6/8/26: Chips Stocks Hammered, Trump Floats Gov Stake In AI Companies

Summary

Breaking Points with Krystal and Saagar
Episode: June 8, 2026 – "Chips Stocks Hammered, Trump Floats Gov Stake In AI Companies"
Date: June 8, 2026

---

Episode Overview

This episode of Breaking Points dives into two seismic shifts in the modern U.S. economy: the dramatic plunge in chip and tech stocks, and the bombshell news that Donald Trump’s administration is openly considering partial government ownership of major AI companies. Hosts Krystal Ball and Sagar Enjeti are joined by economics correspondent Jeff Stein, who broke the scoop on Trump’s unprecedented talks with OpenAI and other top tech firms. The hosts examine Wall Street turmoil, the political and market implications of AI, and the social consequences of rapidly growing economic inequality fueled by tech IPOs.

---

Key Discussion Points and Insights

---

1. Stock Market Turbulence and the AI Bubble (02:04–11:22)

• Market Rout Breakdown
  Sagar and Krystal analyze the carnage in the markets following a hotter-than-expected jobs report, which led to a sharp sell-off:
  • NASDAQ dropped 4.2% in a single day after the jobs report, triggering fears of a Fed rate hike.
  • Chip stocks and tech firms like Micron, SanDisk, Super Micro, Cisco, Nvidia, and even non-tech firms tied to data centers (Caterpillar) plunged—over $1.2 trillion in market value erased.
  • The AI boom is now seen as extremely fragile due to heightened capital costs and interest rates, with bond yields becoming more attractive than risky tech bets.

“With valuations stretched and yields rising, bonds are now much more attractively priced than stocks, leaving the market in a precarious position.”
— Sagar Enjeti (04:04)

• AI Infrastructure and the Scale of the ‘Bubble’
  Krystal points out how dependent the market—and economy—are on ongoing AI investment:
  • Data center build-out "has now surpassed the price tag of all public infrastructure spending in the country"—surpassing even the railroad buildout and dot-com boom. (06:33)
  • If the AI investment proves a bubble, the crash potential is catastrophic.

“The entire economy is bet on this... there will be just a massive, massive crash.”
— Krystal Ball (06:41)

---

2. Disconnect Between Market and Public Sentiment (06:33–11:25)

• Voter Discontent with Trump’s Economic Policies
  Krystal highlights new polling showing Trump underwater with voters—including Republicans—on inflation, government spending, and tariffs, despite the S&P 500’s highs.

  • Only 38% of Republicans approve of Trump’s handling of inflation; overall, 68% disapprove. (08:00)
  • Host notes the everyday economy for regular Americans remains harsh regardless of market indices.

• Example of Cost Increases and Wealth Inequality
  Sagar details how rising costs, from airline surcharges to Knicks tickets, reflect persistent inflation and economic bifurcation:

  • The wealthiest benefit from booming stocks, while daily expenses (food, leisure) keep rising for the average person.

“You save up to take your dad to a game... even that steak dinner is just so crazy expensive... it will only continue to go up.”
— Sagar Enjeti (10:24)

---

3. Trump, OpenAI, and Government Stakes in Big AI (14:03–24:09)

• Jeff Stein’s Exclusive: Trump Administration in Talks with OpenAI
  Guest Jeff Stein breaks down his scoop that Sam Altman (OpenAI CEO) has proposed the U.S. government take a significant ownership stake in the company.
  • This would not simply be the government buying shares like any investor; it involves ceding some control outright to the U.S. state.
  • Trump himself has publicly confirmed these discussions.
  • The move may be motivated by a desire on OpenAI’s part for a government “backstop” if the AI bubble bursts or to make regulation less likely.

“Sam Altman is proposing to the Trump administration, effectively ceding control of his company to the government... I can’t remember the head of any company ever saying... ‘What if you guys came in and made me billions of dollars poorer?’”
— Jeff Stein (15:15)

• Trump’s position was compared to Bernie Sanders’ previous proposal for a public stake in big tech/AI firms—though Sanders proposed majority government ownership for distributing gains to citizens, while Trump is floating a much smaller state share. (17:02, 37:31)

• Motivations and Policy Tensions

  • Republican Party’s base is skeptical of AI and massive data centers, while GOP elites are deeply invested and supportive.
  • Bringing the government in as a shareholder could serve both regulatory and political objectives: mollify skeptics, provide fiscal benefits, or cement elite support.
  • OpenAI’s incentive may be to prevent regulatory crackdowns: by tying government revenue/dividends to AI success, regulation becomes less attractive.

“If they somehow set up a dividend payment... maybe they can maintain elite support for the build-out of AI while simultaneously assuring people at the bottom that they're not getting totally screwed by this.”
— Jeff Stein (18:55)

---

4. SpaceX IPO, AI Valuations, and the Bubble Thesis (26:13–35:31)

• SpaceX IPO Hype and Bubble Warnings
  • SpaceX's valuation is scrutinized, with some analysts saying it’s worth less than half of its $1.75 trillion IPO target (26:13).
  • SpaceX includes Xai and Starlink (profitable), but other divisions are not generating income.
  • Comparison to the dot-com bubble: Nvidia's market cap now approaches 20% of U.S. GDP, three times the magnitude of Microsoft at the height of the 1999 boom. (27:12)
  • Fidelity is offering retail investors access to the IPO with only $2,000, raising alarm bells about “frothy” conditions and the risk to ordinary savers.

