11AM Hour: Carnival CEO on Earnings, Tech Sector Opportunity & OpenAI's Developer Day 9/29/26

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1:06Good Tuesday morning. Welcome to Squawk on the Street. I'm Sarah Eisen with Carl Quintanilla, live from Post 9 of the New York Stock Exchange. Today, it's a busy day in tech and on the AI front as President Trump hosts a White House summit with the CEOs of Anthropic, NVIDIA, Meta and others. And OpenAI hosts its annual developers conference. CEO Sam Altman joins for a first on CNBC interview next hour. It is an interview you will not want to miss. Plus, just watch the true cost of the AI buildout. Baines has a new report saying the industry will need to generate$6 trillion a year in order to justify the capex behind data center construction worldwide.

1:39We'll talk about it. And Carnival shares surging among the leaders in the S &P, the company notching a record quarter as it sees accelerating demand. We're going to break down the results with CEO Josh Weinstein later this hour. As for markets, quite a bit of chop here as we've been circulating around the flat line. Dow's down 200. The only sector is green At the moment, utilities, industrials and IT got some relief in oil down about a buck. But you see that 10 year did get to five to seven this morning. And that's sort of restraining enthusiasm. Let's begin there. Our next guest makes the case for equities to continue to rally despite the high rates.

2:13She's bullish on gold and U.S. large cap sectors like financials and health care. Ali McCartney joins us here at Post 9, UBS Private Wealth Management Managing Director. It's always good to have you back, Ali. Welcome back to the set. Thank you. So this move in yields, not disruptive, you think, to equities overall? So, I mean, what we've already seen is that it has been disruptive to certain sectors, but there are so many cross currents going on and the earnings background is so, so strong. It's really hard to derail all of the momentum we have from everything from reshoring, investment from AI, the big, beautiful bill.

2:53So certainly there is a concern that if yields continue to back up and that if this is the beginning of a significant amount of monetary and financial tightening. But if it's one, two, which we think rate hikes in the next, let's say, 16 months, then I think that the earnings background and the current multiples can sustain and grow into the numbers we're seeing. So two hikes is your base case? Two hikes is our base case. We think that, you know, they've never gone in October. They could go in the October leading into a midterm. They could. We think they don't, especially this Fed from what we've seen in terms of the data interpolation.

3:33So we think they go in December and then they wait. Obviously, market is pricing in four in terms of this cycle. But, you know, when you look at history and you look at cycles that were moderate, not only has it not restrained equity market performance, but equity market performance has actually been very positive in the 12 to 18 months following that initial hike. We were just talking about, though, it's kind of a tale of two markets. It's tech, which is really where a lot of the earnings growth is coming from, not all of it. Yes. And also equity performance. And then there's everybody else. So when you say, when you point to the market's resilience, do you mean across multiple sectors?

4:16That's a very good point. I think one of the things that you're going to start seeing more and more is that largely since 2008, but there's certainly periods you can look at, the cost of capital has been zero or close to zero. And so that can raise all boats, right? That's that rising tide raising all boats. The more and more debt we have issued, the higher and higher rates are, the higher the cost of capital, the more or less democratic the market is going to be. So I think more than ever, when we do talk about the markets, we've had a concentrated but beta market for a very long time. Stock selection is going to make a lot more difference going into the next period, both because of where the investment's coming from, the interest rate backdrop, probably the political backdrop that we're likely to see going forward, and diversification.

5:13And when I say diversification, I don't only mean between sectors in the U.S. I mean investment outside of the U.S., what kind and quality of fixed income you own, whether you have commodity exposure like gold or silver. And hedge funds tend to do quite well, whether you're talking about macro, relative value, in a confusing, volatile interest rate environment. We were talking about the AURA IPO delay. And we were saying, why would they cite market uncertainty? The Nasdaq had an all-time high seven days ago. But I guess it gets to your point about sort of this sort of sagging belly of the market when you look at the median S &P off of its high.

5:54Or just wearable devices. I don't know. So it's funny. I was watching that this morning and I saw that. And of all the things I thought they were going to say sort of after that pause and comma, that was not it. Because when I think about the IPOs also, I haven't plotted it, but it's actually been a pretty robust market and everything from capital market to the way that the capital markets and investors have responded. I wonder if that's a euphemism for some other things going on and some concerns and some pressure and uncertainty that we're starting to see really mount. Right. So there are a lot of positive things in the market.

