SpaceX Governance & an AI Film at the Tribeca Film Festival 5/27/26

11:21Tom Rogers:Ron Barron who said it, but also some of the analysts said it, too.

11:24Nell Minow:We could have reported that. All's fair and love and war, I guess, goes in the index.

11:30Ash Koosha:I'm glad it's coming here. All's fair and love and war. But to me, it's not all's fair and love and war about which exchange is going to use their influence to do this. That's not the all's fair and love and war. Is all's fair and love and war to the investor class? That's who the ultimate responsibility I would think should be. This should be, too. I would think the SEC should be focused on this. I think if we care about the credibility of markets and not perverting the price of different stocks, there should be at least a meaningful public conversation about how these processes work.

12:04Nell Minow:Having been in that business for 10 or 11 years, it was never about satisfying the retail people. No IPO that ever came out was about satisfying John Q. Public. Ever.

12:18Tom Rogers:How does the process take place? I'm just trying to figure it out now.

12:20Nell Minow:Our office would get 100 shares. You know who would get it? It would go to the biggest producer in the office. He would give it to his biggest client, and it's almost like a discount. It was never democratized, though.

12:33Ash Koosha:I'm not speaking about the democratized. But it was never fair. I'm not for or against the idea of giving the shares to retail investors. That's not what we're talking about.

12:40Tom Rogers:No, just for selection in the NASDAQ 100. I'm just reading up on this because I wasn't sure how the process worked to this point. They're governed by specific rules-based methodologies rather than subjective committee decisions. And I think that may be what you're arguing.

12:54Ash Koosha:And they made a subjective committee decision to change the policy so they could get these big, so they could try to attract these IPOs.

13:00Tom Rogers:But for the most part, it looks at liquidity, the size of the float.

13:05Nell Minow:If you were running the place, you would.

13:06Tom Rogers:And age and tenure, how long they've been on. Usually it should be at least three months before.

13:11Nell Minow:Leo DeRocher.

13:12Tom Rogers:We did ask Adina about this. Yes, we asked Adina about it. And I think she said it was because of the size of it. She thought of a reason. Because of the retail interest in getting into this as well.

13:20Ash Koosha:That was the argument. All I'm suggesting is that typically in the aftermath of an IPO, you want the price to have some kind of genuine price discovery. That's actually the phrase we should use. You want real price discovery, real investors making real decisions about what the price of an asset should or should not be. once you uh live in a dream insert a artificial component into that story you have a difference

13:50Nell Minow:a different was that real price discovery what we saw last week when it triples i mean it's just it is what it is i think what does that mean which one did we have last week that uh we had the ceo on was that i mean price discovery they discover it at one point and it's five times what it is in

14:09Ash Koosha:three weeks? The only distinction between what you're talking about, you could argue that the price discovery doesn't happen as efficiently as you want it to. Actually, this will make it less efficient because you will have a component part in the marketplace that is automatically buying the assets and nobody can control it. So in that respect, you think it won't be as accurate in terms of price discovery? By default, it almost can't be. Because the price discovery is never But I'm saying you've inserted something into the process, which ultimately is going to change the outcome.

14:43Tom Rogers:I think we're going to talk a lot more about this.

14:47Ash Koosha:Cheese will be next.

14:49Tom Rogers:Coming up on Squawk Pod, the gravity of SpaceX's potential entry into the NASDAQ 100. With chair of Value Edge Advisors, Nell Minow. Capitalism rests on just one question, which is why should I trust you with my money? The answer is usually, well, we have an independent board of directors. We have arm's length transactions. There are all kinds of checks and balances. They've eliminated all of those. They've really turned this into a meme stock because none of the fundamentals of corporate governance are there. A passionate conversation with the investor who sold mostly out of Elon Musk. The pickle that comes with your hamburger, they're making you eat it.

15:31Tom Rogers:At Venture Global, we think about what can be done, not what's usually done. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States,

15:46Ash Koosha:but delivering American energy at a fraction of the cost in a fraction of the time. So while others are busy talking, we're busy building.

15:55Tom Rogers:That's Venture Global. That's unstoppable energy.

