Jensen Huang, FDA Commissioner Makary, & Beast Industries CEO 2/26/26

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1:04Hi, I'm CNBC producer Zach Valisi. Today on Squawk Pod, FDA Commissioner Dr. Marty Makari is pushing for changes in our health system. More approvals, more rare disease treatment, and more transparency. We decided at the FDA that if we reject a drug, the public deserves to know why. So for the first time in history, our letters detailing why a drug has not been accepted, detailing that we gave guidance that was not followed, detailing why the clinical trial showed no benefit, that is now public information in real time. In the AI world, NVIDIA reported strong earnings and guidance. CEO Jensen Huang spoke to our own Becky Quick.

1:46AI is a new industrial revolution. Huang even weighs in on the other AI story of the morning. the Pentagon's showdown with Anthropic. Here we are in a standoff that is actually, I think, a much bigger deal than maybe we're even giving it credit for. Plus, the Beast Games finale in the books. And season three already underway. Beast Industries CEO Jeff Hausenbold on producing Mr. Beast, the most followed person on the internet with one billion followers across all platforms. How much more can that grow? There's seven more billion people to get. It's Thursday, February 26th. Squawk Pod begins right now.

2:30Stand Becky by in three, two, one, cue it please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernan and Andrew Ross Sorkin. And chip giant NVIDIA reporting better than expected fourth quarter results. It was driven by revenue growth of 75 % in its core data center business. That's a business that's very important to NVIDIA. They control about 95 % of that market. They see profit margins or gross margins of 75%. They are the 800-pound gorilla and then some when it comes to all of this.

3:08And we spoke with NVIDIA CEO Jensen Wong about that revenue growth in AI chip demand first on CNBC. Demand is really strong and it's diverse. It's coming from all over the place. At the core of it, Becky, what's happening is that AI just went through its third inflection. The first one was two years ago with ChatGPT. And then the second one was about a year ago when the reasoning AI agents came out, reasoning AI systems came out. And the number of tokens, the amount of computing demand that it needed to be able to reason and produce all the excellent answers that these chatbots were doing was really sky high.

3:46And then now with these agentic systems, we're now having these agents able to reason, take tasks, and actually do work. And so the agentic systems are doing incredibly well all over the world. Of course, you've heard how cloud code and OpenAI's codecs are doing incredibly well in companies all over the world in software programming. But it's starting to spread out into all these different other types of tasks. And so at the core, it's because AI has gone through a new inflection point and the amount of computing demand is off the charts. Let's talk a little bit about your customers, too, because you did say that the big companies, the big hyperscalers, actually increased the amount of spending.

4:30And I think they make up about half of the spending that went into the data center segment in particular. But you said the other customers were growing really quickly, and that's where so much of the growth came from. Who are those other customers? You know, most people see AI as a chatbot. And it's understandable because OpenAI is so popular and they're doing so well. and we hear a lot about cloud code. But remember, AI is about a new way of doing software and affects every single industry. NVIDIA is really fortunate in the sense that we are the computing platform, the accelerated computing platform for every cloud, for any model, as well as every different domains of science.

5:09And so we're seeing success, whether it's in small cloud service providers regionally around the world, It could be an enterprise. Our big partnership with Lilly, we have many others. Car companies that are building autonomous vehicles, the robo-taxi era is coming. And so there's a whole bunch of computing being built for that. Scientific computing is being completely revolutionized by artificial intelligence. And so, you know, the number of industries that are affected by AI, because AI is fundamentally a new way of doing software, is going to be very broad-based. And that's one of the reasons why I say AI is a new industrial revolution, because every single company is affected, every industry will be transformed, and every country will power it.

5:51And so it's broad based. Again, though, you talk about their market share of that data center chips, 95%, the estimates run from 90 to 98%, but about 95%. And when you have margins like that, 75%, it's obviously a market that lots of others want to get involved with. You did her earlier this week about AMD cutting a deal with Meta. That's supposed to be a multi-year deal that they are going to be looking at as well. You have all kinds of competitors who are trying to get in on that, but you also have NVIDIA kind of running as fast as they can. The new chips that are going to be rolled out, they talked about those new chips that are coming, Vera Rubens.

