Cheating in Chess with Ben Mezrich, Taxing AI with Andrew Yang 6/4/26

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0:58Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, we're talking AI job displacement and AI taxes with former presidential candidate Andrew Yang. I run a company, Noble Mobile. The easiest people to fire are the people you haven't hired yet. So are we replacing junior analysts, junior engineers with AI? 100%. And if we are doing that, then I guarantee organizations around the country are doing the exact same thing. Then author Ben Mesrick is out with a new book, The Biggest Scandal in Chess and the Internet Theory, on how the 19-year-old chess prodigy defeated world champion Magnus Carlsen.

1:40A hint, it is definitely not safe for work. It's this crazy thing that's not supposed to happen. And the way he might have cheated turned into this viral sensation. Are we allowed to say? And that's not the only surprising story today. You don't say this every day. Flesh-eating screw worm. A flesh-eating screw worm. Plus, the House vote on a War Powers resolution to halt U.S. military action in Iran. And Jamie Dimon is reportedly pitching the SpaceX IPO. It is Thursday, June 4, 2026, and Squawk Pod begins right now. Stand Becky by in 3, 2, 1. Cue, please. All right. Good morning, everybody. Welcome to Squawk Box right here on CNBC.

2:29We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernan and Andrew Ross Sorkin. We are back in New York after being in D.C. this week. Glad to be here. Everybody well rested. Oh, yeah. We're here. We're here for all of this. Look, all good things have to come to an end, And that was the case yesterday, at least for the bulls on Wall Street. You had both the S &P 500 and the Nasdaq ending nine day winning streaks. They had their worst day since May 15th, I believe. The S &P 500 or the Dow was down as well. And it had its worst performance since all the way back to March.

3:06The Nasdaq under pressure because of the results from Broadcom and the disappointment that's kind of spread through the chip industry this morning. We'll talk more about that in a little bit. But it looks like the Nasdaq right now is off by just over 300 points. And Bitcoin continues to fall. You might want to call this a crypto winter at this point. It's off another 3.8 percent. Bitcoin's hitting just above$63 ,000. How much of that is really... Crypto winter turns bitter cold. And the question, though, is how much of that is a function of SpaceX IPO? Money going there. Is it the tech pullback?

3:39Or is there an actual sentiment change about Bitcoin? Michael Saylor didn't help, right? I mean, you have the Michael Saylor piece. By the way, even just talking to someone like Mark Cuban, who came out publicly and said that they dumped all their shares. What I call it last week. Their coins. Last week, when I said it last week, you looked at me like I was crazy. What did I say? Dog with fleas? What was that? Wednesday or Thursday. I looked at you like you were crazy before you've been telling me it's like the greatest thing. Well, I saw it happening. Well, I mean, yeah, as you were negative the entire way from$5 ,000, it went to$125 ,000.

4:15thousand. So it's pretty darn great. Right. It's still at 60. I mean, even at 63. You know who could be right? Katie Stocks is at 59. And we went to 80 in the meantime. Maybe she'll be right about that. She could be right about the S &P, the way things are sort of acting right now at 7100. Other people could be. Actually, she was below that. It's 7550. I mean, it was down for the first time after being up for nine sessions. But we talked about things like Micron. Micron's down about$60 today. Micron didn't even say anything. No, Broadcom did. Well, I know. Broadcom didn't really say anything that bad.

4:52No, the problem is those stocks are trading at pretty high earnings relative to somebody like an NVIDIA, which is in the low 20s still. Broadcom was above 30. And you asked about, I immediately said, what's up in the Dow? The Dow's just up. I mean, Cisco's up a couple points. Walmart's up$2. Amgen's up almost$5. Coca-Cola's up a little. It's almost like it's just normal company and normal stocks, unlike the stilts that we've seen. I mean, Micron, how much was Micron up in the last year? It went from like$100 to$1 ,000. I think Broadcom's up more than 40 % over. Yeah, but I mean, some of these stocks are up a multiple.

5:33Oh, one year it's up 884%. That's what I mean. So it's down today, down whatever it is. 5%, 6%. I don't think this journal piece on the front page helped either. The data center piece. Oh, yeah. That there's, for myriad reasons, it's not going to be. I mean, even permitting, which we talked about yesterday in D.C., right? Still have permitting problems. And that's before, like Elizabeth Warren wants to tax these data centers, too. That's before you get regulators that have their hands on any of these things. When I read that about Elon Musk, she's the first person I just thought of. why tax trillionaires when you can tax billionaires?

