6/8/26: Chips Stocks Hammered, Trump Floats Gov Stake In AI Companies

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2:37Turning now to the stock market. Absolutely insane things happening. There are drops, there are increases, but overall, the shakiness over the last couple of days from Friday to Monday reveal potential major weaknesses in the U.S. economy, which lead us directly into our next segment with Jeff Stein on AI. But let's start with D6, actually. Let's put it up here on the screen. This was written over the weekend. The market route leaves Wall Street bracing for rockier times. Investors have to confront the challenges from the latest inflation reading and SpaceX IPO in the days ahead. Specifically, they show stocks, bonds, gold, Bitcoin.

3:11Investors entered the new week battered by a market sell-off that left very few places to hide. The route followed Friday's stronger-than-expected jobs report, which sheared 4.2 % off the NASDAQ, sending investors racing to increase bets that the Federal Reserve will raise interest rates by year end and sparked a bond slide that lifted yields on treasuries to their highest level since early 2025. That pressured shares of multinational and smaller domestic companies alike, and gold fell to its lowest levels on the year. The tumble drew warnings from Wall Street that more turmoil lies ahead. Ray Dalio of Bridgewater said this,

4:10So the two things that caused the NASDAQ and stock market to go down significantly on Friday, were the jobs market that came in a little bit stronger than normal. Now, why would that matter? Because it would mean that they believe that thus the Federal Reserve would have to raise interest rates. Everything from the AI stocks to the general rise had actually previously been bet on the fact that the Fed was going to lower interest rates or at the very least keep them the same. So when that reading came in, they immediately bet that the interest rate was going to go up. That's already crushing now multiple years of generally high interest rates.

4:43How does that affect AI? Basically, from what I've been able to gather, a lot of it is based on the construction and the CapEx costs for borrowing because they have to borrow all this money to build all these new data centers and for all these other things. Money being more expensive increases the cost, and it also demonstrates, as he was talking about with the bonds, making it less attractive to bet on these ultra-risky high investments. I mean, you got Micron out there up like 1 ,000 % and all these other chip companies which are up by boatloads. AMD is up by 200%. Nvidia is up by, God only knows how much.

5:15Google, Meta, everybody. They all got hammered largely either because of the bond issue, interest rates, and then sometimes things just kind of break. Now, I do want to be clear on the day that we're recording this, it currently does look like the market is actually up. It's up by some 0.85%. So it's a race, maybe like a percent or so of the general drop that it had. We don't want to make too much of the drop itself. We're trying to look for the rockiness of where some of the investor beliefs are and what that will mean in the future. So, for example, let's put D2 up there on the screen. There was all that carnage in the chip stocks, quote, hit extra hard in the top-heavy market.

5:52Everything has been dependent now on a small group of big tech companies, which they specifically point to. Micron, Supermacuder, and SanDisk, they all lost more than 11 % in a single day. Cisco and NVIDIA dropped 6%. Caterpillar, lately apparently in AI play because of its power and energy businesses, fell by 3.8%. All of that, you can point to these semiconductor indexes and others combined to erase more than $1.2 trillion in market value on the single day. And the chip story really was the big story out of the general drop, and I think highlights how much of the current market is dominated in this one sector.

6:27So yes, it was like a little bit of a blip, but I think that we have to focus on it, just to make sure that we're covering our bases. Because in the future, a massive drop in those chip stocks will significantly deplete all of the gains from the S &P 500. It won't erase all of them, but so much of your current wealth is tied up in that, no matter who you are, really, because it's not like your companies and others aren't betting on that, that it will mean genuine catastrophe for US markets. And that is actually what will push us into a full-blown recession, Absolutely. You know, I mean, in terms of the level of expenditure, the data center build-out has now surpassed the price tag of all public infrastructure spending in the entire country.

