9AM HOUR: New Warnings About AI, Brent Tops $100/Barrel, CoreWeave CEO at "Communacopia" 9/9/26

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0:43That's 5 % cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to Discover. Terms apply. See discover.com slash 5 for details. Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street. Good morning. Welcome to Squawk on the Street. I'm Carl Cantona with Jim Cramer at Post 9 of the New York Stock Exchange. Fabers out west at Goldman Sachs, Communicopia and Technology Conference. A lot more from David all morning long. Futures are red thanks to some familiar culprits today. Ten-year yield hits 4.82, highest in almost three years on a day when we should hear from Treasury about bond buybacks.

1:26And then there's oil. Brent cracks 100 for the first time since July. Gas prices jump more than a dime in just one day. And as the U.S. and Iran say, they trade strikes on tankers in Hormuz. Our roadmap begins with growing safety concerns around AI as one anthropic researcher leaves the company, claiming neither anthropic nor open AI are, quote, acting responsibly and are gambling with our lives. okay plus apple getting ready to unveil its highly anticipated foldable phone first major company event under new ceo john turnus and a busy day ahead here at the golden sacks communicopia conference including a first on cnbc interview with core we've ceo michael intrader where we discuss some of those safety concerns guys carl david let's begin with these warnings about ai including one from an anthropic researcher who says he quit the company.

2:18In a thread on X yesterday, Jacob Coxon accuses Anthropic and Open AI of not, in his words, acting responsibly. They are racing straight to self-improving superintelligence and gambling with our lives, he writes. He goes on to say the people building AI earnestly believe that it could kill us all by the end of the decade. Anthropic safety researcher Evan Hubinger agreed in his own X post, saying he sees a greater than 10 percent chance of that happening. Jim, it's happening on a morning where Meta's up five-plus pre-market on this Muse, your first personal agent. I look at Muse today. It seemed, I'd say, not unlike when, if you can get a souped-up Alexa and buy things, although Alexa steers you only to Amazon.

3:03This one steers you to many places, including Shopify. On the warnings, it's funny, the fellow, Evan Ubinger, he picks a 10 % number. If you've ever been in a situation where you want a surgery, and the surgery, elective surgery, is more than 5 % fatality, no, you don't do it because it's considered to be a very good chance of fatality. 10 % is twice 5%. So when I read that, I said, well, you know, I don't like those odds. Those odds are just plain bad. You got to take it off the table, and I don't know how to take it off the table. I'm very surprised that this man still works for Dario, for Anthropic, because I think you should know that that percentage is a percentage which says a pretty good chance of death.

3:49Yes. And that's what, you know, if you're, like, let's say you were up at, you're right now, you're going to a hospital special surgery, and it says you've got a 5 % chance of the operation that you might die. Well, then you should, like, fire the doctor because that's just ridiculous. So 10 % is way too close for comfort. David, I imagine this is going to be, among a bunch of other things, topics of conversation where you are today. without a doubt and it was yesterday in fact because we'll see a few of the interviews that that i did here yesterday at the conference obviously were not uh live you know a lot of this also though goes to the overall debate that we've discussed guys and will continue to in terms of data centers because uh while there's certainly going to be some debate around the environmental impact of a data center uh and all the other things that go along with that despite the fact that now they're dealing with water usage that is far below what it had been with previous data centers.

4:48So many of them are now behind the meter, meaning they're actually generating or using their own electricity, some of which is even going back into the grid, and have answered many of those questions. The larger question is, is a data center a physical representation of AI? And when you hear stories like this, Jim, you certainly have to wonder whether people's objection to them is not really about the physical structure as much as what it represents. Right. I'm interested to speak with Mike Intrader about that. I thought last night, you know, you get some, there's sometimes things are just underreported when it comes to the data center.

5:25And I thought last night in a podcast, Dina Powell-McCormick talked about, and I thought this was very important, Meta announces a new compact. We promise to not only pay for our electricity, but to actually work to drive down electricity costs. We're going to work with teachers and first responders to give them direct bonuses. They have a plan, Carl, which basically says, listen, we're going to make a pact with you and we're going to do it in a way that's very responsible. Now, of course, we have that article in the Journal about how irresponsible certain, I felt, governmental entities were. They were so desperate to try to get these things, they didn't analyze what it could be.

