:30:05.757 and and by the way, it may be somewhat maybe I may be the crazy person that 00:30:05.840 --> 00:30:10.077 still only cares about free cash flow, but we have more business than we can 00:30:10.160 --> 00:30:12.397 apply and we have look if you just look 00:30:12.480 --> 00:30:16.157 at our financials you can see like a uh 00:30:16.240 --> 00:30:20.077 two years out you can see 15 18 billion in free cash flow. So, are you 00:30:20.160 --> 00:30:22.717 frustrated by the stock's performance over the last 00:30:22.800 --> 00:30:26.797 >> You know what? I've been at this for 20 years. We've been at this talking this 00:30:26.880 --> 00:30:30.397 when we first started talking, people are like, "Is this a services company? 00:30:30.480 --> 00:30:33.277 Is it worthless?" >> Yeah. The the the markets are 00:30:33.360 --> 00:30:36.157 short-term, very fickle, and also quite 00:30:36.240 --> 00:30:39.357 frankly where I would throw some shade, 00:30:39.440 --> 00:30:41.917 what investors actually understand tech. 00:30:42.000 --> 00:30:45.917 >> They think because they're very high IQ and they understand certain things, they 00:30:46.000 --> 00:30:49.597 understand what they're using. Basically the fault of investors is typically I 00:30:49.680 --> 00:30:51.517 use it therefore it's valuable. Yeah. 00:30:51.600 --> 00:30:55.037 What an enterprise uses that's doing complicated manufacturing or 00:30:55.120 --> 00:30:59.197 pharmacological research or putting a bomb on or bringing special forces 00:30:59.280 --> 00:31:01.837 people home safely very different than what you're using. 00:31:01.920 --> 00:31:04.397 >> Do you think if you if you're a pharmaceutical company or you're the 00:31:04.480 --> 00:31:06.397 government should you not be therefore 00:31:06.480 --> 00:31:10.557 using anthropic or an open AI without 00:31:10.640 --> 00:31:14.237 your layer on top? I mean is that is would you say that's dangerous for them? 00:31:14.320 --> 00:31:18.157 Yeah, you you look first of all honestly the one thing that I am slightly 00:31:18.240 --> 00:31:20.317 frustrated about these these when when 00:31:20.400 --> 00:31:24.157 when open AI or anthropic especially are 00:31:24.240 --> 00:31:28.077 talking about critical infrastructure it only is being used in our product my 00:31:28.160 --> 00:31:30.317 product and there's a reason for that 00:31:30.400 --> 00:31:33.517 these things are very very valuable what 00:31:33.600 --> 00:31:36.317 what what they have done it building 00:31:36.400 --> 00:31:39.117 models is world historic and just so you 00:31:39.200 --> 00:31:41.197 see I'm not throwing shade Dario is a 00:31:41.280 --> 00:31:44.397 literally historic figure and He he came 00:31:44.480 --> 00:31:47.117 from behind and he's now number one. 00:31:47.200 --> 00:31:50.157 Almost no one in the I I've been in business whatever you want to call I do 00:31:50.240 --> 00:31:53.997 for a long time. Never seen anything like this. Okay. So the reality is 00:31:54.080 --> 00:31:57.597 critical infrastructure does not run these models without an application 00:31:57.680 --> 00:32:01.837 layer. In almost all cases and maybe it won't be all cases someday that 00:32:01.920 --> 00:32:05.357 application layers are ontology. That's a fact. And there's a reason for it. 00:32:05.440 --> 00:32:08.637 It's not that as you know some people love me some people hate me. They're not 00:32:08.720 --> 00:32:11.437 buying they're not buying it because of that. they're buying because these 00:32:11.520 --> 00:32:15.757 things have to be made safe. And the I I'm going to trust you. You should trust 00:32:15.840 --> 00:32:18.397 me because I've never lied BS thing that 00:32:18.480 --> 00:32:21.117 just doesn't cut it at this level. And 00:32:21.200 --> 00:32:24.157 and enterprises are run by the shrewdest 00:32:24.240 --> 00:32:28.717 American enterprises are run by the shrewdest, most widely intelligent 00:32:28.800 --> 00:32:32.637 