A Trump-Xi Summit & Cathie Wood’s Investor Letter 9/25/26

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0:45Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, the China-U.S. summit. U.S. Ambassador to China David Perdue has been in the room with Presidents Trump and Xi. Being on the inside, you could see how these two leaders are beginning to develop a relationship of somewhat trust and also working on the issues. I mean, this was a very candid and open conversation. How AI shaped that candid conversation. It would be irresponsible not to engage with China, the second largest economy, arguably the second largest military in the world. And how President Trump addressed concerns about Iran's relationship with China.

1:30President Xi and President Trump have agreed that Iran will never have a nuclear weapon. Plus, the investor beloved by the internet, Cathie Wood.

1:39Cathie Wood:She's been betting on AI and the future of tech for years. I do think this idea that it's going to take away everybody's jobs is going to disappear. No, it's going to leverage human beings, leverage them from a productivity point of view. It's Friday, September 25th, and Squawk Pod begins right now. Stand by, Joe. In three, two, one, his mic here. Good morning and welcome to Squawk Box here on CNBC. Live from the Nasdaq market site in Times Square, I'm Joe Kern. Kelly Evans is here again, and obviously Becky and Andrew are off the date. Tech titans turning out for a lavish White House dinner for China's president last night.

2:23Megan Costello joins us now with more. And I love all the photos. Did we have video, Megan? Not that we can show today, Kelly. Just like yesterday, TV pool coverage remained suspended following the president's decision to ban those three outlets. Some press access had been restored, but no TV pool coverage, at least as of now. But it was a black tie state dinner at the White House last night for China's President Xi. More than 130 guests and at least 27 CEOs. That's according to the guest list provided by the White House. And besides the tech and finance heavyweights that we knew about heading into this, other attendees on that list included the leaders of Paramount Skydance, Pfizer, LVMH, Micron, many, many more as well.

3:04Two notes on the guest list. Amid all the tech CEOs, there was no one from Anthropic invited, despite all the focus on AI. There were also no Chinese CEOs in attendance. That was something that had initially been expected after President Trump brought a business delegation with him to Beijing in May. Now, both President Trump and Xi delivered remarks at the dinner. President Trump going first, speaking of U.S.-China relations that he said had never been better. Xi then called the friendship between the U.S. and China, quote, a worthy cause that holds great promise. And he said that China and the U.S.

3:35must act as responsible major countries, meet expectations of our peoples, keep pace with the trend of our times, and explore a new approach for major countries to get along with each other. Now, the formal programming is not yet done. There's still a private tea and a National Archives tour on the agenda for today. But what we are still waiting on, guys, are any policy deliverables or major announcements. So far, we've heard about a short-term extension of the trade truce, just two months there, and that two Chinese giant pandas are headed to the Atlanta Zoo. But on things like tariff cuts, Iran, ag and aircraft purchases, nothing to announce, at least for now.

4:11Guys. So I thought I had seen video, Megan. Is that coming from the president's Truth Social account? Yes. So there is a distinction here. The White House is providing some video that it's putting out on its own channels. But given everything that's gone on with this media ban, the TV pool coverage remains suspended because some members of that TV pool have not been restored to full access to White House coverage the way that they had before the ban was announced last week. So until that's resolved, that's why we're not showing anything on our air. When will we know whether anything with Taiwan, any change in even the tone of discussions about Taiwan?

4:51The journal's got a couple of pieces on it. Lead editorial was about that Xi is trying, that's why he's here, to try and induce Trump to sort of change that strategic, whatever the hell that they had. Strategic ambiguity. Nobody knows what it really means. And, you know, Biden at one point said, oh, yeah, we'd send troops. And then they said, no, no, no, no. He had no idea. But he stopped the press and had no idea what he was saying. Taiwan definitely at the top of the list for the Chinese president. How about Mike Gallagher? You see this? He was a very smart guy that we used to love having on when he was a politician.

5:26Now he's head of defense at Palantir. And he says that China's drive to dominate AI along with the island nation of Taiwan and what happens there is the biggest threat humanity faces. Yeah. AI and Taiwan, both at the top of the list for this Chinese president. And that is why he's here and why we see two more meetings scheduled between these presidents before the end of the year. Both of these men really feel that being in the room, shaking hands and managing the relationship that way is the best way to get what they want. And what they want for China is for the U.S. to hold off on any more arms sales to Taiwan, to, you know, to not try to dominate on A.I.