6:28That will be the second half of this fiscal year, and that is the way that they are planning to try and keep some of that market share. We'll show you more excerpts from this interview a little later today, just talking about the competition they're facing, talking about what he sees with the SaaS apocalypse or whatever you want to call this, just where those SaaS companies are really under pressure, because you also heard a report last night from Salesforce. That stock was trading a little lower on some of these questions. But we'll get Jensen's take on whether this is overdone in the market.

6:55It's just how long can you keep running ahead of the law of large numbers? Yeah. And that's part of the question. That always, that's like Einstein could have proposed a physical law that there's something called a law. Kind of, but no one's ever, you can't break through the law of luck. But AI might be so, it may be different this time so that you can, how do you do, a$5 trillion company, how do you double a$5 trillion, I guess it goes to$10 trillion. Yeah. Look, OpenAI is a good example of a company that had a valuation of$200 billion and$400 billion and$500 billion. But we're at$5 now. And you're getting 75 % revenue growth on what number did they get the 75 on?

7:39It was$68.1 billion. It was what they did now. It's what they did this time around. So do you do 75 on 68 next year? Well, that's where the data has come in. And if you look at the valuation that the street gives just in terms of P.E. ratio, they are valuing NVIDIA at lower ratios than they are any of the other chips at this point. Because of exactly what you're saying. The bears say it's priced for perfection. It's almost priced for you are assuming you're going to beat on all metrics. Yeah, perfection plus. Right now with where it is. But they may even continue to beat on all metrics next quarter and the quarter after that.

8:13The guidance that they issued for the current quarter in terms of revenue was$5 billion above what the street was expecting. And still, you saw the stock at one point up 3.5 % to 4%. It dropped while I was talking to him yesterday, and now it looks like it's up by less than 1%. So have you thought, both of you, about how many things would be replaced by agentic AI? I've only thought about travel agents and a couple of things. How many things are there? I think you might be replaced by AI. Us? Yeah. Not you? Max Headroom? No, I'm going first. Did he speak at all to this circular stuff, the whole idea of this sort of vendor financing?

8:52Because vendor financing can work in certain instances. By the way, Boeing does vendor financing. People do vendor financing. He used to do some great. We didn't get into in-depth with that. But if you looked at the numbers yesterday, the cash flow that they had at the end or the cash and cash equivalents that they had at the end of the quarter was$20 billion more than it had been. a year ago. And other analysts were looking at that saying, if you were worried about the vendor financing, that tells you that they have money to spread around. The other issue is that so much of the vendor financing is kind of pointing at areas where you could see a real bottleneck for AI to try and move forward.

9:31At one point, people thought it was the NVIDIA chips, but they said they've got supply to last several quarters looking out. That was the other they said last night so the bottleneck is not going to be nvidia chips probably at this point but other arenas and that's where some of that money's going and where would you try to play if if it doesn't work andrew what would the journal points out that bears are they're doing out amazon and alphabet they're not doing nvidia they're doing they're supposed to come up with a combined 670 billion to build out just their ai infrastructure so is that overdone for those two Can they, they got it, don't they?

10:07I mean, Alphabet's results are out of control, too. And they need to do it, but they got the money, too, don't they? And they have the money. It's a different story, but that's a different question than the rest of the whole business. We'll see. Netflix co-CEO Ted Sarandos is reportedly heading the White House for meetings today. A Politico report says Sarandos will be talking about his company's bid for Warner Brothers Discovery, obviously. And President Trump's call for Netflix to fire board member Susan Rice, but it's unclear if Sarandos will meet with President Trump himself. Netflix declined to comment on the report, and the White House says it's not going to provide information or discuss private meetings that may or may not be happening at the White House.

10:57The Pentagon potentially laying some groundwork for a move against Anthropic. Axios now reporting the Defense Department also asking Boeing and Lockheed Martin yesterday about the company's exposure to Anthropics AI model. Claude, that could be an indication that officials are getting ready to label Anthropics a supply chain risk. The Pentagon putting pressure on Anthropics to let the government use the company's technology for what they're saying is any lawful purpose it wants. Anthropic has pushed back on that broad access. And sources tell CNBC that Defense Secretary Pete Hegseth gave Anthropic until tomorrow afternoon to provide wide access to its technology before the government could label Anthropic a supply chain risk or invoke the Defense Production Act.