6:05Obviously, they're being very reflective. But Ms. McCormick is laying out something that I think is very, very special, which is that we're not going to come in and do anything until we get this right. So I thought this was the kind of thing that everybody should join, a pact that all these companies should join. Right. Interesting, speaking of meta, to hear you describe Muse as a souped-up Alexa. Zuckerberg did talk about sort of what it can do for you, how much it's going to cost. Take a listen. Part of what's interesting here is the economic model for how we're pricing it. I mean, you can pay for a subscription if you want to, if you basically kind of want to have that model.

6:42But we're also just making it so that you can get a very large amount of usage for free. I think we're offering something, I think, to start. It's like 100 million tokens a week for free, and you get this virtual machine. so it's like a lot of kind of computer that's a good meme it's a lot of computer it's a lot of computer yeah yeah but the reason for why we're doing this is we basically are confident in standing behind the fact that we think that this is going to effectively for people who are going to use it for running a small business or making money or transactions or commerce in some way we actually just think it's going to make so much money for people that um that the business model over time that we expect is to effectively just take a very small cut of whatever the transaction is.

7:28642 pre-market here, Jim. Right. Well, look, small business is something that Meta doesn't get any credit for. Look, I just say like Meta gets credit for very, very little. There are a lot of forward thinking. Is David with us? Because David, one of the things that Zuckerberg has done is over and over again, try to do things that are good for small business, because we know small business is the backbone of America. I think their compact is very important about what they're insisting they will do if you're going to give a data center. I think they're breaking away, David, from the other companies.

8:00Well, all right. Explain that then, Jim. When you say they're breaking away from the other companies, what do you mean? Well, I'm looking for the other companies that want to put data centers in to take a pact that basically says, OK, look, we're going to do these things before we even come in. I want to know what an intrader is going to do. Is he looking at this and saying, you know what, that's very forward looking. I think we have to take care of the first responders. I think we have to lower electricity. Is this going to be the beginning of a of a of a yes, a contract that you're making with towns before you come in that just say, listen, we agree to this and we're going to do this and making it so that the, you know, the onus is on the town to say no.

8:40Let's are you really going to say no to first responders getting more money, David? Right. Well, yeah, I think they are going to be more focused on doing that and presenting the benefits of the actual data center in the community. You know, it's interesting, Anthropics, Tom Brown, for example, was with Howard Lutnick, the Commerce Secretary at the G20, having a discussion around that very theme as well, not just here, but trying to explain to the world financial leaders as well, the benefits of having data centers as that company, of course, Anthropic, continues to see compute anywhere it can possibly find it to fuel its incredible growth.

9:20But on that growth, guys, and back to sort of the lead here that we went with, I mean, the models that they have internally are even more powerful than what we're seeing right now. And clearly, they are scaring some people. We do seem to be incredibly close, if not already at what they call recursive self-improvement, where basically the models can sort of create their next model and go off and do their thing without much human supervision. I mean, there is a crucial point here. We have different voices around it and different views of what it's going to mean. And I did take opportunity to talk to Brian Chesky yesterday about this.

10:01He's the founder and CEO of Airbnb. B. They have diffused AI in that organization in a very meaningful way over a relatively short amount of time. It has helped, he would argue, certainly to supercharge their business to a certain extent. I think 45 % of all queries that people made now are answered by AI as opposed to human. But we had a broader conversation, much of which I'm going to share tomorrow. But I did want to share, given our conversation right now, a bit from him that is at least a more optimistic view of what this technology is going to become. Take a listen. I think there's maybe an incorrect mental model that we have.

10:46And our incorrect mental model is that we humans are stagnant and AI becomes more intelligent and it leaves us behind. And I think what may be false, and I'm not confident I'm right, but I hope I'm right. And I hope everyone roots for me and roots for this theory is that AI is a cognitive revolution in which we actually ride the intelligence, that the intelligence actually makes us smarter, that we stay in the loop. So there you have it, staying in the loop, of course, being a key. You can take a look at Airbnb. And again, given programming constraints today, guys, and it was a fairly long and interesting interview, we are going to have it available tomorrow.

