11AM Hour: Bank Earnings on Deck, Early Facebook Investor Roger McNamee & AI vs. Humans in Health Care 10/12/26

0:00Dr. Ezekiel Emanuel: Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much. Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished. No matter your industry or role, your agent has the skills to help every team stay in their flow. Seriously, make work less work with Gemini on Google Cloud. Check response. Subscription required. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab.

0:33Dr. Ezekiel Emanuel: Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts. Good Monday morning. Welcome to Squawk on the Street. I'm Sarah Eisen with Carl Cantania, live from Post 9 of the New York Stock Exchange. Today, a big week ahead with bank earnings and two inflation reports on deck.

1:07Dr. Ezekiel Emanuel: We're going to break down how investors should prepare with UBS Wealth Management's Chief Investment Officer of the Americas.

1:13Roger McNamee: Plus, is AI coming for your doctor's office? Former White House Health Policy Advisor Zeke Emanuel will join us to make the case for why he thinks AI will outperform human doctors and be deployed for real-world medical tasks by 2030.

1:27Dr. Ezekiel Emanuel: And Aaron Sorkin's Facebook follow-up, The Social Network, off to a weak start at the box office. We're joined by one of the movie's producers and early Facebook and Google investor Roger McNamee.

1:38Roger McNamee: Pretty constructive here in the overall markets. Dow's up 240. Most sectors are green. Only consumer discretionary and IT are lower. We're a little bit hampered by the fact that the bond market is closed today, so no real read on that 10-year at five and a quarter. But But again, big catalysts on the way, whether that's bank earnings, CPI, PPI or retail sales. And I think Warsh Speaks is on Thursday as well.

2:00Dr. Ezekiel Emanuel: Yeah, and Beige Book as well. So clearly a lot of trading catalysts with the Dow, the only of the big four that are higher right now. We're going to start in the big event for the week. And that is bank earnings. Our Leslie Picker here with a look at what to expect. Hey, Sarah. Yeah, third quarter earnings kicking off tomorrow and into Wednesday with the nation's biggest banks. It's a cohort that's seen more than 1 ,000 basis points of underperformance since June 30th. A negative sentiment that has been driven by several factors. Better than expected results for or executive commentary on any of these could be a catalyst.

2:33Dr. Ezekiel Emanuel: So amid higher interest rates, questions are circulating about whether net interest margins have peaked. KBW says the quote NIM obsession will define results for traditional spread lenders. There also remains a looming question over whether AI agents like Meta's Muse will incite a deposit flight toward higher yielding accounts, which would which would also pressure profitability of that business. Now, the Wall Street side of the business is also poised to fizzle a bit. Sales and trading expected to deliver its least amount of revenue this year after several quarters of blockbuster results. And investment banking is also poised to be a bit weaker in the third quarter.

3:07Dr. Ezekiel Emanuel: Jeffrey's noting that proxy revenues for the eight global banks came coming in lower by 8 percent year over year and 21 percent lower quarter over quarter. Ahead of results, the KBE is on pace for its fifth straight weekly loss, which would be the longest set since January 2025, when it was down six weeks in a row coming into earnings. That following week, though, the KBE gained 8 percent, outperforming the S &P that week. So we'll see if something like that can happen again this quarter, as we've kind of seen the reverse in previous quarters, where there's been so much excitement going into earnings, and then the stock sold off a little bit on kind of the actual results that they saw.

3:47Dr. Ezekiel Emanuel: I mean, do you think that's legit, the worries around AI and deposits? I guess the idea was once people started using Instinct and Muse, they would just get a lot more efficient about putting their money in better returning places, better yielding places? I mean, basically what the large banks will say is it's not a concern for them because they do have so many different products within their organization that people can kind of, you know, move their money around. And there's also this sense that, I mean, there's this old adage on Wall Street that, you know, it's easier to get divorced than to take your money out of a bank account.

4:20Dr. Ezekiel Emanuel: Many would agree that's not necessarily true. But this idea of stickiness of deposits is one that has kind of endured for a long period of time. That said, I mean, if you use Muse, it is very easy to just ask a chatbot, hey, am I getting the biggest bang for my buck here? I have a whole bunch of money in a checking account that's yielding basically nothing. Should I be putting that somewhere else? So you can see a scenario where a large group of people might say, oh, I need to be moving that into somewhere where I'm generating more income on money that's basically just sitting there.

4:54Roger McNamee: As a lot of regional banks would argue, when it comes to money, it's about relationships and your history with someone.

5:00Dr. Ezekiel Emanuel: That's right. I have a serious relationship with Muse right now. I know. Exactly. No, that's the community banker point of view and the regional banker point of view is that you want to go in there. You want to go into the branch. You want to kind of check on your money and make sure that it is where they say it is based on that relationship with the person on the other side of the counter. The question is kind of in this new world, how much easier will it be to take your money out, both kind of emotionally as well as just from a, you know, daily operations standpoint of being able to switch and generate more income on the money that you're holding?

