A Festivus Miracle: AI, Tech, & Crypto in 2026 12/23/25

0:00Bring in show music please. This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, what's brewing for tech and AI in 2026? From commoditization to consolidation to competition, Facebook's former general counsel and chief privacy officer Chris Kelly joins us. I do think that you'll see a number of Chinese players come to the fore, that especially if the NVIDIA GPUs that are being sold to China now come online. Then what awaits in 2026 trading after Coinbase's newest prediction markets acquisition? Professional capital management's Anthony Pompliano says it's all about, well, everything.

0:46One of the things that's really interesting is they're going after this everything exchange. They basically want you to be able to buy public stocks, crypto, prediction markets, perps, everything on one exchange. Plus, a Wegovy pill has been approved. Jim Beam is halting bourbon production in Kentucky for an entire year. And the Chiefs will have a new home. That's close to home. Did you know that Missouri and Kansas were on opposite sides in the Civil War, Sorkin, which is weird? That I did not know. It's Tuesday, December 23rd. Happy Festivus. Christmas, Adam. The day before, the night before Christmas.

1:23We'll get you a mocktail. Squawk Pod begins right now. Stand, Andrew, bye. In three, two, one, cue, Andrew. Good morning and welcome to Squawk Box right here on CNBC. I'm Andrew Osorkin along with Joe Kernan. What are we? A day? We're now, we're a day before Christmas Eve. Can you say that? What would that be? That would be the eve of Christmas Eve? Christmas Eve Eve. Joe, is that Christmas Eve Eve? So we're on the Christmas Eve Eve. Becky is off celebrating Christmas Eve Eve. She'll be back a little bit later next week. But we've got a lot going on this morning. Shares of Danish drug maker Novo Nordisk are jumping.

2:05Yep, you might have a pill of Wagovi. The FDA approving the company's weight loss pill. Novo Nordisk says starting doses will be available early next month. It's cheaper. There's no needles. It contains, the pill does, semiglutide. or semaglutide. That is the same. That is the active ingredient in injectable Wigovi and Ozempic. In a more than year long study, participants who took 25 milligrams of it orally once a day lost an average of more than 16 percent of their body weight versus under 3 percent for those that were on a placebo. The pill will be sold under the Wigovi brand name. won approval for chronic weight management in adults who are overweight or have obesity and at least one health related health condition.

2:52And Novo Nordisch shares have struggled over the past year as it has faced increasing competition from Eli Lilly. And this may not last too long, being the only one, because Lilly's weight loss pill could be approved as soon as March. So that's what I said. I mean, I really did think about it, Andrew, because I was, you know, I'm not going to use a needle to do it. I was thinking, wow, cheaper, like 100 bucks a month or something is what it costs. And just take a pill. And I don't know, I like to eat. I don't want to, I don't want to lose my. But I don't think it changes your sense of the love of the game or the food or the taste.

3:33I don't think that's what it does to you. I think it, look, over the weekend, And I had a friend, you know my love for donuts. I had a friend come over and he brought, you know, those Rye's donuts from Wilton, Connecticut. I think they're the best donuts in the country. And I went to town. I mean, it wasn't just like, could I have half of one or one or maybe one and a half or maybe two. You didn't enjoy that? You didn't enjoy that? Oh, I enjoyed every second of it. The question is, could I have enjoyed a little bit less of it? Because I didn't enjoy it a couple hours later. Okay. I can see that.

4:09When I thought, I've got to go to the gym. Oh, I thought you were going to say, I've got to go to the John. That's what I thought you were going to say. Well, that probably, too. So don't you think that if you had the pill, this would help? No, no. It seems like it's cheating. You're, like, fooling your brain into thinking you're not hungry. The thing is, I think it's got other health benefits, too. Like, really, it's significant benefits, this compound. I don't know. The jury's still out on what I'm thinking about it. It seems like cheating, though, to me. You really need to exercise and, you know, not graze, not graze.