“They wanted to essentially move [the IPO] up faster than any other company has done... probably not a great sign of the confidence of long term durability of the stock.”
— Jeff Stein (30:30)

• Risks for Everyday Investors
  • Because SpaceX will soon be included in major index funds (NASDAQ), millions with 401ks will become exposed to the company’s future by default.

“So you will have a lot of normal investors... who end up exposed to SpaceX and this potential overvaluation.”
— Krystal Ball (31:05)

• AI as Both Bubble and Transformation
  • Krystal and Jeff argue AI is likely both a bubble and a transformational leap—much as the dot-com bubble presaged the Internet’s world-changing impact even as valuations collapsed.
  • Pricing/power may be eroded by global competition (e.g., Chinese AI like DeepSeek), and U.S. dominance is not guaranteed.

“It is both a bubble and it is going to be extraordinarily transformational... part of why I think it's potentially a bubble... is if you look at the AI that most startups and entrepreneurs... are using... it's DeepSeek, it's the Chinese competitor, because it's almost as good and way, way cheaper.”
— Krystal Ball (34:09)

---

5. Wealth Inequality and Political Fallout (37:01–39:25)

• Trillionaires, Billionaires, and Social Impact
  • The pending SpaceX IPO could make Elon Musk the world’s first trillionaire.
  • Stein, referencing his experience writing a Bernie Sanders biography, draws the link between ballooning billionaire/trillionaire wealth and risks to democratic stability.

“We are heading towards a trajectory of unbelievable inequality that makes democracy extremely difficult to persevere.”
— Jeff Stein (37:31)

• Trump’s vs. Sanders’ Public Ownership Proposals
  • Stein underscores: Sanders' vision was majority government and public benefit ("sovereign wealth fund"), whereas Trump’s is minor, leaving control with ultra-wealthy.

---

Notable Quotes & Memorable Moments

| Time | Speaker | Quote | |----------|----------------|--------------------------------------------------------------| | 04:04 | Sagar Enjeti | “With valuations stretched and yields rising, bonds are now much more attractively priced than stocks, leaving the market in a precarious position.” | | 06:41 | Krystal Ball | “The entire economy is bet on this... there will be just a massive, massive crash.” | | 10:24 | Sagar Enjeti | “You save up to take your dad to a game... even that steak dinner is just so crazy expensive.” | | 15:15 | Jeff Stein | “Sam Altman is proposing to the Trump administration, effectively ceding control of his company to the government... I can’t remember the head of any company ever saying... ‘What if you guys came in and made me billions of dollars poorer?’” | | 18:55 | Jeff Stein | “If they somehow set up a dividend payment... maybe they can maintain elite support for the build-out of AI while simultaneously assuring people at the bottom that they're not getting totally screwed by this.” | | 30:30 | Jeff Stein | “They wanted to essentially move [the IPO] up faster than any other company has done... probably not a great sign of the confidence of long term durability of the stock.” | | 34:09 | Krystal Ball | “It is both a bubble and it is going to be extraordinarily transformational...” | | 37:31 | Jeff Stein | “We are heading towards a trajectory of unbelievable inequality that makes democracy extremely difficult to persevere.” |

---

Important Timestamps & Segments

• 02:04 — Market Plunge and AI Bubble Mechanisms
• 06:33 — Economic Impact and Infrastructure Comparison
• 08:00 — Voter Unease with Trump on the Economy
• 10:24 — Wealth Inequality in Consumer Experiences
• 14:03 — Trump–OpenAI Scoop (Jeff Stein’s exclusive reporting)
• 17:02 — Trump Publicly Confirms Talks on AI Stake
• 26:13 — SpaceX IPO, Valuation Bubble Warnings
• 31:05 — Dangers for 401k/Index Fund Holders
• 34:09 — AI: Bubble and Transformation
• 37:31 — Billionaires, Trillionaires, and Democracy Risks

---

Tone & Style

The conversation maintains Breaking Points’ signature blend: frank, critical, and anti-establishment, with a mix of skepticism, deep dives into policy and economics, and unvarnished discussion of power and inequality. The hosts blend populist concerns with technocratic insights, and the addition of Jeff Stein brings new inside reporting and big-picture political economy context.

---

Final Thoughts

This episode unpacks the dangerous roll of the dice Wall Street and Silicon Valley are making with AI and tech stocks, just as the Trump administration contemplates making the U.S. government itself a player in the sector. The stakes—economic, political, and social—could not be higher. Anyone interested in the future of tech, policy, and wealth in America will find this episode a crucial listen.

Transcript

[Podcast Host/Announcer]

This is an iHeart podcast.

[Krystal Ball]

Guaranteed Human. I turned off news altogether. I hate to say it, but I

[Ad Voice]

don't trust much of anything.

[Sagar Enjeti]

It's the rage bait.

[Krystal Ball]

It feels like it's trying to divide people.

[Jeff Stein]

We got clear facts. Maybe we could calm down a little.

[Sagar Enjeti]

NBC News brings you clear reporting. Let's meet at the Facts. Let's move forward from there. NBC News reporting for America.

[Ad Voice]

If you're feeling off fatigue, mood changes, skin shifts, yet your labs say everything's

normal, you're not alone. Meet Oestra from Inner Balance, the first all in one prescription strength bioidentical hormone cream that's natural and effective and only takes one drop, 10 seconds a day. Oester replaces five to six products women typically use to treat symptoms and is third party tested to ensure the highest quality.