11:40So here we are in a standoff that is actually, I think, a much bigger deal than maybe we're even giving it credit for. It involves so many things. You say the word Hegseth and it involves a lot of things. No, no, to me, this isn't even about politics. It's about the idea that Claude and Anthropoc in particular, they've been the most worried about safety of all of the companies. They seem to have this week, we talked about it earlier this week, sort of lessened some of their views about that. They gave lip service to it, but acted differently. Well, no, no, no. So there's two things going on. There's the safety issue just about, like, how safe is Claude?

12:23How safe are all these models? And the fact is that they're actually lessening that in their safety briefings and things. They're going to become more competitive. That's what I mean. To be more competitive. At the same time that they're saying that this stuff could still be used in really bad ways. Yeah. And so here we are. I do think it's a serious concern that Dario Modi has had over this time. And by the way, we talked to Jensen Wong about this, too. We'll play that a little later. just bringing this up because Anthropic is a strategic partner. And customer. And customer. And where does he land?

12:54Can you give us a little hint? I asked him. The Defense Department has the right to use the technology and use the products that they procure in the way that serves their needs. And obviously, their needs are the pen of war. In the case of Anthropic, of course, they have the right to decide how they would like to market their products and what kind of use cases it could be used for. And so I think they both have their reasonable perspective. And however it gets worked out, this won't be the—Anthropic is not the only AI company in the world. And of course, the United States is not the only customer for any company in the world.

13:33And so I think they both have their proper positions. I hope that they can work it out. But if it doesn't get worked out, it's also not the end of the world. I don't think we're a genetic threat. threat. I don't think it's a threat to us. Why not? Because we have because it's garbage in, garbage out, and we have perfected our garbage. Oh, you mean to us as anchors? Yeah. Oh, I thought, I'm talking about... But I think it is a genuine threat to us. You can't, they don't, they don't have general AI. Yes, I see. That too. Long term. Even you. Even you have perfected. Even you have perfected. I like how you each say even you.

14:12No, even you have perfected. Well, Becky's obviously safe. Well, she's safe, but even you are essential. You're essential. You need key man insurance if you don't earn him. I think Andrew's talking about concerns about humanity. I'm saying there's some real... Oh, I'm talking about humanity. I'm talking about robots that are controlled by Claude and drones. All right, they're not going to be sitting here. The way the government can use these things and can use these things either inappropriately on their own or use these things inappropriately without even knowing they're using them inappropriately.

14:42The agentic was going to replace us. That's what I'm still focusing on. You're still back on that. Yeah, I'm still back on it. Always thinking of, you know. Right, enough about me. Let's talk about me. Focus on number one. Cheese will be next. Coming up on Squawk Pod, FDA Commissioner Dr. Marty Makari, the internal politics at the FDA, and the number of medical reforms he's been pushing forward. Just 10 months on the job. We've advocated for many more reforms in the 10 months that I've been at FDA. We advocated for the renewal of the Pediatric Priority Voucher Program that gives companies$100 to$200 million in the form of a transferable voucher if their rare disease drug is approved.

15:24Rare diseases is the vast majority of the resources in our drug effort. It is now the majority of drugs that we approve are for rare diseases. We're back after this break.

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17:39Welcome back to SquawkPod. Here's Becky Quick. The FDA has released a framework to accelerate the development of therapies for rare diseases. Joining us right now is FDA Commissioner Dr. Marty McCary. And Commissioner, thank you for being with us today. This was big news earlier this week when you put out this new framework the FDA is going to be working on. And I think you phrased it best when you said rare isn't really all that rare at all. Rare diseases impact about 30 million Americans. But the system that we have set up right now to approve any sort of medications, therapies that might assist with that is really set up for ailments that affect much larger populations.

18:20What are you doing with these new requirements that you're laying out? Well, good morning, and you're exactly right, Becky. The system has been set up for common diseases and not rare diseases. For example, the requirements to do randomized control trials when these populations are very small. And I want to thank you personally for your passion on this topic. We need to generate more awareness. I personally am very passionate about this topic, having taken care of hundreds of individuals with rare diseases in my career at Johns Hopkins. That's typically where people would go to tertiary medical centers.

18:50And when you take care of these people and you break bad news and you say, hey, there's nothing out there that we know of that can be used as a therapeutic, it has an impact on your soul and your thinking. And so I bring a sense of urgency and a sense of we've got to do something about this community to my role at the agency. As you said, about one in 11 Americans has a rare disease. Now, the FDA in the past historically had treated therapeutics for rare diseases like an afterthought. But today we have tax credits, waivers of the$2 to$4 million application fees, extended market exclusivity, and we've got a new rare disease innovation hub to train the reviewers on standardized approaches.

