2025 Winds Down: Warren Buffett, AI Automation, & WBD’s Bidders 12/31/25

Summary

Squawk Pod – "2025 Winds Down: Warren Buffett, AI Automation, & WBD’s Bidders"

Date: December 31, 2025
Hosts: Becky Quick, Joe Kernan
Notable Guests: Sal Khan (Khan Academy), Courtney Reagan (CNBC), Bill Simon (Former Walmart US CEO)

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Episode Overview

On this special year-end episode, the Squawk Box team reflects on an eventful 2025 packed with market superlatives, major corporate leadership changes, and the mounting impact of artificial intelligence (AI) on jobs. From Warren Buffett’s official step-down as CEO of Berkshire Hathaway to Sal Khan’s provocative proposal for companies to fund worker reskilling in an AI-driven world, the episode explores the year’s biggest headlines and what’s ahead for 2026. Key topics include Wall Street’s performance, seismic shifts in retail, intensifying media M&A activity, and the pressing need for corporate responsibility amidst technological disruption.

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Key Discussion Points & Insights

1. 2025 Market Wrap-Up and Security in NYE Celebrations

Timestamps: 02:33 – 04:41

• NYE Security: Times Square is described as "the most locked down I have ever seen," with a massive police presence due to heightened global security threats.
• Market Superlatives:
  • Dow: up ~14%
  • S&P: up >17%
  • NASDAQ: up 21%
  • Russell 2000: up just over 12%
  • “All of the major averages are on pace for their sixth positive year out of the last seven.” (Becky Quick, 03:37)
• Precious Metals Rally: Silver (+143%) and Gold (+60%) see huge surges, marking their best years since 1979.
  • Debate on Correlation: Despite technical arguments, gold and silver's tandem moves remain a point of curiosity for hosts.
  • Bitcoin: Remains resilient, illustrating different trajectories compared to precious metals.

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2. Media M&A: Warner Bros. Discovery and Paramount Deal Making

Timestamps: 07:51 – 09:54

• Warner Bros. Discovery (WBD): Poised to reject Paramount/Skydance’s offer, potentially favoring an $80B cash and stock play from Netflix.
• Personal Guarantees & Valuations:
  • Discussion on value extraction from traditional cable assets during media consolidation, with the hosts playfully speculating about their own valuation in the coming spin-offs.

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3. Warren Buffett’s Last Day as Berkshire Hathaway CEO

Timestamps: 10:05 – 13:56

• Major Transition: Warren Buffett steps down as CEO after 60 years; Greg Abel assumes the role but Buffett remains as chairman, still controlling 30% of the vote.
• Buffett’s Legacy:
  • "He's done a lot for the NCAA March Madness… A lot of things. I mean, he's given me a brick." (Becky Quick, 11:37)
  • Philanthropy focus: Already given away $50B+ with plans to donate 99.9% of wealth.
  • “He's changed the... way that you invest. How many people's lives is he enriched?” (Joe Kernan, 11:09)
• Leadership Structure:
  • “Greg has been running a lot of the non-insurance companies for years now… and a lot of the problems that Warren Buffett didn’t really want to deal with were the things that Greg Abel’s been dealing with.” (Becky Quick, 12:29)
• Munger’s Wisdom: Charlie Munger noted companies want you to overpay but only once, stressing the importance of long-term value for shareholders.

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4. AI-Driven Automation and Corporate Responsibility: Sal Khan’s 1% Proposal

Timestamps: 19:28 – 25:55

• Job Displacement Predictions:
  • Sal Khan argues that automation’s employment effects will dwarf those seen in globalization or immigration, citing impacts on call centers and driving jobs.
  • “His motivation was he’s taken over a call center in the Philippines and he’s going to be laying off 80% of the workforce and replacing them with an AI.” (Sal Khan, 20:28)
• 1% for Reskilling:
  • Advocates that any company benefitting from automation should dedicate 1% of profits to retrain displaced workers—a “modest proposal” with international precedents (e.g., India mandates 2%, UK requires 0.5% for reskilling).
  • “If folks wait too long, the political winds are going to switch.” (Sal Khan, 01:12 and 20:53)
• Skepticism and Pushback:
  • Becky Quick challenges the voluntariness and effectiveness of such a measure, suggesting many companies claim automation will actually create more jobs in the long run.
  • Sal Khan responds: “The pitchforks already seem to be coming out… This is before things have really gotten bad.” (Sal Khan, 24:08)
  • Importance of urgency and peer pressure if voluntary efforts are not enough; warns that heavy-handed regulation could be worse for business.
  • “If this is something that still stays in the private sector… it can be nimble, because we know what the alternatives are going to be.” (Sal Khan, 25:22)

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5. Retail: 2025 Review and 2026 Outlook

Timestamps: 31:06 – 41:02

• XRT (Retail ETF): Up 8%, lagging S&P 500; e-commerce ETF (IBUY) gained 16%.
• Top Performers: Discounters/staples outperformed:
  • Dollar General, Five Below: +79%
  • Dollar Tree: +65%
  • Walmart: +23%
  • Victoria’s Secret: nearly +200% in six months
• Department Store Rebound: Kohl’s: +45%, Macy’s: +31%—though seen as temporary by UBS.
• Challenges: Tariffs and cost pressures, but big retailers like Walmart, Costco, Amazon were able to “digest the tariff news and really… push back on the manufacturers and get some assistance there.” (Bill Simon, 36:00)
• Leadership Shakeups:
  • Walmart: Doug McMillon retires, John Furner ascends (Feb 1)
  • Target, Lululemon: Also incoming leadership changes
• Expert Outlook (Bill Simon):
  • Scale will continue to dominate; small/mid-sized retailers may struggle.
  • “If you can’t find a reason to be, then you’re not going to be,” reflecting the existential crisis for traditional department stores. (Bill Simon, 37:41)
  • Bullish on Target (“it only has to get better”), Costco (“a beast... valuation is pretty low”), and Home Depot (home improvement rebound expected).
  • “Consumer’s been resilient. Their paychecks have been healthy because wages have gone up… but any number of things could happen.” (Bill Simon, 40:01)

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6. Global New Year’s Celebrations

Timestamps: 28:15 – 30:14

• Hosts cheer on New Year’s Eve fireworks as midnight sweeps across time zones worldwide, with commentary on security, traditions, and the transience of New Year’s resolutions (“around 80% of people abandon their New Year’s resolutions by February”—Becky Quick, 30:14).