Visit innerbalance.com today to start feeling like yourself again. That's innerbalance.com do you want to find

a stress free way to buy your next car? Start at CarMax and shop your way. If you want to browse with confidence, get pre qualified online with no impact on your credit score and shop cars within your budget. From luxury cars to family rides, CarMax has options for almost every price range, including more than 25,000 cars priced under $25,000. So hey, want to get started? Just head to CarMax.com for details and get pre qualified today. Want to drive CarMax?

[Sagar Enjeti]

Hey guys, Sagar and Krystal here.

[Krystal Ball]

Independent media just played a truly massive role in this election and we are so excited about what that means for the future of this show.

[Sagar Enjeti]

This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else.

[Krystal Ball]

So if that is something that's important to you, Please go to BreakingPoints.com, become a member today and you'll get access to our full shows unedited ad free and all put together for you every morning in your inbox.

[Sagar Enjeti]

We need your help to build the future of independent news media and we hope to see [e-mail] turning now to the stock market. Absolutely insane things happening. There are drops, there are increases, but overall the shakiness over the last couple of days from Friday to Monday reveal potential major weaknesses in the US Economy which lead us directly into our next segment with Jeff Stein on AI. But let's start with D6. Actually, let's put it up here on the screen. This was written over the weekend. The market rout leaves Wall street bracing for rockier times. Investors have to confront the challenges from the latest inflation reading and SpaceX IPO in the days ahead. Specifically, they show Stocks, bonds, gold Bitcoin investors entered the new week battered by a market sell off that left very few places to hide. The route followed Friday's stronger than expected jobs report, which sheared 4.2% off the NASDAQ, sending investors racing to increase bets that the Federal Reserve will raise interest rates by year end and sparked a bond slide that lifted yields on Treas to their highest level since early 2025. That pressured shares of multinational and smaller domestic companies alike and gold fell to its lowest levels on the year. The tumble drew warnings from Wall street that more turmoil lies ahead. Ray Dalio of Bridgewater said this Friday was an important move that highlights the central role that the global craze for artificial intelligence and other related stocks has played in the record run. With valuations stretched and yields rising, bonds are now much more attractively priced than stocks, leaving the market in a precarious position. Market and economic concent in one new sector that is highly volatile and risky is super popular among unsophisticated investors. Quote that is classic bubble stuff. So the two things that caused the Nasdaq and stock market to go down significantly on Friday were the jobs market that came in a little bit stronger than normal. Now why would that matter? Because it would mean that they believe that thus the Federal Reserve would have to raise interest rates. Everything from the AI stocks to the general rise had actually previously been bet on the fact that the Fed was going to lower interest rates or at the very least keep them the same. So when that reading came in, they immediately bet that the interest rate was going to go up. That's already crushing now, multiple years of generally high interest rates. How does that affect AI? Basically from what I've been able to gather, a lot of it is based on the construction and the CAPEX costs for borrowing because they have to borrow all this money to build all these new data centers and for all these other things, money being more expensive increases the cost. And it also demonstrates as he was talking about with the bonds, making it less attractive to bet on these ultra risky high investments. Like I mean you got Micron out there up like a thousand percent and all these other chip companies which are up, you know, by boatloads, AMD is up by 200%, Nvidia is up God only knows how much. Google, Meta, everybody, they all got hammered largely either because of the bond issue, interest rates and then sometimes things just kind of break. Now I do want to be clear on the day that we're recording this, it currently does look like the market is actually up. It's up by some.85%. So it's a race, you know, maybe like a percent or so of the general drop that it had. We don't want to make too much of the drop itself. We're trying to look for the rockiness of where some of the investor beliefs are and what that will mean in the future. So for example, let's put D2 up there on the screen. There was all that carnage in the chip stocks quote hit extra hard in the top heavy market. Everything has been dependent now on a small group of big tech companies which they specifically point to. Micron, Super Macutre and SanDisk. They all lost more than 11% in a single day. Cisco and Nvidia dropped 6%. Caterpillar lately apparently an AI play because of its power and energy business fell by 3.8%. All of that you can point to these semiconductor indexes and others combined to erase more than 1.2 trillion in market value on the single day. And the chip story really was the big story out of the general drop. And I think highlights how much of the current market is dominated in this one sector. So yes it was like a little bit of a blip but I think that we have to focus on it just to make sure that we're covering our bases because in the future this a massive drop in those chip stocks will significantly deplete the all of the gains from the S&P 500. It won't erase all of them. But so much of your current wealth is tied up in that basic no matter who you are really because it's not like your companies and others aren't betting on that that it will mean genuine catastrophe for US markets. And that is actually what would push into, push us into a full blown recession if something like that.