people on the planet. If you think they're going for that, you can go try 00:32:32.720 --> 00:32:36.797 to sell me like my my parents still want me to get a job as a faculty member at 00:32:36.880 --> 00:32:40.397 Berkeley. Go try to get me a job at Berkeley. I'm very qualified. It's not 00:32:40.480 --> 00:32:44.077 happening. >> Do you agree with the notion of the most 00:32:44.160 --> 00:32:46.877 robust powerful AI models should be 00:32:46.960 --> 00:32:51.277 withheld from the public due to cyber security risks? Look, philanthropic open 00:32:51.360 --> 00:32:54.557 you really have to make the one of one of the things we're really trying to get 00:32:54.640 --> 00:32:58.717 the west to do is move away from like not liken. These are very technical. 00:32:58.800 --> 00:33:01.757 What does the model do? Who is restricted to do? I would say it is a 00:33:01.840 --> 00:33:05.917 loser to restrict something from the government because you don't agree with 00:33:06.000 --> 00:33:09.677 how the government fights war and then open it up to the world including our 00:33:09.760 --> 00:33:13.597 adversaries. Go sell that to the American people where they already don't like you. 00:33:13.680 --> 00:33:15.197 >> You have a lot of data that you look at. 00:33:15.280 --> 00:33:18.637 Do you think China is getting better at AI? How is the gap? 00:33:18.720 --> 00:33:22.237 >> There are two there are two relevant tech centers on two and a half. America, 00:33:22.320 --> 00:33:27.517 China, Israel. Those are the tech centers of the world. And we like I 00:33:27.600 --> 00:33:30.557 spent half my life in Europe. I want Europe to be relevant. the re and and 00:33:30.640 --> 00:33:34.477 Sweden has a real tech scene. There's you have to be can't just like you know 00:33:34.560 --> 00:33:37.517 but the relevant tech centers uh we are 00:33:37.600 --> 00:33:39.997 we have a peer-to-peer adversary in 00:33:40.080 --> 00:33:42.557 China. China has lots of advantages 00:33:42.640 --> 00:33:45.037 including quite frankly we have to find 00:33:45.120 --> 00:33:49.597 ways to make these models raise the standard of living for every America and 00:33:49.680 --> 00:33:53.437 we need a sense Americans need to have a sense it's not just the people at this 00:33:53.520 --> 00:33:56.477 table people watching it getting rich and there are real issues there and we 00:33:56.560 --> 00:33:59.997 have and then we have left and right far 00:34:00.080 --> 00:34:03.997 left far right gone completely nuts you would think that the greatest problem in 00:34:04.080 --> 00:34:06.157 the world if you were on the far left is 00:34:06.240 --> 00:34:11.277 somehow it's like if things work it's evil and bad By the way, I've been 00:34:11.360 --> 00:34:14.717 wholesale kicked out of my own party because I warned that this was going to 00:34:14.800 --> 00:34:17.197 happen on the left and it is happening. 00:34:17.280 --> 00:34:21.597 Then you have on the far right like it's like on both sides you think the biggest 00:34:21.680 --> 00:34:25.837 problem of our society are like warlocks roaming the street building technology. 00:34:25.920 --> 00:34:27.357 They of course they can't understand it. 00:34:27.440 --> 00:34:30.317 Like they attack Palentia for the craziest. China doesn't have that 00:34:30.400 --> 00:34:32.957 problem. But it also doesn't have the 00:34:33.040 --> 00:34:37.037 creativity, ingenuity and and deep tech 00:34:37.120 --> 00:34:40.077 uh uh creativity we have. But the 00:34:40.160 --> 00:34:44.397 reality is it's not a foregone conclusion that we win that we have we 00:34:44.480 --> 00:34:48.397 have the biggest problem in this country on these debates is we debate these 00:34:48.480 --> 00:34:50.397 things as if we don't have adversaries. 00:34:50.480 --> 00:34:53.117 It's not actually true. It's binary. 