Musk’s Mega-Merger, Disney’s New CEO, & Patriots CEO Robert Kraft 2/3/26

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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. New England Patriots owner Robert Kraft. He is ready for his team's 11th Super Bowl this Sunday. And he's using his platform and his wins to fight hate and anti-Semitism. It does so much for the community and brings people together in such a unique way. So I thank the good Lord for helping us get to this point. And hopefully we can close the order on Sunday. The talk of Hollywood, a Disney successor officially named Josh DeMauro, head of Disney theme parks and cruises, will take over for CEO Bob Iger.

1:40Julie Borsten reports. Iger had been set to stay at Disney as CEO through the end of the year, but now the transition is going to happen as of March 18th. Plus, a big deal, an Elon Musk company merging with an Elon Musk company. Space and AI, the final frontiers.

2:13It's Tuesday, February 3rd, 2026. Squawk Pod begins right now. Stand Becky by in 3, 2, 1. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the NASDAQ market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. And here we go on a Tuesday morning. Meantime, let's talk about the big deal of the day, of the moment, maybe the year. Elon Musk's rocket company, SpaceX, acquiring Musk's artificial intelligence company XAI. This comes ahead of a possible blockbuster IPO later this year for SpaceX. Reports said the deal values SpaceX at$1 trillion and XAI$250 billion.

2:58It would be the largest M &A deal in history and it's from two private companies. In a blog post, Musk saying that he wants to form, in his words, the most ambitious, vertically integrated innovation engine on and off Earth, combining AI rockets, space-based Internet, and the X social media platform. Now, Musk says putting AI infrastructure in space is the only way, he believes, ultimately to scale the technology by using solar power with what he claims will be much lower operating costs. An FCC filing last Friday showing that SpaceX wants to launch a constellation of 1 million satellites into orbit.

3:38It's a huge deal. will see about the data center situation in space. Most of the folks that I know in this space, if you will, think that ultimately if you want to get to sort of AGI and you need the power to do it and the cost is so much lower, you do it up there. You don't have to, there's no cooling. And one of the reasons that these data centers are as large as they are is you need to cool them, you need the energy to power them, You need the networking effects. If you put it all in space, you have the automatic cooling. You have the automatic power. Everything is actually there's basically nothing mechanical moving around.

4:22And then it's basically a networking story. And so the question is, can you get the information up and down fast enough? And look, it makes more sense once you're up there. But it is an expensive proposition to get these things up in space, which is why they have to go public to raise the funds that they're going to need. to do these things. It's truly fascinating to think it through. And I don't know what goes on in Musk's head. The question is whether you need to have it vertically integrated. That's the actual, for this transaction itself, the question is. He argues that it's a perfect vertical integration.

4:56Right. But do you actually need to have the large language model? Or could he be running data centers in the sky and having other people run their large language models on top of it? It's unclear whether you actually need the model itself. to make that work. But the other piece of this is he is making good on his promise, which he has now done repeatedly to his investors, which is he has always said, I'm going to give me the money and I will give you money back. And he is doing that now. I say at this moment, he's doing it in shares. This is all stock effectively, even though we're talking about private deals, but all stock deal.

5:30So effectively, the folks who have invested in XAI originally are trading those shares for SpaceX shares. Having said that, I think there's actually more cash coming in in the SpaceX universe. Can you imagine a company being privately held until it rolls out with a one and a quarter trillion dollar valuation? Did you ever think you would see the day? And I'm not ready to say it's overvalued dogs being traded for overvalued cats because I don't think it is. And then I was just thinking, you know, Tesla, Neuralink, a million satellites. I mean, this guy's got the boring company. But he's really like, I think he's like Ben Franklin and Thomas Edison and all these people.

6:15We got all rolled up into one. Yeah, all rolled up into one. And with all we hear about with people's electric bills as the billionaires and water and as billionaires try to roll out AI and the common man can't, you know, it's paying a thousand dollars. the heat is hot, a common woman. It's amazing that this is a workaround that seems really elegant in terms of thinking about it. I guess the solar power, SANS atmosphere is much stronger up there. For sure. And when you take the gravity piece out of it in terms of the mechanics of these things, it's a game changer. The question is, how much does it cost to actually get it up there?

