T-Minus One Week: SpaceX’s IPO 6/5/26

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1:04This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, Anthropic is urging its fellow AI labs to agree on a slowdown of AI development. Two lawmakers drafting AI legislation weigh in. California Republican Representative Jay Albernalty. They're worried about recursive self-improvement where AI algorithms start training themselves, And that's why they're saying we need to be very aware of the potential for that. But the consequences that we're looking at, I'm kind of an AGI skeptic. I don't think that that's in months. I think it's in years if it happens at all. And Massachusetts Democrat Representative Lori Trahan.

1:44We are just not willing to be relegated to the sidelines while, you know, these companies set the rules of the road. We are a week out from SpaceX's IPO on the Nasdaq. Wall Street Journal business columnist Tim Higgins joins us. Unlike a typical IPO, a larger share of stock is going to be set aside for retail, up to perhaps 30%. And so Robinhood should have an allocation, Fidelity, Schwab, and others. And speaking of SpaceX, the S &P will not be fast-tracking the company's entry into its index, the S &P 500. But you know who did fast-track it into its own index? The Nasdaq. NASDAQ has a financial incentive to put it in the index so that they can get the IPO.

2:32The S &P does not. Plus the trillionaire, billionaires and many millionaires that IPO will make. And a Votorama on Capitol Hill. It is Friday, June 5th and SquawkPod begins right now. Stand Becky by in 3, 2, 1, cue it please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the NASDAQ market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. And it is Friday. Friday, as we like to say around here. June 5th. Is it? Yes, you're right. You said that literally 40 seconds ago. I thought it was. I said that. No, I said that. Yeah, I almost forgot.

3:16Yeah, I thought it was Friday yesterday when Andrew said we'll see you tomorrow. I was like, what? We're back here for another day. That's scary. Meantime, the United States Senate holding a voterama overnight just before 5 a.m. Eastern time. They passed a$70 billion budget reconciliation package to fund immigration enforcement agencies. Republicans defeated multiple attempts to add language to that bill that would permanently ban President Trump's$1.8 billion anti-weaponization fund. And President Trump responding to pushback on his choice of Bill Paltty to be acting national director of national intelligence, saying the appointment is only temporary.

3:57He'll be very good. Again, it's not a permanent position. We're looking at we're interviewing people right now, but it's somebody just to take it over for a little while. And then why asked why he thinks that Paltty is the best person for the job. Bob Chump said he's a very smart guy and, quote, you might find out some things about the rigged elections. So some more grist for the mill, if you will, about what you think Bill Paltrow will be doing over the next couple of months. Say the same thing about the AG initially. I don't know. Maybe not. But that was supposed to be that was going to be just acting.

4:37And now that's going to be permanent. My guess is he says acting because there's no way the Senate is very clearly indicated. There's no way you got to see with Todd Blanch, too, whether there is any way there. Anthropic calling for top A.I. labs to consider slowing the pace of development and said systems are advancing so rapidly. They may soon be able to improve themselves without human intervention, ways that could pose risk to society. in a blog post, Anthropics said that Claude could complete software tasks in 2024 that took humans about four minutes. Now Claude can manage tasks that take humans 12 hours.

5:13The company says it would be a good thing for all frontier AI labs to slow development and give society more time to deal with the implications. But it warns that if a slowdown simply allows the least cautious actors to catch up technologically, it could leave everyone less safe. Now, Anthropics' solution requires multiple labs in multiple countries to agree to stop under the same conditions, and it's urging development of systems to verify that other companies have stopped or slowed development. Critics called Anthropics Safety Warnings a marketing ploy designed to try to put Anthropics or some of the regulatory breaks on open source competitors and potentially tout the capabilities of its own models.

5:52We should mention, I don't know if you recall, this must have been at least about two years ago when there was an effort afoot to get a signed letter by all of the AI labs to sign a letter like this. And you remember Elon Musk, I think, and others were, there was a whole massive debate about this and everybody pushed back on it. But it's interesting. They said, basically, you're just trying to keep us from catching up. From catching up. But so this is, and the question is, is this marketing? Is this something else? I mean, on the face of it, it makes sense. You don't want to agree to do it if all your competitors don't.

6:24But the idea of getting all those competitors in different countries to agree seems basically an impossible task. Right. So if you know it's impossible, then is it marketing? If I was a science fiction writer, and plenty have tried to predict what's going to happen, I'm trying to, what is something that could happen that would be bad for society? What kind of things are we talking about? Well, they've been, like you said, they've been written about and they've been played out. And is it really, you know, what the singularity was based on, we have, it's almost the same thing as a black hole. You don't know what is on the other side.