4:44Leesman's telling me it's also Festivus. So happy Festivus, which that's for people for the rest of us, I think, is what Jerry Stiller used to say. Festivus for the rest of us. Right. For those that don't do either Hanukkah or Kwanzaa or Christmas. This is not a Festivus situation, I don't think, but maybe depends which side of this you're on. President Trump saying the U.S. will keep tankers and crude oil intercepted near Venezuela. They don't think of this as best of us. About two weeks ago, the U.S. seized a ship carrying more than a million barrels of oil. It intercepted a second ship over the weekend, and the president confirmed that the U.S.

5:21is pursuing a third. Now, Trump has ordered a blockade of ships heading to or from Venezuela as he steps up pressure on the country's president. Maduro there asked if his goal was to get Maduro to leave office. President Trump said it would be smart for Maduro to step down. So there's always been this question, is this really about regime change or is this about drugs and other things coming in? And it sounds about all that. I guess he got just shellacked in the last Maduro did in the last election. But it didn't matter because he's a strong man. And, you know, they have been and I saw Trump talking yesterday.

6:01I actually liked what the president, what he said yesterday. He goes, you know, a lot of people have looked the other way as they've, you know, just flooded our country with this poison that kills America. He goes, I they said other presidents didn't mind. I do mind. And I don't think this guy's long for. And then as an ancillary benefit, you get Cuba, which has never been, I don't think, great for the people that live there, the regime that's been there. I mean, we have a special envoy for Greenland now, too. So Denmark's not happy. But it's a very activist role towards controlling the Western Hemisphere.

6:41We're going to talk to Victoria Coates. You said we get Cuba. Are we going to get Cuba? No, we're not going to get it. It's just that eventually, I mean, we've always wanted regime change in Cuba. And we thought when Castro died, and it still, and not just, not for our own interest, I don't think. I think that's what I was at. No, because on Greenland, you know, he wants Greenland. That's our own. That's our. Yeah, that's for us. That's right. It's such an important gateway to the Arctic, the, you know, energy and natural resource rich area of the globe. And at the same event where President Trump made those comments about Venezuela, he announced a plan to build a new Trump class of battleships.

7:27The Navy secretary said the ships would feature the biggest guns ever on U.S. warships, as well as nuclear armed cruise missiles. Meantime, President Trump also putting defense companies on notice. He said he's going to meet with executives next week as he looks to force them to speed up weapons production. So we don't want to have executives making 50 million dollars a year, issuing big dividends to everybody and also doing buybacks. and then they say, well, we don't have the money to build the plant. They've got to build plants. Reports say the White House has been working on an executive order that could clamp down on dividends and buybacks at defense companies.

8:09Okay, Joe. Yeah. So we've had debates about buybacks and dividends. This is Elizabeth Warren right here. No, I know. That's why I said at the top, maybe you can get this. It gets very populist at times, and there is an audience for this type of rhetoric. But it's a new world where, I mean, maybe there was a time where we didn't know we weren't depleting our weapons stockpile every year because we, you know, we weren't supplying our allies because there weren't as many conflicts. So I can see what he's saying. The weapons are depleted. But if a company on its own decides that the best use of its capital is to reward shareholders, I mean, what's he talking about?

8:55The dividends. They think dividends only goes to the CEOs. The dividends go to the shareholders, who are the people that are putting up the capital and risking the capital to fund whatever this they decide the management decides to do. So so return to capital through buybacks or dividends is perfectly proper based on what a company is supposed to do. You know, defense contractors do have, I think, more of a responsibility, a bigger maybe responsibility for for the greater good, maybe of the country. You could make that argument, I guess. But if they think like oil companies, remember, for a while, that's all because of that's what I was going to say.

9:34I was going to say that you you've always made the market based argument that I'm making it again. I'm making it again. I think this is that's why I said right at the top of the show. If I say maybe someone can get together with Elizabeth Warren on something, do you think I think it's a good idea? Am I implying that this is a it's topsy-turvy, but I'm not implying this is a well thought out, correct strategy. If I'm throwing her in there. You know, things are, you know, strange bedfellows. It is. You're right. No, it is. No, I don't like I think this. And you heard, what was that? Dividends to these guys that make$50 million.