00:34:53.200 --> 00:34:56.397 They will win or we will win. >> Let me ask you uh I just want to pivot 00:34:56.480 --> 00:35:00.717 to a slightly different conversation but related. You have been a uh proponent 00:35:00.800 --> 00:35:05.117 and great supporter of Israel over the years. great support of Israel and right 00:35:05.200 --> 00:35:07.437 now we have a ceasefire uh in in the 00:35:07.520 --> 00:35:10.237 Middle East which we hope holds. Having 00:35:10.320 --> 00:35:13.197 said that, there is a bit of space 00:35:13.280 --> 00:35:15.837 between where the US is now and where 00:35:15.920 --> 00:35:20.237 Netanyahu is on what is happening here and whether they ultimately be 00:35:20.320 --> 00:35:23.437 protected. And I'm curious given that and given also your relationship with 00:35:23.520 --> 00:35:27.037 the US government and the work you do there, how you think about that 00:35:27.120 --> 00:35:30.077 disconnect. the the the the the is like 00:35:30.160 --> 00:35:33.677 so many things. I am the most publicly 00:35:33.760 --> 00:35:35.757 supportive CEO of Israel and that's 00:35:35.840 --> 00:35:39.997 true. Uh I think Israel is a is is on 00:35:40.080 --> 00:35:44.077 the side of good now in private because 00:35:44.160 --> 00:35:48.637 I have a I'm known there to be fair. I'm probably also the most effective critic 00:35:48.720 --> 00:35:52.077 of like hey I didn't agree with this without going and I would be very happy 00:35:52.160 --> 00:35:56.317 to be more in public about that except for I think not all. There are many 00:35:56.400 --> 00:36:00.157 legitimate criticisms of Israel and every other country. Although I would 00:36:00.240 --> 00:36:04.797 say, do you want a a country that can sometimes be difficult as your partner 00:36:04.880 --> 00:36:08.077 or do you want a country or do you want partners that have no tech seen as a 00:36:08.160 --> 00:36:10.317 partner? And so like it's like in this 00:36:10.400 --> 00:36:13.757 world having a a fully adult independent 00:36:13.840 --> 00:36:17.517 aligned country that doesn't always agree with us is much better than what 00:36:17.600 --> 00:36:19.837 we somehow have in Europe. Like that's 00:36:19.920 --> 00:36:23.357 we do not want that. Yes. Okay. So um 00:36:23.440 --> 00:36:25.437 look, America and Israel will always 00:36:25.520 --> 00:36:28.077 have will never be fully aligned and 00:36:28.160 --> 00:36:32.877 that's totally okay. My position is they are a very important partner and we are 00:36:32.960 --> 00:36:36.717 proud to support them and in private you can bet your last dollar I call and 00:36:36.800 --> 00:36:38.077 complain about a lot of things. 00:36:38.160 --> 00:36:42.077 >> So what do you think of thisou or whatever deal you think is uh is on 00:36:42.160 --> 00:36:45.917 offer and and whatever the deal that is do you think that we are now in a better 00:36:46.000 --> 00:36:47.997 place than we were before? You mean in Iran? 00:36:48.080 --> 00:36:50.957 >> In Iran and and and visav also what you 00:36:51.040 --> 00:36:55.037 think it means for Israel. >> Well, look is I I don't Israel I'm going 00:36:55.120 --> 00:37:00.317 to leave the I'm going to leave the Israeli thing for my talking to them in 00:37:00.400 --> 00:37:03.597 private because I just don't think at this point it's very hard in public to 00:37:03.680 --> 00:37:06.717 talk about them because you just have people look they're legitimate 00:37:06.800 --> 00:37:09.997 criticisms of Israel. Half the people criticizing Israel just don't believe it 00:37:10.080 --> 00:37:14.157 should exist and that's just a fact. And so like I'm not gonna like totally play 00:37:14.240 --> 00:37:16.157 into their hands by saying things I say 00:37:16.240 --> 00:37:18.957 in private. In America, America has to 00:37:19.040 --> 00:37:23.597 rep his own interests. Do I think Iran's been degraded? Yes. Are are there things 00:37:23.680 --> 00:37:26.397 that I don't think are in the public space that would be comforting to people 00:37:26.480 --> 00:37:30.397 if they are? Yes. And I'll