7:10Like, that's the scale that we're talking about here. The, you know, this is beyond the railroad build-out. It's beyond the dot-com boom. So if it does turn out to be a bubble, there will be, the entire economy is bet on this. I mean, that's not an exaggeration. So there will be just a massive, massive crash. And so, you know, you won't be surprised that investors, they are aware of that or a little bit jittery anytime anything happens that could pump the brakes on that, you know, ever expanding valuations and investment. So I think that's part of why you see the volatility there. You know, at the same time, we should put D4 up on the screen here about how voters are feeling about the Trump economy.

7:56Because while the markets might be up, for most voters, that is not the thing that they are focused on. This is from the Financial Times. They say voters sour on Trump's handling of inflation and grocery prices. I was saying before that even Republicans, there's been a lot of upset about how Trump is doing on inflation in particular. So they have only 38 % approval among Republicans of Trump's handling of inflation. He's actually underwater among Republicans on his handling of inflation. And if you look at the numbers overall, 68 % disapprove of his handling of inflation, only 19 % approve. Those are the worst numbers from this entire poll of various issues.

8:48They're also not happy with government spending. He's deeply underwater on Iran, deeply underwater on tariffs and trade. And all of these things are areas where it is completely under his control. So whatever the stock market is doing, I mean, things could get much, much worse if you have a stock market crash. And then the one thing that is a bright spot in the economy also goes south with tons of carnage. and then you have utter decimation across our entire economy. But even without that happening for the American consumer, this has been a very, very difficult period and all owing directly to the choices made by Donald Trump.

9:25Yeah, and I think what this highlights too is, look, while everybody's looking at AI, the general cost for all of us, let's go to the next one, shall we? D5, for example, we haven't talked about jet fuel here in a while. Airlines have faced a$100 billion hit on jet fuel from the Iran's energy shock. Industry warns that profits will be halved by the surging energy costs. Oh, I mean, yeah, feeling so bad for airline profits. But we also know what that means is that these prices, they're never going back down. We talked about some of those new surcharges that United and American and all this other people have added after the war and even across the world.

10:00Yeah. Call me. So when Jet Fuel is trading at like half the price in, I don't know, like three or four years, I can virtually guarantee you that price or those surcharges will continue to be there. And that is the general quote and shitification, I think, of the U.S. economy. You will see continued inflation be used as an excuse, both because of supplier costs, but all because they want to, of general increased price. And it will never go down. We were talking earlier outside of the show about these Knicks tickets. I think this is a perfect example, is that you have an immense amount of wealth with the S &P where it's at.

10:34The wealthy 10 % of Americans have so much unbelievable amounts of money. People are out there paying$8 ,000 for nosebleed tickets to Madison Square Garden. I told you about the U.S. Open. People are out there paying$6 ,000 for normal U.S. Open tickets, which previously would have been something that you could go to the NBA final. Apparently, the World Cup, at least in some of these more luxury cases, is the same. F1 is another example. It's just purely for the super rich. And it's only continued to explode. All those prices continue to go up. Meanwhile, all of our Costco prices also continue to go up.

11:08But the wealthy people, because they have so much wealth tied up in the markets, and just fundamentally their wealth is very different from the way that most W-2 people make money, that they're able to afford that while everybody else's everyday life continues to get more expensive, and their little luxuries that they may have had in the past. You save up to take your dad to a game. I mean, maybe at this point, but even that is just so crazy expensive. Yeah, steak dinner, exactly. A once a month steak dimmer or a barbecue that you may want to throw for your friends. You better have like$500 if you're going to try to feed 30 or 40 people nowadays.

11:38And that will only continue to go up as the war continues. And I just don't think it'll ever come down. I really don't. After the evidence of the last five years. No, it does. It only goes one way. That's the way this works. All right. So we got our guest standing by, Jeff Stein. Let's get to him. Discover a spectacular island destination with crystal blue seas, endless sunshine, and the cool Bahamian breeze. Bahamar, located in Nassau, Bahamas, offers your choice of three luxury hotels, the richly refined Rosewood, the playfully hip SLS, and the stylishly modern Grand Hyatt. With over 45 restaurants, bars, and lounges, Bahamar serves up delicious dining from world-renowned chefs like Daniel Balloud and Marcus Samuelson, nightlife venues like the new Jean Batiste Jazz Club, and the Caribbean's most luxurious casino.