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Notable Quotes & Memorable Moments

• On 2025’s Market Performance:
  “It has been a good time for investors these last seven years, but it has been a year of a lot of superlatives.”
  —Becky Quick, 03:37

• On Buffett’s Impact:
  “He’s changed the... way that you invest. How many people’s lives is he enriched?”
  —Joe Kernan, 11:09

  “His plan is to give away more than 99.9% of all his wealth.”
  —Becky Quick, 11:42

• On Automation & AI:
  “If folks wait too long, the political winds are going to switch.”
  —Sal Khan, 01:12 / 20:53

  “Automation is going to hit a lot harder.”
  —Sal Khan, 20:51

  “Hope isn't a strategy here. We have to get ahead of the curve.”
  —Sal Khan, 21:45

• On Retail Winners:
  “Scale is going to continue to win... the big guys, Wal Mart, Costco, Amazon, find ways to digest the tariff news and really... push back on the manufacturers and get some assistance there.”
  —Bill Simon, 36:00

  “If you can't find a reason to be, then you're not going to be.”
  —Bill Simon, 37:41

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Segment Timestamps Guide

• [02:33–04:41]: Markets and security at Times Square
• [07:51–09:54]: WBD–Paramount–Netflix M&A & cable valuations
• [10:05–13:56]: Warren Buffett’s transition; succession insights
• [19:28–25:55]: Sal Khan on AI automation and the 1% profits proposal
• [31:06–41:02]: Retail sector review & Bill Simon on industry trends

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Conclusion

This closing episode of 2025 captures the optimism, turbulence, and big pivots shaping business and society as the year ends. Anchored by trademark energy and candid banter, Squawk Box recaps 2025’s standouts—ranging from Berkshire’s biggest succession to the existential questions posed by AI and the evolving retail landscape. Looking ahead to 2026, the message is clear: adaptability, urgency, and thoughtful leadership will be essential for business and workers alike.

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Happy New Year from the Squawk Pod team!

Transcript

[Sal Khan]

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[Becky Quick]

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[Sal Khan]

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[Julia Boorstin]

10 years from today, Lisa Schneider will trade in her office job to become the leader of a pack of dogs as the owner of her own dog rescue. That is a second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does. And she can finally run with the big dogs and the small dogs who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at aarp.org skills.

[Bill Simon]

Bring in show music, please.

[Katie Kramer]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Happy New Year's Eve.

[Becky Quick]

It has been a year of a lot of superlatives.

[Katie Kramer]

AI is taking your job. Probably a modest proposal from Khan Academy founder Sal Khan about that particular employment apocalypse. He wants companies to pay up for the workers they cut.

[Sal Khan]

If folks wait too long, the political winds are going to switch.

[Katie Kramer]

The year in retail. Several brand names will be under new leadership in 26. Our Courtney Reagan on where the retail stocks end this year.

[Courtney Reagan]

So sort of a stealth rally there right at the end.

[Katie Kramer]

And former Walmart US CEO Bill Simon on the winners and losers in the year of the tariff.

[Bill Simon]

We were able to really see the big guys, Wal Mart, Costco, Amazon, find ways to digest the tariff news and really to, you know, push back on the manufacturers and get some assistance there.

[Katie Kramer]

But first, it is the last day of headlines for 2025. Warner Brothers discovery set to reject Paramount's latest bid for its assets. And it is Warren Buffett's last day leading Berkshire Hathaway. Don't worry, the Oracle will remain in Omaha.

[Becky Quick]

Buffett still controls 30% of the vote in that company. He doesn't make bad deals.

[Katie Kramer]

It's Wednesday. It's December 31, 2025 already. 2026. Down Under.

[Joe Kernan]

Tiny Kangaroo down Sport Tommy Kangaroo down. Yeah, you know it.

[Katie Kramer]

Squawk Pod begins right now.

[Bill Simon]

Stamp, Becky.

[Joe Kernan]

Bye.

[Bill Simon]

In three, two, one.

[Sal Khan]

Cue it, please.

[Becky Quick]

Good morning, everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ market site in Times Square on New Year's Eve. This is not an easy place to get to on New Year's Eve, even at these early hours. By the way, I'm Becky Quick. Joe Kernan is here. Andrew is off today.

[Joe Kernan]

Yeah. I was ready to give up, but just go home and get one of the screens Andrew always uses to make it look like he's here.

[Becky Quick]

Hey. It is New Year's Day already in Auckland, New Zealand. You see the fireworks that are taking place? We're going to see that behind us a little later today. But those celebrations are kicking off around the globe today. It's going to be followed what you're watching in Auckland, New Zealand right now by a scaled back celebration in Sydney, Australia that will take place at 8:00am Eastern Time to this morning here. A fireworks display and a concert at Bondi beach were canceled after the shooting there earlier this month. Although the traditional fireworks display at the Sydney Harbor Bridge is still on schedule again for 8:00am Eastern Time here in Times Square behind us. This is the most locked down I have ever seen in the many years that we've been coming here. It was pretty tough to get in even in the pre 60s.

[Joe Kernan]

We're calling it a shooting, are we? The terrorist attack in Bond.

[Becky Quick]

Yeah, well, the terrorist attack.

[Joe Kernan]

Yeah, exactly. There's a shooting there.