6:58But I still think there's a question about whether you need to own XAI. No, I know whether it's really vertically. To actually do it in space. I also think there's a secondary issue about having him own it, which is long term, if he and Jeff Bezos are the only major players, for example, unless you think there's going to be a million more, that are creating effectively data centers in space, do you actually want him to own? I mean, this is a very interesting antitrust issue way ahead of time, but no, no, no, but it's an interesting question because you'd want these data centers to effectively be Switzerland up there so that anyone could use them.

7:37There'd be no advantaging or favoring. I'd be okay with them being American. One or another. Sure. But I'm saying the question about XAI, if he owns a data center, ostensibly, if you are anthropic and you say, hey, I need access to the data center. And he's like, well, I have XAI. I'm competing against to you. Maybe I don't want to give you all of the resources that you want, or I'm going to charge you through the nose for it in a different way. There are interesting issues. Given the situation we're talking about, they're like five to ten years from now. But I imagine, save the tape, because I think we will end up having a conversation about this.

8:17I just can't believe that Twitter is an important part of the whole equation, either, but I guess it is because of Grok. Well, it is insofar as... With what I see on Twitter lately, it's like... It's a good data host. That's what it is. Right. And he knew that when he paid for it. Is it now worth what he paid? Probably. Is it now worth? You mean, did it pay off for him to own it? Is Twitter now worth what he paid for? Well, it's worth$250 billion, so you tell me. Twitter. With XAI, you mean. Yes. So the question is, how much is the Twitter piece of it really worth? I don't know. Well, my question, I don't know.

8:50Because it looked like he paid three times what he should have for it. And now it all, maybe. I mean, obviously, he was about three or four chess moves, 3D chess moves ahead of everybody. He didn't want it at that point. I don't think he wanted it. I don't think he wanted it for this reason. So now it's working. I think he's great at taking certain things that he may not even be planning on and managing to sort of shift them around. Same way, by the way, SolarCity years ago. Which, by the way, was not a great combination. Which was not a great deal. And by the way, some people think he pushed it through governance and forced that thing through to be sold to Tesla.

9:29But the point was, like, he'll create something. And it doesn't always actually work out the way he originally plans. But then he'll find a new path. Yeah. And by the way, when you own all the businesses, you can create a lot more paths. SolarCity was not a great deal, but the investors didn't care because they had made so much money with him anyway. Right. That they were willing to overlook that. it. President Trump renewing his campaign against Harvard University and a late night social media post, the president saying that his administration is seeking one billion dollars from Harvard and it wants, in his words, nothing further to do into the future with Harvard University.

10:04The comments follow a New York Times story yesterday that said president looking to end his administration's fight with Harvard and is no longer insisting on a 200 million dollar payment from the school earlier this morning. The president followed up his initial social post with another one claiming that the Times story was incorrect. He demanded changes and also criticized the Times' election coverage. The House expected to hold a procedural vote today on ending the government shutdown. Emily Wilkins joins us now with more. Hey, Emily. Hey, Joe. Well, look, the shutdown, it could end as soon as this afternoon, thanks to lobbying from Trump.

10:38Some of the key holdouts that we've seen over the week, they're now saying they're going to support the bill. And we know Trump met with several lawmakers yesterday trying to come up with a path forward for a bill with stricter voter ID. So expect that to be a discussion point for the next few weeks. But Trump made another plea on Truth Social for lawmakers to back the bill, posting that he hopes that all Republicans and Democrats will join me in supporting this bill and send it to my desk without delay. Trump added there can be no changes at this time. We will work together in good faith to address the issues that have been raised.

11:11but we cannot have another long, pointless and destructive shutdown that will hurt our country so badly. Of course, Speaker Mike Johnson is going to need to keep basically all of his members together for a key procedural vote later this morning, with the bill then getting final passage in the early afternoon, so long as he's successful there. That second and final vote is expected to be bipartisan. And even though the shutdown's only in its fourth day, we're already seeing it have an impact. Friday's job report will be delayed, according to the Bureau of Labor Statistics. They said they will reschedule the release when the government reopens.

11:46Guys? All right. Yeah, we're not going to get the numbers we need, right? So we're already seeing some effects of things, right, Emily? Again? Yeah, I mean, even at this early stage. And of course, the longer it goes, the more impacts there are going to be. But I think a lot of hope and a lot of optimism that it's going to end today. And thanks to Trump, they've got the support they need on the Republican side. It's weird that both sides seem to learn from the last one that no one wins, I guess. So this has seemed a little different than last time, hasn't it? Yeah, absolutely. I mean, everyone was exhausted going into this.

