SK Hynix Hits the Nasdaq & Talking FIFA with Men in Blazers 7/10/26

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0:33Try our most powerful trading platform yet at fidelity.com slash trader plus. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSE SIPC. Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, big headlines from the tech world. An executive departure from OpenAI, and AI giant of South Korea SK Hynix is debuting on the U.S. Nasdaq, raising billions of dollars from U.S. investors. Our own Christina Parts-Anebolis joins us with its pitch compared to American memory chip makers. SK Hynix is bigger, cheaper, and closer to NVIDIA.

1:17Then, Stat News reporter Bob Herman is digging into the cracks in the American healthcare system. It's all coming to a head for smaller employers. Small businesses are like on the shore of the tsunami and a lot of them are fleeing. They're getting rid of insurance because they know they can't afford it anymore. Plus, Netflix could be getting into live TV. And more good news for viewers, demigods on grass. The World Cup quarterfinals are only just getting started. Founder of Men in Blazers Media, Roger Bennett, made a business betting that Americans will jump aboard the soccer bandwagon. The world falling in love with America.

1:56One Buc-ee's, one Popeye's, one Waffle House at the time, which I think we also needed right now. And then America falling in love with global football. It's been a spectacular four weeks. One new fan from the 2026 World Cup, look no further. It's happening to me a little bit. It is Friday, July 10th, and Squawk Pod begins right now. Stand by, Joe. In three, two, one, this mic. Here. Good morning, and welcome to—well, welcome back, because you were here yesterday. This is Squawk Box here on CNBC, live from the NASDAQ market site in Times Square. And you're going to be happy. Melissa Lee is here, like I am.

2:36I'm happy to be here. Melissa Lee is here. Becky and Andrew are off today, and Ohio is still the best state. It will be for the next year. It certainly will be. One of the key companies in the AI industry, I know, tapping American investors for billions of dollars in funding. Christina Parts Nevelis joins us now with more on SK Hynix's U.S. debut. Yeah, it's official because SK Hynix has raised roughly$26.5 billion at$149 per American depository share. That's what's listed here. This would be the second largest share sale ever after SpaceX, also at the NASDAQ just last month. You're wondering, why all this demand for a company maybe you haven't heard of?

3:20SK Hynix is the world leader in high bandwidth memory, the memory that feeds AI chips with roughly 58 % of that market. Micron and Samsung competitors split roughly 21 % each in that pie chart right there as per counterpoint research. The case, though, against Micron really comes down to one sentence. It's bigger. SK Hynix is bigger, cheaper, and closer to NVIDIA. It's cheaper than the American rival in terms of markets, almost six times forward earnings versus micron seven, so not that much, but still, you know, a little cheaper. That discount existed because U.S. investors couldn't easily buy the Korean shares.

3:55Starting today, they can, which is why analysts see this listing as the catalyst that finally closes the gap between what's going on in South Korea and here in the United States. Barclay estimates the stock could see up to roughly$14 billion in passive buying alone as it enters the major indices just over the next few months. As for the$26.5 billion raise, it all goes into new fabs and equipment like ASML parts. Part of the Korean build-out specifically, the company says, could reach$720 billion. None of that supply, though, arrives before late 2027, which keeps the memory shortage going and record prices high intact for now.

4:34The longer-term risk, though, is that memory has never really met a super cycle It didn't eventually crash. But to be clear, this is the biggest pure play on HBM in the market right now, right? They have the full market share over it and the biggest customer, NVIDIA. The revenue number I thought was a mistake. So it's tripled to$65 billion, and it's going to triple to$235 billion this year. Yeah, that's at the end of this year. I saw that and I said that's got to be a mistake. It tripled to$65 billion. It's tripling again to$237 billion. I know, just in the last three years, and then in one year they're able to do that again.

5:15Yeah, to$200 and something. I mean, a lot of it's pricing, I guess, for revenue, right? Because there's a shortage. And then the investments being made, even in this country, are the numbers I was reading. Some of it's CHIPS Act, too. Yeah, so it's Indiana, and that's going to be an advanced packaging facility. And the goal is for that to be, and they're going to receive roughly$458 million, if I remember correctly, from the CHIPS Act funding. And perhaps maybe soon they'll announce further announcements, further expansions in terms of manufacturing. But most of it doesn't happen here. It happens in South Korea and some in China as well.

5:49Well, you sell almost a trillion dollars. Right. It's a lot of money. $720 billion. And some of it is going to come online very soon. So there's two ways to look at it. It's coming online soon, according to them, you know, in the next few years. So should you be worried as an investor? Because that changes the dynamics of supply and demand for memory and then would in turn lower the prices. Or maybe it's going to take forever because all of these companies promise. And you know the hurdles. You know the not-in-my-backyard scenarios, the labor, everything. And it could take way longer, which prolongs this cycle.