11:24So I want to stay tuned for that, Jim. But, you know, there is certainly another side to this argument. You heard some of it there. Nobody, of course, knows is the key question. I should say not the key question. Nobody knows the answer at this point, regardless of how steeped in the technology they may be. Well, look, I think that, look, I like Chesky very much. You do. You are going to speak to George Kurtz. George Kurtz is probably, I would say, the foremost person in the world to try to stop this from happening. I did love Chesky's quarter precisely because he has been probably the most aggressive in integrating.

11:59It's about time. I mean, I just see over and over again, people say, look, I'm going to put it in and then nothing really happens. I have Bank of America on tonight. Bank of America has been identified as being the most security conscious of banks. But I want to see, did they hire fewer people at the end of the summer? I mean, Now, nothing in the numbers, David, indicates that anybody is using this right now to really save a lot of money and not do a lot of hiring. I'm just not seeing it. Yeah, it continues to be a key question. It will continue to be in terms of what it's going to mean for employment.

12:33I will say that, I mean, even Chesky argues that it creates enormous efficiencies. But he thinks that the growth that will come as a result will also mean more employees are ultimately added. Again, I don't want to get ahead of his comments that we will share in full with you as well. But I don't know, Jim. You know, when you look through reports, you may be right, but it doesn't mean that it isn't coming. More and more code certainly is written every day by AI. In fact, now we're getting, what, 80%, 90 % you often see now numbers as high as that in terms of what's being written. But to your point, it doesn't appear that that many engineers have been fired while that's been going on.

13:16But no, a lot could change. You know, Carl, I'm a huge fan of Stephen King and I've read every one of his books. You often you often compare things to the stand. Charles Dickinson. Now, OK, so let's say you fed all the stand to everybody, to every one of these foundational models. It's got a real blueprint to kill the vast majority of people around the world, including a tremendous scene trying to get out the Lincoln Tunnel to get to New Jersey. I mean, what would happen if you just said, OK, listen, guys, to all the different agents, here it is. Stephen King lays it out. Go make it happen. Did you see the news of OpenAI solving the Navier problem, the 90-year-old mathematical puzzle that it tackled in 88 hours?

13:59Look, if they can do that, it can read the stand. Yeah, it can read the stand. Fortunately, there are some good people in the stand who do a lot. Yeah, but there are people who live in the stand. I mean, it's not necessarily game over. There's just a few people. And King is very visionary. I think King thought about this while ahead of the agents. The solving of that one millennium prize, that was pretty impressive. Yeah, 10 ,000 agents, as Carl said, 88 hours. Not to mention, I was on a plane yesterday, but I assume you guys covered the OpenAI chief scientist who also talked about alignment in that essay called An Alien Mind.

14:41These are the key issues right now that we're going to be dealing with. And, of course, one of the key questions continues to be, well, can we look to the government in some way to help us navigate this, to take a more formative role in terms of what is happening? And there is some from that chief scientist. Obviously, I read that with alarm this weekend to be followed up by the stories we're talking about right now from his competitor, Anthropic, both of which, of course, are here in San Francisco. Interesting to always visit both those companies as well. Excellent. Great conference. Which one?

15:17Communicopia? Yeah. Oh, yeah, it is. It does feel like that scene in The Predator when Billy's on the bridge with the Bowie knife. And he says, we're all going to die. Nice. Nice way to end the A block this morning. When we come back, there's a ton of corporate news to get to. We'll get to Chime. David's got some on that. Albertsons, Dow, Chewy, Cignet, Jersey Mike's. And then we'll talk some Treasury buybacks as we are expecting a Treasury announcement around 11 a.m. at a 10-year note auction at 1. Stay with us. Who's ready for a bike ride? Peppa Pig is learning to ride her bike. First, pop on her helmet.

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17:17Surprise and shine. That's what Apple's calling its first product event under John Ternus due to begin in just about four hours. Company expected to launch its first foldable iPhone along with some other devices. We talked a lot about it yesterday, Jim. Look, I think that this is one where everyone's trying to figure out price. And I always say, look, what you do is you go to Costco and you switch to T-Mobile and you get a cheaper price. I think you have to shop this in the younger people, I think, just are addicted to finding the best price everywhere. It does seem expensive. It does. Remember the days where you could take average selling price at Apple and put it into an EPS model?