5:36Dr. Ezekiel Emanuel: Yeah. And where can you do that safely? I mean, I think the answer to that question isn't obvious either. Yeah, because if you have, I don't know, say$10 ,000 in a checking account and you're looking to move that, it's kind of a scary proposition to just be texting someone and, you know, hey, move that$10 ,000. Whereas I think people historically may have wanted to go and get a cashier's check and maybe take it somewhere else. Although I personally think cashier's checks are scary because if you lose it on the way to the next place, that's a little dicey as well. But from a banking standpoint, that's the cheapest cost for lending.

6:08Dr. Ezekiel Emanuel: So if you do see people kind of leave those types of products in search of higher yields, that impacts the margins. All right. Thank you, Leslie. Going to be busy a few days for you. We'll check back in with you, of course. Also, don't miss the CFO of Wells Fargo joining us tomorrow on this show, 11 a.m. Eastern, right after that firm reports.

6:26Roger McNamee: For more on earnings season and the impact on your portfolio, let's bring in UBS America's CIO Ulrike Hoffman-Purchardi joins us here at Post 9. It's great to have you. Thanks for being with us.

6:35Dr. Ezekiel Emanuel: Pleasure to be here.

6:35Roger McNamee: You do make the point that, I mean, I think your year ends 8 ,100, something like that. Earnings are going to be important this quarter. Yes.

6:42Dr. Ezekiel Emanuel: Earnings are always important fact for these. And we remain constructive on the earnings growth in the S &P 500. There are two camps right now. There is the companies that are more resilient to rates. And then there are those companies that are more sensitive to rates. But we believe the camp that is more resilient is not only driving the majority of the earnings growth this year. We believe that will continue. And that camp is very much tied to the AI infrastructure built out, the picks and shovels of AI. So that's semiconductors, but also cloud computing.

7:14Roger McNamee: That's a really interesting debate right now, the notion of whether the AI ecosystem is immune to rates. Because on the one hand, it might seem that way. But if they really were, would we be seeing spreads widen the way we have in some investment grade names?

7:30Dr. Ezekiel Emanuel: I think we are still quite early in the AI infrastructure built out. and also in the application layer of AI, you just discussed agentic AI. That is just starting to emerge, that market. Physical AI, I think we are close to an inflection point there. And both of these markets could quickly ram to hundreds of billions of revenue over the next five to ten years. So we don't think that there is necessarily the beginning of the end for AI. We're still in the early innings. And the private capital that still flows into the sector is actually accelerating. So that for us is another tailwind to the public company's EPS growth.

8:10Dr. Ezekiel Emanuel: So by semiconductors and hyperscalers, is that the upshot? So we prefer the atoms over bits. So we prefer the physical economy over the digital economy. We think the disruption risk from AI may be underappreciated. In some sense, the Internet and the digital economy disrupted the physical economy. Now AI could disrupt the digital economy. We have seen that with AI coding.

8:37Roger McNamee: Software.

8:38Dr. Ezekiel Emanuel: Software, right? That could append traditional software. But also AI agents could append advertising, digital advertising, and e-commerce. So we are still quite early in understanding just how far-reaching AI could be. And we have a graphic here.

8:54Roger McNamee: Industrials, that sort of makes sense, given what you just said. But does that extend into health care and financials, too?

9:00Dr. Ezekiel Emanuel: Yeah, we like health care, and particularly biotech and pharma, as diversifiers for portfolios. But it's more than that. It's playing offense and defense at the same time. Because on days, and you've probably seen that, when the AI capex trade has come under duress, health care actually has been a good ballast for the portfolio. So that's number one. But also, we think healthcare and pharma could be a big beneficiary of AI over time. Plus, it has some video drivers. So we like it. You have financials on there, too. We were just talking with Leslie about whether there's disruption risk there around deposits.

9:35Dr. Ezekiel Emanuel: What do you think? I think there is disruption risk in all sectors of the economy. In fact, you know, we're talking about sectors. We think sectors are increasingly ill-fitting to capture the winners and the losers. you really have to go underneath the surface to understand who is going to be winning and who is going to be losing. And for us, that means being focused more on the structural trends than necessarily the traditional sector buckets. But to your point, we remain constructive on banks, in particular high quality banks. We think net interest margins are going to come in fine. We think credit quality remains fine.

10:12Dr. Ezekiel Emanuel: And lastly, we also think that expectations on capital markets have been reset, and this is a much lower bar heading into this quarter.

10:19Roger McNamee: That's sort of the general take going into this week is that earnings, there's confidence in earnings, but there has been a re-rating. And that asymmetry, some argue, gives a pretty decent setup going into year-round. Would you agree?