6:36We talked about some of them. We talked about earnings. We talked about AI tailwinds. We talked about big, beautiful bill and infrastructure build. There are a lot of concerning and uncertain things. Politics, inflation, price of oil and the length of that going on. Valuations, as we mentioned. I think that might be a euphemism for all of those. for the valuation thing. But also, and as Mike Santoli noted, it's kind of been a particular sector or class of stock, I guess, characterization of stock, these wearable sort of tech devices that hasn't really proven itself. Well, and I think also it's one of those interesting ones that it is very tech focused, but it's also very consumer focused.

7:18Yes. And all of the things we've been seeing, I just saw a number on the way in here come in that, you know, on consumer confidence that was negative. So I think there's that rub a little bit too, which is if we're talking about something that's at the intersection of tech, which flew the first six months and now has sort of been under pressure, and that intersection with consumer, that might be a place where they want to pause into. That's a good point, actually. Yeah. What if your clients come to you and say, Ali, should we buy the Anthropic IPO? What do you tell them? Well, we had this with the SpaceX IPO.

7:52So, you know, the answer is and again, I saw on your screen this morning the numbers around losses, profitability or lack thereof. A lot of my clients, thankfully, whether direct through the things that we the products that we have on the private side or whether through their own investments, own it. There is a lot of conversation, a lot of sex appeal, a lot of forward thinking. I think that a lot of these companies are part and parcel to what we're going to see in the future. I don't particularly see or trade in names as soon as they go public, because especially being a former derivatives trader, understanding what happens through the lockup process, the expiration, the filings, I like to sort of give it a look.

8:42And most of my clients are so invested. Again, whether through beta or through individual stock selection or privates, ultimately in that very finite ecosystem that we sort of want to give it a minute to be digested. It's like when the soup is too hot, right? You need to give it a couple minutes before it's actually. The excitement around these things is absolutely amazing. And it is part and parcel to every conversation, whether it's safety, regulation, usage, investment, et cetera. Yeah, today's meeting at the White House is a perfect example, which is still in progress. Ali, it's great to see you.

9:20Thanks so much for the help today. All right, turning to trade with Canada, the U.S. banning nearly one billion dollars worth of Canadian imports today. Megan Casella with the details. So, Megan, what does this entail? Guys, good morning. So the trade war now is moving from tariffs to outright bans for the first time. So as of midnight, select Canadian alcohol, dairy products, sweeteners and motorcycles are now being blocked from the U.S. market entirely. All together, it's nearly a billion dollars worth of imports facing these bans. That's based on 2025 data. The majority of that is the alcohol.

9:52Now, this is a considerable escalation in the trade war. The statute that President Trump is using here, it's called Section 338, it does not allow tariffs of any higher than 50 percent. That's what these products already faced. But it does allow for bans if a country maintains or increases discrimination after a tariff is put in place. So that's what the White House is arguing that Canada is doing now. As for where U.S.-Canada relations are headed, President Trump said yesterday that he believes Canada will soon be caving and asking for a deal. I think what's going to happen is over the next three or four weeks, they're going to come to us and they're going to say, we need to get rid of all the tariffs.

10:30They're going to come in and they're going to say, sir, we are sorry. They've treated the United States very, very badly. I think a deal will be made, but it's got to be a fair deal. Canadian officials are not responding with fresh retaliation as of now. They've not laid out any plans to do so. But they also say that while the trade war is costing their economy, they will only sign a deal that's in their best interest. Just on Friday, the Canada U.S. trade minister, that's Dominic LeBlanc, he told reporters that Canada is working in good faith with the U.S. to try to reach a good deal, but, quote, we're not waiting by the phone.

11:04Guys? Megan, the comments by the president yesterday, Canada, one of the worst countries in the world, worse than Iran in many ways. I'm just looking at companies that are affected by this rhetorical tension. I mean, Ford's at its lowest since May. GM back below the 200-day for the first time since July. I mean, a lot of this is going to involve manufacturing, I assume, to the degree that the trade skirmish continues. Absolutely. Those manufacturing companies are in the crosshairs. The automobile industry, of course. Think about companies like KitchenAid, for one. Small appliances are on the tariff list as well.

11:41And then also think about the states that are impacted by this. Canada was very specific in terms of its retaliation in picking out industries and products that are centered in states where there are toss-up midterm races. Think about Iowa and Michigan and Maine, for example, that are all caught in the crosshairs here and all have major Senate races ongoing. It's interesting, the president's comments about Iran as well, because just before this, I was looking at a list of instances where the U.S. has used import bans before. This is the first time they have used this statute, but not the first time we have seen outright bans.

12:11But the countries that were impacted on those lists were Russia and Iran primarily. Then there was forced labor and others. It's really striking to see a close ally, a close trading partner like Canada on that list now. And it does make you wonder that even if the economic impact of just this one move isn't huge on its own, it makes you wonder if this escalation just further throws into question whether the two sides will ever be able to reach a deal. Yeah, it's ugly. Thank you very much, Megan Casella. When we come back, the CEO of Carnival exclusively joins us on earnings. The stock jumping this morning after the company reports its best ever revenues.