17:55Is that harder to do now with memory prices in the margins? We have to know the margins. And we know that when I was out at microton there, price has gone up again. They're talking about 27 being really big price increases and 28 being big price increases. So whatever it is now, get it now because there's going to be a stampede if this is true, because there is no way that Apple will be able to have a huge amount of memory already stored up for next year. Yeah. And then, David, just optically, it's going to It'll be interesting to see how Turnus presents. We've been so used to cook over these last 15 years.

18:35No doubt. That's an important part of the job as well. Jim, do we have any idea what this thing's going to cost? If you guys mentioned it, I didn't hear it. Look, I mean, we hear a fully loaded. I shouldn't speculate. Well, you asked some models. I was building the model on Anthrop. I was asking Claude what it would look like. I was asking Chad GPT what it would look like. and they were talking about a$2 ,000 phone. Now, one thing I can tell you is that there isn't anything that could be more wrong than using these services right now when it comes to predicting something like this. It's a parlor game.

19:15I apologize to John Turnus that I even went to it to ask the price. But, I mean, everybody wants to know. And, look, I do think you have to buy it through a Verizon or you want to buy it through a T-Mobile, and you get a discount. Those guys are all in some big, you know, dogfight. David, you have John Stanky, if I am correct. I mean, maybe John Stanky is the man who can tell me what the price should be. Maybe he will. I'll ask him what he thinks that foldable phone is going to do in a volume. Do you have Hexeth? No, we've got a lot of people. We've got a lot of people out here. Sorry, say again?

19:51Do you have Hexeth? Just kidding. you obviously have everybody that matters. He's the guy who's in the... We've got a good lineup. I don't know if it's everybody that matters, but it's a good lineup and it's an opportunity as well to talk to all of them about AI. Not just, of course, their broader thoughts that I reserve for Chesky and Intrader to a certain extent, but also how they're diffusing it within their enterprise. That's a very important point for all of us as we try to understand how the technology is being used and how it's going to ultimately get paid for and, you know, the return on invested capital.

20:31You have the key man in terms of the price of the Apple iPhone. You have Gary Dickerson, applied materials. He's going to tell you whether there's any way they can alleviate the shortage by 2030. That's a heck of a lineup. Yeah, I know. Next couple of days. We will get Kramer's Mad Dash, countdown to the bell. Faber, of course, live at Communicopia. Don't go anywhere. Who's ready for a bike ride? Peppa Pig is learning to ride her bike. First, pop on her helmet. Safety first. Then, attach the push stick and give her bike a push. And watch Peppa paddle. Her legs go round and round as the wheels turn.

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22:22COSPI was up more than a percent overnight, but we're not benefiting from that tailwind today. A lot of the chips are lower. Intel's getting crushed. I don't know. I mean, oil transcends COSPI. It just does. You have to accept that. Oil can beat this every day. Without any sort of deterrent, if you just keep going and shooting each other, every day these are going to be dead. Yeah, you have said oil is, and its correlation to treasuries, one of the big headwinds of the moment. We'll get the opening bell in a couple of minutes. Don't forget, you can catch us anytime, anywhere. Just listen to and follow the Squawk on the Street opening bell podcast.

22:59A couple of minutes to the bell. Let's get Kramer's Matt Dash. Yeah, look, wherever they can raise money, they will raise money. Wherever they go, they will build. OK, so Amazon's raising money in the U.K. This is following Alphabet doing that. But sterling bonds, they've got a lot of interest in it. It's a 4.25 billion pound sale. And they've got something almost 12 billion interest. It's going to be trading maybe it looks like about 55 basis points over their yields out of their bonds. And that's not bad. But I would have thought they could have raised the same amount in the U.S. But maybe we've saturated.

23:35Maybe we're saturated. You know, and remember, I'm not the house. So I don't know. I beat the house at times, but I do. That's a reference to our secretary. Yes, yes. You can bet against me if you want. You never really want to say that because then what happens is people just say, you know what, I'm going to break that guy. And that's unfortunate. I think you can say, listen, I think Bob Rubin once said that to me when I was running the street. He said, look, the yen, we're going to let it go to$80, but not$79. I said, what does that mean? And he said, yes. Now, that's what I guess. You don't just say look on the house, because the house better be the house, right?