19:32And we've advocated for many more reforms in the 10 months that I've been at FDA. We advocated for the renewal of the pediatric priority voucher program that gives companies$100 to$200 million in the form of a transferable voucher if their rare disease drug is approved. Rare diseases is the vast majority of the resources in our drug effort. It is now the majority of drugs that we approve are for rare diseases. And President Trump signed that voucher program into law three weeks ago. We also announced at JPM that we're going to have more regulatory flexibilities with manufacturing requirements.

20:06You don't have to routinely run three batches of a product when a scientist in a lab develops a new gene therapy for a baby like baby KJ. We're going to use Bayesian statistics that looks at all the trials, all the data in the world, not just looking at a trial in isolation. And, of course, we published in the New England Journal of Medicine and announced on Monday our plausible mechanism pathway. We want to see more baby KJs. If there's a mechanism that makes sense, we waive all the clinical trial requirements. And we say if this is safe and looks like it works for an ultra rare disease, we're going to go ahead and green light that therapy.

20:41Marty, I love all of these things that you're laying out. I think it's incredibly important. We just did a story yesterday about baby KJ. For anybody who wasn't watching, he was a baby who was treated at Children's Hospital of Philadelphia with a genetic therapy, the first of its kind, and it looks like he's doing very well. And huge props for what you are doing. I will also say investors that I've spoken with will say these are great moves for ultra-rare in particular, but there are concerns about slightly less rare diseases and some of the things that have been happening there. This was laid out yesterday in a Wall Street Journal opinion piece or editorial, where they raised questions about what you were doing, which looks like it's great for rare disease, but then at the same time, Dr.

21:27Vinay Prasad at the FDA has been quietly, they say, undermining the program by, you know, turning down with a CRL, a complete review letter that turns down some of the things for these companies that are working on rare diseases where they had been following the advice of the FDA from earlier, and it looks like they're changing the rules of the game later. How do you respond to that? Well, first of all, Becky, there's always going to be two sides to a story. You know, imagine in a theoretical, I know this has never happened to you, but if you have a dispute with your spouse, and you go to a captive audience, you're always going to give one side of the story.

22:04And so we decided at the FDA that if we reject a drug, the public deserves to know why. So for the first time in history, our letters detailing why a drug has not been accepted, detailing that we gave guidance that was not followed, detailing why the clinical trial showed no benefit, that is now public information in real time. So I think there has been a bit of an effort to find a boogeyman to account for certain products that were not approved. For example, there was a product where the researchers drilled a burr hole, literally a hole in people's skulls, to inject intrathecally into the ventricle.

22:43A therapy, the randomized control trial at the end of the randomization period, has found no benefit. And yet this is one of the drugs that we were pressured to approve. Now, look, I have a lot of sympathy for those patients. There's nothing out there to offer them, but we're not going to go ahead and approve something like that that has morbidity associated with it if the clinical trial was stone cold normal. The process is pretty simple. If your drug works, it's going to get approved by the FDA. And let's just remember, there are moneyed interests. I get it. If I were an investor and I put in$100 million into a product and you You didn't get the results that you liked.

23:21It is disappointing. But there has been sort of this effort to put a fatwa on Vinay Prasad by one or two media outlets as if he's the one who's making these decisions. One of them was not even in his center cited in that article. Doctor, what's he doing in the Trump administration in the first place? He couldn't be confirmed by the Senate most likely because he's such an ardent supporter of Bernie Sanders and government-run health care. So what is the upside or the what do you see in him to leave him in the position of to head up your biologics unit? Well, Joe, that's part of the smear campaign.

23:59I'm picking the best scientist. Vinay Prasad loves President Trump. He he did support Bernie Sanders in the past, but he saw the incredible revolution with President Trump and is an ardent supporter of President Trump. Just listen to his podcast for this. Well, if you if you listen to his podcast for the last four years, you'll see that he has been an ardent supporter of everything President Trump has done and is trying to do. We pick people based on the best scientific minds. When you have a surgeon, you want the best surgeon out there. Vinay Prasad is a genius. He's on loan from UCSF. He's published over 500 scientific peer-reviewed articles.