[Becky Quick]

Yeah, it was an attack. And it does have everyone on heightened alert as we head into this season. I'll say things are quiet. Things are locked down here and there's a huge police presence not just in the immediate Times Square area but just everywhere. You went as you went through Manhattan this morning with the backdrop to all of this that we're watching the markets on this last trading day of the year. What a year it has been for the major averages. They are all up for the year. The Dow up by close to 14%. The S&P is up by more than 17% and the NASDAQ up by 21%. Then you've got the Russell 2000 which is up by just over 12%. All of the major averages are on pace for their sixth positive year out of the last seven. It has been a good time for investors these last seven years, but it has been a year of a lot of superlatives.

[Joe Kernan]

Yep. And next year starts with a superlative because we're going to spin off and I think that. Doesn't that happen on Versant? Versant on Monday starts trading. We're going to. I think we're ringing the opening bell. The opening bell. And if you've ever spun off from a big company and gone to a spot, there are a lot of things that go on. Do you know what?

[Becky Quick]

That's the font.

[Sal Khan]

Do you know what I.

[Joe Kernan]

No, you know what I just did. You Know what I just did? No one's gonna know what I'm talking about except for you.

[Becky Quick]

Okay, well, share. We're here together.

[Joe Kernan]

I put my message bar back in.

[Becky Quick]

Oh, I can't find mine.

[Joe Kernan]

I just did that. I can do it for you. No, I'll show you how.

[Becky Quick]

This is our messaging system.

[Joe Kernan]

Internal, Internal. And something changed on this whole thing. And so we're unable to communicate because I had no message bar, and I actually went into. Whatever I did, just did it, found it, so it wasn't that hard. Silver rebounded a little bit yesterday after a big drop on Monday, but we're talking. It was $80 down sharply again this morning, all the way to 71. I don't know where this deserves to be. We had a guy on yesterday that said, maybe not a round trip, but some of these levels just don't make any sense. And they're related to technical things. But, you know, maybe it was, you know, it was dormant for so long. Maybe a lot of it is ketchup. But supposedly, in his view, wasn't as related to gold as it was related to silver's own dynamics and fundamentals.

[Becky Quick]

Weird. When they happen together.

[Joe Kernan]

It is. And copper, too. But remember, exchange operator cme, as they do whenever things get crazy like this, they raise margin requirements on precious metals futures. Now, this is the second time in a week. China is also about to tighten controls on silver exports, echoing the country's stance on rare earth metals. And platinum. Palladium also getting hit. If you're following this, silver is up 143% year to date. That's the best year since 1979. Can you say Hunt Brothers Gold? Up more than 60% this year. Also on pace for its best year.

[Becky Quick]

See, they can say they're not related, but when they move in tandem like that, it's hard to tell.

[Joe Kernan]

Silver went. I mean, silver was up even more. Gold, I understood.

[Becky Quick]

Gold was up.

[Joe Kernan]

Like gold, I understood.

[Becky Quick]

I think silver's been up close to 105%.

[Joe Kernan]

Gold had that long. I mean, for a long time, you know, the gold bulls were. They kind of. They kind of looked. We, you know, kind of looked silly for a long time. They'd been rewarded for their. Their patience.

[Becky Quick]

Yes, they have.

[Joe Kernan]

Yes, they certainly have. But when they really laugh at bitcoin, maybe bitcoin goes to zero eventually. But when they compare, they say, I've had people writing and see, we told.

[Becky Quick]

You Bitcoin's on track to potentially close higher for the year. It's pretty.

[Joe Kernan]

Pretty quite. But it was you know, there were people when bitcoin was at $2,000. There are these very vociferous voices that it'll never get to 5,000. Gold's going to go and it went to 125,000 and gold finally made it to 4,500. And they're Declari victory which is, you.

[Becky Quick]

Know, whatever all the time frame. All the time frame when you got in. We could get the next development in the fight over Warner Bros. Discovery as soon as today. David Faber reporting that the company is expected to release its formal response rejecting the latest offer from Paramount Skydance very soon. Potentially either today or Friday. That's despite a personal guarantee from Larry Ellison, the father of Paramount CEO David Ellison, backing Paramount's offer. A rejection would keep Warner Brothers in line to take a more than $80 billion cash and stock offer from Netflix. But this is going to be interesting. The last time around when they rejected it, David Faber had the chairman of the board on saying that the reason they were doing it is there was no personal guarantee that came. Now I don't know what the personal guarantee is, if it's been put out in writing or what the rationale will be for why this is less this time around but I guess we'll see very soon.

[Joe Kernan]

The reason I like it for me Al Franken is that Joe Kernan you say that all the time on this and it only has to do with me. Only has to do with me.

[Becky Quick]

Okay.

[Joe Kernan]

If you were to value the stub of the.

[Becky Quick]

Oh okay. I know what you're going with this exactly. You want a big valuation for the.

[Joe Kernan]

Cable Nerson's valued at 1.5 is going.

[Becky Quick]

To be the trading.

[Joe Kernan]

So if it really is worth four or five times.

[Becky Quick]

I'm with you.

[Joe Kernan]

I'm with you on that.

[Becky Quick]

I was thinking this this morning on the way in that this is going.

[Joe Kernan]

To be a proxy we got I don't a quarter of the debt of the Warner spinoff and we're coming valued at like one and a half and we have CNBC and we have Squawk Box and in. Like I said this is all about me. But but or us. But if you that that's the only way you can get the Netflix offer to match Paramount is by valuing those cable assets spin off at a much more. That means Versant should be.

[Becky Quick]

Maybe it's even more than $4. Maybe it's 5 or 10.

[Joe Kernan]

Well then Versant should be.

[Becky Quick]

Was it Roger Altman or somebody who told us that recently?

[Joe Kernan]

Vsnt vsntv. If You, Chris, you want to be.

[Becky Quick]

Watching on Monday for the opening bill. Today is Warren Buffett's last day as CEO of Berkshire Hathaw, away after 60 years. Buffett shocked Wall street in May when he announced that he would ask Berkshire's board to replace him with Greg Abel as CEO at the end of the year. Buffett has led the conglomerate for six decades, but he won't be stepping away completely. He is staying on as chairman of the company, and he plans to continue coming into the office each day. In fact, he's there not only five days a week, but I think he comes in sometime six days a week, too. Either a Saturday or a Sunday.

