A 5% Stake in OpenAI & Walter Isaacson 7/2/26

0:00It only happens every four years, and this time, it's here. The biggest tournament in the world. Stadium shaking, flags waving, this is history, and you want to be there. But real life can make it tough. Work, busy schedules, and the price. That's where Priceline comes in. Priceline has millions of deals on flights, hotels, and rental cars so you can go see it live. So find a great deal and make the trip happen. Rally the crew, go see the game live, turn your dream trip into reality. Book now with Priceline. Hey, Fidelity. Can I get a second opinion on stocks in the Fidelity app? With Fidelity, it's easy to get an outside opinion from independent experts in a single score.

0:40And then? When you're ready, trade U.S. stocks and ETFs with no commissions. That's right. I am always right. Investing involves risk, including risk of loss. Zero dollar commission does not apply to customers designated by Fidelity as a professional equity trader. A limited number of ETFs are subject to a service fee of$100. See details at Fidelity.com slash commissions. Fidelity Brokerage Services, LLC, member NYSE SIPC. Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, we're celebrating July 4th. At the local level, we should all read the Declaration of Independence, eat a hot dog, and remember how lucky we are.

1:19Walter Isaacson wrote an entire book on the first sentence of the Declaration of Independence. For him, 250 years later, we should still be working on Unity. And Meta is considering selling its AI compute power. Former Meta chief technology officer Mike Schroepfer maps out the future of tech, big and small. I think we're going to see a massive growth in demand, and we're also going to see a massive growth in efficiency. Plus an historic, exciting victory for the U.S. men's national team in the World Cup. And some folks are taking proposals to new heights, like at the top of the Empire State Building.

2:01I don't want to encourage this, but nearly 1 ,500 feet in the air. It's Thursday, July 2nd, 2026, and Squawk Pod begins right now. Stand Becky by in three, two, one, cue it please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the Nasdaq market site in Times Square. I'm Becky Quick along with Andrew Ross Sorkin. Joe is off today. The U.S. advancing to the round of 16 in the World Cup with a 2-0 win against Bosnia, Herzegovina in San Francisco. This was awesome. I stayed up late to watch the whole thing last night. I didn't get to stay up and see the entire thing, but I was watching pieces of it as it was happening.

2:43It was amazing. It was amazing. So we've got it. way they did it with the second half with the whole there the last 30 minutes i should say with one man down there were only 10 players on the team so how they held on to that was really impressive so here we are the u.s taking the lead in the 45th minute but earning a red card in the 64th and was then forced to play as becky just mentioned a man down more than half uh an hour the u.s made a two to zero uh made a two to zero on a free kick on the 82nd minute uh this is just The second time the U.S. has won a knockout round match in World Cup history.

3:19And the Americans are going to face Belgium in the round of 16 on Monday in Seattle. One World Cup economic note, Goldman Sachs saying that it estimates the tournament could boost the June employment report, interestingly, by 40 ,000 jobs. And the official number we will be getting at 830 Eastern Time. Economists there expecting a gain of 115 ,000 jobs. I was wondering what the watch party was like here last night. I don't know if you remember yesterday when we were here, there was a lot of garbage because from the day before there had been a big watch party here. Looks a little cleaner out here today.

3:51And I don't know if that's because it's so hot. It may have cut down on the number of people watching out here versus the number of people who are watching in bars or restaurants or different places, too. I'm sorry. I feel like I missed the end of this and I should have stayed up to see it. It was really amazing because it was concerning those last 30-something minutes when you only have 10 men on the team. They were already up 2-0, but they made a huge point of just trying to keep the ball down the field the entire time, just keep it away from the goal. There was a really close kick that was in the last couple of minutes that just missed and went through.

4:27But this was an incredible performance by the men's team and really great to see. That's the guy who kicked the second goal in, 2-0. And his dad, apparently, he was born in Germany because his dad was in the military, just watching some of the stuff that came through. They did a really great job of narrating it through it and very exciting to see. OpenAI is considering giving the United States government a 5 % stake in its business and an arrangement that could more widely distribute AI wealth and help secure better relations with the Trump administration. This is according to the Financial Times, which says that the arrangement envisions other AI companies like Anthropic, Google and Meta also contributing stakes that could grow and pay dividends, similar to Alaska's oil wealth fund.

