Jensen Huang on AI Safety & Bob Chapek on His Disney Ouster 9/28/26

22:26Jensen Huang:I mean, if you're using it and your agents break out, you say, wait a second, I'm using OpenShell. It's NVIDIA's problem. Now, the open hugging face, it hosts the models. It doesn't run the models. You download the models. and once you download the models, the models become yours. The model, it's really important to realize that we call them model companies, but in the end, the model doesn't do anything. It's the agents that does something. So this is a tool. And so the model is kind of, yeah, the model is the engine of the car. The agent is the car. And so I wanted to go back to the liability piece of this because I think it's so fascinating because the other side of it, we've read reports that people like Scott Besson have even talked about the idea of building a FINRA-style regulatory body or agency that can oversee this.

23:18Tell us what you think of that, kind of like a FINRA-style regulatory body, whether that makes sense. Some of the reporting suggests that Scott, maybe over the summer, had been thinking about some of this. You might even talk to the president at some point about not going in this direction.

23:34Jensen Huang:Well, first of all, I think that we need to have an industrial set of standards and policies. And those industrial standards, like many other industries, set expectations of the level of quality. Maybe they're third-party auditors, agencies that help you audit whether you achieved the level of performance and quality that you expected and that you promised. That their industry is a benchmark, products versus others, so that the better products that deliver on better safety and capabilities rank higher than the others. there's many industrial systems that I could imagine putting together. If the policies are such that open models are not harmed, young companies are not harmed, that every company could become an AI company, that every bank could become an AI company, that every retailer could become an AI company.

24:40Jensen Huang:So long as we could see policies that don't suffocate the industry too quickly. Because as you know, the AI industry hasn't formed yet. Every single company here in New York, they're all going to be AI companies. And so every car company is going to be AI companies. And so we need to give them a chance to be able to become one of those companies and don't suffocate the industry quite yet. Is that what you think the heads of the frontier labs have done by calling for a slowdown, that it slows down everybody else, just lets them stay ahead? You know, I'll assume that what they're claiming and what they're asking for are genuine and their concerns are genuine.

25:34Jensen Huang:I think just in consideration of the whole industry, in consideration of all of the United States and the entire market, I would just make sure that when we think about AI, don't think about AI as several model companies. Remember, AI is a five-layer cake, as I've described to you before. And the most important layer of the five-layer cake are the end industries above it. I think that Walmart's an AI company. FedEx is an AI company. I think that JP Morgan's an AI company. And I think that that, you know, Lily's an AI company. All of these companies have to be AI companies. So we have to give everybody a chance.

26:13So when you hear David Sachs say this, the motivation of the leaders of these these firms, it's all and it's all a regulatory capture. I think that's Rebecca. It's all just an effort to to sort of capture a particular part of the market. And, you know, Sam and you know, Dario, Dario just had dinner with the president apparently last night. What do you think of that?

26:36Jensen Huang:Whatever their intentions are, we want to avoid regulatory capture advertently or inadvertently. And the technology is moving really quickly. Just think, we want the technology to accelerate, not the other way around. And I can just go back in time and think about this. When ChatGPT first came out, remember, if you go back and use it again, people said GPT-2 was so dangerous it shouldn't be even released. And at the time, I was advocating for AI to accelerate. The reason for that is this. One, we solved the hallucination problem. It's now much grounded on facts. Notice how AI is able to now use useful tools so that it could do the job properly.

27:20Jensen Huang:We can now condition the AI and prompt the AI so that its context is much richer. No, all of this capability was made possible. It's more trustworthy now. It's more functional. Of course, it is much more predictable. All of those reasons, all of those capabilities are made possible because we accelerate the development of AI. Accelerating AI and accelerating AI safety is the same idea. I prefer today's car over the car 100 years ago. At ABS, it has lane keeping. It has much better braking systems, airbags. I mean, all of these different technologies are made possible because of the advancement of the technology.