[Krystal Ball]

Absolutely. You know, I mean in terms of the level of expenditure, the data center build out has now surpassed the price tag of all public infrastructure spending in the entire country. Like that's the scale that we're talking about here. The, you know this is beyond the railroad build out. It's beyond the dot com boom. So if it does turn out to be a bubble there will be the entire economy is bet on this. I mean that's not an exaggeration. So there will be just a massive, massive crash. And so you won't be surprised that investors they are aware of that are a little bit jittery anytime anything happens that could pump the brakes on that ever expanding valuations and investment. I think that's part of why you see the volatility there. At the same time, we should put D4 up on the screen here about how voters are feeling about the Trump economy. Because while the markets might be up for most voters, that is not the thing that they are focused on. This is from the Financial Times. They say voters sour on Trump's handling of inflation and grocery prices. I was saying before that even Republicans there's been a lot of upset about how Trump is doing on inflation in particular. So they have 30 only 38% approval among Republicans of Trump's handling of inflation. He's actually underwater among Republicans on his handling of inflation. And if you look at the numbers Overall, 68% disapprove of his handling of inflation. Only 19% approve. Those are the worst numbers from this entire poll of various issues. They're also not happy with government spending. He's deeply underwater on Iran, deeply underwater on tariffs and trade. And all of these things are areas where it is completely under his control. So whatever the stock market is doing, things could get much, much worse. If you have a stock market crash and then the one thing that is a bright spot in the economy also goes south with tons of carnage and then you have utter decimation across our entire economy. But even without that happening for the American consumer, this has been a very, very difficult period and all owing directly to the choices made by Donald Trump.

[Sagar Enjeti]

Y I think what this highlights too is look, while everybody's looking at AI the general cost for all of us. Let's go to the next one, shall we? D5 for example, we haven't talked about jet fuel here in a while. Airlines have faced a $100 billion hit on Jet fuel from the Iran energy shock. Industry warns that profits will be halved by the surging energy costs. Oh, I mean, yeah, feeling so bad for airline profits. But we also know what that means is that these prices are never going back down. We talked about some of those new surcharges that United and American and all those other people have added after the war and even across the world. Yeah, call me. So when jet fuel is trading at like half the price and I don't know, like three or four years, I can virtually guarantee you that price or those surcharges will continue to be there. And that is the general quote and shitification, I think, of the US Economy. You will see continued inflation be used as an excuse to both because of supplier costs, but all because they want to of general increased Price and it will never go down. We were talking earlier outside of the show about these Knicks tickets. I think this is a perfect example is that you have an immense amount of wealth with the S and P where it's at the wealthy, 10% of Americans have so much unbelievable amounts of money. People are out there paying eight grand for nosebleed tickets to Madison Square Garden. I told you about the U.S. open. People are out there playing 6,000 bucks for like normal U.S. open tickets, which previously would have been something that you could go to the NBA final, apparently the World cup, at least in some, you know, some of these more luxury cases is the same. F1 is another example. It's just purely for the super rich and it's only continued to explode. All those prices continue to go up. Meanwhile, all of our Costco prices also continue to go up. But the wealthy people, because they have so much wealth tied up in the markets and just fundamentally their wealth is very different from the way that most W2 people make money, that they're able to afford that. While everybody else's everyday life continues to get more expensive and their little luxuries that they may have had in the past. You save up to take your dad to a game. I mean, maybe at this point, but even that steak dinner is just so crazy expensive. Yeah, steak dinner exactly a once a month steak dimmer or a barbecue that you may want to throw for your friends. You better have like $500 if you're gonna try to feed 30 or 40 people nowadays. And that will only continue to go up as the war continues. And I just don't think it'll ever come down. I really don't. After the evidence of the last five years.

[Krystal Ball]

No, it does. It only goes one way. That's the way this works.

[Sagar Enjeti]

All right, so we got our guest standing by, Jeff Stein. Let's get to him.

[Ad Voice]

If you're feeling off fatigue, mood changes, skin shifts, yet your labs say everything's normal.

You're not alone. Meet Oestra from Inner Balance. The first all in one prescription strength bioidentical hormone cream that's natural and effective and only takes one drop. 10 seconds a day. Oester replaces five to six products women typically use to treat symptoms and and is third party tested to ensure the highest quality.

Visit innerbalance.com today to start feeling like yourself again. That's innerbalance.com the following ad is sponsored

[Podcast Host/Announcer]

by Pet's Best insurance services. You knew right away he's perfect. The one for you. Those puppy dog eyes, that cute little button nose. You don't even mind the drool. When you find your perfect match in a dog or cat, the love is unconditional. Your budget, on the other hand, has realistic limits. Help protect your heart and your wallet with pet insurance from Pets Best. With plans starting from less than a dollar a day, you can get up to 90% cash back on eligible vet bills. Pets Best makes it easy to pick a plan that works for you and your bank account. Find the perfect match for your Perfect [e-mail] Pet insurance products offered and administered by Pets Best Insurance Services, LLC are underwritten by American Pet Insurance Co. Or Independent's American Insurance Co. For terms and conditions, visit www.petsbest.com. policy products are underwritten by American Pet Insur Co. Independence American Insurance Co. Or Ms. Transverse Insurance Co. And administered by Pets Best Insurance Services LLC. $1.00 a day premium based on 2024 average new policyholder data for accident and illness plans. Pets age 0 to 10 let's talk

[Ad Voice]

about modern home shopping. It's sort of become a fun side hobby, right? Scrolling listings at night, dreaming about kitchens you've never seen or backyards you haven't even stepped foot in. All from the comforts of pretty much anywhere. Redfin knows a lot of people like you want to own but are stuck in this browsing mode loop. That's where Redfin flips the script with listings that update within minutes and tours you can book right from the Redfin app, you can see your dream home the moment it appears. Now, liking a listing is easy, but actually landing it, that's where Redfin comes in. Redfin has over 2200 agents with local expertise, and Redfin agents close twice as many deals as other agents. That means they want to help you win, not just window shop. Redfin is built to help you go from just looking to wait. This could actually be home. So become the newest neighbor on the block. Visit redfin.com to start finding and start owning. That's redfin.com

[Krystal Ball]

joining us now to talk all things AI, including a very important new scoop, is a longtime friend of the show, Jeff Stein. He is now an economics correspondent with Great to see you, Jeff.