leave it at that. 00:37:30.480 --> 00:37:33.997 >> Wow. Pretty great. >> Thank you. 00:37:34.080 --> 00:37:36.877 >> Thank you. >> Thank you. Have to get up from the seat. 00:37:36.960 --> 00:37:38.957 Yeah. >> You know, I I I just like I feel like 00:37:39.040 --> 00:37:40.397 I'm going to be kicked out of the room. 00:37:40.480 --> 00:37:43.357 No, >> never wide ranging conversation. We really appreciate your time. 00:37:43.440 --> 00:37:46.397 >> No, not like your party. We want you to We want you to stay. Can you come back 00:37:46.480 --> 00:37:49.677 tomorrow? >> Yeah. No, I'll come back. I I really do appreciate you guys. 00:37:49.760 --> 00:37:52.157 >> Talk to it. >> Yeah. You know, the thing I actually 00:37:52.240 --> 00:37:56.797 like about you guys the most and I watch you is just that you actually, and it's 00:37:56.880 --> 00:38:01.277 very hard to pull this off, you actually have divergent opinions and somehow you 00:38:01.360 --> 00:38:03.357 guys stay together. >> This is true. 00:38:03.440 --> 00:38:07.037 >> We're still on camera. >> Oh, yeah. Well, great. That's true. you 00:38:07.120 --> 00:38:09.997 actually like it's it's honestly it's so 00:38:10.080 --> 00:38:14.717 boring the other stuff like and and again I get kicked out of these rooms I 00:38:14.800 --> 00:38:17.837 even if even if I agreed with you I would try to disagree with you it's more 00:38:17.920 --> 00:38:22.237 fun >> there's sea thank you for bringing Alex 00:38:22.320 --> 00:38:25.037 here this morning thank you for your perspective on this Alex thank you we 00:38:25.120 --> 00:38:29.037 appreciate it very very much thanks >> people live in echo chambers we've been 00:38:29.120 --> 00:38:33.117 so offended both >> what do you like 00:38:33.200 --> 00:38:36.797 >> it's so crazy and I'll tell you uh we're off camera now. 00:38:36.880 --> 00:38:41.037 >> No, we're still going. >> Let me get off camera. 00:38:41.120 --> 00:38:44.877 >> Coming up, >> you're like a mini problem solvers uh caucus. 00:38:44.960 --> 00:38:49.037 >> Close friends and daughters of frequent squat guests, Congressman Josh Godheimer 00:38:49.120 --> 00:38:51.357 and DHS Secretary Mark Wayne Mullen have 00:38:51.440 --> 00:38:58.040 written a children's book about bipartisanship. They'll join us next. 00:39:00.640 --> 00:39:04.637 You're listening to Squawk Pod >> and Becky Q. 00:39:04.720 --> 00:39:08.717 >> Welcome back everybody. Our next guests are close friends. Their parents come 00:39:08.800 --> 00:39:12.797 from different sides of the aisle. Their bond has actually inspired them to write 00:39:12.880 --> 00:39:14.957 a new children's book on bipartisanship 00:39:15.040 --> 00:39:17.677 in Washington DC. Joining us right now 00:39:17.760 --> 00:39:20.237 is Larara Mullen and Ellie Gottheimr. 00:39:20.320 --> 00:39:24.957 They are the co-authors of Schmo and Azie go to Washington. Larara's father 00:39:25.040 --> 00:39:27.197 is former Republican Senator of Oklahoma 00:39:27.280 --> 00:39:30.317 and now DHS Secretary Mark Wayne Mullen. 00:39:30.400 --> 00:39:34.637 Ellie's father is Congressman Josh Godheimer, a Democrat from New Jersey. 00:39:34.720 --> 00:39:38.077 And obviously both of those gentlemen are are frequent guests right here on 00:39:38.160 --> 00:39:41.117 Squawkbox. Uh Larry and Ella, I I want 00:39:41.200 --> 00:39:45.597 to thank you both for being here today and for for coming on to talk about 00:39:45.680 --> 00:39:49.277 this. This is no joke. You guys are actually close friends. 00:39:49.360 --> 00:39:51.997 >> Yes, very close. We work out together. 00:39:52.080 --> 00:39:54.797 Yes, [laughter] that is. >> And how long have you two known each other? 