“Weapons of Mass Disruption” with NYT’s Tom Friedman 5/8/26

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0:27Tom Friedman:This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join 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 marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. Bring in show music, please.

1:00Dan Murphy:Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. New York Times columnist Tom Friedman on the AI revolution.

1:10Tom Friedman:We're right on the edge of basically changing the physics of geopolitics. And that's going to affect every small actor and every big actor.

1:19Dan Murphy:He calls them weapons of mass disruption. And he's hoping for progress in President Trump's upcoming meeting with China's President Xi.

1:27Tom Friedman:We in the Soviet Union reached agreements on limiting nuclear weapons through arms control. I don't see why that same approach can't work for the U.S. and China on this limited domain.

1:40Dan Murphy:Plus, the hopes for a peace deal with Iran change by the day. CNBC's Dan Murphy.

1:46Tom Friedman:You've heard of the taco trade, right? Now the desks are talking about nacho. This is not a chance Hormuz opens.

1:54Dan Murphy:And creepy AirPods are watching you. And Anthropics Billions are impressive. But how do we say the name of its new large language model? Is it Mythos or Mythos? It's Friday, May 8th, 2026. Squawk Pod begins right now.

2:12Tom Friedman:Stand back goodbye in 3, 2, 1. Cue it, please.

2:17Dan Murphy:Good morning, everybody. Welcome to Squawk Box right here on CNBC. I'm Becky Quick, along with Andrew Ross Sorkin. Joe is out today. It's Friday and we're ready for it.

2:28Tom Friedman:What has turned out to be a new round of fighting breaking out in the Middle East in the latest test now to this U.S.-Iran ceasefire. I want to get straight over to our own Dan Murphy. He joins us this morning from Abu Dhabi. Good morning, Dan. Andrew, good morning once again to you. Well, we have seen U.S. and Iranian forces exchanging fire near the Strait of Hormuz. This is probably the most direct confrontation that we've seen since the ceasefire began, and it's certainly adding a fresh layer of uncertainty for markets this morning. We saw three U.S. Navy-guided missile destroyers coming under attack as they moved through the strait towards the Gulf of Oman.

3:04Tom Friedman:CENTCOM saying Iran launched missiles, drones, and deployed small boats as well, but no U.S. vessels were hit. The U.S. responded with what it's calling self-defense strikes targeting Iranian missile and drone launch sites along with command and control positions. And now President Trump is trying to walk a very fine line here as well. He's called this exchange just a love tap and also insisting that the ceasefire is still holding, but at the same time as well, warning Iran, and I quote here, will knock them out a lot harder and a lot more violently if there's no deal. And all of this is not just happening at sea as well.

3:43Tom Friedman:We've also had developments in the UAE earlier this morning. The Defence Ministry here saying it intercepted Iranian missiles and drones, triggering emergency alerts for residents. No confirmed damage on the ground at this point, but the details are still coming in. And we're also following reports here that Saudi Arabia and Kuwait have now lifted restrictions on US military access to bases and airspace. That could potentially pave the way for Project Freedom. Remember that? The US-led effort to secure the strait to restart as soon as this weekend. That comes after some earlier pushback from Gulf allies, at least according to reports.

4:22Tom Friedman:So where does this leave the markets right now? Well, traders are, of course, focused on whether or not Iran responds to that reported 14-point framework now on the table, and whether, of course, diplomacy can keep place with what is, apparently, some rising military pressure in this part of the world. Back over to you. Yeah. And so the big question, we won't even get into the love tap of it all, but the big question, I think, is just where you think these talks stand. And are you surprised? And what's the feeling on the ground just about, A, how the markets have been, I would say, shockingly resilient in the face of all this?

5:00Tom Friedman:And even you could argue oil prices have been resilient on a relative basis. Well, I think this is really interesting. And it's interesting you ask, Andrew, because you've heard of the taco trade, right? Now the desks are talking about nacho. This is not a chance Hormuz opens. And a great piece on the CNBC website this morning, one analyst actually telling CNBC that the market is starting to price in higher oil for longer with some real skepticism growing around any kind of quick resolution to this. So heading into the weekend, it's pretty clear tensions are elevated. The positioning still pretty cautious.