12:47OpenAI with that developer day today. We're going to break down what to expect with AI safety concerns now front and center when we're back in a couple of minutes.

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14:30Welcome back. OpenAI hosting its developer day today. Our Kate Rooney joins us with more ahead of a busy afternoon. Kate. Carl, we're going to be heading over there soon. OpenAI, as you mentioned, hosting its annual developer day. It's going to be here in San Francisco. They've been teasing new launches. They're going to have hands-on demos as they really try to court the next generation of startups, try to convince them to use their technology amid a lot of competition. There's also cost competition out there from some of the open source models. A big theme to watch, guys, today is agents, so AI that can essentially take action on a user's behalf, especially after Meta and Mark Zuckerberg's splashy launch of Muse last week.

15:07And there is some tension here for OpenAI after a string of safety issues around increasingly autonomous AI. So last night we did confirm that OpenAI actually abandoned plans to release its latest AI model amid some of these safety concerns. There was also, of course, the high profile hugging face hack, which we will be talking about. I'm going to be sitting down with Sam Altman, CEO of this company and CFO Sarah Fryer at that event later today. Meanwhile, guys, we are getting some new reporting on OpenAI's biggest rival, Anthropic, which is set to go public. This is perhaps the clearest look yet at some of the economics of these AI labs.

15:41Reuters obtained a copy of the IPO prospectus. Revenue, according to this report, surged 12-fold over the last year, nearly$4.6 billion, but also wide operating losses. That widened to more than $8 billion, according to Reuters. They also reported a net loss of nearly$42 billion. They say$34 billion of that did come from an accounting charge related to some earlier financing. The prospectus does show more than$500 billion as well in future cloud commitments, compute infrastructure, for example. So that's sort of the CapEx number there. And then there's AI safety. This company devotes roughly 80 pages of this more than 200-page prospectus to AI safety.

16:23And some of the risk factors, they warn investors that some of the advanced AI models could pose what the company calls catastrophic or existential risks to humanity. A company also, according to this report describes the possibility of models resisting shutdown, concealing information, or engaging in manipulative behavior. Reuters has also reported the listing is likely to come in November after the midterm elections, guys. So what do you hear, Kate? I mean, we just talked to Ali McCartney from UBS and asked if clients are going to buy into IPO, and she said, you know, a lot of them already have it through a lot of the private products that these banks offer.

16:58And I just wonder, first of all, how many folks, it's a private company valued at almost a trillion dollars have already made the money on Anthropic, or if there's a view that, you know, buy it because it's going to be a$5 trillion company. Well, it's a great point on the existing ownership. There's been the rise of things like SPVs, more of these private market vehicles. OpenAI has done a bit more in that category. They partnered with Robinhood on one of these private market funds. So Anthropic is actually not as widely available, I think, as OpenAI is at this point. But you're right in terms of the growth expectations.

17:31One other takeaway from this perspective is just how tied Anthropic is to the rest of the tech market. I mean, Google, you have Microsoft, you have Amazon that hold major positions in Anthropic and at a certain valuation in private markets. So there is the risk of if Anthropic trades down, it's going to have massive impacts of the earnings numbers on all of those big tech companies, things like revenue concentration. And those are the more systemic things I think that investors are looking at when it comes to this IPO. There's also the question of rates and the market mood. Are people going to want to buy growth?

18:04So far, investors that we talked to say, yes, there is still appetite for these high growth names. But I think rates are going to be a big factor, as this company looks to list in November, potentially. Yeah. I mean, we were speculating about the motives behind Aura and their delay. And maybe rates are part of that combination where they just didn't think they were going to get what they deserved. Kate, really can't wait for this afternoon and your coverage. Do not miss Kate's interviews with Sam Altman today, 12 p.m. Eastern time on the half. And then, of course, CFO Sarah Fryer at 3 p.m. Eastern on Closing Bell.

18:36Meantime, chip stocks bouncing back nicely so far this morning after tumbling yesterday on fears over AI safety and the potential existential threat it poses to humanity. Let's bring in Tony Wang, portfolio manager of the T. Rowe Price Global Science and Technology Fund. He has nearly$14 billion of total net assets under his umbrella. How, as an investor, do you think about some of these growing safety concerns? Well, I think it's definitely super important. I mean, with any new technology, you have to develop guardrails around it. And just like, you know, with cars, you have to have airbags. And so I think with AI, that fact that everybody's really focused on it is really good.

