Circle’s CEO & Elon Musk’s Threat to Apple 8/12/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Coming up today on Squawk Pod. The future of finance with Circle's co-founder Jeremy Allaire in his first earnings interview since his crypto-native company went public. The validation that we've seen in Circle and the sentiment around Circle is really about people understanding, I think in some cases for the first time, that the internet is colliding with the financial system. Elon Musk threatening to sue Apple over XAI's position in the App Store recommendations. CNBC's Steve Kovac. This really, guys, follows a pattern we've been seeing with Musk, where if things don't go his way, he likes to kind of sue or at least threaten to sue.

0:47And contributor Mihal Levram on the legal standing. You know, Musk could have a case. I think what he's really, like, unleashed here, though, is some real frustrations with Apple's AI strategy. Plus, all that glitters in gifts to the Oval Office. I mean, to move a gold bar, you need to put some elbow. Have you ever seen the guns on Tim Cook? This guy has arms. And a new head of the Bureau of Labor Statistics named. You'd rather have one of our left-leaning guests. No, I don't. I'm not suggesting that. You want someone perfectly right in the middle. I want somebody who people think is, and I don't know.

1:24Who is that? At a time when trust and numbers don't always align. I think that crime in D.C. is actually down. It's not. I don't believe it. You don't believe it? It's Tuesday, August 12th. 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. We're live at the Nasdaq market site in Times Square. I'm Andrew Ross Sorkin along with Joe Kernan. Becky is off today, but there's a whole bunch of stuff that's going on. Take a look at treasuries right now because we're going to show you the 10-year and the 2-year. The 10-year at 4.27, the 2-year sitting at 3.76.

2:04And then check out gold because it was down 2.5 % yesterday. That was about its worst day in about three months now. The decline following an announcement by President Trump that the U.S. won't be imposing tariffs on imported gold bars. But let's also show you crypto because yesterday Ether hitting its highest level since late 2021. That's at$4 ,290 right now. We've got Bitcoin sitting just at about$118 ,000,$118 ,449 to be exact. We're going to talk crypto later this hour with Circle's CEO, Jeremy Allaire. And that stock has been one of the great phenoms of our time. It's really the only way to get into to buy from the public markets into stable coins.

2:48Quickly on gold, people that watched him cook, and we should have figured this out, that watched him give that gold bar, whatever you want, with the glass on top to President Trump, he very easily was able to move that. You're trying to suggest it was not as heavy as it really could have been. It wasn't, and it was gold-plated. 24-karat gold-plated nonetheless, but probably hollow. Made in Utah. Made in Utah, but probably hollow. Because we forget. I mean, gold, to move a gold bar, you need to put some elbow grease. Have you ever seen the guns on Tim Cook? This guy has arms. So this guy. So you're saying.

3:33I'm just saying. You're saying that it could have been solid. And we wouldn't know it because it would have been effortless. He makes everything look effortless. He does. I'm just saying that. And I think, you know, if it was a gold, solid gold, you're talking about like over a million dollars, probably. So that would have, this way, you know, it was nice, but it's not like a million dollar. Like, if I got one, this is what it's like. And I know you celebrate all our holidays. I do. You do Easter, too. Love it. When you get one of those bunnies and you get ready to eat it and you grab it a little hard.

4:11And it's hollow. And it just breaks apart. Totally different. Yeah. Totally different. E.J. Anthony is on our show a lot. President Trump announcing he's going to nominate Heritage Foundation Chief Economist E.J. Anthony to be the next commissioner of the BLS. Our loss. Maybe the BLS is gain. He's going to replace Erica McEntifer, who just, you know, seems like a fine person, but that name every time. I mean, this is an uptick there, a lot easier. President Trump, right? First fired. You know what? You would have said the foot. You would have just, I guarantee you, you would have said the old BLS commissioner that was fired.

4:51That's how you would have probably gotten around. That's how I would have done it. One way, which I thought about it, and then I said, you know what? Little tricks on TV. Yeah, no one at home is going to know either way, so I'm going with McEnter. Who President Trump fired on August 1st, following a worse than expected jobs report. At this point, I would have learned her name. I'm a little worried about I hope the CPI isn't like crazy because, you know, we do have to trust these numbers. These are as good as it gets probably around the world. Most of the numbers that we do generate, the president had accused the last BLS director of manipulating the data.

