Paul Tudor Jones Makes a Big Market Call 10/6/25

0:00Bring in show music please. Today on Squawk Pod, Paul Tudor Jones says a big rally is coming. It's like the Prince song. It's 1999. Party like it's 1999, right? The billionaire hedge fund manager once predicted the 1987 stock market swoon. He says today everything is set for a surge in stock prices. It's a bit like Star Trek. We're kind of boldly going where no man has ever gone before. A massive Monday deal. OpenAI and AMD coming to terms that could have the Sam Altman-led AI star take a 10 % stake in the chipmaker. Mackenzie Sigalos broke the news. This is OpenAI committing to buying several generations of this tech, and it is a leg up that AMD needed.

0:53And White House top economic advisor Kevin Hassett, as the government shutdown hits day six. The Democrats need to come to the table, get the government open, and then if they want to negotiate over something, they can. Plus, the rest of today's news that got us squawking. And Taylor Swift rules the box office. Swifties are everywhere. Try wearing, you know, me going out in a Taylor t-shirt. Do you have a friendship bracelet on? It's Monday, October 6th, 2025. Squawk Pod begins right now. Stand Becky by in three, two, one. Cue, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC.

1:35We'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 again. It's a Monday. We did close at record levels for all of the major averages last week. The Dow, the Nasdaq, the Nasdaq 100, the S &P 500, and the Russell 2000, the small caps. You're looking at the Russell 2000 and seeing its eighth positive week just out of the last nine. And then you had gold at another all-time high and closing in on the$4 ,000 mark. It's up about one and a half percent this morning,$3 ,965 an ounce. Bitcoin continuing its recent upswing.

2:13It hit a record over the weekend, too, above$125 ,000 over the weekend. Right now, it's at$124 ,000. And it is now day six of the federal government shutdown. Democrats and Republicans remain at an impasse right now over federal spending, also reopening agencies in Washington. And speaking with reporters yesterday, President Trump saying that layoffs of government employees are now underway. That's a different message than we heard from the National Economic Council director, Kevin Hassett. He told CNN that layoffs would begin if the president decides that negotiations with Congress aren't making progress.

2:47I think that if the president decides that the negotiations are absolutely going nowhere, then there will start to be layoffs. But I think that Everybody's still hopeful that when we get a fresh start at the beginning of the week, that we can get the Democrats to see that it's just common sense to avoid layoffs like that. Democrats pushing to include a permanent extension of the health care premium tax credits in a deal to fund and reopen the government. Republicans insisting a discussion over those credits should be separate and take place once things reopen. And we could see another vote in the Senate on all of this today.

3:23And we're going to speak with Kevin Hassett. That's going to happen this morning. On this week's Squawk Planner, the government shutdown is likely to disrupt a few of this week's planned data points, including tomorrow's international trade numbers and Thursday's jobless claims, also wholesale trade on that day, too. The agencies that released those numbers have suspended data collection, and they won't resume publishing it until the shutdown ends. The Federal Reserve is still set to release the minutes from its latest policy meeting on Wednesday. President Trump is calling on corporate homebuilders to ramp up construction.

3:57In a post on Truth Social, the president said the companies are, in his words, sitting on two million empty lots, which he called a record. Trump said, I'm asking Fannie Mae and Freddie Mac to get big homebuilders how to get them going, and by so doing, help restore the American dream. On X, Federal Housing Finance Agency Director Bill Pulte said Fannie and Freddie would meet now with each of the big corporate home builders. How does that work? Get them to move by doing what? Suggesting it? And Bill Pulte probably has some pull at Pulte. Normally you'd say, you know, let the market take over. If there's demand, they'll build the houses.

4:35There is demand. So I don't know what the... There is demand, but costs are up and prices are high. So that's kind of where the rub is for some of these things. Even if you get mortgage prices down, the cost of construction, the cost of labor has all gone up. Overseas, Japan's Nikkei average jumping by close to 5 % today to a record high. The country's ruling liberal Democratic Party electing a conservative, Senei Takeichi, as its new leader. A research note over the weekend saying that she is likely to ask the Bank of Japan to maintain its accommodative monetary policy. She could become Japan's first female prime minister.