5:35Tom Friedman:And the big question right now, I think is whether this stays contained or whether it spills over even further. In terms of the feeling on the ground as to which direction this is going, there's some cautious optimism here. We are, of course, waiting for that Iranian response and whether or not any of these 14 points are going to land in order for both sides to narrow the gap and get a deal done before the president arrives in China. Okay. Dan and Abu Dhabi, this morning, we appreciate it as always. Thank you. Meantime, President Trump's tariff agenda suffering another setback. A U.S. trade court now ruling that the president's 10 percent global tariff isn't allowed under Section 122 of the Trade Act of 1974.

6:18Tom Friedman:U.S. Court of International Trade ruling was two to one, but only two private importers in the state of Washington are affected by that ruling. Now, all other importers will be unaffected during any appeals by the White House. President Trump imposed that Section 122 tariff after the Supreme Court had ruled that the prior tariff plans were illegal. But the newer tariffs were by definition temporary and set to expire in just about two months, Becky. But another setback. But nonetheless, as we've talked to Representative Greer, for example, I think we're going to start to see a whole number of tariffs that are going to be put in place and probably done in a way that I don't think could be contested legally.

6:57Right.

6:58Dan Murphy:That had been their backup plan as they were waiting for all of that to go through the Supreme Court. In the meantime, President Trump threatening the European Union with potentially higher tariffs as well by this summer. The president said he will give the EU until July 4th to ratify its trade agreement with the United States. But if a deal can't be reached, he would ratchet up tariffs to what he calls much higher levels. In a post on Truth Social, the president said that he held a productive call with the European Commission's president, Ursula von der Leyen. On X, von der Leyen said that the EU remains fully committed to implementing those trade deals and both sides are making progress.

7:38Tom Friedman:President Trump getting ready for a high stakes visit to China next week to meet with the country's leader, Xi Jinping. paying sources telling CNBC that Boeing CEO Kelly Ortberg and Citigroup CEO Jane Frazier are among the executives that will accompany the president on his trip. Boeing expected to sign a large aircraft order. A semaphore reporting that the White House also planned to invite CEOs from NVIDIA, Apple, ExxonMobil and some other companies on that trip as well. Reuters put the potential CEO delegation at about a dozen people. That would be much smaller than the group during Trump's 2017 visit to China.

8:11Tom Friedman:And just a side mention, there's a fascinating piece, Becky, I don't know if you saw it in Politico this morning, just about the debate inside of the White House, inside the Treasury Department about which CEOs should be invited, how many CEOs should be invited, whether they, by bringing these CEOs to China, they would be sending the wrong message to the business community in America about the idea that we don't want to be doing business with China, But at the same time, trying to suggest to China that we want to do enough business. It was this sort of sort of threading of the needle is fascinating.

8:45Tom Friedman:And to sort of hear the players talking about how to do it in the right way. And there seems to be a massive debate about the White House wanting more CEOs to come, the Treasury Department wanting less CEOs to come. And then, of course, who's on the list and then whether they can even go. Some of them can't make it.

9:00Dan Murphy:Yeah, a little bit last minute timing on some of these things, but this is kind of the way diplomacy works in all of these high stakes meetings like this and meeting with China at the highest levels, most important at this point. I remember back to the trip to Saudi Arabia earlier this year, I guess it was. Time moves pretty quickly. So this year, was it last year? Maybe it was last year. But all of those trips, President Trump seems to feel more comfortable having a lot of those business leaders around. We will see how things shake out. It's really the Middle East that's going to be a big negotiation, too, because China does have some sway over what happens with the Strait of Hormuz and does have some sway over Iran.

9:42Dan Murphy:And I think that's going to be very closely watched there, too.