6:08She had some language about needing to work together. But to your question about when we might hear more on Taiwan, it's interesting that the Chinese put out a full readout of the bilateral meeting early yesterday afternoon in Chinese state media. So we did hear that they were talking about Taiwan. They were pressuring the U.S. president on Taiwan. He was also talking about Iran in that readout. But we haven't gotten anything similar from the White House just yet. So while we know the Chinese were trying to make their voices heard on Taiwan, we haven't heard from the White House directly as to what the response was or what the tone of the conversation was on any of those topics.

6:41The president has said it was a great meeting and I would expect we hear more from him later today. But in terms of announcements or a readout on how these conversations went, we just don't know that from the U.S. side yet. I'm going to send this to James Cameron or something. This is the first two paragraphs, Mike Gallagher. the year 2028. America's facing economic Armageddon. Frontier artificial intelligence development has been halted. Data center construction frozen. The market's in freefall. Americans leading AI labs did not decide to pace the frontier. Instead, the Chinese Communist Party did it for them.

7:21Then Beijing moved on Taiwan. And the critical vulnerability in the U.S.-aligned And AI supply chain has been taken away first through a blockade, then through an invasion. That's the future. That sounds even worse than Terminator. But is that why the president is, you know, they're all smiles. I mean, on some level, is it because he goes, OK, well, that's option A and this is option B? I don't know what what happens. Do you? I'm glad Palantir is raising the alarm bells or Mike Gallagher. Right. I mean, this is the biggest question right now is who paces the frontier, who sets the tone on AI. It is part of why we've seen some criticism of this visit, even from a few Republicans, because with so many major issues like this where there's really deep division, they felt some some critics felt that the U.S.

8:12shouldn't have been rolling out the red carpet in this way and should have instead been taking a firmer approach on things like AI. We did hear from President Trump yesterday morning on AI before the meeting took place. And what he was saying was that he wanted things to remain exactly as they were. He says that's because that's the best way for the U.S. to remain competitive and to keep leading China, that the U.S. is leading for now and that we can't have any new regulation or anything resembling regulation, that instead we'll use the DOJ as a backstop. But because that's the best way for the U.S.

8:41to remain competitive. President Trump said President Xi felt the same way. President Xi's comments on AI were a little bit more nuanced yesterday. He was reusing some language that AI must remain under human control that he's been using since the summer. So there was some talk around AI. But guys, you had Treasury Secretary Bessett on just earlier this week on AI talking about the safety dialogue and the incident hotline. We haven't heard that from the presidential level or if that was established. So it was part of the agenda here, but we don't know exactly what was accomplished or if much was accomplished.

9:14I might have been on to something because I kept every single person I keep asking, do we worry about AI killing us or China using AI to kill us? And this is the biggest threat to humanity isn't rogue AI. It's AI controlled by China. That's the last paragraph, which would use this transformative technology first to take Taiwan and then displace America as the world's dominant superpower. In all seriousness. What do you mean? That's not serious enough for you. But knowing the stakes, if you know this, if this is in the Wall Street Journal, the president clearly knows this. Is there some logic behind having Xi come to the White House, sending us some more pandas, and maybe hoping that if you're the president, that your personality, your friendliness, literally buys you more credibility with him so he's less likely to enact that scenario.

10:02After that article, you go, well, then I'm glad they're all smiles and Xi Jinping isn't coming in here right now and telling us something about Taiwan. I guess that's the strategy. There's a raging debate about what's more. And we're going to have someone who is in the Obama administration on in a second. I don't know. We'll see. But that he fully thinks government's got to just control every every aspect of AI slowdown. All I'm saying is if if the point is that China is actually such in such a advantageous situation with this kind of leverage, then maybe the president says the last thing we need to do is piss them off.

10:39That sounds like Neville Chamberlain or something. I don't know. That sounds like appeasement. But the argument will... I'm asking, what would you do? Are you more scared of China or AI? I'm just saying, what would you do if you wanted to capture the benefits of all innovation, technology, everything continues at pace without China making the Taiwan issue implode the whole economy? Your president, what would you do? Would you be more friendly with him? You want to know? I would do what Trump is doing. That's what I'm saying. No, I would do what he's doing in terms of I would be pushing back on us, any possibility of us losing at least a whatever, however far ahead we are of China.

11:18I want to stay ahead. Exactly. But how would you treat the man personally? If you thought that at any moment, if he could pull the rug out from underneath the global economy with the Taiwan issue, could he really, though? I don't think he knows. You don't want to poke the bear still. You don't want to talk about bears. You don't want to poke the bear necessarily, or even the panda bear. Right. That's what, you know, is there. It's a, I don't know. That was 2000. We got a couple of years. So enjoy. Cheese will be next. Coming up on Squawk Pod, inside the President Trump-President Xi summit with U.S.