16:27Tom Rogers:Bank of U.S. Soccer and FIFA World Cup 2026. Bank of America NA member FDSP.

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17:05Tom Rogers:You're listening to Squawk Pod with Joe Kernan, Becky Quick, and Andrew Ross-Organ. Here's Becky. As SpaceX prepares to become a public company, questions about the company's corporate governance are getting louder. The country's three largest public pension systems have said that they have serious governance concerns. Now, Minnow is a ValueEdge Advisors Chair. She's been an outspoken critic of lease arrangements between SpaceX and Valor Equity Partners. That's a major early investor and shareholder in SpaceX. The founder, Antonio Gracias, also serves on SpaceX's board. She's called the leases between those two deals deeply troubling.

17:45Tom Rogers:Nell, thank you for being with us today. You've got a long list of complaints on governance. Why don't you talk about this issue that you say is the worst of what you've seen? The problem is that Elon Musk and his cronies treat the company like it's their personal piggy bank. You know, all of capitalism rests on just one question, which is why should I trust you with my money? The answer is usually, well, we have an independent board of directors. We have arm's length transactions. There are all kinds of checks and balances. They've eliminated all of those. They've really turned this into a meme stock because none of the fundamentals of corporate governance are there.

18:21Tom Rogers:And yet the retail demand is maybe the highest we've seen for any offering that I can recall. Yeah, that's what makes it a meme stock, because it's completely unconnected to the fundamentals and to the corporate governance. This has got probably the biggest corporate governance risk I've ever seen. And I wouldn't care about that except for one thing. I'm a big believer in the free market. I went to the University of Chicago. ago, I work on behalf of shareholders. But I believe the free market depends on whether you get a chance to decide whether you want to buy it or not. You remember when Apple all of a sudden sent a U2 album to everybody, whether they wanted it or not?

18:59Well, that's what they're doing with

19:01Tom Rogers:this. They're shoving it into the index, even though it doesn't meet any of the normal requirements and qualifications for getting into the NASDAQ index. And unlike the U2 album, you can't erase it. You know, the pickle that comes with your hamburger, they're making you eat it. And that's what bothers me. If they thought that this was a real viable stock, they would not be taking all these end runs to the free market. OK, let's let's talk about that in particular. We discussed it a little earlier on the show this morning. But the idea that the Nasdaq has said that they'll put SpaceX into the Nasdaq with 100 within, I think, 15 trading days versus the three month waiting period that is normally required.

19:44Tom Rogers:Explain why you think that that 15-day period is not enough time. Well, normally they have a 30-month period, and the people who invest in the index rely on that because that will adjust for some of the volatility that often happens in the early trading days. And especially they've got a low float. There are so many red flags here, and yet they're forcing people to buy it. Now, the concerns that you mentioned from the New York State and city pension funds and the California pension funds, they have written to Elon Musk and said, we are shareholders. We are concerned about this. They haven't addressed any of those concerns.

20:19Tom Rogers:And what I'm recommending to our clients is that they pick up the phone, they call Larry Fink, they call Vanguard, they call Fidelity and say, make us a new index that doesn't include this. You think the Nasdaq 100, I guess people could vote with their feet and not put money in the Nasdaq 100. Do you think that's too complicated? Why should they have to do that if they like the other night? the growth opportunities of the other 99. Yeah, exactly. So I think that all of those financial institutions are in business. They're all very sensitive of what clients want. And if the clients come to them and say, we want those traditional indicators, we want those traditional qualifications that are the reason that we bought into this index to begin with, I'm sure that they will make a deal.

21:00Ash Koosha:Right. And now, so I have such mixed views of this situation. I think like you don't love the way this index thing has been put together and think that there's at least a larger debate that should be had publicly about the governance of how this is approached and arguably governance around a lot of the Musk companies. Having said that, the truth is that history has shown that this man, Elon Musk, has been a winner at a magnitude in order, and the shareholders that have been with him at a magnitude order that is frankly off the charts. I mean, it's just a remarkable thing. Doesn't mean that history is going to suggest that or mean that everything's got to go to the moon.