[Sagar Enjeti]

Good to see you, man.

[Jeff Stein]

Hey, thanks so much for having me on.

[Krystal Ball]

Yeah, of course. So let's go ahead and start with this scoop that you were able to obtain. Put E1 up on the screen. So Trump is talking with tech executives about acquiring pieces of major AI companies. You say that he said on Friday he's talking with the leaders of the largest AI companies about having the Government acquire pieces of their firms. This actually confirmed your previous reporting that he had been discussing that idea with Sam Altman in particular. So what do we know at this point, Jeff?

[Jeff Stein]

So I think this has the potential to be one of the most dramatic federal interventions in the economy in modern American history. The big mystery at the heart of this that I've been trying to figure out is why do you open AI does open I do. To Sam Altman. Why do they want this? And I'm curious for, for your guys potential take on this, but essentially what we revealed last week is that OpenAI has gone to the Trump administration and said, you know, how we're moving forward with this potentially trillion dollar IPO to become sort of a public company. What if the government stepped in and became one of the largest shareholders and not because the government would come in and buy shares. Like if you or I wanted to go out and buy shares in OpenAI or Anthropic stock, that would be one thing. What they're talking about here is having Sam Altman is proposing to the Trump administration, effectively ceding controls of his company to the government. And that's the story we broke. And we reported that the Trump administration is looking into this and thinking about it. And then Trump confirmed that they were doing that. And so this is an unusual thing where you have the head of a major company saying to the US Government, hey, would you guys like billions and billions of dollars worth of my private company. I don't know about you guys, but I can't remember the head of any company ever saying to anyone, much less the government, like what if you guys came in and made me billions of dollars poorer? And it's, it's, it's such a head spinning thing. And it raises I think a lot of questions about motivations, about money, about sort of the Trump administration's role in all this. And it opens up, I think, a really important and fascinating policy debate.

[Sagar Enjeti]

Yeah, let's go ahead and take a listen to Trump actually confirming this story. Let's take a listen.

[Donald Trump (clip)]

When Bernie Sanders lost, you know that I got many of his people, they voted for me. Because we are on an economic plan as far as economics is concerned. We have certain things that aren't that far apart. People are surprised. But many of you'll take a look. Many of the people that voted for Bernie Sanders when he was no longer there to vote for, they went to me. I picked up a lot of his, a tremendous amount of his voters.

[Sagar Enjeti]

So there he was confirming the Bernie idea, being asked specifically about AI. So Bernie had previously proposed some legislation, I think, taking a 50% or so equity stake as part of a sovereign wealth fund. What do you think is the Trump administration's motivation, though, behind exploring this type of deal?

[Jeff Stein]

I think the Trump administration on AI is in an incredible sort of two forces colliding right on top of each other. And one is that the base of the Republican Party on every poll and every demonstration that we see is extremely skeptical. Almost the way like there are a lot of Republican voters who are skeptical of the party elite on Israel. There are a huge portion of the base is really riled up about data centers. It's not seeing the benefit to them of this AI explosion and is pushing back. I mean, I think we saw the head of the Michigan Republican Party express a new openness to data centers because at the ground level, the base of the Republican Party is extremely skeptical of this. But then at the elite establishment level, the Trump administration, I'm not breaking any news here. Is deeply intermeshed with the biggest tech companies. Trump relied on, you know, the biggest players in this game, David Sachs and others to set administration policy. And that administration policy has been very supportive. And we're at a point now where, because in part of that supportive policy, there's trillions and trillions of dollars. I mean, I don't know what your guys take is on this, but it seems quite possible to me not to sound over the top that we are heading towards an enormous bubble popping. And the risk from the Republican Party's standpoint is that the base opposition to these data centers and to AI will basically prevent the build out on which trillions of dollars on investment is now contingent. So, right, you're seeing like those two trains are heading towards each other and, and what the Trump comments there confirm, which I was kind of delighted to see because a lot of people before my story came out were like, this isn't true. You have no idea what you're talking about, like, blah, blah, blah, blah. And then of course, like the President himself is like, yeah, of course that like, sounds great. But like, the really interesting thing to me is that Trump is sort of implicitly acknowledging that they have this problem that people don't like this. And so if they, the suggestion seems to be if they can absorb the shares of the AI companies and maybe redistribute them through a dividend payment, maybe they use them to pay down the debt, there's lots of ways they can use that money, then maybe they can maintain elite support for the build out of AI. While simultaneously assuring people at the bottom that they're not getting totally screwed by this.

[Krystal Ball]

Yeah. That there's going to be some benefit to them because right now all they're seeing is their electricity prices going up and everybody's brains being rotted and a bunch of oligarchs plotting whatever evil plans they have. And Jeff, let's get to that question about the motivation from OpenAI and Sam Altman. I mean, to me, the most straightforward reading is that they too are worried that it's a bubble that is about to come crashing down at some point and they want to guarantee that they're going to be able to get their government bailout.

[Jeff Stein]

Yeah, I mean, I think that's the main criticism I've heard that if the government is a major shareholder in OpenAI, then the incentives for the government to step in in the event that OpenAI has a true bubble bursting economic collapse, that that incentive will be greater. I think it's a little, I don't know, maybe that is what's going on. I think part of my hesitation is that, like, if they're just ceding shares, the US investment in this will technically be $0.