11:56Ambassador to China, David Perdue. The two powers engaged on Iran, AI, and of course, on trade. While I'm encouraged, it's going to be a bumpy road over the next year until we establish independence again on rare earth elements, magnets, pharmaceuticals, commercial shipbuilding, all the things that we have fallen into a single source dependency on. We'll be right back. This episode is brought to you by SoFi, the everything app for smarter money. Your money should work as hard as you do, but most of us leave it sitting and checking, doing nothing. SoFi Checking and Savings changes that. competitive APY, no account fees, and a direct deposit bonus.

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13:51Welcome back to Squawk Pod from CNBC. You're watching Squawk Box on CNBC. I'm Kelly Evans, along with Joe Kernan. Becky, bless you, and Andrew are off this morning. Is that ice or is that hot, by the way? He can't even talk. Among today's top stories, Iran is offering to reopen the Strait of Hormuz and to resume nuclear talks with the U.S. within seven days if the Trump administration agrees to its conditions. Last night on Fox News, the president of Iran said this to Brett Baer. The problem is that America, instead of conducting dialogue, they descend into the arena by bombing us first, by blocking every pathway.

14:30We are ready. This is not the way to conduct yourself on the world stage. They can have free access to see whatever we have, but not to put us under such pressure, under blockades, deny us access. Chinese President Xi's first U.S. state visit in 11 years, wrapping up the day following yesterday's White House meeting and a state dinner. Joining us now, U.S. Ambassador to China, David Perdue. Wow, you're in the you're in the spotlight this week, Mr. Ambassador. Can you give us some color on what it's been like to be part of all this? Very historic. You know, we had the Busan pull aside. last October and we had the May summit in Beijing, which was spectacular, but I think Trump outdid himself with this one.

15:22Being on the inside, you could see how these two leaders are beginning to develop a relationship of somewhat trust and also working on the issues. This was a very candid and open conversation. Every time they talk, I think we see a different level of intimacy about these difficult issues that we're dealing with. It's a bumpy road to reach to strategic stability. And what we're talking about is that constructive strategic stability does not mean status quo. The old term isn't strategic stability, it's strategic ambiguity. And I wonder if it's any less ambiguous, given that they've been talking.

15:59And at the same time, Mr. Ambassador, here's the front page of the journal. That's what I was doing. Iran, you know, all that great stuff you're saying. Iran has a secret weapon in the war with America. Help from China. Can't they talk about that and get a heart to heart on that with President Xi? It's like, cut it out. Help us. Believe me. Believe me. Much of my personal time and much of President Trump's time over the last month has been that very topic. We made it very clear to them weeks ago that, you know, any help that they would give Iran, whether it be direct or indirect, whether it be intelligence or parts or military equipment was totally unacceptable.

16:40President Trump made that very clear again yesterday. This is an ongoing drumbeat that we have made very clear to them. And we're not letting it tie into anything that we are doing or any commitments we have with Taiwan either. This is an independent issue. And President Trump's made it very clear what our interests are and with regard to Iran. What does President Xi say or what does he make some type of motion with his hand when the president says that stuff or like? No. Does he seem to be getting through to him? Does he. Let's put it in. Let's put it in perspective. A year ago, we didn't have the following three things.

17:20And after May, we do now. President Xi and President Trump have agreed that Iran will never have a nuclear weapon. They also agreed to open up the Strait of Hormuz and that no one ever would be allowed to have tolls inside that strait. So that's major progress. We continue to talk about it privately and we've seen progress. We've seen evidence that they have listened to us. They pull some things down and we have evidence that they pay attention when President Trump talks about this particular issue. So China hasn't been helping them keep the strait closed. Look, there's been indirect support, we think, but there's no direct evidence.

17:57We're very concerned about this indirect work, and we've made that very clear, Joe. OK, let's move on to AI. We kicked this around and you, you know, thank God you had a lot of business experience. So you can figure this stuff out. Do you think do you think President Xi would would hit would sort of self-regulate? AI because of the CCP and what it would mean to this. You know, we all have different interests and the United States has different interests. China's interest in AI, I understand it, but but it's got to be colored by the CCP staying in power. And I would think that would make for a different approach than we might have here in this country.

18:42Well, of course, it's a different approach. We have two different systems. You know, what we talked about is developing a dialogue and that is in the Secretary Besant, Ambassador Greer channel with Hally Fung. We established that in May in Beijing. We reaffirmed that here. We've established this dialogue and also a crisis mechanism between the two countries. That's that's historic. Look, we don't know what we don't know in this area. But AI, or as SI, as President Trump is now calling it, superintelligence, is an area that's very dangerous for all of us. It has huge opportunity, but there's an unknown out there that goes beyond the nation state, Joe.

