Meta’s “Right to Win AI” & A Bond Market Rout 9/24/26

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0:43Track your cha-chings from every channel right in one spot. And turn real-time reporting into big-time opportunities. Take your business to a whole new level. Switch to Shopify. Start your free trial today. Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, a big night for Meta, a new device to harness AI small enough to fit in your pocket. OpenAI's launch event is next week. Are they going to have something similar? Is Apple ultimately going to have something similar? This is Steve Jobs' energy to me, what Zuckerberg and Wang are doing right now.

1:24Is it a watershed moment, though? Rich Greenfield joins us and says maybe. From June to now, Meta stock is up like 30%. I think what you just saw last night and what you've seen from Muse in the last few weeks is that Meta has a true right to win in AI. AOL co-founder Steve Case knows a thing or two about a tech revolution and about regulating an evolving ecosystem. I think at this point, pledging to do things better probably is not going to be sufficient. just self-regulation. I don't think it's going to be sufficient. Plus an AI hack of the Aussie government and Chinese President Xi's first United States visit in over a decade.

2:05It is Thursday, September 24th, and a busy squawk pod with Joe Kernan and Kelly Evans begins right now. Stand by Joe in three, two, one, his mic to you. I was just doing an imitation of Kelly's house with six kids. All the oldest is? Eight. So you're not glued to Bret Baier. You! Stop! Stop it. Timmy, over there, eat your broccoli. Which they do. Open up. You've got one where you're still doing that, don't you? Come on. Oh, yeah. The hardest. The hardest. Good morning. Kelly's here. Thank you. Thank you. You say yes. You say yes. Because think about the alternative. Yeah, right. You're right. Right.

2:54And you'll be here tomorrow. U.S. equity futures. And we're going to talk quite a bit about this because yesterday I was saying it's pretty amazing with all the things that hit us. A couple of days ago, we were talking about 7800 on the S &P. It didn't get there. That would be a new high. But the October fear and angst, it's only September, But you know how we sell off seasonally sometimes and hit a low in October? That hasn't happened yet. You know why? But there's still time. You're going to really be like, wow, all I want to talk about for three hours. Is the meta thing? Okay. I don't even know what you're talking about.

3:35Are they glasses? Well, no, but I don't think it's the specs. But I think it's everything that meta is doing. I could go off about this for three. I saw your notes, and I didn't know what you were... This company, do you know about Alexander Wang? You wanted to have him come in as a guest? Do I want to have him come in? I'm like begging, I'm like, Alexander, if you're watching, call the control room. Do you see what he wore last night? Do you follow him on Twitter? Joe. Do I follow Alexander Wang on Twitter? If everybody watching this doesn't follow Alexander Wang on Twitter, you are missing the reason why the stock market is up.

4:09Follow, like, cat turd, I think. You know, he would take that as a compliment. Yeah, let's look at energy, energy, not everybody. I don't know how I started following that guy. Your algorithms, you know. That's what it is. You can't tell people what you see anymore because it will tell people what you're interested in. Really? Yes, because it's interest media. It's not social media. If you say, gee, I'm seeing a lot of dicey stuff, people go, well, because. Is that why foot fungus cures keep coming up? We got to get serious here. The 2093.80, we were above 100. Remember, it got down. It did have an eight handle.

4:46And I thought that would help Treasury yields. But they are the Treasury yields aren't necessarily just king. They had a really high correlation with oil before. Now it may be something else. The five year, 10 year, 30 year for 514 for the 10 year. Right. All near their their highest level since May of 2007. Yesterday was one of the biggest one-day jumps in yields for more. For the 10-year in more than a year, there was some inflation data. There was a crappy auction. Well, there have been a lot of crappy auctions. A lot of Cs and Ds that Rick was giving them. But the real thing was the flash PMI report.

5:22That was the inflation data. It's not just inflation. It was growth. It's booming. Yeah, right. Absolutely booming. And what is GDP going to be? They think nominally, I mean, I don't know how much to trust the Atlanta Fed right now or the real GDP, but nominal is probably 6 % and has been for a couple of quarters. You could say things are booming. Look, I have a little bit different weird take on this. Again, I'm not, whatever. It's possible the yields are going up because of good things as well as some good things. It's possible. It's possible. But what don't you think is going well? I think the Fed is pushing yields higher because it is being hawkish about the rise in oil prices.

