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Kalshi’s ‘Midterms Hub’ & SeatGeek & Serval Automate the I.T. Department 7/23/26
00:41:29
Former CFTC Commissioner Brian Quintenz is now on the board of Kalshi Exchange and a senior advisor to the Coalition for Prediction Markets. The morning after Kalshi unveiled a “Midterms Hub” for election contracts, Quintenz discusses prediction markets regulation and impact on U.S. elections. AI-native IT startup Serval is helping customers like SeatGeek bring IT engineers off of IT help desks and into business units, where they can focus less on support tasks and more on big picture problem solving for the organization. Serval CEO and founder Jake Stauch and SeatGeek CEO Jack Groetzinger discuss the future of work in the age of AI. Plus, Google parent Alphabet has hiked capital expenditures, and Meta has unveiled its newest perspective on AI. Brian Quintenz - 19:00 Jake Stauch & Jack Groetzinger - 35:28 In this episode: Becky Quick, @BeckyQuick Andrew Ross Sorkin, @andrewrsorkin Katie Kramer, @Kramer_Katie
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- [00:00]
Host/Producer (Katie Kramer)
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Host/Producer (Katie Kramer)
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Andrew Ross Sorkin (CNBC Anchor)
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Jake Stauch (CEO of Serval)
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Andrew Ross Sorkin (CNBC Anchor)
Bring in show music please.
- [01:02]
Host/Producer (Katie Kramer)
Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, our tech future, first prediction markets and the midterms. Kalshi has rolled out a new hub for elections contracts. Former CFTC Commissioner and Kalshi Exchange board member Brian Quintenz on the government pushback
- [01:20]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
on pre these are new markets, so I don't think it's a surprise that states are grappling with a lot of these issues from what the laws are that have been on their books for a long time.
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Host/Producer (Katie Kramer)
Then the future of work with an AI startup trying to disrupt the IT department. Servil CEO Jake Stauch instead of filing
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Jake Stauch (CEO of Serval)
a ticket and waiting for somebody to respond to that, we're actually going to automate that resolution with AI, get you back to the more meaningful parts of your job.
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Host/Producer (Katie Kramer)
And CEO of SeatGeek, Jack Gertzinger, a customer of Servol and a believer in a more efficient use of of your IT guy.
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Jack Gertzinger (CEO of SeatGeek)
We see this as a way to move people from less interested work to more interesting work, get them focused on harder problems.
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Host/Producer (Katie Kramer)
Those conversations plus the question of course
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Andrew Ross Sorkin (CNBC Anchor)
is is a reframe of this the answer unto itself.
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Becky Quick (CNBC Anchor)
I'm of two minds when it comes to AI too.
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Host/Producer (Katie Kramer)
It is Thursday, July 23, 2026. Squawk Pod begins right now.
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Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Stand back. You buy in 3, 2, 1.
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Becky Quick (CNBC Anchor)
Good morning everyone. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ site in Times Square. I'm Becky Quick along with Andrew Ross Sorkin. Joe is off today.
- [02:28]
Andrew Ross Sorkin (CNBC Anchor)
Meantime, shares of Google parent Alphabet. They are lower in the premarket. This after the company reported second quarter revenue above expectations. 82% growth in Google's cloud business, but overall profit fell short of estimates. Investors are focusing on an increased CapEx forecast as the company invests in AI. Alphabet now expects to spend between 195 and 205 billion dollars just this year. That's up from a prior forecast of 180 to 190 billion dollars. Let's show you what CEO Sundar Pichai said on the company's earnings call. I do think, you know, it feels like we are in very early innings of what feels like secular shift across multiple areas in our core information businesses. Just the possibilities when I see what all you can do with ABSO Frontier capabilities. There's still a lot of work ahead to translate all that into experiences for our consumer users. Another Alphabet earnings highlights search revenue growing 17% in the company's other income category, which includes stakes in anthropic and SpaceX coming in just shy of $100 billion. What's so interesting to me about the reaction though in the market right now about the Google piece is just, you know, every time these companies have spent more money recently, you've seen the stocks go up, meaning investors have rewarded what's been happening because they've said, oh, this is the future. This is really the first time where it seems like at least on the margins investors go, hmm, I don't know.
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Becky Quick (CNBC Anchor)
And it's not just that, it's Tesla as well. We may talk about that stock a little bit later. It's the first time they've been cash spent that they've put into, you know, bigger projects that they're working on longer term issues. That's the thing you watch for when the street rewards this long term payoff saying we want you to chase it, we want you to win, versus when the street kind of pulls back and says whatever that is. The headline that's basically been taken away from every single take on this. The AI spending balloons a little different than what we've seen at least in recent years. We should also tell you Iran's military says that it has hit US targets in Kuwait and Jordan. It also says ships attempting to sail through the Strait of Hormuz are still being attacked. In addition, Iran aligned Houthis say that they struck two Saudi Arabian oil tankers in the Red Sea. At least one of those tanker attacks has been confirmed by the British military. Attention has turned to the Bab El Mandid Strait as the US and Iran fight over the Strait of Hormuz Yesterday afternoon, US CENTCOM said that American forces launched more strikes against Iranian military targets. Separately, the Wall Street Journal reporting the United States is moving forces and weaponry to the Middle east in case President Trump wants to scale up American attacks against Iran. Yesterday on social media, the president said that anytime Iran fires on a ship in the Strait of Hormuz, the US Will destroy one of the country's bridges or power plants. President Trump was speaking at a rally last night and made additional comments on some of these things, saying that he doesn't think the Iranians are serious about talking right now, but thinks that they will be soon based on the continued attacks. And I call it a skirmish. This is with this skirmish we have
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Jake Stauch (CEO of Serval)
with the Islamic Republic of Iran. And I call it that because, let me tell you, they're getting hit so hard and they want to make a deal.