10:18The dividends, it's a very small amount. I don't know how much the CEOs own of the stock. They probably own some of the stock. Some of the dividends would accrue to them, I guess. But dividends go to shareholders. Stock buyback, that's a return of capital to shareholders. And they're the people that should be deciding on how the company plans out its strategies to succeed. say it loud and say it proud you're on my side now am I going to have to question you may have to rethink your whole view there okay maybe on the weight loss drug what kind of donuts were they did they have bacon on them or anything no no no the store is called Rise I'll give them a shout out it's the Aztec or the Vanilla and it's amazing Love donuts.

11:12Is it all sugar and fat? That's all it is, right? It's not even it. It's all it is. Full on carbs. There's nothing else to it. And fat. Fat, too. Mainlining the sugar, basically. The Kansas City Chiefs announced that they're moving across the Missouri border to Kansas. Six and nine here. You take them. No, that's not why. Lawmakers approved a public-private partnership to fund a$3 billion stadium. which is set to open at the start of the 2031 NFL season. The plan includes entertainment districts surrounding both the stadium and a new headquarters and training facility. The franchise still needs approval from other NFL team owners to relocate.

11:57Officials in Missouri have been pleading to renovate the Chiefs' current home. You know that's Arrowhead. You see it all the time. If you ever drive past on I-70, it's right there. It is aging. They're still working on a package of incentives to try to persuade team owners to stay in the show me state. I was looking at where they're talking about this new facility, training facility right in Olathe, Kansas, which is familiar to me. I had a good buddy on my drives to Colorado and school. And I know Kansas as well, that side of Kansas City. And it's all the same thing, Andrew. There's Kansas City, Kansas City, Kansas City, Kansas.

12:32It's kind of one big Kansas City. So it wouldn't make that big of a difference. But did you know that Missouri and Kansas were on opposite sides in the Civil War circuit, which is weird? That I did not know. There were. That I did not know. It's very weird. Jayhawks and all. I know Kansas well. Love Kansas. America's largest bourbon maker, Jim Beam, is pausing production at its flagship facility in Kentucky. The distiller, owned by Japan's Suntory, said the pause will begin on January 1st and last the entire year. The facility produces about a third of the company's annual output, and bourbon sales have rapidly declined this year after more than 20 years of expansion in the U.S.

13:18The slump is due in part to changing consumer behavior. A recent Gallup poll found that 54 percent of Americans say that they do drink alcohol. That's the lowest level since tracking began way back in 1939. And distillers lost a large market when Canada halted imports of American whiskey in response to President Trump's tariffs. Distillers face a unique challenge. They're producing whiskey today that won't be consumed until it's aged for years, often more than a decade in barrels. And, Andrew, we just I don't think you were here. We just had the gentleman, I think it was Private Equity owns Heaven Hill and some of the other boutique brands.

14:01And we pressed him on how's business. And, you know, you're always going to I mean, if you're in that if you're in the bourbon business, you're going to say, oh, it's you know, you're going to find ways to look at the bright side. But it's tough right now, just alcohol in general. and then we could get into, you know, the changing preferences of the younger generations. Might not even include alcohol. Might include who knows what, cannabis or whatever. But I've never been a brown liquor drinker. You? Me neither. Clear. Clear is better, I think. At best. I can't even do that anymore. You know what I mean?

14:42Unless it's clear wine. We'll get you a mocktail. So, teas will be next. Next on Squawk Pod, the commoditization and consolidation that could be brewing for AI in 2026. Former Facebook General Counsel and Chief Privacy Officer Chris Kelly. I think that there is a bit of a bubble around, hey, we've got to have this constant upward spiral of more GPUs, more power consumption, more data centers. I think that that drive towards efficiency is going to be very real.

15:19Welcome back to Squawk Pod today with Joe Kernan and Andrew Ross-Organ. It's been a tough year this year, trying to keep up with all the incremental advances in AI. Steve Kovach joins us now with what to expect in 2026, given how busy and crazy this past year has been, Steve. Yeah, Andrew. And look, there's this bubbling trend in the AI model race. I've been kind of clocking all year long. We talked about that race between these models that, you know, they do video or image generation. Some are better at coding than others or writing than others. They all improve, though, but they all generally do the same thing.