10:32Dr. Ezekiel Emanuel: We agree with that assessment.

10:34Roger McNamee: When it comes to energy, it sounds like you're less concerned about prices as you are about duration of this conflict.

10:43Dr. Ezekiel Emanuel: So there is a risk, to your point, that inflation could seep into core inflation. But then you have some offsetting factors. You have moderating, for example, shelter inflation. Waste growth is also contained. So that's why we think core is going to be relatively contained come the inflation prints this week. But it's something we're watching. Our base case is just one more hike.

11:06Roger McNamee: In December?

11:07Dr. Ezekiel Emanuel: That's December. But there's a risk case for more. We don't think, though, it's going to be like 99 with six hikes. That is not in our playbook at this stage. I mean, the narrative has been strong consumer, low unemployment. Do you have any concerns about risks to that story?

11:26Roger McNamee: Especially if AI is disruptive on a headcount basis.

11:30Dr. Ezekiel Emanuel: I think right now we are still in this age or in this stage of the tech cycle where AI still assumes that everyone is going to be a winner. or the market assumes that everybody is going to be a winner. It's more the boom phase. That starts to change when we realize that there are going to be some winners and some losers. That's typically when the bust begins, like we saw in 2000, you know, the great sorting of who actually is going to be a winner. But I think that's too early right now. So AI will be a tailwind. I think the biggest risk to your question is more a very, very sudden rise in rates because that could be very disruptive to equity valuations, to the bond markets.

12:13Dr. Ezekiel Emanuel: It could raise concerns about fiscal sustainability. So that would be the one risk factor. But that's not what's happening now? It's more gradual? It's more gradual in our view. So in 1999, 10-year peaked at 6.8%. We are quite far away from that. And again, we don't think the Fed will be on a prolonged tightening cycle. So if there are one or two more hikes, that's something we think the equity market can take.

12:38Roger McNamee: And what about the argument that the bond market, if they don't get that many hikes, worries even more about the long end and you do wind up with the 10 or the 30 at six or above?

12:48Dr. Ezekiel Emanuel: We prefer the shorter end and the belly of the curve compared to the long end. I think there is a risk for the term premium to pick up. But we think ultimately in this situation where you have larger deficits, growth is going to be the best cure. And that's why this AI infrastructure potential productivity expansion is going to be key.

13:09Roger McNamee: Yeah, we're looking for signs of that and maybe more granularity out of corporates in the coming quarters. Ulrika, thanks so much. Good to have you.

13:17Dr. Ezekiel Emanuel: A pleasure to be here. Thank you. When we come back, former White House health policy advisor Dr. Zeke Emanuel will join us. Why he thinks AI is on track to outperform human doctors in the medical field.

13:29Roger McNamee: Later on, early Facebook investor Roger McNamee is with us. He's the producer of this new movie, The Social Reckoning. We'll discuss the film, get his latest thoughts on things like meta as Squawk on the Street continues. Legacy credit scores only look at a brief snapshot in time, and that limited view often leaves millions of qualified credit seekers out of the picture. Vantage Score is changing that by modernizing credit scoring. Vantage Score uses 400 % more credit and alternative data to create a fuller picture of financial behavior, Including trended credit data, rental payments, and timely utility payments, VantageScore safely broadens access to the credit economy and brings 5 million mortgage-ready borrowers into the market.

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14:24Dr. Ezekiel Emanuel: Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much. Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished. No matter your industry or role, your agent has the skills to help every team stay in their flow. Seriously, make work less work with Gemini on Google Cloud. Check response, subscription required. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab.

14:57Dr. Ezekiel Emanuel: Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. Welcome back. Yemen's Houthis launching deadly attacks on Saudi Arabia's airport in Riyadh over the weekend. Our Eamon Jabers joins us with more, and particularly, Eamon, how the U.S. might be involved in a response.

15:34Roger McNamee: Yeah, Sarah, that's a good question. Saudi Arabian officials reportedly reported early this morning that they were dealing with additional drones and missiles headed toward the kingdom, and the General Authority of Civil Aviation there announced They've extended the suspension of operations at King Khalid International Airport in Riyadh for safety reasons. And take a look at this video released over the weekend by the Saudi media ministry. It shows the moment of the strike at Riyadh's airport on Saturday. You see those passengers in that security line, mainly dressed in white, which is associated with pilgrims heading toward Mecca.

16:06Roger McNamee: And then this tremendous explosion. Officials said at least 14 people were killed and at least 320 injured in the attack over the weekend. Now, speaking to reporters on Saturday, President Trump said he planned to be in touch with Mohammed bin Salman, the de facto ruler of Saudi Arabia, and called attacks by the Iranian allied Houthis not acceptable. And all of this, Sarah, shifts the relationship between the U.S. and Saudi Arabia into a new phase. The core trade and the core deal between those two countries has always been U.S. military protection for Saudi Arabia in exchange for Saudi access to Saudi oil.