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Andrew Ross Sorkin (CNBC Anchor)
But I say they're not ready to
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Jake Stauch (CEO of Serval)
make a deal because every time they make a deal, they want to change it and everything.
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Andrew Ross Sorkin (CNBC Anchor)
They're not ready.
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Jake Stauch (CEO of Serval)
They'll be ready very soon.
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Becky Quick (CNBC Anchor)
But this is why you see oil prices higher this morning.
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Andrew Ross Sorkin (CNBC Anchor)
And there's the question, does this bring them to the table or not? And that's the best negotiating sort of chess piece that's even available at this point.
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Becky Quick (CNBC Anchor)
On this vote, the yeas are 232. The nays are 198. The bill is passed without objection. A motion to reconsider is laid on the table. The House approving legislation that would prevent members of Congress from buying individual stocks while they are in office. More than a dozen Democrats joined Republicans in support of that bill. But the so called Stop Insider Trading act falls short of what many advocates of a congressional trading ban have called for. House Republicans also attached a voter identification provision to that measure. Democratic leaders urged their caucus to vote against the bill. And by the way, even though the House leadership said that they should vote against it for the Democrats, more than a dozen Democrats did cross over and vote in favor of this. There is the question of don't let the perfect be the enemy of the good. But then again, there are some real questions that have popped up around this
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Andrew Ross Sorkin (CNBC Anchor)
in terms of how it's set up. Yes. Meta Just out this morning with a new video and it's it's an interesting situation pushing CEO Mark Zuckerberg's take on the future of AI. The company says that it believes AI has the ability to build community and connection and is really sort of pushing forward into something. Let's show you the Video and we'll talk about it in a second.
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Jake Stauch (CEO of Serval)
Leave us behind.
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Andrew Ross Sorkin (CNBC Anchor)
We couldn't disagree more. Call us optimists, call us dreamers, just
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Jack Gertzinger (CEO of SeatGeek)
as we've always done.
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Andrew Ross Sorkin (CNBC Anchor)
We're betting on people. We bet on people when we connected
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Jack Gertzinger (CEO of SeatGeek)
you to the ones you lost touch with.
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Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
And again, when we connected.
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Andrew Ross Sorkin (CNBC Anchor)
June. This seems to be a new effort by Metta, but I think more broadly by the AI industry. And I don't know if you've sort of been picking this up between some of the comments that Sam Altman's made recently, between some of the comments that Dario Amadei has made recently and now I think, Mark Zuckerberg about trying to reframe AI more about people. I mean, this, this new commercial sort of about humans and the connection with people, in large part, because I think AI is becoming this sort of political football because people are so scared, frankly, that it's not about people or that it's going to undo people. Jeff Bezos, who was on our air making this argument that he believes that AI is ultimately going to create more jobs rather than less jobs. Obviously, there's a whole other side of it. So these are the optimists about what this is going to do. I don't know whether you think this is going to ultimately benefit people or not, but it's so interesting to me that the companies themselves now are sort of, you know, taking that narrative and at least try to push in this other direction, whether it'll turn out to be that way because you think they're
- [09:10]
Becky Quick (CNBC Anchor)
afraid of the political football and how much pressure is coming down.
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Andrew Ross Sorkin (CNBC Anchor)
This is my own, my own take is that right now there is. Look, every morning we have, you know, skeptical conversations about what's going to happen to people's jobs. Is AI going to take your job? Is AI going to take your dignity? Is AI going to what. What is it really going to do to help you? And I think you're now seeing whether, as I said it was. Whether, whether it was Jeff Bezos on our air or now Mark Zuckerberg this morning, at least. And I believe their views are genuine. I mean, I think they come by them genuinely. They, they really believe that this is going to change humanity for the better. I know that there are skeptics on the other side, but it's just interesting to me that there's sort of an effort now to reframe the conversation around what AI can actually do for people. And so much of it hasn't really been that. So much has been about the technology and tokens and token maxing and business and ROI and all of that. And so the whole sort of effort now, I think, in this ad specifically, to sort of shift the conversation in another way, whether it's successful or not. I don't know.
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Becky Quick (CNBC Anchor)
Yeah, I was going to say that's the question. Do you. I mean, you've brought up several times about how when AI has been mentioned at commencement speeches, it was no.
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Andrew Ross Sorkin (CNBC Anchor)
And I think, by the way, I think this ad and what. I think so much of the conversation in Silicon Valley has actually been shaped in the last three months, two months, by those commencement speeches and by the booing and by the sort of realization that so much of the work that they're doing scares people. And, and the question, of course, is, is a reframe of this the answer unto itself, is it just a reframe or is it and is it real? And the truth is we're never, we probably are not going to know until we get to whatever that place is.
- [10:58]
Becky Quick (CNBC Anchor)
Sure. And look, I will admit that I'm of two minds when it comes to AI, too. I have incredible hope about what it can do on the healthcare front, what it might be able to do to find new cures, to find new ways to deal with things that we would never be able to figure out otherwise. But you do hear this constant drumbeat of what it means for workers. And we can say we think it's going to create more, but this is happening the same day we just find out that Uber is laying off 10% of its customer service people and it is blaming AI for this. It's saying we're trying to get better about how we're doing this, but it's also because we're becoming more efficient with the artificial intelligence that we're using and how we're incorporating it. So you're going to see these competing headlines that come out on a.
