A $6.5B Gift for Kid Accounts & OpenAI’s ‘Code Red’ 12/2/25

0:00Bring in show music, please. This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, Investing in America's Children. Hedge fund manager Brad Gerstner has been suggesting for years and seeding investment accounts for children. Today, billionaire Michael Dell and his wife announce a landmark gift of$6 billion to fund tax-advantaged accounts, dubbed Trump Accounts, for 25 million kids. Gerstner joins us on the announcement. We're coming together on the National Day of Giving. This truly is something that we can all get united around. And what it can do to change views of ownership and capitalism in America.

0:45It takes all of us, every family, every company, every philanthropist coming together to solve this problem. And Heaven Hill Distillery, behind legacy brands like Elijah Craig and Evan Williams, has remained family-owned and operated for 90 years. Chairman Max Shapira on consumer taste for spirits. Kentucky bourbon and all the spilled spirits are discretionary expenditure, and those discretionary funds are being squeezed and squeezed mightily by almost all consumers. Plus, cryptocurrencies plunge, Costco suing the president for tariff refunds, And OpenAI's Sam Altman is calling a code red to improve chat GPT in the face of artificial intelligence competition.

1:35It's moving so fast. Do we want it to get there? Not sure. It's Tuesday, December 2nd, 2025, and SquawkPod 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're live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernan. Hello. Good to see you. Andrew's off today. Yesterday, we did see a little bit of turbulence in the markets. First trading day of the month, and it was the first down day for the S &P 500, the NASDAQ, and the Dow in five sessions. So it broke a five-day winning streak.

2:14Could have been much worse yesterday, obviously, for the NASDAQ anyway. The Dow is down 400, rallied back to not being as bad, but then finished on close to, I think, close to the lows, although the NASDAQ paired some of its losses, which has correlated maybe to this next story more than the Dow. We're talking about crypto. As we're watching Bitcoin, big stories today. Okay, crypto sell-off worsens. That's Wall Street Journal, Lisa. That's all other people saying. 60 is a possibility, which wouldn't be - Is that just technical perspective? It's just some guy that thinks with some of the leverage that's in the system right now, that he just, I don't know if he picked that number out of his - Toes?

3:07Yeah, head, butt, wherever he picked it. But I don't know whether that, but, you know, it was a 20 and it went to three, I think. 20 ,000 went to three. And there was a time I think it went to 65 and then went to 17. So these are the kind of things that have happened. As you mentioned, though, that makes that an issue. That's why Michael Saylor at Strategy is now kind of beefing things up and saying, you know. I think it's, we will talk about, yeah, about the market cap of Strategy. But Bitcoin had its worst, and cryptocurrency, worst day since March. Bitcoin fell about 6%, and that's a start the week after.

3:45There's already been some tremors prior to that. And here's strategy. Those shares fell more than 10 % yesterday before closing about 3 % lower. The company cut its 2025 earnings forecast and announced plans for a$1.4 billion reserve to support debt interest payments and two years of dividends on some of those preferred stocks that Michael Saylor has outlined the strategy of strategy on this show many times. And our eyes kind of glaze over. We understand about half of it. Lucky. It's funny because it's based on something that people don't really understand. Not all people really understand crypto that well.

4:28And then you start doing derivatives of crypto and your head starts spinning. In a statement, strategy founder Michael Saylor said the fund that he just set up will help the company weather the short-term market volatility. And strategy stock fell by more than a third in the last month. It owns about 650 ,000 bitcoins. I don't understand everything about cryptocurrency for sure. But leverage is something that's a little easier to understand. And that's always been the concern there. If you take something that's pretty volatile to begin with and then lever it up, what happens with the underlying issues?

5:03And that's why he's putting up this$1.4 billion fund to try and assure people that, no, we're not going to be taken down by volatility. When we've had him on, I've asked him, you keep loading, you know, you're loading up at 60 ,000. It's gone to 17 ,000. Were you sleeping OK and wondering about whether they're in there were rumors? Maybe there could be some kind of margin calls or something. And he has always been steadfast. And we'll have him on again soon, hopefully, to be able to talk about all these things. It's weird that the hardcore Bitcoin hodler, if it was 90 % hodlers, you wouldn't get this kind of volatility.

