OpenAI CEO Sam Altman & Amazon CEO Andy Jassy 2/27/26

0:00Geico presents a 30-second podcast between your podcast. Today's story is shared by one of our listeners. It's called Betrayed by Bill. It was in that moment I caught who was staring back at me in betrayal, or more like what? My insurance bill. With trembling hands, I grabbed my phone and switched to Geico, saving about$900 in the process and never to be betrayed again. Now that was bloody riveting. It feels good when the story ends with savings. It feels good to Geico. Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills.

0:37Access new online courses, insightful webcasts, articles, engaging videos, and more. All curated just for traders. Plus, guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need, so you can spend your time learning to trade brilliantly. Learn more at schwab.com slash trading. Bring in show music, please. Hi, I'm CNBC producer Zach Felici. Today on SquawkPod. A massive fundraise for the massively valuable private company OpenAI. $110 billion, including from Amazon. Leaders of both companies join us on this news. OpenAI's Sam Altman. The more we see revenue growing, the more we see demand growing, the more we want to invest to be able to serve that.

1:28and Amazon's Andy Jassy. This is the most significant transformation in technology, maybe business, in our lifetime. Plus, Paramount one step closer to a long-sought prize, the legacy assets of Warner Brothers' discovery. It's either the end of Hollywood in theaters, or it's the magification of Hollywood. And we never thought artificial intelligence would come for us. It's such a bonkers and backwards thing to think because here we have this great innovation, this great technology that's supposed to move us forward, which it may, but we could take our jobs in the meantime. It's Friday, February 27th.

2:10Squawk Pod begins right now. Stand and or buy in 3, 2, 1, cue and it. Good morning and welcome to Squawk Box right here on CNBC. We're live at the NASDAQ market site in Times Square. I'm Andrew Ross Sorkin along with Joe Curtin. And Becky is off today, but we've got a lot going on this Friday morning. Take a look, though, at shares of fintech company Block. They are soaring literally right now up about 20 percent here. This is after the company said it would lay off roughly half of its workers. Block CFO saying if the company sees an opportunity to, in her words, move faster with smaller, highly talented teams using AI to automate more work.

2:49Block's headcount is, in this case, going to go from more than 10 ,000 people to just less than 6 ,000 people. And this may be one of those moments about AI and what it does to employment. In a letter to shareholder CEO Jack Dorsey, saying that AI tools have changed what it means to run a company, he said, quote, I don't think we're early to this realization. I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively.

3:24And if you think about this, if you could cut 50%, 40 % of your workforce, which is what these folks are going to be doing literally overnight, what does that mean for the rest of us? I need a list of companies that are in a position like Block where they can do that. You must have some ideas. Well, I would imagine, first of all, you could look at a lot of the... By the way, the question is whether this is all white-collar jobs that you could do this with, whether this is just, you know, in this case, transactional companies. Could Stripe do this to itself, for example? Stripe, by the way, may want to buy PayPal.

4:02Could PayPal do this to itself? Don't give me individual names, then. Give me total percent total of the S &P 500 that could be something similar. 20 %? 60 %? Oh, I wonder whether it's 50%. 50%. Yeah, why not? That's a frightening and that doesn't even include all the things that we've talked about with truck drivers and, you know, not just AI, but, you know, look at the future five years. Well, there's a lot of them. No, I know, but I'm saying I actually think truck drivers are better off than... are safer in this moment than in this moment. In this moment. Before you get to robotics. Well, that's what I mean.

4:39Well, I'm just talking about five years. I'm talking about the future, not just AI. And the way AI will inform robotics, too. So that's all part of it. I saw it yesterday. I was like, is block in trouble? It's not necessarily. It's in trouble. That's usually when you hear of a 40 % work for whatever it is cut. That's usually what you're thinking of, cost cutting. I'm often asked, how can you get, could we ever have another 1929? You're kidding. Which ultimately turns into unemployment of 25 % in 1932. I'm not even sure, by the way, I'd even say that the crash is related to that. But there's a couple ways to get there in 1932 of 25 % unemployment.