21:46Ash Koosha:But it is a thing. And I just wonder what you what you think of that.

21:51Tom Rogers:All right. Past performance, no guarantee of future performance.

21:55Ash Koosha:I recognize that. I'm just saying most people who have hitched their ride to Elon Musk have done very, very well hitching their ride.

22:02Tom Rogers:to elon musk through the moon space absolutely uh i used to have tesla stock myself until i donated most of it to charity because i don't want to pay for a part-time ceo you know yale did a study showing that uh musk who has made himself the brand like the green giant or you know betty crocker uh he's made himself the brand of the company and that that has hurt the sales at Tesla. As you know, Tesla for the first time is not number one in the world anymore. China is ahead. And the man is as good as he is. He has spread too thin. This particular company, SpaceX, depends a lot on government contracts.

22:42Tom Rogers:That's very high risk. I don't think it's adequately addressed in the disclosures that they've made. And these insider transactions, I mean, this, you know, as I said, they're using it like a piggy bank. Elon Musk has borrowed money from this company three times. He's the richest man in the world. He should go borrow money from someplace else or sell some of his stock.

23:01Ash Koosha:No, I recognize all the things you recognize. The only thing I wonder is for years, people had the exact same debate about Tesla. Yeah. And look, and had you been an owner in Tesla, I think ultimately you would have been relatively satisfied with the outcome of being that investor. And that's that that's the only pushback I would give you about some of these governance things, which no doubt are unusual. I'm just saying that even despite the unusual nature of it all, he has found a way, even with XAI. That's the only pushback he would give her. What do you mean? That's a lot of pushback.

23:35Tom Rogers:Okay, that's fine. But at what point does he run off? You know, he's like Wally Coyote. He's going to run off the cliff. He's going to stand suspended there for a moment. The fact is he's a part-time investor. I mean, he's part-time CEO and investors are paying him for full time work.

23:51Nell Minow:We'll have you on with Ron Barron. No, I think that'd be a good.

23:54Tom Rogers:I would love that. You know, that guy who is, of course, very, very bullish because he is personally invested. He certainly benefits his fund benefits if people want to buy in. But, you know, I saw him on your show and he was bragging that he got to scoop up stock from the employees who are underpaid and who are so desperate for cash. That's not the The employees were looking for a way to cash out now. I mean, it allowed the company to stay private for longer, but the employees were looking for a way to cash out. But we want them to be invested. We want their interests to be aligned with ours.

24:27Tom Rogers:Elon Musk has got his crazy board of, you know, his brother, the chef, to give him a ton of stock contingent on establishing a colony on Mars. And yet, even though that has not happened yet, to my knowledge, he is allowed to vote that stock. That is ridiculous. So at some point it's going to be too much. And I'm arguing now is that point. You bought into the stock. What made you buy into shares of Tesla at what point? And what point did you give the shares away to charity? How much of the. I waited until I could. March of 2024 is when I donated the stock to charity, except I kept a little bit so I can continue to get the shareholder communications.

25:07Tom Rogers:But I bought the stock, I think, about five years before. Yes, I did very, very well with it. And I bought it because I thought he was a very innovative thinker. But I donated it because I thought he wasn't spending enough time at Tesla. And I thought he was a drag on the stock. Nell, thank you for joining us this morning. My pleasure. Next on Squawk Pod, the first AI-generated film to be accepted at the Tribeca Film Festival. It's called dreams of violence. Tom Rogers says AI is a democratizing force in film.

25:44Nell Minow:Financial barriers to getting an independent film done today are too big. And too many independent films just aren't being made, can't get the financing. What this does for any independent filmmaker or budding filmmaker is take away the financial barrier.

25:59Tom Rogers:But at what cost? Film director Ash Kusha addresses the many jobs not needed on this AI production. It suddenly removes a lot of people like the gaffers and all the people on the set. But I think those people have such a deep knowledge and experience that can translate to these new types of jobs in the AI studio. We'll be right back.