6:11You mean billionaires when you can tax billionaires? No, they did that opposite in Austin Powers, if you remember. Yes, yes. That was the... Let's get back to Broadcom. Those shares are tumbling. The earnings beat estimates yesterday, but revenue was below what Wall Street was expecting, and the company didn't raise its full-year target of$100 billion in AI chip sales. That came as a disappointment to the street. You can see that stock is now off by about 12 percent. However, it jumped 48 percent from a year ago, and the company's current core revenue guidance was higher than Wall Street's forecast.

6:45It's just expectations have been incredibly high for all of these chick companies. And if you can't not only meet or slightly beat expectations, you need to blow them out of the water. If not, you see this disappointment that we're seeing on the street. And that's certainly the case here.

7:03On this vote, the yeas are 215 and the nays are 208. The concurrent resolution is adopted.

7:14Meantime, we've got a rare Republican rebuke for President Trump in Congress. The GOP-led House voted to restrict the president's ability to continue the war in Iran without congressional approval. Now, the war powers vote passed 215 to 208 with four Republicans joining Democrats. House Speaker Mike Johnson calling the result a very unfortunate outcome and said it was dangerous at a serious time. Democratic Congressman Roe Kahn is saying the vote was the beginning of the end of the war. The bill now heads to the Senate. And developments in the Middle East are occurring right now. Israel and Lebanon announcing a ceasefire last night.

7:51Eamon Jevers joins us now with the details. What's up, Eamon? Yeah, good morning, Joe. here's what we know. Israel and Lebanon announced a ceasefire last night as a result of U.S.-led negotiations on the condition that Hezbollah stops firing at Israel and withdraws its personnel from certain sectors. Now, it was not immediately clear if Hezbollah itself would commit to the deal. That's obviously the linchpin of the whole thing. The news came just a few hours after our Sarah Eisen sat down with Israeli Prime Minister Benjamin Netanyahu in Jerusalem yesterday, and she asked him directly if he had agreed to President Trump's request to stop fighting in Lebanon.

8:31At that time, Netanyahu gave a somewhat evasive answer. Here's what he said. Did you tell him that you would stop in order to get the peace talks going? No, I think what we discussed is something else. They were firing, Hezbollah was firing these terror missiles into our cities. You know, they hide behind their civilians and they fire at our civilians. Like Hamas in Gaza, they commit double war crimes. And we are responding. We're targeting the terrorists themselves. The terrorist chieftains, many of them are in Beirut. So Netanyahu there saying that he did not commit to that with the president.

9:07Now, the Iranians have said that any overall peace deal must include a settlement of the violence in Lebanon, where Israel is trying to degrade Hezbollah, which of course is an Iranian proxy force. Now, President Trump said yesterday that negotiators are making progress on an overall deal with the Iranians. Now, the text of the smaller deal that was released last night said that the parties would work to create what it called pilot zones in which the Lebanese armed forces will take exclusive control of the territory to the exclusion of non-state actors. You can read Hezbollah into that. Now, the party is also committed to further talks in the week of June 22nd, they said, with a view toward reaching a comprehensive agreement.

9:51Back over to you guys. All right, Eamon, thank you. So here it is. It's a New World screw worm has been detected in a cow in Texas. The USDA said it identified the parasitic fly in a three-week-old calf. The screw worm burrows into the flesh of living animals and can infest livestock and other warm-blooded animals, including humans in rare cases. The USDA has established a 12-mile infested zone and is implementing quarantines, increasing traps for the insects along the border. 26 ,000 cases have been identified across Mexico already, and efforts have been underway to prevent them from spreading.

10:40You've got pictures. You've got... Looking at the... It's the larva that they lay not only in open wounds, but also on mucous membranes of the animals that then can burrow into you. The Agricultural Secretary, Brooke Rollins, assured Texas ranchers that USDA personnel have already been called into this, But the Texas Agriculture Commissioner, Sid Miller, has been very critical of the federal response. He says that USDA moved too slowly and relied solely on a partial solution that takes years to fully implement. It's this release of sterile flies that they've been kind of putting out there, but that will take time.

11:18That's interesting. That's how you deal with it. That's the slower way. He's critical of that. He'd like to see. I don't know what the faster way is of dealing with this. This is a worry about the cattle. It's not like we're not worried about it that we're going to get schooled. No, it's very rare that it actually affects humans, but you are already looking at cattle levels at the lowest levels in 65 years in this country. And high prices. And if you have to then go through and start culling herds as a result, it's going to be a very big issue. J.P. Morgan CEO Jamie Dimon will discuss the SpaceX IPO with thousands of the bank's high net worth clients today.