5:24But oddly, the success of AI could be one of them. It's such a bonkers and backwards thing to think. Because here we have this great innovation, this great technology that's supposed to move us forward, which it may, but could take our jobs in the meantime. And I don't even know if there's a transition. What I can't figure out is people talk about a transitionary period, right? You know, from horse and buggies to this and that. The question is, what is the transition in this case to? I don't know whether it means a 1929 type thing. Is it possible that it's so powerful and it increases productivity so much that we all only need to do three or four day work?

6:00group, because we all have all this leisure time, that there is some kind of UBI, that it's actually a boon for maybe someday we don't have to work. We can just, all we need to do is play golf and travel the world. Elon Musk would say, but that only works if some people, and I'm pointing to you, but people that you like and associate with decide that UBI and redistribution are the way to do it because otherwise all of the economics get concentrated in a very small number of hands and and then i really don't know what happens well let's just hope the machines aren't deciding what to do with this sure but what i'm suggesting what i'm suggesting is you're not going to this this idea of this leisure society is a false choice if you believe that there's a group of people in america who don't believe in in any form of redistribution that can't that's but then you're back to how many boats can you water ski behind it.

6:59Elon Musk is never going to spend his trillion dollars. I mean, yes. But what I'm saying is for a very, very long time, there's been in particular on the right of you not to tax people, not not not to provide benefits to people and services. That's not what it is at all. The right thinks that the private sector can generate more prosperity than the government, which helps the people that you're talking about. And in fact, In fact, the policies of the left, nine out of 10 times, end up hurting the people they're intended to help through redistribution. No one wants to be a liege of the state where all of a sudden...

7:38But what I'm suggesting to you, unfortunately, is in the context of what you're saying, everybody may be a liege of the state. You may be a liege of the state. I just think that is a really false premise, that Republicans don't want to do any redistribution because they want to keep it for themselves because they're a greedy bastard. I think they think that this is the best way to grow the pie for everyone. But how would that work in this new world? I don't know how it's going to work. I'm saying that approach may not work in this new world. Let's talk Netflix. Netflix abandoning its pursuit of Warner Brothers' discoveries, studio, and streaming assets after Warner's board labeled a revised bid by Paramount Skydance and saw it as a superior offer.

8:21shares of both Netflix and Paramount jumping this morning. And I'm not going to say that Netflix is up because it was, I mean, there's arbitrage, there's all kinds of things, right? For why it's maybe people were short Netflix. Netflix has got bigger problems than just trying to, you know, than what we talked about, whether there was a negative reaction to trying to buy Warner Brothers, which maybe it didn't even need. But in a statement, Netflix's co-CEO said at the price required to match Paramount Skydance's latest offer. The deal is no longer financially attractive. They went on to say this transaction was always nice to have at the right price, not a must-have at any price.

9:04In his own statement, Warner Brothers Discovery CEO David Zaslav wished Netflix well. He said, once Warner's board approves the Paramount merger, it will create, in his words, tremendous value for our shareholders. The deal will still have to pass regulatory muster. with the Department of Justice, California's attorney general, also saying the state intends to carefully review the deal. Do you have any firm knowledge of what went on yesterday at the White House? I do not. I've been trying to get some firm knowledge. You've seen the reports from different places that he that Sarandos met with Pam Bondi and not meet with the president, did not meet with the president, but got the feeling that this is going to be tough.

9:45And so that's the big question to me. So I was surprised that they're walking away. I thought, invariably, for a buck a share, you know, can't be that much of a difference. There's more to it than just... If they really wanted this asset, I always thought Paramount would raise... Right. Well, that's not what they're saying. I thought Netflix would match. So you don't believe them. I don't know. They're saying it was nice at this price and it's not so bad. I know that's what they're saying. And what I'm I'm suggesting to you is it walking into yesterday. My expectation was that they would try to match.

