A $6.5B Gift for Kid Accounts & OpenAI’s ‘Code Red’ 12/2/25

Summary

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Squawk Pod – December 2, 2025

Episode: “A $6.5B Gift for Kid Accounts & OpenAI’s ‘Code Red’”
Hosts: Joe Kernen, Becky Quick
Guests: Brad Gerstner (Altimeter Capital), Max Shapira (Heaven Hill Distillery)

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Overview

This episode delves into two major stories:

1. The landmark $6+ billion philanthropic gift by Michael and Susan Dell to create investment accounts for American children – dubbed “Trump accounts” under the Invest America initiative.
2. OpenAI CEO Sam Altman’s internal “code red” following increased AI competition, especially from Google’s new Gemini model.

The show also covers market volatility (with a spotlight on crypto and big tech), a major lawsuit from Costco over Trump-era tariffs, trends in the bourbon industry with Max Shapira, and wide-ranging discussion on capitalism, philanthropy, and the future of AI and tech.

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Key Discussion Points & Insights

1. Michael & Susan Dell’s $6.2B Gift for Children’s Investment Accounts

[16:16 – 22:45]

• Background: Michael and Susan Dell announce over $6 billion in direct funding for “Trump accounts”: savings and investment vehicles available to 25 million American children — around $250 per child.
• Context: The gift is intended as a massive catalyst for the bipartisan Invest America Act, aiming to give “every eligible U.S. child a savings and investment account that they can grow over time” (16:00).
• Expansion:
  • The initiative originally targeted the high school “class of 2026”, but political and philanthropic momentum expanded eligibility to all Americans under 18.
  • Not just public funding: Companies like Uber, Nvidia, T-Mobile, and philanthropists nationwide are encouraged to contribute, making this a blended public/private model.
• Direct Impact:
  • “100% of this is going directly into the private accounts of these children. Would have been impossible but for the passage of the Invest America Act.” — Brad Gerstner [16:25]
  • Not a traditional charity; these are private, owned accounts, and anyone can contribute to them.
• Bipartisan Support: Unusually, Senators Cory Booker (D) and Ted Cruz (R) released a joint statement urging corporate America’s involvement.
• Financial Literacy:
  • Gerstner stresses the huge platform this creates for hands-on financial education: “They actually need to be able to open their phone and see that they have a little skin in the game… Now everybody’s going to have that.” [18:38]
  • 30 states already require financial literacy education, which will be integrated with these accounts.
• Broader Vision:
  • “We’re not only bottling up hope for every one of these kids… but aligning all these kids with the future of capitalism and the future of, of free markets, which I think is critical as we enter this age of AI.” — Gerstner [20:13]
  • Addresses concerns about the declining popularity of capitalism among youth: “Less than half of people under the age of 40 have a positive view of capitalism… When you have no ownership, it’s a lot easier to want to burn the house down.” [21:29]
• The “Snowball” Effect:
  • The $250 per child is just the start: “Once that snowball goes, we know that parents and others will add to the account. Savers save more.” [22:39]
• Memorable Moment:
  • Becky Quick: “I am amazed that you were able to get this done. So really congratulations and to see this continuing to grow.” [20:45]
  • Gerstner gives credit to CNBC’s platform for raising awareness.

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2. OpenAI’s ‘Code Red’ and the Accelerating AI Race

[06:55 – 09:37 & 23:08 – 28:34]

• OpenAI’s Situation:
  • Internal memo surfaces: Sam Altman declares “code red” as Google’s Gemini 3 raises the bar for generative AI, putting pressure on OpenAI and ChatGPT.
  • OpenAI delays some projects (e.g., advertising) to focus on making ChatGPT more capable.
  • “The head of ChatGPT said… OpenAI’s goal is now, in his words, to keep making ChatGPT more capable.” — Becky Quick [07:33]
• Competitive Landscape:
  • Google’s renewed AI push (helped by co-founder Sergey Brin returning to a “founder mode”) demonstrates that tech incumbents can still leap ahead in new domains.
  • Joe Kernen: “The demise of Google search is greatly exaggerated. Why wouldn’t the leading search firm vault into one of the leading AI firms?” [07:43]
  • Becky: “When you have founders who get re-engaged and energized, I think anything can happen.” [08:21]
• AI Model Diversity:
  • Not just a two-horse race: “One [model] might be good at coding… another at video, another at consumer applications.” — Joe [08:57]
  • The technology still has gaps (“It still can’t analyze… You’re still just a glorified search engine.” — Joe, [09:00]), but progress is relentless.
• Industry & Investment:
  • Brad Gerstner: It’s hard to pick a winner; recommends a “basket” approach: “You can own them all—OpenAI and Anthropic, Google and Microsoft.” [24:43]
  • AI-phase transitions create volatility, but long-term transformation is underway: “We’re heading into a very significant productivity boom… Our economy is going to see that productivity tailwind.” — Gerstner [25:50]
  • Past innovation cycles compared: Early Internet, mobile adoption, with AI described as “bigger than the Internet itself” [31:49].

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3. Crypto & Market Volatility

[03:14 – 06:12, 28:34 – 31:49]

• Market Moves:
  • Recent sharp sell-off in crypto, with Bitcoin falling about 6% (its worst day since March); MicroStrategy (major institutional BTC holder) cut earnings forecasts and established a $1.4 billion reserve to weather volatility.
  • “If you take something that’s pretty volatile to begin with and then lever it up, what happens with the underlying issues?” — Becky Quick [05:49]
  • Gerstner: Altimeter Capital doesn’t use significant leverage, especially not on Bitcoin, describing MicroStrategy-style strategies as risky and opaque.
• Role of Leverage & Risk:
  • “It works incredibly well on the way up. But I said: I didn’t understand the strategy.” — Brad Gerstner on MicroStrategy [28:50]
  • Bitcoin remains a risk asset, not a true store of value yet; “One is a risk asset and one is not. Doesn’t mean you shouldn’t own Bitcoin… But it is a speculative asset.” [29:39]
  • Potential for further downside if leveraged players unwind.
  • “It is a risk asset. You should treat it appropriately in your portfolio because if microstrategy is forced to deliver… it could get really messy in the short run.” — Brad Gerstner [31:05]

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4. Costco vs. Trump Tariffs Lawsuit

[10:25 – 13:22]

• Details: Costco sues the US government, seeking refunds for tariffs paid under the International Emergency Economic Powers Act, arguing the Trump Administration’s tariffs were illegal.
• Broader Implications: Other companies (e.g. Revlon) are filing similar suits. Decision pending at the Supreme Court.

