AI Taxes, Dell Shares, & A Rocket Explosion 5/29/26

Summary

Squawk Pod Episode Summary: "AI Taxes, Dell Shares, & A Rocket Explosion"

Date: May 29, 2026
Hosts: Joe Kernen, Becky Quick, Andrew Ross Sorkin
Featured Guests: Rep. Greg Casar (House Progressive Caucus), Joaquin Duato (CEO, Johnson & Johnson), Angelica Peebles (CNBC Health & Pharma Reporter)

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Episode Overview

This episode dives into some of the most pressing business and tech stories of the day:

• The proposal to tax AI companies to fund jobs programs amid fears of mass layoffs
• Dell's explosive sales growth in connection to AI-driven demand
• The dramatic Blue Origin rocket explosion and the realities of modern spaceflight
• A deep discussion with Johnson & Johnson’s CEO on cancer research, pharmaceutical pricing, and innovation in oncology

As always, the Squawk Box team balances analysis, debate, and candid industry insight through engaging conversations with policymakers and C-suite leaders.

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Market and Economic Snapshot

[02:22 - 05:11]

• All major US indices (S&P 500, Dow, Nasdaq, Russell 2000) closed at record levels.
• May saw notable gains: Dow +3.7%, S&P +6%, Nasdaq +9.1%.
• Oil prices dropped sharply, aiding equity markets (WTI crude down ~15% for May).
• US and Iran are in talks over a potential nuclear program agreement, impacting oil prices.

Memorable Quote:

"Every day it looks like new records... it's all happened as oil prices have come back down." – Becky Quick [02:41]

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Dell’s Meteoric Growth & Political Entanglements

[04:12 - 11:02]

Key Highlights

• Dell reported its fastest sales growth since returning to the public market in 2018:
  • Q2 revenue growth of 88%, far exceeding previous highs (39%).
  • Market cap up over 280% year-over-year.
  • AI-related demand fueling optimism for future quarters.
  • Raised 2027 fiscal guidance well above analyst expectations.
• Discussion around Michael Dell’s history, previous private equity battles, and recent Defense Department deals.
• Speculation and debate over political figures’ investments in Dell, Trump-affiliated "accounts," and the ethics of public-private partnerships.

Memorable Quotes:

"It just kind of blew expectations out of the water." – Becky Quick [05:40]
"I don't think $9.5 billion over five years is something that just raises a lot of eyebrows... The idea that we have discretion over these trades is laughable." – Joe Kernen [07:42]
"Once you start getting into these realms, the public does have these questions, and the questions undermine... the credibility of both government and business." – Andrew Ross Sorkin [08:51]

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Blue Origin Rocket Explosion: Iteration vs. Failure

[11:08 - 14:17]

Key Highlights

• Blue Origin's New Glenn rocket exploded during a Cape Canaveral engine test; launch pad destroyed, no injuries.
• Context: The rocket program experienced previous setbacks, with “iterative” testing approaches mirroring SpaceX’s history.
• Jeff Bezos’s statement emphasizes safety and rebuilding—a “rough day” but the mission continues.
• Hosts reflect on how the space industry frames high-stakes failures as part of the innovation process.

Memorable Quotes:

"I look at that as a human and go, oh, that looks like a big failure. That looks terrible. They think of this as like an iterative process where they're learning." – Andrew Ross Sorkin [02:03, 13:49]
"Rocket science is harder than E-commerce and probably just about anything else with the exception of maybe brain surgery." – Becky Quick [13:04]

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Johnson & Johnson’s Quest for Cancer Leadership

[17:26 - 31:11]
Guest: Joaquin Duato, CEO, Johnson & Johnson

Key Insights

• On Oncology Ambitions:
  • J&J’s goal is to become the "number one company in oncology by 2030" ([18:16], [18:38]).
  • Presenting paradigm-shifting data on localized, high-risk prostate cancer at ASCO: new treatments with potential to reduce recurrence ([19:23]).
• Pipeline and Research:
  • Focus on bringing innovative therapies earlier in treatment timelines for cancers including multiple myeloma and head/neck tumors.
  • Utilizing bispecific antibodies and cell therapies to improve patient outcomes ([20:14], [20:24]).
  • "Our aim is to have one Johnson and Johnson regimen for every patient in multiple myeloma… we are not going to stop until we find a cure." – Joaquin Duato [20:14]
• FDA and Regulatory Landscape:
  • Despite leadership turnover, asserts FDA is still functioning efficiently: “We have not seen any delays or interruptions with the FDA... credit to the professionals that they're going the extra mile for patients.” – Duato [22:17], [23:00]
• GLP-1 Drugs & Bariatrics:
  • GLP-1s are shaking up the obesity treatment industry (and may affect cancer therapies).
  • Bariatric procedures might eventually level out as it becomes clearer how the two approaches complement each other ([23:36]).
• Global Drug Pricing:
  • J&J signed a “most-favored nation” pricing deal with the White House to align US and EU drug prices ([28:18]).
  • Duato emphasizes recognizing American innovation abroad while maintaining affordability at home.
• Future Industry Trends:
  • Sees tension between innovation and affordability as persistent but potentially surmountable if pharma companies cure major diseases ([30:44]).