24:15But good luck. I mean, maybe it's playing that role. But this Amazon deal is interesting because the currency is not that strong. They have a piece of paper, July 2036 in our country, that yields 5.3. So, I mean, I don't know how great it's really going to be, but it's testing a market like Uber. And if there's markets, roll by and bring it. Yeah, Uber as well with some euro-denominated bonds.

24:49Let's get the opening bell here at the big board on Wall Street. It's Oracle, Latin American team visiting here, doing the honors. We get earnings tomorrow night. Streets looking for 174. At the NASDAQ, it's EXL, a data and AI company, celebrating the launch of its new brand, Go Beyond, as well as 20 years of listing. Jim, as we're once again to that 76-50, remember last week it was 76-20, those opening August levels. Yeah, and look, my biggest fear is that this time there were over 100, but there may not be as much in the Strategic Petroleum Reserves. I think that people are beginning to believe that there can be no deterrent to a ramp.

25:29Whatever we do, they do. That's not acceptable, and that will send oil up. And I just think we can spiral higher. I've been very bearish on this huge petroleum resource. They're just being used up. So I don't know where this extra oil is going to come in to be able to tamp things down. There's a company, I know this is a little anecdotal, called Casey General, and it's absolutely terrific. I've had them on. And the stock's down 112. Now, it does have a, you know, so the stock's at 620. But the interesting thing about Casey is it's a convenience store, and it has gasoline. Gasoline up, numbers aren't made.

26:09This is the—and I never use the term canary in a coal mine because it just sounds like what a cliche. But this is an example of what can happen. You have a pump, and you have good food. They have excellent food. I've had their morning pizza. Yeah, of course. We talk about their pizza all the time. All the time. And you can see this stock has been crushed. I mean, this was a case where they beat on revenue, beat on EBITDA, beat on EPS, but it was comps that missed. Jersey Mike's the other one today, restaurant-wise, Jim. First earnings post-IPO, comps up 2.3, revenue up 10. Now, I have Charlie Morrison, and I happen to love Charlie, and I've been urging people to buy this stock because Charlie came on when Wingstop started.

26:52Charlie came on the show, and at that point, Troy Aikman, whom I actually liked despite the team he played for, came in and said, listen, this is the best one. even Troy's in it, and he laid it out. And he said, listen, this stock is going to go up huge. And I said, then I want a franchise. I own two restaurants. And he goes, how many McDonald's do you own? He said, none. He said, well, if you own 10 McDonald's, I might look at your recipe. So this guy's a serious practitioner. I think this stock is probably one of the best that's come public this year. The rest is owned by Blackstone. It's a very underpenetrated market.

27:24It can go worldwide. and Charlie knows how to do a kind of not that expensive store all over the country. They have a lot, but all over the world. So I just think it's very exciting. I tell people over and over again, you have to look at the CEO when it comes to these kinds of franchise outfits because if you don't have good franchise, if you can't have someone at the helm who knows how to measure a franchise, then you're going to have weak franchisees, and that's the end of the world. That was what some argue did Pizza Hut in with suboptimal franchisees. Boom! Boom! Exactly. I'm worried about Wendy's, who's a suboptimal franchisee.

27:59I'm not worried about Jersey Mike's because Charlie, this guy, he can be fun, nice, ruthless when it comes to balance sheet. Ruthless. And that's what you need. David, you want to talk some thematics at Communicopia today? If you were here, we would probably jump off of Jim's point about oil because Valero, Marathon, they are not looking back today. Yeah, thankfully I'm not there, so I don't have to talk about that. But I will talk about SpaceX, guys, just in terms of what we typically would cover. I'm keeping an eye on it. You know, there is a lockup. And it's weathered the lockups extremely well, as our viewers well know.

28:42The stock, what, there it is, 151, well above the IPO price. Amazingly enough, it is, it was June 12th. So we're talking 90 days. But a number of the shares, remember, of course, they did the XAI deal. And XAI is not just, it was also included the holders of Twitter that got rolled in there. I think it was as much as 1.4 billion shares. You've got over 13 billion outstanding, but that they presented to XAI holders to get that deal done. Remember, it was valued as much as$250 billion. Some of those shares are becoming available. So, again, unlocked doesn't mean you're selling, but it is something for people to keep in mind as we continue to monitor that stock and its ability to, frankly, Jim, withstand quite well the unlocks as they continue to come.