16:43Roger McNamee: But with both sides of that grand bargain now under strain, that creates some real pressure on the overall bilateral relationship. So we'll see how they manage it over the days to come.

16:53Dr. Ezekiel Emanuel: I saw a headline today that the Iranian foreign minister is urging diplomacy and wants to broker talks, which I just found odd because isn't isn't Iran the funder of the Houthis and making these attacks?

17:05Roger McNamee: Yeah, the Houthis are allied with the Iranians, but the Houthis have been a little bit more independent than a lot of people expected during the course of this war. They waited a while to get involved. When they have, they put a lot of pressure on Saudi Arabia, particularly that east-west pipeline and Saudi's ability to pump oil outside of the Persian Gulf and avoid some of the blockade activity that's happening in the Gulf. So the Houthis have been very calculated here, and it's presenting a real conundrum for the Saudi leadership. Yeah, well, viewers of this show, Eamon, will remember that we were talking about the prospect of Houthi involvement as early as I think late March or April.

17:44Roger McNamee: And it certainly it did take its time, but it has come to pass. Eamon Jabbers in D.C., thanks. Still ahead, former White House policy advisor Dr. Zeke Emanuel will join us while he says AI models should be in charge of some health care in some cases instead of human doctors.

17:59Dr. Ezekiel Emanuel: Plus, NVIDIA and Amazon looking to make new acquisitions, according to some reports. We're going to discuss the strategy behind these moves after the break.

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18:38Dr. Ezekiel Emanuel: Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much. Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished. No matter your industry or role, your agent has the skills to help every team stay in their flow. Seriously, make work less work with Gemini on Google Cloud. Check response, subscription required. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab.

19:10Dr. Ezekiel Emanuel: Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts.

19:36Roger McNamee: Welcome back, NVIDIA and Amazon looking to make some new acquisitions, according to some reports. Our Kate Rooney is all over it. Morning, Kate.

19:43Dr. Ezekiel Emanuel: Hey, Carl, good morning. So there is a potential wave of AI dealmaking right now as big tech companies are looking to buy up some smaller names and expand their lanes right now. Let's start with Amazon. So reportedly in talks to acquire AI startup Descartes for roughly$7 billion. This is according to The Wall Street Journal. The startup builds software that helps AI developers run all of the software across different types of chips, makes it easier to switch between different types of hardware. Guys, that could be particularly strategic for Amazon as it looks to challenge NVIDIA's dominance with its Tranium chips.

20:16Dr. Ezekiel Emanuel: We also did have news this morning of a new Microsoft chip following the same playbook there. Descartes creates AI models as well. It was valued around$4 billion earlier this year. The kicker here, though, Anthropic also reportedly kicked the tires on a deal with Descartes, but did reportedly walk away after due diligence. In other news, NVIDIA is reportedly in early talks to acquire or at least deepen its investment in Reflection AI. This one, according to the FT, NVIDIA already has a stake in this startup. We have talked about Reflection on our air. It is developing American open weight models to compete with some of the lower cost Chinese rivals like DeepSeek.

20:53Dr. Ezekiel Emanuel: The two sides are also reportedly considering an acqui-hire, which would give NVIDIA access to some of Reflexion's talent and technology without a traditional takeover. Reminder, NVIDIA has been also beefing up its other open source offerings. It has its own model and did buy a hugging face as well. And finally, guys, over the weekend, we heard from Microsoft CEO Satya Nadella on AI safety. He called for what he described as an emergency break on AI. He argued companies should just assume right now that models could be compromised. He talked about needing safeguards, needing to build those from within and building them from the start, guys.

21:29Dr. Ezekiel Emanuel: Is that it? Do you think that that is something that would, I don't know, be popular with open AIs and anthropics of the world? Well, I think it's a very diplomatic stance, Sarah. So without new regulation, which some of the AI labs, Anthropic in particular, have called for, this is a way to sort of self-police to say we need a kill switch is the way that others have described it, including Demis Asabas from Google DeepMind. So it's a popular strategy. I think emergency break versus kill switch is sort of a new way to brand it. So maybe he's looking to sort of rebrand the same idea that others have talked about.

22:08Dr. Ezekiel Emanuel: But it is popular and it's a way to guarantee human intervention to say, all right, these this technology is getting a lot better. It's getting a lot more autonomous. We needed a way to pull the brakes. And I would say he's sort of seen as a someone described it as like a father figure in A.I. He's the voice of reason. Jensen probably in the same category. But Satya Dela has been increasingly writing these almost think pieces online and have been getting a lot of attention. Yeah, well, it's also a way to not let Congress or government completely regulate it and have those calls calm down a little bit.