5:10It's not clear, though, whether those firms would sign on to a proposal like this. According to the FT report, OpenAI CEO Sam Altman has spoken about public ownership with the president, also with Treasury Secretary Scott Besant and Commerce Secretary Howard Lutnick. He's also apparently spoken with Democratic Senator Bernie Sanders. Again, this is according to the Financial Times, but it's a pretty interesting move at this. And I don't know if it if you feel like you're losing out because the public is growing frustrated with the data centers that are being built, frustrated with the wealth that's being accumulated that they're not being part of with higher energy prices that are going up with some of these issues.

5:52There is some pushback and certainly a lot of not in my backyard sort of mentality when it comes to the data centers these days. for open AI to negotiate this and say, oh, by the way, everybody else should give 5 % too, also makes you wonder, is this a move because you're concerned that Anthropic is winning when it comes to enterprise at this point? Well, I think that last part almost invariably has to be true. But the other part that I wonder is if you're a Google, which has been around for the last... I'm going to give you 5 % of my stake, which by the way, I'm way more than just AI. Well, that's what I was going to say.

6:22Are you going to give away your stake? By the way, There may be pressure and reasonable pressure to be born in a couple of years from now, depending on how you think AI really changes the economy, where you really do have to say to yourself, OK, the spoils can't all go to one or two or three companies. But to have a company that's about to go public kind of laying out the rules of the road for everybody else, as you mentioned, Google's been public. I think it's going to be hard. I would think Meadow would probably have a hard time with this. You know, unless you told me that this is sort of an Intel story where you thought you were.

6:56I mean, the argument I would imagine if you're open to this is that maybe you'd capture every government contract. Correct. If you are losing to everybody else, I can understand why you'd want to make a deal along these lines to make the administration like you more and choose you. because, look, it's been a huge issue for Anthropic with the issues they've had going with the Defense Department, right? That's been their biggest pushback to this point. If you can capitalize on that, it's probably a smart move for you. So we're talking about it in the capital. We are talking about it in this sort of very economic capitalization perspective.

7:28I do think if you talk to Sam, and I've been talking to him for years about this, he was talking about UBI, universal basic income, and what he thought this could do to the economic forces in our country for years. Dario has talked about this for years. So there is a sort of a larger societal impact question. Particularly when you think about the jobs impact of the guy. And my only point is that it may very well be that in a couple of years from now, if it all goes the way they hope it'll go, that this conversation won't be about whether Google should give it over or Meta should give it over. It'll be like it otherwise doesn't make sense if they don't.

8:07But I don't think we're there yet. The jobs picture, I think, is the important one. And on this Jobs Thursday, as we talk about it, what jobs disruption or destruction comes through as the result of AI? And I think that's still an open question. Well, let me tell you about this op-ed because it touches a little bit upon all of this. Following the government intervention in the rollout of some new AI technology in recent weeks, the FT reporting officials are in talks with AI companies to set voluntary standards around the release of new models. And that could dovetail with a proposal from OpenAI CEO Sam Altman in an op-ed piece that Altman floated the idea of a U.S.-led international forum to establish AI safety standards, assess risks, and make the technology available to countries that follow the rules.

8:54Altman says it's critical that the world set standards before high-performance models are broadly rolled out. And he says the most important decisions about how this technology is used should be made through democratic processes, not by a small number of companies in San Francisco. That I agree with. It's a reasonable thing to think. Apple in talks to buy memory chips from two Chinese companies that appear on a defense department list of companies the U.S. believes support the Chinese military. Bloomberg report saying that Apple is now looking to source the Chinese components because of the worldwide computer memory shortage.

9:29And the report says that CEO Tim Cook has personally appealed to the Trump administration, including Treasury Secretary Scott Besson, about doing so. CNBC has reached out to Apple for a comment. Obviously, this is the huge shortage, just the scramble for chips, what that means for consumers with prices going up around for everything. And again, you can point back to the data centers and the open AI boom for all of those things and prices going up. And that's, again, where you see consumer pushback and voter pushback on some of these issues, too. Clearly. Yeah. OK, love at the top of the Empire State Building, a daredevil couple scaling the iconic building in Manhattan yesterday.