Memorable Quotes:

"Our goal is to be able to eliminate cancer." – Joaquin Duato [18:38]
"A functional, strong FDA is foundational for a company like us and for the overall innovation ecosystem in the US." – Duato [15:00], [22:17]
"If GLP1s have a role in cancer, that's fantastic... should be pursued and investigated." – Duato [24:34]
“I believe we are now in a golden era of pharmaceutical innovation.” – Duato [30:44]

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Proposal: AI Tax to Fund Jobs Programs

[33:19 - 40:49]
Guest: Rep. Greg Casar (Chair, House Progressive Caucus)

Key Points

• The Proposal:
  • Casar introduces a “token tax” on AI companies, calculated per units of compute (“tokens”) to fund a federal jobs program.
  • Motivation rooted in concerns that AI will generate unemployment on a scale reminiscent of the Great Depression ([34:34]).
• Policy Rationale:
  • Emphasizes rapid adoption of “positive” AI while protecting workers ([36:20]).
  • Calls for AI exemptions in critical areas (e.g., medical research).
• Critique & Debate:
  • Joe Kernen presses on how such a tax might slow US AI development, risking global competitiveness, particularly relative to China ([35:39]).
  • Casar responds: “I think we can lead the world as America by developing good uses of AI but then also having protections for workers.” [36:20]
• Implementation & Vision:
  • Envisions “modest” AI tax funding jobs “AI can’t do” (e.g., elder care, teaching, insulation, caretaking).
  • Models it on FDR's New Deal jobs programs, referencing the WPA’s infrastructure legacy ([38:33]).
• Additional Context:
  • Cites lack of current US policy on AI as a major concern, with lobbying and super PACs from AI companies stifling action ([37:16]).
  • Expresses skepticism of a “workless” future: “People want careers. They want to help each other out and contribute to this country.” [38:33]

Memorable Quotes:

"We're in the midst of what's likely the greatest technological transformation of any of our lifetimes, and we need a plan." – Rep. Greg Casar [34:34]
"A tax on AI that would fund a jobs program so the unemployment rate does not rise." – Casar [34:34]
"When you tax something, you get less of it... so this will slow down probably the adoption and the development of AI and, you know, who will win if we do that? Somebody else like China." – Joe Kernen [35:39]
"We can lead the world as America by developing good uses of AI but then also having protections for workers." – Casar [36:20]

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Notable Lighter Moments

[40:00 - 40:49]

• Greg Casar predicts both a San Antonio Spurs win and a Democratic House takeover:
  • “I'm telling you, the spurs will win and I believe beat the Knicks and that Democrats will also retake the House. You heard it here from me.” – Greg Casar [39:51]

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Structure & Flow

• The episode alternates tightly between big-picture analysis, candid debate, and deep-dive interviews.
• Hosts maintain their signature blend of skepticism and humor, especially when exploring politically charged stories and complex science.

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Conclusion

This Squawk Pod episode offers a robust mix of market insight, in-depth policy debate, and high-profile leadership interviews. Listeners are treated to nuanced discussion on the risks and realities of AI, the new wave of innovation and ambition in biotech, and the practical and political implications that cross industries.

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Transcript

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[Joe Kernen]

Bring in show music please.

[Katie Kramer]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. They're coming to take away your job.

[Greg Casar]

We're in the midst of what's likely the greatest technological transformation of any of our lifetimes. And we need a plan.

[Katie Kramer]

Taxing successful artificial intelligence companies to stave off job decimation. House Progressive Caucus chair Greg Cassar joins us.

[Greg Casar]

A tax on AI that would fund a jobs program so the unemployment rate does not rise.

[Katie Kramer]

Then Johnson and Johnson with a bold call.

[Joaquin Duato]

Our goal is to be able to eliminate cancer.

[Katie Kramer]

CEO Joaquin Duato joins us on his investment to end a terrifying health diagnosis.

[Joaquin Duato]

We have the bold ambition to become the number one company in oncology by 2030.

[Katie Kramer]

Plus shares of Dell are on a tear, maybe for a surprising reason. And a blue origin rocket exploded on the launch pad just last night. We have the latest.

[Andrew Ross Sorkin]

I look at that as a human and go, oh, that looks like a big failure. That looks terrible. They think of this as like an iterative process where they're Learning.

[Katie Kramer]

It's Friday, May 29th. Squawk Pod begins right now.

[Andrew Ross Sorkin]

Stand Becky by in three, two, one.

[Joe Kernen]

Cue it, please.

[Becky Quick]

Good morning, everybody. Welcome to Squawkbox 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. It's Friday, folks. You made it. So did we. Let's take a look into where things stand this week.

[Joe Kernen]

It was only a four day week and it still felt like we were Friday creeping along.

[Becky Quick]

Yeah, every day it looks like new records yesterday. The S&P 500, the Dow, the NASDAQ, the NASDAQ 100, the Russell 2000, all setting at record levels at the close. We will to watch this because the month of May the major averages up pretty sharply across the board. Dow's up by 3.7%, the S&P is up by 6% and the NASDAQ is up a whopping 9.1% over that period of time. It's all happened as oil prices actually have come back down.