5:12Gains for the Nikkei were led by real estate, technology, and consumer cyclical stocks. The yen also weakening to the psychologically important level of 150 per U.S. dollar. France's new prime minister, Sébastien Lecornu, has resigned. This is just weeks after his appointment. He was installed last month after several government coalitions failed to pass a budget. The yield on France's 30-year government bond hitting a one-month high before retreating slightly. And the CAC 40 index slumping by about 2 percent on the news. The euro also falling against the dollar. Taylor Swift ruling the weekend box office.

5:53No, it's not deja vu. The musicians' one-weekend-only album debut event at AMC Theaters raked in$33 million domestically and another$13 million internationally. The 90-minute movie tied to the release of the 12th Taylor Swift album featured a music video for one of her new songs, some behind-the-scenes footage from the video shoot, and personal reflections from the singer. This is the second collaboration between Swift and AMC. In 2023, the theater chain distributed a film version of her Eras tour concert that generated more than a quarter of a billion dollars at the global box office and took the crown as the highest-grossing concert film of all time.

6:38And I actually was benefited from that. I actually had a thank you. I was going to ask, were you behind this one? Yeah, that was it. Thank you. You're welcome. Not even a t-shirt? You're welcome. I didn't even get a... What do you say? I didn't even get a t-shirt. I didn't even get a... I orchestrated this and all I got was this lousy t-shirt. No, yeah, right. All I got was this lousy t-shirt. Actually, I did get it. I do have some Taylor t-shirts. Some merch? Try wearing, you know, me going out in a Taylor t-shirt. Do you have a friendship bracelet on? I have... I wore one to a concert once. I can't remember which one.

7:13Do you want to get friendship bracelets? The two of us? Yeah. I mean, Becky, obviously, and I already have friendship bracelets. No, I just think it's... I don't need a bracelet for you to know how I feel. It's that deep. And you've expressed similar sentiments recently. Yes, this is true. Coming up, more of today. This is eye-watering. Or, you know, Mary Cry at this hour. You've explained that that doesn't take a lot for you. Well, I cry car commercials. Cheese will be next. Coming up, let's make a deal. OpenAI has reached an agreement with chip maker AMD that could give OpenAI a 10 % stake in that company.

7:57Our Mackenzie Cigalos with the headline that has shares of AMD skyrocketing. The company is projecting for$120 billion in revenue by 2030, and this is a big part of that strategy. And we are still in a government shutdown. Kevin Hassett, the economic advisor with the president's ear, joins us from the White House North Lawn on the potential cost of Washington not doing business. It costs the U.S. GDP about$15 billion a week for a shutdown. And so if the shutdown continues for a long time, then there are going to be a lot of things that don't happen and it will show up in the GDP number. So much more Squawk Pod is right ahead.

8:43Welcome back to Squawk Pod. Here's Andrew Ross Sorkin. We do have some breaking news right now. I want to get straight to it. It's a new AI partnership, and it is fascinating. AMD stock is surging. OpenAI and AMD getting together this after OpenAI, of course, doing a deal just a week ago, a week and a half ago now with NVIDIA. Kenzie Cigalos has the details on all of it. What's happening here? So, Andrew, OpenAI is teaming up with AMD in a partnership that could give Sam Altman's startup a 10 % stake in the chip maker virtually for free. Now, the rollout starts with one gigawatt of AMD's Instinct GPUs in 2026 and expands to six gigawatts across multiple hardware generations.

9:26Now, as part of this arrangement, OpenAI receives up to 160 million shares of AMD stock. their performance-based warrants priced at just one cent each, compared to AMD's current trading price of around$165. Now, those shares vest as deployments grow, but both companies are also billing it as a massive win for AMD, which has trailed NVIDIA for years. It's also a clear sign that OpenAI doesn't want to be dependent on just one supplier. This is all about OpenAI locking in the supply chain that it needs to scale, and it comes within weeks of cutting a$100 billion deal with NVIDIA. It's also in talks to build custom chips with Broadcom and comes as OpenAI plans a trillion-dollar-plus infrastructure build-out across chips, data centers, and custom silicone.