28:02Jensen Huang:And so I would advocate that today's AI, when we think about advancement, you don't have to think about it separately from capability versus safety. To me, it's the same thing. And so we want to accelerate the advancement of AI. And today we're putting forth this new technology, OpenShell and NVIDIA Sentry, that these two technologies make it possible for us to contain and to monitor. But it takes a lot of technology to make this possible. Do you get frustrated by, look, everybody at this point, I think, is either getting painted as a doomer or somebody who has absolutely no interest in any safety at all that's going on.

28:39Jensen Huang:I read an article over the weekend that compared you to Thanos, the supervillain from Marvel. But when you actually sit and talk to you, it's a much more nuanced view than that. You do want some of these safeties. I'm a responsible optimist. I'm a responsible optimist. If we're not optimistic about this future, for what reason are we building it at all? And so I think you've got to just maybe sit and contemplate, for what reason are we bringing everybody along if we're not optimistic about its future? But we also have to understand that technology is powerful. and the technology is powerful, so we have to build it safely and we have to build it responsibly, which is the reason why we built OpenShell, which is the reason why we launched all this technology.

29:18Jensen Huang:It's the reason why all of these companies have joined us. You know, look, I've got a lot of adult friends. These are leaders of giant industries. We're not Pollyanna about any of this stuff. However, we are serious about creating the technology, doing it seriously, doing it responsibly. There are laws. We comply by laws. The reason why we love this country is because it's a rule of laws, and we've got plenty of laws and regulations. Apply those laws and regulations. Apply those laws and regulations. Take our job seriously and build for an optimistic future. I've got two questions that relate to China, because I think underneath a lot of this, in terms of the rush and the speed, is this idea that we're in this deep competition with China.

30:05I've always thought, maybe you'll agree or disagree with the theory I'm about to pose, that China has oftentimes been very permissive about technology early on. I think about crypto, I think about Alibaba, and then what happened with Ant later. But oftentimes, at some point, when they feel, or if they feel, that something's going wrong, they clamp down. And so I'm curious whether you think, you know, right now we're in this race with China because there's a view that China's not going to hold back. But whether you think there could become a moment where China says, you know what, actually, we need to control this like full on.

30:37We can actually, we really need to control this in a different way.

30:41Jensen Huang:Innovation and regulation are not conflicts. Innovation and regulation are not conflicts. The question is, which one do you lean towards at which phase of the industry? At the beginning of the industry, when the technology is being invented and nobody really knows how it's going to turn out, it would be a shame to regulate before understanding. And so you regulate prematurely as a result, the technology doesn't get a chance to innovate. And for example, we never got a chance to invent automatic braking systems. We never got a chance to invent airbags. We never got a chance to invent all the technologies that made the cars, made transportation safer.

31:26Jensen Huang:We never invented autopilot systems with redundancy and diversity. But you're not calling for protection from regulation, like a Section 230. At different parts of the industry's S-curve, there's a constant of the S-curve. In the beginning, it kind of goes slowly, and then it grows exponentially. But eventually, it kind of plateaus out. I think that for new industries, when the innovation and the industry is changing so fast, you ought to let it innovate so that you can learn about it before you regulate it. But do you see a moment where... And that's kind of the way they are. They build, then regulate.

32:01But do you see a moment where they do? And the reason I mention this is because maybe it changes the dynamic of the race. Because if you think at some point they will slow down.

32:09Jensen Huang:That's right. When the technology becomes more clear, you regulate. When the technology becomes more clear and you can see the landscape shape a little bit, then you regulate. Now, of course, it's not an on-off switch. You know, the temperature increases. In the beginning, the innovation temperature and the energy is super high. and maybe regulation energy is slightly lower and people watch. But over time, the regulation and temperature ought to raise, just like it's raising now, because we have a better understanding of the technology today than we had two years ago. Could you imagine if we were to shut it down two years ago?

