Elon Musk’s Interview with The Economist & Lina Khan’s NYC Role 7/24/26

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0:47Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, when Elon Musk went on the record, the world's richest man spoke to The Economist on tech, on politics, even his personal brand. We'll talk to the editor who did that interview, Zannie Mitten-Beddoes. You guys had a lot of debate. I want to know how it ended. We ended perfectly amateur. I hope he'll talk to me again. We'll see. It was really interesting, but I think it was important to push back on these areas where I think it deserves being pushed back on because I just think it's not right what he's saying.

1:31Lena Kahn made waves as head of the Antitrust Federal Trade Commission during the Biden administration. Now she's got a new gig running economic development for Zorhan Mamdani's NYC. CEO whisperer Stephen Fulop of the business group Partnership for New York. When you put people in prominent positions that aren't necessarily pro-business, it sends a message to the business community that is mixed at best. And that's kind of where we are. Plus, trading on truth. Wall Street firms are paying thousands a month to get a fast track to the president's posts on Truth Social. Wall Street Journal reporter Gunjan Banerjee.

2:06Nanoseconds matter. We're talking billions of a second can make a difference in terms of their profits or losses. It is Friday, finally, July 24th. Squawk Pod begins right now. Stand, Andrew, bye. In three, two, one, cue Andrew. Good morning and welcome to Squawk Pod right here on CNBC. We're live at the Nasdaq market site in Times Square. I'm Andrew Ross Sorkin along with Melissa Lee hanging out. Joe and Becky are off on what's called a summer Friday. Is that what we'll call it? Thank you for coming in and hanging out with us at this early hour, very early hour. President Trump hitting dozens of countries with new tariffs.

2:44It's all happening this morning. And Eamon Javers joins us from Washington, D.C. with the latest. What's happening here? Yeah. Good morning, Andrew. Just a few hours before those 10 percent global tariffs expired overnight, the White House announced a new round of tariffs that will effectively replace those worldwide duties with a new set of tariffs. Now, these new tariffs are being imposed under Section 301 of the Trade Act of 1974. This is one of several trade authorities that the president has used. These tariffs took effect at 12.01 a.m. this morning. So they're just a couple of hours old and they impose duties of 10 to 12.5 percent on 60 economies over what the U.S.

3:25describes as forced labor practices. Now, bear that in mind because that's going to be part of the controversy here. A senior administration official tells CNBC these Section 301 tariffs will not stack on top of existing 232 tariffs. Now, the announcement marks the administration's latest tariff action after suffering a major legal setback earlier this year when the Supreme Court largely struck down President Trump's so-called reciprocal tariffs. Andrew, this is all about this question of how can the president find tariffs around the world that he can use to replace those reciprocal tariffs? He had the temporary tariffs in place.

4:03Now he's leaning on this issue of forced labor The critics are saying, look, this isn't really about forced labor. The president is not really particularly concerned about that issue. What he wants to do is have this blanket tariff regime. And so you can expect that this will be challenged in court under those grounds. OK, so who has standing to bring a case? How would this work? How long does this take? Sort of walk us through the next set of dominoes. It takes a long time. And what we saw with the tariffs last time and the legal challenges, people who are impacted, have standing to sue. So in this case, somebody who is an importer who relied on some goods that are now being tariffed and this impacts their business, those are the types of people you can see filing a suit.

4:51And so you can see lawyers going around gathering up some plaintiffs like that, looking for particularly sympathetic ones in order to make the case. And then you bring that. And what we saw with the first round of tariffs is this takes a tremendously long time. And you could go all the way to the Supreme Court again at some point, depending on how things go in the lower court. So this is not going away anytime soon. So if you are one of those people who has to pay this tariff this morning, you're going to have to pay it. And then you're going to have to wait and see what happens in court and whether or not you get these tariff refunds.