12:26At Bahamar, you'll find every pleasure under the sun and one-of-a-kind experiences for the entire family, like Baja Bay, our 15-acre lush tropical water park, interactive wildlife experiences, including our daily flamingo parade, world-class golf, tennis, spa, and so much more. Visit BajaMar.com today and discover a vacation destination where memories are made for a lifetime. Baja Mar, life spectacular. When it comes to advancing your education, you have more options than you think. At Rasmussen University, we find ways to remove barriers, not build them. Like a new laptop if you're eligible and enroll in select online or on-campus programs.

13:05That means flexible and engaging online courses and resources, tuition savings options if you qualify, exceptional student support, and much more. Online nationally or check out their 20 campuses across six states. Start when you're ready and get the support you need. Visit rasmussen.edu. Go on. Get a little out there. into the big heart of Nevada, where you can go off-road and off the map, on two lakes or on horseback. Dip into hot springs and dive into deserts. Climb a mountain or make your best effort. See thousands of stars in some of the darkest skies. Stake out haunted hotels. Can you make it to sunrise?

13:44There's always something new to see because we've got plenty of space to just be. Plan your trip at TravelNevada.com. Joining us now to talk all things AI, including a very important new scoop, is a longtime front of the show, Jeff Stein. He is now an economics correspondent with Notice. Great to see you, Jeff. Good to see you, man. Hey, thanks so much for having me on. Yeah, of course. So let's go ahead and start with this scoop that you were able to obtain. Put E1 up on the screen. So Trump is talking with tech executives about acquiring pieces of major AI companies. You say that he said on Friday he's talking with the leaders of the largest AI companies about having the government acquire pieces of their firms.

14:27This actually confirmed your previous reporting that he had been discussing that idea with Sam Altman in particular. So what do we know at this point, Jeff? So I think this has the potential to be one of the most dramatic federal interventions in the economy in modern American history. The big mystery at the heart of this that I've been trying to figure out is why do OpenAI, does OpenAI do Sam Altman? Why do they want this? And I'm curious for your guys' potential take on this. But essentially what we revealed last week is that OpenAI has gone to the Trump administration and said, you know how we're moving forward with this potentially trillion dollar IPO to become sort of a public company?

15:13what if the government stepped in and became one of the largest shareholders and not because the government would come in and buy shares like if you or i wanted to go out and buy shares in in open ai or anthropic stock that would be one thing what they're talking about here is having sam altman is proposing to the trump administration effectively ceding controls of his company to the government and that's the story we broke and we reported that the trump administration is looking into this and thinking about it. And then Trump confirmed that they were doing that. And so this is, you know, an unusual thing where you have the head of a major company saying to the US government, hey, would you guys like billions and billions of dollars worth of my private company?

15:56I don't know about you guys, but I can't remember the head of any company ever saying to anyone, much less the government, like, what if you guys came in and made me billions of dollars poorer? And it's such a head-spinning thing. And it raises, I think, a lot of questions about motivations, about money, about sort of the Trump administration's role in all of this. And it opens up, I think, a really important and fascinating policy debate. Yeah, let's go ahead and take a listen to Trump actually confirming the story. Let's take a listen. When Bernie Sanders lost, you know that I got many of his people.

16:30They voted for me because we are on an economic plan as far as economics is concerned. We have certain things that aren't that far apart. People are surprised. But many of you, if you'll take a look, many of the people that voted for Bernie Sanders when he was no longer there to vote for, they went to me. I picked up a lot of his, a tremendous amount of his voters. So there he was confirming the Bernie idea being asked specifically about AI. So Bernie had previously proposed some legislation, I think taking a 50 percent or so equity stake as part of a sovereign wealth fund. What do you think is the Trump administration's motivation, though, behind exploring this type of deal?