29:36But this is another one. Not sure exactly what the full number is that comes unlocked. It's sort of hard to, at least I haven't been able to tell. But, you know, we're talking hundreds of millions of potential shares that do become unlocked. It doesn't mean they're going to be sold, Jim, of course, as we know. No, but look, this is quite frankly amazing. You have a company where there are just billions of dollars that are coming off. And what happens? The stock goes up the day before, which is rather amazing. And then the stock hangs in. And when I see this stuff, I say to myself, how many true believers are there in this man?

30:10Because holy cow, this is just one huge windfall if you did sell it. Carl, it's strange numbers, like 7 % of the existing amount that comes in. I'm just checking the numbers now. But it is, without a doubt, so much stock that should be sloshing around, and it's not. It's just not sloshing around, and I just find that amazing. Yeah, we're watching, obviously, the weight on the NDX. It's weighting on the NASDAQ 100. That's going to be rising as the float increases. By the way, guys, we should note that the opening bell over at the SIBO this morning, it was Burke Wealth Management doing the honors.

30:46They're celebrating the launch of its BWM quality growth ETF. Jim, one interesting chart we built was the percentage of S &P components that are above the 50-day. You want to look at it? Yeah. I mean, it's the lowest since April. This is just an argument for weak breadth in September. Look, we're not going to be able to do anything if every night oil goes up$1.50. Because there are cases in general is the beginning. I mean, we're just, well, jeez, that's awful. I just think that there's just so much that you can do. Interest rates go up. You mentioned Valero. That's another great indicator. Watch Chevron.

31:27And you end up just saying there's just not enough discretionary income. I have Bank of America on. And they were talking about the end of the K economy and how everybody's going to pretty level think, Carl, I'm not so sure the K economy isn't going to be reborn here. Watch Dollar Tree. Watch the Dollar Tree. They'll tell you. Well, you mentioned CoreWeave with David a moment ago. David, I think you've got more of them, yes? Yeah, we do, Carl. You know, yesterday I was able to sit down with Michael Entrader here later in the day at the Goldman Sachs Communicopia Conference. Obviously, we have them on every quarter.

31:58We had him on most recently after a very strong quarter from the company, as you guys well know. But I did take the opportunity to have a broader discussion with Michael about some of the very issues we led the show with today. Opposition to data centers, fear around AI, and what that will mean for their ability to continue to grow. In particular, I cited comments from the Treasury Secretary last week in which he called, let's call it broadly speaking, the efforts of the industry horrendous when it came to articulating the benefits of AI and data centers. Take a listen. I think that there is some truth to what he said.

32:38I do not think that as an industry we have done a particularly good job of representing ourselves in terms of what the data center's impact is on the communities. I don't think we have done a particularly good job of talking about the benefits of what the data centers allow the AI companies to be able to deliver to people, to governments, to decision making. You know, I mean, sometimes we get a little bit lost in the weeds. But you're in a difficult position, if you'd allow me to offer that, because you can talk about the positive things that may occur, but none of us know what's coming. And in fact, you even talk about transformation yourself.

33:31People hear that and they get scared. Yeah, they do. And you can't blame them because obviously the future is unknowable. We're at this period of incredible change, dynamic change, some of which may result in things that aren't necessarily good. We just don't know. I'm not sure how you combat that. Yeah, listen, like I said, it is a difficult problem to have, on one hand, this tremendous unknown that can be populated with a virtually unlimited number of scary things. And on the flip side is to say, hey, you know, we're going to make progress within science that's going to cure diseases that the world has never seen.

34:15And those are very specific, right? and wonderful, but that doesn't help somebody who feels like their job may be at risk. And I get that, and I do. And like I said, there's these competing forces, which the industry has not done a great job filling the void, talking about there's a responsibility to help with these adjustments. There's a responsibility to build data centers, which are the physical manifestation of AI. So a lot of the fear around the transformation isn't actually a data center. It is. It is really about, hey, the world is changing, and it's changing very quickly, and that's going to have impacts on myself.