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5. Tech Supercycle, Market Outlook & The Fed

[23:08 – 38:00, weaving throughout]

• Tech Sector Insights:
  • Nvidia’s growth is “truly extraordinary”—adding ~$200B in revenue in three years; transformational change rippling throughout the economy.
  • AI’s effect on productivity: “You’re seeing these growth rates in these companies… but only adding to their personnel at 1 or 2% because they’re getting more efficient from AI today, dramatically more efficient.” — Gerstner [36:42]
• Market Volatility:
  • Volatility is natural and even healthy during transformational cycles; bubbles less likely at current valuations.
  • Lessons from Internet cycle: “There are going to be companies in this cycle that go bust… but that’s part of the process of creative destruction.” [27:12]
• Monetary Policy:
  • Recently ended “quantitative tightening” could provide a tailwind to markets.
  • Gerstner expects rates to fall in 2026 as inflation ebbs and unemployment ticks upward.
  • Fed’s choice of new Chair (potentially Kevin Hassett) could see a pro-growth, business-friendly policy stance.

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6. Heaven Hill & The Bourbon Market

Guest: Max Shapira, Executive Chairman
[40:14 – 48:20]

• Bourbon’s Roots & Kentucky: 95% of bourbon is made in Kentucky; historical and logistical reasons persist [41:09].
• Industry Challenges:
  • Decline in liquor consumption post-pandemic + tariffs (especially in Canada).
  • Shapira: “Kentucky bourbon and all distilled spirits are discretionary expenditure and those discretionary funds are being squeezed, squeezed mightily by almost all consumers. That’s had a big effect.” [42:33]
  • Residual COVID impact: Shift to at-home consumption, reluctance to go out; predicts eventual rebound as social habits return.
• Global Trade:
  • Main export markets stable (no new European or UK tariffs), but Canadian market hit hard by prohibition-like restrictions.
• Targeting New Demographics:
  • Gen Z not yet fully of age; industry will continue to target next generations through modern marketing, social media, and storytelling.
  • “We have so many different ways of speaking to consumers…” [46:26]
  • Lighter moment: Joe jokes about aging drinkers and bourbon hangovers; Max offers to host him in Kentucky for a drink. [48:03]

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Memorable Quotes & Moments

• Brad Gerstner (on the child investment accounts):
  • “This truly is something that we can all get united around… It takes all of us, every family, every company, every philanthropist coming together to solve this problem.” [01:34 & 20:12]
• Becky Quick (on the philanthropic gift):
  • “I am amazed that you were able to get this done. So really congratulations and to see this continuing to grow.” [20:45]
• Joe Kernen (on changing AI landscape):
  • “The demise of Google search is greatly exaggerated. Why wouldn’t the leading search firm vault into one of the leading AI firms?” [07:43]
• Max Shapira (on bourbon consumption):
  • “Covid has a leftover effect. You have consumers today who are used to staying at home… the further we get away from COVID… you’re going to see a re-socialization of people…” [43:40]
• Brad Gerstner (on capitalism & youth):
  • “Less than half of kids, people under the age of 40, have a positive view of capitalism. But as the president has said, when you’re left out and left behind, when you have no skin in the game… it’s a lot easier to want to burn the house down.” [21:29]
• Becky Quick (on crypto leverage):
  • “Maybe volatility is not a surprise, but when you layer on leverage on top of that… does raise a lot of questions.” [28:34]
• Brad Gerstner (on AI & productivity):
  • “We’re heading into a very significant productivity boom… Our economy is going to see that productivity tailwind.” [25:50]

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Timestamps for Major Segments

| Segment | Time | |-------------------------------------------------|--------| | Markets & Crypto Selloff | 03:00 – 06:12 | | OpenAI’s ‘Code Red’ & AI Competition | 06:55 – 09:37 | | Costco Lawsuit Over Trump Tariffs | 10:25 – 13:22 | | Gerstner & Invest America/Trump Accounts | 16:16 – 22:45 | | Gerstner on Tech & AI Investment Trends | 23:08 – 28:34 | | Gerstner on Crypto and Leverage | 28:34 – 31:49 | | The Fed, Interest Rates, Monetary Policy | 32:51 – 36:02 | | AI’s Economic Impact, UBI, Capitalism | 36:02 – 38:00 | | Max Shapira & Bourbon Industry | 40:14 – 48:20 |

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Tone & Style

• Balanced, curious, sometimes cheeky (Joe’s playful asides, Becky’s straightforward analysis)
• Brad Gerstner provides energized, optimistic perspectives on both social reform (child accounts) and markets
• Max Shapira is measured, historical, and pragmatic about challenges in the liquor industry

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Conclusion

This episode of Squawk Pod highlighted a unique convergence of philanthropy, innovation, and market change—anchored by a historic gift to America’s children and a rapidly evolving AI landscape. The hosts balance serious analysis of policy and economic forces with candid, lively discussion, leaving listeners with practical insight and a sense of the big shifts shaping the US economy in 2025.

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Transcript

[Brad Gerstner]

This episode is brought to you by.

[Podcast Announcer]

Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information.

[Brad Gerstner]

Packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and.

[Podcast Announcer]

Statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts. And now a next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding and International Sleep Day is tomorrow. Luckily, ATT 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T5G requires a compatible plan and device coverage not available everywhere. Learn [e-mail] 5G Network.

[Producer Cameron Costa]

Bring in show music please.

[Joe Kernen]

This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode Investing in America's Children. Hedge fund manager Brad Gerstner has been suggesting for years and seeding investment accounts for children. Today, billionaire Michael Dell and his wife announce a landmark gift of 6 billion to fund tax advantaged accounts dubbed Trump accounts for 25 million kids. Gerstner joins us on the announcement.

[Brad Gerstner]

We're coming together on the National Day of Giving. This truly is something that we can all get united around and what it.

[Joe Kernen]

Can do to change views of ownership and capitalism in America.

[Brad Gerstner]

It takes all of us, every family, every company, every philanthropist coming together to solve this problem.

[Joe Kernen]

And Heaven Hill Distillery behind legacy brands like Elijah Craig and Evan Williams has remained family owned and operated for 90 years. Chairman Max Shapira on consumer taste for spirits.

[Max Shapira]

Kentucky bourbon and all distilled spirits are discretionary expenditure and those discretionary funds are being squeezed and squeezed mightily by almost all consumers.

[Joe Kernen]

Plus cryptocurrencies plunge, Costco suing the president for tariff refunds. And OpenAI's Sam Altman is calling a code red to improve ChatGPT in the face of artificial intelligence competition.

[Joe]

It's moving so fast. Do we want it to get there?

[Becky Quick]

Not sure.

[Joe Kernen]

It's Tuesday, December 2, 2025 and Squawk Pod begins right now.

[Max Shapira]

Stan, Becky, Bye.

[Producer Cameron Costa]

In three, two, one. Cue it please.

[Becky Quick]

Good morning everybody. Welcome to squawkbox right here on cnbc. We're live from the NASDAQ market site in times Square. I'm Becky Quick along with Joe Kernan.

[Joe Kernen]

Hello.