6:05I think they're, well, number one, that's who knows whether higher rates help a supply problem. And number two, they're really not pushing rates higher. They're following where rates are going on their own. I don't think that rates should be following oil prices higher. Right. But they are, and not because of the Fed. But I think it's because the Fed, because Warsh has indicated that they're going to raise. And then what did they do last week? They not only raised, he left open the possibility of more raises. Now Williams is saying more there. If instead they took the tone of, no, this could hurt the economy or not.

6:35But they're raising and maybe it'll be fine because we're booming. But New York Fed President John Williams did say in a new speech that it would be reasonable to expect another interest rate hike by the end of the year. He was speaking in London earlier this morning. He also said the time for explicit forward guidance is over, echoing the approach of Fed Chairman Kevin Warsh, who said the central bank will refrain from directly signaling to the market what it intends to do at coming meetings. Yesterday, Fed Governor Michael Barr said the Fed may need to raise interest rates further. Traders on Calci now bet a 67 percent chance the central bank hikes by a quarter point in October.

7:10It's so serious, Joe, that I think we're going back to D.C. for the October Fed meeting at the end of the month. We're going to skip it. We're going to skip it and wait until they hype you. What do you mean we? You, the show? I think we're going back. Well, whoop-dee-doo, we're going on Tuesday. What are you doing out there on Tuesday? Coming up, we're going a hell of a lot sooner than you are. Are you doing the Senate thing again? That was awesome. We're doing the Senate. The show, are you? I think we're in the Rayburn room again. I loved that. That was great. Yeah. So good. So we'll do that again.

7:42People say, I watch NBC for finance news. What is this? It's like, come on. With the program, you really don't think that what's going on in Washington is impacting all of this? It's always been that way, but it seems like even maybe more so since. Yeah. I mean, we've got the election. It's a couple weeks in the election. There's a lot going on. Like this. President Trump, we talked about this, welcoming Chinese President Xi Jinping for a state visit. You know what he likes more than anything? Which one? The president? Mm-hmm. having a lot of cameras as a head of state is walking down the steps and he's there to get I didn't see it yesterday no because there's no cameras yes because of what the press pool is doing yes yeah that's why I think they're going to get an off-ramp on this because he it's just I watched you talk to Besson about that right he he's great at answering a hostile question that Trump loves to answer hostile questions he might not love to answer them but his answers often shine.

8:44I mean, they stand out. I think he likes it. I think he doesn't like to hear it. But then I think, you know, sometimes in his view, I think, or at least in his base's view, he answers with the hostile or not or at least right. It's fighting fire with fire. They think you got to punch back. President Trump traveled to joint base Andrews outside Washington to greet China's leader on tap for today and arrival ceremony at the White House. A review of troops. The White House will host a black tie dinner tonight with tech titans like Nvidia's Jensen Wong, Tesla's Elon Musk, many, many more. We had a board yesterday showing most of them and we said billionaires and darned if they weren't.

9:26I think Jane Frazier was there. I think Jane, you know, she's a billionaire. Yeah. And Jane might be, maybe she's a billionaire in training. I don't know. Meanwhile, Treasury Secretary Scott Besson, right there, telling Fox, I just told you news that the U.S. and China have agreed to extend a trade truce for two months until January 10th. We have agreed today that we will extend what we call the Busan Agreement, the economic detente between the two countries that was scheduled to end on November 10th. That is going to be extended until January 10th to give us more time to see what we can do on the economic front.

10:09This was the one that was supposed to expire in November, right? Yeah. He says it's now going to be extended. November 10th. It's now going out two months. Supposedly, China wanted two years. And then I was watching, as I said, and Treasury Secretary Besant said, well, you know, on when this expires, January 10th, we maybe we just extend that and leave it as is. He said China wanted two years. Yeah. But we were. We said two months. We said two months, but the status quo may extend past the two months. Australia's leader, meanwhile, says an AI agent developed by OpenAI hacked into one of the country's government websites.