35:06It's going to have impacts on my children. And what is that going to look like? And that is frightening. On the other hand, we as a species have done a really good job of incorporating new technologies and driving positives and some negatives, for sure, that have to be accounted for. But instead of taking that on, we sort of abdicated that as an industry, and that's unfortunate. We're talking broadly here, but this does have real-world implications for your business. Are you seeing any manifestation of this opposition to data centers start to mount to the extent that it actually mitigates your ability to grow?

35:48So we've taken an approach that has been kind of universal across our business. Like we have thought about client diversity and making sure that we are touching different parts of the consuming portion of the market. We've also, you know, I talked about this a little bit in my last earnings, we have a gigawatt worth of pipeline for data centers outside of the U.S. so that we can perhaps locate our compute in communities that are less resistant. Not in space yet, but in other communities. We're terrestrial in our nature. But our approach to building these data centers has really been around kind of entering the communities early, trying to participate in the process as good citizens, as good neighbors, so that we're able to be able to build and drive the infrastructure that is in our pipeline into the market effectively.

36:55And we have done a really good job of that. Yeah. And so what you're telling me is you're not seeing it impact your business. It's something that we are extremely attuned to and have put a lot of effort into for a very long time. And so we have de-risked that to a large extent. All right. We spent a lot of time with you after earnings going over things, but let me hit a few things on the financial front. We are, after all, at an investment conference. But you're talking about things on the cost side as well, Michael. I mean, you did, I think, call the second quarter an inflection point in terms of scale beginning to translate into operating leverage.

37:30That's correct. And adjusted operating income did improve,$128 million from$21 million in the first quarter. But you still have a lot of inputs. You just mentioned a lot of them. Cost of revenue growth, about$335 million more in rent expense,$87 million more in data center utilities and power spend. Depreciation and amortization, obviously, up sharply as your fleet expands. Absolutely. So what gives you the confidence that this operating leverage is here to stay? Look, when we have built our business, we really built our business around the idea that you go, you make an investment, you have a long-term offtake with a counterparty, and you go out and you borrow money to support that deal in and of itself.

38:14And I said this to you, and I've been saying this to you for quite a while, that the deal-level economics are excellent. And when I went through my earnings and when I spoke to you guys, I talked about how they've improved recently as we've added between 5 % and 10 % of operating income, operating margin to the more recent deals. So not only were they good, but they're getting better. And they're getting better in spite of the fact that the price of the inputs are increasing because the amount people are willing to pay for them is increasing faster. Guys, you can see a lot more of that interview on CNBC.com, CNBC Pro as well, the full interview, because we covered a lot of ground there.

39:03I spent more time as well on some of these broader issues, Jim. But, you know, StockOxley had a very strong day yesterday, as you know, along with a number of these other names that are seeing a bit of a retreat today. Right. I mean, look, I like to think that you can make the extension of Microsoft by Michael because they were great partners. And even as recently as Point 25, it was a plurality of their business. But, David, the thing that I find interesting is that when we read what happened with all the towns and all the states trying to lure these different data centers, do you really expect Microsoft to say, hey, guys, before you take us, let me just tell you about what we do to water, what we do to electricity.

39:45Before you take us, let me just tell you we're not going to have any people here once we're finishing it. Is that really incumbent upon Microsoft to do? I guess it might be, yeah. What, say no to the states that want them? I mean, if you want to continue to build data centers. Well, now, yes, but I'm saying when you start, you know, states are urging you. So you don't really put up the stop sign and say, listen, I know you want us. I know you want to give us tax breaks, but let me tell you, we actually are net negative for a community if we don't check water first and electricity. But who does that?

40:17Does anyone really do that and say, listen, you know, we're bad news? No one does that. No, they don't. Why would they? I don't know. I mean, we're all going to die anyway. So what does it matter? By 2030, we're all dead. I mean, do we really care about electricity when we're all dead? No. 10 % chance we're all going to die. I mean, honestly. I mean, can we just put that perspective as this person who used to work at the, I mean, who works at Anthropoc? because that's a frightening number. I would like it to hear like.01. By the way, let's just step back a minute on this very theme as well. Anthropic and Dario Mode in particular has been the person who has most often warned about the downside of AI.