5:48So there's definitely some, it's not all strong hands and people that are in it forever. OpenAI sounding an alert on its position in the AI race amid advances by other companies. We've heard and we've seen this, particularly what happened in the last couple of weeks with Alphabet and its latest iteration, which a lot of people say is better than what they're seeing from ChatGPT right now. Citing an internal OpenAI memo, reports say that the CEO there, Sam Altman, told employees he was declaring a code red to improve ChatGPT and is delaying other projects at the company, like advertising. OpenAI's place in the AI ecosystem has come under scrutiny after the release of Google's high-performing Gemini 3 model.

6:33The head of ChatGPT said on X that OpenAI's goal is now, in his words, to keep making ChatGPT more capable. I guess we should have realized that the demise of Google search is greatly exaggerated. Why wouldn't the leading search firm vault into one of the leading AI firms. Well, there are all these stories, too, about Sergey Brin going back into founder mode, that he was kind of challenged by someone at OpenAI to say, this is like the greatest revolution in computing that's ever taken place. How can you be sitting on the same side? I mean, in the past, legacy companies have missed the next big move.

7:13And that's why I was saying, OK, Google is, you know, own search, but there's no reason to think that their birthright, that they'll be the leading AI company, but they went ahead and did it. And when you have founders who get reengaged and energized, I think anything can happen. I don't have the discerning ability to tell who's great and who's not. But the industry standards that have been run on some of these things, I was reading a 10.1 the other day and where they come out ahead. Look, you've also got perplexity that is getting picked up by businesses in some ways, too. So there's a constant...

7:48But one might be good at coding. One might be good at software. One might be good at video. One might be good at consumer applications. Yeah. There's, you know, where the consumer wants to get a little chattier with you. Has anyone gotten past Gigo and just scraping stuff to give you answers that it has no idea? It still can't think that this is, it still can't analyze. Because I see it all the time. Yeah. It gives me answers and it's like, you are still just a glorified search engine. You're not doing any real. Actual. Right. Analytical thinking. It's not like it's called some generative, I guess.

8:30We're not there yet, I don't think. But it's moving so fast. Do we want it to get there? Not sure. We are getting some preliminary numbers on U.S. Cyber Monday shopping. Adobe Analytics says that online spending was up four and a half percent from midnight through 630 p.m. Eastern time last this year versus last year. The company projected that shoppers would spend about 14 billion dollars by the end of the day. That would bring online spending from Thanksgiving through yesterday to close to 44 billion dollars. And I remember when the increase is like four and a half percent. That sounds pretty good for retail sales for cyber shopping, for online shopping.

9:11The numbers back in like 1999, 2000, 2001, the numbers were growing by two, three hundred percent. And it was always that it was it was a much smaller number. So you saw your increases. Now you're getting to where online shopping is is getting so significantly large. Yeah. That you're now talking about regular returns or increases of four and a half percent, which you could see in comp store sales on a good year, too. Yeah. Retail giant Costco is joining a lawsuit against the Trump administration seeking tariff refunds. Eamon Javers joins us right now with more from Washington. And Eamon, this now is something where you see a big retailer like that and maybe you sit up and pay a little more attention to it.

9:52Yeah, this is one of the biggest names, Becky. In a 17-page lawsuit filed Friday against U.S. Customs and Border Protection, Costco said it has to act now because it's facing a December 15th deadline for a final tally of its tariffs this year. And that Customs has already denied Costco's request for an extension given that these tariffs are being litigated in the Supreme Court right now. So the company also says that firms that paid these tariffs under the law in question are not necessarily going to be granted refunds unless they take independent action against the government, which is why they're doing this.

10:27Costco is asking the U.S. Court of International Trade for a declaration that collecting tariffs under the International Emergency Economic Powers Act, as the Trump administration has done in many cases, is actually illegal. And the company wants an injunction blocking further duties, as well as a full refund of all tariffs paid under the statute this year. Though importantly here, Costco does not reveal how much these tariffs have cost the company so far. A White House spokesman said yesterday, The economic consequences of the failure to uphold President Trump's lawful tariffs are enormous, and this suit highlights that fact.