[Andrew Ross Sorkin]

Meantime, the US and Iran are inching towards a deal. Treasury Secretary Scott Bessen telling reporters that both sides have the makings of a deal that would include a reopening of the Strait of Hormuz and Iran curtailing its nuclear program. Besson saying that Iran must agree to dispose of its highly enriched uranium and never seek nuclear weapons. Meanwhile, Vice President J.D. vance saying that the US and Iran are still negotiating over a couple of language points on a deal to end the war. Earlier reports said that the two countries were closing in on a 60 day agreement. But President Trump has yet to sign off on it. Of course it's been a volatile week for crude prices. Take a look. WTI crude now down about 8% while Brent is down about 9% and that has helped the equity markets along for the week.

[Joe Kernen]

They're talking.

[Becky Quick]

That's for the week, for the month you're talking about WTI as of yesterday. It was before the declines we saw yesterday it was down by like 15% for the month. So it's come down sharply. If you're looking since the start of the war, it's still up by 30 plus percent.

[Joe Kernen]

But 87 is. We haven't seen 87 in a while.

[Becky Quick]

Yeah.

[Joe Kernen]

Shares of Dell surging after reporting its fastest sales growth since returning to the public market. It was back in 2018. Computer and server maker posted stronger than expected earnings and revenue and guidance was also upbeat. Dell expects more AI driven growth guiding current quarter EPS to $4.8, 38% gain just pre market this morning. The current estimate is 298. Dell is also guiding revenue to between 44 and 48 billion dollars. I mean think about it. The consensus was 35 billion. So these are similar gains to what we're seeing in the stock in terms of just growth above expectations. The company also raising its forecast for 2027 for the fiscal year above estimates. I'm just looking at the market cap. If you, if it's certainly not like what we were talking about yesterday. These companies hitting a Trillion dollar. It's, it's a fairly small company in

[Becky Quick]

terms of market, $284 billion, but it's up by more than 280%, I think, over the last year. The revenue growth was 88% in the quarter and as you mentioned, fastest growth since they went public seven years ago. The closest they've gotten to that was up 39%. Yeah, it was public again after being private for five years. But the biggest growth revenue that they've seen since they went public again was 39%. So it just kind of blew expectations out of the water.

[Joe Kernen]

I can't remember the. Do you remember the whole saga of who was it? Was it Icon?

[Becky Quick]

It was Icon because Dell wrote about

[Joe Kernen]

it in his book about how angry

[Becky Quick]

he was through the whole situation with Icon and how Icon really kind of raked him over the coals.

[Joe Kernen]

Brought it back in Michael Dell himself. Right. Didn't he?

[Becky Quick]

Yeah.

[Joe Kernen]

And then brought it. But all these, you know, how long you been, when were you at the Journal? 25 years ago.

[Becky Quick]

No, 30 years ago.

[Joe Kernen]

30 years ago.

[Becky Quick]

No, no, no, I take it back. No, 27. I, I came here in 2001, so it's been 25 years that I've been here. Yeah.

[Joe Kernen]

A lot of the people remember going, think they're dead.

[Becky Quick]

Not me.

[Joe Kernen]

Not me. God.

[Andrew Ross Sorkin]

Will, what is your take on the, the, the Dell part of the deal in terms of the President making the investment in Dell part of the Dell.

[Joe Kernen]

It was in February and it was someone on his behalf, I guess.

[Andrew Ross Sorkin]

Someone on his behalf.

[Joe Kernen]

Yeah.

[Andrew Ross Sorkin]

And the second, the second question in that realm, and I give him a lot of credit for doing it, but maybe he's a beneficiary of doing it,

[Joe Kernen]

but it was, it was nine. It wasn't, the, the five year deal that it got from the Defense Department was $9 billion or something. Yeah, well, that's, you see what their revenue are. It's like, okay, they got some business from the Defense Department. I mean, when we talk deals now across the board, it's usually tens or hundreds of billions of dollars. I just don't think five year, $9.5 billion deal is something that just raises a lot of eyebrows. And as far as, you know, I don't know. I, when we were talking about all these investments, that same day, I got a long statement from, from Eric Trump that says the, the idea that any of this, that we have discretion or that because it's the stuns are doing this on behalf of President Trump and the idea that we have discretion over any of These trades is. He called it laughable and that it's totally farmed out and they have no discretion over what's going on.

[Becky Quick]

Look, the stuff with the Trump accounts, I like that.

[Andrew Ross Sorkin]

No, I love the Trump accounts.

[Becky Quick]

Yeah.

[Andrew Ross Sorkin]

I just think that what's. I think one of the things about all of this, I don't know if you agree with this is it just by default, once. Once you start to get into this sort of private, public, private. I don't know if you call it partnership whatnot, where people are either donating money for charitable purposes, giving money for ballrooms and just all by default. It raises the question, like the question shouldn't even exist. That is sort of.

[Joe Kernen]

I don't know how, but I don't know how you. You prevent it. Michael Dell's allowed to. This is. Personally. Oh, he did. It wasn't Dell.

[Andrew Ross Sorkin]

I'm not criticizing Michael Dell, by the way, at all. I'm suggesting.

[Joe Kernen]

And then it was. Well, then you. Then you have to look at the. Supposedly it was they considered bids from how many companies?