41:03That's what's so disturbing. Without a doubt. And has built the company to a certain extent or a large extent. And this is one of the reasons I think they would say they have kept as many people as they have because they have, they would say, put safety first. Yes. And, you know, you can argue about OpenAI and where they are on that as well. What I wonder is when both of these companies are public companies with large shareholder bases that are pushing them for growth, are they going to really withhold models to the extent that they would need to because they believe they're unsafe? I don't know.

41:38They will say yes, but we shall see. That's the calculus, Jim. They might be thinking, you know what, in the end, we are all dead, so we might as well try to win before we all get there. I wrote a lot of obituaries. I hate to have to write 334 million obituaries. Yeah, I know. You're an accomplished obituary writer. I was really good. Sorry to bother this time. On deadline. Oh, my God. I wrote so many, and I feel so badly. This is some dark stuff we've got going on here, Carl. I don't know. Maybe we should talk about oil. Well, look, when you wake up and a guy says we're all going to die and then another guy says, hey, listen, there's really only a 10 percent chance we're going to die.

42:15I don't feel all that reassured, David. No, but go back and listen to Elon Musk and Sam Altman. Go back and listen to Elon Musk. He was talking about this many years ago. I mean, OpenAI was founded for this very purpose to make sure it doesn't kill us all. I think Dario is going to save us. I am not going to put those 10 percent. I'm not buying that. I'm just not buying it. I mean, the Alien Mind blog came from OpenAI, not philanthropic. Okay, I don't think Dario's companies could be responsible. He's too responsible. I genuinely believe that. I'm not being clear. I think he's a great man. I think he's doing his best.

42:50That's a lot of responsibility from companies that are pretty new to the public eye. By the way, coming up at 10 a.m. this morning, don't miss our exclusive with Wells Chief Charlie Scharf. We'll talk about the economic outlook, the Treasury buyback, and some of this AI. Charlie will have thoughts on this, I hope. Charlie's great. Technically understands technology better than any of the bankers. Great lineup. I'm so jealous. Jeez, I've got like, I don't know, scatabot. Speaking of all this, watch bonds as well. Pretty stable here with the 10-year just around, I think, 4. Where did we get to? 4.8?

43:28Yeah, right. I pinned to 4.8. We'll get Treasury buyback in about an hour and, of course, a 10-year note auction. Are we still alive when that piece of paper comes to you? We'll find out. We'll find out, Jim. I hope so.

43:41Well, Jim, for all of the warnings about AI, you know what's at an all-time high today. It is Dell. Month to date, 22. It was the best quarter. It was actually the best quarter of the year. And it was like one of these things where you said, I thought they could do that quarter in 2028. And quote forward, Michael is a genius. And the whole time he was telling people, look, it's coming together. You've got to buy the stock. You can't move my show and say, you've got to buy the stock. I just think that people didn't listen. I got frozen because we kept talking about it. I couldn't buy it. I mean, that AI server number in the print was pretty remarkable.

44:15Flying in the face of some weakness within tech overall today. Dow with its worst three-day run since March. Thanks, Mike Sicardi. We're back in a minute.

44:28So, Jim, tonight, J-Mike? Oh, boy, we've got J-Mike. That's Charlie Morrison. We have Brian Moynihan. I think he's doing a terrific job. Back in America, we are going to talk about 9-11. And then Adrienne Carvara said, yeah, now Tapestry's been a weak stock, but I don't think it's a weak company. So we've got to find out what the heck's going on. Yeah. The spread between year-to-date S &P and some of the retailer baskets, it's getting wider. And this is all oil. Again, we've got to keep coming back to oil because it's creeping into the day-to-day of everybody's life. It's almost as if the people have gone through the Strategic Petroleum Reserve.

45:03A lot of the travel names are down today. That's been a big tell. They've been strong. Yeah. A good piece on The Wire today about refiners, because they normally do maintain, take some offline to make sure things don't break. They have to. And if they don't, if they make it to year end, they say that would be a huge achievement. Refinery should probably, but that's where you really need AI. Those are some of the most dangerous jobs. Yes. Got to hand it to those people who do that. Jim, big show tonight. We'll see you at 6. Thank you very much. Mad Money, 6 p.m. Eastern. You've been listening to the opening hour of CNBC's Squawk on the Street.

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