22:43Dr. Ezekiel Emanuel: Thank you, Kate. Kate Runeet. We'll stick with AI. Turn to its growing role in health care. Our next guest out with a pretty bold call saying as AI improves, having humans in the loop will likely worsen patient care, pushing back on the notion that human doctors must always have the final say in clinical care in this new Atlantic article last month. Let's bring in Dr. Zeke Emanuel, vice provost of global initiatives at the University of Pennsylvania, former Obama White House health policy advisor. Zeke, welcome. It's good to have you.

23:11Roger McNamee: Thank you for having me.

23:13Dr. Ezekiel Emanuel: So this is this is pretty provocative. I think that I know there's even pushback from the American Medical Association. You think that ultimately, AI will will replace the doctor?

23:25Roger McNamee: No, I think that's probably putting it to extreme. I think there are areas in which it will do a better job than physicians. There are some areas in health care where we're actually doctors don't do such a hotsy-totsy job, as I like to say. Sometimes the diagnoses, we miss about 12 million diagnoses a year. But I would say that the lowest hanging fruit with the biggest impact on the health care system is managing chronic illness. This is an area the United States health care system doesn't do well, managing your hypertension, your diabetes, your high cholesterol. And we have some evidence, and there's good reason to believe that autonomous AI can probably do it better.

24:10Roger McNamee: For one thing, these are all conditions that are pretty algorithmic on how you're supposed to manage them. You know, you start with a drug, and if it doesn't work, you add another kind of thing. And there's, again, some evidence, especially in diabetes, with a small study out of Stanford that says AI can get the control in these chronic conditions faster than humans and that the patients actually respond better to them.

24:36Dr. Ezekiel Emanuel: So then what is the role of the doctor in this world that you see?

24:42Roger McNamee: Well, AI is unlikely to be able to control everyone. There are brittle patients who, despite a lot of efforts, can't actually get the control easily. And that's about 20 percent of patients typically. And that's a place where human doctors are likely to be necessary. And I think until we are sure about the AI, there's going to be a role for physicians to engage and oversee and make sure that the models, not every model and not models right out of the box. You just don't go to chat GPT or something like that and just run it. They need to be well trained with guardrails, as was just mentioned. And I think doctors definitely have to be involved in that.

25:29Roger McNamee: Yeah, it's not certainly hasn't stopped patients from chat GPT their own maladies in the current environment. Oh, of course. I do wonder, you know, we've had this discussion a few times, doctor. And some argue that it's the parts of the country where access to health care is the worst rural areas where there's doctor and nurse shortages, where this should start. Do you agree that should be the cadence? I think that is going to be the cadence, not just rural areas. There are about 140 million Americans who live in counties with insufficient primary care physicians. That's certainly one major place to start.

26:07Roger McNamee: Mental health issues where we don't have enough providers is another place to start. There are lots of different areas of healthcare where we have widespread deficiencies, whether it's physical therapy and occupational therapy, a lot of pediatric areas, also insufficient number of physicians and other clinicians. So I think those are the areas to start. The other area I look at is areas which are common, where physicians are not doing a really great job, and that's these major chronic illnesses. All of them, actually, physicians aren't doing as well as they should be, and AI is probably going to do better.

26:48Roger McNamee: Do you think the sweet spot for this is going to be GPs, family doctors, or specialists? Well, I think it's going to start out with GPs. But look, I'm an oncologist, okay? One of the things we know that almost every cancer patient experiences, we give them chemotherapy. They have adverse events from chemotherapy. Managing those adverse events is also, a lot of it is algorithmic. What do you do if a patient has fever and neutropenia or patient develops nausea and vomiting? And that's another place where AI is likely to be very, very good, available 24-7, 365, and probably going to help a lot with the timely management and the reassurance for patients that no matter what hour, they are going to get top quality care.

27:37Dr. Ezekiel Emanuel: Well, as you know very well, America spends trillions of dollars on health care. And I do wonder if this could be a huge cost savings ultimately. And who captures that economic value?

27:48Roger McNamee: Well, we're working on thinking that through. But I totally agree with you. Look, if you could manage hypertension and diabetes well, each of those diseases, there's hundreds of billions of dollars that we spend on them. They have long-term consequences, whether it's amputation and diabetes, whether it's heart disease and stroke for hypertension. And you're right. We can save a lot of money if we manage those patients much better. So I think that's a we're trying to estimate that cost.

28:25Dr. Ezekiel Emanuel: No, you would think it would be savings down the line from the from the hospitals to the patients. I guess the question is just is this run by Silicon Valley? You know, are the are the A.I. companies running all this?