11:52He's going to host a live interactive discussion from J.P. Morgan's headquarters. That's accompanied by Mary Erdos and a pair of SpaceX executives. The event will be broadcast to around 90 J.P. Morgan locations across 26 states. This goes to show sort of how everybody's pulling out the stops here. And according to the SpaceX prospectus, Elon Musk's stake in the company is worth$866.5 billion on paper. That means the SpaceX IPO will likely rocket Musk's net worth past$1 trillion. The Tesla stake is worth about$355 billion with options that could be worth more than$100 billion. But, you know, when you start to go back to the Elizabeth Warren conversation we were having yesterday, if you had to effectively pay a 2 % fee.

12:42Wait a minute. Wealth tax. Two cents. It's not too big. It's two cents. Every year. A 2%. She deliberately says that every time. If you have to pay 2 % on that, remember this, there's only a 4 % float on the entire thing. Yeah. So there's lots of other consequences. You couldn't possibly sell 2 % every year. It would be very challenging in that case to do that because you'd have to actually sell. And what is the impact of the selling on the rest of the market and other things? is this is why I've always thought if you're going to tax people, and by the way, I'm not against different forms of taxation.

13:20You have to do it, though, I think ultimately on realized gains. It's because you could be worth half of what you're worth the next year. Well, that's the other piece of it. Right. You're in a date down 28 % for crypto. The one thing that I think is compelling, not about the wealth tax, but the thing that she does say and why I think she's gone this direction is there's so many other loopholes. What's happened here is because nobody's dealt, no, no, because nobody's figured out a way to deal with the step-up in basis at death. Nobody's dealt with the issues around carried interest. Nobody's dealt with any of the actual issues.

14:01The tax code just keeps getting bigger and bigger, and it's a mess. And it's not just it's a mess more broadly. It's a mess in favor of, it is a mess in favor of the wealthy on a relative basis to others. It's a mess in favor of anybody who can hire an accountant or a lawyer who can walk you through. But that was the whole point. Do everything you want to do. That was my whole point, is do everything you want to do and it doesn't make a dent. Maybe for optics it does, but it doesn't make a dent. And you're going to have to do other things. How about if we cut two cents? We cut two cents of federal spending.

14:32Let's do that and see what happens. But there is a fair question, and I do think it's a real question, about, I know you're going to put air quotes around it, but fairness. Like, I think that's a real thing. If you want to do that, I often say that the tax code is a manifestation of democracy. And it is crazy for people who are at the lower end to pay a much higher rate. Right, because of the billionaires, not because of the tax system, because it's very progressive. Not about even billionaires, by the way. 10 % pays 60%, Andrew. It's very progressive. You shouldn't be worried about, you, of all people living in New York, The cheese will be next.

15:09Coming up on Squawk Pod, politician and entrepreneur Andrew Yang on the issue that could make waves in the midterms and well beyond AI. Saying we're going to retrain workers sounds great as a soundbite, but it doesn't actually work. And what are you going to do with the revenue you raise from the taxes? What good is it to tax it then? If you can't do anything to help the people that are getting displaced. What we need to do is create incentives for people like me to hire more human beings. AI's labor market impact, the concept of AI taxes, and the future of entrepreneurship in America. Right after this break.

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17:26Welcome back to Squawk Pod. AI data centers are famously greedy beasts. They demand enormous amounts of energy and water to run. And that demand has sparked protest in many communities where they're being built. Around the country, communities concerned about water supply and higher home energy prices, not to mention job displacement, are speaking up to their local leaders. And the issue is becoming an important one for the upcoming midterms. Some municipalities have instituted moratoriums on new data center projects. And states like New York, Maine, Maryland, Vermont, Georgia, Michigan, and others have introduced legislation to do the same, though none have successfully passed said legislation.

18:10At least, not yet. At this point, the answer to the data center conundrum may be taxes. Former presidential candidate Andrew Yang made news on our air back in March with this idea. You tend to tax things that you want to discourage and you want less of. And we're going to be in a position where we want to shore up labor in every quarter, in every organization and environment. We should actually try to stop taxing labor because... Tax the agents instead? Yes, exactly, Becky. And he's not alone. The way many see it, taxes on AI and on the data centers that provide AI's compute power could fund social services and could ultimately cushion AI's blow to the labor market and community resources.