15:56And what we're really seeing here, guys, is a race towards the commoditization of these LLMs. And there are plenty of examples of that happening this year. I want to use Apple and Microsoft as sort of case studies here to show what I'm talking about. Neither of those companies have a real frontier model like OpenAI or Anthropic. So what they're doing instead is investing and partnering in those to make their products happen. Now, for Apple, of course, earlier this spring, they failed to launch that new AI version of Siri. And they started hinting that they're going to do partnerships with these LLMs instead.

16:28Now, Tim Cook was actually asked this last July on the earnings call if he thought LLMs were becoming commoditized. And he gave kind of an interesting answer here, commenting on saying commenting on that would give away Apple's strategy. But later in the year when I met with him, I impressed him a little bit more on that. And he talked even more about partnering with these other LLMs. He told me, in addition to the current integration that you have on your iPhone now with ChatGBT, quote, our intention is to integrate with more people over time. Think about that ahead of that big Siri launch next spring.

17:01Now, Microsoft, they've been hosting Anthropic models and they are also investing up to$5 billion in the company. They just announced that last month. They also started using Anthropic for some co-pilot products in addition to OpenAI. Now, they also struck that new deal with OpenAI, which frees OpenAI up to work with other cloud providers, while Microsoft can work with more model makers. I spoke with Judson Althoff. He's the commercial CEO over at Microsoft last month, and he told me customers are actually asking for more model options in his products. He also said they originally invested in OpenAI to make that a standard.

17:40Now they're doing the same with Anthropic. Now let's look ahead to next year, what all this can mean and this commoditization in action. We're going to have that Siri, the new version with AI powered by a third party LLM, likely Google's Gemini, although Anthropic has been in the conversation and it could be a future where you just choose your own model within Siri. And also, I'm expecting to see CoPilot adopt Anthropic for more features now that that relationship has tightened up. But look, it's becoming this sort of ultimate commodity. Users don't really see what LLM they're using. It's that product layer on top of it that is really going to matter, guys.

18:17So here's the question. If you do ultimately think that all these LLMs converge in some way that makes them a commodity, what does that ultimately mean towards all the investment that's going into that space? Not necessarily the privatization of it, but the actual underlying LLM. Yeah, and that's what's interesting. I was talking with Frank Holland about this last hour. We're going to likely see some consolidation. I mean, we're already seeing some winners bubble up. Jim Cramer is talking about this on Squawk on the Street yesterday, how it's really going to come down to Anthropic, Google, and OpenAI, and everyone else is going to kind of race for that fourth place.

18:52I know XAI just got that big deal with the military yesterday, but we'll have to see how that forms out. But right now, it's just going to be people building their software layers on top of it and trying to productize it. Right now, Andrew, the best company at making products out of this is OpenAI. But we're starting to see hints that Apple and others are going to do it, too, next year. OK, Steve, want to thank you. Wish you a happy holidays. We don't see you before Christmas on this Christmas Eve of the eve of Christmas Eve. No, I got an update for you on that, Andrew. And you can say Merry Christmas to Andrew.

19:26Definitely. You have a tree. You got a tree again, didn't you? You get a tree every year, I think, typically. Me? Yeah. Yeah, you. Oh, you know I'm a Christmas-loving Jew. Absolutely. I know you are. I don't need the tree. Love Christmas. I know you are, but here's what I found out. Colloquially, it's called Christmas Adam. Today it's called Christmas Adam because Adam came before Eve because in Genesis, God created Adam out of the dust of the earth but created Eve out of one of Adam's ribs. I'm going with Festivus. Well, Festivus. That's just that. I think that's I don't know. It's a real holiday.

20:02Christmas is a beautiful day. It's also, Andrew, the day before the night before Christmas, which is harkens to that great. Yeah, but he you don't get a tree. No. You have kids yet? No. Oh, there you go. I have a nice menorah. You have a nice menorah. Yeah. Beautiful. We have a menorah, too. I just want to be clear. Lots of menorahs as well. Right. Twice the gifts, right? And don't you get like seven or something? Eight. It's eight. Eight. We do eight gifts, eight days of Hanukkah. And then we got the tree. And then you got the tree. And we think of it more, to be honest, just to be clear, for us, it's like an American holiday.