11:04The White House looks forward to the Supreme Court's speedy and proper resolution of this matter. Dozens of other companies have filed similar lawsuits. Remember, President Trump invoked the International Emergency Economic Powers Act to impose many of his tariffs earlier this year. But in August, the U.S. Court of Appeals for the Federal Circuit upheld a prior decision that found that Trump did not have that power under the law. The Supreme Court has agreed to take up the case, but it's not clear when a decision might come down, guys. So it could be any day. And you've seen the president posting about this again and again on social media, hammering home just how important he thinks a resolution in his favor would be.

11:45Eamon, do you get the sense that other big companies are going to join this lawsuit as a result of Costco kind of stepping up? I always wondered if they weren't joining it because they didn't really want to stick their heads up and risk drawing the ire of the administration. Yeah, we've seen some companies file suits here. Revlon is one of the biggest that's already taken action. A lot of smaller names, though, to be honest, given the scale of the impact of these tariffs. I think you're right. I think a lot of companies have been reluctant to go this far in opposing the administration. But as Costco said in their filing, they're facing this December 15th deadline.

12:18And so that kind of forced their hand. OK, amen. Thank you. You bet. Next on Squawk Pod, the major Giving Tuesday gift from Michael Dell of Dell Computers. It's$6 billion to jumpstart the president's project for Trump accounts, investment vehicles for American children. Hedge funder Rod Gerstner, an early proponent of the idea, joins us next. The idea was to start with the class of 26, and then it would move forward with every subsequent class. And the president and members of Congress said, hey, why don't we expand it to every kid under the age of 18?

12:58This is Squawk Pod today with Joe Kernan and Becky Quick. Standby, Joe. Here's Mike. You're watching Squawk Box on CNBC. I'm Joe Kernan along with Becky Quick. Andrew is off today. It is Giving Tuesday and in the spirit of giving, Michael and Susan Dell are announcing a$6.25 billion gift to be paid directly into accounts of 25 million American children. That works out to about$250 per child, and it's designed to accelerate the impact of Invest America. That's the new national program that gives every eligible U.S. child a savings and investment account that they can grow over time. Here with more details on that gift and on Invest America is Brad Gerstner.

13:40He's a champion of the cause. He's been talking about it here on Squawk Box and all over the place from the beginning. Brad, we can't believe you actually got this done. Congratulations. It's incredible to be here and incredible to be here on Giving Tuesday with this announcement. I mean, this is one of the largest gifts in the history of the country. I think the largest to children. Right. Largest to children. And by the way, Joe, it's not going to a charity that will then distribute some of the money to children. 100 % of this is going directly into the private accounts of these children would have been impossible but for the passage of the Invest America Act.

14:14I think what's important about this, too, because I always thought it was a little unfair that it went to kids who were only born after a certain date. What about the kids who were born the week before? I love what Michael and Susan Dell are doing here, which is to say we're going to take care of a lot of the kids that were born after, before those dates, who are a little older than that. And remember, when I first came on, the idea was to start with the class of 26 and then it would move forward with every subsequent class. And the president and members of Congress said, hey, why don't we expand it to every kid under the age of 18?

14:42But we couldn't afford to give$1 ,000 to every kid under the age of 18. So we're really looking now to the power of philanthropy, the power of corporations. There's an incredible joint statement, joint letter out this morning from Senator Booker and Senator Cruz coming together, like in this day and age, that bipartisanship, saying that every company should contribute to these accounts. And I've already announced here Uber and Nvidia, you know, companies like T-Mobile and iHeart are all going to contribute to these accounts. It's a Trump account. Booker? That must have been hard for him. Listen, we're coming together on the National Day of Giving.

15:17This truly is something that we can all get united around. And I will tell you this. There's tremendous support in the philanthropic community. Michael and I will be leading the Invest America Giving Council, talking to all of these philanthropists, right, on both sides of the aisle. in the corporate community, moms and dads, churches and synagogues. The magic of this is these are privately owned and anybody can contribute to these accounts. So it's unlike just a charitable contribution. This is really a new direct giving platform that's universal for every child born in America. I love the idea for this.