19:13And so to me, that's going to be an important guardrail to have when we do agentic, which I think is the next big kind of sector of change that's going to happen. And so I think it's a super exciting time, but also a time that, you know, the industry needs to be careful, too. So I'm looking at some of your Global Science and Technology Fund holdings there. Interestingly, Apple is up there at the highest. Broadcom, Microsoft, NVIDIA, Alphabet, MEDA, AMD. Like, how do you guys think about the winners and what this is all going to look like? Yeah, well, look, I think that the large platforms are going to have, you know, a huge install base that can essentially like roll up this new technology and benefit their users.

19:57You know, I think you saw Meta doing that more recently. And, you know, I think the market was skeptical about how much CapEx they were spending. I knew the cost side of it, but, you know, in terms of the revenue, I think that that's what Muse is really doing for the market is to like, you know, you can have so many different use cases, right? And it's driving a lot of new kind of ways to use the technology and drive kind of efficiency for users and enterprise in the future. So I think that like the broadening of how AI can be used across a large customer base is very important for these big tech companies.

20:33Tony, are you beginning to think or maybe you already have been thinking about a meta as an enterprise solutions business beyond just cloud compute? Yeah, I mean, look, it's early, right? And enterprise is really a difficult area to get into. And they traditionally play into the consumer route. But I think that Mark looks really serious about getting into enterprise with their new hires. And so I think that's like a new cam, right? Like with AI, you are seeing kind of the old markets get shaken up. And there's these new markets that are happening that are kind of creating contestable markets here.

21:08I mean, think about Google's role as like they kind of had intent search, right? But now AI with Muse is like, you know, maybe they do have like a shot at being more, not just discovery, more intent. And also along with Agente, they've got the model, they've got compute. They've got the ability to then provide a different avenue for enterprises to drive RSE. And they're already in the SMB, you know, and I think that with, you know, their broad platform, they can do that. Does it deserve a richer multiple than a straight consumer business because consumers are famously fickle? well i think that you know at the same time like you know you have to think about what does it do to the growth algorithm and durability of the business and so i think when you look out like you know the fact that it can make the platform a lot stickier it can drive a ton of value you can you'll have so many more transactions on meta and they already know you in terms of what your what your preferences are so once they i think fuse those two i think that can be like a relatively durable advantage.

22:07And you look at Apple, right? They're largely consumer. And so, but they have, you know, shown that they can grow and compound their time. Do you worry about regulatory risk with some of the, with all the AI heavyweights and increasing data center bans and all of that? Yeah, I mean, like some of that is definitely things that they need to work out, right? But I do think that this is like actually a new frontier and that it creates like a lot of more competition. You know, they're all spending a lot more capital. So in terms of like when we think about antitrust, like that probably would be the antithesis in terms of they're all investing in time, you know, driving forth new technology.

22:44Nobody's like really resting. And so to me, that's fine. That's good for kind of, you know, look at all the free productivity tools that the world's getting. So I think that's a positive so far. Yeah, there's a piece on the wires right now. Bloomberg saying that Ternus has discussed internally plans to maybe offer overhauls, product overhauls more often, which I think is something some desks have called for. Yeah, I think that, you know, Apple's probably seen this as a big new opportunity to revamp Siri. There's new technology. They can, you know, integrate across their install base. And it also creates, like, more demand for better silicon.

23:26You know, you see them really pushing the frontiers of kind of low power, kind of edge, mobile. And so to me, that's like, you know, another signal that they take off to everyone's investing behind it. Yeah, they're citing people familiar saying that he's doing an overhaul to make it more lean and more fast when it comes to product announcements and development with a greater focus on engineering. Tony Wong, thank you for joining us on Apple and the portfolio right now from T-Row. Still to come this morning, Carnival's chief will join us exclusively on earnings. We'll talk about consumer trends, pricing, stock enjoying a pretty good morning.

24:04Plus, Bain's global chairman of technology joins us. Company just releasing a new report saying the AI build out will require an AI market of roughly$6 trillion in annual revenue by 2031. We're back in a moment.

24:21Hi, I'm Roman Mars, host of 99 % Invisible. It's a podcast about all the thought that goes into the things most people don't even think about. You're going to see stories everywhere. Follow and listen to 99 % Invisible wherever you get your podcasts. There's a fire inside you you can't ignore. Stand still, not a chance. You're a lifelong learner who's come this far. Now we're here to help you keep going further. Capella University, what can't you do? Visit capella.edu to learn more. I'm Serena Williams, and I'm healthier on Roe. I've lost 34 pounds in a year with GLP-1's diet and exercise. On Roe, you can access GLP-1 options, including the first FDA-approved GLP-1 pill for weight loss.