[Becky Quick]

Good to see you. Andrew's off today. Yesterday we did see a little bit of turbulence in the markets. First trading day of the month and it was the first down day for the S&P 500, the NASDAQ and the Dow in five sessions. So it broke a five day winning streak.

[Joe]

Could have been much worse yesterday, obviously for the Nasdaq anyway. The Dow is down 400, rallied back to not being as bad but then finished on close to, I think close to the lows. Although the Nasdaq pared some of its losses, which is correlated. Maybe this next story more than Dow. More than the Dow. We're talking about crypto. We're watching bitcoin. Big stories today. Crypto sell off Worsens. Wall Street Journal, Lisa, other people saying 60 is a possibility, which wouldn't be.

[Becky Quick]

That just technical perspective from it's just.

[Joe]

Some guy that thinks with some of the leverage that's in the system right now that he's, he just, I don't know if he picked that number out of his, out of his toes. Yeah. But wherever he picked it, I don't know whether that but you know, it was a 20 and it went to three, I think 20,000 went to three and there was a time I think it went to 65 and then went to 17. So these are the kind of things.

[Becky Quick]

But that have happened as you mentioned, though, that makes that an issue. That's why Michael Saylor at Strategy is now kind of beefing things up and.

[Joe]

Saying I think it's we will talk about, yeah. About the market cap of strategy. But bitcoin had its worst and cryptocurrency worst day since March. Bitcoin fell about 6% and that's a start the week after. There's already been some tremors prior to that. And here Strategy, those shares fell more than 10% yesterday before closing, about 3% lower. The company cut its 2025 earnings forecast and announced plans for a $1.4 billion reserve to support debt, interest payments and two years of dividends on some of those preferred stocks that Michael Saylor has his outlined the strategy of strategy on this show many times and our eyes kind of glaze over. We understand about half of it Lucky. It's funny because it's based on something that people don't really understand. Not all people really understand crypto. That's then you start doing derivatives of crypto and your head starts spinning. In a statement, Strategy founder Michael Saylor said the fund that he Just set up will help the company weather the short term market volatility and strategy. Stock fell by more than a third in the last month. It owns about 650,000 bitcoins.

[Becky Quick]

I don't understand everything about cryptocurrency for sure, but leverage is something that's a little easier to understand and that's always been the concern there. If you take something that's pretty volatile to begin with and then lever it up, what happens with the underlying issues? And that's why he's putting up this $1.4 billion fund to try and assure people that no, we're not going to be taken down by volatility.

[Joe]

When we've had him on, I've asked him. You keep loading, you know you're loading up at 60,000, it's gone to 17,000. Were you sleeping? Okay. And wondering about whether there. And there were rumors maybe there could be some kind of margin calls or something. And he has always been steadfast and we'll have him on again soon, hopefully be able to talk about all these things. It's weird that the hardcore bitcoin hodler, if it was 90% Hodlers, you wouldn't get this kind of volatility. So there's definitely some. It's not all strong hands and people that are in it forever.

[Becky Quick]

OpenAI sounding an alert on its position in the AI race amid advances by other companies. We've heard and we've seen this, particularly what happened in the last couple of weeks with Alphabet and its latest iteration, which a lot of people say is better than what they're seeing from ChatGPT right now. Citing an internal OpenAI memo, reports say that the CEO there, Sam Altman, told employees he was declaring a code red to improve ChatGPT and is delaying other projects at the company, like advertising. OpenAI's place in the air ecosystem has come under scrutiny after the release of Google's high performing Gemini 3 model. The head of ChatGPT said on X that OpenAI's goal is now, in his words, to keep making ChatGPT more capable.

[Joe]

I guess we should have realized that the demise of Google search is greatly exaggerated. Why wouldn't the leading search firm vault into one of the leading AI firms?

[Becky Quick]

Well, there are all these stories too about Sergey Brin going back into founder mode, that he was kind of challenged by someone at OpenAI to say this is like the greatest revolution in computing that's ever taken place. How can you be sitting on the street?

[Joe]

I mean, in the past, legacy companies have missed the next big move. And that's why I was saying okay, Google is you know own search but there's no reason to think that they their birthright that they'll be the leading AI company. But they, they went ahead and did.

[Becky Quick]

When you have founders who get re engaged and energized I think anything can happen.

[Joe]

I don't have the discerning ability to tell who's great and, and who's but.

[Becky Quick]

But the industry standards that have been run on some of these things I was reading a 10.1 the other day and where they come out ahead look, you've also got perplexity that is getting picked up by businesses in some ways too.

[Brad Gerstner]

So there's a constant but it's one.

[Joe]

Might be good at coding, one might be good at software, one might be good at video, one might be consumer applications. Yes.

[Becky Quick]

There's you know where the consumer wants to get a little chattier with you.

[Joe]

Is anyone gotten past Gigo and just scraping stuff to give you answers that it has no idea. It still can't think that this is it still can't analyze because I see it all the time. It gives me answers and it's like you are still just a glorified search engine. You're not doing any real actual analytical thinking. It's not like it's called generative. I guess we're not there yet I don't think but it's moving so fast. Do we want it to get there?

[Becky Quick]

Not sure. We are getting some preliminary numbers on US Cyber Monday shopping. Adobe analytics says that online spending was up four and a half percent from midnight through 6:30pm Eastern time last this year versus last year the company projected that shoppers would spend about $14 billion by the end of the day. That would bring online spending from Thanksgiving through yesterday to close to $44 billion. And I remember when the increase is like four and a half percent. That sounds pretty good for retail sales. For cyber shopping. For online shopping. The numbers back in like 1999, 2000, 2001 the numbers were growing by 2 300% and it was always that it was a much smaller number.

[Brad Gerstner]

So you saw bigger increases.

[Becky Quick]

Is getting so significantly large numbers. Yeah. That you're now talking about regular returns or increases of four and a half percent which you could see in comp store sales on a good year too. Retail giant Costco is joining a lawsuit against the Trump administration seeking tariff refunds. Eamon Javers joins us right now with more from Washington. And Eamon this now is something where you see A big retailer like that and maybe you sit up and pay a little more attention to it.