5:29And then when we spoke to the president, I tried to talk him into, look, the data is so bad and it hasn't been improved. that there's plenty of reasons maybe to try and get somebody else to do it without saying that it was politically motivated. Antony, by the way, was a contributor to the project 2025 policy blueprint, frequent squawk box. Guest President Trump, advisor Steve Bannon, had been pushing for him to be nominated. So can I say, here's my thing. I always thought he was fascinating to talk to. Antony. Antony. Always enjoyed speaking with him. But one of the things that we always tried to do with our panel was to try to have different kinds of voices from different kinds of perspectives.

6:12He's a Heritage Foundation guy. All you've got to say is Heritage. Right. We've also had people from Yale and Democrats and all sorts of things. And you want the mix on a show when the numbers are coming out so you can get different perspectives of the analysis. All I'm suggesting is when it comes to the we talk about the credibility of the numbers. Right. Right. And I don't know him so well, so I don't want to. No, I think you're I think you're barking up the wrong. But I do think neck of the woods. Well, I think you look. Everybody's going to be somewhere on the political spectrum. Right. But you'd rather have if someone who leaned a little left, you'd rather have one of our left leaning guests.

6:46No, I don't. I'm not suggesting that you want some someone perfectly right. I don't want somebody that I want somebody who besides you is. I don't know who is that may be unimpeachable, by the way. I don't know him. I don't know him personally. I would assume he is. That would be my default position. That's your default position? Absolutely. That everybody's unimpeachable? No. That's how you start. If you look at this gentleman, we know him. He comes on. Heritage is a great organization. Just because it's right-leaning, I don't think he's suddenly impeachable. No, I don't think that. I didn't say impeachable.

7:18Suddenly impeachable. You're saying he's suddenly impeachable. The only thing is Project 2025 is a particularly unique effort that is political. And that if you were somebody on the left, you would invariably be almost triggered the way you... There are some things, right. There's a couple of things in there that would raise the eyebrow of some people. But a lot of it, it was sort of demagogued into some horrible thing. And most of it was pretty reasonable. I mean, yesterday, Andrew, I saw this crazy thing. if you're a Republican, you stand for this. If you're a Democrat, you stand for this. And I'll send it to you.

7:55We don't need to go over it now. But there's one, two, there's probably 30 things. It's just unbelievable when you look at really what the left stands for versus what the, I mean, very normal things like, you know, capitalism, lower taxes, legal immigration, voter ID needed, pro-police, border enforcement, all these normal things and opposite on the other side it's it's like what type of political party would have that as a platform i don't know what what particular graphic you're reading no it's just it's just lists some of the things and you've known this yeah we talked about kamala harris's positions where i mean one after another even when i had people on that were backing her i'd ask them what what positions do you like and they went orange man bad orange man bad that's all they could come up with.

8:49I think that people, but I think that the point is you want these numbers uniquely to be credible. You're talking about 2025. You think that that stigmatizes him because of the... I think that 2025 has a political sort of triggering effect on large parts of the country. It does trigger people. Who look specifically at that as something that undermines democracy, right? Because if you really read that... Because of voter ID and stuff like that. No, no, no, not voter ID. It was sort of how they were planning to use this administration to try to get certain things. By the way, you're seeing it. By the way, you are to some degree seeing what's happening, for example, in D.C.

9:24with the National Guard. That's an interesting example. Do you have a problem with that? I think that crime in D.C. is actually down. It's not. I don't believe it. You don't believe it? No, I don't believe it. I've been there. It's a terrible place. You're totally unsafe wherever you go. In the brief time I spent there, my car, within eight hours, my wife's car was stolen. Someone I know that lives down there, house was broken. I don't feel safe in any neighborhood there, Andrew. Go into a McDonald's down there. There's about five cities in New York, all of which are in red states, which you probably, on a numerical basis, statistical basis, feel a lot less safe.