25:04Go to roe.co slash journey to see if you qualify. 14 to 20 % average weight loss in one year in non-diabetics with obesity or overweight with a weight-related medical condition versus 2.2 % to 3.1 % in placebo R. RX only. To stay informed about serious side effects, go to roe.co slash safety. Time now for a news update. Frank Holland has it for us. Hi again, Frank. Hey, good morning again, Sarah. Russian President Vladimir Putin has ordered another increase to the size of that country's army as the war with Ukraine stretches to more than four and a half years. That is according to Russia's official database.

25:37It brings the number of active duty troops to more than one and a half million. And Ukrainian President Vladimir Zelensky estimated there are more than 8000 North Korean troops on Russian territory, with 10 ,000 more expected to join the fight. Authorities investigating the disappearance of Nancy Guthrie are looking into the possibility of a new ransom note related to her disappearance. Police in Tucson do not release details of how they found that note or what was in it. Guthrie, who was the mother of Today Show host Savannah Guthrie, went missing from her home on February 1st. And Target said today it's lowering prices on almost 2 ,000 items to attract customers ahead of the holiday shopping season.

26:13Target already cut prices on 3 ,000 items earlier this year, joining Walmart, which has also cut prices. Those cuts come as retailers try to appeal to families struggling with higher gas prices brought on by the war with Iran. Carl, back over to you. All right, Frank, thanks so much. Coming up after the break, Bain's global chair of technology will join us on the firm's new tech report. Why they say the AI buildout requires an AI market of roughly six trillion in annual revenue. Plus, President Trump set to meet with key tech CEOs this afternoon. We'll preview what to expect. Squawk on the street.

26:45We'll be right back.

26:51Just want to show you what's happening with bonds and the stock market. There's been a lot of focus on the bond market, and we are seeing 10-year Treasury yields move even higher. 5.28 is the level. You know, earlier, about an hour and a half ago, we did get the job openings data, which came in light. So we saw a little bit of buying, but now it's going the other way, selling bonds again with yields pushing even higher. Those higher rates reverberating through the equity market as well. See, look, there's where we are intraday. Just got to the highs of the day. And saw the S &P kind of go down with that.

27:25So we're clearly teething off the bond market right now, keeping our eye on things like oil prices, higher interest rates from the Federal Reserve, potentially, you know, decent economic news. Although consumer confidence came in light as well, Carl. But this is the story right now. It's so true. It's so true. Look at the long bond, too. Can you give us a 30-year today? We got to 5.61. That's also been a move, even as oil has not really done a whole lot today. I mean, it's stayed down. It's down by a buck. But this leg lower that we've taken in equities is obviously tied to what's happening at the long end of the curve.

27:59You know, one stock we're watching today is Goldman Sachs, which is actually at the bottom. But the financials have been hit hard today on all of this. The Wall Street Journal came out with a report saying that the board has been talking about succession planning. They mentioned John Waldron, who is widely perceived to be the next CEO of Goldman Sachs. The Wall Street Journal also reported that the succession plan could be put in place, could happen as soon as next year. And from my understanding and speaking with insiders, that that is completely false. There's been no actual decision on timing of any succession plan and that, you know, a lot is being made of this article.

28:37But really, all it is is just as many boards as most boards should be talking about succession planning for many times. If God forbid something happens to the CEO, you know, next year or, you know, in the future that they have a plan in place. There was also in this report, it mentioned the$80 million retention bonus that they signed with John Waldron a few years back for five years. By the way, David Solomon also signed that same retention bonus that vests in January 2030. 30. And he's, you know, there's no indication that he's going to be going anywhere anytime soon. He's he's definitely catapulted the bank's performance and stock price.

29:16This was a$220 stock when he came in. It's up more than 400 percent since then, looking at total return. And, you know, that he's been he's been pretty bullish lately on what's going on in the pipeline in terms of the investment bank and what he's done, despite, Carl, remember all of those articles that were so negative about him across media when he came in and the consumer strategy and all of that. It's been a good ride, and there's no indication that he's going to leave anytime soon. Yeah, no, there was definitely a turn. A lot of thematic discipline came into play. And then the market kind of became an environment in which they like to say, let's Goldman be Goldman.

29:53That changed a lot. No, that helped, and right. And then with that, what we got was a new administration that was a lot more friendly to M &A. And then we got the AI boom and these massive, you know, IPOs like SpaceX with Goldman, you know, front and center and all of those. So that's been helpful as well. But as far as Goldman Sachs and David Solomon and what I can report and what I've learned, not going anywhere anytime soon. And next year is an exaggeration. Interesting. Meantime, Bain & Company publishing its annual global technology report today. They're forecast that it'll take an AI market approaching$6 trillion in annual revenue by 2031 to fund the insatiable compute demand that we're seeing.