32:45Jensen Huang:We would have the worst AIs in the world. Unsafe, unuseful, uncapable, no industry, no benefit to society, all at the same time. I had one other related question, which is about distillation, which is just the idea of whether you think where we are in the race. And if China can't distill from us, which some people think is stealing. I know other people think distillation is not stealing. How you how you think about that? People distill my products every single day. They take it and they strip it down to its raw parts. They test everything. That's called competition. Do you think that's fair game?

33:19You think distillation is not robbery?

33:21Jensen Huang:That's called competition. OK. Yeah, you're allowed to test somebody else's products all you want. People strip our products down to nothing, down to bones. And I prefer they didn't. I really prefer they didn't. I really prefer that nobody learns from our products and we have the benefit of just cruising along. But, you know, frankly, competition makes everything better. And so I would, number one, if you don't like that, if you don't like people to use your products, know your customers and disable the service to them. And so I am fairly certain if Netflix can solve this problem, you know, and they know your customers and disable the service and don't give you access, you could probably do the same for AI.

34:10Jensen Huang:Jensen, I know you have to run. Your stock was up about one and a half percent, 1.7 percent now. It jumped on the news of the share buyback, not the OpenShell and Sentry, but I'm guessing you think OpenShell and Sentry is the much bigger news today. Yeah, really important news. And the reason for it is, of course, we can't have a successful AI industry if the world doesn't think it's built or confident that it's built and deployed safely. And so today's the open agent safety system is really, really important for that. We've got the the support of a giant industry to work with us. I want the world to know that this industry has the technology, it has the maturity, has the responsibility to do it right, and we will do it right.

34:53Jensen Huang:And so that's number one. I think we're going through the largest infrastructure buildout in human history. And we have the benefit of being a very central part of that. We're generating a lot of cash. We're going to generate a lot of cash in the coming years. And every single year as we generate more cash, we like to be able to return it back to the shareholders. Wonderful. Jensen, thank you for joining us this morning. We really appreciate it. Up next, the Bob breakup. Over time, I feel that sort of my healing process stopped. Former Disney CEO Bob Chapek succeeded Bob Iger in 2020. He was out two and a half years later to be succeeded by Bob Iger.

35:39Now, Chapek is describing what he saw as a concerted effort by Iger in the media to diminish his role. What was your relationship like with him prior to all of this? We would, you know, drink red wine and play Name That Tune with songs from our phones. And it was as good as it could be. And that's why I never saw this coming. Bob Chapek tells his side of a painful professional story when Squawk Pod returns. Never bet against American grit or American energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time.

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37:42Welcome back to Squawk Pod. It is one of the strangest corporate succession battles in recent history. Disney had a splashy rollout of a new CEO in early 2020, Bob Chapek, who'd be taking over leadership at the House of Mouse after a long and legendary run by another Bob, CEO Bob Iger. He had been doing the job since 2005, Except basically five minutes later, a global pandemic upended pretty much everything, especially businesses like theme parks and movie theaters, i.e. Disney. Bob Chapek himself had kind of a rocky run. He was forced out by Iger a little more than two and a half years after his appointment, and a surprise move that came over a weekend.

38:26It was one really bad public breakup. Andrew Ross Sorkin takes things from here. Joining us right now is former Disney CEO Bob Chapek. He's got a new book out, comes out tomorrow. It is called Behind the Castle Walls, My 30 Years at the Happiest Place on Earth. And it's a fascinating book. But I know that the last three years were not the happiest place for you. No. And you detail a lot of that in the book. And I just want to understand it from your perspective, because I was fascinated as I was flipping these pages about your own sort of emotional feeling that the whole time you're in this role, you think you're being undermined by the other Bob, Bob Iger.