[Producer Cameron Costa]

Yeah, this is one of the biggest names. Becky. In a 17 page lawsuit filed Friday against U.S. customs and Border Protection, Costco said it has to act now because it's facing a Dec. 15 deadline for a final tally of its tariffs this year and that Customs has already denied Costco's request for an extension, given that these tariffs are being litigated in the Supreme Court right now. So the company also says that firms that paid these tariffs under the law in question are not necessarily going to be granted refunds unless they take independent action against the government, which is why they're doing this. Costco is asking the US Court of International Trade for a declaration that collecting tariffs under the International Emergency Economic Powers act, as the Trump administration has done in many cases, is actually illegal. And the company wants an injunction blocking further duties, as well as a full refund of all tariffs paid under the statute this year. Although importantly here, Costco does not reveal how much these tariffs have cost the company so far. A White House spokesman said yesterday the economic consequences of the failure to uphold President Trump's lawful tariffs are enormous, and this suit highlights that fact. The White House looks forward to the Supreme Court's speedy and proper resolution of this matter. Dozens of other companies have filed similar lawsuits. Remember, President Trump invoked the International Immigration Emergency Economic Powers act to impose many of his tariffs earlier this year. But In August, the U.S. court of Appeals for the Federal Circuit upheld a prior decision that found that Trump did not have that power under the law. The Supreme Court has agreed to take up the case, but it's not clear when a decision might come down, guys. So it could be any day. And you've seen the president posting about this again and again on social media, hammering home just how important he thinks a resolution is in his favor would be.

[Becky Quick]

Amy, do you get the sense that other big companies are going to join this lawsuit as a result of Costco kind of stepping up? I always wondered if they weren't joining it because they didn't really want to stick their heads up and risk drawing the ire of the administration?

[Producer Cameron Costa]

Yeah, we've seen some companies file suits here. Revlon is one of the biggest that's already taken action. A lot of smaller names, though, to be honest, given the scale of the impact of these tariffs. I think you're right. I think a lot of companies have been reluctant to go this far in opposing the administration. But as Costco said in their filing, they're facing this December 15th deadline. And so that kind of forced their hand.

[Becky Quick]

Okay. Amen. Thank you.

[Producer Cameron Costa]

You bet.

[Joe Kernen]

Next on Squawk Pod, the major giving Tuesday gift from Michael Dell of dell computers. It's $6 billion to jumpstart the president's project for Trump accounts, investment vehicles for American children. Hedge funder Brad Gerstner, an early proponent of the idea, joins us next.

[Brad Gerstner]

The idea was to start with the class of 26, and then it would move forward with every subsequent class. And the president and members of Congress said, hey, why don't we expand it to every kid under the age of 18?

[Joe]

The heaviest metal credit card of all.

[Brad Gerstner]

Time, rumored to be one of only 18 in existence, plated with the very same tungsten that forged the International space Station.

[Joe]

And wielded at business dinners like a samurai sword. It's a classic corporate power move.

[Brad Gerstner]

But the real power move, having end.

[Joe]

To end visibility on your most critical shipments. FedEx, the new power move.

[Brad Gerstner]

Score holiday gifts.

[Joe Kernen]

Everyone wants for way less at your Nordstrom Rack store.

[Brad Gerstner]

Save on Ugg, Nike, Rag and Bone.

[Joe Kernen]

Vince Frame, Kurt Geiger, London, and more.

[Joe]

Cause there's always something new.

[Becky Quick]

I'm giving all the gifts this year with that extra 5% off when I use my Nordstrom credit card.

[Brad Gerstner]

Santa who join the NordicLub at Nordstrom.

[Joe Kernen]

Rack to unlock our best deals. It's easy. Big gifts, big perks. That's why you rack.

[Podcast Announcer]

And now a next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep Day. You, you've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. ATT 5G requires a compatible plan and device coverage not available everywhere. Learn [e-mail] 5G Network.

[Joe Kernen]

This is Squawk POD Today with Joe Kernan and Becky Quick.

[Podcast Announcer]

Standby.

[Producer Cameron Costa]

Joe, his mic.

[Joe]

You're watching Squawk Box on cnbc. I'm Joe Kern along with Becky Quick. Andrew is off today.

[Becky Quick]

It is Giving Tuesday. And in the spirit of giving, Michael and Susan Dell are announcing a 6.2 to $6.25 billion gift to be paid directly into accounts of 25 million American children. That works out to about $250 per child. And it's designed to accelerate the impact of Invest America. That's the new national program that gives every eligible U.S. child a savings and investment account that they can grow over time. Here with more details on that gift and on Invest America is Brad Gerstner. He's a champion of the cause. He's been talking about it here on Squawk Box and all over the place from the beginning. Brad, we can't believe you actually got this done. Congratulations.

[Brad Gerstner]

It's incredible to be here and incredible to be here on Giving Tuesday with this announcement. I mean, this is one of the largest gifts in the history of the country, I think.

[Joe]

Largest to children, right?

[Brad Gerstner]

Largest to children. And by the way, Joe, it's not going to a charity that will then distribute some of the money to children. 100% of this is going directly into the private accounts of these children. Would have been impossible but for the passage of the Invest America Act.

[Becky Quick]

I think what's important about this, too, because I always thought it was a little unfair that it went to kids who were only born after a certain date. What about the kids who were born the week before? I love what Michael and Susan Dell are doing here, which is to say we're going to take care of a lot of the kids that were born after. Before those dates who are a little older than that.

[Brad Gerstner]

And remember when I first came on, the idea was to start with the class of 26, and then it would move forward with every subsequent class. And the president and members of Congress said, hey, why don't we expand it to every kid under the age of 18? But we couldn't afford to give 1000 bucks to every kid under the age of 18. So we're really looking now to the power of philanthropy, the power of corporations. And there's an incredible joint statement, joint letter out this morning from Senator Booker and Senator Cruz, coming together, like in this day and age, that bipartisanship, saying that every company should contribute to these accounts. And I've already announced here, Uber and Nvidia, you know, companies like T Mobile and iHeart are all going to contribute to these.

[Joe]

It's a Trump account. Booker, that's. That must have been hard for him. Listen, swallow hard.

[Brad Gerstner]

We're coming together on the National Day of Giving. This truly is something that we can all get united around. And I will tell you this, there's tremendous support in the philanthropic community. Michael and I will be leading the Invest America Giving Council, talking to all of these philanthropists right on both sides of the aisle in the corporate community, moms and dads, churches and synagogues. The magic of this is these are privately owned, and anybody can contribute to these accounts. So it's unlike just a charitable contribution. This is really a new direction giving platform that's universal for every child born in America.

[Becky Quick]

I love the idea for this. How do you then make sure that kids understand what to do with this? Because that's the question too. It seems like the easiest way to fix things. Give money to the people who need it. How do you then give them the tools to understand that? If I continue to invest in this, if I continue to put money aside, save instead of spend, this is where I wind up.

[Brad Gerstner]

The place you start is they actually need to be able to open their phone and see that they have a little skin in the game. Right. If you don't have anything and your parents don't have anything, it's hard to get excited about learning about financial literacy, stocks, et cetera. Now everybody's going to have that. Thirty states already require a semester of financial literacy, I expect. And you will hear some announcements in the months ahead about efforts at the state level financial literacy threaded in public education. Because now the teacher can say, oh, open up your phone, open up your Invest America account. Let's talk about how those stock, what it means to own a stock. Let's talk about the compounding. Let's talk about what it would do if you added another 20 bucks a month to that account. So I think it gives us a platform for literacy and education around finances that we desperately need in the country.

