2025 Winds Down: Warren Buffett, AI Automation, & WBD’s Bidders 12/31/25

0:00Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, Happy New Year's Eve. It has been a year of a lot of superlatives. AI is taking your job, probably. A modest proposal from Khan Academy founder Sal Khan about that particular employment apocalypse. He wants companies to pay up for the workers they cut. If folks wait too long, the political winds are going to switch. The year in retail. Several brand names will be under new leadership in 26. Our Courtney Reagan on where the retail stocks end this year. It's sort of a stealth rally there right at the end. And former Walmart U.S.

0:44CEO Bill Simon on the winners and losers in the year of the tariff. We were able to really see the big guys, Walmart, Costco, Amazon, find ways to digest the tariff news and really to, you know, push back on the manufacturers and get some assistance there. But first, it is the last day of headlines for 2025. Warner Brothers Discovery set to reject Paramount's latest bid for its assets. And it is Warren Buffett's last day leading Berkshire Hathaway. Don't worry, the Oracle will remain in Omaha. Buffett still controls 30 percent of the vote in that company. He doesn't make bad deals. It's Wednesday.

1:27It's December 31st, 2025. Already 2026 down under. Time a kangaroo down. Spork. Time a kangaroo down. Yeah, you know it. Squawk Pod begins right now. Stand Becky by in 3, 2, 1. Cue, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the NASDAQ market site in Times Square on New Year's Eve. This is not an easy place to get to on New Year's Eve, even at these early hours. By the way, I'm Becky Quick. Joe Kernan's here. Andrew is off today. Yeah, I was ready to give up and just go home and get one of those screens Andrew always uses to make it look like he's here.

2:10Hey, it is New Year's Day already in Auckland, New Zealand. You see the fireworks that are taking place. We're going to see that behind us a little later today. but those celebrations are kicking off around the globe today. It's going to be followed, what you're watching in Auckland, New Zealand right now, by a scaled-back celebration in Sydney, Australia. That will take place at 8 a.m. Eastern time to this morning here. A fireworks display and a concert at Bondi Beach were canceled after the shooting there earlier this month, although the traditional fireworks display at the Sydney Harbor Bridge is still on schedule again for 8 a.m.

2:48Eastern time. Here in Times Square behind us, this is the most locked down I have ever seen in the many years that we've been coming here. It was pretty tough to get in, even in the pre-6 a.m. hours. We're calling it a shooting, are we? The terrorist attack in Bondi? Yeah. Well, the terrorist attack. Yeah, exactly. We called it a shooting there. Yeah. It was an attack, and it does have everyone on heightened alert as we head into this season. I'll say. Things are quiet. Things are locked down here. And there's a huge police presence, not just in the immediate Times Square area, but just everywhere you went as you went through Manhattan this morning.

3:24With the backdrop to all of this, we're watching the markets on this last trading day of the year. What a year it has been for the major averages. They are all up for the year. The Dow up by close to 14 percent. The S &P is up by more than 17 percent. And the DASDAQ up by 21 percent. Then you've got the Russell 2000, which is up by just over 12 percent. All of the major averages are on pace for their sixth positive year out of the last seven. It has been a good time for investors these last seven years, but it has been a year of a lot of superlatives. Yep. And next year starts with a superlative because we're going to spin off.

3:59And I think that doesn't happen on. Versant. Versant. On Monday starts trading. I think we're ringing the opening bell. The opening bell. And if you've ever spun off from a big company and gone to a small, there are a lot of things that go on. Do you know what? That's the font? Do you know what I just did? You know what I just did? No one's going to know what I'm talking about, except for you. Okay. We'll share. We're here together. I put my message bar back in. Oh, I can't find mine. I just did that. I can do it for you. Let's see. No, I'll show you how to. This is our messaging system internally.

4:37Internal, and something changed on this whole thing, and so were unable to communicate because I had no message bar, and I actually went into whatever I did. Just did it. Found it. So it wasn't that hard. Silver rebounded a little bit yesterday after a big drop on Monday, but we're talking it was$80 down sharply again this morning all the way to$71. I don't know where this deserves to be. We had a guy on yesterday that said maybe not a round trip, but some of these levels just don't make any sense, and they're related to technical things. But, you know, maybe it was, you know, it was dormant for so long, maybe a lot of it is ketchup.