10:04Your chance of getting killed in these other cities is meaningfully higher. Not even close. And the statistics the way that I have no idea how they got to these statistics. Now you don't believe the math. It's much worse than pre-pandemic levels. There's homeless encampments everywhere down there. No neighborhood where you're walking around can you say, wow, this one I feel totally safe. Maybe Georgetown a little bit. But most of the places down there, you do not. It needs help. It's horribly run. And this is perfectly within his purview to do this down there. And, you know, police state the way that it's, you know, the hyperbole that's used immediately to look at it.

10:46Like USA Today claims, what was it, must rescue in quotation marks. This is an editorial. That's an editorial statement on the front page of this stupid newspaper right there. Right. Rescue. It is. Andrew, you spend some time down there. you've seen some of the recent i know it's anecdotal but people getting beat up and elvip congressional people a guy gets shot in the head that's we have a a we have a whole bunch of friends who live in dc yeah who don't complain about this or don't suggest that this i have someone very close to me that lives there and it is a a very scary place and i my car was down there for six hours on the ring camera on the person in capitol hill ring camera there's the guys jumping into it, driving it off.

11:32You know, you remember what I... I remember what happened to you. In the last year. I remember. So I get that there's bad things that happened, but then you could go around the whole country. I think it's great that he's... I applaud him for... And the issues that he's won on, law and order type issues. But then, okay, but then, can I just ask you this? Yeah. And I know you may or may not agree, then you go back to something like January 6th, which was a big law and order day. Huge law and order situation. Huge law and order, and everybody who did things that were completely unlawful. That was a mob.

12:05People who were chanting, they're trying to say, kill the police officers. It wasn't Trump himself saying that. Hold on. He didn't. But hold on. Do you know that there's somebody in the Department of Justice today who was hired, who works at the Department of Justice, who was part of the mob, and during this mob, he is chanting, he's telling people to kill the police officers. I don't know about him. I don't know about that. He works at the Department of Justice today. Okay, I'm over. I've been over January 6th for a while. I don't think it compares to September. How can you be over one thing and then say, well, we're cool.

12:38We're all law and order. How are these things? Because you're conflating something totally different. I'm conflating law and order with law and order. No, you're okay. So you had a single incident. Single incident. Yeah. And the summer of Floyd was mostly peaceful. No, I'm not. Hold on. Just let's stipulate right now. I remember at the time you said this is totally different and that the Somerfao had no way you can... Because this is almost like... Somerfao was like a just cause. No, I did not say it was a just cause. I did not say... Look, and I was never a defund the police person or anything like that.

13:14You know that. You know that. Okay. You're going to tell me like five people died and you're going to tell me... I'm going to say... Usually an insurrection... I'm not even going to use the word insurrection. Good, don't, because it usually starts with armed. I'm just going to say there was an incident that was clearly a violation of law and order. What's your point, then, that the president who gave that speech and said, go peacefully? No, we're not even talking about that. We're saying here's a group of people who did something that was clearly illegal. And law and order. So let him stop it.

13:50No, and what happened? What? Every single person, practically, who was involved and engaged in that either was let out of prison, their case was expunged. You know, not a single person. They were ended all of that. Nobody did time from Summer of Floyd. None of those people even did a day. Half of these other people that were, you got caught up in what, going on, you were playing with Nancy Pelosi's laptop and swinging from the rafters with the guy with the horns. And come on, it was over by nightfall, Andrew. And it was terrible. But it's not September 11th. And you don't think the people who are engaged with that kind of stuff?

14:28Not September 11th. But you don't think the people who are engaged with that kind of stuff? I don't see what it has to do with this. Well, it's just the whole idea. No, it was more that you were making an argument that we needed law and order in D.C. And I was suggesting. And Baltimore and probably other cities. The crime in Baltimore is down by a third. You believe these statistics. Have you been to Baltimore? I have been to Baltimore. I was actually just in Baltimore as it happens. Do I believe the statistics? I mean, this goes back to the idea of do we believe the numbers? This whole conversation began because it was about do we believe the numbers?

15:01Do we believe the BLS numbers? Do we believe the labor statistic numbers? You can game the violent crime. You can game the violent crime? You either know the person's dead or they're not dead? You do know that Biden in the past, Biden in the past signed a congressional resolution in 2023 to overturn the D.C. city's revisions to the criminal code, which reduced all the maximum penalties for carjacking and illegal gun possession. You reduce the penalties, you reduce what is a felony and what's a misdemeanor. Wow, look at how felonies have dropped. By the way, that sounds like a terrible idea. Well, it got a lot of eyes from the Democratic side of the aisle when he did it in 2023.