26:27Tom Rogers:at Venture Global we think about what can be done not what's usually done through innovation Venture Global is not only building some of the largest energy facilities in the world

26:39Ash Koosha:right here in the United States but delivering American energy at a fraction of the cost

26:45Tom Rogers:in a fraction of the time so while others are busy talking we're busy building that's Venture Global that's unstoppable energy I want to grow the game so every kid can fall in love with soccer like I did so I asked myself what would you like the power to do my answers inspired me to invent a pop-up soccer goal that can turn any basketball court into a street soccer pitch Bank of America champion street soccer advocate Kyle Martino and everyone who dares to ask what would you like the power to do Bank of America Proud to be the official bank of U.S. soccer and FIFA World Cup 2026. Bank of America N.A.

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27:45Tom Rogers:Welcome back to Squawk Pod from CNBC.

27:49Ash Koosha:I'm Andrew Ross Sorkin, along with Joe Kernan and Becky Quick. This Wednesday, a new movie about Iran's protest movement premiering at the Tribeca Film Festival this year. It's going to offer a glimpse into the potential future of filmmaking. The movie is called Dreams of Violets. It was produced entirely with generative AI tools by a single filmmaker working alone. No actors, no sets, no traditional production crew at all for under$2 ,000. That's the price tag of putting this film together. Joining us right now, Tom Rogers, the film's executive producer, as well as executive chairman of Fountain Zero.

28:20Ash Koosha:He's also a CMC contributor, Versin senior advisor. And then there's Ash Koucha. He's the film's director, as well as the CEO of Fountain Zero. Good morning to both of you. So here we have a film, the first sort of feature length film. It's been entered and accepted into a film festival like this. Only cost$2 ,000 to make. I mean, that's a remarkable thing. Ash, how long did it take to make itself?

28:45Tom Rogers:Well, thanks for having me on. It took two months, but that's due to the fact that I had a day job. So I had to basically do this overnight when I'm not working or if I find some time on the weekend. So two months, I would say it would have taken around three weeks to a month end to end.

29:05Ash Koosha:OK, so as you can imagine, people in Hollywood who are going to see this, I imagine, will be scared by what you've done. Some people may get excited about it. I'm not sure. Walk us through the process of putting a film like this together. Was the script also generated by AI?

29:22Tom Rogers:No, the script. So this is the interesting part is that whatever you see on the screen is AI. The rest of it, the voice acting, the script, the blocking of the film, the way the story unfolds, everything is human created. So I had these ideas myself about different stories related to the events that happened in Iran and over the last 50 years. So all of those bits and bobs, basically you collaborate with an AI, on the language side at least, to be able to block this film in the correct way. And I think I could easily confirm now, having done this once now, that the human creativity is at the center of this production.

30:04Tom Rogers:Everything else is to be able to render that creative force into the final picture. So, yes, the picture is fully AI generated. And the reason for that, it's obvious it's very difficult to shoot this film. It's almost impossible to make this film in general, I think, besides the fact that it was...

30:26Ash Koosha:When you say the voices, for example, are there actors who are providing the voices? No.

30:31Tom Rogers:I've acted the entire voices. When there's voice acting, that's just me, and then the voices are changed to different fictional character voices, basically.

30:41Nell Minow:So every scene, every image is AI generated. The human creativity is there, and the company we've created, Fountain Zero, which we hope to create, sprout a full flow of these films, therefore Fountain Zero, meaning approaching zero cost. that whether it's an independent film of something that might cost in the order of$5 to$20 million or a huge, big-budget Hollywood film, these same techniques can be brought to bear to create something equivalent to what human labor would create.

31:17Ash Koosha:How did you do it only at$2 ,000? We've had conversations about token maxing. I'm a subscriber. I was paying an extraordinary amount recently even for the highest-end version of Claude. what services were you using to put this all together ash i think uh ash best for you yeah

31:34Tom Rogers:well you know there is a clever way having a background in cloud computing there's there are clever ways to optimize for the lower cost when you orchestrate the models when you build tools that make these models more efficient for example if you're required to generate 50 videos and you get two good shots out of it that's not a good way to do it because each video costs you two dollars right but if you have done your pre-production and post-production uh in a in a more proprietary way in a more creative way you can actually save a lot of money on the subscriptions right you can give one pro subscription on a video uh model provider or claude uh which which i use on a daily basis um and and you can get very clever with it and we we are basically specializing in building these tools right we we think that what comes out of the model is actually not the most efficient version of it.