39:11Right. Well, if you would have asked me any time in the last 30 years whether I'd ever be sitting here talking about a book that I wrote about my experience at Disney, I would have said absolutely no. And in the very beginning, the first few years, I was going through what I would call a process of healing. I was trying to understand what was happening and the thought of writing a book was put into my mind by a friend of mine who's an author, a biographer. And I said, no, I just couldn't see myself doing that. But over time, I feel that, you know, sort of my healing process stopped. It stopped because I couldn't get over the edge because every time I go on to the Internet, you know, I see fantasy.

39:55I see rhetoric, things that have filled that void. About you. About me, because I hadn't said anything in the four years, nothing. I did not give one interview. And I felt that it was certainly one-sided and, frankly, not accurate. So I felt compelled to do it for my legacy. I felt like I had to get the truth out there. And it was all right in front of all of us for so long, and we just ignored it. So here's the part I still can't wrap my head around. In the book, you effectively say that within days, frankly, of getting this job, you believed that he, meaning Bob Iger, had chosen you and effectively chosen you to fail.

40:39And I couldn't get my head around that, even to this day, that idea. Yeah, I mean, that's certainly a possibility, but I don't know that you even necessarily have to characterize it that way. I think he chose me some time past. And if you watch the first interview I did with you guys. Yeah.

41:02Jensen Huang:There is a first interview after getting after getting the job. Right. We had, I think, you and Bloomberg over to the studio. And there was a rigidity, a certain hesitancy. And I was called by a reporter and the reporter said, did you see his body language? And I'm like, I was obviously sitting there. I didn't want to comment on it. But yeah, I was sitting there. I watched it. But I think the real time that I knew that I had a problem was when he did the Ben Smith interview with The New York Times, essentially reasserting himself into the position of CEO without, A, ever talking to me about it, and B, from what I understand, my understanding, never talking to the board about it.

41:45Jensen Huang:The thing is, he was executive chairman. He didn't leave and retire. He was there not just as chairman, but as executive chairman, which means he was going to have a lot of say in day to day. Yeah, but that's not what they said. It was he was reasserting himself as the CEO. And, you know, I would have thought just maybe out of pure courtesy, if there was nothing nefarious about it, he might have told me that this was coming or somebody on the board might have told me this was coming. But it wasn't. It was a blind sight on a Sunday. What was your relationship like with him prior to all of this?

42:17It was fabulous. I mean, you know, we went, you know, sometimes when you go through really tough times and, you know, not only the 20 years that I worked with him, but we would fly to, we probably flew to Shanghai back and forth trying to get Shanghai Disneyland open 20, 30 times. And we would, you know, drink red wine and do play name that tune with songs from our phones. And it was as good as it could be. And that's why I never saw this coming. Maybe I should have. And now that I look backwards in time.

42:46Jensen Huang:Could it be could it be that you had a personal relationship with him? That was a good one. But as things got rocky and he disagreed with some of your decisions, business is business. Yeah. The only reason I think that's not the case is that when you work with somebody for 20 years, you're going to have certain things that you disagree on. Right. And I think to think that that's the first time in 20 years we had a disagreement. All of a sudden, just because I've got the CEO title now, it doesn't work. I think there's more to it than that. And there's breadcrumbs all the way through, as you saw in the book, you know, from the beginning.

43:26Like I said, the the Ben Smith article all the way to his going away party. I mean, I don't know how you discount that whole history and just say, well, you know, you guys just agreed to disagree. And he was still hanging around him hanging around, by the way, made it extremely difficult on me. What was the toughest conversation for you with him? Toughest one was after the Ben Smith article. We spoke the next morning. And, you know, I'm I'm the type of person that's very different to authority. It's just the nature of my makeup. And this time I was appointed because I felt that he completely undermined me.

43:59And as I told Susan Arnold, our chairman of the board at the time, I felt like it was a death of a thousand cuts. And it was just one after another. Let me ask you, there's a story in the book that's also been reported on, but reported on somewhat differently. And I wanted to ask you about it because to me it was sort of maybe indicative of maybe the way different people around the situation thought. This is a famous binder story on the airplane. Maybe you know where I'm going with this. you're going to be handling the conference call with analysts and investors, right? Well, it was the annual meeting at the annual meeting.