[Joe]

Go big or go home. For Michael, that's. I was thinking that's a lot of money. But he's, he's doing all right.

[Brad Gerstner]

I mean, Joe, think about this. We have the Giving pledge, right? I think we're one of the most. It's Giving Tuesday. We're one of the most giving countries in the history of the world. Think about Europe, where they had dynastic trusts, generations skipping trust. Everybody was devising a scheme to hold on to the money. And yet in this country, we have so many people who said, I want to give away the vast majority of my wealth during my lifetime. I think that's unique in the history of the world. But it's very difficult to give away.

[Joe]

Money at this scale by billionaires. And will Senator Warren say, wow, here's a good one, a good billionaire. That's not a leech on society or.

[Brad Gerstner]

I'm not going to go there today, Joe, it's the national day of giving. It's about a unity.

[Joe]

Let's give him some grief.

[Brad Gerstner]

And we got, we got people on both sides of the aisle who are coming together to support this. I think that's what you'll hear later today from when we're in Washington D.C. we're certainly going to be meeting with folks on both sides. It takes all of us, every family, every company, every philanthropist coming together to solve this problem. And I think we're not only bottling up hope for every one of these kids. Right. But we're aligning all these kids with the future of capitalism and the future of, of free markets, which I think is critical as we enter this age of AI.

[Becky Quick]

Again, congratulations. I am amazed that you were able to get this done. So really congratulations and to see this continuing to grow.

[Brad Gerstner]

Thank you for giving us a platform. I hope see CNBC stays involved. I think that this can be, you know, something that we. A whole new audience, right. A whole new feature we can talk to these kids about. Wouldn't have gotten done without us getting the word out there. But. But today is all about Michael and Susan. It's an extraordinary gift to the future of this country.

[Joe]

It will help if we start kids early on the benefits of free markets and capitalism 100%. I know you're not going to go. You say you're not going to talk about anything interesting, but I mean, we are at a point where 51% of our youth think that socialism is a better. We've got a mayor named Mamdani now in.

[Brad Gerstner]

That is a devastating risk to the country. Less than half of kids, people under the age of 40 have a positive view of capitalism. But as the president has said, when you're left out and left behind, when you have no skin in the game. It's Peter Thiel's famous tweet that went around over the last few weeks. When you have no ownership, it's a lot easier to want to burn the house down. But the fact of the matter is when every one of these kids opens up their phone, sees they own a little slice of Microsoft, of, of. Of Nvidia, it's a lot easier to get excited about capitalism. This is the first thing we've done in the history of the country. We're creating a private prosperity account for every child. They will all be in the game. The President's Main street agenda. This is getting all of those people on Main street folks where I'm from in rural Indiana who don't have anything, feel left out and left behind. This gets them on the side of the upside of America. We got to get everybody believing in the American dream again. And there's no reason not to. We have the most dynamic economy in the world today. But everybody needs to share in that upside. This gets them going. This gets that little Snowball going. The $250 from the Dells is just the beginning. Once that snowball goes, we know that parents and others will add to the account savers save more.

[Becky Quick]

And by the way, I didn't read the rest of the introduction when we had you here. I think most of our viewers know you're the head of altimet, Altimeter Capital. You're a big tech investment firm. You've got top holdings that include in Video, Amazon, Alphabet, OpenAI, Microsoft, lots of others. So let's talk a little bit about what you're seeing in the tech economy, in the broader economy and where things are headed because there's been a lot more volatility lately.

[Brad Gerstner]

Yeah, I happen to think that volatility is good and let me tell you why. We're coming up on the third anniversary of Chat cpt. We've come a long way fast. You know, you've seen Nvidia add almost $200 billion of revenue in the last three years. Truly extraordinary transformational phase shift super cycle going on in our economy. It added 100 basis points to GDP this year. But remember this year we had two 25% drawdowns in Nvidia. It hit 90 bucks earlier in the year on the deep sea scare. Right, Right. And so there's going to be volatility when you're early in these phase shifts. Right. That's that wall of worry, prevents the bubble that everybody's worried about. And when you look at the multiples today, take in video for example, I think it's trading at 23, 24 times fully taxed earnings on next year's numbers, 18 times on 27 numbers. That is not the stuff, stuff that bubbles are made of. Right. I think the rest of the mag 7 all trades somewhere between 25 and 30 times, maybe met is at 21 times earnings. So to me, taking a little of the gas out, having some of these, you know, conversations and debate, very healthy. And what I see out there right now is a tremendous amount of progress on the model side. But I think the diffusion, the rate at which this transforms lives, both consumer lives and enterprise, that takes time. And that's what we're seeing play out. We're seeing the debates about Nvidia versus Broadcom, Google versus OpenAI.

[Becky Quick]

Well, yes, and that's what I was going to get to. Is the new version of Gemini better than chatgpt?

[Brad Gerstner]

Terrific. It's terrific. Remember a Year ago, we were counting, you know, Google out of the equation. I've said on Twitter and otherwise, we own Google. I've said it's very difficult to pick a winner here. So you can own them all. You, you can own OpenAI and Anthropic. You can own Google and, and Microsoft. And I think at this phase, you know, you probably should do that. I think Google's done an incredible job. Remember a year ago, Satya was saying, you know, we're making Google dance. I think Sundar is making people do a little dancing today. And so that is, that's part of the competitive dynamic that I think is great for the country. It's what's going to keep us on the leading edge.

[Becky Quick]

That's great for the tech, technology spending. There are a lot of questions about what this means for the business world too, for enterprise. Yesterday, Jensen Wong was on Squawk on the street with Jim Cramer talking a little bit about that deal that they did with synopsis. And that was pretty interesting to hear how it's got to be able to be used by these big industrial companies to be able to really make the next steps. And Jensen made the point that I thought was really interesting, that 90% accuracy is okay if you're dealing with consumers. It is not okay if you're in any of these big enterprise issues.

[Brad Gerstner]

That's right. That's right. Think about it this way. The machine that builds the machine, right? That's really what he's talking about. We saw that with Tesla and Elon. Right. Elon used to talk about we can't get to where we need to get to with electric cars until we first build the machine. Right. A totally new way to manufacture cars that can drive down the costs. And that's what you see Jensen talking about, for example, in the design of chips. Right. That you really imbue the entire higher industrial economy with AI. And all of those benefits lie before us. I think we're going. We're heading into a very significant productivity boom. I've talked about the golden age of margin expansion for a lot of industrial and other companies in America that can simply do more with less. Our economy is going to see that productivity tailwind and, you know, but it's never a straight line up and to the right, Becky. And so I think for people who are watching it, you know, you've got to anticipate we're going to have volatility. I remember early in the Internet super cycle, Google would be up 5 or 10% a day. Early in the, remember When Facebook went public. Right. And then it broke 7 or broke $20 a share. Right. It broke issuance because everybody was worried. Could they possibly monetize on these mobile devices? When you're early in these super cycles, there's a lot of questions and that's where we are today.