10:12They climbed to the tippy, tippy, tippy top of the building's antenna. It was quite a remarkable video. You can see it right there. I don't want to encourage this, but nearly 1 ,500 feet in the air. They did put up a banner that said, when the power of love beats the love of power, the world knows peace. I think a lot of folks originally thought it was a protest. But then after about a half an hour at the top, congratulations to them. I know it's illegal, but they got engaged up there. The mass climbers. I'm not going to pronounce their names. Vanya Birkas. Vanya Birkas and Angela Nicola. Angela Nicola.

10:50They are stars of the 2024 Netflix documentary Skywalkers, a love story. They were taken into custody by the NYPD and faced several charges, including reckless endangerment, criminal mischief, possession of burglars, tools and trespassing. But they clearly got the attention of not just New York, but the world yesterday. That, I think, was ultimately the goal. Cheese will be next. Coming up on SquawkPod, the future of compute for big tech and for consumers with former Meta Chief Technology Officer Mike Schroepfer. If you think about how much of a battery you lug around with you between your laptop and your iPhone, it's exponentially larger than it was 20 years ago.

11:37I think you'll be using way more compute in five years than you are today.

11:49little as$1 with no account fees or trade commissions on U.S. stocks and ETFs. Hmm, that's music to my ears. I can only talk. Investing involves risk, including risk of loss. Zero account fees apply to retail brokerage accounts only. $0 commission does not apply to customers designated by Fidelity as a professional equity trader. A limited number of ETFs are subject to a service fee of$100. See details at Fidelity.com slash commissions. Fidelity Brokerage Services, LLC, member NYSE SIPC. You want to get your backyard summer ready, but you don't want to break the bank? Wayfair gets it. Planning on dining al fresco or relaxing poolside?

12:21Wayfair has everything you need to prep your space. Shop now and save up to 70 % off during Wayfair's 4th of July clearance. Score huge deals on outdoor furniture, area rugs, and more. We're talking thousands of products for every style and budget. Plus, surprise flash deals July 6th. Don't wait. Shop Wayfair's 4th of July clearance now through July 6th at wayfair.com. How does America stay so beautiful at 250? By getting its Beautyrest. This July 4th, save up to$1 ,000 on Beautyrest black mattresses and adjustable base sets featuring pocketed coil technology for our most advanced motion separation.

12:57Visit a Beautyrest retailer today. Welcome back to Squawk Pod, today with Becky Quick and Andrew Ross-Organ. Here's Becky. Chairs of the company Bending Spoons are lower in the pre-market this morning, down by about 7 percent. But that's because it was up about 40 percent in its debut trading day yesterday. That stock has been one we're going to be watching very closely. We've been talking to Luca Ferrari, who is the founder of the company. We've spoken with him several times over the last few years. Bending Spoons is an Italian holding company that has acquired some of the formerly hot internet brands, names like AOL, Vimeo, Eventbrite, also Evernote.

13:36They kind of turn these companies around by basically laying off a lot of people who work there, having their own engineers re-engineer and put in new features into some of these things. They've done pretty well with it so far. But again, we'll keep an eye on where those shares continue to trade. OK, Apple reportedly preparing to launch at least five new iPhone models through early next year. This according to the Nikkei Asia company also asking suppliers to prepare manufacturing for about 10 million foldable iPhones this year. It's up from an earlier forecast of about 7 million to 8 million units.

14:10There's been speculation that that phone, by the way, could cost upwards of$2 ,000. This is the foldable phone, given both the memory and price increases and just what it's going to be. Because it's going to obviously have a screen on the outside and then a screen on the inside that then folds. Meantime, GigaScale Capital just raising a$250 million fund to invest in early-stage physical economy startups for climate impact, building the next generation of real-world infrastructure. This from energy and industrial materials to AI hardware. That's also going to be shaping future data centers. Doing this right now is Mike Schroepfer.