[Krystal Ball]

Yeah.

[Jeff Stein]

It's not like they have an investment to recoup, but maybe like just the fact that the US Government is more part of this company now means that they have a greater incentive to step in. That that makes of sense. I mean, I think the other major thing that's going on here is that there's a war within the Trump administration over the regulation of AI. And you have on the one side David Sacks, who left the administration, but he sort of articulates the. Embodies the idea that there should be essentially no, maybe that's an overstatement, but very, very little federal oversight of this industry at all. That it slows down sort of the innovation and that we are in a fierce fight with China and that the best way to win is to not exert really almost any scrutiny over these companies. And then on the other side, we've seen Pete Hegseth and the Department of whatever we're calling it war is now saying these capabilities are so dangerous to US national security, as they're framing it, that we need some degree of federal intervention. And I think part of what might be going on here is that OpenAI and the other AI companies are saying while we're trying to prevent this regulatory onslaught, if we bring the government in a little bit, maybe they have less of an, you know, if we're generating all this money for the Government, they have may. Might have less of a. Of an incentive to slow down the pace of our growth, which is a little different than the bailout argument, but maybe, maybe not that dissimilar in some ways too interesting.

[Krystal Ball]

So they think they'll be regulated less if. Because their view is. I don't know that this is totally true because Anthropic has been not perfect, but the most responsible on the safety front and has also been very successful. But anyway, their view is that as as much. As much off to the races as that they can be with little hindrance and as irresponsible as possible, the more they're going to profit and the more they're likely to win the race to super AI AGI, whatever the goal ultimately is.

[Jeff Stein]

So that's the idea is if they somehow set up a dividend payment. The math doesn't quite net out, I don't think, for this, but you can imagine a world where they say, okay, Trump accounts exist and we'll add $1,000 into each person's Trump account from the shares of OpenAI and the other AI companies that we've acquired. Then the thinking is regulation makes that payment go down, so the government is less likely to do it and people

[Krystal Ball]

will be less interested in regulation generally. Maybe there'll be less populist pressure. That could be the thinking.

[Jeff Stein]

Correct. And I think to go to your point about Anthropic, which I think is really important and interesting, we reported in our first story that anthropic, that basically OpenAI and Sam Altman have been pushing this with the administration and that Anthropic has not discussed this idea with the administration. My sense from sources is that Anthropic is much cooler to this, which is kind of an interesting inversion of the idea that Anthropic is kind of the good guys. Yeah, right. And maybe that's a function of the fact that OpenAI has a bigger PR problem where they're like, please take our money because we are so unpopular and Anthropic doesn't have that problem. Or maybe it's. It raises questions about Sam Altman's motivations. And is it partly a reflection of his coziness with the Trump administration?

[Ad Voice]

If you're feeling off fatigue, mood changes, skin shifts, yet your labs say everything's normal.

You're not alone. Meet Oestra from Inner Balance. The first all in one prescription strength bioidentical hormone cream that's natural and effective and only takes one drop, 10 seconds a day. Oestra replaces five to six products women typically use to treat symptoms and is third party tested to ensure the highest quality.

Visit innerbalance.com today to start feeling like yourself again. That's innerbalance.com protect your pet with insurance

[Podcast Host/Announcer]

from Pets Best Plans start from less than a dollar a day. Visit petsbest.com Pet insurance products offered and administered by Pets Best Insurance Services, LLC are underwritten by American Pet Insurance Company or Independence American Insurance Company Co. For terms and conditions, visit www.petsbest.com. policy products are underwritten by American Pet Insurance Company, Independence American Insurance Company or Ms. Transverse Insurance Company and administered by Pets Best Insurance Services LLC. $1.00 a day premium based on 2024 average new policyholder data for accident and illness plans. Pets age 0 to 10 let's talk

[Ad Voice]

about modern home shopping. It's sort of become a fun side hobby, right? Scrolling listings at night, dreaming about kitchens you've never seen or backyards you haven't even stepped foot in. All from the comfort of pretty much anywhere. Redfin knows a lot of people like you want to own but are stuck in this browsing mode loop. That's where Redfin flips the script. With listings that update within minutes and tours you can book right from the Redfin app you can see your dream home the moment it appears. Now, liking a listing is easy, but actually landing it. That's where Redfin comes in. Redfin has over 2200 agents with local expertise and Redfin agents close twice as many deals as other agents. That means they want to help you win, not just window shop. Redfin is built to help you go from just looking to wait. This could actually be home. So become the newest neighbor on the block. Visit redfin.com to start finding and start owning. That's redfin.com

[Krystal Ball]

let's talk a little bit more about you asserted earlier you think that this is a bubble. There are many others who do related to that. We have Space SpaceX IPO which is imminent and we can put this up on the screen from CNBC. They wrote up this Morningstar analysis that SpaceX in their estimation is worth less than half of its $1.75 trillion IPO target. And of course SpaceX includes Xai, includes Grok and Xai, but it also is a much larger company. Obviously they do the rocket ship. Their most profitable business is Starlink, which is genuinely a good product that is in demand. A lot of the other stuff in here is a money loser, including XAI at this point. What do you make of the valuation here? Do you think it is overvalued and overhyped and could help to further fuel and potentially help to collapse this potential bubble.