[Andrew Ross Sorkin]

No, I understand that. All I'm saying is you need.

[Joe Kernen]

You need something besides just the appearance. You need. You know, you need something and I don't think you can get it. And I think.

[Andrew Ross Sorkin]

I'm not suggesting you can get it. That's not the. That's not the point.

[Joe Kernen]

The point is how would you do it otherwise? Then Dell shouldn't give them the money and they can't get.

[Andrew Ross Sorkin]

No, I'm suggesting that once you start creating all of these systems, which, I mean, it's interesting. Trump accounts are like a very interesting approach to things, which I, by the way, I'm an advocate of it. I like the idea of it. But I'm suggesting that once you start getting into these realms, people, the public does have these questions, and the questions undermine sometimes the credibility of both the government and. And probably less so. I don't think they actually undermined Michael Dell's credibility, actually. But I think it raises questions about why things are being.

[Joe Kernen]

We'll see if it goes. I don't want.

[Becky Quick]

I think it's complicated.

[Joe Kernen]

I don't think it goes anywhere and

[Becky Quick]

I don't Trump accounts. I think it's right. If you looked back at Bush administration, what they did with pepfar and the huge amount of aid that came in to do those things. They weren't labeled.

[Joe Kernen]

You know, he calls everything Trump that

[Becky Quick]

it's the marketing of it that makes it a little.

[Joe Kernen]

We're talking about whether there's quid pro quo. We're not talking about whether he's a promoter.

[Becky Quick]

No. But I think the, the basic underlying issue of what the counts are trying to accomplish is fantastic. The idea of trying to bring literacy, financial literacy.

[Joe Kernen]

I don't have a problem with kids

[Becky Quick]

all over the place.

[Joe Kernen]

It was his idea. And, and I also think, you know,

[Becky Quick]

you get a. Brad's idea.

[Joe Kernen]

Right. Brad. But you know, it's under the Trump presidency. I don't.

[Joaquin Duato]

Would you.

[Joe Kernen]

What Gerstner accounts. It's not going to be Gerstner account.

[Joaquin Duato]

Brad account.

[Becky Quick]

It's just, you know, call them the American accounts or something like that.

[Andrew Ross Sorkin]

Well, it was originally invested by the way. I mean I give Brad enormous amount of credit. You could, you know, Bill Ackman originally had this called birthright accounts. This was five, ten years ago. This idea.

[Joe Kernen]

It's a Trump Kennedy sense. So this is going to happen. If you have a problem with that, you're. It's not going to help.

[Becky Quick]

I don't think you think about it. Marketing makes it complicated from some Americans perspectives who get mad about this stuff. So I'm saying I get mad about it but I do think it creates marketing issue.

[Joe Kernen]

We've never seen anything like what the word Trump means to some Americans. And you know that that's probably not going to change either. But Michael Dell, I think it's great that he did it. And then I think it has nothing to do with a $9 billion five year deal, which is not why the stock is up. It's not up on $1 billion a year.

[Becky Quick]

It's up on the idea that.

[Joe Kernen]

Look up on. On the numbers that it just reported.

[Becky Quick]

Infrastructure.

[Joe Kernen]

Right. And it's up on. On the results from yesterday and the. And the guidance.

[Becky Quick]

Right.

[Andrew Ross Sorkin]

Some dramatic video of a blue origin rocket exploding during a test on a launch pad last night. Let's show you happened. It was an unbelievable image. Jeff Bezos's company saying its new Glenn rocket exploded during an engine firing test conducted ahead of a satellite launch planned for next week. It erupted into a huge fireball there, you can see it right there. Lit up skies over Cape Canaveral and rattled nearby homes. No injuries reported. That new Glenn rocket was grounded last month after it left a satellite in the wrong orbit due to engine failure. Blue Origin intending to use the new Glenn rocket to launch landers to the moon for NASA. In a statement on X, Bezos said all personnel are accounted for and safe. It's too early to know the root cause, but we're already working to find it. Very rough day, but we'll Rebuild whatever needs rebuilding and get back to flying. It is worth it. One of the things just to think about when you're on the location, it's not just that the, the, there was an engine failure. It effectively destroyed a lot of what is effectively the launch pad itself. And so that's a, that's going to take a while just to rebuild. They have, by the way, a number of engines and rock. I mean they're building these things regularly, so that's lesser of the issue. The issue is actually just how quickly you can you get back to being able to test new flights from that location. And that is of course, where, where they launched those rockets from the water

[Becky Quick]

tower standing next to it. I'm not sure.

[Joe Kernen]

I didn't know the rocket water tower was. No, the rocket was called. A good name for a rocket, obviously for me.

[Becky Quick]

Yeah.

[Joe Kernen]

Ohio native, right?

[Becky Quick]

John Glenn.

[Andrew Ross Sorkin]

Yeah.

[Becky Quick]

You know, Andrew, when you were speaking with Jeff Bezos, it's only been what, a week and a half.

[Andrew Ross Sorkin]

Yep.

[Becky Quick]

Or so. Since you did, when you were speaking with him, he told you at one point. I've been studying rockets since. I've been fascinated by the, since the

[Andrew Ross Sorkin]

time I was five.