14:50He's GigaScale Capital founder and a former chief technology officer at Meta. Good morning to you. What does it mean to be investing in the physical state of all of this? Yeah, I mean, the thesis was simple. We spent 15 years with the theory that software is eating the world. I think AI is eating software. And what's left is competition in the physical infrastructure. We're seeing power, need for electrons, land, network capacity, materials, ended up being the bottleneck to many businesses today. And at the same time, there's a whole raft of new technologies that are arriving that allow us to build this infrastructure, electrons, materials, etc., physical AI, better, faster, cheaper, cleaner, and in the United States.

15:35How concerned are you that we are in the midst of an overbuild? Well, there's certainly a lot of building going on. And every time in history when humans have had growth like this, there's been some overbuild. I think at the same time, you're seeing companies making real money and lots of demand. So I think, you know, build and demand will be healthy for a few years. Well, to the extent that you have any anxiety about it, and we talk to lots of people who come on the air all the time, and we have questions about these large language models, the new frontiers, whether it ultimately becomes commoditized.

16:12Does all of that matter or not to the build out on the infrastructure side? I mean, I think we're still just at the beginning of the deployment phase of AI into the real world. It's a fast technology transition. But if you think about, you know, the iPhone and the App Store coming out in, what, 2007, 2008, it took many, many, many, many years, almost a decade to get really full diffusion of apps and all of the business built on top of that. So, you know, we're just 12, 18 months, 24 months in normal businesses trying to deploy AI. So I think we have lots of demand. On the same time, we're seeing lots of opportunity to optimize the way these models work, whether using smaller models or open source models or new hardware technologies.

16:56We invested in one company called Fractile that's got a new chip coming out in a few years. There are lots of opportunities for 10x, 100x optimizations in the use of that infrastructure. So I think we're going to see a massive growth in demand, and we're also going to see a massive growth in efficiency. And then the other piece of this, though, is, you know, for a long time, people have compared all these data centers to, you know, the build out of fiber. I'm thinking late 90s. And on one end, I think to myself, oh, fiber that, you know, even if you thought there was an overbuild, we got to use that fiber.

17:29But that was like laying the train tracks, you know, down. And you didn't have to replace the fiber, really. The question I have to you is, you know, as we develop all this, whether the chips ultimately not that they need to be replaced because they don't work after a couple of years, but more because you're going to want chips that are the latest, greatest chips in the same way that I imagine you replace your iPhone every year or two. This is the most surprising thing. You know, I thought the same thing, but Nvidia H100s, which are ancient by today's standards, you know, are still mostly sold out with hosting providers right now.

18:04People are finding ways to leverage that capacity. So I think, you know, the question is, will the average person, you know, use a whole heck of a lot more compute in five years than they do now? I think the answer is yes. If you think about how much of a battery you lug around with you between your laptop and your iPhone, it's exponentially larger than it was 20 years ago. I think you'll be using way more compute in five years than you are today. And that is, you know, a huge room to grow to use all this infrastructure. What do you think about space as in up there? I mean, I think we have a lot of places to build here before we start launching things into orbit.

18:43I mean, we backed early a company that's building offshore floating data centers. And my napkin mass says it's about 100 times cheaper to put a ton of steel in the open ocean than it is to put it into space. So, you know, I think it's really cool and sci-fi and fun. But the economics look challenging to launch my very expensive servers into orbit. And as a former Meta guy, how do you think about their AI efforts? How do you think about all the how do you think about the big frontier model folks? And I know I and A.I. is obviously I mean, Meta is obviously trying to be part of that. I mean, it's it's no one has done well over the long term betting against Mark.

19:22He's still in founder mode, still involved in the company day to day. Meta does an incredible job building infrastructure, recruiting technical talent. They have a huge set of data. I think, you know, I would be long on Meta and what they're going to do for it. If you were betting on one of these companies, though, who would you bet on? You know, what's funny is it switches every 12 months. You know, 12 months ago, everyone thought OpenAI was untouchable. Now it's Anthropic. I mean, Anthropic is pulling in a tremendous amount of talent all the time. I just saw, you know, four to six former CTOs have all joined as just like members of the tech staff at Anthropic.