15:39Well, it sounds like it was a terrible mistake. To reverse the... Well, you're telling me that... Biden reversed all of these revoking the maximum sentences. Yeah, it was a good thing that he did. And it got a lot of Democratic support to not allow them to lessen the sentences for serious crimes. Right. But that's what they were doing. You can you can classify a felony as a misdemeanor. And suddenly your felonies are down. Felonies are down 30. Did you ever see the wire or any? Of course. Then you see how these things are. You just think it's all manipulated. I absolutely do. I know what I feel like in D.C.

16:16What about the murder rate? What I feel like. Do you believe murder rates? It's not great. Do you believe murder rates? Yeah, you can see how many people died, but it's still way up. You can see they're dead or they're not dead. So it's down from really bad recent years, but still up from the pandemic. No, no, all I'm suggesting is there are cities in this country, unfortunately, and it's terrible. In red states? Yes, that's where the highest murder rates are. And? In red states. And? And my question is, would you then support the National Guard taking over those cities? Wherever you need to do it, yeah.

16:47Okay. And he definitely has the purview in this city, where the seat of government. Okay. January 6th? How did you get to January 6th? I love you, man. You can get there. Let's talk about Elon. We got Elon Musk. We got some big news with Elon Musk going on and Apple. You want to talk about the poor Doge kid, the big balls that had to crap beat out of him down there trying to stop a carjacking? That happened last week. Cheese will be next. Coming up. Some people are getting out their popcorn on this one. Elon Musk threatens legal action against Apple. He's alleging antitrust violations over seemingly preferential treatment of open AI in the App Store.

17:29CNBC's Steve Kovac and contributor Michal Levram explain the relationship. Apple has a partnership with open AI for powering its Siri and Apple intelligence products. And that in and of itself is not an antitrust violation. Squawk Pod will be right back.

17:51This is Squawk Pod from CNBC. Here's Andrew Ross Sorkin. Up in, Andrew. Welcome back to Squawk Box. Elon Musk threatening to sue Apple over the tech giant's App Store ranking for Grok AI chatbot versus OpenAI's chat GPT. Now, OpenAI CEO Sam Altman joined us on Squawk Box last week, and we asked him about Musk's comments that OpenAI will eat Microsoft alive. You know, I don't think about him that much. What do you think of the larger idea, though, that that he's effectively saying that OpenAI long term will eat Microsoft alive? I don't know what that means. Do you know what that means? I'm not sure what he means, except to say that he thinks in the grand scheme of the partnership that ultimately you'll have more power and more influence and more leverage over them than they'll have over you.

18:41I thought he was most, I mean, someone was, I thought he was just like tweeting all day about how much like open air sucks and our model is bad and, you know, not going to be a good company and all of that. So I don't know how you square those two things. Well, we're going to try to square those two things with two new things that happened overnight. Some people getting out their popcorn on this one. Steve Kovac is here. He joins us now with the latest. Yeah, well, Altman was certainly thinking of Musk last night because he weighed in on this comment by Musk saying he wants to sue Apple over those apps or rankings.

19:09Now, let's talk a little bit about what Musk is alleging here. He's saying the editorial decisions the App Store team makes is being is an antitrust violation because they promote the ChatGPT app and those recommended app rankings, but not the Grok or XAI app. So that apparently to Musk is an antitrust population. Let me talk a little bit, though, about how the app store actually works. There are these organic rankings, which is based on the popularity of how the apps are being downloaded. You'll see those in the most popular apps. ChatGPT usually ranks there, but that's just because more people are downloading it than any other AI app.

19:44And then there are a team of humans over at Apple who decide what apps to feature on a given day. You see this when you launch the App Store and it tells you, you know, you can look at this app or, you know, some kind of cool little article or something about it. That is that's kind of what Musk seems to be claiming complaining about. There are ways to get ranked, though. You can make a good app and get it and make it very popular. You can also pay Apple to buy ads to be promoted in the App Store. Musk seems to think he deserves to have this kind of free placement in there. And this really, guys, follows a pattern we've been seeing with Musk, where if things don't go his way, he likes to kind of sue or at least threaten to sue about it.