28:36Roger McNamee: Well, I think I think that is a very good question. How do you distribute the savings? My fervor and hope is that a large part of those savings end up going to patients through reduced insurance company costs, through less costs for Medicare and Medicaid, because we are, after all, the people who are paying for the health care services in this country and paying those trillions of dollars. And, you know, if we save, let's put it at$300 billion, that's actually$1 ,000 per American. And that's less than 10 percent of health care spent. So that's a lot of money.

29:16Dr. Ezekiel Emanuel: Well, it also means, you know, and I know there's a big debate about this. We have to enforce these liability laws where ultimately who's liable if mistakes are made.

29:26Roger McNamee: So you're raising an issue. There are four big challenges with getting AI out there. The first one is licensure or certification. When is the AI ready to go and for what diseases or conditions under what circumstances? Second is the liability question. I don't think that's as complicated, but we haven't had legislation, and I don't know that Congress is thinking about it. The third is the whole issue of reimbursement. How are we going to pay for these things to make sure that they just don't blow up the costs and raise costs? And the last one is, how do we get doctors and the health system to implement them efficiently and effectively?

30:06Roger McNamee: We know that it can be hard to implement new technologies well. So I think that's going to be the fourth big challenge. But you're 100 percent right. Each one of those needs to be addressed and needs to be addressed expeditiously, I think. Finally, there's an interesting debate. You know, some of these frontier models have been solving math problems that have been around for a century. It's sort of irritating the mathematicians who were working on it and in some cases argue that their work was stolen. And the question's been raised, what happens if the models, the labs in AI, decide that they can do pharma research better than pharma companies themselves and just keep those intellectual property gains for themselves?

30:50Roger McNamee: I'm very skeptical of that. For one thing, pharma does, they're absolutely essential for many things. For example, just having a molecule does not mean you've proven that it's safe and effective. So you actually have to get it into patients. This isn't just a tech play. In health care, it's always interacting with patients and caring for patients. And in that regard, I don't think a simple tech company, as rich and as talented as they are, can actually do it. they have to partner with players in the health care system who have gained a lot of experience, a lot of knowledge and a lot of know-how.

31:30Roger McNamee: So I think this issue of, well, we'll develop the molecule and then we're going to develop a whole pharma company around it. I don't think that's it.

31:41Dr. Ezekiel Emanuel: Yeah. I mean, there's also the trust issue, as we've been talking about. It's increasingly unpopular. AI right now. Moratoriums are going up. And even though usage is going up as well, Watch what they do, not what they say.

31:53Roger McNamee: Well, I agree with you. And we do have to recognize that technology does shape people and shape people's behavior. We know that with the cell phone, right? Our attention span has shrunk and all sorts of other things that have become from the technology. I hope in health care, AI technology actually helps people, makes them healthier, makes them actually better off, not worse off.

32:20Dr. Ezekiel Emanuel: Yeah, well, it'd be good to keep having conversations like this on that front. Dr. Zika Manuel, thank you very much for joining us.

32:27Roger McNamee: Thank you for having me. I hope it was illuminating.

32:30Dr. Ezekiel Emanuel: Definitely. And also just more evidence, Carl, of the progress point of AI, that it can do things like lower health care costs and improve accuracy and ultimately outcomes for people who are dealing with chronic illness.

32:43Roger McNamee: Yes, assuming they don't go rogue and start sending in false homicide reports to the Philadelphia police. They've got to do it responsibly. Yes. Let's get a news update with Dom Chu. Hey, Dom. Good morning, Carl. President Trump and Secretary of State Marco Rubio are reportedly considering firing Kimberly Guilfoyle as U.S. ambassador to Greece. That's according to the Associated Press, which says a decision is likely to come this week. Guilfoyle is under fire after a series of stories in the Wall Street Journal, including allegations she accepted improper gifts and offered to use her influence in return for a payment of$100 ,000 credit card bill.

33:18Roger McNamee: A federal judge ruled President Trump must cancel any remaining TV commercials paid for with taxpayer money that promote his political message. The judge sided with a coalition of groups that challenged the ads as an illegal use of funds. At the same time, the administration said the ad campaign was coming to an end. And death row inmate Krista Pike is back in prison after being released from the hospital over the weekend after recovering from her botched execution attempt. A Tennessee judge last week ordered all evidence related to the attempt be preserved, and Governor Bill Lee has suspended all executions for the rest of the year.

33:56Roger McNamee: Sarah, I'll send things back over to you.

33:58Dr. Ezekiel Emanuel: Okay, thank you, Dom. Coming up, we're going to take a look at new data that shows competitive pressure is building for McDonald's. That says the company looks to grow in the chicken and beverage markets. Also in the fast food space, Chipotle is falling this morning after a Starbucks spokesperson told our Jim Cramer that the company is not buying Chipotle. Remember, there was that report from the FT last week.