10:20They were fighting it out. And then all of a sudden they stopped fighting out. Now, I don't know how much that was about yesterday's meeting at the White House. I think there could have been some element to that. By the way, I think it could have even been some of the. Not noise, but indications and signals they got around the regulatory regime and what it would mean for them. prior to ever showing up in the White House yesterday. And around the world, even. And it would create a pretty big streaming company. I don't know if it's too big. You know that people that work in the business, I've said this all along, it was a terrible choice, according to them.

10:57Like, film Twitter-type people. It's either the end... No, it was a terrible choice. 100%. It's either the end of Hollywood in theaters, or it's the magification of Hollywood. And now... That is the view. It's almost like now they went from the frying pan into the fire. A lot of these people into that. And it set their hair on fire immediately about the Ellisons and Trump and what it means. Right. So Hollywood and Netflix, the more you heard about it, there are a lot of people now that I know of. I'm not one of them that think that Netflix is really selling a certain narrative in terms of the culture wars that they don't approve of.

11:42So see, now we're getting somewhere. Now we're getting to, no, we're getting to what I imagine has to, underneath this, been the problem for Ted Sarandos. You see it as a problem. I've always said I can't wait for Barry Weiss to be running CNN. I didn't say it was a problem. I said that it was a problem. Neither one of us have any force in this game. I said the problem being that it could be. No, I'm talking in the context of Ted Sarandos. The problem that he was going to confront trying to buy this asset was going to be the steady drumbeat of Susan Rice, the type of films that you think that they are trying to push or the political message they're trying to push.

12:23The cultural push. You can see it in everything. I don't see it. I know you see it. Oh, my God. You don't see it. How about even Disney? It's got the same sort of image. But nonetheless, I believe in a free market, so I think that everybody should be able to do whatever they want. They certainly are able to at this point. Well, they're able to do only certain things. They're not allowed to buy other people because... Well, now the new regime is going to be able to make whatever kind of movies it wants to make in the free market. Well, the question in this case is how free is the market? Well, how free was the market before when it was 99 % slanted to the left?

12:59I don't understand where you're even going with it. The free market is the free market. Okay, and this is still the free market. You think Trump's telling the Ellis' what to do? No. Well, then why isn't it the free market? There's two elements to it. One is, if you believe that Ted Sarandos couldn't acquire Warner Brothers because of its approach, then guess what? It isn't a free market. Let's start there. That's just plain as day. That's a lot of assumptions that you're making that you have no idea. And then the flip side of that question is, do you believe that the Ellisons were bending over backwards to do things to placate this administration in certain ways, in which case around either coverage or this or that, in which case that wouldn't be the free market?

13:53Well, I guess Sarandos didn't go to the White House yesterday to try to sell Melania the sequel. That probably, that might have, might have, huh? That was my idea. New York Mayor Zoran Mamdani says that he had what he called a productive meeting with President Trump and suggested that the two had found common ground on building more housing in New York City. Mamdani posted a photo on X from the Oval Office. President Trump held up a copy of the famous New York Daily News headline, Ford to City dropped dead, as well as a mock-up of a Daily News front page that said, Trump to City, Let's Build. A small sub-headline says Trump delivers 12 ,000-plus homes.

14:41Later on, Ex-Mum Donnie said he had spoken to President Trump on the phone, and the president told him a Columbia University student detained by immigration and customs enforcement would be released. Columbia's acting president said the student had been detained by agents who misrepresented themselves by saying they were looking for a missing child to get access to a residential building. You know the mayor, Andrew. I thought that picture, I thought it was a delicate dance for the mayor. And I thought the president's smile, he's beaming like he always does. I'm trying to read the mayor's expression.