12:21We were asking lawmakers how they felt about this funding deadline. And just, you know, you could see it on their faces when you'd ask them about another shutdown. They didn't want to deal with it. They didn't think it was particularly effective. and I think everyone's just kind of hoping to get the government funded and then figure out this DHS stuff. Exhausted mentally because no one's going to think that those people in Washington are exhausted from, they're gone like half the time. They show up for votes maybe if they've been fitted into their schedule. No, that's what I said. All right. Yeah.

12:53Thanks, Emily. Just thought we were getting our feet back under us. Here we go again. Cheese will be next. Coming up on Squawk Pod, New England Patriots owner Robert Kraft standing up against anti-Semitism and hate this Super Bowl Sunday. I love this country and I'm really worried with the divisiveness and the hate that's going on in so many different areas. That's not what this country is about. It's not why our ancestors came here. His work at the Blue Square Alliance and his work on the sidelines right after this break.

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15:05This is Squawk Pod from CNBC. Stand, Andrew, bye. Three, two, one, up in Andrew. Cue with Mike. You're watching Squawk Box on CNBC. I'm Andrew Osorkin, along with Joe Kernan and Becky Quick. Blue Square Alliance founder and New England Patriots chairman Robert Kraft is behind an ad at this year's Super Bowl. It's focused on combating the rise in hate crimes and anti-Semitism, and it's debuting this morning right here on Squawk Box.

15:48Do not listen to that. Thank you, man. I know how it feels.

16:03That's pretty powerful. Joining us right now to talk about it is Kraft Group chairman and CEO Robert Kraft. Robert, that's the first time I've seen that ad as well. And this is not a new campaign, but you all are doubling down on trying to go after hate and anti-Semitism. What's happened since the Blue Square was launched, and what are you doing now? Well, it's nice to be with you all. You know, we wanted to target an ad. Look, I love this country, and I'm really worried with the divisiveness and the hate that's going on in so many different areas. That's not what this country is about. It's not why our ancestors came here.

16:48And it was a land of opportunity for everyone. And, you know, we saw back in 17 with Charlottesville and then the Tree of Life and 18 things going on that we had to stop. And unfortunately, I think the role of social media has put so many falsehoods out. And the bad trend that we see going on in our data center is young people falling into this trap. And, you know, hate, you're not born with hate. It's learned. And we have to find ways to push back on it. I was looking at some of the numbers. The ADL says that anti-Semitic incidents jumped about 900 percent over the last 10 years. And there's other statistics that show 45 percent of Americans remain unaware of rising anti-Semitism.

17:49What is your hope? What do you think you can do? And I know you've put someone, Adam Katzen, as the new president of the group to try and take this on. What's his plan? Well, it's about education and making sure everyday Americans understand that this is happening. You know, we have a data center tied to over 500 million websites throughout the world. And we show that 60 % of Americans don't believe that anti-Semitism as a form of hate is really as bad as it is. And we're trying to educate those people just like that young black man in the ad. he has experienced it and he connected and tried to relate and we're we tried to speak to everyday americans younger americans because we're we're so concerned and um our ads are having an impact we of that 60 percent 30 percent are willing to stand up and do something after they see our ads and We have to just keep educating the good people of America what's going on.

19:13Robert, thank you for leading this charge. Thank you for bringing these things. Obviously, we'll be watching for this at the Super Bowl, but that's not the only thing we're watching at the Super Bowl. We're going to be watching the Patriots there. And I would say just a year ago, even at the beginning of this season, nobody thought that the Patriots were going to be back in the Super Bowl. I didn't realize the amount of money and effort that you had poured into rebuilding this franchise. I knew about the changes at the coaches. I knew about the quarterback who's done amazing things, you know, to see Drake May really perform like this.

19:50I didn't realize you'd spent$365 million on free agents. And when you total it up with the changes in the coaching staff, the new practice facility, close to half a billion dollars. Did you think when you were pouring that money in that you would see results like this so quickly? Well, it was my big dream, Becky. You know, when you want to compete in this world today, especially in our business, everybody wants to win badly. So you've got to do a lot of the little things that allow people to put team first and come together. And, you know, one of the nice things we saw, we were privileged after seven years to have a couple home playoff games.