[Jeff Stein]

Yeah, my first disclaimer is never take stock advice from Jeff Stein. As, as my friends have discovered and for all the listeners out there, don't trade on anything I say. That said, there's a new report coming out today from economists at sieper. They're going to find essentially that they did a systemic analysis of the dot com bubble and the current AI bubble. And the findings which I've been talking to the researchers about are really striking. In 1999 the peak of the Microsoft stock was 6% of GDP. That number was the top. And then after the dot com bubble burst, the number went to 3% of GDP. Today we've seen Nvidia stock come close to 20% of GDP. So more than three times the relevant metric for evaluating how much money as a percentage of the economy is pouring into these really frothy tech stocks. And that to me suggests obviously Microsoft did become an extremely profitable, successful company. So it's a little bit of a nuanced picture where I think there's a good chance that SpaceX is making products that make money and that it will take some time to do that. But that is not a sign that no one would look back and say Microsoft was a failure. But that reality was simultaneously true with the reality that this was a bubble. From what you mentioned about the profitability and the revenue that SpaceX is generating is so far from the valuation and we're seeing that across the tech sector, not just Nvidia, not just SpaceX, but open topic, it doesn't mean that this technology is unimportant or unvaluable for us to be heading towards a major course correction in the valuations.

[Sagar Enjeti]

The other thing that was a huge red flag to me. Can we put E4 up here on the screen? I had no idea about this, but Fidelity actually slashed its SpaceX minimum to $2,000 for retail investors. So basically they changed the Getting into an IPO for the offer price is normally a privilege that's reserved for big accounts. From what I could see, you needed a minimum balance of like 100k or something like that. For Charles Schwab, Fidelity actually changed that, offering it to any customer with only $2,000 in a retail brokerage account, a fraction of the threshold that has been quote, historically gated access to hot new users. That's the easy in. The costly out is a 15 day calendar leash and penalties that escalate with each early sale until a third strike triggers a lifetime ban on Fidelity IPOs. They're tied to your Social Security number. So basically you can buy it with a very small amount of money in your bank account, but if you sell it, you'll get banned sometime in the future. But this appears to have been a coordinated effort by SpaceX and others to let retail investors buy into the IPO. I mean, zooming out generally seems like frothy activity. I'm clearly curious to see what you think.

[Jeff Stein]

I haven't seen that report, but that is really interesting. I saw another report basically that SpaceX has been trying to essentially circumvent the normal process for being put on the stock market. They wanted to essentially move it up faster than any other company has done, which I mean is probably not a great sign of the confidence of long term durability of, of the stock. If they're like, we have a ton of momentum to cash in on right now and if we let people take the average amount of time to invest, that is a threat to us. That seems inauspicious to put it mildly.

[Krystal Ball]

Well, the other impact of that is so they were denied this fast track entry for the S&P 500, but they were granted it for the NASDAQ. And so a lot of people who aren't like, you know, retail investor day traders just have, have a lot of money in what's supposed to be very safe index funds. That means without doing anything, SpaceX shares will flow into their 401ks. And so you will have a lot of retail of normal investors who aren't the top 0.1% who end up exposed to SpaceX and this potential overvaluation. So it is definitely a concerning situation given the fact in particular that I think the entirety of the lofty valuation here is based on the possibility of X AI and the idea that, you know, this could be incredibly, incredibly profitable, but also hasn't been at the sort of bleeding edge of the competition. Anthropic is considered the best in some areas. OpenAI is considered the best in other areas. X has kind of fallen a bit behind. So even from that perspective it seems, it seems hard to justify, let's say.

[Jeff Stein]

Yeah, I mean, I think we're all just going to be insanely jealous when everyone else sees their SpaceX stock triple in value and the three of us are left without anything. I mean, I don't know. I think there's to argue the other side of this. Maybe Elon took the long view on Tesla and the company has had problems, but it is also the most successful EV maker in the world right now. And the Starlink product is unbelievable. It's incredible as you mentioned, but no, I'm not the world's biggest expert in the SpaceX stock.

[Krystal Ball]

But

[Jeff Stein]

the idea that we are on the precipice of something that is beyond any of our conceptions of what the economy might look like is such a sort of, of either or dichotomy that if you are of the mindset that we are about to enter a different dimension almost in our political economy, that these technologies are so transformative that we can't even conceive of what the world is going to look like in a year or two because everything will be run by these firms then yeah, then it's a rational investment. But there are so many, so many regulatory and real world logistical hurdles to the extent of deployment that these guys have bought in on in their own heads that we are on the precipice of that. It's so hard for me to see that in a year or two we are going to be in this brave new world that everything looks different and every AI company is valued six times above it's its projected profit in the near term future.

[Krystal Ball]

Well, where I am currently, and this could shift as I continue to take in new information and try to figure out where to land on this stuff, is that it is both a bubble and it is going to be extraordinarily transformational. I think it's both and there are parallels right, to the dot com bubble there. As you were pointing out before that it was a bubble but also the Internet did change the world and part of why I think it's potentially a bubble and I've been talking to Zach Exley about this, this is his view is, you know, know if, if you look at the AI that most startups and entrepreneurs and companies are using at this point, it's not open eyes, it's not Claude, it's not chat GPT, it's Deep Seek, it's the Chinese competitor because it's almost as good and it's way, way cheaper.

[Jeff Stein]

Cheap. Yeah.

[Krystal Ball]

The idea that you're going to have, you know, one of the American companies that establishes this dominant position and then everybody goes to that one. That's not the way it's playing out right now. It may end up being much more like a utility that is cheap and easily available and then yes, it still has that incredibly transformative impact, but it doesn't lead to all of these US AI companies being fabulously successful from a revenue perspective that's kind of where I am at this point with what's likely to happen here.