34:19Roger McNamee: Tomorrow, by the way, do not miss an exclusive with Dell chairman and CEO Michael Dell talking to Faber right here on Squawk on the Street at 11 a.m. Eastern time. Beef is about a$50 billion category globally. We already have a 40 share of beef. But if you think about chicken, chicken's$130 billion category. We have about a 20 share of chicken. Beverages is about a$230 billion category. We have a 10 share of beverages. So just right there, it dimensionalizes the upside that we have in particularly chicken and beverages for growth while still having a really strong presence in beef. So that's certainly one big opportunity that's going to drive the top line.

35:00Roger McNamee: That was McDonald's chief Chris Kamchinski during an interview with him last month on how chicken and beverages will fuel the fast food giants next phase of growth. But some new data shows some stiff competition in that market. Our food and wellness reporter Brandon Gomez is here with some exclusive data on that front as the chart doesn't look too good on MCD. Yeah, I mean, it was a great interview. And McDonald's did lay out what their plan is to turn the company around. But McDonald's set a goal. They said they want to gain an additional one and a half percentage points of global market share in both categories, chicken and beverage, by 2030.

35:29Roger McNamee: But consumer edge credit and debit card data shared exclusively with CNBC shows it's going to be an uphill climb. Now, McDonald's customers are increasingly spending at competitors that specialize in chicken and beverage. Chick-fil-A was the biggest gainer in restaurant spending share among McDonald's diners in third quarter. And four coffee chains, including Starbucks, Dutch Bros and Dunkin, collectively picked up nearly nine tenths of a percentage point there as well. And therein lies the challenge. McDonald's already saw a slightly negative comparable sales in July and August. consumer edge, saying though recent trends are more positive.

36:02Roger McNamee: Take a listen. McDonald's market share losses within limited service did narrow in September year-over-year relative to August. So whether or not that represents an inflection point remains to be seen, but it certainly did see an improvement at the end of the quarter. But look, there's a big battle for sort of a smaller amount of restaurant spend as people become more selective in what they spend. And that's the longer-term question here, right? Yes, spending continues, but how long does it remain selective for the consumer? Kamchinsky warned last month that the investment growth could add pressure to the near-term earnings.

36:40Roger McNamee: Not everyone on the street was convinced. Bernstein warning new beverage launches haven't generated enough sales to offset broader weakness, and innovation and chicken are taking longer to get to market than previously expected. So this is going to be a little bit of seeing how the playbook actually does play out, but the stage is looking a little bit dicier than perhaps we thought going into it. Also the issue of kitchen complexity, especially once you start hand-breading chicken, that's hard to do at scale, is it not? Yeah, and I mean, that's another conversation about how the franchise owners are going to be able to execute on these innovations.

37:08Roger McNamee: We saw that as being an issue in the last year when it came to executing on the value menu. We'll see how it comes to actually executing on these new menu items. Fascinating numbers, though, on that shift. Thanks, Brandon. Thanks.

37:20Dr. Ezekiel Emanuel: All right, still ahead, shares of Biogen are moving higher after J.P. Morgan upgrades the stock. More details on that call after a quick break. Welcome back. Shares of Biogen are jumping today. That's after J.P. Morgan upgrades the stock to overweight, increases the price target to$300 per share. J.P. Morgan citing, quote, an increasingly compelling catalyst path and an improved long-term growth outlook for the company, which is up about 4 % on the call.

37:44Roger McNamee: Best day here since July. Still ahead, we'll talk to the social reckoning producer Roger McNamee on the film's debut. This is what director Aaron Sorkin said about the film and Zuckerberg on a podcast over the weekend. I didn't want to jump up and down on him again with another movie. I don't feel that way anymore. And it's not about jumping up and down on Mark. It's about Roger McAmeon's right. This is really dangerous, what's going on.

38:25Dr. Ezekiel Emanuel: That was a clip from The Social Reckoning, which made its box office debut this weekend. And joining us now first on CNBC is the executive producer of the film, frequent guest on the show, Roger McNamee. First of all, congrats on being an executive producer on this film, Roger. And the opening box office was a little underwhelming just in terms of the numbers. Do you think that speaks to anything about the way the story is resonating with folks?

38:50Roger McNamee: You know, I have no idea. What I can tell you is that the people that I've talked to, and I've talked to about 100 people who went, have enjoyed this movie enormously and found it inspiring. And I think that's Aaron Sorkin. I think Aaron Sorkin is a genius, but also a master storyteller. Takes complicated topics and makes them not just digestible, but makes them fun and interesting. I think he's done that brilliantly. And I think that this film is going to have tremendous legs. I think that 30 years from now, people are going to look at this film essentially like an historical document to remind themselves of what this era was like and the choices that people made now.

39:34Dr. Ezekiel Emanuel: You know, the original one was so good and it was it was about the founding. It was more like a drama. I do wonder, Roger, if if one of the goals here and maybe one of the problems is that this one was was a little more, I don't know, preachy, luxury. about how you should feel about social media, which I know reflects some of your views.