17:12I think the Trump administration on AI is in an incredible sort of two forces colliding right on top of each other. And one is that the base of the Republican Party on every poll and every demonstration that we see is extremely skeptical, almost the way like there are a lot of Republican voters who are skeptical of the party elite on Israel. A huge portion of the base is really riled up about data centers. It's not seeing the benefit to them of this AI explosion and is pushing back. I mean, I think we saw the head of the Michigan Republican Party expressing new openness to data centers because at the ground level, the base of the Republican Party is extremely skeptical of this.

17:53But then at the elite establishment level, the Trump administration, I'm not breaking any news here, is deeply intermeshed with the biggest tech companies Trump relied on, you know, the biggest players in this game, David Sachs and others, to set administration policy. And that administration policy has been very supportive. And we're at a point now where because in part of that supportive policy, there's trillions and trillions of dollars. I mean, I don't know what your guys' take is on this, but it seems quite possible to me not to sound over the top that we are heading towards an enormous bubble popping.

18:31And the risk from the Republican Party's standpoint is that the base opposition to these data centers and to AI will basically prevent the build out on which trillions of dollars on investment is now contingent. And so, right, you're seeing like those two trains are heading towards each other. And what the Trump comments there confirm, which I was kind of delighted to see because a lot of people before my story came out were like, this isn't true. You have no idea what you're talking about, like blah, blah, blah, blah. And then, of course, like the president himself is like, yeah, of course, that like sounds great.

19:10But the really interesting thing to me is that Trump is sort of implicitly acknowledging that they have this problem, that people don't like this. And so the suggestion seems to be if they can absorb the shares of the AI companies and maybe redistribute them through a dividend payment, maybe they use them to pay down the debt. Like, there's lots of ways they can use that money. Then maybe they can maintain elite support for the build-out of AI while simultaneously assuring people at the bottom that they're not getting totally screwed by this. Yeah, that there's going to be some benefit to them.

19:44Because right now all they're seeing is their electricity prices going up and everybody's brains being rotted and a bunch of oligarchs, you know, plotting whatever evil plans they have. And Jeff, let's get to that question about the motivation from OpenAI and Sam Altman. I mean, to me, the most straightforward reading is that they, too, are worried that it's a bubble that is about to come crashing down at some point. And they want to guarantee that they're going to be able to get their government bailout. Yeah. Yeah. I mean, I think that's the main criticism I've heard, that if the government is a major shareholder in OpenAI, then the incentives for the government to step in, in the event that OpenAI has a true bubble bursting economic collapse, that incentive will be greater.

20:32I think it's a little, I don't know, maybe that is what's going on. I think part of my hesitation is that, like, if they're just seeding shares, the U.S. investment in this will technically be zero dollars. Yeah. It's not like we have an investment to recoup. But maybe like just the fact that the U.S. government is more part of this company now means that they have a greater incentive to step in that. That makes a degree of sense. I mean, I think the other major thing that's going on here is that there's a war within the Trump administration over the regulation of AI. And you have on the one side, David Sachs, who left the administration, but he sort of articulates and embodies the idea that there should be essentially no.

21:11So maybe that's an overstatement, but very, very little federal oversight of this industry at all, that it flows down sort of the innovation and that we are in a fierce fight with China and that the best way to win is to not exert really almost any scrutiny over these companies. And then on the other side, we've seen recently Pete Hegseth and the Department of whatever we're calling it, war, is now saying these capabilities are so dangerous to U.S. national security as they're framing it that we need some degree of federal intervention. And I think part of what might be going on here is that OpenAI and the other AI companies are saying, well, we're trying to prevent this regulatory onslaught.