00:39:54.880 --> 00:39:58.317 >> We kind of grew up together. Just our dads have always been friends. And like 00:39:58.400 --> 00:40:02.797 Larara was saying, we are forced against our well to go to a bipartisan workout 00:40:02.880 --> 00:40:06.237 group most mornings when we're in Washington DC. So we've kind of trauma 00:40:06.320 --> 00:40:07.677 bonded over that a little bit. 00:40:07.760 --> 00:40:11.437 >> Yeah. So these forced workouts that t took along the way. You all have this 00:40:11.520 --> 00:40:14.957 new book. It's called Shoo and Aussie go to Washington. And this is based on your 00:40:15.040 --> 00:40:19.117 two dogs. Yes. >> Going to Washington and seeing what it's 00:40:19.200 --> 00:40:22.877 like in Washington DC. What was it like kind of growing up in Washington DC and 00:40:22.960 --> 00:40:24.797 going there? >> It was definitely very different than 00:40:24.880 --> 00:40:26.797 when you'd say the normal childhood. 00:40:26.880 --> 00:40:31.037 couple times I felt like Hannah Montana just [laughter] like living like I'd go 00:40:31.120 --> 00:40:33.837 from school and then right after school we'd fly up to Washington. I'd be in all 00:40:33.920 --> 00:40:37.997 these amazing meetings and stuff like that. And so it definitely I got a lot 00:40:38.080 --> 00:40:43.117 of cool experiences >> and and and you too um again your dad's 00:40:43.200 --> 00:40:46.157 come from different sides of the aisle but they have formed a pretty close 00:40:46.240 --> 00:40:50.317 partnership and bond too. What did that kind of teach you as you were growing up 00:40:50.400 --> 00:40:53.757 Ellie? Yeah, I mean I think it's so amazing that our dads are able to work 00:40:53.840 --> 00:40:58.957 together and it really inspired Lar and us Lar and I to write this book and you 00:40:59.040 --> 00:41:02.157 know the idea that even though they're from two completely different sides of 00:41:02.240 --> 00:41:05.757 the aisle, they're able to be such close friends and work together and they even 00:41:05.840 --> 00:41:09.997 can find common ground to agree on and that's kind of what inspired us to be 00:41:10.080 --> 00:41:13.677 able to write this book and hopefully educate and have children learn that, 00:41:13.760 --> 00:41:16.317 you know, even if they're different from one another, they're still able to work 00:41:16.400 --> 00:41:20.477 together. before sec secretary Mullen before your dad was in before he was 00:41:20.560 --> 00:41:22.317 secretary of senate but before that he 00:41:22.400 --> 00:41:25.197 was in the house a lot for for years I 00:41:25.280 --> 00:41:29.357 how many terms yeah so that's when >> yes that's when they first started 00:41:29.440 --> 00:41:32.797 working together >> I got it so the Oklahoma New Jersey 00:41:32.880 --> 00:41:36.557 thing that didn't >> I got some questions about just growing 00:41:36.640 --> 00:41:38.957 up with the spotlight on your parents 00:41:39.040 --> 00:41:43.597 and then maybe a little on you in a way and like how did that feel all of the 00:41:43.680 --> 00:41:48.157 time and whether you ever had friends at school who said, "I can't believe your 00:41:48.240 --> 00:41:53.437 dad's doing this or they're doing that or what's happening." And I did you guys 00:41:53.520 --> 00:41:56.557 did you feel that or was it or are you always sort of kept separate from that? 00:41:56.640 --> 00:42:00.797 >> I really do a good job of keeping politics out of my relationships. And so 00:42:00.880 --> 00:42:02.797 with my friends, I never talk politics. 00:42:02.880 --> 00:42:06.557 I never talk like they obviously know who my dad is and I'm sure some of them 00:42:06.640 --> 00:42:10.557 don't completely like agree with everything. And so I really try my 00:42:10.640 --> 00:42:14.477 hardest to keep politics out of pretty much everything just to keep my 00:42:14.560 --> 00:42:17.197 relationships Maybe that's what we all have to do. 00:42:17.280 --> 00:42:20.397 >> That's Yeah, exactly. And that's why it's been so nice getting to know Lara 00:42:20.480 --> 00:42:24.317 because, you know, we both kind of have had very similar experiences growing up 00:42:24.400 --> 00:42:27.277 and we're even though, you know, our dads