18:55Senator Elizabeth Warren, in her conversation with our anchors just yesterday, proposed exactly that. I've proposed, for example, an excise tax on the data centers themselves, the place where all of this is being produced so that, in effect, they internalize the cost of what they're doing. And that's money we can then spend on health care. It's money we can spend on child care. It's money we can spend on education so that people can train for other jobs. But shouldn't we be doing that? You can hear the rest of that conversation on yesterday's Squawk Pod. Senator Bernie Sanders recently suggested an American AI sovereign wealth fund to give Americans access to the success of these AI companies.

19:37It's worth noting that he also proposed a ban on new data center construction in his state of Vermont. It is a longer conversation, as we say, one we'll have right now with Joe Kernan, Becky Quick and Andrew Ross-Sorkin.

19:54Joining us now, Andrew Yang, CEO of Noble Mobile and founder of the Forward Party. It's good to see you. Every day we go back and forth about the two assumptions for AI that we've heard about every other technological revolution from, you know, no more farmers. OK, now they're doing this. No more buggy whip makers. Oh, but look at the automotive industry. We always hear that the disruption is going to pay off. No one necessarily thinks that it could be different. It could be staring us right in the face. But if everything AI does basically is designed to do without humans, how can it possibly not be the most disruptive thing to the labor market ever?

20:39Is that what you think will happen at this point? I do, Joe. And if you look at the numbers, you're going to spend, let's call it even a trillion dollars on infrastructure and data centers and the like. You have to get hundreds of billions of dollars in cost savings from corporates. And where is that going to come from? Headcount. I mean, it's obvious. And the powers that be have said, look, we've got to stop talking about kicking workers to the curb because people are starting to hate us. People are protesting data centers. Someone threw a Molotov cocktail and took a shot at Sam Altman's house.

21:11So then the message has gone out. Look, this is going to be fine for workers, but we know different. It doesn't make any sense. And I'm going to say, too, I run a company, Noble Mobile. The easiest people to fire are the people you haven't hired yet. So are we replacing junior analysts, junior engineers with AI? 100%. And if we are doing that, then I guarantee organizations around the country are doing the exact same thing. So you just, and I was going to say, but if you tax something, you're going to get less of it. Most people think that. You're saying that's not necessarily a bad thing to get less AI?

21:44Because the promise of it is in drug development. And then there are cases that can be made that this genie is not going back in the bottle and it's going to be it's going to be great in a lot of ways. So we want to go forward. So should we sacrifice labor to do that? Look, this is not just me talking. Dario Amadei, the CEO of Anthropics, said tax us, please. He proposed a three percent token tax. Now, you can argue about what the appropriate level is. But I think that drug is going to get discovered if you have. So what do we do with the, that's the other thing. I wanted to ask you, historically, when we have tried to ease the disruption to the old workforce when there's a new technology, when we've tried to design reskilling or job programs, has it ever really worked effectively?

22:32That has been a total bust, Joe. In the past. I looked at the success rates of U.S. government-funded retraining programs for the manufacturing workers in the Midwest, and the general effectiveness rate was 0%. And I know, Becky, it's painful, but if you look at it, what happened was someone would start a certification program in the Midwest, give those certificates to workers, and then shut down. The government would pay that school. The school disappears, and then workers are left with valueless certificates. A lot of those people left the workforce, went on disability, etc., etc. So saying we're going to retrain workers sounds great as a soundbite, but it doesn't actually work.

23:13And what are you going to do with the revenue you raise from the taxes? What good is it to tax it then if you can't do anything to help the people that are getting displaced? What we need to do is create incentives for people like me to hire more human beings. So check it out. If I hire a young person, I'm going to pay 7 % to 10 % in FICA. and state unemployment and a bunch of taxes. I'm going to pay another 8 % to 11 % for their health care. And then that worker is going to be spending 15 % to 25 % on income taxes. You're talking about almost half of the total money that's getting allocated to that worker.

23:46That's not going to the worker. So if you start to lighten those costs and taxes, then people like me hire more people. And this would be the most effective way to get the private market bringing more people into companies and opportunities. So how do you deal with things like health care, which are already unaffordable based on just where we've seen trends take us? Yeah. So health care is a massive burden on companies that are, you know, essentially like killed before they get started. Because there are a lot of talented workers out there that might start a company if they didn't have to provide health care to their families through their employers.