10:10It is a tightly wound circular economy and one that analysts fear could face real strain if any link in the chain starts to weaken. Guys? So can we just discuss, this is in many ways the opposite of NVIDIA, when NVIDIA invested effectively in OpenAI. In this instance, OpenAI is getting shares in AMD, but I also imagine OpenAI is going to have to pay for the access to these chips and these data centers that are going to have these chips. Is OpenAI using NVIDIA's funds to turn around and fund their competitor? Well, so that's an interesting element to it too. But the question is sort of ultimately, where is all the money going to come from?

10:51because even with the money that it's getting from NVIDIA, for example, by my math, it still doesn't have all of this money. Yeah, great question. So let's start with how it's going to pay for it. The$100 billion worth of equity that NVIDIA is putting into OpenAI is also pegged to certain build-out milestones being met. It's rolling out in$10 billion increments per gigawatt. Now, that goes into a pool of cash that OpenAI can spend on anything that it wants to. It is not contractually obligated to give it all back to NVIDIA. So, yes, ostensibly that could also go to AMD to buy their chips. And, yes, they are buying the chips from AMD directly, which is separate to this equity arrangement.

11:30Now, in terms of how they're going to pay for it, yes, there is a huge shortfall. Each gigawatt is roughly$50 billion. So$35 billion typically goes to the chip maker. The other$15 billion is roughly what the data center buildout requires. Now, to pay for that, I was talking to Sarah Fryer two weeks ago, and she says that equity is too expensive to hand out. So it's all about debt. And so that$100 billion investment deal, investment from NVIDIA, gives them leverage at the bank because they're not cash flow positive. And Andrew, well, I mean, your entire team has talked to Sam Altman about the fact that he has no intention of becoming profitable anytime soon because his goals are so ambitious and that requires additional compute build out.

12:08And so where ultimately do you see the money coming from? I mean, I hear you saying it's going to come in the form of debt. We obviously saw a company like Oracle take on, I think,$17 billion in new debt. We haven't seen classic debt being taken on, right, by like OpenAI, for example. Not yet. But the other piece of this, I'm going to head pretty soon to Dev Day, which is OpenAI's big event. They're bringing in 1 ,500-plus developers. And that's another play here for them. Sam Altman is looking to monetize the tech that they have. So one last week, they had this e-commerce strategy announced where they're basically cutting deals with merchants to get a portion of transaction revenue.

12:52It's starting with Etsy. It's growing to Shopify. But this is an ambition that Sam Altman has talked about for a very long time. He brought Fiji Simo in-house, and she's someone who is just known during her meta days of being able to turn product into revenue engines. Now, it's not going to look the same as what she did at the social media giant, but she is trying to invent new ways to make money. You saw the Sora app. It's now number one in the Apple App Store. This is the video generation software tool. And it's still highly gated, but there's a lot of interest there. Altman specifically said this could also be a good monetization engine.

13:23But I brought up DevDay because ultimately, they want more killer apps built on top of OpenAI's bones. Because to your point, Andrew, they don't have enough cash. I mean, they haven't taken on debt yet. And even if they do, that's not going to be enough. But the company is projecting for$120 billion in revenue by 2030. And this is a big part of that strategy. I mean, that is a staggering amount of market cap gain in AMD. That's over 60 billion dollars. So, so much for Intel catching up. It was coming back a little bit. It was 160 back to 170 billion. This takes AMD from 270 or so billion well up into the 300 billion plus range.

14:01That is an amazing move in one day. I mean, shareholders must be, AMD shareholders are like glad that they don't have the Mondays, Mackenzie. They don't have the Mondays. They've got the Fridays. But this is a huge endorsement of their entire Instinct GPU line because this is not a one-off deal. This is OpenAI committing to buying several generations of this tech, and it is a leg up that AMD needed. Look at that,$330 billion. Yeah. Is this, I mean, you mentioned that this is them trying to diversify the supply chain. I guess they've been doing that on every level, trying to make sure that it's not just Microsoft they're reliant on.

14:42This has been their new strategy for a while. Yeah, I mean, that Microsoft relationship is a big part of how they unlock the$40 billion tranche of cash in that SoftBank-led round. Now, they've got a term sheet. We don't know what that looks like because the Microsoft relationship, one part of it is commercial. And so we know that they would like to revise down that 20 percent revenue share that they're currently giving to Microsoft when they make enterprise sales. I've talked to Brad Leichkapp, their COO, who's been leading their go-to-market team, and that's scaled from up to 700 people in the last 18 months from a couple dozen.