[Becky Quick]

I know this better than I know E commerce, which he probably does. But it just goes to show that rocket science is harder than E commerce and probably just about anything else with the exception of maybe brain surgery.

[Joe Kernen]

Yeah, it is a, the term.

[Andrew Ross Sorkin]

It is a very difficult business. It is a very difficult business. You know, the one thing I would say watching grass about all, all these rockets though, which is so interesting, and I think we saw this early on with SpaceX too, is when you're launching these new rockets, they think of it in a way that's slightly different than I think we all think of these things, which is, I look at that as a human and go, oh, that looks like a big failure. That looks terrible. They think of this as like an iterative process where they're learning. It's like a very different sort of mental model for how these things work.

[Joe Kernen]

Right. You would think that's one way, the half full way of working.

[Andrew Ross Sorkin]

I mean, I think we saw this happen over the years with so many different rockets.

[Joe Kernen]

Remember Elon Musk? One. One failure away was one. I love it when you're trying to talk in the screen. It was one failure away from everything collapsing. Right. Elon Musk.

[Becky Quick]

Interesting timing too though, with SpaceX looking like it has a huge advantage as that IPO.

[Andrew Ross Sorkin]

Oh, they do. Look, there's, I don't think that Jeff would, would we tell you there they are in this, in this particular moment, advantaged because of the, because of the Falcon 9. Interestingly, it is new Glenn though that is the big hope for them to go up against Starship and everything else, which still has its own way to go on the other end. So we'll see.

[Deck]

Tease will be next.

[Katie Kramer]

Coming up on Squawk Pod, the nation's biggest meeting of cancer and unconscious specialists kicks off this weekend. We have an exclusive discussion with the CEO of Johnson and Johnson on the search for cures, the race to innovate, and how America's pharmaceutical brands work with the government.

[Joaquin Duato]

A functional, strong FDA is foundational for a company like us, and it's foundational for the overall innovation ecosystem in the US So it's very important for us to have a strong regulatory agency.

[Katie Kramer]

We'll be right back.

[Deck]

Deck

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AT&T business wireless connecting changes everything. This is Squawk Pod, Becky's mike in three, two, one. Q.

[Becky Quick]

You're watching Squawk BOX right here on cnbc. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorokin. The American Soc Society of Clinical Oncology's annual meeting begins today in Chicago. That event brings together doctors, researchers and drug makers to share the latest advances in cancer treatment. Joining us right now ahead of all that is Johnson and Johnson CEO Joaquin Duada. Also with us on set is CNBC health and pharma reporter Angelica Peebles. And welcome to both of you. Joaquin, let's talk a little bit about cancer because this is a very important topic for your company. You all have, I think, cancer drug sales in 2025, $25 billion. You've said that by 2030, it's your ambition to become the world's leading oncology company. So what's the most exciting thing you can tell us about what you're going to announce this weekend?

[Joaquin Duato]

Thank you. So we are going to be going to Asco and we are presenting practice, changing studies with data that can reshape the standard of care. So improving how cancer patients are treated. As a matter of fact, we are opening the ascoplanery session with a study in prostate cancer which has been an area that has not changed much in the standard of care for decades. And we are presenting data that can mean and step forward in how we treat patients. There you are right. This is a sign of where Johnson and Johnson is going. We have the bold ambition to become the number one company in oncology by 2030. And this is a deliberate intent. What we want to do, Becky, is to be able to work in an area like oncology in which we can help lots of patients and family in where there's still real medical needs. So that's where Johnson and Johnson is going. Our goal is to be able to eliminate cancer and we are putting all the resources, all our portfolio and our research to get closer to that goal.

[Becky Quick]

What's the change in the standard of care for prostate cancer that you're going to be talking about?

[Joaquin Duato]

So we are presenting data in an area which is localized, high risk prostate cancer. During many years, the standard of care has been surgery, but unfortunately, some of the patients have recur after surgery. So what we are doing now is treating patients before and after surgery with our medication, Erlida. And we have signals that this is going to be something that could benefit patients in reducing recurrence.

[Lilly]

And Joaquin, I know we talked about that. Multiple myeloma is not really the main topic of this asco, but you know, that drug that you have, Carvycti, has been so successful, but you do have competition coming later this year from a needle cell. And then you also have Lilly going out and buying that in vivo car t company. So where do you see the landscape for multiple myeloma and do you feel like you need to do more there to stay at the lead?

[Joaquin Duato]

Our goal is to be able to cure multiple myeloma. So as a company, we are absolutely dedicated to be able to find a cure for multiple myeloma. In this Congress, we are presenting data, bringing our therapies into earlier lines. So are bringing our bispecific antibodies, our cell therapy, into earlier lines. And that clearly creates better outcomes for patients. And that is the trend. The trend is to be able to bring precise therapies into earlier lines to have better, more durable responses. Our aim is to have one Johnson and Johnson regimen for every patient in multiple myeloma, all disease subtypes, all stages of the disease, from frontline to relapse. And we are not going to stop there. We have multiple modalities and we will continue to investigate different modalities in order to be at the forefront. We will remain to be leaders in multiple myeloma. We are not going to stop until we find a cure.