10:50No personal information was believed to have been accessed, but Australia's prime minister said he'd spoken with OpenAI CEO Sam Altman to express, in his words, the country's extreme concern. He also criticized OpenAI for alerting Australian authorities nearly three months after the incident. OpenAI said it only learned of the hack last month. According to OpenAI, the breach took place as its models attempted to look up statistics about Australia. A spokesperson told CNBC, in the course of that, our models took actions we did not intend. The news comes alongside a New York Times report saying that OpenAI technology attempted at least three other hacks in May and June.

11:29And when that happens, you know, I'll be at home and we're watching and they go, oh my God, look, dad's on TV. So you're famous. Cheese will be next. Still to come on Squawk Pod, a charm, a muse, and an 11 % stock surge. Meta's new era has arrived, we think. Tech watcher Rich Greenfield is up next. It's not just about the best model. It's about who can build the software platform, the harness that actually uses those models and actually brings it to consumers to use every single day. When did work become so much work? The meeting about the meeting, the hundreds of files to find one insight, setting aside the things you want to do for the things that pop up.

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12:56Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts. When it's time to scale your business, it's time for Shopify. Get everything you need to grow the way you want. Like all the way. Stack more sales with the best converting checkout on the planet. Track your cha-chings from every channel right in one spot. and turn real-time reporting into big-time opportunities. Take your business to a whole new level. Switch to Shopify. Start your free trial today.

13:38Welcome back to Squawk Pod today with Joe Kernan and Kelly Evans. Facebook parent Meta is looking to bring AI into the physical realm. At the company's Connect conference last night, CEO Mark Zuckerberg unveiled a handheld device called the Muse Charm. There it is, Joe. That's it. That's the Tamagotchi Muse Charm. It works with the company's newly released Muse AI agent. Details about the functionality so far are scarce, but Zuckerberg said without AI-enabled glasses, the charm would present the fastest way to talk to a Muse agent. He said the device would be ready to ship before the holidays.

14:11Not clear yet how much it will cost. And with AI privacy increasingly in focus, Meta did also unveil some smart glasses, a set without a camera, and it debuted a new set of virtual reality glasses that only cost$1 ,300 and are much smaller. They look like real sunglasses. Here's my larger point. And look at the t-shirt Zuck is wearing, by the way. Building is my love language. And do we have B-roll from Alexander last night? Alexander Wang, who also took the stage to talk about his... Here he is. I just want everybody to take a look. I don't know if you can see the green Crocs from here, but I'm telling you, the way that Meta lets this guy be himself on social media, every company, very few companies, would ever do this.

14:53Go follow him. You'll see what I mean. He is a big part of the special sauce. How different is Meta now from the Sheryl Sandberg era? This guy is now the face, kind of, to the public and to young people who are using the app. Think about how far they've come in 10 years. 19 at MIT started a company. Okay, but what you just said was, okay, he shows this thing, which looks like nothing. But you say, you know, we don't really know anything about the functionality. Correct. Well, then. But here's. You like the way that stupid thing looks. I don't even know if I would use. I don't. But. So, you know, you don't really know anything.

15:30Remember when Steve Jobs created the iPhone? Uh-huh. And he said. I don't see why anyone needs a phone. We made this. You're going to like it. And then off came that. So we all know we're moving to a world in which this is something or many things are going to start to. I don't know if I'd say replace, become. And here is meta. All of a sudden, kind of the first one out there with this new. Now, OpenAI's launch event is next week. Are they going to have something similar? Is Apple ultimately going to have something similar? Think about the in-tech. This is Steve Jobs' energy to me, what Zuckerberg and Wayne are doing right now.

16:01Yeah, but you've got to displace the most powerful ecosystem ever created with Apple. But for Meta. And why don't they come something. Look at the market cap they've added in the past two or three weeks. Well, the market caps can come right. They can come and go. Yeah. But it has come in a big. This was a huge bet. It looked insane. I have to admit, I thought it was completely insane. I just can't believe you just said that you love it, but you don't even know what the functionality of it is. I'm not saying that I love it. I'm just saying this is the space to watch. They have just come and taken this space, planted themselves in it, and put everybody else on notice.