15:51How do you then make sure that kids understand what to do with this? Because that's the question, too. It seems like the easiest way to fix things, give money to the people who need it. How do you then give them the tools to understand that if I continue to invest in this, if I continue to put money aside, save instead of spend, this is where I wind up. Well, the place you start is they actually need to be able to open their phone and see that they have a little skin in the game. Right. If you don't have anything and your parents don't have anything, it's hard to get excited about learning about financial literacy, stocks, etc.

16:23Now everybody's going to have that. 30 states already require a semester of financial literacy. I expect, and you will hear some announcements in the months ahead about efforts at the state level, financial literacy threaded in public education, because now the teacher can say, open up your phone, open up your Invest America account. Let's talk about how those stock, what it means to own a stock. Let's talk about the compounding. Let's talk about what it would do if you added another 20 bucks a month to that account. So I think it gives us a platform for literacy and education around finances that we desperately need in the country.

16:57Go big or go home for Michael. I was thinking that's a lot of money, but he's doing all right. I mean, Joe, think about this. We have the Giving Pledge, right? I think we're one of the most, it's Giving Tuesday. We're one of the most giving countries in the history of the world. Right? Think about Europe, where they had dynastic trusts, generation skipping trusts. Everybody was devising a scheme to hold on to the money. And yet in this country, we have so many people who said, I want to give away the vast majority of my wealth during my lifetime i think that's unique in the history of the world but it's very difficult to give away money at this scale by billionaires and you think will senator warren say wow here's a good one a good billionaire that's not a leech on society or probably i'm not going to go there today joe it's the national day of giving it's about a unity let's give him some grief and we got we got people on both sides of the aisle who who are coming together to support this i think that's what you'll hear later today from when we're in washington dc we're certainly going to be meeting with folks on both sides.

17:58It takes all of us, every family, every company, every philanthropist coming together to solve this problem. And I think we're not only bottling up hope for every one of these kids, right? But we're aligning all these kids with the future of capitalism and the future of free markets, which I think is critical as we enter this age of AI. Again, congratulations. I am amazed that you were able to get this done. So really, congratulations. And to see this continuing to grow. Thank you for giving us a platform. I hope CNBC stays involved. I think that this can be, you know, something that we a whole new audience.

18:32Right. A whole new feature we can talk to these kids about. Wouldn't have gotten done without us getting the word out there. But but today is all about Michael and Susan. It's an extraordinary gift to the future of this country. It will help if we start kids early on the benefits of free markets and capitalism. 100 percent. I know you're not going to go. You say you're not going to talk about anything interesting. But I mean, we are at a point where 51 percent of our youth think that socialism is a better. We've got we've got a mayor named Mimdani now. And that is a devastating risk to the country.

19:04Less than half a kids, people under the age of 40, have a positive view of capitalism. But as the president has said, when you're left out and left behind, when you have no skin in the game, it's Peter Thiel's, you know, famous tweet that that went around over the last few weeks. When you have no ownership, it's a lot easier to want to burn the house down. But the fact of the matter is when every one of these kids opens up their phone, sees they own a little slice of Microsoft, of NVIDIA, it's a lot easier to get excited about capitalism. This is the first thing we've done in the history of the country.

19:37We're creating a private prosperity account for every child. They will all be in the game. The president's Main Street agenda, this is getting all of those people on Main Street, folks where I'm from in rural Indiana who don't have anything, feel left out and left behind. This gets them on the side of the upside of America. We got to get everybody believing in the American dream again. And there's no reason not to. We have the most dynamic economy in the world today. But everybody needs to share in that upside. This gets them going. This gets that little snowball going. The$250 from the Dells is just the beginning.

20:11Once that snowball goes, we know that parents and others will add to the account. Savers save more. And by the way, I didn't read the rest of the introduction when we had you here. I think most of our viewers know you're the head of Altimeter Capital. You're a big tech investment firm. You've got top holdings that include NVIDIA, Amazon, Alphabet, OpenAI, Microsoft, lots of others. So let's talk a little bit about what you're seeing in the tech economy, in the broader economy, and where things are headed. Because there's been a lot more volatility lately. Yeah, I happen to think that volatility is good.