44:33I'm sorry. And but but dealing with questions that are going to be coming your way. And there's one version of the story effectively where he's telling you, I'm not really going to help you. I'm just going to give you this binder and you're going to go off and and and have to read it and figure it out. And there's the other where he's offering to help you, and you're saying, no, no, it's in the binder, I don't need your help. It was so interesting to me that the two versions of it maybe suggest sort of where people's heads were even then, or you think that those were sort of reconstructed later?

45:07I think that was reconstructed later. Anybody who knows me, anyone who's worked with me in the context of that 30 years, knows, once again, with anybody of authority, particularly somebody like Bob Iger, who I worked for 20 years, I would never, ever blow him off like that, ever. And that's just not the nature of my style, and it's so out of character for me. And by the way, I didn't, I mean, it would have been great if like other CEOs, you know, he acted as a steward of my new role. It would have been one thing if he was neutral. But to be actually working against me actively, I thought was just unbelievable, and that's why I had to get this out.

45:46I had to write this book.

45:47Jensen Huang:Did you ever bring any of those concerns to the board along the way? Oh, weekly. And the reaction you got? You know, he'll be gone in two years. It's okay. That's Bob being Bob. And that's what I got. And that's where the death by a thousand cuts came. Is that, you know, any one of these, I can survive. I think the amazing thing isn't that they let me go. I think the amazing thing is it took three years. And by the way, an extension in between. When you when you look back on the whole situation, is there anything you said, you know, I know you said you were that you're deferential to him. Clearly, he must have thought you weren't being deferential more broadly.

46:28If you could go back in time and redo the whole thing from the beginning, Bob Iger calls and says, you're going to get the job. You know, you're going to become the CEO. You would have done what? I think you opened up the interview with this, the idea that he was going to hang around as executive chair. and that wasn't the problem, but then it kind of grew that he was also going to control the creative product and talent. And it gave him the degree of freedom to pretty much insert himself in any meeting at any time because he still had a role. And that became very difficult and forced people to choose, you know, Team Bob I or Team Bob C.

47:06Jensen Huang:So you didn't really feel like you were the CEO. Yeah, I felt like I was a COO, and especially after the New York Times article. Do you think there was a way, though, to manage it? Meaning to the extent that someone says, look, it's on you to figure out how to deal with this uniquely. Right. Maybe not the situation you thought you were getting into, but this is the situation. This is how he's going to operate it as the exec chair. And to the extent that you could have done something that made it work. Right. I tried. I tried. It's not like I'm just going to go throw my whole 30 years away and let this situation sort of evolve and develop the way it did.

47:47I tried the deference route, and it seemed that the more deference I showed, the more the teeth came out. And when I started hearing about lunches that he had and dinners that he had where he was absolutely trashing me, and I'd hear two, three times in the same week the same bullet points, the same talking points, I was like, OK, I got a problem. At the same time, though, it's fair to say that the stock was not performing the way you'd want it to. Well, the stock has been stuck for a long, long time. Stock's been stuck for 10 years. Matter of fact, the stock's about the same right now, four years after I left as it was when I was there.

48:22It did pop, as you recall, with sort of the recovery, a bit of the recovery, early recovery from COVID and the and the streaming success that we had in terms of getting households dramatic increases. So, you know, you have to remember, I got this job. This wasn't just in a vacuum. This was right after COVID. Right. Right before I got the job. And within weeks, we shut down the entire company. So it was the worst situation possible. And it's one thing to deal with, you know, some of the social issues that were happening at the time. It's one thing to deal with the biggest, you know, a shutdown in the history of, you know, American business with with with the pandemic.