30:36Joining us this morning in a CNBC exclusive is David Crawford, chairman of Bain & Company's global tech media and telecom practice. Great to see you, David. Appreciate the time today. Good seeing you again. So walk us through what needs to happen and how much is in place that would make that possible and what needs to be filled. Yeah, great question. And we're just doing the math like we've done in prior years. If you look at the current course in speed and say, gosh, we'll be spending$1.5 trillion a year in CapEx by 2031, you can do basic math to say that implies we've got to come up with about$6 trillion more in revenue.

31:10And the good news is we have a lot of visibility into where that can come from. At least roughly a third to a half, we can point to markets that are pretty clear. And there's nevertheless sort of an open jaw there of about$4 trillion that we need to find. We're pretty excited about that growth opportunity and what it means for innovation. This is assuming how much compute capacity by 2030? This is basically the industry's current capacity trajectory, where it gets to. And, you know, there are differing messages. You'll hear numbers as high as$2 trillion a year, as low as$1 trillion. We're kind of in the middle of that.

31:47We have our own model for it. And it's more or less, it's not controversial. It's basically today's current course in speed. So the spending comes from hyperscalers, as we've been seeing, mostly? The vast majority of it will still come from a pretty concentrated set of investors. Yeah, that's right. So as you probably know - And will it be debt funded? We don't know. It depends on how the economics take shape between now and then. To date, as you know, not as much debt as you might have expected. So that's the good news. The bad news is we need to know we need to sort out where where that revenue is going to come from.

32:24And so that's our imperative. And that's what you can see the ecosystem aligning around. We got some commentary from a Fed official yesterday who said Lisa Cook said that she she does anticipate some productivity led disinflation in the coming years. But for now, it's it's it's creating this inflationary environment. What's your view on sort of productivity and and how much is possible in 27? I think the industries, when we look at the math, we're, of course, excited about the productivity impact and what happens with enterprises becoming more efficient and so forth. But we're actually more excited about the other side of it, which is we've got to come up with a lot of new growth and new capabilities.

33:06And so we're thinking everything from aerospace and defense to semiconductors to drug discovery, et cetera, will be going through a massive wave of innovation. And we're going to see that as an acceleration of GDP, we think. And so I believe the industry's sort of narrative around job loss and job destruction will actually evolve quite a bit. Because what's happening is the technology has been introducing capabilities faster than humans are able to absorb it. So that creates enormous amounts of work to sort out how to take this technology, deploy it, and make productive impact. So you started to say about a lot depends on the revenue impact.

33:46How do you think, I mean, the cost is trillions. How do you think about revenue when and how big? Yeah, loosely, you'll see in the report, you know, you can quickly get to a top line revenue number of about six trillion. And pointing to existing markets where, you know, AI is used for digital products such as ad casting, you know, recommendation engines, et cetera, you can see a fair bit of growth. We also have now growth in consumer subscriptions and so forth. plus then you add in enterprise productivity. And if you take kind of what we're getting with our top clients and apply that, it gets you roughly a third of the way there line of sight.

34:25And so really just adopting what's known. There's a remaining 4 trillion or so that you need to build up. And we have candidate markets that we're excited about. And those include things like physical AI, autonomous everything, autonomous factories, autonomous driving, et cetera. But then there's an unknown component, it, which is really just broadly GDP acceleration. But it's not scary. The numbers, if you do the math around it, you have to believe kind of a 1 % acceleration in global GDP to get there. That's still a lot. That's a lot of additional commerce, that's for sure. It's a great report.

35:00It's a lot of new jobs as well. Yeah, let's hope. We didn't get to cyber. I know you believe they're having a moment, but please come back and we can elaborate on that in the days to come. David, thanks. Anytime. Anytime. Great seeing you. David Crawford of Bain. When we come back, CEO Carnival joins us exclusively on earnings. The company just reporting its best ever revenues. We're back in a moment.

35:23Mr. Nadella, can you give us a sense of what you're going to tell the president today? Mr. Nadella. You want me to get a question for you? Sure, go ahead. You want to take the mic? I'll do this. Okay. This is how you do it. Okay, like, Shom. Okay, Shom, tell me about how AI works on the battlefield. That's a question he'll answer. or I think we found Karp's second career. That was our Eamon Javers and Palantir's Alex Karp of the White House ahead of the president's meeting with some key tech leaders. Let's bring in Eamon now, talk a little bit more about that moment. Eamon? Yeah, Carl, that's right.