5:23But we have seen companies getting these tariff refunds throughout the year for the last tariff regime that the president imposed. The administration feels this one is on much more solid ground because the legal, the statute is there in Section 301. They've done all the preliminary investigations and everything you have to do under the statute to do it. So this feels to them as something that's a lot more solid, and therefore they can really use it as a foundation for this tariff, overall sweeping tariff authority. And by the way, those tariff refunds don't make it back to the consumer if the consumer is going to be charged more to cover those tariff costs.

5:59We haven't seen that float back. But, Eamon, I'm wondering, you know, if we've heard from China, this makes for an interesting setup ahead of the Xi-Trump summit later on this year, because now the effective tax rate on China is higher than it was before. It's like north of 22 percent or so. Yeah. You know, Melissa, I have not seen any reaction from the Chinese side yet. That said, you know, it's very early in the morning and I haven't had a chance to scour all the media from China. So I don't know if we've seen a statement from them overnight. But, you know, the U.S.-China relationship is just under enormous strain just in the past week.

6:32Think about the tariffs here, but also you had the president accusing China of meddling in the election in 2020 that he lost. So this is a relationship where the president is really using China as a scapegoat for political and economic things going on in the country that he doesn't like. All of that pointing ahead to this September meeting here in Washington where we expect Xi Jinping to arrive. So, you know, does that trip continue? You know, we've had no indication that it's been canceled. But if it happens, it's going to happen under a whole new set of strains. Eamon, thank you. Eamon Jabbers in Washington.

7:13A bipartisan pair of House lawmakers want AI companies to maintain the ability to shut down their models if things go wrong. The introduction of the AI Kill Switch Act came just days after OpenAI disclosed that some of its models went rogue and access another company's proprietary systems. The bill would authorize the Secretary of Homeland Security to issue a shutdown order of AI technology that could cause catastrophic harm. Firms that don't comply could face penalties as high as$20 million a day. And a defense tech company, Antrell, reportedly in talks now with investors for a new funding round that could value that company at$100 billion.

7:50Reuters saying there has been talk now of Antrell using a two-stage process, which would force investors to commit to a financing, a second round, effectively, at a higher valuation that could occur within a year and involve Andrew meeting financial benchmarks. A$5 billion funding round led by Thrive Capital and Andreessen Horowitz two months ago valued Andrew at$61 billion. And I think if you look at the valuation of a Palantir, all of a sudden you'd say, oh, goodness. Or you can triangulate and go the other way and say Lockheed Martin is$131 billion. Right. So that's also mind-boggling. Somebody who's a little bit higher or lower than they should be.

8:29We'll see. The Wall Street Journal is reporting this week that Wall Street firms are paying$100 ,000 a month to get a fast track to the president's posts on Truth Social. Wall Street Journal lead markets writer Gunjan Banerjee was one of the reporters working on this story. She's also a CNBC contributor, joins us live this morning. So basically this is a feed that will go straight into a firm's black box. So they get it like milliseconds before? Exactly. So this is going to be the very fastest way to get Trump's truth social posts. And in this business, for the high frequency traders, the types of firms that are subscribing to this data, nanoseconds matter.

9:06We're talking billions of a second can make a difference in terms of their profits or losses. So they want to be the very first of these posts and make moves across stock markets, bond markets, derivatives markets. So is the advantage just because the company is saying that they are releasing everything at the same time. So nobody's actually getting anything early. But these firms that sign up, they can theoretically, they get it at the same time, but they are better equipped to trade immediately off of that release. Is that the way to look at it? Exactly. So they are saying that all these posts will be available once they become public, right?

9:39But how you get the data is very important. And API is certainly going to be faster than, say, me opening up social in the morning and then trying to trade off of the news. So one, this could shift the balance of power further towards Wall Street and away from many Main Street investors who might want to trade on this data. And there's entire Reddit boards dedicated to trading on Trump's truth social posts. But just zooming out a little bit, these HFT firms do everything in their power to get this data as quickly as possible, even tied to government data releases. Think the labor market reports, you know, inflation data.