21:50If we bring the government in a little bit, maybe they have less of it. You know, if we're generating all this money for the government, they might have less of an incentive to slow down the pace of our growth, which is a little different than the bailout argument, but maybe not that dissimilar in some ways, too. Interesting. So they think they'll be regulated less if because their view is I don't know that this is totally true because Anthropic has been like not perfect, but the most responsible on the safety front and has also been very successful. But anyway, their view is that as much off to the races as they can be with little hindrance and as irresponsible as possible, the more they're going to profit and the more they're likely to win the race to super AI, AGI, whatever the goal ultimately is.

22:39So that's an interesting perspective. The idea is if they somehow set up a dividend payment. The math doesn't quite know, I don't think, for this. But you can imagine a world where they say, OK, Trump accounts exist and we'll add$1 ,000 into each person's Trump account from the shares of OpenAI and the other AI companies that we've acquired. Then the thinking is regulation makes that payment go down. So the government is less likely to do it. And people will be less interested in regulation generally. Maybe there'll be less populist pressure. That could be the thinking. Correct. And I think to go to your point about Anthropic, which I think is really important and interesting, we reported in our first story that Anthropic, that basically OpenAI and Sam Altman have been pushing this with the administration.

23:27And that Anthropic has not discussed this idea with the administration. My sense from sources is that Anthropica is much cooler to this, which is kind of an interesting inversion of like the idea that Anthropica is kind of the good guys. Yeah. Yeah. Right. And maybe that's a function of the fact that OpenAI has a bigger PR problem where they're like, please take our money because we are so unpopular. And Anthropica doesn't have that problem. Or maybe it's, you know, it raises questions about Sam Altman's motivations. And is it partly a reflection of his coziness with the Trump administration? Discover a spectacular island destination with crystal blue seas, endless sunshine, and the cool Bahamian breeze.

24:09Bahamar, located in Nassau, Bahamas, offers your choice of three luxury hotels. The richly refined Rosewood, the playfully hip SLS, and the stylishly modern Grand Hyatt. With over 45 restaurants, bars, and lounges, Bahamar serves up delicious dining from world-renowned chefs like Daniel Bolloud and Marcus Samuelson. nightlife venues like the new John Batiste Jazz Club and the Caribbean's most luxurious casino. At Baja Mar, you'll find every pleasure under the sun and one-of-a-kind experiences for the entire family like Baja Bay, our 15-acre lush tropical water park, interactive wildlife experiences, including our daily flamingo parade, world-class golf, tennis, spa, and so much more.

24:51Visit BajaMar.com today and discover a vacation destination where memories are made for a lifetime. Bahamar. Life spectacular. When it comes to advancing your education, you have more options than you think. At Rasmussen University, we find ways to remove barriers, not build them. Like a new laptop if you're eligible and enroll in select online or on-campus programs. That means flexible and engaging online courses and resources, tuition savings options if you qualify, exceptional student support, and much more. Online nationally or check out their 20 campuses across six states. Start when you're ready and get the support you need.

25:27Visit rasmussen.edu. Go on, get a little out there, into the big heart of Nevada, where you can go off-road and off the map, on two lakes or on horseback. Dip into hot springs and dive into deserts. Climb a mountain or make your best effort. See thousands of stars in some of the darkest skies. Stake out haunted hotels. Can you make it to sunrise? there's always something new to see because we've got plenty of space to just be. Plan your trip at TravelNevada.com. Let's talk a little bit more about you asserted earlier you think that this is a bubble. There are many others who do. Related to that, we have SpaceX IPO, which is imminent.

26:13And we can put this up on the screen from CNBC. They wrote up this Morningstar analysis that SpaceX, in their estimation, is worth less than half of its$1.75 trillion IPO target. And of course, SpaceX includes XAI, includes, you know, Grok and XAI, but it also is a much larger company. Obviously, they do the rocket ships. Their most profitable business is Starlink, which is genuinely like a good product that is in demand. A lot of the other stuff in here is a money loser, including XAI at this point. So what do you make of the valuation here? Do you think it is overvalued and overhyped and could help to further fuel and potentially help to collapse this potential bubble?