49:10But it's another thing than to be shot at the same time by friendly fire. I guess the question is, during this period, given how complicated it was, do you have any misgivings and go back and say, you know what? When we were thinking about, for example, the whole Scarlett Johansson situation or trying to manage Governor DeSantis at the time, maybe I should have talked to Bob in a different way and he could have helped me figure this out in a different way. Well, we spoke almost every day in mid to late afternoon. So it wasn't that there was lack of conversation about this. And if he had suggested that I take path B instead of path A, I certainly would have considered it.

49:50So you think he was behind all of these decisions as well? Well, on the Scarlett Johansson Black Widow situation, it says right in the memo that announced my role as CEO that Bob will handle creative and talent issues. And the interesting, this is what I'm saying, the interesting thing is I'm somehow being plastered with that decision on how that situation was handled. But I was told to give him a wide berth, let him handle creative issues. He did that? Well, he approved it. He approved the statement. Statement was written by a publicity person. But that so that's what it's like. This is why I wrote the book.

50:33How do you think about Disney now? I love Disney. I know you love Disney, but how do you think about the strategy and what Bob did? the other Bob did, after you left. Some people would say that he put it on a, created some more stability inside the company. Do you agree with that? Do you disagree with that? I think the problems that were there before he came in a second time are the exact same problems that exist right now. I don't think materially anything has changed. There was a whole bunch that was said about, well, you know, the prices are too high for theme parks. We're going to lower them.

51:07We're all for the guest, and guess what? Two price increases after. It's the same. It's more of the same. Honestly, it's more of the same.

51:16Jensen Huang:I will say I'm a Disney Vacation Club member. I did not appreciate the squeezing of every penny out of the guest experience in the parks that took place on your watch. And that's certainly a consideration. As CEO of Disney, you have a very public position, but you also have one where you have a lot of constituents. You have the cast members who won a high wage. You want the consumers, the guests who want low prices. You've got Wall Street who wants high returns. You want the annual pass holders who essentially want to get in all the time. And it's a juggling act. And I think where every CEO falls is going to be a function of the time and their own personal approach to it.

51:58But it's certainly a balancing act. If you could go sit with Bob Iger today, what would you tell him? I would say I hope it was worth it.

52:11Jensen Huang:Have you talked to him since you left? No, I have not. You like the Lakers? Not necessarily. Less so these days. I was going to ask whether you'd... You're probably a Bulls fan, I imagine. More of a Bulls fan, right, because of my Chicago roots. Not because of him. What's next for you? I'm involved in a variety of consulting and advising roles. I had mentioned a Broadway play that I'm involved in as well called Midnight. I'm advising one company that's fascinating. It's called Ninja Tech AI, and it's a 24-7 employee, if you will, with unlimited tokens. And it runs continuously, and I've had a chance to play with it quite a bit, and it is absolutely amazing.

53:01You want to get back in the entertainment business? Let's put it this way. I am category agnostic. There's a lot of things I'm doing that have nothing to do with entertainment. I am also advising three different location-based entertainment companies. So in some ways, I am, but not necessarily in terms of the media business. Okay, and then finally, prognosticate Disney 10 years from now. What do you think it is? I think it's going to be a company that's going to focus and pair itself back a little bit towards distribution agnostic. If you remember back in the Michael Eisner days, there was a lot of questions about is it content or is it content and distribution?

53:47I think it's going to go to, you know, not just Disney branded distribution, but more of a content distribution platform agnostic creative business. Fair enough. Bob J. Beck, congratulations on the book. It's fascinating. I read every page. Thank you. I appreciate it. Thank you. That's Squawk Pod for today. Thank you for listening. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Weekday mornings on CNBC starting at 6 a.m. Eastern and going all the way until 9. To catch the best bits of that three-hour TV show right into your ears, follow Squawk Pod wherever you're listening now.

54:27Thanks for tuning in. We'll catch you tomorrow. We are clear. Thanks, guys.

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