10:12A lot of them try to put their computers next to the government data buildings around those reports to get it, again, nanoseconds faster. And that's a practice called co-location. They're also investing in the most expensive, fastest technology to get this data really fast and trade. The distinction, though, that we're not talking about here yet is that the president's putting this news out. And historically, when presidents or other federal officials have put news out, they also haven't owned the device with which people are going to pay to get the milliseconds of news ahead of time. right that is a distinction yes that's the big distinction here so yes hedge funds do this all the time but it typically elected officials are not you know we we say that um there's rules now in the white house that you can't use prediction markets to make money off of what you know before you know it but truth social is actually going to make money from what it knows before you know it you could argue it already is to some degree because that's become an outlet for the president to begin with.

11:21Is that factored into any conversation you've had with anybody who's actually thinking about this? It's really fascinating. When I was talking to traders this week, we started the conversation with commenting on how unprecedented this is, right? We haven't had a president who's profiting from these payments before. But then they went on to say, look, we have to do this. We have no choice but to subscribe to this feed if we want to keep up with our competitors and many of them said hey we're already doing it we are already doing everything in our power to get this data it's not up to them though i mean it they're playing by the rules that exist currently i mean i get the outrage but is there anything specific that prohibits this from happening is there anything that says that information that is you know shared by the government is in the public domain and so therefore cannot be profited on i'm not i don't know what the legal ramifications are.

12:13The distinction in this case is that the company that is the distributor of the information is also owned by the elected official, right? Andrew, that's a criticism that Democrats have had. Senator Warner of Virginia said this amounts to self-dealing by the president. He said this creates a two-tiered system for market data. Elizabeth Warren has spoken out against it. So has Chuck Schumer. That is the exact criticism for Democrats. I just wonder I don't care whether there's any firm or individual who will actually bring a case. Because interestingly, in this instance, all of a sudden, we were talking about who has standing.

12:48Right. Who is harmed by this? The investor who's watching us now, who historically had invested based on what they thought the president was saying, could argue now that they are harmed by this in a different way. Let's play this out then. There are feeds, like data feeds from the NASDAQ and the NYSE that traders pay for as well. The NASDAQ and the NYSE, it's pricing information. But they benefit from it. The question is whether the NASDAQ and the New York Stocks has no duty to a public citizen to do anything. Because they're not elected. There's not a public official role in this. so that now we're into an emoluments clause situation.

13:37I mean, there's just questions about how this works. I mean, there was always a question about the Truth Social piece of it to begin with, except that that data historically was distributed both on Truth Social, it ended up on Twitter. You could argue there was a different thing happening. When you're selling it directly, I just wonder whether there's a larger conversation that'll turn into potentially even a legal case. I don't know. I'm not suggesting there should be. I'm just suggesting that there's an interesting debate, at least that I keep hearing about, and I didn't know if that was something that you've heard about.

14:09So to the person at home arguing, hey, I'm now at a disadvantage, I would argue they've already been at a disadvantage. Wall Street has already been doing this. They have set up complex automated trading systems to screen for words like ceasefire, Iran, even terms like thank you for your attention to this matter. Oh, for sure. To act on this information as quickly as possible. They've already been doing this. To say that the person sitting at home has had an advantage or is on the same playing field as the Susquehannas, the DRWs of the world is not true. I'm not disagreeing. All I'm suggesting is that there's a distinction with the elected official element of this.

14:47That's the biggest change. And we haven't had that in modern history, right? And it's interesting. It's come up in my conversations with traders, but then it just goes back to we have no choice. Like their livelihoods depend on getting that data. It's not up to them to be the ethical watchdog. I get it. I get it. All I'm suggesting is if every senator or congressperson decided that they were setting up a special website where all their statements were available through their own companies and the only way to get them would be to pay for them if you wanted it early, I think that you would imagine that people would raise their hand and say, there's something not right about what's happening here.