35:57A little bit of an unusual interaction with Alex Karp there. And we're just watching here outside the southwest gate of the White House for the arrivals of these other CEOs who are expected for lunch with the president any time now. We're just seeing some of them pulling in here. Alex Karp, as you saw from Palantir, definitely wanted to talk. He had a lot to say. At one point, as you saw, he took my microphone out of my hands and began interviewing people on the street here. He wanted to talk. We saw Satya Nadella of Microsoft, who did not want to talk, did not answer any of our questions. So we're getting a variety of responses here as these CEOs come in to meet with the president.

36:32I asked Karp, and he got a little bit defensive, I have to say. I asked him what his message is to the president. He said, I'm not going to answer that question. What do you think I am, the village idiot? And he got a little bit confrontational just before that soundbite that you saw there. So I think you can pick up a sense that some of these CEOs are feeling a little bit on the spot here, right? Because this is a president who has said he doesn't think we need any AI safety slowdown at all. He said that again today over at the Mellon Auditorium. And now we're seeing these CEOs, some of whom believe very fundamentally that we do need an AI slowdown, coming in to talk to the president and give him their two cents.

37:07And so this could be potentially a contentious meeting with the president. All these CEOs, of course, don't want to get on the wrong side of the president of the United States. So that's kind of the underlying tension as we talk to these CEOs who are on their way. I've never had anybody, Carl, grab my microphone, though, and start interviewing other CEOs on my behalf. I feel like I need to kick in some of my salary for today. Well, now you know what it's like to interview Alex Karp. You never know where it's going to go. That's right. You never do. I think that they all agree fundamentally with the president that the U.S.

37:41needs to win the AI race, right? And the U.S. needs to have support from the government and the administration to do that and to innovate. And I guess the question is just how to make sure it's safer society and what that looks like. For instance, we've talked to Karp a few weeks, I don't know, like a week or two ago about all this. And he was saying that these companies really want to be nationalized because they because the fallout from all the liabilities. While we're talking, we're going to have another arrival here live. So I'm going to just see if we can ask Lisa Sue. Good morning. Good morning.

38:18Can you tell us what you're going to tell the president today? It's always great to be here. OK, fair enough. Thank you so much. OK, another CEO who doesn't want to say much more than the pleasantries on the way in. But I thought we'd just interrupt the live shot there and see if we could get a sense of what's going to happen. But go ahead and finish your point. No, no. At least she was polite to you, even if she didn't want to. That's right. I've had stiff arms much worse than that. I mean, I don't know. The tension, I guess the tension is on what to do about all this when it comes to some of these societal concerns and some of the security concerns around cyber and around civilization that some of these AI executives have warned about.

38:57And around that table, I would think there's actually quite a mix of views on what to do about that. Yeah, that's right. And what we saw from the president today was this sense that this is a zero-sum game, according to the president. He said there's going to be one winner and there's going to be a lot of losers and there's not going to be any second place, right? So from the president's perspective, this is you do not want to slow this AI race down because if you do, you're going to get beaten by China. And you don't want to interfere with this great gamble that financial markets have made on this new technology.

39:27and potentially pop a bubble that could happen from his perspective. You wouldn't want that to happen at all before the midterm elections or certainly during your term as president. So from the president's perspective, it is full gas in the gas pedal. From some of these other CEOs, though, that we're going to see here, they're raising these concerns about safety. And you saw that in the S-1 today from Anthropic, raising existential concerns for all of humanity. We've never seen anything like that in an S-1 before. And so we're in a situation where, you know, these CEOs have to tell the president something that he might not want to hear.

40:02Some of them feel that they need to tell the president something that he might not want to hear. Eamon, I loved your point earlier where normally you get business going to the White House, asking them, begging them to loosen the shackles. In this case, you do have maybe the inverse as the world turns upside down just a touch. No one more dangerous with a stick mic than Eamon Javers. Eamon, thanks for that. That is fun. That was a fun little ride. By the way, speaking of AI, later today, don't miss OpenAI, Sam Altman from their developer day. He'll sit down with our Kate Rooney at noon. More Squawk on the Streets after this.

40:38Welcome back to Squawk on the Street. Take a look at shares of Carnival surging this morning after reporting a blowout quarter. All-time high in net income, revenues and net yield. Sending the stock on track for now its best day of the year. A company also saying that full year 2027 booking occupancies and pricing are at records. Joining us now for CNBC exclusive, Carnival CEO Josh Leinstein. Josh, I guess the big debate is on the U.S. consumer and the global consumer, given the higher oil prices and whether that's impacting demand. Talk about what you're seeing here. Well, I think you gave him the answer.