9:47Tom Friedman:Anthropic considering a fundraise now that could make it more valuable than OpenAI. The Financial Times reporting the company is fielding interest from several large investors and could raise as much as$50 billion. It would value the firm at$900 billion before the new infusion. Paper site sources say they expect Anthropic's annualized revenue to soon grow to more than$45 billion. It's up from just$9 billion at the end of last year. Anthropic was valued at$380 billion just in February, Becky. And so it's unbelievable to think about just how quickly that business is growing.

10:23Dan Murphy:It is. But again, we were talking, was it just yesterday, the day before, hearing revenue grow 80x, 80 times, you know, not the up to 10 times that they'd been anticipating. When you see demand growing like that, I guess it's not as surprising to see these valuations grow like this. But, man, you've got to be paying attention and watching closely to keep up with everything that's happening. Open AI rolling out a new model for cybersecurity about a month after Anthropic shocked the tech world with Mythos. Is it Mythos or Mythos? Because in the last week, I've heard Jensen Wong call it Mythos and Dario Amadei call it Mythos.

11:02Dan Murphy:Do you know?

11:02Tom Friedman:You know, I'm going with Mythos. I've been saying Mythos. Dario's been saying Mythos. I figure it's his model.

11:11Dan Murphy:OK, so you're right. He's got to be the one who knows that. So Mythos, you're right. That's what we're going with. OpenAI says that the upgrade, specifically vetted cybersecurity teams, will have an easier time using the company's latest model for things like identifying tech vulnerabilities and analyzing malware. The generally available GTP 5.5 has more safeguards that are built into it.

11:35Tom Friedman:Tomato, tomato. Tomato, tomato.

11:37Dan Murphy:But I think you're right. It's his model. He gets to call it what he wants.

11:40Tom Friedman:He does. But you know what? Jensen gets to call it whatever he wants. When Jensen said it, I was like, what? Apple has now reportedly reached late stages of development for new AirPods with built-in cameras. Now, a Bloomberg report saying the cameras will act as eyes for the Siri digital assistant and are not designed to take photos or videos. They're going to allow the device to see the space surrounding a user and provide information. The product will resemble the current AirPod Pro 3s, but will have longer stems to accommodate the cameras. And Becky, I think we're moving into this idea of sort of a persistent helper or watcher.

12:19Tom Friedman:I know some people will think this is creepy to some extent. I think this is maybe the answer a little bit to what OpenAI and Johnny Ive have been talking about for a long time, which is trying to have a persistent device that you just walk, you know, seeing and listening around you at all times. It's a little bit like what Meta is trying to do with its glasses to some extent. Of course, those cameras can be used for pictures and video and all of that. But the idea we've talked about sort of the idea of having sort of an AI helper with you at all times. And I think this is a bit of that. How quickly this device ultimately comes out.

12:54Tom Friedman:I don't know if this is a if this is a September situation or we're we're we're longer out. But I think we're moving there.

13:00Dan Murphy:I mean, it is it is a little creepy to think of somebody listening and watching all the time. I don't know if I'm 100 percent comfortable with that. Maybe there's a way it's listening already, Becky.

13:10Tom Friedman:It's been listening the whole time. It's listening right now.

13:14Dan Murphy:Hate that. Hate that. It's going to be a time when we regret it. I do agree there are some useful things. It's just there are also you hear the stories all the time about people not realizing that it's listening. Things going out, mistakes going out. People, you know, and sometimes cameras being on when they're not anticipating it either when they're changing or their partner's changing or different things. You know, that that's the point where it gets a little creepy because it's there all the time. You forget that it's there. It's not like it's a person and you can see them and they're paying attention.

13:43Dan Murphy:Any of these things, particularly with cameras that are paying attention all the time. I've read reports about this with the glasses. You know, you mentioned Meta's glasses. Somebody leaves them on the counter and then takes off their clothes and changes. They forget it's there. You know, that's why it's creepy. But yeah, I have a pair of glasses, though. I will say I have a pair of the glasses. It's cool because you can video when you walk out, but I don't want it videoing me all the time. There's got to be like an on-off switch that you remember to click or to hit or to do something. Because, yeah, I don't know.

14:15Dan Murphy:Living with this technology, we're still kind of forging our ways with it.