[Joe Kernan]

Amazing. With. Is it Cherry Coke Zero or cherry.

[Becky Quick]

No, no, no, no.

[Joe Kernan]

Diet.

[Becky Quick]

No, Zero.

[Joe Kernan]

Full on.

[Becky Quick]

Yeah, he likes the full flavor.

[Joe Kernan]

I like it, too. I like it, too.

[Becky Quick]

But don't drink Coke or Cherry Coke.

[Joe Kernan]

Either way. Yeah, I just can't. The 140 calories. If you run on a treadmill for like a half Hour, it's like 120 calories. It's like, I can't. It's not a fair trade.

[Becky Quick]

You know, his record as an investor, what he's managed to do.

[Joe Kernan]

Unbelievable. He's changed the. Yeah. I mean, one man can change the world, and he certainly did in the way that you invest. I mean, how many people's lives is he enriched? Not just. I'm talking monetarily, but I'm sure in other ways as well. And he's going to leave a legacy of philanthropy that's going to help a lot of people as well. He's done a lot for the NCA March Madness. I mean, he's done a lot for.

[Becky Quick]

A lot of things. I mean, he's given me a brick.

[Joe Kernan]

I have a brick. I have an Acme brick. An Acme brick.

[Becky Quick]

He's given away more than $50 billion already. His plan is to give away more than 99.9% of all of his wealth.

[Joe Kernan]

Give me a lollipop.

[Becky Quick]

Children are going to finish carrying that out for him.

[Joe Kernan]

They will.

[Becky Quick]

And Greg Abel is the person who Charlie Munger first kind of slipped at an annual meeting in May 2021, to say that Greg would be the one who would be taking.

[Joe Kernan]

Yeah.

[Becky Quick]

So it was 2021 when he first slipped and. But then it was this annual meeting, May of this year, when Warren Buffett surprised everybody in the auditorium by saying that he liked to step down as CEO today.

[Joe Kernan]

How much is it more oversight for the last. Since then. What is that, four years? Is it more oversight? Do you Think they took anyone took ideas to him to get his blessing? They did.

[Becky Quick]

Well, I think not internally. I think for the most part, Greg has been running a lot of the non insurance companies for years now. That's been the way that they set it up. Ajit Jain has been running the insurance companies. Everybody reports through to Warren Buffett. But Greg has done a phenomenal job really in the operations business of trying to make sure that things run smoothly. And a lot of the problems that Warren Buffett didn't really want to deal with were the things that Greg Abel's been dealing with. But they work together very closely and I know they still talk constantly. So there is a lot of back and forth. And I think that's great for Greg Abel too, to be able to have Warren Buffett as a fire shield to anybody who wants to come along and say that you're not Warren Buffett. This is not your company. Buffett still controls 30% of the vote in that company.

[Joe Kernan]

But what does this really mean?

[Becky Quick]

Greg Abel's back today.

[Joe Kernan]

I just wonder if he has a strong feeling about something that's going on. I'm sure he, as a chairman, I.

[Becky Quick]

Think he is trying to step back and let Greg do more and more.

[Joe Kernan]

Than step back, more than he already has.

[Becky Quick]

I think people are going to Greg with some of the deals on these things. I think Warren's phone is always there if somebody wants to come and call.

[Joe Kernan]

30%. You could still say, I don't want to do that.

[Becky Quick]

Yeah, but I think he's, you know, he's worked with Greg for a long time. He's been his chosen person for a long time. And I think he's very happy to see what Greg has done with the company over the last several years, too. And I think what you pointed out, his legacy is going to be much more than just Berkshire Hathaway. Although that's a pretty phenomenal legacy in.

[Joe Kernan]

Itself for anyone who's owned it.

[Becky Quick]

$119 to 2,500. You're talking about gains of three and a half million pounds.

[Joe Kernan]

You could probably, with AI, figure out how many millionaires he's created, he's created from.

[Becky Quick]

But I think it's also like his Thanksgiving letter that he wrote this year talking about how you should behave in life. And kindness is an easy choice and that's what you should really do. I think those messages are pretty important too. He's got a huge following of people who admire not only what he's done in business and in investing, but what he has chosen to do in life.

[Joe Kernan]

He's kind. Unless you're on the other side of a negotiation. Because especially when he was younger I heard he was just an assassin.

[Becky Quick]

Like he doesn't make bad deals. No, I shouldn't say he doesn't. He does occasionally.

[Joe Kernan]

I mean ruthless. That's a bad word. Has a bad connotation. But he.

[Becky Quick]

If you're spending your partners. He's always looked at the shareholders as his partners because it started out as a small group of family and friends he's not going to overpay with.

[Joe Kernan]

I wouldn't want to be on. I wouldn't want to buy or sell anything to him.

[Becky Quick]

I think there have been a lot of pretty good deals where people on both sides come out.

[Joe Kernan]

No, I'm sure. I'm sure it's not going to overpower. He hasn't. No. And he hasn't been on this journey.

[Becky Quick]

Charlie Munger once made a really interesting point. He said there are all of these companies that want you to overpay but only once when you pay for them. And then they want to make sure if they're getting paid in stock because that's more tax advantageous that you never overpay for another.

[Joe Kernan]

Is he frugal? I mean he gave me a net debt.

[Becky Quick]

He just doesn't want anything.

[Joe Kernan]

He gave me a net debts card.

[Becky Quick]

And he lives in the same house he's lived in for.

[Joe Kernan]

But it wasn't good for it. It just had my name. There was nothing associated with it that would have taken nothing for him to me a, you know, a couple of.

[Becky Quick]

Million on his plan with philanthropy has been trying to help the people who need the help the most. And you're not it.

[Joe Kernan]

No, unfortunately. I love netjets. It's always somebody else's.