20:42We treat it like something like, yeah. And it's another excuse for donuts.

20:51AI and tech players vying for dominance in the new year may pursue consolidation in the industry. Joining us right now is Chris Kelly, founder of Kelly Investments and former general counsel and chief privacy officer for Facebook. What do you think happens? Good morning, Andrew, and happy Christmas, Adam. It's great to see you, sir. Exactly. Did you know that beforehand about this Adam business? I did not know that beforehand, but I've learned a lot this morning. You know, news you can use, my friend, news you can use. So help us understand how you see 2026 play out in this AI space, especially among some of these large language model providers.

21:29So there's going to continue to be a war for talent among the biggest players, and there will probably be some new ones who come to the fore. But more than anything else, there's going to be a drive towards some efficiencies instead of just constantly building more data centers and more GPUs all the time. That obviously the amount that it takes to train a new model is an immense amount of resources in terms of dollars, in terms of GPUs, in terms of power. But I think that there's going to be a lot of companies that turn hard towards how do we do this more efficiently and effectively. And one of the most interesting approaches that's going to be out there is thinking about how the human brain reasons and modeling that better.

22:15I mean, we run our brains on 20 watts. We don't need gigawatt power centers to reason. And I think that finding efficiency is going to be one of the key things that the big AI players look to. Is there anybody who you think either drops out of the game or fundamentally changes how they're doing this? I mean, there is a big question about whether you think all of these models get commoditized, especially if you think some of the open source stuff, either coming out of China or elsewhere, really actually takes, you know, catches fire because it sort of could undermine what some of the other folks are doing.

22:51I mean, I think there will be a number of open source players, most probably my former colleagues at Meta, who have the Lama models out there. Mark has invested quite extensively in building a new team, a bigger team, to focus on this. I do think that you'll see a number of Chinese players come to the fore, that especially if the NVIDIA GPUs that are said to be being sold to China now come online. And when you think about winners and losers, are you of the view we're in some kind of bubble? Are you of the view that it's all going to be fine? Are you of the view that this is just the beginning?

23:28Where are you? Both is the way that I would put it. I mean, I think that there is a bit of a bubble around, hey, we've got to have this constant upward spiral of more GPUs, more power consumption, more data centers. I think that that drive towards efficiency is going to be very real. And those who kind of strike breakthroughs in this area will come to the fore. And I think that some of the bigger players will end up acquiring smaller players that do that breakthrough. And then I do think that you'll see open source models, both out of China and the U.S. and some out of Europe, too, but mainly out of China and the U.S., will provide people basic levels of compute and access for generative and agentic aid.

24:11What is the chance we see in this regulatory environment a major transaction? Now, OpenAI may be too big. I don't know where you think the valuation lands for an Anthropic, for example, which obviously has stakes in it or ownership stakes by people, including Google and Amazon. And now I believe Microsoft as well. Could you see a company try to take out one of the big large language models? I mean, the other piece of this is Apple is not really in the game the way I think they want to be. Exactly. And they have an incredible cash hoard to deploy and obviously an acquisition currency in their stock that works pretty well as well.

24:50So I do think that you'll see some big deals in the space, particularly as some of these more efficient players come to the fore. If you can take essentially an operating system that you have going on with your LLMs and think about how to make that a lot more effective and efficient on all the classic tests and coefficients about reasoning to get to applied general intelligence, everyone's going to take the opportunity to do that. And to the sense that they have both cash forwards and obviously incredibly valuable stock to deploy, I do think you'll see a few big deals in this space. But how big are we talking?

25:32I mean, so I would say Anthropic would be, you know, potentially hundreds of billions of dollars. Hundreds of billions. Exactly. I don't think we'll get that big. And I think that most of the folks who have achieved sort of nine-figure valuations or 12-figure valuations are thinking about how they begin to operate on their own. They're going to have to deal with the fact that the resource intensivity of the models operating can be a cash bleed. And so eventually they're going to have to come, the big players, the big boys are going to have to be profitable at the end of the day and make this work from a revenue perspective as well.