32:25Tom Rogers:So you need a lot of tricks and tools around this. And this is why I think this eventually with Fountain Zero will create a lot of new jobs. We're inventing these new jobs, which is building those tools and methods and systems.

32:38Ash Koosha:I recognize this could create jobs for some, but invariably, given the production costs of putting a film like that, that would look like that typically together, the number of jobs, the makeup artists, the lighting people, the sets, all of it, and that's a lot of jobs. What do you tell all of those people? What do you tell actors, for example, who are watching this right now?

33:01Nell Minow:Well, we think, first of all, writers, directors are hopefully going to be working with us. So creative types, we think, will find a home where these tools can bring to life their visions at much lower cost. I think Much more importantly, there's an article in the New York Times over the weekend about how independent film has kind of hit a wall, that the financial barriers to getting an independent film done today are too big and too many independent films just aren't being made, can't get the financing. What this does for any independent filmmaker or budding filmmaker is take away the financial barrier of bringing a story to life.

33:42Nell Minow:And we think with that, we're going to democratize filmmaking in a major way.

33:46Ash Koosha:But here we are in a week or the past week or two where we've had these commencement addresses where you have young people booing when the word AI is even mentioned because they think to themselves they're not going to have a job. And it's true that there's a lot that the budding filmmaker can now go off and make the film that they otherwise couldn't make. That part, I get you. But the all of the sort of ecosystem that would have otherwise built that film is out of luck. And I'm just curious how you think socially all this is going to work.

34:17Nell Minow:Well, I think like a lot of sectors, AI is going to impact jobs. I don't think there's any denying that. I do think jobs will be created by this. There'll be different kind of jobs. I think creative types will still be able to work intimately with the creation of film with these kind of techniques. But the fact of the matter is this film would not have been created without AI. I don't think this film was accepted into Tribeca because it's AI. It's a great film. It's an artistic film. It's a beautiful film. And the fact that it was generated by AI, and I think when people see it, indistinguishable from something that is created by traditional human labor, it's really a phenomena that is going to democratize filmmaking.

34:58Tom Rogers:Who will distribute the film? Is it something that you see only in movie theaters? Is it a Netflix or a Hulu or an Amazon or Apple?

35:08Nell Minow:We haven't lined up a distributor yet. Obviously, there'll be distributors watching the film at Tribeca. This is the first such film that will be available to the ticket-buying public. So that's a first as well.

35:23Ash Koosha:What is the feedback you heard from Tribeca? Because I'm imagining there are going to be people, when this movie is shown, there are going to be some people who are going to stand up and clap, and there are going to be some people who may very well boo.

35:31Nell Minow:Well, it's a very touching and impactful film. I don't think people will boo the film. I hope they don't.

35:37Ash Koosha:I'm just suggesting that the heart of the creative community has a deep fear about a lot of this stuff.

35:46Nell Minow:Well, Rotten Tomatoes has created a page here to capture feedback. And I think there'll be a lot of feedback. And I think it'll be very instructive in terms of what the full spectrum of opinion is. And we're clearly expecting some who, because it's AI, don't like it. But the fact is the technology is here. We have to deal with it. And the fact is it can be brought to life to make some social good. And that social good is democratizing filmmaking at the highest quality level. Got his reasons. You got him. You knew you'd get some flack. A long-term media executive, you're consorting with the enemy, Tom.

36:23Nell Minow:Dealt with transitions in the media world before. That's right.

36:27Ash Koosha:Ash, what's your background? Table versus broadcast TV maybe, right? Have you made films before? Have you wanted to make films? Tell us a little bit about yourself.