[Katie Kramer]

Ahead on squawk pod corporate responsibility in the age of AI driven automation. With CEO and founder of education powerhouse the Khan Academy Sal Khan India requires.

[Sal Khan]

2% of profits for corporate social responsibility. The UK already has a half a percent mandatory for reskilling. I'd argue most companies already do spend something like that but they do it in their own silo.

[Katie Kramer]

We'll be right back.

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[Courtney Reagan]

What made you confident that you could.

[Becky Quick]

Do something that hadn't been done before? I have no fear of failure.

[Julia Boorstin]

Trailblazing women, changing the game.

[Courtney Reagan]

Favorite pieces of advice. Think about what your boss's boss needs.

[Katie Kramer]

Leadership can look in many, many different forms. It really does come down to just trusting yourself.

[Becky Quick]

Life is short, and you just gotta think big to accomplish big things.

[Julia Boorstin]

Julia Boorstin hosts CNBC Changemakers and power players. New episodes every Tuesday. Wherever you get your podcasts.

[Becky Quick]

Welcome back.

[Katie Kramer]

This is Squawk Pod, as always, from the crossroads of the world, Times Square.

[Bill Simon]

Stand by, Joe in three, two, one. His mic.

[Joe Kernan]

You're watching Squawkbox on cnbc. I'm Joe Kernan along with Becky Quick. Andrew is off today and I mean, we should take a shot of. We are here.

[Becky Quick]

We barely made it in.

[Bill Simon]

This is it.

[Joe Kernan]

This is exactly where everyone is going to be wearing the pens tonight because you can't. There's 2 million people or whatever it is, no bathrooms and it takes like eight hours.

[Becky Quick]

Once you leave, you can't go back out. They are saying you might even be frisked again through security.

[Joe Kernan]

This is the most I've ever seen. I had to get a Had to walk from 8th, which we're over on Broadway between Broadway and 7th. I mean, that doesn't sound like a lot, but it was a maze. There were all these barriers that are closed and at the very end of like, one of the barriers, there's a tiny little place where if I threw like a rat, if I suck in my stomach, where I can just barely get through.

[Becky Quick]

No, I had to rely on the kindness not of strangers, but of the NYPD to get in this morning, too. I don't know how they got in here because nobody is at the.

[Joe Kernan]

Nobody is at that. Yeah, but. And there are police everywhere. They were pretty nice, the cops.

[Becky Quick]

They are New York's finest.

[Joe Kernan]

They didn't respond well to. Don't you know who I am? I don't know. What did you try that stuff?

[Becky Quick]

They were far nicer to me.

[Joe Kernan]

You didn't use that.

[Becky Quick]

Our next guest warns that an AI fueled job apocalypse is on the horizon. Let's bring in Sal Khan. He's the CEO of the Khan Academy. In his latest piece for the New York Times, Saul makes the pitch that every company benefiting from Automation should dedicate 1% of profits to help retrain workers who will be displaced by AI. Sal, first of all, thanks for being here. Second of all, this is a pretty radical proposal, but let's lay out what you think is happening, why you think this job apocalypse is coming.

[Sal Khan]

Yeah, you know, as soon as generative AI became a big thing, obviously this has been a big debate. Will we have net loss jobs, net gain jobs and living out here in Silicon Valley? Most people have been on, hey, this is going to be like the industrial revolution. We'll just, you know, there'll be jobs. We can't name them. They'll, they'll happen. But what we're seeing now, you know, in that op ed, I talk about seeing the Waymos in my neighborhood and that's cool. But then I go and meet with a friend who is thinking about contributing 1% of his firm's profits for reskilling. And his motivation was he's taken over a call center in the Philippines and he's going to be laying off 80% of the workforce and replacing them with an AI. That's, that's 7 to 10% of the Filipino GDP. Directly driving some form of a vehicle is 4 to 5 million workers just in the United States. It's the biggest, one of the biggest sources of employment for men globally, including in the United States. And even if you look at white collar jobs, a lot of people are talking about and seeing what's happening in software engineering right now, it seems kind of frozen. Things like product management, design, we're seeing those jobs are at least changing. You're not seeing a lot of net hiring. If anything, there's a lot of things going the other way. And the only way to think about how to navigate this, I think if folks wait too long, the political winds are going to switch. We've already seen that populism can, can, can get a lot of momentum off of things like globalization and immigration. I think automation is going to hit a lot harder. And you know, 1% isn't without precedent. As I mentioned, my, one of my friends, he hasn't announced it yet. That's why I'm not naming their firm. But it's a major firm. There's Ares Capital, another major asset manager. They have a class of funds, several billion DOL under management where they're giving 5% of their promote to philanthropy for they're doing health care and education, but that's related to reskilling. So the pitch here is it's in companies best interest. This isn't going to be just, you know, hope isn't a strategy here. We have to get ahead of the curve. The benefits of doing something significantly weigh out the alternative. And I think if we don't do something, politics are going to take over and that's going to be worse for everyone.

[Becky Quick]

I hear what you're saying and I've thought the same thing myself. You know, we watched it with Occupy Wall street and other movements in the past where people feel like they have no hope, where they feel like they've lost things. You definitely do lose the political wins. I think it's probably difficult to convince lots of companies to say, yeah, we're just going to take 1% of profits and give them to this when it's many of them probably can't say, look, we're going to lay off a lot of workers as a result of this. I think what you're talking about, specifically a company that is going to give back 1% of profits after deploying an AI agent that's capable of wiping out 80% of call center jobs in the Philippines. That seems like a token you drop in the offering box on your way out of mass because you feel really bad because you've been so guilty. I don't know how we balance this out, but I think you're going to have a hard time convincing some of the biggest companies out there that they are really losing jobs. Even if you talk to somebody like an Amazon, they'll say, you know, that's a situation where Andy Jassy said if they're successful, they'll have more workers than they have in years past. I think that's what Jamie Dimon says, specifically at JP Morgan. If we're successful, we're going to have more workers. They'll just be in different jobs. So I don't think you're ever going to convince a company like JP Morgan that they should be taking 1% of their profits and then giving it away like this. How do you see this playing out on a grander scale?