6:19And these were like this run-of-the-mill RAM that makes a difference as they stack on top of each other? For high-battiness. So you're reading the same article. In general, that's our CNBC article, which I'd recommend everybody go check out. Was that CNBC where I read that? Yeah, it was a longer piece. I think we're getting better and better with this new guy, right? No, he's not new. Kiff, if that's who you're talking about. Wipe that off your nose, Joe. But high bandwidth memory is a type of DRAM, and so that's dynamic memory that needs to be plugged in. The rest is NEN, so where it just stores on your laptop.

6:54See, my laptop's turned off, so it's still working. So the memory is still stored in there. But this type of memory that you're referring to, high bandwidth, does layer on top. It's more complex, and that's what's needed for AI systems. Okay. But this is almost be careful what you wish for, because this opens up a whole new fundraising channel for SK Hynix, which they can then use to build out, which would then impact supply, increase supply later on, which could then bring it back to that traditional cycle that it's been in in the past. Exactly, because that's where they said the money is going to go.

7:25They're raising the capital to fund what's going on in South Korea, to fund the ASML machines that cost a lot of money. I thought you were actually alluding to the money, maybe even leaving U.S. dollars and going back into South Korea, too. So the arbitrage opportunity that you and I spoke about just last night, the fact that you can buy freely, you can buy the U.S., you can buy the South Korean shares, transfer them into U.S. shares. But to go back, you have to go through some paperwork. And that's because the South Korean government doesn't want everybody having their money leave that country and come over here to the United States.

7:57But it's still the company saying it's a two way deal. They just have to go through some paperwork if they want to transfer the shares from South Korean to U.S., which, by the way, you get you need 10 shares here to get one share there. OK, Christina, thank you. Thanks, Christina Barsanovelis. And Fed chairman, we heard about this. Kevin Warsh revealing some of the participants now in groups that he's setting up to study various central bank operations. You might recall at his first news conference last month, Warsh outlined five task forces, which normally you hear about a government task force and say, oh, no, not another one of those.

8:35But probably necessary in this case, he said, would look at Fed communications data, data as well, the central bank's balance sheet, productivity and jobs and inflation. among the prominent names set to be involved in the task forces, venture capitalist Mark Andreessen, former White House economic aide Greg Mankiw, former Bank of England Governor Mervyn King, who you were mentioning for some reason yesterday. Because before he was reported as being part of the Fed Communications. So you already knew all of that. I mean, I'm just reading this and you're doing something else probably. No, I always listen to every word you say to me.

9:12And former Walmart CEO, did you get any sleep last night? No. Kind of obvious. Walmart CEO Doug McMillan, Warsh indicated he expects some changes at the Fed this year. I'm not going to hold that against you. It's hard. It's hard work. You want to finish this and then go anchor two hours at the end of the day? You're not doing that today, are you? Not today, but I did that yesterday. You did five hours yesterday? Yes. See, I would normally have some compassion or empathy. You have none. No, if anyone can handle it, it's you. That's all I was going to say. I'm going to try and say something nice.

9:49But, I mean, I don't need to keep trying. Great. OpenAI product and business head Fiji Simo announcing she'll step down from the company to focus on her health. Kate Rooney joins us now with more. Kate. Mel, good to see you in person here. Yeah, so this was one of OpenAI's top executives, second in command to CEO Sam Altman. Fiji Simo announcing she is stepping down to a chronic illness she's been battling since 2019. She did announce this on social media and a memo to staff yesterday. Her official title was CEO of AGI Development. She's now going to be a company advisor. OpenAI did hire the former Instacart CEO last year to help really scale its chat GPT product suite and then business operations, which is key right now as the company moves towards a highly anticipated IPO.

10:34She did help take Instacart public, which was part of that hire. SEMO has been on medical leave since this spring. The void at the time did cause a lot of concern from investors that we spoke to at the time. But since then, company co-founder and president Greg Brockman had been overseeing product overall that is expected to continue to talk to sources who say SEMO's responsibilities are going to be split up among Brockman and CFO Sarah Fryer, among other top executives. SEMO did spearhead advertising within ChatGPT, also a health-focused version of the chatbot. And the company's overall product strategy did get a lot leaner and more focused under her leadership.

11:09OpenAI has moved out of some of the more experimental side projects. Think of the video generation app, Sora, and focused a lot more on coding and enterprise, where it is now sprinting to catch up with rival anthropics. Simo, in her post yesterday, did also talk about the importance of this technology as she steps back from the role. She says curing disease is the most important thing AI could accomplish right now, guys. Does this impact at all its outlook or its roadmap for, you know, IPO? I would say no. In March, when she stepped down, that was the worry that there's a void. There's a vacuum in leadership.