19:20And so what we're trying to do is engage with them. It'd be irresponsible not to engage with China, the second largest economy, arguably the second largest military in the world, on this issue. So I'm encouraged that we've at least moved the ball down the court a little bit with regard to cooperating and at least exploring how we can work together on that. Do you think it is President Xi asked for more access to NVIDIA's technology or to some of our technology? And would the president consider that as a, I don't know, an olive branch to get something he wants? Well, you can see the export controls that we have put in place over the last two years.

19:58And let me say, part of this issue that we have with China right now is showing some progress. I mean, our trade deficit, Joe, as you know, is down almost 50 % over the last two years, but it's still a problem. It's a major problem,$200 billion deficit with them. And while our deficit went down, the trade surplus of China with the rest of the world went up dramatically. And so what we do every time we talk with these guys is we talk about this imbalance. All we want is reciprocity, and we're working to get that. With regard to these other issues, AI or SI and some of these other things, I mean, it's a drumbeat that we've been giving them.

20:31And over time we see progress. Law enforcement cooperation now is very encouraging, not only in fentanyl, but also in things like crimes against children, fraud, cyber crimes, and so forth. So while I'm encouraged, it's going to be a bumpy road over the next year until we establish independence again, Joe, on rarest elements, magnets, pharmaceuticals, commercial shipbuilding, all the things that we have fallen into a single source dependency on with China, which is unacceptable to America. Mike Gallagher, former congressman, he's now with Palantir, wrote a piece, too, about how Taiwan, how important Taiwan is in terms of our designs on building out AI in this country.

21:15There's also been a lot of conjecture that President Xi would try to induce President Trump to maybe soften on Taiwan again, quid pro quo, to get something in return. The whole dynamic of what I've just described makes me uncomfortable, knowing how important the supply chain of Taiwan is to AI and what China's capable of. How is this going to play? Are we being played? Do we trust President Xi not to do something that would really be not in our best interest with that island? President Trump does that repeatedly. He established again last year, and he's been consistent through his first administration and this administration.

22:02There's no change in the Taiwan policy here. He's fully committed to the one China policy. We're committed to the Taiwan Relations Act, the three communiques and the six assurances. Nothing has changed there. Of course, China has tried to coerce change in that regard. We're not changing the language. We're not changing our position there. We want peace across the strait. We don't want coercion. We don't support independence. And we think that, you know, President Xi has gotten that message. President Trump has shown respect and listened to their side of that argument. But we are more stable on that issue today than we have been in the last decade.

22:40Ambassador, it's Kelly here. You know, the issue that a lot of business community keeps raising is rare earths because they just feel that until we have our own sort of supply, secured there that forget any other goals we're trying to accomplish with China. They just keep they perceive that we back down on tariffs. We back down on everything because ultimately, China just has that issue to exert leverage over us. Kelly, you're exactly right. This is one of only three times that I can find in U.S. history where we're this dependent on a single source supplier. Right now, 25 years ago, we were the single source supplier.

23:15And over that 25 years, We watched not just rare air and magnets, but commercial shipbuilding, pharmaceuticals, copper, a lot of things that we now find China in a single source position. And they're using that. In April 4th last year, they put an export review process, a licensing process in that was very onerous and they weren't really ready for that. Then in October 9th last year, they doubled down and weaponized that and said if you use their technology anywhere in the world, you had to get an export license there. And then this year, the most troubling thing, in my opinion, is the state council decrees that, Kelly, make it a criminal offense if you diversify any of your work in China.

23:56And many of these U.S. companies do that regularly just as a matter of business and then criminalize any sanction support that any U.S. company might have for a U.S. sanction. So we believe this is an increasing drumbeat. And what we're concerned about is it weaponizes a single source dominance. So until we establish our independence, as I said earlier, on these key strategic industries, it's going to be a bumpy road. President Trump is working feverishly right now to regain that independence. And I can tell you, we have a Manhattan Project level effort underway right now in pharmaceuticals and in rare earth elements.

24:32Well, but you raised pharmaceuticals was exactly the next thing I was going to ask about, where a lot of U.S. companies, again, are concerned about their kind of prowess being undermined. So it seems like you're kind of confirming that China has the upper hand here. And so what happened to this whole idea that, you know, here comes President Trump's second term, China tariffs, where we're, you know, reordering the global supply chain, you know, all of that, all of those goals go out the window. Now Xi Jinping's at the White House and we don't have the rare earths yet. And now we have to work with them on pharma.