[Sal Khan]

Yeah, you know, I hope and I do think that there could be a form of peer pressure here and what you're saying is real. You know, when I wrote the op ed, most of the people who read the op ed is why only give 1%? 1% is nothing.

[Becky Quick]

If you actually feel like you're guilty for releasing the agent that's going to lay off thousands and thousands of workers. Maybe you should cough up more. But other companies I don't think will feel the same way about it.

[Sal Khan]

That's. I think that's the interesting thing. I think the public is already feeling that it should be a lot more. I mean, if you look at some of the comments in the New York Times article, the pitchforks already seem to be coming out. And this is before things have really gotten bad. We're still in a relatively good economy. On the other side, 1% isn't a trivial amount. I point out that, you know, if you take the top 10 or 12 companies out there, that's over $1 trillion a year in profit. That would be a significant fund. $10 billion that you could deploy for reskilling. But you could do it for millions and millions of, of people. And I'm just saying if they don't do it voluntarily, and it might, it probably won't be enough, but at least it's a start and there'll probably be more that you want to do. It will become mandatory in some way. There's other governments. You know, India requires 2% of profits for corporate social responsibility. The UK already has a half a percent mandatory for reskilling. I'd argue most companies already do spend something like that, but they do it in their own silo. They do it for very.

[Becky Quick]

That's what I was going to say. Some of these companies might do it if they feel like they have control over it and they think it's going to a good use for actual reskilling, but not necessarily throwing it into a government bureaucracy that they're, they're not convinced will necessarily use it appropriately.

[Sal Khan]

That's right. If they, if this is something that still stays in the private sector, something that they can drive, something that can be nimble, because we know what the alternatives are going to be. In four or five years, you could see the pendulum swing. People become very anti automation. They start taxing automation, they start taxing AI. There's already serious politicians talking about bans on automation and AI that's going to be way, way more harmful. And even if they do increase corporate taxes and the government wants to do reskilling and spends tens of billions or even hundreds of billions, we know it's going to be slower and less efficient than doing it in coordination with private industry.

[Becky Quick]

Sal, thank you. It's a lot to think about. We appreciate it and I wish you a happy New Year.

[Sal Khan]

You too. Thanks.

[Joe Kernan]

Coming up, what's the new year? What does it hold for the retail sector? From new leadership to the health of the consumer? More on that next. Plus, Sydney, Australia is set to ring in the new year. We'll have some fireworks while here at home, Times Square is getting ready for the ball to drop right at midnight. The ball's right above us right now, basically.

[Becky Quick]

In fact, there's a brand new ball and if you read all about it, the Wall Street Journal has a picture of it right on the front page right above. It's got 12 and a half feet in diameter. It weighs 12,350 pounds, 5,280 Waterford crystals in circular shapes and LED light picks. This is the brand new, the ninth spear that they've ever had in the history of the New Year's Eve ball drop.

[Joe Kernan]

Ryan Seacrest being interviewed yesterday. He goes, no one really listens to anything I say. I just have to smile. And we just got to make sure the ball drops at the right time, that's all. I guess.

[Becky Quick]

Yeah, like us.

[Joe Kernan]

Yeah. The only thing they need to worry.

[Becky Quick]

About on that whole, the markets go off at 9:30.

[Joe Kernan]

Dick Clark, Rock and eat.

[Courtney Reagan]

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[Courtney Reagan]

What made you confident that you could.

[Becky Quick]

Do something that hadn't been done before? I have no fear of failure.

[Julia Boorstin]

Trailblazing women, changing the game.

[Courtney Reagan]

One of my favorite pieces of advice, think about what your boss's boss needs.

[Becky Quick]

Leadership can look in many, many different forms. It really does come down to just trusting yourself.

[Courtney Reagan]

Life is short and you just gotta.

[Becky Quick]

Think big to accomplish big things.

[Julia Boorstin]

Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts.

[Katie Kramer]

You'Re listening to squawkpod from CNBC Today with Joe Kernon and Becky Quick.

[Becky Quick]

All right, folks, this is a picture of Sydney, Australia, where we are about to see fireworks. It's about to turn midnight there. Here we go. They're late.

[Joe Kernan]

A little bit of a delay maybe. Oh, here it is.

[Becky Quick]

20 seconds that they're coming down. You know our clocks are right. They're running a little behind on this.

[Joe Kernan]

Yeah, yeah.

[Becky Quick]

Our clocks are definitely right.

[Joe Kernan]

It's like eight here.

[Becky Quick]

We get to ring in 20, 26. And there you have it. It's time to play. Should old play dance be forgot? Here we are, the first, or actually not the first. Auckland, New Zealand we watched two hours ago. Now you're watching Sydney, Australia. These are the fireworks. Sydney Harbour ringing in the new year. And those are some beautiful fireworks. Up next, Tokyo is going to be ringing in the new Year. That comes at 10am Eastern time.

[Joe Kernan]

Is that just us with old langs on?

[Becky Quick]

Probably.

[Joe Kernan]

Did they. What did they do? Taimy kangaroo down sport. Do you remember that song?

[Becky Quick]

Nope.

[Joe Kernan]

That was a huge hit. Number one.

[Becky Quick]

If I sang it, I would recognize.

[Joe Kernan]

Timey kangaroo down sport. Timey kangaroo down, kangaroo down. Yeah. You know it?

[Becky Quick]

Yeah, I do. All right. We're going to continue to watch these new Year celebrations, but those are some great fireworks over the water. Taipei comes at 11am Hong Kong's fireworks were canceled after November's devastating apartment fire. At noon Eastern time, though, Bangkok, Thailand will ring in the new Year. That will be followed by Dubai at 3pm Eastern Time. Athens, Greece will take place at 5pm and of course, much of Western Europe at 6pm London's going to be celebrating at 7pm and then right here behind us, midnight Times Square.