39:55Roger McNamee: So to be clear, I don't take that out of it at all. And so what I do think is it's a great story. It's the story of a woman who was confronted with a situation that violated her principles and struggled to figure out what to do about it. And she comes up with a path forward. And And the path she created was one she essentially invented for herself. I mean, Francis Haugen is this heroic human being who conceived of whistleblowing like a product launch. And she really transformed, at least for me, my understanding of how one can use activism to affect change. She went in front of Congress and laid out for them all the issues that we face, not just with social media, but really with big tech in general.

40:45Roger McNamee: And, you know, the end of the film is a reminder that we each have the power to affect change, not just for ourselves, but for the larger world. Now, it takes a whole village of us doing it together to change the world. But Francis Haugen gives us the formula. And what Aaron Sorkin does is package it in this work of art. I mean, it's really a beautiful thing, and I'm incredibly proud of it. You know, I don't pretend to be a Hollywood person. I'm not. I went there, though, because I remember the film Philadelphia changed the conversation in the United States about AIDS and about LGBTQA issues. And I thought to myself when I wrote Zocked that it wasn't going to be enough to write a book, that it was going to be really important to push this into the culture.

41:37Roger McNamee: And I think this film does a brilliant job of that. And, you know, people are going to see things that they like, that are going to see things that they don't like, whatever. It's a movie. But I do think it gets after one of the topics that is going to affect our lives essentially forever in the future. Yeah. I mean, your point about Philadelphia is a good one. I mean, it's easy to forget just how brave that film was in that environment and Jonathan Demme. Exactly. In the 90s. I wonder, Roger, how you think the story informs how we now view, you call them whistleblowers, but I'm just thinking of employees who, for example, have recently quit OpenAI and are trying to tell a story.

42:17Roger McNamee: They walk into a politically loaded environment. They do. And, Carl, you know, first, may I pay a compliment to this show and to this network? Absolutely. In the summer of 2017, when I was first trying to make people aware of the issues I saw, it was this show. It was you personally who gave me the platform to talk about it. And the thing is, from a market point of view, owning Facebook stock has been the right move financially. But it has not come without huge cost to society. And I think one of the things that I would observe is that we live in a time where money, you know, where wealth has become the predominant value and it crowds out everything else.

43:01Roger McNamee: And if you're on the receiving end of that, that feels fantastic. But for the vast majority of the people, this is resulting in, you know, the environment they're living in becoming less and less predictable, less stable and less secure. And so eventually the game comes to an end because you can't have the vast majority of people being hurt all the time. And the beautiful thing about Hollywood, the beautiful thing about storytelling is you can put this in a package which people can digest as entertainment, enjoy as entertainment. And yet it leaves a little something with them to remind them, hey, you have the ability to influence the environment you live in.

43:41Roger McNamee: And, you know, Francis Haugen is an extraordinary human being. Some of the people coming out of open AI and Anthropoc, I would argue, are in fact less authentic whistleblowers than they are actually, you know, kind of ambassadors for the industry in pushing some of the ideas that the industry thinks are important for marketing. And so they've essentially preyed on the really positive attributes of Frances Haugen for reasons that are not so positive.

44:14Dr. Ezekiel Emanuel: I wonder how you think, Roger, about her legacy. I mean, you mentioned it hasn't slowed down Meta's growth and its stock price, certainly. But, you know, we did see a landmark settlement of 17 billion dollars and definitely it had not won in all of the cases in the courts. And there have been some concrete changes to Facebook and Instagram right around teens and kids. So ultimately, has it worked?

44:40Roger McNamee: I would actually argue it's been better than that. You're absolutely correct. A whole bunch of things have changed. Have they changed enough to prevent harm? No. However, the facts are the facts. And they are out there. Facebook, Meta, knowingly engaged with Instagram, with business strategies, tactics, and a product that harmed young people over body image and a variety of other things. And they did so knowingly. They profited from hurting young people. They understood internally that drug traffickers and human traffickers were openly using the platform. They did nothing to stop it. They knew that three million people were using Facebook to organize things.

45:30Roger McNamee: It just, they didn't stop any of it. Running up against the top of the hour. Congratulations on the film. I look forward to talking more about it. We'll see you soon. Roger McNamee. Get ready for bank earnings in the morning. All opinions expressed by Squawk on the Street participants are solely their opinions

45:46Dr. Ezekiel Emanuel: and do not reflect the opinions of CNBC or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Such opinions are based upon information Squawk on the Street participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Squawk on the Street disclaimer, please visit cnbc.com forward slash Squawk on the Street disclaimer.

46:43Dr. Ezekiel Emanuel: market update podcast or find Schwab market update wherever you get your podcasts.