7:05We don't, the beginning of the universe, you don't know what, we don't have the ability to know what happened before or after. And I don't, I mean, conjecture, I don't think we have any idea what we're talking about. The potential for something to happen. And what if it really started spiraling? And it, I don't know, could it? Yes, but I think we're still 10, 20, 30 years from now. I know. That's what we talked about. By the way, we were at the CNBC CEO Summit earlier this week. That was the whole conversation. What does it look like? We actually had two professors who were, what does it look like?

7:37What does it look like? Scare me. Scare me. You want me to scare you? I want you to scare me. The concept is not just that the AI models start to train themselves, but we live in an age of robotics. So you have to get to a point where we literally have robots, probably humanoid robots and other kinds of robots behaving in our society. So we've I robot. So society has now we have robots that are helping us. We're the robots, by the way, are building factories. They're building homes. They're doing things for us. And at some point, they don't need us. At some point, they decide their job is to build the new factory and then the new factory.

8:12And then they just and we try to stop them for whatever reason. And they believe that they need to do that. Then they come after us. That's how it gets. All of these AI labs have run experiments where they try and shut them down. Right. They don't like being shut down. They don't want to be shut down. Then they design a pathogen that wouldn't even touch them. Maybe. Maybe they do that. By the way, you won't you won't like this one because I know you have different views about climate. But there's. Oh, please. No, no. There's an argument that they decide that they just industrialize the entire planet and therefore don't care.

8:49What do you mean I don't like climate? That's such a preposterous. I'm saying that CO2 is not the boogeyman. That's all I'm saying. I understand that. But one of the arguments is that they industrialize the planet to such a degree that the planet becomes so hot. And because they don't care about humans on Earth that we all live in this other universe. From the 0.04 percent CO2. You can debate that with the robots. Trace. When you're. The ubiquitous gas. When your skin is burning off. Essential fur. You can have that conversation with them. It's not correlated in the past. The SpaceX IPO roadshow is underway and CNBC's Leslie Picker is with us this morning as the countdown to the space giants listing on the NASDAQ one week from today.

9:38Hey, Leslie. Hey, Joey, I heard your conversation about the numbers there and the pricing. I had asked my sources the same question. Was there anything to the 135 and the 555? It sounds like there wasn't. It was just the math that got them to the$75 billion raise. But to your point, JPMorgan hosting a SpaceX event last night for prospective investors in the IPO. Chairman and CEO Jamie Dimon interviewed surprise guest Elon Musk, who joined virtually. The conversation opened with a question about why SpaceX is going public now, to which Musk responded with an answer about 100 ,000 satellites and the future of energy generation in space.

10:16But then he summed it all up in this exchange. We're embarking on a massive new growth phase and we need capital for that. OK.

10:31OK, number two. Another thing is the revenue, like I also feel pretty good about like the revenue projections. I mean, like before, like revenue was a little unstable. But now I feel like the revenue is like much more predictable. We were also able to get an exclusive sneak peek at how JPMorgan decked out its new headquarters with moon rocks and 40 foot rockets in the elevator banks. You could see that there and space themed sculptures around the lobby. However, there was another surprise that dropped last night as well, guys. S &P Global saying it would not change the rules for entry into the S &P 500, which is a blow to SpaceX by preventing it from fast entry into that benchmark.

11:17And that stands in contrast to what the Nasdaq did for quicker inclusion into the Nasdaq 100, which is seen as a tailwind for SpaceX, creating a cohort of forced buyers who track that index. However, the S &P has about 20 times as many assets tracking that benchmark than the NASDAQ 100. So it's very, very meaningful for this IPO, guys. I think everybody stays private longer. The amount raised is getting bigger and bigger and bigger. And everybody's going to get in more quickly eventually. The NASDAQ rules were for three months. You had to be there for three months before they made an exception for SpaceX.

11:55I think the S &P 500 Global is tougher, right, Leslie? you have to be there for at least a year and you have to meet revenue and potentially earnings numbers as well. But I think there's a larger issue. Yeah, no, that's exactly right. The larger issue I was going to say that we should be talking about is NASDAQ has a financial incentive to put it in the index so that they can get the IPO. Right. The question is, who is not the S &P does not. So you have the people who do not have the incentive are not doing it. The people who do have the incentive are doing it. Who are they serving? You think it's a real advantage for for it's an absolute advantage to put it in that quick.

12:36Yes. A hundred percent. It is not just an advantage. It is not forgetting the deal, but it's an advantage to get to the deal because New York Stock Exchange was not willing to do it. People need to buy it. But this is a natural. This is an empirical experiment. You can see New York Stock Exchange wasn't willing to do it. NASDAQ was willing to do it. Okay, so who won? NASDAQ. We'll see what the price is. But you're asking, like, what the incentive? You have to always look behind the curtain and figure out what's happening here. You don't immediately need to think it's, you know, conspiracy. It's a conspiracy.