[Lilly]

And really quick on Karvichty, you actually got one of those commissioner priority review vouchers that former commissioner Marty Makary set up. So what's the status of that now that he's no longer at the agency?

[Joaquin Duato]

So what we had was a priority review voucher in a combination of our bispecific antibody tech bile, which is targeting BCMA2 and our backbone therapy, Darzalex, showing very, very good results in second line patients. It was for the first time showing significant improvement and seen improvement in outcomes in second line patients early on with this combination of our bispecific antibody and Darzalex, our backbone therapy. So that was given by the FDA an unsolicited review voucher. And today it's an approved combination that is already benefiting many patients that may not be able to access cell therapy in a hospital.

[Lilly]

And with all the changes at the fda, you know, what have you seen in terms of the actual review Staff. You know, first of all, at the leadership level, how has that changed anything in your interactions and also the people who are actually doing the reviews, has there been turnover?

[Joaquin Duato]

Thank you. Look, a functional, strong FDA is foundational for a company like us and it's foundational the overall innovation ecosystem in the US So it's very important for us to have a strong regulatory agency beyond the leadership changes. What I can tell you, and this is to the credit of the FDA professionals, is that functionally we have not seen any delays or any interruptions with the fda. We have seen the FDA working very well with us. And again, it's to the credit of the FDA professionals that are going the extra mile for patients here.

[Becky Quick]

Joaquin, I've been told that in oncology in particular, that the, the staff that have left, the long term staff that have left have potentially set them back a decade when it comes to cancer research. You haven't seen any of that?

[Joaquin Duato]

I have not seen that. So, I mean, when it comes to our reviews, they have all gone on time. As a matter of fact, we are also presenting at ASCO Data with our medicine ribreban in head and neck cancer. And the FDA gave us very promptly a breakthrough designation and we are working very diligently with them. So I have seen a functional FDA which is working well with us.

[Becky Quick]

That's good to hear. Bariatric surgery is an area that your med tech division is largely involved in. You manufacture a lot of the staples and other things that go into that. How has the GLP1 business impacted that and what do you think the longer term implications are?

[Joaquin Duato]

When I talk to bariatric surgeons, when I talk to specialists in obesity, they tell me that they see bariatric surgery for people that are morally obese to be well combined with GLP1s. So I think what they are working towards is to see how they combine GLP1s with bariatric surgery in these special populations that are going to require. So down the road, I see bariatric surgery continue to stay in combination with the GLP1.

[Becky Quick]

What's happening right now on the ground, just in terms of disruption to that,

[Joaquin Duato]

I would say that now there is a significant growth of the GLP1s and that has created some decrease in the procedures in bariatric surgery. But eventually, as we understand better how to use both things, we think that this will continue to be normalized.

[Becky Quick]

Yeah. And GLP1s, we're also anticipating that there's going to be a study that shows that these GLP1s can really impact cancer growth as well. The metastasizing and spread of cancer. Have you looked into that at all? When your focus is cancer, what do you think from that perspective?

[Joaquin Duato]

Well, everything that is going to help in cancer is welcome. Our goal is ultimately eliminate cancer. And if GLP1s have a role in cancer, that's fantastic. And it's something that should be pursued and investigated.

[Joe Kernen]

Joaquin, if you're not number one, by the time you would like to be, who will be? Who. Who is in the lead right now?

[Andrew Ross Sorkin]

Who.

[Joe Kernen]

Who is your. Who's doing great with cancer? Because they're, they're. I mean, Merck obviously has some, some great things happening. Who?

[Joaquin Duato]

Yeah, our ambition is to be number one. Okay, who's. Who's on the ball under multiple.

[Joe Kernen]

Who's your target? You want everyone to do well. You just want to do better.

[Joaquin Duato]

There are multiple companies that are doing well. And look, I mean we all know the names of the companies that are working there. And there's multiple areas in cancer. I mean, we are focused in certain areas. Hematology, multiple myeloma, acute myelo, leukemia, solid tumors, lung cancer, bladder cancer, prostate cancer, head and neck. But there are other cancers that still need a solution in which we have not found. Things that are going to give patients more years of life, like pancreatic cancer. So I welcome more companies to be involved in cancer. I think it's an area of unmet medical need. We all have been touched by cancers, and I welcome more companies collaborating, working together to eliminate cancer.

[Joe Kernen]

I just wonder what. I guess that's going to be a combination of these advances made in immunology. But also what's so exciting about the GLP1 is if every cancer tumor was benign, it wouldn't matter. It's just when it metastasizes and that's take myeloma or not melanoma. Think about that. If all it was was a freckle, it would never end up in your lungs and your brain and your bone.

[Joaquin Duato]

And you are completely right there. I mean, treating earlier and be able to diagnose earlier is the key to be able to address cancer and to find a cure. I mean, the tendency in cancer is to identify the cancer earlier and bring the best treatments in.

[Joe Kernen]

The foreline breaks out. Yeah, stage two, stage three, stage four.

[Joaquin Duato]

Absolutely. That's when you have the higher chances of creating durable responses. And that's what we are trying to do. Bring the best treatments into the front line as we are doing with the study that we are presenting there, bringing our bispecific antibodies Darzalex into second line in multiple myeloma. Bring the best treatments into early line.