11:42Greg Brockman has stepped in and the company has sort of consolidated under the founders. So you have Sam Altman, you have Greg Brockman. He is a product person and has really been doing that also leading infrastructure. The thought is that they may not replace her. It may just be sort of divvying up this role. And the product focus overall has just been enterprise. They're going after coding. They have just gotten a lot leaner, and that's expected to continue, I think, regardless of if they bring in someone else. That is the strategy as they look to go public. It's so much more profitable to be doing the enterprise business versus just ChatGPT.

12:12I've never heard of this condition. It sounds absolutely terrible. It's called POTS. I mean, her memo was very deep and more about her career and wishing that she had actually stepped back. She said in that that Mark Zuckerberg, when she was at Facebook, she was also top executive there, had recommended she take a year off. And it was sort of a step back and career reflection saying she wished she'd done that. But it does sound awful. Let me take it for granted. It's a neuroimmune disorder of the autoimmune, of the nervous system. The thing that we don't even think about, like heart rate, blood pressure, it regulates all these things and it gets all haywire from a neuroimmune disease.

12:52So you can be standing there, you get dizzy, chest pains, fatigue, feigning. I mean, I talk about I think she has spoken to Becky for CNBC Cures, by the way, but it sounds like an awful, awful disease. I mean, I can't imagine a more stressful job than running things at OpenAI, by the way. And she had been working remotely, you know, but it is it is such an intense culture. It is such an intense, fast paced job at this point. But OpenAI, yeah, they are the pressure is on right now as they look to go public. And they're really trying to monetize the user base, which was really her purview and her task.

13:28But she was number two to Sam Altman. And so very big job there. Not rare. One to three. I mean, rare, but not classified as rare. One to three million Americans up to one percent of the global worldwide population, which is crazy. But I guess it could be differing degrees. Yeah. It's interesting in her memo that she mentions AI as the tool to cure disease. Right. It's the silver lining of this technology. There's so much talk about economic disruption and what it could do to jobs. But I think, and the popularity overall, you see the data center pushback. There is a thought that this technology could actually really be used for good.

14:05I mean, Sam Altman talked about that, too. But if AI is able to go out and cure rare disease or cancer, I think it's going to be a lot more popular for a lot more people. Just more people that won't have jobs. But they won't have rare disease. No, they won't. Yeah. So we'll live for it. Yeah, yeah. It's a great opportunity. But we'll live forever, but have nothing to do. Nothing to do. Yeah, we'll just be hanging out. I'd rather live in a future. And nothing to watch on Netflix. Back to that. Kate, thank you. Good to see you guys. Kate Rene. Netflix is looking to get into live TV. The Wall Street Journal says the company is exploring adding live streaming channels to its service or potentially allowing subscribers to use its platform to buy access to other streaming services like NBCUniversal's Peacock.

14:48The report says that Netflix executives have grown concerned about engagement, which measures how long users spend watching particular programs. Netflix recently partnered with France's TF1 to allow users in that country to watch some live content, including news. Other similar overseas deals could be a next step. Netflix declines to comment to CNBC, but of course this might pour fuel on the idea that it could buy NBCUniversal. I had a lot of comments on this, a lot of thoughts. I don't know whether I can talk to you about it, though. Why? Because you have twins, and you don't get, are you looking for things to watch on TV?

15:25Do you ever have time to do that? Sometimes. You do, at times, because I do a lot. So Netflix is now$300 billion or so. It's down 50%. Yeah. And I've been complaining about what's on Netflix. I can't, you know, there's a lot of stuff. I'm not engaged. And I've tried to watch a dozen of their dramas, whatever they are. And they need either to get better. It's always about content. We keep coming back to that. It's always about content. And I remember in the past when General Electric bought, what you said, NBCUniversal. And all of a sudden the suits there were looking at the numbers. And it's like, wait a second.

16:02So Universal, we have no idea. They could make X or three times X depending on whether they make good movies. and these like suits at GE are like, this can't be, we can't run a business like that. It's all about hits. When's the last Sopranos? A Breaking Bad, a Homeless, nothing like that. And they have no guarantee that they're going to be able to do that. So now they're like, holy crap, we might have to do quality programming. Let's do some sports. Let's do some news. Let's do some stuff that - And how expensive are sports rights at this point, right? I mean, Netflix had been applauded for having a TV strategy, a live TV strategy that was unscripted, but were events that they created.

16:47They weren't bidding against other parties for the rights to broadcast those. They would stage fights. They would have, you know, these sorts of things that were under their control, tennis matches. Yeah. But here they are, they're entering the fray. Do you remember the demise of appointment? It was must-watch TV, NBC said. So we had, let's say we, because we worked for them. for so long. But it's Seinfeld. Okay, 10 years of Seinfeld. Then replace that with Friends. Wow, everything's great. It was different. It was a different day. It was a different day. But we never... Do you remember what Jeff Zucker did to try to extend that?