15:16It's been pretty tremendous, the effort that they've made on that front. But separately to that, Microsoft, I mean, once their biggest investor, their biggest partner, listed them with the SEC as a key AI rival. So we've seen this relationship evolve in the last year. Mackenzie, one of the things I'm trying to understand here is whether you believe and maybe you know or don't know. I don't know the answer to this. Whether NVIDIA knew when it made this deal a week and a half ago now that or two weeks ago that this was possible. Open AI has made no secret of the facts. Airfire openly talking about the fact that they plan to diversify their chip strategy.

15:58I asked her in Abilene, Texas, whether or not that preferred provider language that they used with NVIDIA meant that they were exclusive. And she said, no, we plan to use AMD chips. I mean, for weeks now, they've been talking to Broadcom about building a custom chip that might lead to even more effective compute if it's designed with a proprietary model in mind that would fit with OpenAI's LLM specifically. So I don't think that there's any secret there that they were going to diversify. Now, I mean, someone who might have been more surprised was Microsoft when they heard about some of these compute buildouts, because historically, OpenAI was getting all of its compute power from Azure.

16:35And then they announced this$300 billion deal with Oracle. And that was the week that we saw the term sheet come from Microsoft and OpenAI, which is the thing that we were waiting for in terms of negotiating the relationship between those two partners. So that would be interesting to me. And I don't have the answer to that, but it's a question that I'm asking. A lot to unpack there. McKenzie, thank you for taking the initial stab. I'm sure we're going to talk a lot more about this.

17:04Day six of the government shutdown with no movement over the weekend. Our next guest says if negotiations continue to go nowhere, then perhaps layoffs will begin. Joining us now, White House National Economic Council Director Kevin Hassett. Kevin, always good to see you. You too, Joe. Where are we? I don't believe this goes much longer. I could be wrong, but it's pretty clear that the Democrats don't have a winning hand here and they're going to slough off another five near term. I just worry more about what happens after we reopen the government and Republicans fold and bend and wimp out because they're worried about the midterms on Obama on these subsidies.

17:51Right. You know, I don't think that that's going to happen. I think people will negotiate. But the bottom line is right now we just want a clean, continuing resolution. And any government worker that loses their job because of rifts after another failed attempt to negotiate is going to be really there because the Democrats are being in transition. And don't forget, Joe, that this is the third time since President Trump is in office that they've decided to shut the government down. So they've got Trump derangement syndrome. They don't really know how to govern when he's in the White House. And they're just flailing about.

18:26And this is really the worst of the three. They have absolutely no leverage whatsoever. And, you know, one would expect that they would come and they would come soon to the table. But they keep not doing it. You know, today the Senate opens its gavel, I think, around three o 'clock. I expect there'll be a team of people in the Oval with the president, hoping that we're going to get the government to stop being shut down. But if not, then I would guess that that team of the Oval is going to start taking sharp measures. The one and a half trillion that they'd like to add during a reconciliation or during a CR continuing resolution, that's not obviously going to happen.

19:07So they really want these these these Obamacare subsidies from COVID. They want those extended. I just want to go over and maybe you can come up with what the Republican plan is. So back before Obamacare, Republicans didn't want to talk about health care. That left a huge opening for Obama. 2010 came up with this, what is really a mandate subsidy mess. I'm quoting Kimberly Strassel, which almost got repealed by a couple of physicians who led the way, Tom Price and Tom Coburn. But it didn't. She says that spurred a return to the dark ages ever since 2017, where Republicans haven't done anything to try and fix the problem.

19:50So these these bump ups that we're going to see have nothing to do with the expiration of these covid super subsidies. It totally has to do because Obamacare is a flawed system that isn't working. And yet, I guarantee you, watch your colleagues in some of the red states wimp out and decide that we're going to pretend that we care and we're going to renew these subsidies. Right. Well, you know, the bottom line is that we made some progress with the previous bill. And a lot of people share your opinion about Obamacare. You know, most of the people who are getting insurance in Obamacare are just being put on Medicaid at sometimes four times the poverty limit.