[Becky Quick]

You're talking about the winners that came out of that. There was a lot of film volatility in pets.com to for sure webvan. And by the way, those companies went bust.

[Brad Gerstner]

And there are going to be companies in this cycle that go bust. There are a thousand companies in Silicon Valley valued over a billion dollars that are trying to raise money. It's not going to be equally easy for all of them. Right. But I think that's part of the process of creative destruction. Right. It's okay that you know that some companies aren't going to make it.

[Becky Quick]

We talked earlier this morning about some comments from Masasan who said that he didn't want to sell his entire Nvidia stake, but he had to in order to be able to put it into open air. You've got bids bets on both of those companies?

[Brad Gerstner]

Yes.

[Becky Quick]

What do you think about that?

[Brad Gerstner]

I wish my bet in OpenAI was as big as masses, but you know.

[Becky Quick]

Sacrifice your Nvidia for it.

[Brad Gerstner]

No, like I said, like I said, Nvidia has been an extraordinary winner. We invested in a video In December of 22, right after we saw Chachi beat the stocks up over 10, 10 times 10x over that period of time as the revenue went from roughly $30 billion a year to over $200 billion a year. And they just told us that we should expect a run rate by the end of next year of $100 billion. And this is at the same time that Broadcom is doing extraordinarily well. What Hock Tan has done partnering with Google to build out TPU 7 is extraordinary. That's going to force Nvidia to be even better. So I think we've seen a lot of a lot of winners and you can see from the logos that Altimeter owns. Our choice has been really to own a lot of the best names that are benefiting from the supercycle.

[Becky Quick]

We also have talked a lot about Bitcoin this morning and the volatility you've seen there. Maybe volatility is not a surprise, but when you layer on leverage on top of that, as strategy has done, does raise a lot of questions. Do you play in leverage in your holdings?

[Brad Gerstner]

No, we run very, very limited. As a hedge fund, we run very limited Leverage, we certainly would not be levered Bitcoin and in fact I've commented on Twitter about it with respect to microstrategy, it works incredibly well on the way up. But I said I didn't understand the strategy. And when I can't understand something that somebody explains, you know, time after time after time, that's a warning sign to me. And I think you're seeing kind of some of the unlevering that is occurring. Bitcoin this year is down 10%. Gold is up 50 or 60%. I, I hope we can dispel the myth. Right. One is a risk asset and one is not. Right. And so it doesn't mean that you shouldn't own bitcoin. I own some bitcoin and I might, might be buying a little bit more as it comes down. But it is a speculative asset that over time will have more and more utility. But we have to be honest, with.

[Joe]

What it is today, it will have more utility. Will it have more store of value features than, than you just discounted?

[Brad Gerstner]

You know, it's a great question, Joe. I think as it has more utility, as it's used more in the financial system, as it becomes a part of more and more endowments and sovereign wealth funds. Right. That in and of itself becomes a.

[Joe]

Self fulfilling philosophical thesis of why it should hold value. Because of the 21 million and because of the unbanked that, that are living in countries where with, you know, 20% inflation, they work their ass off and they put it in a bank and it's worth half as much in a year. They put it in bitcoin, it stays stable. That. Why isn't that working right now to hold prices higher?

[Brad Gerstner]

Well, I mean I think that what you've seen over the course of last year is a rush, a speculative rush into bitcoin.

[Joe]

Yeah.

[Brad Gerstner]

As we got the genius, the clarity. Yes. Again, of course it's reset. I don't think. You know, I think again, I think these are more likely approaching buying opportunities than selling opportunity.

[Joe]

I do something at 87,000 because I saw someone earlier say that it could go to 60 and that sounds almost like the end of the world. But I mean, Bitcoin was $3,000 a couple of years.

[Brad Gerstner]

I will stipulate this. It's all possible. It is a risk asset. You should treat it appropriately in your portfolio because if microstrategy is forced, forced to deliver.

[Joe]

Yeah.

[Brad Gerstner]

If there is an unwind there, it could get really messy in the short run. Which is probably why I would be waiting to see How.

[Joe]

This doesn't go to zero, does it?

[Brad Gerstner]

No, I mean, I think something the black, the black swan, right, is that somebody hacks, you know, crypto, whether it's quantum or otherwise. There was some news out overnight about, you know, anthropic running some vulnerability tests on the blockchain. Those things I think will be important if this is to have durability.

[Becky Quick]

I mean, the only thing I will say is nothing would ever surprise me. Did you ever think you would see oil go negative?

[Brad Gerstner]

Like someone saying, remember that March of 21?

[Becky Quick]

Right. Paying. Yeah, paying you to take.

[Joe]

I couldn't buy any. Yeah, got a big backyard. I could have tanks back there, Brad.

[Brad Gerstner]

No doubt, no doubt. But you know, you know, just back to, just back to the trade. The innovation that I see going on in Silicon Valley and the utilization of these models that are going on. This is, I've said here before, it's bigger than the Internet itself. It doesn't mean that you're not going to have zones of disillusionment where people get worried. And I think as we head into 2026, the big question is this, are the revenues showing up? I'm not worried about compute. Nvidia is basically, you know, like, we have analysts in Asia this week. I'll tell you the biggest challenge for Nvidia next year is going to be delivering enough but Blackwell's and Rubens that their customers want. I think the same thing with Broadcom. The problem is going to be capacity. They have tremendous demand. However, if OpenAI falls short of revenue next year, if Anthropic falls short of revenue next year, if the Mag 7 reports AI revenues that are less than people expect, I think that would be the moment that we have a challenge to, you know, we really have that zone of disillusionment.

[Becky Quick]

Okay, so then less than two weeks ago we were thinking that the Fed might not cut rates, was less likely than the not to cut rates in December and all of a sudden all of these risk assets panicked because the theory was if we don't have easy money, we can't continue the games the way they've been set up. We cannot continue these, these business models because it doesn't work.

[Brad Gerstner]

If you don't have the predicate of that argument. Argument. I don't think that's what was happening in risk markets. I think that things had gone up a lot and we were in nosebleed territory on some multiples and they've given back 5, 10%. I already talked to you about earlier.

[Becky Quick]

So you don't think it matters if the Fed does not cut rates any.

[Brad Gerstner]

I do. I actually think what the Fed is doing matters tremendously. So let's talk about two things. Number one, earlier this week they ended quantitative tightening, right. Which is significant. We've let three and a half billion roll or three and a half trillion roll off the federal balance sheet. That means when those bonds matured, they were not back in the market buying another one. Now they are. That will have a positive impact.

[Becky Quick]

But we're still dealing with a much bigger balance sheet than we were, of course.