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Andrew Ross Sorkin (CNBC Anchor)
Well, so interesting. So Brett Taylor was sitting actually in your seat, I think, earlier this week. Chairman of OpenAI, but also runs Sierra, which is his own firm, which is, is, by the way, doing a lot of the kind of work that, that effectively customer service people used to do that. The basic premise of his company is that we can, we can do that work more efficiently and at a much lower price. And by the way, you hear that
- [12:01]
Becky Quick (CNBC Anchor)
they say to yourself, that's not a terrible thing. Progress has been made by increasing efficiency and making it so that humans don't have to do some of the jobs we used to have to do. It's been a constant since We've been working our way through this industrial revolution. I think this was scarier because it's happening so fast. And the question is, how do you retrain the people who are going to lose those jobs? How do you do it on such mass scale?
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Andrew Ross Sorkin (CNBC Anchor)
And so I think, well, so then the question is, and since we won't know the other side of it until we get to the other side of it and who knows what the other side of it when the, you know, what's the timeline? But you know, with someone like Mark Zuckerberg or this ad coming out or other things, trying to be more suggestive of the things that this could be helpful with. And I think health care is a
- [12:42]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
huge part of it.
- [12:43]
Becky Quick (CNBC Anchor)
Yeah, Health care is where I have the most hope for what I can do, the most promise for things that would take us millennials millennium to try and accomplish on our own. If we can fast forward that, that's fantastic. But it comes right after the headline we got yesterday on OpenAI with the bots, you know, the agents getting out of control and breaking out of the sandbox and breaking into another company. I mean, those are the type of.
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Jake Stauch (CEO of Serval)
And that.
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Andrew Ross Sorkin (CNBC Anchor)
And that's why this ad sort of lands in the middle of the, this whole debate. And I think that's pretty interesting. And what I just don't know ultimately is, you know, what will resonate with the public and how much of it's ultimately going to be a show me story as opposed to a tell me story. I do think that the AI industry has, hasn't done the best job of, of articulating exactly how this could work. I mean, it's all, it seems very vague even to someone like myself. So maybe this is the beginning of something that shifts that conversation. I don't know.
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Becky Quick (CNBC Anchor)
I do think trust is going to be important. And if you're someone who's been in this industry for a long time, great. Show us. But show us. Like you said, show us. Don't tell us the jury's still out on this. Show us how you're going to lead us to these areas. Show us and prove it. And I think it is a big lift when you have so much public animosity already and fear that exists at
- [14:07]
Andrew Ross Sorkin (CNBC Anchor)
this point, I would say, I don't know. If every single executive that I talk to these days says 2028, the election of 2028 is going to be. The election is going to, is going to turn into a conversation, turn into a sort of litmus test on what you think of AI with with different political candidates taking different positions and maybe even being very, you know, you think Republicans would be on one end a certain way and maybe Democrats on the other end. But it may transfer.
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Becky Quick (CNBC Anchor)
I meaning that they think regulating AI. The Republicans to this point have had a lighter touch with it and maybe kind of trying to bolster more advancement. There is this entire okay, we're worried about what it does to our society, but we also don't want to lose to the Chinese who are working so hard.
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Andrew Ross Sorkin (CNBC Anchor)
I think there's almost two factions inside the Republican Party. There's one, one, I think that is much more in the let, let's, you know, let's laissez faire. Let's say fair, let it go. And there's a whole other crew that wants to go in a different direction. And I think in the Democratic side you could see, you know, a whole other push that could push for way more regulation than before. And so I think that's a little bit of the other piece of it that the whole tech industry is sort of watching and trying to figure out how they're going to message or talk about and discuss. That
- [15:28]
Host/Producer (Katie Kramer)
tease will be next Next on Squawk Pod Prediction markets are coming to the 2026 midterms. Some states are already warning voters about placing bets on who will win. We will hear from a former CFTC commissioner who now works with betting site Kalshee about the bets, the votes and the challenges.
- [15:48]
Andrew Ross Sorkin (CNBC Anchor)
Yes, things can always go wrong, but it's very hard to police in real time and we could debate the Elon Musk of it all.
- [15:55]
Host/Producer (Katie Kramer)
Like is this all legal?
- [15:57]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
We've seen cases of insider trading in prediction markets and in other markets where the news comes out much later than the individual was flagged. The account was frozen. They've been referred for investigation and prosecution.
- [16:12]
Andrew Ross Sorkin (CNBC Anchor)
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- [16:58]
Andrew Ross Sorkin (CNBC Anchor)
What made you confident that you could
- [17:00]
Becky Quick (CNBC Anchor)
do something that hadn't been done before? I have no fear of failure.
- [17:04]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Trailblazing women, changing the game One of
- [17:07]
Becky Quick (CNBC Anchor)
my favorite pieces of advice Think about what your boss's boss needs.
- [17:12]
Host/Producer (Katie Kramer)
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta
- [17:18]
Becky Quick (CNBC Anchor)
think big to accomplish big things.
- [17:20]
Host/Producer (Katie Kramer)
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to Squawk Pod from cnbc. Prediction markets betting on the likelihood of any number of events or outcomes came exploding onto the political scene in the last presidential election. Well, another November approaches prediction platform Kalshi has rolled out a midterms hub to help political junkies and the site's users see speculated results and polling averages for the 2026 races all in one place. The launch came just a day after the elections commission in Wisconsin warned voters there that placing bets on elections they plan to vote in is illegal in that state. How will this turn out? I can't predict. Andrew Ross Sorkin takes things from here.
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Andrew Ross Sorkin (CNBC Anchor)
Joining us right now to discuss this and so much more is Brian Quintez. He is the former CFTC commissioner, Calci Exchange board member, and senior adviser to the Coalition for Prediction Markets. Of course you are in favor of what's going on in terms of all this. Let's talk about Wisconsin as a sort of microcosm of a lot of the questions going on in the country about how prediction markets should be used, whether they can be manipulated, and how we should all be thinking about this.
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Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Big questions there.
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Andrew Ross Sorkin (CNBC Anchor)
There's a lot of questions there. But, but when you, when you saw the news on Wisconsin, for example, what did you think?
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Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Well, these are new markets, so I don't think it's a surprise that states are grappling with a lot of these issues from what the laws are that have been on their books for a long time. But in my mind, federal preemption is supreme when it comes to federally regulated derivatives markets. And there are a couple examples there that I think are informative. And the first is Michigan has a law on its books from 1931 that prevents its citizens from trading in grain futures back when it thought doing so represented gambling. Now, if it tried to enforce that on its citizens, I think we would all think this is ridiculous, right? But just because these markets are new, I think it's just part of our process to Debate, you know, what the role is of a federal law versus a state law. But in my mind, this is, this is an overstep by Wisconsin.
- [19:40]
Andrew Ross Sorkin (CNBC Anchor)
Okay, so here's a question I just wanted to. I'm going to posit something to you for just a second. There's an argument to be made that when people look at the prediction markets unto themselves, whatever, wherever something stands as an election is taking place, that it can influence their decision to vote at all. Because maybe they think it's a runaway situation and the person that they were going to vote for is otherwise going to win anyway. So they don't even show up at the voting booths or that they're not going to vote, or that they're going to vote for the other person. Meaning that the actual sort of where things stand, the horse race itself can influence what people's actions and I would actually say journalists, interestingly, like the day of an election, oftentimes hold back in terms of what they report and when they report it, in part because they want people to go to the polls to do it honestly and not to influence the outcome. And I'm curious what you think about that distinction.
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Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
I don't think it's a lot different than what the arguments are around that with polling, to be honest. Sure, prediction markets provide more real time information to people, but I think you also have to understand what the benefits of that are so that people can incorporate what a market's view is. And it's different. You know, polling and markets are different. Right? Polling is asking someone what do they want to have happen? Whereas a market is asking what do you think will happen?
- [21:10]
Becky Quick (CNBC Anchor)
What's interesting though is the last election or last several elections, sometimes the prediction markets have been more accurate than the polls.
- [21:16]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Well, that's right. I mean, I think it forces people to take more of a dispassionate view of what they think the outcome.
- [21:22]
Andrew Ross Sorkin (CNBC Anchor)
Let me take this back to me at least the market mechanism, the data that comes out of this, what it means is fascinating and you could argue beneficial in many, many ways. The question I think is a slightly different one, which is ultimately, does it, does it and can it impact the outcome of an election? Because it has an effect on what voters ultimately do and whether we think philosophically that is a good or bad thing and whether polls are different. By the way, people don't typically run polls midday. Like people hold those polls back, you don't hold those polls back. I understand why that's beneficial to the marketplace. I'm wondering whether you think it's beneficial to the electoral process.
- [22:10]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
I mean, I just come from a philosophical perspective but I think we have to trust people exercising their own self interest and if they are going to vote based on that, then I think a poll or a market isn't going to dissuade them from doing it. And if they don't care enough to do it and that's something that would influence it, then I think that's their decision to make. But I just, I think this is a, a critical new piece of data and information that is market derived that can inform and you know, in some cases lower polarization as opposed to have
- [22:41]
Andrew Ross Sorkin (CNBC Anchor)
negative impact on the, on the self interest piece that it's, you know, people should do what in their own self interest. They should go to the polls and the like. One of the other things I think people wonder about and this gets to the manipulation question. If somebody is wealthy enough and self interested enough to decide they want to put a big bet, especially maybe not on a presidential poll since that's, that is probably going to hopefully a lot of volume if you will, but maybe on a smaller campaign but, but wants to demonstrate that one person is way ahead or what and thinks that that can affect people's self interest on the other side. How should we think about that?
- [23:21]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
So I think that's why it's important to recognize that these are markets that are federally regulated that follow all of the same rules as traditional derivatives markets. In fact they are derivatives markets, they're licensed derivatives markets and there are rules on the books, and they've been on the books for a long time that require exchanges and require the CFTC to surveil the markets for manipulative conduct. And those cases can be brought. Right. Outsize influence is something that occurs in all markets and not just these. Right. And those can be flagged by size, by timing, et cetera. So you know, I don't think we can have the perspective of saying, you know, you need to guarantee that nothing bad could ever happen in these markets as opposed to saying try to do your best and then make sure that you.
- [24:06]
Andrew Ross Sorkin (CNBC Anchor)
But there's also a timing issue. So I don't know if you saw this news. Another fascinating sort of development also relates to Wisconsin. I don't know if you saw that Elon Musk has been. Now it's been said that he likely broke the law when he promised a million dollars payouts to voters who were going to support the President in the last election. That's only happening now. Meaning part of the question is yes, things can Always go wrong. But it's very hard to police in real time. And we could debate the Elon Musk of it all, but.
- [24:38]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Well, I mean, I think, I think the distinction there is, is when the news is reported versus when the investigation process occurs. Right. And we've seen cases of insider trading in prediction markets and in other markets where the news comes out much later than the individual was flagged, the account was frozen. They've been referred to, you know, for investigation and prosecution. So just because we're hearing about that now doesn't mean that that activity was flagged and is going through a normal judicial investigatory process.
- [25:08]
Becky Quick (CNBC Anchor)
How did you guys catch the teleprompter? The president's teleprompter operator?
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Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Yeah, well, so I think there's, there's a fine line between trying to disclose how a market surveils for activity because you don't want to tip people off of how to avoid that.
- [25:22]
Andrew Ross Sorkin (CNBC Anchor)
Right.
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Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Versus being transparent parent. But this was a person who was, you know, taking positions in real time when he saw the president skip over certain words, you know, that were in a speech patterns of behavior over time. And this is a KYC account.
- [25:40]
Becky Quick (CNBC Anchor)
Kyc.
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Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
It means that, that the exchange customer, that the exchange takes the information of who the person is, you know, where they live, employment information, and all of a sudden you can start matching their identity with these trades. I mean, again, these are new markets and they might tempt people to do bad things, but the important part is that they can be investigated and they can be flagged and they can be prosecuted.
- [26:02]
Becky Quick (CNBC Anchor)
How much time and energy is spent on trying to make sure that people aren't finding information and getting an edge on the market.
- [26:11]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
So I think, I think there, I mean, there, I think there's a distinction between incentivizing people discovering information and making a market more efficient than using information to benefit themselves over which they have a duty to someone else. I mean, that letter is insider trading.
- [26:30]
Andrew Ross Sorkin (CNBC Anchor)
Do you have, does the industry have a list, for example, of what might be described as politically exposed people? So banks, some banks keep lists of what are described as politically exposed people. You would describe, by the way, potentially the teleprompter operator as politically exposed, potentially based on where they work or what they do. But how does that database work in practice?
- [26:53]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Yeah, so. So Kalshee, for instance, bans certain people, certain government officials, you know, congressional staff, cabinet officials, judges, mayors, governors, anyone in an FVC filing, for instance, from participating
- [27:10]
Andrew Ross Sorkin (CNBC Anchor)
in the markets at all, at all these sports. And it doesn't matter what, you know,
- [27:15]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
and then it can get down to specific events and specific contracts. So, you know, coaches, referees, you know, people in campaigns, you know, on their own campaigns or areas. So, so, so there is a actual, you know, an ability to try to preclude certain people from, from trading on insider information upfront, which is more than any exchange in the world does. You know, no other exchange precludes someone from trading in any market based off of that kind of sensitivity. So this is a pretty extraordinary step.
- [27:49]
Becky Quick (CNBC Anchor)
I think it's necessary. You guys are making bets that nobody else makes. I mean, there's a reason that you probably have a higher standard of things that you have to do.
- [27:57]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Well, I think it's important for market integrity.
- [27:59]
Andrew Ross Sorkin (CNBC Anchor)
But do you think it's across the board, meaning you're talking about Kalshee? There's, by the way, a big story in the New York Times about sort of the fight taking place between Kalshee and polymarket. It was a story that really suggested it's not just a fight, but almost a personal fight between the two leaders of the companies and two different approaches even to the regulatory complex.
- [28:20]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Well, I mean, I think it's. It. The reason that I wanted to join this coalition, the reason that I've been involved with Kalshi for the last five years, is because they took a regulatory first approach. The companies in this coalition have regulatory compliance in their DNA. That's not to say that all companies in this space do, as opposed to taking a position of regulatory evasion and not following the laws on purpose and what bad outcomes that could lead to.
- [28:44]
Andrew Ross Sorkin (CNBC Anchor)
Do you think that's happening?
- [28:46]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
I do. I think it's obvious.
- [28:48]
Andrew Ross Sorkin (CNBC Anchor)
And which firms do you think are doing that?
- [28:49]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Well, I think the story that you described as well as the story in the Wall Street Journal talked about offshore firms marketing to US customers when they're not registered, servicing US Customers when they're not registered, not having any conflicts of interest rules. I mean, the CFTC has a very robust set of standards and guidelines and regulatory principles for regulated exchanges. From a customer protection know your customer reporting obligations, conflicts of interest obligations, the quality of contracts that can be listed. And I think it's at best an open question whether firms that are based in the United States but claim to
- [29:24]
Andrew Ross Sorkin (CNBC Anchor)
be offshore following one final question, has to do with sports because sports is a big piece of the prediction markets. Gary Gensler, former head of the CFTC back in the day, you know where I'm going with this, made a very interesting comment that when the original rules were put in place to allow for prediction markets, that there was no way that any senators who voted in favor of this contemplated that sports would be part of it, given the states that had built their own rules around whether gambling would be allowed or not.
- [29:59]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
I think at the core of this
- [30:00]
Andrew Ross Sorkin (CNBC Anchor)
issue is did Congress in 2010 say,
- [30:05]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
no, none of the states can regulate this. It's going to this little small agency
- [30:11]
Andrew Ross Sorkin (CNBC Anchor)
that I once was proud to run.
- [30:12]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
And the answer is categorically no. If we had asked Senator Harry Reid,
- [30:17]
Andrew Ross Sorkin (CNBC Anchor)
who was then the majority leader, who
- [30:19]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
had the Nevada Senator Harry Reid, oh,
- [30:22]
Andrew Ross Sorkin (CNBC Anchor)
we're going to take this and move
- [30:24]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
this to the federal government, he would have thrown me out of his office.
- [30:29]
Andrew Ross Sorkin (CNBC Anchor)
I'm curious, as someone who's sat in the seat you've sat in, what you think of that?
- [30:34]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Well, I don't know why we're trusting Gary Gensler with interpreting the law, given what we saw him do at the CFTC and then what we saw him do at the SEC in exceeding his authority. And for him to come now having advocated for the law to be written as broadly as possible to give himself as much jurisdictional leeway as he could and say, I'm going to mind read everyone in Congress at that point in time and tell you what they meant. You know, there's a great line from an opinion, a majority Supreme Court opinion written by Justice Barrett that said the judicial role is to read text, not minds, and the text is clear.
- [31:12]
Andrew Ross Sorkin (CNBC Anchor)
Brian, I want to thank you for joining us this morning. It's a fascinating discussion and debate and a real shift in society and we're all trying to make sense of it. So thank you.
- [31:19]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Thank you.
- [31:20]
Andrew Ross Sorkin (CNBC Anchor)
I appreciate it very much.
- [31:20]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Thank you.
- [31:21]
Andrew Ross Sorkin (CNBC Anchor)
And we should make clear because this is an important reminder. CNBC and Kalshi have a commercial relationship that does include CNBC having a minority stake in the company and a joint venture of sorts of
- [31:35]
Host/Producer (Katie Kramer)
up next on Squawk Pod, the future of work for IT engineers. Stick with me here. Computer problems, benefits, questions. Some companies like ticket site SeatGeek, are turning to artificial intelligence. CEO Jack Gertzinger is highlighting the tool he is using for efficiency.
- [31:54]
Jack Gertzinger (CEO of SeatGeek)
You implement something like Serval and we actually now get more IT requests than we got before because they're getting answers faster and you know, it's actually going to be not that big of a pain to deal with.
- [32:02]
Host/Producer (Katie Kramer)
And the founder of that tool, CEO of Serval, Jake Stauch, he envisions disrupting competitors like ServiceNow and freeing up engineers to do more meaningful work beyond your company's help desk.
- [32:15]
Jake Stauch (CEO of Serval)
The problem with a lot of these legacy cloud providers is the time to value, the time to implementation. So you have this brilliant idea for an automation for supporting employees. By the time you get that rolled out with these legacy providers, it could be months, sometimes years. We're going to have you up and running in days, if not weeks.
- [32:31]
Host/Producer (Katie Kramer)
A new era at the office when we come back.
- [32:37]
Jack Gertzinger (CEO of SeatGeek)
USAA knows dynamic duos can save the
- [32:39]
Andrew Ross Sorkin (CNBC Anchor)
day like superheroes and Sidekicks or auto and home insurance. With usaa, you can bundle your auto
- [32:45]
Jake Stauch (CEO of Serval)
and home and save up to 10%.
- [32:47]
Andrew Ross Sorkin (CNBC Anchor)
Tap the banner to learn more and get a'@usaa.com bundle restrictions apply. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10
- [33:03]
Jake Stauch (CEO of Serval)
minutes or less, including projected stock updates, monetary policy decisions and key results and
- [33:09]
Andrew Ross Sorkin (CNBC Anchor)
statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.
- [33:21]
Jake Stauch (CEO of Serval)
Yeah, Maxing is so maxing right now bro. Get ready for Spicy chicken maxing because Carl's Jr. Is saving you big with a 5.99 maxed out double stack Double Stack Double Stack Spicy Chicken sandwich. Seriously, just $5.99 double stack spicy chicken. This is unreal value in the bromosphere. The new Spicy Chicken Max Wallet Friendly Max Tasty only at Carl's Jr available for a limited time at participating restaurants. Tax unincluded, not valid for use within a combo or in combination with any other offered discount.
- [33:53]
Host/Producer (Katie Kramer)
This is Squawk Pod.
- [33:54]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Stand Andrew by in 3, 2, 1.
- [33:57]
Andrew Ross Sorkin (CNBC Anchor)
Q. Andrew, you're watching Squawk Box right here on CNBC. I'm Andrew Sorkin along with Becky Quick.
- [34:02]
Becky Quick (CNBC Anchor)
Our next guests have teamed up to automate IT support with AI bringing engineers out of IT departments and into specific business units. Joining us right now is Jack Gretzinger. He is the CEO of SeatGeek. Also, Jake Stout, who is the the CEO and founder of AI startup Serval. Servile's customers for automated IT support include Seeking Perplexity Together, AI and many more. And gentlemen, thank you both for being with us today. Jake, I think first we need to dig into what Serval is. You. You all were only launched, I think in April of 2024. Already you've got a valuation of over $1 billion. You have some big backers and you have some even bigger, bigger customers. Customers over 100 customers including perplexity and SeatGeek and lots of others along the way. Explain what, what you do. You are a native and you help automate IT departments.
- [34:55]
Jake Stauch (CEO of Serval)
That's right. We're an AI platform to get people help at work. It's employee support. So imagine you're an employee, you're having issues with your laptop or you have a question about your benefits. Instead of filing a ticket and waiting for somebody to respond to that, we're actually going to automate that resolution with AI and get you back to the more meaningful parts of your job.
- [35:12]
Becky Quick (CNBC Anchor)
Which means what? I type into my computer, My computer's not working. I can't.
- [35:17]
Jake Stauch (CEO of Serval)
My computer's broken. And we fix it magically with the power of AI.
- [35:20]
Becky Quick (CNBC Anchor)
Like how do, how do. How does it work?
- [35:22]
Jake Stauch (CEO of Serval)
Absolutely. So it could be a chat interface where you're going and you're communicating over Slack or teams, or it could be over email. It could even be a phone call. So you call into the support line internally and you say, hey, I've got a question, or I'm having issues with my computer, I need access to an application and we're going to give you that automatically.
- [35:37]
Becky Quick (CNBC Anchor)
Jake, let's talk about how you all have implemented it at SeatGeek and what it's actually meant for your. For your production.
- [35:43]
Jack Gertzinger (CEO of SeatGeek)
Yeah, we had, prior to server, we had over 7,000 IT requests every year, which is often.
- [35:49]
Becky Quick (CNBC Anchor)
7,000 requests every year? Every year.
- [35:51]
Jack Gertzinger (CEO of SeatGeek)
So that would be, you know, I
- [35:52]
Becky Quick (CNBC Anchor)
feel like I have that many every week around here.
- [35:54]
Jack Gertzinger (CEO of SeatGeek)
Yeah, it feels like that. But things like I need permission to this app or I need a new computer. And thanks to Servo, we cut it down by over half, which ultimately lets the people that were previously doing that kind of manual work focus on more interesting stuff and solve harder problems.
- [36:09]
Becky Quick (CNBC Anchor)
Let's talk about that. Because part of the fear with AI is that people think it's going to replace jobs. Did you lay off anybody? Did you hire new people? Explain how that works?
- [36:19]
Jack Gertzinger (CEO of SeatGeek)
No, didn't lay off anyone. In fact, I was looking at the stats yesterday. Our hiring thus far this year is already meaningfully above what it was for
- [36:26]
Becky Quick (CNBC Anchor)
all of last year in it, Just
- [36:28]
Jack Gertzinger (CEO of SeatGeek)
overall across the company and it, I don't think we've made any changes. So it's flat, but company wide. We've seen more and more hiring. There's this interesting effect where you implement something like Serval and we actually now get more IT requests than we got before because they're getting answered faster. And, you know, it's actually going to be not that Big of a pain to deal with. So overall we see this as a way to move people from less interested work to more interesting work, get them focused on hard work problems.
- [36:54]
Becky Quick (CNBC Anchor)
So what are the people in your IT department do now?
- [36:56]
Jack Gertzinger (CEO of SeatGeek)
Give you a random example. One person spent a number of months kind of embedding with our customer support team and looking at what is their life like, how do they spend a day, how could you automate things, how could you turn eight clicks into two and create custom stuff for SeatGeek? Sometimes with the help of AI, but ultimately allows them to get back to customers more quickly.
- [37:17]
Becky Quick (CNBC Anchor)
So you're a big fan.
- [37:18]
Andrew Ross Sorkin (CNBC Anchor)
Big fan, yeah.
- [37:19]
Becky Quick (CNBC Anchor)
Let's talk a little bit more, Jake, about what exactly happens with this. And you know you're going after companies like ServiceNow.
- [37:28]
Jack Gertzinger (CEO of SeatGeek)
That's right.
- [37:28]
Becky Quick (CNBC Anchor)
That's kind of your.
- [37:29]
Jake Stauch (CEO of Serval)
Most people know us as the ServiceNow competitor.
- [37:32]
Becky Quick (CNBC Anchor)
Yeah. And what do you do differently than what ServiceNow does? Bill McDermott was on this week talking about his earnings too and saying that they have AI agents as well. What do you do differently?
- [37:43]
Jake Stauch (CEO of Serval)
I think we get people implemented so much faster. I think the problem with a lot of these legacy cloud providers is the time to value, the time to implementation. So you have this brilliant idea for an automation for supporting employees. By the time you get that rolled out with these legacy providers, it could be months, sometimes years. We're going to have you up and running in days, if not weeks and you're going to be getting all these requests automated. You're going to get people back to the work they actually enjoy, get them out of those ticket queues.
- [38:08]
Becky Quick (CNBC Anchor)
Why are you able to do that faster?
- [38:10]
Jake Stauch (CEO of Serval)
So fundamentally the technology is built around these cogen agents. So we use AI to write code that powers all these automations. So we take this amazing capability of this, these AI models to be able to generate code. You're seeing this being activated in engineering organizations today. We're taking that same approach to IT and other back office teams so they can use cogen to automate not just help desk requests, but onboarding, offboarding, compliance workflows, all these different things that take up so much time for all these different teams.
- [38:38]
Becky Quick (CNBC Anchor)
Jake, you know what the next question has to be after what we just heard from the open air agents that got out of the sandbox and broke into hugging face, what happens? How do you control the agents? What do you do to make sure that they're not taking or doing. Taking information they shouldn't be taking, doing things they shouldn't be doing?
- [38:56]
Jake Stauch (CEO of Serval)
It's a. IT'S a really important problem and something we're thinking about a lot. One of the core pieces of our architecture is this two agent model where we actually have agents that IT and admins use to build workflows that are fully deterministic, that don't have the ability to go into these different systems but are very constrained. And then a separate agent that end users talk to that can only run those automations in a deterministic way. So you can avoid a lot of these scary problems when AI agents have direct access to these underlying business systems.
- [39:22]
Becky Quick (CNBC Anchor)
Is there a kill switch for agents that go rogue at any point?
- [39:25]
Jake Stauch (CEO of Serval)
There is more than a kill switch. There's actually almost a white list of things that it can do. So it cannot do literally anything other than what you've expressly designated, which is much more powerful.
- [39:34]
Becky Quick (CNBC Anchor)
Between those open air agents which were essentially told that they could the guardrails were taken off and they were kind of seeing what would happen with it.
- [39:43]
Jake Stauch (CEO of Serval)
That's right.
- [39:43]
Becky Quick (CNBC Anchor)
Okay, so let's talk from your perspective, Jack. Do you have concerns about any of these things or you feel like this is all good?
- [39:51]
Jack Gertzinger (CEO of SeatGeek)
Listen, I think anyone should be constrained about giving AI unconstrained access to, to lots of different things. We've done the opposite. We've tightly sandboxed what an agent can do within seatgeek to human approved stuff that we've reviewed, we've published that's auditable afterwards. And it's part of the, you know, broadly we're becoming an AI company very quickly both in terms of our product but almost more interestingly in terms of how we operate. And obviously you have to do that responsibly. Lots of things.
- [40:19]
Andrew Ross Sorkin (CNBC Anchor)
When you say you've sandboxed it open, I thought it, it sandboxed it too. So do you actually think, I mean that this is the fundamental question, how confident can you be in sort of the quote unquote sandbox?
- [40:33]
Jack Gertzinger (CEO of SeatGeek)
Yeah, I think, listen, there were hacks and mistakes made before I, there were sure there will be more in the future. It ultimately comes down to taking great care and building really strong systems that are reviewable by humans that have tight permissioning. And that is where it all all starts for us. And I think if you start kind of like Jake was saying, you start from a place that you can only do X, Y, Z, not run a constrained as in the opening eye hugging face case, then you're in a pretty secure spot.
- [40:59]
Jake Stauch (CEO of Serval)
I think increasingly the product becomes the governance, the ability to control what the AI can and can do, what it has permissions to perform, who has to approve those actions. And I think the products that will succeed are those that really emphasize the governance layer, not just the underlying capability of the models.
- [41:12]
Andrew Ross Sorkin (CNBC Anchor)
Can I ask you a broad sort of philosophical question? We were talking about this ad that Mark Zuckerberg put out this morning about humans at sort of the need that AI is going to make humanity better. And sort of reframing the narrative around all this. On one end, the, the industry seems to be trying to, to move in that direction, at least talk about it like that. At this. At the other end, as a business, you have to talk about the ROI on what your product can ultimately create for your clients. And those things, to me, at least in the short term, feel like they're in conflict.
- [41:49]
Jake Stauch (CEO of Serval)
I don't think that's true. And I think it's because the AI is automating the work, not automating the job. There is actually infinite work that we want our employees to do. There's so many valuable things that workers can do. And so when you automate a lot of these low hanging tasks, the IT support requests, the password resets, you can take folks like it, which are the most technical people in your organization, and you can deploy them like SEAT has into all these really productive activities, more productive than what they were doing before. So I actually think we're seeing unlimited demand for more and more work from these employees. So we want more of them, not less of them. Isn't even as AI is taking over.
- [42:26]
Becky Quick (CNBC Anchor)
Jack, I got to ask you while you're here, the World cup was the biggest event, the finals, the, that you've ever seen on SeatGeek. You had massive success with the NBA playoffs with the Knicks tickets. All of this though is happening against the backdrop where Congress is trying to heavily regulate the ticketing industry. How do you kind of balance the best of times, the worst of times?
- [42:47]
Jack Gertzinger (CEO of SeatGeek)
Yeah, World cup is amazing. I'm personally still in a hangover for not being able to watch every week. I think everyone agrees on the problem, which is fans want lower prices, is they want more access tickets. Where the evidence disagrees is that capping fees or capping the total resale price actually leads to better solutions. We've seen, as a random example, they tried this in Ireland and saw a meaningful increase in scams. They're now trying it in Ontario and having a ton of problems with enforcement. So I think the real answer is transparent pricing. There's actually a big change last year that was really positive which required every marketplace to show prices all in Meaning Jake's buying Nick's ticket. What he sees is what he pays. Another issue which has not been tackled and I think is really, really important is speculative ticketing, which is basically someone selling a ticket that does not exist. We do not allow that on seatgeek. We think it should be banned industry wide. And it leads to lots of problems, which some marketplaces saw with the World cup where they had meaningful numbers of fans that bought tickets. They might have flown international. They show up and they can't get in.
- [43:51]
Becky Quick (CNBC Anchor)
How do you prevent that?
- [43:52]
Jack Gertzinger (CEO of SeatGeek)
You verify that every buyer actually has
- [43:54]
Becky Quick (CNBC Anchor)
the ticket, has the ticket ahead of time.
- [43:55]
Jack Gertzinger (CEO of SeatGeek)
The problem is that it's actually from a short term economic perspective kind of appealing to sell spec tickets because you can make some money and you can offer inventory that not everyone else has,
- [44:05]
Becky Quick (CNBC Anchor)
but it comes to roost because it doesn't exist.
- [44:08]
Jack Gertzinger (CEO of SeatGeek)
Exactly. And the seller is hoping that they can acquire it and fulfill the order. Sometimes they can, sometimes they can't.
- [44:14]
Andrew Ross Sorkin (CNBC Anchor)
Yeah.
- [44:14]
Becky Quick (CNBC Anchor)
Okay. Jack, Jake, thank you both for coming in. We appreciate your time.
- [44:18]
Andrew Ross Sorkin (CNBC Anchor)
Thank you so much.
- [44:20]
Host/Producer (Katie Kramer)
And that is Squawk Pod for today. 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. Get the smartest takes and analysis the interviews. You can't miss all the good stuff from our TV show. Get it right into your ears when you follow Squawk Pod wherever you get your podcasts. We'll meet you right back here tomorrow.
- [44:44]
Andrew Ross Sorkin (CNBC Anchor)
We are clear.
- [44:46]
Brian Quintenz (Former CFTC Commissioner, Kalshi Board Member)
Thanks, guys. Yeah.
- [44:56]
Jake Stauch (CEO of Serval)
Maxing is so maxing right now, bro. Get ready for spicy chicken maxing because Carl's Jr. Is saving you big with a 5.99 maxed out double stack. Double stack Double stack spicy chicken sandwich. Seriously, just $5.99. Double Stack Spicy chicken. This is unreal value in the bromosphere. The new spicy chicken Max wallet friendly Max Tasty only at Carl's Jr available for limited time at participating restaurants, taxon included. Not valid for use within a combo or a combination with any other offered discount.