15:28Santoli and I, yesterday at 4 o 'clock, when we were discussing the story, we were saying, well, what if CENTCOM set up their own direct feed? Because arguably CENTCOM would have very powerful tweets that impact the markets and use all that money to pay for the war. I mean, it's endless where this could be carried out. No, no, but you just made a distinction. But that's for the public good. If you told me that CENTCOM was doing this, and I don't know if I'd be fine with it, but if you said that CENTCOM was doing this and that taxpayers were the beneficiary of it, then you'd be okay with it. I think there's a very different conversation.

16:02I think the conversation I'm trying to at least suggest isn't happening, it appears, is that the benefit, the profit, is not to the taxpayer. Yeah, no, I agree with that. There is an interesting backdrop here where President Trump is one of the largest owners of Trump media, right? He's one of the largest shareholders. The company has not done very well this year. Its stock is down more than 30 percent. And it's actually venturing into some interesting business areas in order to try to turn its business around. It recently decided to merge with a nuclear fusion company. This is a media company that's merging with a nuclear fusion company.

16:38And advisors to the company told The Wall Street Journal recently that that was an attempt to turn its stock around. So they do view this as a cash cow for the company, certainly. Dungeon, fascinating story. Thank you. Thank you. Cheese will be next. Coming up on Squawk Pod, the interview making the rounds in tech and beyond. Elon Musk's change of heart on artificial intelligence, his willingness to work with his AI peers, his defense of who he calls normal people. I'd like to just admonish you and the media for the absurd characterization of the far right. It is false and misleading and nonsense.

17:19Please keep this part in. The editor-in-chief of The Economist, Zannie Minton-Beddoes, on her 90-minute chat with the richest man in the world. He's an extraordinary individual, and there were lots of times when I was kind of slack-jawed, at least inwardly. That's next. It's smart to always have a few financial goals. And a really smart one you can set? Earning cash back on what you buy every day. And with Discover, you can. Get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show.

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19:00podcasts. Welcome back. You're listening to Squawk Pod from CNBC, where we're talking about a pretty buzzy interview. Elon Musk sat down with the Economist Insider and spoke with the editor in chief there, Zannie Minton Bedos. That's where we start. The most immediate thing that we could do is to have the leading AI companies at least just meet or have some sort of call once every few weeks um and just uh discuss any safety and security issues but why why haven't you done that yet i mean you don't all like each other very much yeah yeah but you're not you're not all i mean you're also all competing right you all want to be first yes but that's that's where i think um the competitors can keep it keep each other honest so meaning like if um I think it's quite difficult for someone in the government who doesn't have a deep technical understanding and isn't driving the frontier of AI to know whether something should be released or not.

20:05However, the competitors, I think, if given sort of a week or two to review a new model, can highlight issues and have an incentive to keep all the competitors have an incentive to keep the others honest. That was Elon Musk going to sit down and interview with The Economist. Joining us now is Zannie Petos, editor-in-chief of The Economist, who conducted that interview. It's fascinating, Zannie. I thought you did an extraordinary job, and we were all glued to the screen. I'm curious. I mean, you touched on so many things. You touched on the AI piece, the whole idea that he really thinks within five years AI is going to be even smarter, potentially even than him, and what that means to his own power.

20:50You got into some of the things that happened with Doge and his role in the government, USAID. What was the thing? What was the moment as you were sitting there where you thought, huh, that really surprised me? Oh, so many. I mean, he's he's an extraordinary individual. And there were lots of times when I was kind of slack jawed, at least inwardly. I was really struck by the his vision of the future and actually the fact that he now thinks it is inevitable. that, as you say, within five years, AI is going to be more intelligent than humans. And that within 10 years, he's painting this picture essentially where, you know, we are like the kind of the Labradors to the AIs.

21:33You know, money will be irrelevant. It'll be such an era of abundance, but they will be in control. I think AI may exceed the sum of human intelligence in about in around five years. Five years? Roughly five years is my guess.