36:34Tom Rogers:Well, yeah, about 20 years ago, I was at Cannes. I played as myself in a movie that won a Cannes Award. And after that, I tried to make a film, and I sadly got pneumonia because it was really cold on the set for six months. We had to try and make a feature film that failed. So I've been an artist for most of my life, an artist who was building technology to make it easier because I come from a background where even having a good guitar was pretty difficult, right? So I'm pretty acquainted with what it means to have technology at your fingertips and try to express yourself. I think the problem we're talking about is something I call content market fit.

37:18Tom Rogers:AI doesn't have content market fit. That's the problem. People hate it because it's just bad, right? I don't watch any of the AI stuff. When Sora came out, I was like, this looks bad, right? This is almost like a mockery of what I was doing as an artist. That's what I was going to say. Right? Yeah. Not just sort of, but some of the stuff you see on YouTube, some of the new content that's out there is not great. Your idea is that this is going to be quality that no one would know was AI generated? Yeah. Well, there's a tension, right? Obviously, AI labs are at full speed making these models. And then the content creators don't know how these technologies work.

37:58Tom Rogers:So there's this gap in between that I'm trying to come in And for the last 10 years, by the way, if you look at what I've done in the last 10 years, is try to make technology human, right? And make it more expressive, make it more emotional. And this film, I mean, in 20 years, we should forget that this film was made by AI the same way that we forgot about all the films, the early films that were shot on digital camera, right? But here, the problem, it's severe because you're right, it suddenly removes a lot of people like the gaffers and all the people on the set. But I think those people have such a deep knowledge and experience that can translate to these new types of jobs in the AI studio.

38:39Tom Rogers:You have to look at these images. You have to write logic for how the light works. And that is a new job. And I think most of these people will switch to that. I don't think you can just find a random person on the Internet and say, oh, here's an AI model and go become an AI filmmaker. I think you still need those logic of filmmaking and the emotions involved and the intention involved in filmmaking to translate into these new tools and methods. And when we talk about Hollywood, who are we talking about? Right. We're talking about the top down structure or the people who are working for Hollywood.

39:11Tom Rogers:And I think those people now are actually more empowered than the old business structure.

39:18Nell Minow:Major trouble on the horizon. It's major trouble. Any character actor has to worry. Could you make an AI star, or do you still need human stars to open, like a Tom Cruise, to open a movie? It's a great question. I do believe that actors will be able to license their images to AI-created films. They're already stars. Who are the new stars? Well, you may find that influencers who are going to be critical to marketing and distributing become featured characters in films. I mean, it appears to me that there'll be no actors left because we won't have to hear those speeches on Academy Awards night. I mean, they wouldn't say any of these things, right?

40:00Nell Minow:There are a lot of implications, but one that's really... A lot of positives. Yes. One really positive thing here is that as Pouya Kousha, Ash's brother, who's a technology genius and built a lot of the things on top of the model that allowed these techniques to emerge to make it so realistic, has said, this is movie making at the speed of news. and the January protest massacres in Iran were a few months ago. The idea that a movie would be made that quickly, a movie of this magnitude about events that happened so recently, is unheard of. It could be a two to three year process for a movie to come out.

40:46Nell Minow:And to be able to have major motion pictures about things that are still very much in the mindset of people who are dealing with them, confronting them, current events and all, I think is going to be a major development in movie making, which will open up a whole new avenue of movies as well. You are just a gadfly. You did the cable with broadcast. You did the TiVo with people so you can skip commercials. Now you're doing this. Don't, don't, don't. Well, media is always emerging. Do you have loyalty to anyone? What has it all meant? More choice for consumers. That's really the bottom line. It's always come back to more choice.

41:24Ash Koosha:Tom and Ash, we want to thank you both. Appreciate it.

41:28Tom Rogers:That does it for Squawk Pod today. Thank you for listening. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross-Lorkin. Weekday mornings on CNBC starting at 6 a.m. Eastern. To get the best parts of that three-hour TV show right into your ears, follow Squawk Pod wherever you're listening now. We'll meet you right back here tomorrow. Have a great day.

41:54Nell Minow:We are clear. Thanks, guys.

42:18Tom Rogers:monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast, or find Schwab Market Update wherever you get your podcasts.