[Brad Gerstner]

And I suspect that if you have, you know, the front runner, good friend Kevin Hassett, who, if he's elected Fed chair, Right. I think his view, these politics, publicly stated, well known, is he thinks the Fed should have a smaller balance sheet, a smaller role and lower rates and let the economy really grow. And so I think that would be a positive for markets.

[Joe]

Right.

[Brad Gerstner]

I do think rates are going lower next year. Why do I think rates are going lower?

[Becky Quick]

Because being Kevin being named Kevin Hassett being named positive for the markets.

[Brad Gerstner]

I think fundamentally though, you know, he's going to have to follow what happens in the markets. Part of the reason rates are going to go lower is because inflation, inflation is under control. Part of the reason rates are going to go lower is because labor and unemployment is going up. That is the role of the Fed. We're in restrictive territory. The Fed has been slow to roll off on these rates. And I think now we have.

[Becky Quick]

This would absolutely be an independent Fed that Not, not one that's being run by the White House because they want to see cheaper rates, but one that is being run by somebody who says, no, I'm going to follow what the Fed's two mandates are.

[Brad Gerstner]

Listening. I think it's grossly unfair to Kevin Hassett. No, I said to say that, to say that he would, you know, simply be a puppet of the President.

[Becky Quick]

The reason that people say it, because the President would like someone who thinks like he does on these.

[Brad Gerstner]

Listen, the President has the prerogative, just like Biden did, in nominate, you know, in picking the Fed chair. And so of course, a president's going to pick somebody who they think is generally aligned with their worldview. Kevin's worldview, which is well documented on this channel and others over the last decade, he is a massively pro growth, pro business, you know, economist. And he believes that if you allow, if you get out of the way of business and you let business do what it does in competitive markets, compete, that they will be. That will lead to massive benefits for the economy. So I think that, I don't think he would ignore it. I think if we were in June of 21st and he saw inflation so skyrocketing, I think he would have been raising rates way faster than Chairman Powell did in June of 21.

[Joe]

So just back to I, just for a second. So. So we're building it out. We're in the build out phase of companies like Nvidia. They're probably not overvalued when the payoff period finally comes where everybody's got their models and they're all built. And now businesses have to actually use AI to increase productivity or to do something. We've seen the, the benefits of the Internet. No one could have predicted it. Will there be benefits commensurate with that? And will 95, will that mean 95% of the people are on UBI and in Universal Basic Income? We got nothing to do. And for it to be that powerful, none of us are going to be working.

[Brad Gerstner]

Disagree vehemently with the second half of that. But let me start with the first. Okay, the first is, is the impact of AI going to be big and is it already showing up? I would stipulate that it's already showing up. That's why you're seeing these growth rates in these companies of 20 some percent. But they're only adding to their personnel at 1 or 2% because they're getting more efficient from AI today, dramatically more efficient. They're investing in things because they're working today at Metta, at Google, at Amazon. I will tell you this, you couldn't take chatbots away from my employees today or anthropic away from my employees employees, they have an agent on their desktop that is working for them all day long doing deep research on stocks. So the companies that adopt it the fastest. And remember in 2001, not everybody got on board the Internet train either. But the companies that did benefited tremendously. And so that's what I mean by the rate of diffusion on the second half of this. Joe, I am firmly in the camp and we have hundreds of years of economic history. I know that technical innovation, different, this expands the pie different. This expands the pie for America. We will have dislocation. There will be people who lose their jobs. Drivers will be replaced by autonomy. And we need to deal with that as a society. But we need to wait until the problems come. We can't preempt this and shut down AI because we're worried for everything.

[Becky Quick]

We've loved it. We appreciate your time. Brad Gerstner that does it for us today.

[Producer Cameron Costa]

Keys will be next.

[Joe Kernen]

Coming up, the largest family owned distillery in America, Heaven Hill. It's been serving up spirits through nearly a century of consumer and policy changes. We talked to chairman Max Shapira about his business and of course, his bourbon.

[Max Shapira]

Whenever we say bourbon, we always say Kentucky bourbon.

[Joe]

Okay, now why basketball and horses?

[Max Shapira]

Basketball is a big sport as well.

[Joe Kernen]

Yes, Squawkpod will be right back.

[Podcast Announcer]

And now a next level moment from ATT Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device coverage not available everywhere. Learn [e-mail] 5G Network.

[Brad Gerstner]

Thanks to TikTok ads, I was able to open up a business with my childhood friend and even hire employees.

[Becky Quick]

My name is Julian and I am.

[Brad Gerstner]

One of the founders of the Snacks Lab. We are an exotic snack company.

[Becky Quick]

We import snacks from all over the world.

[Brad Gerstner]

We had over $100,000 in sales from our TikTok ads in the first month. So our orders went from five a day to over 250 orders a day. You definitely have to use TikTok ads.

[Producer Cameron Costa]

TikTok for business is helping owners like.

[Brad Gerstner]

You reach new customers every day. Head head over to get started.TikTok.com TikTokapps.

[Podcast Announcer]

Buy the dip with CNBC Pro's best.

[Brad Gerstner]

Deal of the year Market moving news and interviews across three global live streams.

[Podcast Announcer]

Subscriber only content from Wall street pros like Josh Brown.

[Brad Gerstner]

If you love the stock market as much as I do, you're gonna love the best stocks in the market list.

[Podcast Announcer]

Plus exclusive live events.

[Max Shapira]

This is my first time at the.

[Brad Gerstner]

Stock exchange and it's been awesome.

[Max Shapira]

Something to be on the floor.

[Brad Gerstner]

I just can't believe I'm here. Go pro with the best deal of.

[Podcast Announcer]

The [e-mail] ProBlack Friday.

[Brad Gerstner]

Terms and restrictions apply.

[Joe Kernen]

You're listening to Squawk Pod from cnbc. Here's Becky Quick.

[Becky Quick]

All right, welcome back, everybody. It's been a tough year for distillers. Everything from a post pandemic pullback in liquor consumption to tariff disruption in the global markets. And joining us right now is Max Shapiro. He is executive chairman of Heaven Hill that is the largest family owned and operated distillery in America. And Max, it's a pleasure to have you here today.

[Max Shapira]

Well, it's nice to be here. Thank you for having me.

[Becky Quick]

So you're in Kentucky, and we were just talking off camera about why is Kentucky the place where all bourbon is born?

[Max Shapira]

That was the original 13 colonies. After those 13 colonies, Kentucky was the next on the list to be part of the Union. People moved to Kentucky, they were farmers, they grew up grain. It turned that grain, instead of taking it in the form of grain to market, turn it into whiskey. And they had the Ohio river to take it down to be enjoyed by people in Memphis, New Orleans and other places. So that's really sort of a very quick answer as to why it all started, historically speaking.

[Becky Quick]

And it's stuck and it stayed. And.