[Joe Kernan]

It's almost like you move across, keep going west around the world. And it's just every.

[Becky Quick]

It's coming every hour, just like Santa's sleigh.

[Joe Kernan]

Oh, that's right. That's right. We saw this on the 24th.

[Becky Quick]

It's only been a week. And here we are following Chasing the Sun once again. What percentage of people abandoned their New Year's resolutions by February? Drumroll, please. Yeah, around 80% of people abandoned their New Year's resolutions by February. You made it a whole month. That's impressive, that statistic, by the way. According to Forbes.

[Joe Kernan]

Yeah. If you're interested in the subject, Journal's got a good one, a slightly better you. In the new year, your resolutions can become a reality if you set your slights, set your sights embarrassingly low.

[Becky Quick]

That's a good point.

[Joe Kernan]

That's what I'm going to do.

[Courtney Reagan]

I Very realistic.

[Joe Kernan]

I'm going to lose some. I'm going to lose some weight in ounces.

[Courtney Reagan]

There you go.

[Becky Quick]

That can even be tough to hold on.

[Joe Kernan]

I don't think I can do that.

[Becky Quick]

All right. Retailers closing the book on 2025. Courtney Reagan joins us for the review of the sector's Performance. Hey, Court.

[Bill Simon]

Hi.

[Courtney Reagan]

Good to see you. Happy New Year. Well, the retail ETF, the XRT gained about 8% this year. That is less than half the growth of the S&P 500. The I buy retail ETF that's more E commerce geared, that did better, gained 16%. But after that massive sell off in concerns about the impact of the April 2 announced tariffs, which you can see really clearly in the charts, the damage honestly could have been much worse. The retail theme for 2025 in my mind was two headed the Resilience of the US Consumer in the face of economic uncertainty and the ability of retail to pull every mitigation lever possible to blunt the consumer impact effect of tariffs. Prudence by consumers is evidenced by some of the bigger retail winners this year. Dollar General five below both gained 79%. Dollar Tree up 65%. TJX of 29%. And Wal Mart gaining 23%. May not sound like a lot compared to the others, but that outperformed the broader market.

[Becky Quick]

Pretty good right off of the base. It's working.

[Courtney Reagan]

Absolutely. Victoria's Secret gained almost 200% in the last 66 months. American Eagle gained traction with some well timed marketing campaigns. Their shares grew 60%. And department stores, Kohl's and Macy's, they also quietly made progress, their shares up 45% and 31% respectively for the year. But UBS doesn't think the department stores will stay in the winner's circle. Sell ratings for both of those names into 2026. Target, Lululemon, both shed significant market share under the weight of some internal mistakes. Both now getting new leaders. Target on February 1st. Lululemon, TBD, Wal Mart too. We'll see CEO Doug McMillan retire and John Furner take over on February 1st. And Jefferies tells investors it thinks the setup generally for retail is more constructive. And the challenges for 2025 are improving. But stock picking will remain important. So Jefferies has Nike as its top pick on its turnaround and Shark Ninja second. It suggests shorting on running while UBS puts on running top of its buy list. So there you go, a debate already. Along with Ralph Lauren, tjx, Victoria's Secret, American Eagle and Pressured Deckers they think is going to be a turnaround.

[Becky Quick]

They put Shark Ninja in the retail category.

[Courtney Reagan]

They did, yeah, yeah. I mean it's consumer products.

[Joe Kernan]

Yeah.

[Courtney Reagan]

They also have Planet Fitness on their list, which is sort of consumer. So their coverage is is a little bit more broad than sort of that typical shoes, apparel, sporting goods kind of universe.

[Becky Quick]

There were some really big Movers that kind of snuck up on you, as you said. I mean, the biggest with some of those too.

[Joe Kernan]

Yeah.

[Becky Quick]

I mean, you knew they were doing okay.

[Joe Kernan]

I didn't realize.

[Becky Quick]

45%.

[Courtney Reagan]

45%. When you're looking at the S&P 500. Up about 17%. So sort of a stealth rally there right at the end.

[Becky Quick]

Pretty great. Yeah. Court, thank you. Thank you.

[Joe Kernan]

Joining us now with a wrap on retail and what's ahead for consumers in the new year, Bill Simon, former president and CEO of Walmart US and it's good to see you, Bill. Happy New Year.

[Bill Simon]

Happy New Year. How are you?

[Joe Kernan]

I'm good. You got to watch. Were you when that unbelievable CEO just finally said he was leaving and we, you know, we didn't eulogize him because he's alive and he's young, but we certainly were going to erect a statue or so something formed. Did you watch that from afar and sort of marvel at the, you'd have to say, troubled waters that Doug guided that company through just to do. Just incredible success.

[Bill Simon]

Yeah, look, it was a serious transition 10 years ago, 11 years ago, when Doug took over, it was. Walmart was valued as a pure brick and mortar retailer despite the fact that their digital business was growing, you know, nearly as fast as Walmart's. And that's really the transition that he led them through. Having Walmart recognized as the innovative digital blended company that it is. And that's why they think the valuation so high did an incredible job.

[Joe Kernan]

I mean, Amazon was, you know, didn't do anything wrong. And other companies just fell in the wake of the power of, of Amazon and everything else, but not Walmart. I mean, they were worthy competition. I guess it started out with a pretty good, with a pretty good franchise. Walmart.

[Bill Simon]

Yeah, look, scale and make 29 billion in operating income gives you a lot of flexibility and they use it well.

[Joe Kernan]

Yeah, but not everybody did well. We don't need to go in and relitigate some of the failures of other companies, but it's not like it was just going to happen without doing the right things because there were other companies that showed you what not to do during that period.

[Bill Simon]

Yep, exactly. Exactly. They did a wonderful job. They did everything they said they were going to do and more.

[Joe Kernan]

Okay, well, let's talk in general. Who, who won last year and who do you expect to win this year?