5:17But supposedly, in his view, wasn't as related to gold as it was related to silver's own dynamics and fundamentals. Weird when they happen together, though. It is. And copper, too. But remember, exchange operator CME, as they do whenever things get crazy like this, they raise margin requirements on precious metals futures. Now, this is the second time in a week. China is also about to tighten controls on silver exports, echoing the country's stance on rare earth metals. And platinum, palladium also getting hit. You're following this. Silver's up 143 % year to date. That's the best year since 1979.

5:58Can you say Hunt Brothers? Gold up more than 60 % this year, also on pace for its best year. They can say they're not related, but when they move in tandem like that, it's hard to say. Silver was up even more. Oh, I think gold was up like 50%, maybe. I think silver's been up close to 145%. Gold had that long, I mean, for a long time, you know, the gold bulls were, they kind of looked silly for a long time. They'd been rewarded for their patience. Yes, they have. Yes, they certainly have. But when they really laugh at Bitcoin, maybe Bitcoin goes to zero eventually. But when they say, I've had people writing and say, we told you.

6:44But Bitcoin's on track to potentially close higher for the year. It's pretty close. But it was, you know, there were people when Bitcoin was at$2 ,000. There are these, you know, very vociferous voices that it'll never get to$5 ,000. Gold's going to go to, and it went to$125 ,000. And gold finally made it to$4 ,500. and they're declaring victory, which is, you know, whatever. All the time frame. All the time frame when you got in. We could get the next development in the fight over Warner Brothers' discovery as soon as today. David Faber reporting that the company is expected to release its formal response, rejecting the latest offer from Paramount Skydance very soon, potentially either today or Friday.

7:28That's despite a personal guarantee from Larry Ellison, the father of Paramount CEO David Ellison, backing Paramount's offer. A rejection would keep Warner Brothers in line to take a more than$80 billion cash and stock offer from Netflix. But this is going to be interesting. The last time around when they rejected it, David Faber had the chairman of the board on, saying that the reason they were doing it is because there was no personal guarantee that came. Now, I don't know what the personal guarantee is, if it's been put out in writing, or what the rationale will be for why this is less this time around.

8:02But I guess we'll see very soon. The reason I like it, for me, Al Franken, is that the, Joe Kernan, you say that all the time on this. It only has to do with me, only has to do with me. Okay. If you were to value the stub of the properties. Oh, okay, I know where you're going with this. Exactly. You want a big valuation for the cable properties because version is going to be the trading. So if it really is worth four or five times. I'm with you. I'm with you on that. I was thinking this this morning on the way in, that this is going to be trading proxy. We got a quarter of the debt of the Warner spinoff.

8:41And we're coming valued at like one and a half. And we have CNBC. And we have Squawk Box. And in, like I said, it's all about me, but, or us. But that's the only way you can get the Netflix offer to match Paramount is by valuing those cable assets. We had somebody who said maybe it's even more than$4. Maybe it's$5 or$5. Well, then Versant should be valued. Was it Roger Altman or somebody who told us that recently? VSNT. VSNTV if you want to be watching on Monday for the opening bell. Today is Warren Buffett's last day as CEO of Berkshire Hathaway after 60 years. Buffett shocked Wall Street in May when he announced that he would ask Berkshire's board to replace him with Greg Abel as CEO at the end of the year.

9:38Buffett has led the conglomerate for six decades, but he won't be stepping away completely. He is staying on as chairman of the company, and he plans to continue coming into the office each day. In fact, he's there not only five days a week, but I think he comes in sometimes six days a week, too, either a Saturday or a Sunday. Amazing. Is it Cherry Coke Zero or Cherry? No, no, no. No diet, no zero. Full on. Yeah, he likes the full flavor. I like it, too. I like it, too. But I. It's been Coke or Cherry Coke, either way. Yeah, I just can't. The 140 calories, if you run on a treadmill for like a half hour, it's like 120 calories.

10:16It's like, I can't, it's not a fair trade. But his record as an investor, what he's managed to do. Unbelievable. He's changed the, yeah, I mean, one man can change the world. And he certainly did in the way that you invest. And he's, I mean, how many people's lives has he enriched? Not just, I'm talking monetarily, but I'm sure in other ways as well. And he's going to leave a legacy of philanthropy that's going to help a lot of people as well. He's done a lot for the NCAA March Madness. I mean, he's done a lot. For a lot of things. I mean, the wealth that he's got. He's given me a brick. I have a brick.

10:54I have an Acme brick. An Acme brick. He's given away more than$50 billion already. His plan is to give away more than 99.9 % of all of his wealth. Give me a lollipop. His children are going to finish carrying that out for him. They will. And Greg Abel is the person who Charlie Munger first kind of slipped at an annual meeting in May of 2021 to say that Greg would be the one who would be taking the culture. He did back then, yeah. So it was 2021 when he first slipped, but then it was this annual meeting, May of this year, when Warren Buffett surprised everybody in the auditorium by saying that he'd like to step down as CEO.

11:29Today would be his last day. How much, is it more oversight for the last, since then? What is that, four years? Is it more oversight? Do you think they took, anyone took ideas to him to get his blessing? They did still? Well, I think not internally. I think for the most part, Greg has been running a lot of the non-insurance companies for years now. That's been the way that they set it up. G-Chain has been running the insurance companies. Everybody reports through to Warren Buffett. But Greg has done a phenomenal job really in the operations business of trying to make sure that things run smoothly.

12:05And a lot of the problems that Warren Buffett didn't really want to deal with were the things that Greg Abel's been dealing with. But they work together very closely. And I know they still talk constantly. So there is a lot of back and forth. And I think that's great for Greg Abel, too, to be able to have Warren Buffett as a fire shield. To anybody who wants to come along and say that you're not Warren Buffett, this is not your company, Buffett still controls 30 percent of the vote in that company. What does this really mean today? He's got Greg Abel's back. I just wonder if he has a strong feeling about something that's going on.

12:38I'm sure as a chairman. I think he is trying to step back and let Greg. Yeah, do more and more. Step back more than he already has. I think people are going to Greg with some of the deals on these things. I think Warren's phone is always there if somebody wants to come and call. If you own 30%, you could still say, I don't want to do that. Yeah, but I think he's worked with Greg for a long time. He's been his chosen person for a long time. And I think he's very happy to see what Greg has done with the company over the last several years, too. And I think what you pointed out, his legacy is going to be much more than just Berkshire Hathaway, although that's a pretty phenomenal legacy in itself.

13:11For anyone who's owned it. Yeah,$119 to$7 ,500. You're talking about gains of$3.5 million plus. You could probably, with AI, figure out how many millionaires he's created. But I think it's also his Thanksgiving letter that he wrote this year, talking about how you should behave in life and kindness is an easy choice, and that's what you should really do. I think those messages are pretty important, too. He's got a huge following of people who admire not only what he's done in business and in investing, but what he has chosen to do in life. He's kind unless you're on the other side of a negotiation.

13:46Because especially when he was younger, I heard he was just an assassin. He doesn't make bad deals. No. I shouldn't say he doesn't. He does occasionally. I mean, ruthless, that's a bad word. It has a bad connotation. If you're spending your partners, he's always looked at the shareholders as his partners. Because it started out as a small group of family and friends. He's not going to overpay. I wouldn't want to buy or sell anything to him. I think there have been a lot of pretty good deals where people on both sides come out. No, I'm sure. I'm sure. He's not going to overpay. He hasn't. No. And he hasn't been on the short end.

14:20Charlie Munger once made a really interesting point. He said, there are all of these companies that want you to overpay, but only once when you pay for them. And then they want to make sure if they're getting paid in stock, because that's more tax advantageous, that you never overpay for another company. Is he frugal? I mean, he gave me a NetJets. He just doesn't want anything. He gave me a NetJets card. He lives in the same house he's lived in for 50 years. But it wasn't good for him. It just had my name. There was nothing associated with it. That would have taken nothing for him to give me a couple of million on this.

14:50His plan with philanthropy has been trying to help the people who need the help the most. And you're not it. No, unfortunately. I love NetJets. It's always somebody else's. Ahead on SquawkPod, corporate responsibility in the age of AI-driven automation with CEO and founder of education powerhouse, the Khan Academy, Sal Khan. India requires 2 % of profits for corporate social responsibility. The UK already has a half a percent mandatory for reskilling. I'd argue most companies already do spend something like that, but they do it in their own silo. We'll be right back.

15:38Welcome back. This is Squawk Pod. As always, from the crossroads of the world, Times Square. Stand by, Joe. In three, two, one, his mic. Q. You're watching Squawk Box on CNBC. I'm Joe Kernan, along with Becky Quick. Andrew is off today. And, I mean, we should take a shot of it. We are here. It's empty here. We barely made it in. This is it. This is exactly where everyone is going to be wearing the pens tonight. Because you can't. There's two million people or whatever it is. No bathrooms. And it takes like eight hours. Once you leave, you can't go back out. They are saying you might even be frisked again through security.

16:22This is the most I've ever seen. I had to walk from 8th, which we're over on between Broadway and 7th. I mean, that doesn't sound like a lot, but it was a maze. There are all these barriers that are closed. And at the very end of one of the barriers, there's a tiny little place where if I suck in my stomach, where I can just barely get through. No, I had to rely on the kindness, not of strangers, but of the NYPD to get in this morning, too. I don't know how they got in here because nobody else has made it. Nobody is allowed, yeah. And there are police everywhere. They were pretty nice, some of the cops.

17:03They are. New York's finest. They didn't respond well to, don't you know who I am? I don't know. Did you try that stuff? They were far nicer to me. You didn't use them.

17:20Our next guest warns that an AI-fueled job apocalypse is on the horizon. Let's bring in Sal Khan. He's the CEO of the Khan Academy. In his latest piece for The New York Times, Sal makes the pitch that every company benefiting from automation should dedicate 1 % of profits to help retrain workers who will be displaced by AI. Sal, first of all, thanks for being here. Second of all, this is a pretty radical proposal, but let's lay out what you think is happening. why you think this job apocalypse is coming. Yeah, you know, as soon as Generative AI became a big thing, obviously this has been a big debate.

17:58Will we have net loss jobs, net gain jobs? And living out here in Silicon Valley, most people have been on, hey, this is going to be like the Industrial Revolution. We'll just, you know, there'll be jobs. We can't name them, but they'll happen. But what we're seeing now, you know, in that op-ed, I talk about seeing the Waymos in my neighborhood, and that's cool. But then I go and meet with a friend who is thinking about contributing 1 % of his firm's profits for reskilling. And his motivation was he's taken over a call center in the Philippines and he's going to be laying off 80 % of the workforce and replacing them with an AI.

18:31That's 7 % to 10 % of the Filipino GDP directly. Driving some form of a vehicle is 4 to 5 million workers just in the United States. It's one of the biggest sources of employment for men globally, including in the United States. And even if you look at white collar jobs, a lot of people are talking about and seeing what's happening in software engineering right now. It seems kind of frozen. Things like product management, design, we're seeing that those jobs are at least changing. You're not seeing a lot of net hiring. If anything, there's a lot of things going the other way. And the only way to think about how to navigate this, I think if folks wait too long, the political winds are going to switch.

19:13We've already seen that populism can get a lot of momentum off of things like globalization and immigration. I think automation is going to hit a lot harder. And you know 1 % isn't without precedent. As I mentioned one of my friends, he hasn't announced it yet, that's why I'm not naming their firm, but it's a major firm. There's Aries Capital, another major asset manager. They have a class of funds, several billion dollars under management, where they're giving 5 % of their promote to philanthropy for they're doing health care and education, but that's related to reskilling. So the pitch here is it's in it's in companies best interest.

19:51This isn't going to be just, you know, hope isn't a strategy here. We have to get ahead of the curve. The the benefits of doing something significantly weigh out the alternative. And I think if if we don't do something, politics are going to take over and that's going to be worse for everyone. I hear what you're saying, and I've thought the same thing myself. We watched it with Occupy Wall Street and other movements in the past where people feel like they have no hope, where they feel like they've lost things. You definitely do lose the political wins. I think it's probably difficult to convince lots of companies to say, yeah, we're just going to take 1 % of profits and give them to this.

20:30Many of them probably can't say, look, we're going to lay off a lot of workers as a result of this. I think what you're talking about specifically, a company that is going to give back 1 % of profits after deploying an AI agent that's capable of wiping out 80 % of call center jobs in the Philippines, that seems like a token you drop in the offering box on your way out of mass because you feel really bad because you've been so guilty. I don't know how we balance this out, but I think you're going to have a hard time convincing some of the biggest companies out there that they are really losing jobs.

21:05Even if you talk to somebody like an Amazon, they'll say, you know, that's that's a situation where Andy Jassy is. If they're successful, they'll have more workers than they have in years past. I think that's what Jamie Dimon says specifically at J.P. Morgan. If we're successful, we're going to have more workers. They'll just be in different jobs. So I don't think you're ever going to convince a company like JP Morgan that they should be taking 1 % of their profits and then giving it away like this. How do you see this playing out on a grander scale? Yeah, you know, I hope and I do think that there could be a form of peer pressure here.

21:41And what you're saying is real. You know, when I wrote the op-ed, most of the people who read the op-ed is why only give 1 %? 1 % is nothing. And for that guy, if you actually feel like you're guilty for releasing an AI agent that's going to lay off thousands and thousands of workers, maybe you should cough up more. But other companies, I don't think, will feel the same way about it. I think that's the interesting thing. I think the public is already feeling that it should be a lot more. And if you look at some of the comments in the New York Times article, the pitchforks already seem to be coming out.

22:11And this is before things have really gotten bad. We're still in a relatively good economy. me. On the other side, 1 % isn't a trivial amount. I point out that, you know, if you take the top 10 or 12 companies out there, that's over a trillion dollars a year in profit. That would be a significant fund,$10 billion that you could deploy for reskilling, but you could do it for millions and millions of people. And I'm just saying if they don't do it voluntarily, and it might, it probably won't be enough, but at least it's a start. And there'll probably be more that you want to do. It will become mandatory in some way.

22:41There's other governments, you know, India requires 2 % of profits for corporate social responsibility. The UK already has a half a percent mandatory for re-skilling. I'd argue most companies already do spend something like that, but they do it in their own silo. They do it for very - That's what I was going to say. Some of these companies might do it if they feel like they have control over it and they think it's going to a good use for actual re-skilling, but not necessarily throwing it into a government bureaucracy that they're not convinced will necessarily use it appropriately. That's right.

23:14If this is something that still stays in the private sector, something that they can drive, something that can be nimble, because we know what the alternatives are going to be. In four or five years, you could see the pendulum swing. People become very anti-automation. They start taxing automation. They start taxing AI. There's already serious politicians talking about bans on automation and AI. That's going to be way, way more harmful. And even if they do increase corporate taxes and the government wants to do reskilling and spends tens of billions or even hundreds of billions, we know it's going to be slower and less efficient than doing it in coordination with private industry.

23:47Saul, thank you. It's a lot to think about. We appreciate it. And I wish you a happy new year. You too. Thanks. Coming up, what's the new year? What does it hold for the retail sector? From new leadership to the health of the consumer. More on that next. Plus, Sydney, Australia is set to ring in the new year. We'll have some fireworks. While here at home, Times Square is getting ready for the ball to drop right at midnight. The ball's right above us right now, basically. In fact, there's a brand new ball. And if you read all about it, the Wall Street Journal has a picture of it right on the front page.

24:21Right above. It's got 12 and a half feet in diameter. It weighs 12 ,350 pounds, 5 ,280 Waterford crystals in circular shapes and LED light pics. This is the brand new, the ninth spear that they've ever had in the history of the New Year's Eve ball drop. I saw Ryan Seacrest being interviewed yesterday. He goes, no one really listens to anything I say. I just have to smile, and we just got to make sure the ball drops at the right time. You know, like us. Yeah. The only thing they need to worry about on that whole Dick Clark rockin' Eve.