20:34And so the thing to remember is that these high subsidies that are expiring are expiring because the Democrats passed a bill saying they should expire then because the emergency over COVID is over. So Democrats themselves said that we should take them away. And now they're just trying to use them as a political cudgel to try to score some points. Kevin, the only thing, they did it because it was too expensive to do it for longer. It's the same reason that the Republicans passed temporary tax cuts that you just made permanent. It's because of the way it was scored with the OMB. It would have been too expensive to say they were going to do it otherwise.

21:12It's not that they wanted it to end. It's that they couldn't afford to pay for it. But, I mean, there are budgets and budget constraints in government. And if it was free, they would have done it forever. But they stopped it when they did. But it's the same thing with the tax cuts. That was originally a temporary and that was just made. This is both parties do this. They play with the numbers because they know they hope these things will be permanent, but they can't afford to pay for it at the time. So they make them temporary and assume that it's going to be too hard for anybody to ever take them back.

21:37Tax cuts included. They put four times people with income, four times the poverty level on Medicaid and said they were doing so because of an emergency. and the emergency is over. And so I understand your point, Becky, but I think that in the end, they had to stop these subsidies because the subsidies made no sense. And now maybe if they open the government up, then maybe somebody on the Hill is gonna wanna negotiate, well, maybe we should do this to that to the subsidies, but that's not where we are right now because they wanna give the health insurance to illegal aliens. They wanna keep this sort of massive expansion that they did during an emergency.

22:10They're holding Americans, workers and American government services hostage and it's just not right. When do you think GDP or the economy starts to be affected? Because it takes a while, doesn't it? What do you think? Is it a month? How long does it take? You know, my friends over at the Council of Economic Advisors gave me a report at the end of the week that said that it costs the U.S. GDP about$15 billion a week for a shutdown, or about a tenth of a percent of GDP. And so if the shutdown continues for a long time, then there are going to be a lot of things that don't happen, and it will show up in the GDP number.

22:46Now, the good news is that the economy is booming. We've got GDP now at 3.8 percent. We've got retail sales year over year up 6 percent. We've got a capital spending boom. We've got deals like the ones that you've been talking about this morning happening left and right. And so there's a lot of good news out there. And I think the government shutdown in the end is just going to be a footnote in history. But the Democrats need to come to the table, get the government open. And then if they want to negotiate over something, they can't. Is the Fed flying more blind now than they normally are? It's hard to imagine.

23:20Yeah, there are data items that aren't coming out. We didn't get the jobs numbers last week. But then again, the jobs numbers have been revising so much that it's hard to extract a signal from the first print. And so I think, yes, the Fed would like to have more data. Yes, the Democrats need to open up the government so that we get the data that we need, so that we're making policy decisions based on the data. But I do wonder about the quality of the data lately, which is something that we've been talking about on your show. Do you think inflation, the print, when it does finally come, are we at 3 % at this point, do you think, on the most?

23:59I think we're below. If you look at the GDP deflator, which is kind of one measure of the macroeconomic measure of inflation. I know the Fed uses other ones like PCE, but it was 2.1 percent. And so inflation by any measure has come down by maybe about 50 percent since President Trump took office. It's headed in the right direction. More importantly, we're having a productivity boom that's unlike anything we've seen since the 90s. And when there's a big productivity boom like that, then that means that you can have growth without inflation. And that's our main expectation right now. If you really had to just be very forthcoming, does the president want to do doge?

24:36Yeah. I really want you to nail this one, Kevin. Does the president want to do doge-type cuts to the federal workforce? Or is it a threat just to bring Democrats to the bargaining table to reopen the government? And I guess Russ Vot. What is Russ Vot? Is the president holding back Russ Vogt, who really would love to do it either way? What's really going on? Look, look, we've, from the beginning, from the time that Elon came, have had an objective of making government more efficient, of taking away positions that were, you know, no-show positions and so on. And government employment, the latest numbers I'm seeing, is down by more than 200 ,000.

25:21And so for sure, we're going to continue to want to make government more efficient. But right now, this particular moment is about keeping the government open. And if the Democrats refuse to keep the government open, then perhaps the efforts we've been making to make government more efficient will even accelerate because of the extra legal authorities we have because they haven't appropriated the funds. As far as this shifting gears a little, where are we on trade? Where are we with China? China, could you see tariff money being used to support the farmers who obviously are being hit hard by, I think, you know, China retaliated against some of the tariffs recently?