17:21He made a supersized version of Friends because we couldn't come up with it. And to this day, NBC hasn't really come up with another... Poor Dick Wolf had designed it. We have a CSI in every city at this point because they can't come up. I think they're all good. I just think the content is king, and it's really hard to do, and Netflix is, for me, I find myself on Paramount a lot more. The number of Emmy nominations that they've gotten would tell a different story. Like what? For what? I agree that there's a lot of stuff on there, and oftentimes you don't find what you want. A lot of it is pretty woke, too.

17:58I don't like it rammed down my throat. Cheese will be next. Coming up on Squawk Pod, cracks in the American health care system. Fewer employees are getting insurance coverage from work. Costs are rising and they're being left to go it alone. Stat News reporter Bob Herman explains. Large companies, they usually have the means to still offer health insurance. It's pretty universal among the bigger companies. But small employers, which really are the backbones of entire communities, which politicians everywhere love, they're the ones who are giving up entirely. It only happens every four years, and this time it's here.

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20:01Fidelity Brokerage Services, LLC, member NYSE SIPC.

20:07Welcome back to Squawk Pod from CNBC. Stat News, a website covering stories in the world of health care insurance in the pharma industry, has a new series this week focusing on health insurance. And the second sentence in the first article sets it all up by saying America's employer-based health insurance system, which is still the dominant form of coverage for people younger than 65, is crumbling. The percentage of working age adults who get their health coverage from a job has declined. In 1998, it was 67 percent. It's now about 60 percent. It's also more expensive than ever. And Bob Herman is the reporter behind the series and joins us live.

20:50Bob, it's good to see you. Not everyone is aware of this. Large companies still can make it work at this point. They're able to induce people to come with these lucrative health care plans because they have tax advantages. You're mainly seeing the deterioration in small and midsize companies. Yeah, that's right. What definitely surprised me the most. You're right. Large companies, they usually have the means to still offer health insurance. It's pretty universal among the bigger companies. But small employers, which really are the backbones of entire communities, which politicians everywhere love, they're the ones who are giving up entirely.

21:30There's surveys that show companies with 200 or fewer employees, about 60 % of those types of companies offer health insurance now. That's the lowest it's ever been. We're on the trajectory to a 50-50 split of small businesses now offering health insurance. It was about 83 % a couple of decades ago when the ACA passed. So this is this is like a small businesses are like on the shore of the tsunami. And a lot of them are fleeing. They're they're getting rid of insurance because they know they can't afford it anymore. You know what else? And you saw the piece yesterday, probably, Bob. Obamacare, the type of increases that those insurance companies that provide Obamacare need is off the charts.

22:14And at this point, it's getting more expensive for people to the only 19.2 million people are in. Obamacare now down. So that's going down to down from twenty two point one. When people at small to medium sized companies lose their their coverage, what do the employers tell them to do? You're on your own. Yeah. I mean, first of all, a lot of the small business owners and workers I talk to, it's not an option that they want to do. Right. Like a lot of employers want to provide health insurance to their employees. But it's the costs have gotten to the point where they have to make a choice. either we offer it or our business suffers to the point of whether it still survives.

22:57And so a lot of employers have said, hey, we're going to give employees money. Maybe you can go buy coverage on the ACA exchanges then. But it's a tough tradeoff for workers because, as you mentioned, the premiums are much, much higher now. And the ACA marketplaces, we need to start thinking of these as also places where it's almost like another marketplace for workers. About half of people who enroll in the ACA marketplaces are small business owners or solo entrepreneurs. And the premiums there are incredibly high. And part of that reason is it comes back to politics. Republicans let these enhanced subsidies, which help lower the cost of premiums, those expired at the end of last year.

23:42Republicans did not renew them. Democrats created them during the pandemic. So that meant a lot of middle class people started to have to pay full freight for those premiums. And obviously that it's unaffordable. So there are a lot of people said, I can't do it anymore. I'm just not going to pay for that coverage. So Democrats said, oh, it's we got to we got to do this because of the pandemic. And they didn't they they let it you know, it wasn't going to last. They knew it was going to expire. They were they were in control at the time. They could have made it permanent, but they didn't because it wasn't cost effective.

24:16And then the realities of providing coverage set in, and it doesn't hold costs down. I don't blame Republicans for not bailing the Democrats out. Obamacare does not work effectively to keep costs down, right? Well, the Obamacare premiums are a reflection of how sick enrollees are in that marketplace. When insurers offer premiums and when they offer health plans, it is they look at their data. The actuaries say, OK, this is these are the premiums that we have to charge. And increasingly, if healthy people leave the market, they're going to have to charge more to cover the sick people that remain.