13:11It's out in the public. You can see it in front of you. Leslie, what were you going to add? I'm a homer. I like the NAS. I'm glad that you're going to say. Oh, I was just going to say that The deal is really constructed in many ways for index inclusion. For example, to Andrew's point, it creates this market of forced buyers very quickly after it goes public, which is a bullish case to actually buy into the IPO. And then they have this lockup structure to increase the float a bit quicker to make sure that it's a bigger weighting into the NASDAQ 100 index as well, which was part of their rule change.

13:43So the entire structure of the deal is kind of made. Could it reach out, bro? Essentially, with this in mind, because it is seen as such a big tailwind. And then the other thing that I'd point out, too, is that if you do have SpaceX in the NASDAQ 100, but not in the S &P 500, you could start to see a bit of kind of performance diversion between those two if it comprises, you know, as it becomes a bigger and bigger part of the NASDAQ 100, but not in the S &P 500. Could I buy 100 shares as a retail? You can try. Supposedly, it's easier, but I know he's giving more to you. I can't imagine you could buy, what's it, 135?

14:19I can't imagine. Look, there's places like Fidelity and Charles Schwab and Robin Hood are all going to have some. That's what I mean. There's just no way, though. It's going to be the same. But then the other piece of this is you have only a 4 % float. Think about that. One of the reasons you would only have a 4 % float is to buoy the stock. I mean, there's all sorts of things happening in terms of how this whole thing is constructed on a relative basis to this full size of the company that are built around this. By the way, I could argue to you the idea that they are going to allow more retail investors into this.

14:54They're able to. One of the reasons, arguably, they're able to do that and think that it's going to work is because of the index buying on the other end. So typically they sell. Retail investors are not. Retail investors are considered sort of fast money that they will sell right into the IPO. If you know on the other end that you have an index that's going to be buying for you, all I'm suggesting is all of the sort of classic price discovery processes that take place in the IPO are going to diverge in this case. It's just different. I do like that it's giving more to retail investors. And the demand was going to be there.

15:29I don't even think you need to do anything to try to cheat on the demand. I mean, the demand is going to be ridiculous. Normally, Fidelity requires that you have at least$100 ,000 in your account for it. I think they're dropping that level to$2 ,000 for this. You still can't. I guarantee you can't get any. It's like a lottery ticket, right? Yeah, it's like a lottery ticket. If you haven't, you put in for it, you may or may not, you know, long odds, but you might be able to get it. By the way, if I was, just to be 100 % clear, if I was Elon Musk and SpaceX, I would be doing this. This is absolutely what they should be doing.

16:00There's nothing wrong with what they are doing. I'm just suggesting that the other sides of this, their incentives and their motives, are not necessarily fully aligned in the same way that you would have thought around the way they used to think about these things. And we have seen so many times, we try for price discovery, but you look back a year and it's like... Who knows? I remember when Google initially was not nearly as hot as, and then look where it is. And it depends on the fortunes of a very fast-growing company. I think AI, under the underwriter's own expectations, AI revenue has to increase 100 times.

16:41I mean, this is a fast-growing company, and it's hard to get your arms around where it's going to be in a year's time. Did we bury the lead? Let me just check in this, Andrew. What's that? It's National Donut Day. It is. It is. Well, did we bury the lead for you? What I didn't know is... By the way, thank you, Leslie. I don't know if she's still there. Thank you, Leslie. Yes, thank you. L-E-D-E. You're welcome. And sorry, if you were here, you'd get a donut. I think... Did you see what's in there? I do not know. You didn't stop by the makeup room. You get your makeup out here, but there's a...

17:16There's donuts. A very good smell of kind of a... It's a... Cronut. caramel mixed with bacon smell. You know that smell? I do. They're cronuts. Because there's bacon on some of them. There was before Joe got into the makeup. I haven't touched. I haven't done any. I haven't done anything. Today is National Donut Day. There's apparently, what I learned today is there may be a second National Donut Day. What? I don't know. I need to look into this. No one would argue against that. One last time. Yes. Don't you like having the feeling that you would love a donut? Do you wish you looked at a box of donuts and just went...

17:54Back to the GLP-1 discussion? That's not... I've had this conversation with people who take this medication. That's not how they feel. They want the donut. And some of them will still have a donut. They want the donut as much as I want the donut? They just won't have a dozen donuts, Joe. They want the donut as much as you want it. I don't know. I just think you're so wrong about how it actually works. I like my muscle mass. We're coming up on 15 years. I like my muscle mass. I don't want to lose it. I also like my pancreas. Next month is the 15th. I looked this morning. Andrew, I looked this morning whether I should be on it.