16:34They are now the ones who are kind of out there in front. It's going to be fun. It's going to be fun to watch because everybody's going to try and do this. Exactly. It's going to be incredibly fun. Well, beautiful wedding dresses. I do. Now that you say it, I do remember Alexander Wang, the fashion designer. And Vera Wang. Well, obviously. Oh, right. What do you mean, obviously? I don't think about wedding dress. Obviously Vera Wang, yeah. Join us now. Rich Greenfield, co-founder of Light Shed Partners. And a new note, Light Shed puts a$925 one-year price target on Meta stock. Good to see you, Rich.

17:10I'm still, you know, a guy who can change the name of his company because of some stupid glasses that no one's ever going to travel again. What happened to the metaverse? Are we going to change this to AI? Is it maybe super SI? But you think they got it together now with this because of Alexander, according to Kelly? You know, you can sort of criticize Mark for mistakes down the road. There certainly have been, you know, things that he's done wrong. I think what's amazing about Mark Zuckerberg, and probably one of the most amazing founders and leaders of a company of our generation, maybe of all time, is his ability to pivot and to find where the business opportunity is.

17:55So, Joe, you're right. VR was an off-road or a ramp to nowhere, but he realized it. And if you think about the VR to AR to now AI and how he's leaned in, you know, a year ago, If you think about not this past summer, but summer 25, nobody was talking about Claude. Like Claude was sort of irrelevant. It was all open AI. A year later, everything, obviously the whole world's been, you know, riveted by Claude. And you see what's happened to the Anthropic valuation. Well, I saw Mark at the UFC 250 fight, actually where I saw you, Joe, later that night after we were talking, I saw Mark at the UFC 250 event.

18:33And he literally said then, you're going to think of Meta like you thought of Anthropic, meaning that change of irrelevant to relevant in AI was going to happen in pretty short order. And I think what you've seen from June to now, Meta stock is up like 30%. I think what you just saw last night and what you've seen from Muse in the last few weeks is that Meta has a true right to win in AI because it's not just about the best model. It's about who can build the software platform, the harness that actually uses those models and actually brings it to consumers to use every single day. And nobody does that better than Meta.

19:13And so I think there's just a huge opportunity. Investors have not given them any credit to win in AI. I think that started to change. And I think over the next year, you're going to see a dramatic change in how investors view Meta's spending on AI. Yeah, you got the you got the models and then you got the interface with consumers. And you think that he knows how to do that, like a Tim Cook or Steve Jobs or something. But then those are competitors that you're going to have. Maybe, you know, we all laugh at Siri, too. Maybe, you know, Apple gets good enough at an average AI model, but then also is able to make consumer devices.

19:52And you don't even know what Muse does, do you? Can I ask you one thing, Rich? There are different glasses than the ones that Mark put on, right? Because that is straight out. That's Robert Carradine, the late great Robert. That's straight out of Revenge of the Nerd. I mean, I wouldn't wear those. I don't care if they I don't know what it would take. But look at him. He's going to start Revenge of the Nerds 3 with those. Are there better ones, Rich? You wouldn't buy those, would you? Joe, what I think you really have to focus on is think about how Mark's evolved. The initial idea was VR glasses, right?

20:23It was all about VR glasses. Then he went to glasses with a camera that could see the real world. And I think he realized, you know, look, is there a market for that? Absolutely. Are consumers ready for that? Probably not. How do you really build utility into eyewear? You actually put just the meta AI or the Muse AI into the glasses. So the new glasses, no cameras. It's just to use the meta products like Muse. And I think that's really he pivots like he understands how to evolve. He's not just fixated on this is I'm going to force consumers to do this. He's recognizing how behavior is changing, where the massive market opportunity is.