[Jeff Stein]

Sagar, is that your view as well?

[Sagar Enjeti]

I don't know. I go back and forth at the same time, I see all of these reports about people inside of these companies who say, well, we don't even use AI all that much. Then I also see people who, what is that company that spent half a billion dollars in a single month and on, on thropic credits? I'm like, okay, well they're spending the money not for nothing. Like they're clearly buying it. And despite Deep Seq being available, Anthropic and OpenAI do make billions of dollars. They're not profitable, but that's because their outlay is still very large. They're still, I think OpenAI revenue is like 10,115 billion or something like that. And projected? Well, yeah, but it was projected to increase year over year. So the thing is, is that there does seem to be a genuine technological edge, at least on the forefront of technology. The utility point remains there as well. But circling back to the original story that you originally, that you said about the stake in government, I also think that there's an element here, not just of regulation, of being too big to fail and entrenching yourself with the government and with Trump's penchant for wanting to take stocks and companies anyways to make sure that you preference government regulation and others to keep them afloat no matter what. Like maybe in the future even banning cheaper Chinese AI, Deepseek or any of these other models. That's just kind of my reason.

[Jeff Stein]

That's a really good point. That the potential desire for these companies to ban foreign competitors and the government's incentive to do that if.

[Krystal Ball]

Yeah, yeah, I think that's very possible too.

[Jeff Stein]

That makes a lot of sense.

[Krystal Ball]

Jeff, the last thing I wanted to ask you about is that the SpaceX IPO is likely to make Elon. It's set to make Elon a trillionaire. World's first trillionaire. We're going to be minting many new billionaires between that IPO, plus potentially OpenAI and Anthropic. What impact does this have on society? You know, how do you think people are going to take in this brave new world in terms of wealth that is already being created before our eyes?

[Jeff Stein]

Well, I've just spent the last year or so not in this program and working on a biography of Senator Bernie Sanders, whose view on this is now like something I read about every day and have for the last year. So it's hard to think of that question and not think of the things he was saying in the 60s and 70s about how one day America is heading towards a trajectory of unbelievable inequality that makes democracy extremely difficult to persevere in the face of that degree of wealth disparity and that degree of differential in power. I think this gets back. I really want to I've seen a lot of confusion on Twitter about this. Bernie Sanders and Donald Trump do not have. And you see it in that clip, right? Trump is sort of like, oh, Bernie and I aren't that different. The proposal that Sanders has and the proposal Trump has are incredibly different. They're similar in the sense that both of them are talking about having the government involved in these companies. But Sanders is talking about forcibly seizing control and over half of each of these companies and redistributing the gains from them to the entire American citizenry through a sovereign wealth fund. Trump is talking about seizing a tiny fraction, maybe 5, maybe 10%, we don't know yet, but a small percentage of these companies and allowing the private sector and these trillionaires now to continue to have full control over them. And I just think it's really important for the public to understand that those are very different paths for the future of what they themselves are saying is the most important technology in world history or whatever.

[Krystal Ball]

Yeah, very important note, Jeff, excited about your new position there at notice. Super excited about the Bernie book that you've been working on and it's great to see you. Where can people find your work now?

[Jeff Stein]

My Twitter is now jsteinstar, which is actually not the name of the publication there.

[Sagar Enjeti]

They're still trademark problems.

[Jeff Stein]

So Jeff Steinpublication name tbd. But thanks for everyone.

[Krystal Ball]

Great to see you, Jeff.

[Jeff Stein]

Thanks for having me on, guys. Really appreciate it.

[Sagar Enjeti]

Thank you guys so much for watching. We appreciate it. We'll see you all tomorrow.

[Ad Voice]

If you're feeling off fatigue, mood changes, skin shifts, yet your labs say everything's normal.

You're not alone. Meet Oestra from Inner Balance, the first all in one prescription strength bioidentical hormone cream that's natural and effective and only takes one drop, 10 seconds a day. Oester replaces five to six products women typically use to treat symptoms and is third party tested to ensure the highest quality.

Visit innerbalance.com today to start feeling like yourself again.

That's innerbalance.com Paramount is now the home of all your BET favorites.

[Sagar Enjeti]

What?

[Podcast Host/Announcer]

Yes.

[Ad Voice]

With all new episodes of Tyler Perry's Divorce Sisters you've always liked a little drama, plus a whole new world of movies like Gladiator 2.

Now I will control an Empire original

series like the Shy.

[Krystal Ball]

Just make sure we protect each other

[Ad Voice]

in live sports like like ufc.

[Donald Trump (clip)]

Welcome to the history books.

[Ad Voice]

New home, same family. Your BET favorites are now on Paramount plus Subscribe now.

This episode is brought to you by Bobcat. They started the compact equipment industry through grit, determination, and a whole lot of think. We can't do that.

[Jeff Stein]

Watch us.

[Ad Voice]

They set standards, broke records, empowered people to build bigger and higher.

[Podcast Host/Announcer]

Higher.

[Ad Voice]

To dig deeper, to make the impossible possible. We've all been there with doubters telling us what we can't do. Who cares what they think? We don't need their permission or forgiveness. We just get things done. So go ahead and doubt me. Judge me, challenge me. But when the time comes, watch me. Bobcat.

[Krystal Ball]

This is an iHeart podcast. Guaranteed Human.