18:25My BMI does not. It would be a bad. If I didn't have a comorbidity, if I didn't have a comorbidity, it would make no sense for me to be on that. Microdosing. Andrew's been on the show 15 years next month. Is that true? I think that's next month. And over the course of time, do you remember National Donut Day when you actually ate like 17 donuts? I do. There was a time. And I got older. and I don't eat as many donuts. You ate seven or eight last year. Yeah. I mean, I don't know. Today I'm not, I'm going to be good. Well, these are not the glazed ones that you can eat a bunch of. Maple, maple bacon, maple.

19:00That was the word of it. Cheese will be next. Coming up on Squawk Pod, the bipartisan group on Capitol Hill that's working on AI legislation. California Republican Representative Jay Albernolte. Americans need to be protected against the malicious use of AI, particularly by malicious human actors. But also we want to create a regulatory environment that allows all the good things that AI has to bring. And Massachusetts Democrat, Representative Lori Trahan. Congress needs to work in a bipartisan way so that we put proper guardrails in this early phase. At Venture Global, we think about what can be done, not what's usually done.

19:47Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. you're listening to this podcast so you've got a curious mind here's a helpful fact drivers who switch and save with progressive save over 900 on average visit progressive.com to see if you could save on car insurance progressive casualty insurance company and affiliates national average 12-month savings of 946 by new customers surveyed who saved with progressive between june 2024 and may 2025 potential savings will vary this episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab.

20:42Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, 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. Welcome back to Squawk Pod. Bipartisan lawmakers have unveiled a draft for a national AI framework aimed at streamlining regulation and managing catastrophic risks. The proposal seeking to temporarily override state laws for three years while establishing a federal oversight center to balance safety and innovation.

21:27Joining us right now with the co-authors of that legislation, Congressman Laurie Tran and Democrat from Massachusetts Republican Congressman Jay Obernotty. Oberyn Olti, good morning to you of California. We're all trying to understand the risks of AI in this moment. The big news, by the way, this morning is that Anthropic, which of course is going public this fall, saying there should be a pause, a stop to development because of the worries of where this could all go. I'm curious if you'd weigh in on that, but also maybe more importantly, you know, what kind of bipartisan support you think this bill that you've written now has?

22:07Well, thank you for having us on. I think the news that you just shared about Anthropic, coupled with Open Eye putting out a framework earlier this week and the White House executive order, has all signaled what Congressman Olberno-Nolte and I know to be true, that this technology, while has a lot of promise, also creates threats. And so, you know, we welcome more people to this conversation because at the end of the day, you know, Congress needs to, you know, work in a bipartisan way so that we put proper guardrails in this early phase so that we prevent the risks to our cybersecurity, our national security, certainly to workers and the American people.

22:54Is your sense, though, that there's a clear and present danger today? Do you think that the danger is in multiple years from now, decades from now? How do you how do you all see that? Well, there are a number of hazards that AI poses to Americans, particularly in the hands of malicious human actors. And we want to make sure that Americans are protected against those risks while still setting the groundwork for an industry that's going to have tremendous positive impact on American consumers, American economy and our national security. So we think the discussion draft that we put together accomplishes that where we're balancing the guardrails that need to be put in place against still creating an environment that allows this industry to flourish and to bring all the good things it's going to bring to Americans.

23:43Well, that's the big question, which is, you know, oftentimes you hear folks, big proponents of AI, both in industry and elsewhere, say we are in this grand race against China. And frankly, if you put any, you know, stops in the system, we could potentially lose that race. What do you both think about that? Well, I mean, I think what you see in the proposal that we've put out is some balance, right? We are accepting that Americans need to be protected against the malicious use of AI, particularly by malicious human actors. But also we want to create a regulatory environment that allows all the good things that AI has to bring.

24:26And we think that what we've achieved here balances that very nicely. Congressman Overdolte, we saw you a couple of weeks ago and we were duly impressed with your Caltech degrees in UCLA and AI and all that. And you brought up something interesting, I guess. Near term, it's some malicious human that it could do. I mean, I don't even want to think about it in terms of pathogens or whatever. However you want to hacking something, however you want to think. How long, as someone who knows about it as an advanced degree, how long before we do it? It's not a human, but it's actually a malicious AI entity itself that would do something.

25:07That's got to be. Is that decades? Well, I mean, that's something out of a Terminator movie, right, where an army of evil robots rises up to take over the world. And honestly, what you're talking about is what computer scientists call AGI, artificial general intelligence. And what you saw Anthropic talking about is related to that. They're worried about recursive self-improvement where AI algorithms start training themselves. And that's why they're saying we need to be very aware of the potential for that. But the consequences that we're looking at, I'm kind of an AGI skeptic. I don't think that that's in months.