20:43And let me tell you why. We're coming up on the third anniversary of ChatGPT. We've come a long way fast. You know, you've seen NVIDIA add almost 200 billion dollars of revenue in the last three years. Truly extraordinary. Transformational phase shift super cycle going on in our economy. It added 100 basis points to GDP this year. But remember, this year we had two 25 percent drawdowns in NVIDIA. It hit 90 bucks earlier in the year on the deep seek scare. Right. Right. And so there's going to be volatility when you're early in these phase shifts. Right. That's that wall of worry prevents the bubble that everybody's worried about.

21:22And when you look at the multiples today, take Nvidia, for example, I think it's trading at 23, 24 times fully taxed earnings on next year's numbers, 18 times on 27 numbers. That is not the stuff that bubbles are made of. Right. I think the rest of the MAG-7 all trades somewhere between 25 and 30 times, maybe Meta's at 21 times earnings. So to me, taking a little of the gas out, having some of these conversations and debate, very healthy. And what I see out there right now is a tremendous amount of progress on the model side. But I think the diffusion, the rate at which this transforms lives, both consumer lives and enterprise, that takes time.

22:04and that's what we're seeing play out. We're seeing the debates about NVIDIA versus Broadcom, Google versus OpenAI. Well, yes, and that's what I was going to get to. Is the new version of Gemini better than ChatGPT? It's terrific. It's terrific. Remember, a year ago, we were counting, you know, Google out of the equation. I've said on Twitter and otherwise, we own Google. I've said it's very difficult to pick a winner here, so you can own them all. You can own OpenAI and Anthropic. You can own Google and Microsoft. off. And I think at this phase, you know, you probably should do that. I think Google's done an incredible job.

22:38Remember a year ago, Satya was saying, you know, we're making Google dance. I think Sundar is making people do a little dancing today. And so that is that's part of the competitive dynamic that I think is great for the country. It's what's going to keep us on the leading edge. That's great for the technology spending. There are a lot of questions about what this means for the business world, too, for enterprise. Yesterday, Jensen Wong was on Squawk on the street with Jim Cramer talking a little bit about that deal that they did with Synopsys. And that was pretty interesting to hear how it's got to be able to be used by these big industrial companies to be able to really make the next steps.

23:15And Jensen made the point that I thought was really interesting that 90 percent accuracy is OK if you're dealing with consumers. It is not OK if you're in any of these big enterprise issues. That's right. That's right. Think about it this way. The machine that builds the machine. Right. That's really what he's talking about. We Elon used to talk about, we can't get to where we need to get to with electric cars until we first build the machine. A totally new way to manufacture cars that can drive down the cost. And that's what you see Jensen talking about, for example, in the design of chips. That you really imbue the entire industrial economy with AI.

23:49And all of those benefits lie before us. I think we're heading into a very significant productivity boom. I've talked about the golden age of margin expansion for a lot of industrial and other companies in America that can simply do more with less. Our economy is going to see that productivity tailwind. And, you know, but it's never a straight line up and to the right, Becky. And so I think for people who are watching it, you know, you've got to anticipate we're going to have volatility. I remember early in the Internet super cycle, Google would be up five or 10 percent a day early in the. Remember when Facebook went public, right?

24:25And then it broke$20 a share, right? It broke issuance because everybody was worried, could they possibly monetize on these mobile devices? When you're early in these super cycles, there's a lot of questions. And that's where we are today. You're talking about the winners that came out of that. There was a lot of volatility in Pets.com, too. For sure. Or a web van. And by the way, those companies went bust. And there are going to be companies in this cycle that go bust. There are a thousand companies in Silicon Valley valued over a billion dollars that are trying to raise money. It's not going to be equally easy for all of them.

24:55Right. But I think that's part of the process of creative destruction. Right. It's OK that, you know, that some companies aren't going to make it. We talked earlier this morning about some comments from Masa-san, who said that he didn't want to sell his entire NVIDIA stake, but he had to in order to be able to put it into OpenAI. You've got bids on bets on both of those companies. Yes. What do you think about that? I wish my bet in OpenAI was as big as Masa's. But, you know, you sacrifice your Nvidia for it. No, like I said, like I said, Nvidia has been an extraordinary winner. We invested in Nvidia in December of 22, right after we saw chat GPT, the stocks up over 10, 10 times, 10 X over that period of time.