20:22We know, of course, he's suing OpenAI over the nonprofit issue there. He does have some good points about how that company was structured. He's also suing Media Matters, alleging antitrust collusion between a group of advertisers because they pointed out correctly, by the way, that a lot of ads were being up against some bad content. So this is part of a larger pattern, guys, that we see with Elon Musk, you know, not necessarily winning on product, but kind of trying to win in the court. This is not. And he hasn't sued, by the way. But this is not the this is not the App Store Apple tax debate.

20:58No, not even close. No. So but what do we think is really going on here that's preventing somebody else from getting to the top of the App Store? It's an editorial decision that Apple makes. So they have, years ago, I met with one of the members of this team, and they really think about this. They see what apps are cool, what do we want to feature. You know, there's no guarantee your app is going to get a good featured placement there, but you do get featured if your app is good. You can win in the marketplace, so to speak, right? You can make a really good app. Just so we're 100 % clear, you're saying the rankings.

21:29There are two rankings, right? Right. OK, so there's the one ranking that's just literally based on how popular an app is. Right. That's not what Musk is talking about. What he's talking about is this group of people who decide there are like these recommended app rankings. And those that's what he's complained about. When I go on the App Store. Right. And I look and I look at the number one, number two, number three. That's, I hope, a ranking based on some mathematical formula. Is that not the case? That's not. But that's not what it doesn't seem like that's what he's talking about, because then he just has to win by making a better app than Chachi BT, right?

22:04But I think that's what he is talking about. I think he's talking about the editorial decision because there are recommended apps. If you look in the App Store right now, just the homepage of the App Store, you'll see some apps featured there. Of course, they like somebody, they don't like somebody, whatever. But that seems to be his complaint. His complaint isn't that— He said you can't get to the top of the ranking. I think he's talking about the recommended one. If you can't get to the top of the ranking, that's on you, Elon Musk. You have to make a better app that people want to download. See, I thought, okay, so here, top free apps right now.

22:33ChatTPT is at the top of that list. Right. Top charts. And that's based on how many people are downloading it. Correct. That's not based on any kind of editorial choice. There's no editorial choice. Now, there are sections in the app store where there are editorial choices. He's running at number five, by the way, at the moment. Yeah, and that's pretty darn good, by the way. He's behind the Tea Dating Advice app. We don't even want to get into what that is. I don't even know what that is either. A little bit of a sore subject, Andrew. You don't want to get into it. Do you know about this? Speaking of apps, where would my app be by now if you did it?

23:03It doesn't exist. Exactly. Oh, no, I've been building it on ChatGPT for him. Shouldn't it be done by now? Well, ChatGPT 5 is super slow. No, that's my point. So 5 has been slower than I expected. It's really slow. And then separately, it threw me into GitHub with the code. When are you expecting this to be? What is the app? I have my people. Oh, you don't know about this? No, I know it's a Joe Kernan app. This is the Kernan. You would want the opposite app. This is the Kernan MSM Truth app. So what this app does is it looks at the day's news and then it takes the most conservative view you could possibly take at it and tells you what's wrong with the news.

23:41It would be the anti-Kovac app. It takes the emails Joe forwards me in the mornings. You only got one. Bingo was his name up. But if I don't get up there where it deserves to be, you should sue. You should sue. You should get on. So where are we on this? I'm like halfway in. And then I didn't give up. I just need to spend more time to work on your book. You know, I got I got other work to do. You do. OK.

24:12Joining us right now on her thoughts on all of this is Michal Levram, Silicon Valley journalist and a contributing editor at Fortune magazine, as well as a CNBC contributor. What say you what do you make of this? Well, good morning, Andrew. I don't know about unequivocal. There are definitely some really valid issues that Musk raises here. What he's basically saying is that Apple is giving OpenAI preferential treatment in its App Store rankings. And like you said, threatening to take legal action. As we all know, Apple has a partnership with OpenAI for powering its Siri and Apple intelligence products.