15:20Well, the mayor's usually beaming. That's what I mean. And he's not in this instance. He's got a smile that... But what I don't know is, did they just... Is this like the one shot, the one shutter shot? Where he wasn't. Where he wasn't, because usually he is pretty smiley. I mean, I'm not sure what that is. It's almost like, I hear you. This is not something I want to do, but I'm doing it for you. I have to... You know, that's sort of what it looks like to me. Like, he's... I don't know, but I don't want to read too much into that. But the president, that's his genuine big toothy grin, which is, yeah, he's charismatic.

15:55They're both. And I think that's part of Trump's approach to Mamdani is he admires his political skills. Don't you think? Charisma on charisma. Right. Cheese will be next. Coming up on Squawk Pod, they're coming to take us away? mega shifts in mega technology. Former Wall Streeter and former White House staffer Gary Cohn on the changes AI is making to the job market. This is a trend we're going to continue to see as people fight with higher interest rate costs, higher input costs, higher commodity costs, and more trade tariffs.

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17:37trading at schwab is now powered by ameritrade bringing you an expanding library of education with even more ways to sharpen your trading skills access new online courses insightful webcasts articles engaging videos and more all curated just for traders plus guided learning paths with content designed to fit your unique interests and no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more at schwapp.com slash trading. You're listening to Squawk Pod. Stand by Joe in three, two, one, his mic. Shares of a financial technology company block shooting higher after CEO Jack Dorsey said he was laying off 40 % of the team due to AI efficiencies.

18:24In a letter to shareholders, he said, intelligence tools have changed what it means to run a company. That's just one of the things we're going to talk about with IBM vice chair and former NEC director Gary Cohn. Someone did write right into me, Gary, and welcome. It's good to see you that Elon Musk bought Twitter and got rid of like 90 percent of their employees. And no one, not one thing happened. So maybe Dorsey has some bloated employee ranks at companies that he owns or runs. Joe, look, it's great to be here. I think we're in this reality where companies are being forced to run themselves much more efficiently.

19:04You know, we saw headcounts around the world bloat pretty dramatically after COVID. You know, people were hoarding labor when people were working from home. They were working two, three, four days a week. The productivity rate was down. So companies had to make sure they had excess capacity and excess employees. We're now back to a much more normalized environment. People back in the office were getting productivity out of workers. And we've got this whole new AI thing upon us, let's call it. And it's hard for companies to actually explain how they're using AI. But the one KPI that they can tell you is we've cut heads.

19:40So today, we've sort of made the world synonymous with I'm using AI, therefore I need less heads. I ultimately don't think that's the truth. but companies don't have a better way to explain to you how they're creating synergies, how they're creating productivity. They're saying, look, we're just being more efficient by cutting heads. And I think that's the trend we are seeing and we have seen for the last year or so. Because you have been on, in past appearances, and I remember, you were explaining something that was very confounding about, I guess, the labor force or the Jobs Fridays, what was going on.

20:17And you said people don't need that. Oh, I remember what it was. The reason that one way to deal with tariffs is you look at the whole situation at your company. And if your margins are going to be hurt by some increased costs, then you're not going to hire people. And that's the way they were dealing with it. So if you look. That's continuing. I agree. And if you look back on the last few years and you think what companies have had to live through, you know, A, we went from a zero interest rate environment. 22 to the Fed raising rates to five and a half, five and three quarters percent. They did that to slow the economy down.

20:55That's why you raise interest rates. So we went through that period of zero interest rates, the higher interest rates. We've gone through this period of what I would call trade, trade wars, trade imbalances, higher input costs. We've gone through this world where the dollar continues to go down in value, meaning that a lot of the commodity input costs continue to go up in value in dollar terms. So if you're going through this period of time where your input cost, whether it's cost of funding, cost of labor, cost of raw materials, go up, and you don't feel like you have pricing power to the consumer, the company's going to get squeezed somewhere.