19:59So currently, in terms of leading models, Anthropic looks like they're in a privileged position. But I think it's not one company is going to win. I think a lot of companies are going to end up playing a big part in the race in the future. And then I don't know if you had an opportunity to hear us earlier, but I'd love for you to weigh in on this headline we've been talking about, which is this story from the FT that Sam Altman has effectively proposed, not just floated, but proposed some kind of effort for the U.S. government to take a stake in a company like AI, like a 5 percent stake, and also take stakes in all of the other companies, including your former company, Meta and Google and Anthropic and the like.

20:39What do you make of that? You know, I didn't see that, so I don't have time to really react to it. I'm a free market capitalist, so I think that, you know, government support is great, but I think we should let the free markets sort of decide who's the best product out there. We're going to leave it on that note on the 250th birthday of the United States. Mike, thank you for joining us very, very much this morning. Happy for you. Great to be here. Next on Squawk Pod, we are celebrating America's 250th anniversary with author Walter Isaacson. He penned an entire book to honor this country's history, and he's applying the values of our founders to today's politics.

21:21If I were to look at any candidate or what's happening, I'd say, Is this somebody who's going to unify us or is this somebody who's going to do sort of performative partisan ways to divide us? We'll be right back. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast, or find Schwab Market Update wherever you get your podcasts.

22:06Celebrate America's 250th birthday with a perfect night's sleep. This July 4th, save up to$600 on Serta Perfect Sleeper X mattresses and adjustable base sets with the Q4 support system that helps relieve aches and back pain. Visit Asserta Retailer today. Thursday, July 16th, CNBC Sport and Boardroom join Fanatics Fest for Game Plan. Groundbreaking ideas shaping the future of sports and entertainment. Request your invite at CNBCEvents.com slash Game Plan.

22:39You're listening to Squawk Pod. As the country gears up for its 250th birthday, we are joined by Walter Isaacson. And he, of course, is the advisor partner with Perella Weinberg, Tulane, a university professor, a CNBC contributor and the author of The Greatest Sentence Ever Written, a reference to the first sentence of the Declaration of Independence and a book that is worth reading or maybe rereading this this weekend. Have you gone to reread it? Oh, no. I think we should all reread the Declaration of Independence. It's something you should do on July 4th. It's a shame that America 250 is getting itself in competition with Freedom 250, that in the way we're celebrating this birthday on the federal level is all kind of confused and contentious.

23:27So I think at the local level, we should all read the Declaration of Independence, eat a hot dog, and remember how lucky we are. OK, so what would the founding fathers think now? I think that Franklin would love Benjamin Franklin would love the technology. I'm just listening to your show on everything, including A.I. and data centers. He was into that. But they thought Franklin's great line when they come out with the Constitution is, you know, somebody says, what have you brought in there? A republic, madam, if you can keep it. And I think they would feel, wait a minute. We pulled together, we made a lot of compromises, some of them difficult, maybe even wrong compromises.

24:06But you've got to be able to keep this country together. As somebody who's spent a lot of time looking at this document and understanding these people, what do you think they would have thought was a mistake that they made today? Well, I think they thought that the Senate in particular, that we hold these truths to be self-evident that all men are created equal, was not obviously a truth about America at the time when one-fifth of the people on the continent were enslaved, so many things like that, but that it was a forcing mechanism. It was an aspiration. And so they would look at history at how did we do in making that sentence a bit better?

24:44Four score and seven years after they write it, Lincoln invokes it at Gettysburg, when he's burying more than 7 ,000 young men who have died to make that sentence more true. Dr. King invokes it. Seneca Falls Declaration of Women invokes it. So I think they wouldn't have said, hey, we wrote a perfect sentence. But they would say, hey, we did a mission statement. And what would they think of the Supreme Court today? I think, you know, maybe I'm optimistic. And I think the Supreme Court is thoughtful and balanced at times. Obviously, we all disagree with certain decisions one way or the other. But it does seem to be the branch of government right now that's trying to do balance.