[Joe Kernen]

I asked Joe what happened last time he was on. I mean you were at Johnson and Johnson. I can look at it and going all the way back to 2020, kind of the same price. And then something happened in the last year or so because now you're a half a trillion dollar company. There it is. We go back a little bit further. What do you think? Was it when you came on? Is that what you're going to say?

[Joaquin Duato]

Look, it's everybody's work at Johnson and Johnson. We have 140,000 employees and truly it's everybody's work. But what you're seeing now is that we are at the beginning of a new cycle of growth for Johnson and Johnson. We had a great 2025. We're saying that 2026 is going to be better, that 2025 and 2026 will become $100 billion plus company and we have guided 6.1% growth. But we are going further. We're saying that 27 will be better than 26 and we have double digit growth visibility to double digit growth by the end of the decade. And that's remarkable for a company our size. And that's based on the fact that we have the strongest portfolio and pipeline in our company history and that's what investors are recognizing. So I think we're just at the beginning of a cycle of growth for

[Becky Quick]

Johnson and issues that you may not be facing at this point.

[Joaquin Duato]

We are working through that. As you know, we are litigating every single case and we are winning. We have a track record of 16 out of 17 cases. And just Wednesday we just won a case in Oklahoma. So we are dealing with that and we are standing for what we think is right.

[Lilly]

Really quick, I want to go back to Washington. You were one of the about a dozen companies that made this most favored nations deal with the White House basically saying that you will charge similar prices for drugs in the US as other countries. So what are you doing differently as a result of that agreement and especially in areas like cancer, where there tend to be discrepancies or markets that get drugs and others that don't. I mean, what more do you have to do to normalize those prices?

[Joaquin Duato]

Thank you. So our goal together with the government, it's to be able to make medicines more accessible and affordable for Americans and hence why we sign these deals with the government. Are these deals the best way of going about it? In our opinion they are better Ways we should focus on the middleman. We should also focus on certain programs like 340B that are not used as intended. Now, as far as prices outside of the U.S. we agree with the government that we need to work in closing the gap between US Prices and European prices. And anything that we can do in order to be able to do that and in order to have the support of the US Government to have better recognition for our innovation outside of the US Is welcome. So I realize that this is going to create some tensions, but it's positive in order to get American innovation recognized outside of the US So are there

[Lilly]

actually markets then where you're not going to launch drugs like icotide, for example?

[Joaquin Duato]

There's always been a delay between the US and the rest of the markets in launching the products. I don't think that's going to change and we are going to be working through that. But the fact that Americans have earlier access to innovation matters. I was reading cancer death rates comparing the US With Europe. And the US Has a lower cancer death rate and the decrease in the cancer death rate is faster. So that's because in the US we get innovation, we get therapies at least two or three years earlier than we get in certain European markets. So our goal is to be able to bring our medicines to everybody. But at the same time we need to be able to have the appropriate recognition for our innovation and close the gap that is not rational that exists between the US And European countries.

[Lilly]

And just longer term, you know, I talk to people in Washington who say that maybe the industry didn't do itself a favor here by going out and negotiating these deals because then, you know, say the next administration, they actually go and they try to codify it, they do other things. So do you feel like it was, do you think that was the right strategy to go out and say we agree to these, you know, price deals?

[Joaquin Duato]

Time will tell. But I tell you, throughout my career there's always been a tension between innovation and affordability. I believe that we are now in a golden era of pharmaceutical innovation. And to the extent we are able to address some of the problems that exist there, like curing cancer, addressing dementia or addressing cardiovascular disease, I think we are going to be in a good place because the tension between innovation and affordability will always exist.

[Becky Quick]

Joaquin, thank you very much for joining us this morning. Angelica, thank you.

[Katie Kramer]

Coming up on Squawk Pod, Representative Greg Cassar, chair of the House Progressive Caucus, wants to tax AI companies to slow down layoffs and start a depression style federal jobs program.

[Greg Casar]

We can lead the world as America by developing good uses of AI but then also having protections for workers.

[Katie Kramer]

That's next.

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[Katie Kramer]

Welcome back to Squawk Pod from cnbc. The fast adoption of artificial intelligence promises to make life more efficient, our technologies more powerful. But what about the workplace? Corporate leaders have warned that so much advanced tech could mean the need for fewer humans on the job. So lawmakers are stepping in and sounding the alarm, calling for a tax on the AI companies to stave off an economic catastrophe. Joe Kernan takes things from here.

[Joe Kernen]

Congressman Greg Kazar is calling for attacks on AI companies. He's the chairman of the Congressional Progressive Caucus. He joins us now. Congressman, it is, it's good to see you and we grapple with this question all the time. And I'm reading in your op ed what you said could be like similar to the Great Depression in terms of job losses. And it's coming and we don't really seem to be prepared for the possible consequences. When I think about it, if it's that Productive for every company, it's got to include not using humans for certain things. So I don't see how you're going to be wrong on this. But what is your idea of how to maybe make that less harmful to workers?

[Greg Casar]

We're in the midst of what's likely the greatest technological transformation of any of our lifetimes, and we need a plan to make sure that we don't wind up in a dystopic future with mass levels of unemployment, but just a few people who own AI making huge amounts of money while millions of people are without work. And so my plan is a first step. A tax on AI that would fund a jobs program so the unemployment rate does not rise. And AI companies already measure the amount of AI that's being used through something called tokens, which is basically just a measurement of how much compute they use. And so we would have a modest tax on tokens, which people might know as a token tax, and use that revenue to make sure that there are lots of jobs that are worth doing, worth for Americans to do so, that the AI revolution here benefits everyone, not just a small number of people.

[Joe Kernen]

I guess we have to decide, you know, we're plunging headlong into this. We have to decide whether AI is going to be that transformative to humans that we pursue it breakneck pace. Because if you tax something, Congressman, you know, when you tax something, you get less of it. So this will slow down probably the adoption and the development of AI and, you know, you know, who will win if we do that? Somebody else like China. So if we decide, we definitely want it and it's a good thing, maybe there's other ways of trying to deal with some of the downside that you're talking about other than taxes.

[Greg Casar]

I think we can all agree that we need rapid development of the good uses of AI. That's why the legislation I'm beginning to draft should include exemptions for things like medical research. But I think we can lead the world as America by developing good uses of of AI, but then also having protections for workers, also not deciding that we need a huge unemployment rate in order to develop AI rapidly. I think we should be able to lead the world by doing both. Having good uses of AI be rapidly developed while having a thoughtful program like this one to make sure that Americans stay at work.

[Becky Quick]

Xi Jinping in China, reportedly the Wall Street Journal was reporting yesterday, has told Chinese companies the Chinese government has on his concerns that they shouldn't be laying off anyone. Do you think that's the right way for America to do it as well.

[Greg Casar]

The problem we face right now in the United States is that the government is doing nothing on AI. The government is doing nothing to stop AI from taking your jobs. The government is doing nothing to stop AI from exploiting your kid. Is doing nothing to stop AI from giving advice to a terrorist. Is doing nothing to stop AI from being a huge cybersecurity threat. And when you ask yourself why, it's because these AI companies have funded massive super PACs that are threatening to spend over $100 million in the upcoming elections in order to silence people, that's wrong. We can, of course, respectfully work through the specifics of what AI policy should be, but we shouldn't be in a situation where AI companies have silenced the people's representatives and we do nothing. And that's why I'm proposing this first step. A modest AI token tax to make sure that AI does not result in mass unemployment.

[Joe Kernen]

Trying to figure out how it would actually work and whether it would actually work. So you get the tokens, you tax them. You've got a pool of money that you use for job programs. How would it work? Where are the jobs going to be? How would you know which jobs programs to pick for people that are being displaced and the free market.

[Greg Casar]

When I look around, yeah, when I look around, I see tons of good work that needs doing, work that needs to be done by people that can't be done by AI. We have an aging population. We need a lot more elder care in this country. As the father of a very young child, I know we have a huge shortage of childcare workers and teachers. There's homes that need insulating all around the country. So there's good work for people to do. These AI billionaires have been talking about the end of work. People like Bill Gates and Elon Musk saying that humans may not be needed for most things. I just disagree with that point. I think that Americans want careers. They want to help each other out and contribute to this country. And so, just like FDR set up the WPA that finished the Hoover Dam, built the LaGuardia Airport, I believe that we can come together and have a program that makes sure that Americans stay at work even in the age of AI.

[Joe Kernen]

All right, Congressman I I from Texas, head of the Progressive Caucus. That gotta be from Austin. That's what I thought, but then I saw it also includes part of San Antonio. Is that true?

[Greg Casar]

That's right. Go spurs, go.

[Joe Kernen]

Oh, boy. So, Tom, What? Tomorrow night?

[Andrew Ross Sorkin]

So what do you.

[Joe Kernen]

You tell me. Take the Spurs.

[Greg Casar]

I'M telling you, the spurs will win and I believe beat the Knicks and that Democrats will also retake the House. You heard it here from me.

[Joe Kernen]

Oh, my God.

[Becky Quick]

Doubling up.

[Joe Kernen]

I got to think.

[Greg Casar]

I know, I'm sorry. You came to ask me about AI, but then you came and asked me about the NDA. What can you do?

[Joe Kernen]

No, no, you're from Texas. I'm like, head of the progressive. Where's this guy from? And then, okay, awesome. So I got it. It makes sense. But then in checking it out then I also saw the San Antonio connection. Anyway, Congressman, I'm not willing to just say out of, out of sort that there's not something. I'm not sure how to do it. But I'm worried as you are about it, because if the only one is, yeah, the only rationale to do it is to get rid of all the humans. It really is. So.

[Greg Casar]

And people want to work. I don't agree with this future, with this future of lots of people without work being any better for our country. Thanks so much for having me on.

[Andrew Ross Sorkin]

You're welcome.

[Joe Kernen]

I mean, I like the four day week we had this week, but in general, people like to work. Thank you, Congressman. Good to have you.

[Katie Kramer]

And that is Squawk Pod for today and for this short week. Thanks for listening. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern or follow Squawk Pod wherever you get your podcast guests. We'll meet you right back here on Monday. Have a great weekend.

[Joe Kernen]

We are clear. Thanks, guys.

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