21:30And where they've been trying to alleviate the earnings problem is they've been doing it through human capital. So human capital has been sort of the lever that companies have been pulling to make themselves profitable. And you saw it, even in this last quarter's earnings announcements, we saw well over 100 ,000 announced layoffs in some of the bigger companies. And I think this is a trend we're going to continue to see as people fight with higher interest rate costs, higher input costs, higher commodity costs, and more trade tariffs. One thing that President Trump tried to do the other night was highlight some of the things in the economy that the administration feels are underappreciated.

22:09And there are a lot of things that are underappreciated. Maybe. We had Mike Wilson. I know you follow his work. The other day, he said, look, the stock market anticipates future positive business activity. And then as it starts playing out, some of the money comes out of the stock market and goes to fund the increased corporate activity. He's expecting some blockbuster year inflation trending down or maybe at least flat. You have the same optimism. It's not reflected in polls. Look, I'm fairly optimistic right now. You know, we've got a lot of really strong tailwinds. And I think the president tried to talk about some of these tailwinds during the State of the Union.

22:48You know, look, we've got the Build Back Better bill. And what people are now starting to understand for the first time is when they put that legislation through, they changed things in the tax code retroactive the last year, but they didn't change the withholding tables, meaning that we could have withheld less money from workers every day. Instead, what they did, and probably very smartly, is they kept the withholding rates at the same level. So as people are actually filing their taxes today, they're getting a much bigger refund than they might have expected. They're allowing to deduct higher SALT deductions.

23:27So whether it's state and local taxes, real estate taxes, that's giving people more money. So the consumer is getting more money in their pocket. You look at what's going on in the CapEx boom and the reindustrialization of the United States. Is that happening? It's happening. But I've always sat here and said, look, this stuff is slow. As fast as the federal government wants to work and as fast as the federal government wants to get manufacturing built and they want to get data centers built, state and local regulation does not move at the speed that federal regulation moves. So these plans to build and these plans to develop factories, they're in state courts.

24:05They're in state zoning committees. They're in city courts. They're in city zoning commission. We're starting to now see some of that money being put to work in real construction projects. The Dow hit 50 ,000. We heard that the other night. The S &P hit 7 ,000. But Monday was a scary day. Today, I think we're down 450 now. Now, NVIDIA, unable, with a great report yesterday, unable to save the technology sector or the AI or software or whatever. Is this just a normal backing and filling after a big gain, or is there more to it? So, Joe, I think we're having a bit of a rotation. If you look at the S &P itself, you know, the market cap-weighted index.

24:47So the biggest companies have the biggest influence, which are the companies we've been talking about, the NVIDIAs, the Googles, the Microsofts. They've gone up so much. Well, this year, it's basically, today, right now, with today's activity, it's about flat. Flat. Pretty prior to that. If you look at the equal weighted index, where every company is equal, that index, as of last night, was up about 6%. So net-net, we're seeing the stock market as a whole hold its value. We're just seeing a rotation where people want to be. People are starting to reevaluate the growth numbers that they had on a bunch of these, I would say, technology companies, software companies, technology companies.

25:27And they're starting to reevaluate the growth of what I would say traditional companies in America and traditional companies like Walmart, like J &J, like Exxon, like Verizon. Companies like that are all trading basically at their 52-week high as people are saying, look, I still want to be invested in the market. I still want to be long the economy. I just want to be long it in a more judicious fashion where I don't have as much exposure to the mag seven or the top five or seven names. I want to have exposure across the board. We didn't talk about the sub four 10 year in mortgage rates falling below six percent.

26:04So some of those things that takes time for all this stuff to happen. But it does seem to be happening. Do you think that the mood of the country eventually improves if we believe the polls? I do. I believe that the mood of the country does improve. Look, you know, these PPI numbers today are not going to be helpful. But a lot of this is when you see on the producer side, a lot of this, as you can see, is input costs. When you're talking about producer price index, you know, the producer has to absorb the input cost. They have to absorb the higher commodity prices, the higher copper prices, aluminum prices, steel prices, nickel prices.