20:37And when you see the crowd, it was like 25 years ago when we had the privilege of winning our first Super Bowl. You have people of all backgrounds, all skin color, ethnicity, religions, all rooting for the home team. And it gave me such a positive feeling to hear that. And it's so good for the community. So therefore, our family wants to do everything we can to put our team in the best position to be able to win games. It does so much for the community and brings people together in such a unique way. So I thank the good Lord for helping us get to this point. and hopefully we can close the order on Sunday.

21:27You think you're building a new dynasty here? People are looking at the age of your players. I think one of the oldest on the roster was only brought in and drafted in in 2020. Is this a new franchise? Well, I sure hope so, but I've learned this is a business. You have to go year to year. You know, you have physical injuries. You get people hired away. and you have to look at each year as a separate year. We've been very privileged over the last 25 years to do okay, but it's a real battle every year. So our focus now is on this coming Sunday. And I'll tell you what's wonderful, though, when you have a group of younger, new people and you see their attitude and how much they want to do things for one another.

22:24That's what I love about the country. And it's actually what we're trying to do with the Blue Square Alliance, get that same kind of feeling and have it be a team effort because we're protecting America and keeping America open. You know, Robert, people know you, particularly on this show. our viewers know you, but what you did in terms of building up your father's small company into the incredible global presence that it holds today, what you did with buying the Patriots for under$200 million, and I think your wife was not thrilled about it. She worried it would bankrupt you. Watching what you've done, not only with the Patriots, but also with the NFL writ large.

23:11You see big things and you accomplish them. What is your hope with Blue Square? Where do you think you can be with this project, let's say in the next five years? Well, my hope and dream is this Blue Square. It's a symbol of unity. And we have sisterhood, brotherhood. And when we live in such a transactional world and things are going so fast, if people will just wear this blue square and we put it on all our emails and texts and people see it and it gets them to stop for a moment and just think about love and not hate. Because I've never, I have a few years on you, and I've never seen things like this in America.

24:06And, I mean, just think, people who go to worship in a synagogue, there's armed guards. In 2026, in the United States of America, well, they're afraid to wear a Star of David because what'll happen? That's not good. That's not good for anyone in America. and we want to stop it. And I think the blue square is just a symbol of sisterhood, brotherhood and love. We're proudly and we're glad to see that. This kind of pales in comparison to what you're talking about. But there is a report out this morning from ESPN. Sources are telling them that you were not voted into the Hall of Fame class of 2026.

24:49Bill Belichick had not been voted in. And I know you gave an issue of support for him earlier this week. Goodell has said he believes you will be in the Hall of Fame. Does that matter to you? What matters to me is we win Sunday. That's a function how the team we're involved with and organized. And I can't speak on issues where other people are voting or doing things. Robert, I remember watching a couple of times in not really maybe the first game of this year but watching you and Jonathan you know they always show you guys in the box and you just looked weird losing and I could just tell that you and Jonathan really didn't like it and there are a couple of times where things happen like late in the game that didn't go your way you probably should have won and you were like I could just tell um but I'm still shocked that that you're back in the catbird seat just this quick.

25:50And it's fun to watch. And man, how does that, you found Brady, no one knew his name at Michigan hardly. And this guy, I just don't see how it happened so quickly. Well, we're privileged to have good people. We have good analytic skills. And I think the good Lord's hands at work. And we're trying to create an environment where people can do what they do best. And, yeah, we, I'll tell you, there's no worse feeling than losing on a Sunday. All those other teams do it every Sunday. So many teams have never, I mean, you are blessed with, what, if you win seven, no one's ever won seven, have they? No, no.

26:40Please God, we'd be the first team to do that. But I'll just tell you, my new wife, Dana, you know, she went through the last two years at 4-13. And beginning of the year, she said to Vrabel, my weeks are a lot better when we win. There have been very few. So I think he must have taken it to him. You never skipped any of the games. She likes you better. Didn't matter what city, cold. I would see him in the, you know, no matter where the Patriots are. I can't believe he's still showing up for this. They're like four. But you were there. Yeah, I know. We're very fortunate. And you know what? And what the NFL and our team symbolizes this year is the greatest part of America.

27:28People from all backgrounds putting their egos down and putting team first. We need more of that in this country and love of this country. And we're so excited and honored to be here. And it's going to be a fun weekend. It is. And we are glad you are here with us first. Maybe you come back next week, Robert. I'd love to. You know, we've shown this. This is the third year we've done the Super Bowl, lad, because there's nothing. The exposure to all of America that you get. And this program, I know Jonathan and I, we love watching you guys. It's a great way to get educated quickly on what's important.