are so different from each other, 00:42:27.360 --> 00:42:31.437 we're able to talk together. But yeah, it's definitely been a crazy experience 00:42:31.520 --> 00:42:35.517 growing up, but one that I'm so grateful for. I've had friends say, you know, my 00:42:35.600 --> 00:42:39.917 parents didn't vote for your dad. And I'll just be like, okay, that's fine. We 00:42:40.000 --> 00:42:43.597 can just talk about something else. So yeah, that's something Lar like a mini 00:42:43.680 --> 00:42:48.317 problem solvers uh caucus. Was uh was your dad in problem solvers? That was 00:42:48.400 --> 00:42:50.477 was that around when he was in the house? 00:42:50.560 --> 00:42:54.317 >> Oh yeah. >> And he was with Josh along with that group. Okay. 00:42:54.400 --> 00:42:57.757 >> Do you guys ever get frustrated because sometimes it feels like in Washington 00:42:57.840 --> 00:43:01.117 not a lot gets done on a bipartisan basis. 00:43:01.200 --> 00:43:02.557 What What do you all see? What do you 00:43:02.640 --> 00:43:05.757 think about that? I see a lot of I see 00:43:05.840 --> 00:43:10.557 getting a really bad rep in Washington and I just see a bunch of like oh 00:43:10.640 --> 00:43:15.197 they're different you can't be friends basically and that's really about 00:43:15.280 --> 00:43:17.197 >> yeah I think that Lar and I both kind of 00:43:17.280 --> 00:43:21.757 saw you know we see the actual work that gets done behind the scenes but a lot of 00:43:21.840 --> 00:43:23.837 kids our age don't actually see that. 00:43:23.920 --> 00:43:26.477 So, I think what we were trying to do with this book is that before kids 00:43:26.560 --> 00:43:30.637 really get to social media and before they see all this fighting um that's 00:43:30.720 --> 00:43:33.597 orchestrated on social media, we wanted to be able to tell them, you know, 00:43:33.680 --> 00:43:36.397 things actually do happen. People actually work together who are different 00:43:36.480 --> 00:43:39.677 from each other and it's not impossible and it's something that should happen. 00:43:39.760 --> 00:43:41.517 And, you know, that's what's amazing about us being 00:43:41.600 --> 00:43:45.437 >> we wanted to show them the side that we see considering we we grew up there 00:43:45.520 --> 00:43:49.277 pretty much. >> And the proceeds go to help homeless families. 00:43:49.360 --> 00:43:54.237 >> Project Night. Yes. >> Gives boxes, night boxes to kids under 00:43:54.320 --> 00:43:57.597 the age of 12 that are homeless. It gives us a cured blanket, a stuffed 00:43:57.680 --> 00:43:59.757 animal, and a book, a children's book. 00:43:59.840 --> 00:44:01.437 And so, >> we thought it was really important to be 00:44:01.520 --> 00:44:05.197 able to help kids that um weren't as fortunate as we were growing up. And 00:44:05.280 --> 00:44:09.037 also hopefully provide some media and like literacy education as well. 00:44:09.120 --> 00:44:10.957 >> All right. Well, Ellie and Lara, I would 00:44:11.040 --> 00:44:14.477 just want to say we welcome you here. We appreciate what you all are doing and 00:44:14.560 --> 00:44:17.357 the message that you're getting out and thank you for taking the time to be with 00:44:17.440 --> 00:44:21.320 us. >> Thank you so much. 00:44:21.440 --> 00:44:23.917 And that is Squawk Pod for today. Thank 00:44:24.000 --> 00:44:26.397 you for listening. Squawkbox is hosted 00:44:26.480 --> 00:44:28.797 by Joe Kernan, Becky Quick, and Andrew 00:44:28.880 --> 00:44:31.117 Ross Sorcin. Tune in weekday mornings on 00:44:31.200 --> 00:44:33.597 CNBC at 6 Eastern or get the best of our 00:44:33.680 --> 00:44:38.317 TV show in an easy to listen to podcast when you follow Squawk Pod. Hit that 00:44:38.400 --> 00:44:42.157 follow button wherever you're listening now and [music] check us out anytime you 00:44:42.240 --> 00:44:45.197 want. We'll meet you right back here tomorrow. 00:44:45.280 --> 00:44:51.960 >> Now we are clear. Thanks, guys. Thank you guys so much.