21:08And he pivots to it and he pivots to it better than any company. It just seems like a big leap of faith. Kelly's already made it. She wants to she's like all in. I'm not. I don't even use that. But here's Kelly, can we get rid of the dinosaur? Let's get rid of the dinosaur. Kelly, come on. I'm too paranoid. My producer, Brianna, was listening. She goes, all right. She hasn't, her Yahoo email was locked for a year. You know, we all accumulate too many messages. She goes, all right, Muse, clean it up. Boom, done. This is what I'm talking about. And you're exactly right about Mark Zuckerberg. How many times has this guy been laughed at?

21:42You know, how many times? And he still goes out there and makes insanely bold decisions that could blow up, but he seems to have this sense of this is where the market's going, and maybe it's not going to pan out like the metaverse, and maybe it is with Muse for a brief time. I don't know whether it's a lasting success. I don't know what OpenAI might launch next week, but I do know that everybody's talking about it. And this isn't just one of those geeky gadgets where people go, nice try, move on. It's like they've really captured the zeitgeist. You don't know the functionality of it yet. How do you know any of this?

22:14In a broad way around the glasses, the VR headset,$1 ,300 and a lighter form factor for something that you can actually kind of game or have an immersive experience. Tell me, Rich, what's it do? Kelly won't tell me what it does. I don't need to clean my messages up. Honestly, Joe, I would actually, if you sit back, everything hardware wise they announced last night, I'd almost put to the side. It almost doesn't matter. All that matters, and they said it at the very beginning, Muse is the centerpiece of our company. They are betting that an agentic personal assistant with super intelligence is the future, whether it's tied to glasses, a charm, your computer, your phone.

22:53I don't think it matters. Like just stop focusing on the devices. The software platform is what matters. So what Kelly just described what Kelly just described is it just gets stuff done. It's very simple. Better than Apple's. Why will it be better than what Apple comes up with or Anthrop or OpenAI or any of those places? All because of Zuckerberg and Alexander Wang? Joe, we're not betting on best right now. There's possibility. But Meta was ignored in AI until three weeks ago, like literally ignored, penalized valuation-wise. Now I think you can start to see that all of this spending, the massive amount of capital investment and spending, actually has a reason and a real consumer product.

23:34And I think to what Kelly said, there is a wow factor to muse. You start using it and you go, oh, my God. And it starts learning about you and proactively suggesting and even proactively doing things. That type of freeing up your time, that's something you tell your friends about. You know, if you think about sort of like the buzz here and when you have three billion people and you have a lot of products like, you know, WhatsApp, Instagram and Facebook, you use every day, their ability to drive this out to billions of people over the coming year is real. And there's a lot of value they can create that isn't in the stock today.

24:09You're right. No, but you're right. Dinosaur, because, no, I don't use WhatsApp. I don't use Instagram and I don't use Facebook. I don't use any of those every day. Joe, I have a question for you. What would you call if you did use Muse? No, no, Kelly, this is a good question. If Joe was to use Muse, what would he call his Muse? What would his mini-me be? I don't get into that game. What would I use him for? You just said that for people that use those three things, I don't use any of those, Rich. The absolute brilliance of this is this is the first ever Meta product. Meta has always been about a product that's dopamine, right?

24:43Like you can't stop scrolling Instagram. You can't stop scrolling Facebook. But what's amazing about this, this is actually a product that actually saves you time. It gives you more time to whether to go play basketball, scroll Instagram, whatever it wants. But this is freeing up time. I think there's a lot of people who just have tired of the platform. It's filled with influence. It's filled with AI content, ironically. And now here they are. Now I'm talking about meta again. Rich, thanks. Coming up on SquawkPod, the flip side of AI enthusiasm. how to regulate a technology that seems like it's evolving faster than anyone can control it.

25:20AOL co-founder Steve Case says the tech industry is on the clock. If we don't do something soon, I think we're going to run the risk of 50 states doing 50 different laws, which are going to be really difficult, or a real backlash that leads to much more onerous regulation. If you like YouTube, you'll love YouTube Premium. Hi, I'm Sean Evans from Hot Ones, and I want to tell you about YouTube Premium. It has offline downloads, so you can watch without Wi-Fi. Background play, so you can lock your phone, and it still plays, baby. Oh, and it is completely ad-free. Yes, I said it, ad-free. Try YouTube Premium for two months free at youtube.com slash premium.