21:52So there really won't be anything that AI can't do better than humans, apart from being human, perhaps. In a more prosaic level, what will life be like? The most likely outcome is an age of amazing abundance where anyone can have anything they can think of. this is this is uh this may sound preposterous but well here we are in 2026 let's see where we stand in 2036 now of course there are things that could derail this like a massive global thermonuclear war or something like that you know you know andrew you know his background and he's you know this is a man who 20 in 2015 said on a podcast that that was one of the scariest things he could imagine.

22:41In 2023, he wanted to pause AI. And now he's, you know, he's, you know, right at the front of this. And I said to him, you know, it sounds like you've given up on your concerns and you're, you're, you're going along for the ride. And he sort of goes, yeah, I'm going along for the ride. For the longest time, I declined to participate in AI or was, you know, you know, created OpenAI as a, essentially a counterweight to Google, because at the time they had more or less a monopoly on AI. In creating open AI and then having Anthropics spin out of that and now currently Anthropics the leader in AI.

23:20These actions have actually resulted in knock-on effects that accelerated AI, which wasn't really my intention. So it just seems like all roads lead to acceleration of AI. so then i'm like okay well you can just sort of be sad about it or join the club and he said he admitted that within a within one day he would go from exhilaration to terror but i was i was very struck by the inevitability he thought that this technology and the speed with which it was progressing would mean that this extraordinary future would would kind of come within five years I mean, really struck by that. And again, at the same time, he laid out, I think, for the first time, and you showed that in your clip, a willingness to work with the other frontier model makers to have some kind of, and he wants it in from a typical Elon, right?

24:17He wants them all to get on a call and talk to each other and test each other's models for a week. And, you know, if they come up with security flaws, tell the model maker that's got them. And only then, if the model maker doesn't do anything, then go to the government. But I was struck how similar that is actually to the proposal by Dennis Osavis last week for a FINRA style public private partnership. And I think this really now has legs. I think this is going to go somewhere. He did seem to suggest that he'd be even open to talking to Sam Altman at some level. Absolutely. I mean, I hinted at that.

24:51No, no more than hinted. He said that. No, he absolutely said that because I said, look, you know, you are all massive, not just massive competitors. you know, many of you dislike each other and you're, you know, frankly, you know, slagging each other off on social media quite often. And he said at the end, he said, well, he explained to me why he disliked Sam Altman. But then he said at the end, you know, yeah, maybe we should talk for the good of humanity. And so I think there is a sense of responsibility that he recognizes that, you know, the leading model makers do have to do this. And I said, does this have to happen quickly?

25:25And he said, yes. And I said, well, yeah, people are telling me this has to be done within the next six months. He said six months is a very long time. It has to happen now. Right. I want to show a clip of another piece of this that's going viral. It has to do with, I think you might have used the word right-wing politics at some point, and he did not react well. Let's show that for a second. It's just more people. And here are the principles. And tell me which of these sound terrible. That we should have secure borders. That we should have safe cities, that we should have sensible spending. Which of those three are far right fringe?

26:02And I would like to just admonish you and the media for the absurd characterization of the far right. It is false and misleading and nonsense. Please keep this part in. We'll keep all of this in. Don't cut this part. Let me push back on that. Let me push back on that. Because you have... Nonsense. Elon, you have, what is it, close to 250 million followers on X. You say things like, quote, civil war in Britain is inevitable. Just a question of when. Yes. When were you last in the UK? A few years ago. Okay, so you obviously reacted in the moment, but now you've had even more time to react and think about that.

26:48You kept it in, so we all got to see it. What do you think? Well, of course, I kept it in because I think people should see the whole of the interview. I said to him that he supports not just the populist right in Europe, but the far right fringe groups that are nowhere near the mainstream and do actually propagate, not just the three characteristics he said, but really divisive far right politics. I think that's undoubted. And I think many of these politicians wouldn't be anywhere without Elon Musk's support. And I asked him why. And the reason I did that is because he also propagates a kind of caricatured view of Europe, that it is some sort of hellhole overrun with Muslim immigrants, incredibly violent.