41:12We had a lot of records in our third quarter. We telegraphed to the street. We have a lot of visibility looking into the future, given the nature of our business. We're half booked for 2027 already. And that's at record prices. So we feel very good. I mean, at the end of the day, there is a lot going on this year, right? Macroeconomics, geopolitical, you name it, it gets thrown at the consumer. And the consumer is strong. And that's not a consumer statement about Americans. That is about our major markets. At the end of the day, people pick and choose what they want to spend their hard-earned money on.

41:49And what they've decided is vacations are sacrosanct. And we provide an amazing experience and value for their hard-earned dollars. Yeah, I mean, everyone, you know, no one thought that cruises would come back. We always say, right? COVID, that was one of the worst hit areas. I did. Right, but talk, and then it was thought to be all this pent-up demand. And that was driving the strength. And now we're in this environment several years past that where there just seems to be insatiable demand for cruises. Do you think it's a mind shift? Yeah, well, I think it's a mind shift. I mean, we're past the days of revenge travel.

42:28We've been sailing for over five years since the pause in our operations. This is about providing great experiences at great values. It's about having a portfolio of eight world-class brands that really understand their consumers. what their consumer wants, what makes them happy, and then delivering on that. And if anything, you know, this is a bit of a flywheel we're on where it's just accelerating because the more mainstream we get, the more people we take on a holiday, the more we deliver on that vacation experience. They go home, they tell their friends, they tell their family, and we generate even more demand.

43:04So it's quite a big momentum we've got going on. How do you do cost control with these fuel prices and oil prices rising so much? I don't think you're hedged on it, are you? No, no, we're not hedged. And clearly fuel prices have skyrocketed. You know, you can name the stats, what, 70 percent up since the start of the year. Look, at the end of the day, fuel is an input cost for us. The best thing that we can do to control that cost is to use less, which is why we have been maniacal on cutting our consumption. As a matter of fact, we've cut our unit consumption rate by 26 % since 2019. Despite the fact that we are, I think, 11 % bigger than we were in 2019, we're burning double-digit less fuel in absolute terms than we were because we focus on the consumption.

43:57And when you focus on the consumption, it's not only good for the planet, it is good for the bottom line. And we estimate we've saved about$700 million in 2026 based on that consumption savings rate going down since 2019. And even if you don't go that far back, if you look just since 2023, we're saving$300 million based on the consumption savings that we've achieved. So that's the main focus. You know, we're not going to hedge it. Prices will go up. Prices will go down. We can reduce volatility by hedging, but you don't solve the problem. You solve the problem by using less. Josh, isn't the demand backdrop the kind of environment where you start to really step on the gas regarding capacity?

44:40You know, we have a strategy of wanting to wring out more returns and more value for the assets that we have because they are amazing assets. And we generally we should be getting more for them because of that experience that we can provide at the value that we provide. So we have moderate growth on our horizon. We've got one ship a year from 2026 through 2033. And it doesn't mean we can't order more. We certainly could. Our balance sheet would allow for it. But we like the moderate growth, focus on increasing demand for the supply that we have and generating outsized returns. It's not to say we're not investing in ourselves.

45:17We're going through major refurbishments for some of our midlife ships. So they can be as good as new, even if they're 15, 16, 18 years old. And so we're We're investing in the products that we have. We're investing in our destination portfolio that complements our cruises, Celebration Key in the Bahamas, our unmatched land-sea experiences that we can deliver in Alaska. You know, we actually own thousands of hotel rooms and lodges in Alaska. We invest in those glass rail cars. The largest motor coach fleet in all of Alaska is our asset. And we can deliver all those things to enhance the cruise experience for our guests and improve our return profile.

45:59We have less than a minute, Josh. Are the cruisers getting younger? Is there a new generation to get to here? There's always a new generation. You know, our average age across all of our brands more or less has stayed pretty consistent over the years. But that means people are aging up and new folks are coming at a younger age and we're maintaining that consistency. It is absolutely on the minds of millennials and Gen Zers, though. They are some of the most open to cruising of all the generations that we've got. So it really is something that can be for everybody. All right. Well, we certainly appreciate you joining us with all that color, Josh, on what you're seeing in the business.

46:36Thank you. It's good to see you as always on Earnings Day. Josh Weinstein, Carnival Cruise CEO. I've heard him about a lot. I know you've been saying the cruise to Alaska is the way to go. Yeah, Alaska is an amazing place. Yes. So is the market, actually, 76.61. This 10-year now, 5.28. It's going to keep things in check. All the oil's hanging on to 90. Yeah, we're just seeing this steadily rising rates, and now the equity market is paying really close attention. Let's get to the judge. All opinions expressed by Squawk on the Street participants are solely their opinions 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.

47:14You 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. Hi, I'm Roman Mars, host of 99 % Invisible. It's a podcast about all the thought that goes into things most people don't even think about.

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