[Max Shapira]

And today, 95% of all the bourbon is made is Kentucky. So as far as far as we're concerned, whenever we say bourbon, we always say Kentucky bourbon.

[Joe]

Okay, now, why basketball and horses are.

[Max Shapira]

Big sport as well.

[Joe]

Yes. Good players indeed. And fast horses indeed.

[Max Shapira]

Yes.

[Becky Quick]

Well, let's talk about what's happening in the bourbon industry right now or in the liquor industry writ large. We have seen a pullback in consumption. You've lived through a lot of these things. What do you think is happening right now?

[Max Shapira]

Well, we're on the cusp of celebrating our 90th anniversary in a week or so. So we've seen this all over the years. And everybody thinks this is so unusual, and it is a bit unusual. And I can't deny that there's a number of headwinds. But the facts of the matter are over the course of the time that our company has been in business 90 years, we've seen this happen in so many occasions. Whether it's pullback and pullbacks, growth, all the things that are happening today have happened over the course of the time that we've been in business. And we've. We always say we've seen it all in a multiplicity of different time frames.

[Becky Quick]

What is happening, though, is this a consumer that bought a lot of this during the pandemic and is now drinking less, or do you think they're still living off the stocks that they bought during four or five years ago?

[Max Shapira]

Well, the consumer always is changing. We saw this big changes where they weren't drinking as much bourbon in the period from about 1960 for a couple of decades. Then we've seen the great bourbon renaissance. And today, though, we see the consumer still enjoying bourbon. We think one of the issues that, that the country or that the individuals face today though, is the fact that they are really strapped for funds. Kentucky bourbon and all distilled spirits are discretionary expenditure and those discretionary funds are being squeezed, it's squeezed mightily by almost all consumers. That's had a big effect. I think the most important thing though is the fact that Covid has a leftover effect. You have consumers today who are used to staying at home. You've got younger consumers who are getting all their news and sociability over the Internet, over their phones.

[Becky Quick]

So they're not the bars drinking socially.

[Max Shapira]

And so they're not going out. I predict that over the course of the years ahead, it's the further we get away from COVID and the more that becomes a really distant memory that you're going to see a re socialization of people wanting to go out, wanting to be with their friends, wanting to celebrate, whether it's with a colleague or with a family member or whatever, a significant event. And you're going to see a whole lot of turnaround in this.

[Becky Quick]

We also have some other headwinds, as you mentioned, the tariffs that are out there and just the idea that the bourbon industry has routinely been targeted over the years, thanks in part to reformers. Senate Majority Leader Mitch McConnell. If another nation wanted to put some political pressure, they would target bourbon and say we're not going to take bourbon or we're going to put some excess tariffs here so that you all feel the pain politically. Is that still happening?

[Max Shapira]

That's still happening to some extent. But frankly, the tariffs have been a relatively small part of what's happening today. The European Union, United Kingdom have had no increases in tariffs during all the recent turmoil over the implementation implementation of tariffs. The biggest, the biggest problem that we've had has been in Canada where not only there was a large tariff, which I believe is still has now been removed, but they took all of the products off the shelves and effect prohibition came back in Canada overnight to us.

[Becky Quick]

Has that changed? Are Canadians more likely to buy Kentucky bourbon?

[Max Shapira]

Well, we don't know that because at this point the bourbon and other American.

[Brad Gerstner]

Still, it's still shelves off the shelves.

[Becky Quick]

So what does that mean for your bottom line? How much were you selling to?

[Max Shapira]

Well, that was a relatively small market. Again, the preponderance of the American whiskey business, the preponderance of bourbon is here in the United States.

[Joe]

Young people don't drink bourbon, do they? It's cannabis an issue then? I'm thinking if it's going to be. If we're going to go and start socializing again. You're not going to be. Want to be like wasted. You can't even talk when you're with this. As powerful as the weed is these days, that's not. That's not social.

[Max Shapira]

Well, the interesting thing is, Joe, is that the fact that consumers today are still young and still developing their taste styles. We talk about the generation Z. Nearly half of Generation Z. Is it even of legal drinking age, but yet we're ready to throw it. Okay.

[Joe]

Is it okay to target them next? Is that.

[Becky Quick]

What are you doing?

[Max Shapira]

No, no, no. They're not even legal drinking aids.

[Joe]

But once they are, can you. Can you go after young drinkers with. I guess you can with ads and things like that. I mean, drink in moderation, whatever. Because you like the taste today.

[Max Shapira]

Of course. Course. We have so many different ways of speaking to consumers, and we can target consumers across a wide spectrum. And one of these days, we'll be able to send a message with using a app directly to you. Directly to you as you walk into a store.

[Becky Quick]

Advertise on social media.

[Max Shapira]

Absolutely. There's so many different ways of reaching consumers today, whether it's in visitor centers, face to face. We have visitor centers in Kentucky. We will bring through about 250,000 people a year to enjoy and hear the story of bourbon. And those are the kinds of stories that resonate with the young consumer today. They're looking for something unusual, different, out of the ordinary that have transparency and have a great story etched in history.

[Joe]

I do see some ads with people out and they're having fun. You know, they got a couple of beautiful ice cubes with some. A dark liquid. And so I think you. In my view, the older you get, the hangovers start really hurt more than they used to.

[Brad Gerstner]

Right.

[Joe]

So you're going to lose the old guy. The old. They're going to stop. You can't drink when you're in your tixis like you used to be able to.

[Brad Gerstner]

You just can't.

[Joe]

So you're going to need to always be marketing to the key demo, which is 30 years old, 25 to 40, something like that.

[Max Shapira]

We're always looking to pivot to new consumers.

[Joe]

You must every.

[Max Shapira]

Yeah, every day of the week.

[Joe]

Yeah. Because I'm not going to have six of those at night. Just not Michael, none at lunch. I'm not going to have any, to be honest with you. I'm like my fingers up in the air with some chardonnay, which I know is lame, but that's where I am right now. I'm sorry I'm not going to be your guy.

[Max Shapira]

I. If you came down to Kentucky, I might start. Oh, great.

[Joe]

That's a good idea.

[Max Shapira]

I will guarantee you.

[Joe]

You know what time my alarm goes off now? 3:30.

[Max Shapira]

I'll make you a drink and you'll say, okay, this is the best.

[Joe]

This is good. All right. And I want the first six go down. Pretty smooth. No, I don't know.

[Max Shapira]

It'll be great.

[Becky Quick]

Okay, Max, thanks a lot for coming in.

[Max Shapira]

Nice to meet you.

[Joe Kernen]

That's the podcast for today. Thank you for listening. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin weekday mornings on CNBC for three full hours, starting bright and early at 6, 6am Eastern. To get the best of our TV show right into your ears. Follow Squawk Pod wherever you get your podcasts. We'll meet you right back here tomorrow. Have a great day.

[Producer Cameron Costa]

We are clear. Thanks, guys.

[Brad Gerstner]

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