[Bill Simon]

Well, I think scale is going to continue to win. I think the, you know, the relative uncertainty that the whole tariff discussion brought forward, you know, we were able to really see the big Guys, Wal Mart, Costco, Amazon, find ways to digest the tariff news and really to, you know, push back on the manufacturers and get some assistance there, use the distribution power. And they're increasingly starting to use technology and AI to, to help make their operations even more efficient. So they're able to better deal with some of the uncertainty going forward than some of the, the mid range guys. And I think the bigger going to keep getting bigger and you know, the smaller and the middle guys are going to struggle.

[Joe Kernan]

What's going to happen with, with not just malls, but I look at the flux in some of the most storied names in retail and department stores and I'm trying to figure out the Saks or Macy's or Bloomingdale's. What does the future look like there and what's happening? What's changing so much? Is it all just, are they missing the online digital side of things?

[Bill Simon]

Well, I think it's a combination of things. You know, you mentioned mall traffic. I think mall traffic in a lot of places is challenged. So they have some geographic issues to deal with. I think you've seen, you know, some of them start to respond. I think Macy's had a couple of good quarters. Now, you know, you got guys like Dillard's who've sort of found a way to navigate through it and then you've got guys who are just starting to figure it out. Kohl's has a leadership transition. Michael Bender's taken over there. He's a terrific, terrific, terrific leader. But they've got their challenges ahead of them. If you can't find a reason to be, then you're not going to be.

[Joe Kernan]

Do you dabble in, I mean, specialty retailers? Do you have opinions about all those things? You keep up with foot traffic. Who do you expect? If you were going to give me a list of companies to buy or for our investors, what do you like in 2026? Can you do that? Maybe you got a future in, you know, at Goldman Sachs or something, tickets.

[Bill Simon]

Docs, you know, I don't know, I sort of look at the ones who are really beat down. Look, I think Targets had its struggles. They've got a leadership transition. But I can't imagine in my mind how it could get worse. Right. It only has to get better. So if I'm looking, I kind of like Target and we talked about Wal Mart. They've done a really good job. But because of their transition, you know, I love them as a company from an investment standpoint, I might be on the sidelines on that one. For a little bit while in specialty. You know, I, I think sporting goods had its heyday, so Dick's and, and Academy I think had a nice run. A little bit leery on those going into next year.

[Joe Kernan]

How about Costco or some of the other big name Home Depot?

[Bill Simon]

Costco is a beast. One of my favorite retailers of all time. I think they've just done a really good job consistently. I think their stock's a little bit beat down. I am a little bit worried about the demographic shift away from the big pack sizes in the club panel. You know, we'll have to see how that plays out. But I think they're, I think their valuation is pretty low and they're somebody I'd be interested in. Home Depot is going to continue to go on as long as new home sales and home sales have been slow. I think we're going to see a rebound in the, in the home improvement channel. So I kind of like Home Depot as well.

[Joe Kernan]

Anything. I mean, China's got a lot of, gets a lot of play, a lot of talk about all their, they're online businesses. Anything plus or minus is coming out of there for you individuals.

[Bill Simon]

You know, from an investment standpoint, I'm kind of, I would stay away from it. For me, you know, I don't, I don't really know. We don't. Nobody knows what's going to happen with tariffs in the Supreme Court ruling and, you know, reciprocal tariffs. It's going to be really interesting. You know, we're in an unprecedented territory from a, from a retail and consumer standpoint. We've got, you know, upward pressure on prices from tariff and downward pressure on prices from technology and we've got, you know, population, immigration changes, affecting demand. It's just, it's. And then we have the whole geopolitical situation in the election coming up and who knows what's going to happen. So I think the consumer's been resilient. Their, their paychecks have been healthy because wages have gone up pretty substantially the last three or four years and the consumer, I think, remain buoyant. But from an investment standpoint, you know, any number of things could happen.

[Joe Kernan]

I think I give you some money if you want to, you know, allocate them.

[Bill Simon]

I'm here to announce my, the formation of my investment company.

[Joe Kernan]

Right, you probably could. You didn't sell all your Walmart stock when you left the company, did you?

[Bill Simon]

No, I sold some, bought some back and I've been trading it at a.

[Joe Kernan]

What'd you get Doug for Christmas? You better get Doug something nice for Christmas.

[Bill Simon]

He doesn't need anything, trust me. No, you're right.

[Joe Kernan]

You're right. All right, Bill Simon, thank you. Appreciate it.

[Bill Simon]

Thanks, guys.

[Joe Kernan]

Okay, see you.

[Becky Quick]

You know, Doug carried around that list of the top 10 retailers of every decade. He wanted to make sure that Walmart was at the top of it. And 11 years later certainly is. So did it.

[Joe Kernan]

Well, we got 15 seconds. Wish everyone happy New Year. Happy safe New Year, everybody. Safe New Year.

[Becky Quick]

We're looking at a very strong year for the markets. More importantly, we hope you are looking at a very strong year for your families, for your friends, and for your own health.

[Joe Kernan]

It's amateur night. It's amateur night. Drink and drive.

[Becky Quick]

We'll see you on Friday. Be careful. And happy New Year.

[Katie Kramer]

And that is Squawk Pod for today and for the year. Thank you so much for listening throughout 2025. Stick with us in 2026. Squawk Pod is produced by me, Katie Kramer and Cameron Costa. For our anchors, Joe Kernan, Becky Quick and Andrew Ross Sorkin, as well as the whole Squawkpox crew behind the sounds. We wish you a very happy new year. We'll meet you right back here in January.

[Courtney Reagan]

What made you confident that you could.

[Becky Quick]

Do something that hadn't been done before?

[Courtney Reagan]

I have no fear of failure.

[Julia Boorstin]

Trailblazing women, changing the game.

[Courtney Reagan]

One of my favorite pieces of advice, think about what your boss's boss needs.

[Katie Kramer]

Leadership can look in many, many different forms. It really does come down to just trusting yourself.

[Becky Quick]

Life is short, and you just gotta think big to accomplish big things.

[Julia Boorstin]

Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts.