Aaru, Iran, & an AI Horror Story 3/20/26

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1:27And Cameron Fink. If you can predict human behavior, you can predict the future, right? We can predict how people are going to shift markets. We can predict how individuals are going to change their product preferences. And MasterCard's$1.8 billion acquisition of BVNK, bridging legacy finance and the blockchain. Legendary venture capitalist and BVNK backer Katie Hahn on the future of finance. If you think about how humans progressed from using checks to credit cards, and now actually not even credit cards as much as credit cards on their iPhone, we think that also agents will be using some of these new systems.

2:07So I think that's where AI comes in. Plus, the latest on the Iran war, President Trump's push on Fed Chair Powell, still, and a horror novel at the center of AI controversy. It's not The Bachelorette that we're talking about. That was a horror novel. It is Friday, March 20th, 2026. Hooray, it's spring, finally. Squawk Pod begins right now. Stand Becky by in three, two, one. Cue, 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 and Andrew Ross Sorkin. Let's get to the latest headlines.

2:53out of the Middle East. As the war in Iran reaches three weeks, CNBC's Dan Murphy joins us now from Dubai. Dan, good morning. Hey there, Joe. Good morning. Well, Israel and Iran both exchanging a fresh wave of strikes this morning, and Iran has hit back with missiles and drones targeting the UAE, Saudi Arabia, Bahrain, and Kuwait, where a refinery has been hit, sparking a fire. As you mentioned, despite the uptick in attacks, oil prices are cooling a little today after Israel's Prime Minister Benjamin Netanyahu said American and Israeli strikes had destroyed Iran's ability to enrich uranium and also suggesting the war could end a lot faster than expected.

3:33The Treasury Secretary Scott Besson also floating this plan to unsanction about 140 million barrels of Iranian crude currently sitting on the water. certainly a pivot away from maximum pressure, but designed to add supply, cool prices, and reduce the war premium that Iran collects on its oil sales. Instead of those barrels flowing to China at a discount, Washington wants them heading to allies like India and South Korea and Japan that all rely on the Strait of Hormuz for oil. Meanwhile, we're also following fresh reports out of Qatar this morning, which is counting the cost of its latest strikes as well.

4:11Qatar Energy CEO Sado Kabi confirming overnight that the Iranian strikes have taken out about 17 % of Qatar's export capacity. And those repairs will take three to five years now and cost tens of billions in revenue. It's certainly a big blow for Qatar, its economy, its people as well. And it is raising the risk of an energy price shock and inflation translation for the economies of Asia and Europe that rely on that Qatari gas that will now need to find alternative sources of supply. Joe. All right, Jan. We're all wondering about the next moves, how long it would take for the U.S. to degrade the Iranian assets in the strait to the point where we could see escorts.

4:57We actually thought that that was happening with the energy secretary. We had him on. He said, no, it wasn't. And we're not ready right now. But that is something I think that the United States is trying to do in earnest. How many weeks? How many days? Any idea on that? When we could do escorts and we wouldn't be at risk? I heard there's low flying jets trying to take out a lot of Iranian assets as we speak. That's exactly right, Joe. And those efforts continue. The Energy Secretary told your show that it's too soon to see US naval escorts. And that's because the conflict is still too hot at this stage.

5:38In the last 12 hours, interestingly, we've also heard from the Europeans suggesting that they could potentially get involved as well, helping to secure the safety of those ships and their crews and their cargoes passing through the strait. But the message from the Europeans is that they wouldn't be interested in getting involved until the conflict also came to an end. So this week, we saw the Americans and the Israelis really working to eliminate threats inside the Strait of Hormuz. But right now, that critical waterway basically essentially remains choked off to the world. And as a result, up to 20 million barrels of oil remaining offline.

6:15Until it can effectively reopen again, it is likely we'll see that price premium staying intact for oil and for gas as well, given the gas flows that also flow through the strait. On the timeline, Joe, that is the biggest question facing not just market investors, but everyone here in the Gulf region today as well. We still don't know the duration of this conflict and indeed how soon it could be before the White House or the Israelis now signal that this war could be coming to a close. Disturbing news coming out of Iran to cover the New York posts, you know, young protesters being hung in public.

6:52And it's just it's a it which which sometimes reminds us of exactly what maybe this this is all about in the first place. Dan, thank you. Appreciate it. Meantime, President Trump was reportedly open to the government ending an investigation into Fed Chair Jay Powell, but his thoughts have now changed his mind after judge rejected subpoenas issued to the Fed. Bloomberg report says that the White House to aides now think the president wants to appeal last Friday's ruling with Justice Department leaders also backing that idea. That could mean a delay to getting the next Fed chair installed. However, the president wants former Fed Governor Kevin Warsh to replace Powell when his term ends in the spring.

7:31But North Carolina Senator Tom Tillis, who we've had on the broadcast a couple of times now, has vowed to block the replacement process until that investigation into Powell is resolved. And Powell, of course, says that he is staying at a minimum until it is resolved. But given how handily the courts sort of said, no, we're not doing this. It's a judge. You called it a judge. It's the same guy. It's a judge. But you could say who it is. Go read what the judge said. No, but supposedly it's the same. Andrew, I'm just making a point. It's the same guy. It's this Bozberg guy. It's a coincidence. He sits on the D.C.

8:12court. He's a federal judge. He just it says it's randomly assigned by a computer who gets different things. But it's just he has been at the center of about four or five rulings that have gone against the Trump administration, which is not maybe unusual since it challenges the federal authority go through the D.C. federal court. That's what would happen. Well, it just has been clinky dinks that it has been him. The Supreme Court has not ruled in the president's favor on several cases. But he's been appointed. He was appointed by Obama. I'm just saying partisan viewers do not like this guy. And the point I'm making is that Trump, sometimes the president does things, cuts off his nose, despite his face because he probably.

8:54Pressure doesn't generally work. He gets mad that this. Oh, Bozberg again has done this. So now I'm not going to drop this thing against Powell. So Warsh is not going to get an earlier hearing. So it all works against what Trump's trying to do because he gets mad about it. And I'm just saying that that probably in this case doesn't make a lot of sense. The other thing I will add to this is that President Trump did ramp up the pressure on Jay Powell again yesterday, saying that anybody would be cutting rates at this point. You know, the Fed has been fairly united. And even Rick and Steve agreed the other day after you got those hotter PPI numbers, that it would be complicated for anyone, no matter who they're appointed by, to cut rates given the potential impact for inflation.

9:36But when you hear, you know, Republicans or conservatives complain about activist judges, this guy is like the poster child. And it's just weird. There he is again. Tim! Oh, my God. Hachet, a book group, has canceled the publication of a horror novel called Shy Girl, following allegations that portions of the book were written with the use of generative AI. The book was published in the UK in November and was due to be released in the US in May. But after an investigation into the book's origins, the publisher has canceled that release in a brief statement. Hachette, right? Hachette. Hachette.

10:21It's a publishing thing. It said it remains committed to protecting original creative expression and storytelling in an email out of the Wall Street Journal author Mia Ballard said she did not personally use AI and said in her words, all I'm going to say is please do your research on editors before trusting them with your work. It was a horror novel about a female. It's not The Bachelorette that we're talking about. That was a horror novel. I don't understand this. So they're saying that the story was written by AI. Some of it. That's what they're trying to claim. And therefore they can't sell the book?

10:59First of all, I don't know how you figure out. Or they're saying that it's copied from somewhere else. What's the issue? I don't know. You're the book guy. Should you be allowed to use AI to? That's the question. Not in 1929. I know that. Too late for me. But yeah, I imagine in the future that all writing, I mean, is going to be, I mean, people are now, the way people use Google They will ultimately use AI in certain cases. Can I tell you, we went to Gemini last night just to try and see what AI could do in terms of picking the best bracket for March Madness. It's useless, the best I can tell, at least from that point, because what they did was say they basically went to the predictions market and said, based on this, based on the predictions market.

11:49So then we gave it a new prompt and said, without using prediction markets, what's the best one? And they just spit back what the top ranked teams were for everyone. they would use. But all I'm saying is it's no better than we are trying to figure this out at this point. Or it's been given directions not to do it. I mean, they come from what people think, right? And people are frequently, yeah, people are frequently wrong. You know, once again, yesterday, I don't know if you saw Watson, you see Duke almost lost? Yes, I did. It was, it was down to the wire. It's unbelievable. I think it's actually quite cool that it would go to look at the prediction markets.

12:23North Carolina and the high point. Because that's what you would It's not a clairvoyant thing. I would want it to do that. But I can do that by myself. Like, I don't need your help, AI. Thank you. So she's saying... Sure, but it could probably go make all the bets for you. The author is saying that it's the editor who... Who used AI. That's what it sounds like, at least, from her statement in this. But it's a fair question. Is AI generative? And I guess the question becomes, where does AI go to come up with some of the stuff? Was it ripping off from other written publications to say this is what someone else might look?

12:54and so it looks like it's plagiarism to some extent. I don't know. Interesting questions. Yeah, I was watching March Madness last night too. Yeah, I'm sure. It was unbelievable. It's happening again today. I like the first two days best. I don't know why. Yeah, because you get some real upsets then. That's when you see some of the Cinderella stories. But the brackets are less important when you actually are using DraftKings. Nothing happens from the... I'm not going to win Buffett's thing, so... Yeah, but Kyle's just interested because he's in a pool with his friends. And that's where you have fun with it, when you win bragging rights.

13:30Meantime, we've got a new Reuters report just out moments ago, saying that Amazon developing a new mobile phone that would integrate AI voice features through its Alexa assistant, the project known internally as Transformer. The report saying it's being developed within Amazon's devices and services unit. Amazon first introduced the A-phone, I should say, many, many years ago. You remember this was a flop, though. It's called the Fire Phone back in 2014. It was scrapped after about a year, though, as I think we move more towards AI and Alexa and other services where voice is becoming the new interface and becoming a much better interface than it's ever been before.

14:09I know you still have your Siri problems, but I do. But I don't like people listening. If I talk about Becky, if I talk about toe fungus with Becky, and the next thing that happens is I get a toe fungus medication, immediately comes up as an alert on my phone. It's happened too many times. And you've gotten the toe fungus advertised. That was an example. That's how it's all going to happen, though. And before we go to break, it's 1046 a.m. is the vernal equinox. It could be into the 19th. It could be the 19th, 20th or 21st. The calendar doesn't line up with what the sun does, but it's when the sun is directly.

14:471046 AM. Yeah, it's directly above the equator, equal daylight and nighttime. Hooray, it's spring. Yeah. Finally. 33 degrees. 1046. That stupid groundhog cost us the last six weeks. And I knew it was going to snow again. Remember, the last one was major, and then it was 80 degrees. Yeah. I knew it was coming back. Which was a trick. I knew it was, yeah, it was. It was like a... Head fake. Cheese will be next. Coming up on Squawk Pod, the very young founders shaking up the world of market research. With AI, what else? Aru co-founder Ned Coe on how they convince legacy businesses to trust their models over actual human data.

15:31We'll run whatever process got them into that, whether it was traditional survey, traditional research work, etc. We'll run the exact same questions, the exact same groups that they actually spoke to in the real world. We'll simulate them in our model and then predict more accurately the behavior of the customers that they actually have. And co-founder Cameron Fink on one of Aru's contrarian predictions in a new era for health. Not just what's happening in the next two, three, four days or next four months, but rather what is going to be the long-term impact that GLP wants over the next two, three, four years.

16:02We will be right back.

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17:40You're listening to Squawk Pod from CNBC with Joe Kernan, Becky Quick, and Andrew Ross-Sorkin. Here's Becky. AI startup Aru is a simulation company that believes it has cracked the code for predicting human behavior with higher accuracy and speed. It was founded just about two years ago by teenagers at the time. The startup is now valued at a billion dollars, and it has clients that include Ernst & Young, Accenture, Drugmaker Buyer, the film studio A24, Boston Beer Company, Spindrift, and others in business and politics. Joining us right now is Cameron Fink. He is the CEO of Aru. Ned Koh is the president, and John Kessler is the chief technology officer.

18:27And gentlemen, welcome to all of you. John, I think you're still a teenager, aren't you? I still am, 17 years old. Thank you so much for having us. Were you guys 18 or what? 19? What do we add here? 19 and 18 when we started the company, 21 and 20 now. Okay. Wow. Wow. We are blown away by, first of all, what you have built. Second of all, how you have built this at such young ages. There's so much to talk about, but why don't we just start on how you guys developed all of this? And I think this is a situation where Cam and Ned, you two were running cross country together in school. What were you talking about?

19:01What were you working on? Just tell us the story. Well, first off, thank you guys so much for having us on. Ned and I met first day, first class, freshman year of high school and have been friends ever since. I mean, in high school together, we used to program computer programs together in order to hack our Wi-Fi so that we could avoid turning in homework on time. We started a quantitative insurance business. I mean, we did almost anything you could under the sun, but nothing we were quite passionate about until we met John and started Aru together. So how did you meet John? That was online, right?

19:33Yeah, so it's a little bit of a ridiculous story. I was applying to an accelerator that they'd previously gone to for a different company, and I cold DMed one person out of 296 alumni on the LinkedIn page. Happened to be Cameron. And about two weeks later, we decided to start the company. We raised our first round two weeks after that, and then we met in person a week after that. And today marks day 722 of ours. Cameron, after you spoke with him, you went back and told Ned you thought you'd just talked to the smartest person you'd ever met? Yeah, John and I scheduled a 30-minute Zoom call. We ended up talking for two and a half hours.

20:05By the way, thank God this time I did answer my LinkedIn DMs. And I remember calling Ned afterwards, and I just said to him, the very first thing I said is, this is the smartest person I've ever met in my life. Ned and I were about to sell our previous business at that point, and we decided to set everything down and start a company together, the three of us, as soon as we could. You were only 15 at that point, John? Yeah, I was 15. And so I'd been spending time at the MIT City Science Lab, and I was working in simulation research over there. And I found it tremendously interesting. But I figured that there were larger opportunities to pursue it.

20:37And that's how I got into startups. OK, so Ned, tell me what you guys got interested in just trying to predict human behavior. Yeah, I think it's really interesting. Cameron and I and John are probably some of the only tech founders who read the paper news every morning. We've been obsessed with politics for years now. It was a really interesting time to start the business in early 2024 because we had seen these models get more and more progressively powerful. but being used for minute applications, summarization, right, email writing, other sorts of things. And we saw them become more and more humanistic.

21:08We saw a really interesting opportunity to start making them actually humanistic in the way they act. And politics being in 2024, primary season, became an incredibly interesting time to prove that out. Like predictions markets. Prediction markets are interesting. But at the end of the day, they're entertainment. They fail for the same reason that traditional human research fails. Which is? The average human doesn't use them. They have incredible sampling bias behind the people who use them. So they're predictive in nature for the top 200 issues that matter to America. But for business leaders and other folks across the world, those don't always fall within those categories.

21:42We found that the most interesting and the most alpha to be extracted from most problems come from areas where you would never be able to access the humans who underlie those behaviors. Like what? Give us an example. Sure. Alcohol behavior, GLP-1 users. This is an incredibly large problem for the industry, but yet not a single person who's on weight loss drugs is willing to admit that in the general public. People don't want to talk about their alcohol usage, yet it's creating massive, massive trends in the market. Wait, you think alcohol usage goes up with GLP-1s or goes down? I think it's completely to the antithesis of what the market believes right now.

22:15We think that people are going to be drinking less alcohol per occasion, and the type of alcohol people are drinking is changing. So you're seeing people shift away from higher calorie alcoholic drinks like beers and seltzers, but they're starting to go towards spirits. And that's something that simulation has uncovered as a continued trend. But the biggest insight that we pulled out is actually the net number of occasions is going to start to go up. And the reason behind that at the end of the day is that people are actually becoming more confident on GLP-1 drugs. They're becoming more social, more outgoing.

22:44And as a result, they're spending more time at bars. They're spending more time out at restaurants and nightclubs. Can I ask a question about that one sort of prediction, if you will? At least thus far, the data seems to suggest, at least what I've read, maybe I'm completely ignorant and wrong, that there is less drinking going on between beer, spirits, and everything in the country today than there was 12 months ago. Around the world, I believe. And I think a lot of people believe that that is a function of GLP-1s. So I hear what you're saying, but I'm trying to square the circle of what's actually happening here.

23:19Yeah, I mean, what we see, and this is something that we're really good at predicting, right? Simulation, our technology is incredibly accurate at, is the long tail of predictions, right? So not just what's happening in the next two, three, four days or next four months, but rather what is going to be the long-term impact of GLP-1s over the next two, three, four years. And what we're seeing, actually, is you look at people who are on GLP-1s for a long time. At the very beginning, alcohol usage does crater. And as GLP-1s are continuing to be adopted, you're seeing that cratering occur at like a massive rate.

23:50But as people stay on GLP-1s for longer and longer, we have been able to uncover, and this has started to be evidenced in market data now. I mean, this prediction was almost six months ago for us. We've started to uncover that people first level out in their alcohol consumption, and then second are getting more social. I mean, there are ways you see this, the first thing is that. You're saying overall there's going to be... You can't use correlation as causation. You do that a lot of things. How do you know it's not all the pot shops that are open? No one's drinking anymore. There's a lot of things going on.

24:16But right now, if you look at alcohol use around the world. But you immediately say GOP-1s? There's a lot of evidence that seems to suggest that that's the case. I know that people don't crave alcohol after GOP-1s, right? I mean, it's a real thing, food or alcohol. When would that bear itself out, that prediction? I think you would see this play out over the next two to five years. And you also see, like, there's, again, a long tail of not just GLP-1s like we have, some of glutide, you have ozempic and gobi on the market right now. But you see the next generation of drugs are more friendly to alcohol consumption.