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[00:00]
Schwab Announcer
Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests and no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more@schwab.com trading EVER check different weather
[00:29]
Julia Boorstin
apps and get different forecasts? That's kind of what cloud transformation can feel like. Different priorities, different technologies, different opinions. That's why you need CDW's expert guidance and support every step of the way because your cloud strategy deserves clearer skies. And when your team feels calm, cool and cloud protected, that's when amazing things happen. We configure, optimize and deliver the tech that runs business. CDW make amazing happen.
[00:58]
Joe Kernen
Bring in show music please.
[01:02]
Julia Boorstin
Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, can we blame AI for everything? The US economy unexpectedly lost 23,000 jobs in July, with a labor participation rate the lowest in 5 years.
[01:17]
Keith Lansford
Buckle up on this one. Minus minus 23,000 on non farm payrolls. I can hear the bond yields from
[01:26]
Julia Boorstin
falling right now, taxing AI companies that cut jobs to create a new era. Works Progress Administration Congressman Greg Kazar of Texas joins us.
[01:37]
Congressman Greg Kazar
I'm not talking about just stopping all of AI in its tracks. I'm saying we should lead in AI, but that doesn't mean we have to be in a country with large amounts
[01:47]
Julia Boorstin
of unemployment and AI created viruses. Haven't we been through enough? A new study on just how willing artificial intelligence is to create biological weapons. MIT scientist Kevin Esvelt.
[02:01]
Kevin Esvelt
There is no reason to think that future researchers cannot and will not attempt the same thing for viruses that infect other organisms. Probably not humans at first. That would be too obvious.
[02:12]
Julia Boorstin
Plus the rest of today's news, the clogged strait of Hormuz, Airbnb's Rise and OpenAI's new smart speaker will be shaped like a donut.
[02:22]
Joe Kernen
Spherical, a color, a twist, a long darn claw, a bear claw. Novelty shapes like hearts, stars, seasonal outlines
[02:32]
Julia Boorstin
it's Friday, August 7, 2026. Squawkpod begins right now.
[02:37]
Joe Kernen
Standby Joe in 3, 2, 1. His mic Q good morning and welcome to Squawkbox here on cnbc live from the NASDAQ market site in Times Square. I can't help it. Try to not smile, but it's impossible. I'm Joe Kernan along with Melissa Lee. There goes again. Becky and Andrew are off today. Why does that happen?
[03:01]
Melissa Lee
What? When certain people are gone. You're smiling.
[03:04]
Joe Kernen
Well now you're actually on with. No, I was doing it in a positive way because you're here.
[03:10]
Melissa Lee
Thank you.
[03:11]
Joe Kernen
You know that I'm happy to be here. I think it is it years of this that we've shared together. Is that what it is?
[03:17]
Melissa Lee
It feels like it.
[03:21]
Joe Kernen
And I was talking about you. You have people on all the time on your multiple shows. Not all of them at the beginning of the year were at 7,700 or 7,800 or 8,000. No, somewhere in the sixes. A lot of them my favorites because they're sell side people. They don't really. They really aren't able to make very good calls and they don't even try.
[03:44]
Melissa Lee
What was your call at the beginning of the year? A lot has changed during the nobody could have guessed in January or February.
[03:50]
Joe Kernen
I don't. You know luckily we just get to second guess other people.
[03:53]
Melissa Lee
Exactly.
[03:54]
Joe Kernen
Which is good. However, I don't know if I would just take where the market closed and say that's my target until it goes the SP goes up 100 and then I raise my target. Well, you have to feel for.
[04:06]
Melissa Lee
My point is you have to feel for the.
[04:08]
Joe Kernen
They make money. They tell their poor retail sales force that they pretend they actually know something they don't.
[04:13]
Melissa Lee
It's a no win job.
[04:16]
Joe Kernen
You know who does know are buy side people because they look right at their what they have and they go oh God, why did I buy that? They know they bought it a year and a half ago. They know they bought something sick like some of your traders. I think they feel because they're able to change they actually it's not according to I use this term a lot and luxury beliefs. Everybody has a luxury belief that doesn't cost money. You can be negative on bitcoin from all the way up and you can still say and it doesn't cost you a penny to be negative. Then it finally comes down and you start pretending that you call it coming down. Which predictions you want from me. Well, I think it has more to do with AI. I think it has to do with deregulation. I think it has to do with the big beautiful bill and expensing. I think it has to do with this is heretical. But. But onshoring and some of the. There have been some realization re industrialization and obviously AI on top of. On top of all those things huge. And I think that and I said it about a week and a half ago that when we had had the, the pullback in AI and we started to okay, this is the beginning of the unraveling. A lot of people thought that hits my after it comes back a little and we're at new highs again, that's the hardest time to buy. The easiest thing to do at that point, that's what all the sell side people do would be, you know, I think we need and to buy things that have been breaking out the new highs is harder.
[05:53]
Melissa Lee
That's true. I mean although we had sat on the S&P 500 at 7,500 for about 11 weeks.
[05:59]
Joe Kernen
Yeah.
[05:59]
Melissa Lee
I mean it was a long time just churning around like at the index level with a lot of the sectors and it was turning around underneath.
[06:08]
Joe Kernen
But it never a long time to sort of a lot of people are at 70, 100. It never really threatened to go back. It looked like it could a couple of times, but it never did. Do you want to continue? It's up to you.
[06:21]
Melissa Lee
Thanks for monitoring developments out of the Middle east alongside the price of crude oil. Iranian State News publishing a draft plan for the Strait of Hormuz that would ban US and Israeli ships from transiting the waterway. And the draft also says other nations that harmed Iran would not be allowed to sail through the strait until they paid compensation. Iran State News said the plan is under review by a parliamentary committee. President Trump said yesterday he thinks the Iran war will end, in his words, pretty soon. Iran's chief negotiator accusing the president of staging what he called theater diplomacy.
[06:53]
Joe Kernen
Yeah, got a lot of factions over there and some of them are hardliners. Do any of them really care about the Iranian people?
[07:01]
Melissa Lee
No.
[07:03]
Joe Kernen
Airbnb shares jumping on better than expected unless they consider the Revolutionary Guard.
[07:09]
Melissa Lee
Right.
[07:09]
Joe Kernen
The Iranian people, and I think they do. Expecting second quarter results, the company's current quarter sales forecasts also topped estimates. Airbnb raised its full year projections for both revenue growth and adjusted EBITDA margins. And in an interview with cnbc, CEO Brian Chesky credited AI for the company's acceleration. I think a year ago it was really a question, is AI good for Airbnb or is AI bad for Airbnb? The verdict was out last year and I think now it's safe to say AI is the best thing to have happen to Airbnb. I think we're becoming an AI native company and I think that is probably the number one explanation for our results. Trying to figure out exactly how you'd Use it. Do you understand it? I guess I could Airbnb how you would use AI to streamline everything at Airbnb, I'm going to think about. Regarding AI and staffing at Airbnb. Chesky said the company's philosophy is not to employ fewer people, but to use the technology to make people more productive. And I say this because we have an interview coming up with a former chief information officer of Lululemon who wrote a book about, on the one hand, AI. There is a lot of promise, but there's a lot of companies that are already saying, oh, yeah, it's amazing. When it's really. They're just saying that, saying it's real. And there are other kinds, she points out. There are other places that, yeah, you can use it, but you need a lot of human supervision and, you know, employing it the right way and making sure that it's functioning properly. You got to roll your sleeves up and really work hard for the payoff that hopefully is going to take a
[08:50]
Melissa Lee
big smile, I think, for AI. I mean, originally the argument was that AI would displace Airbnb. It would displ. The online travel platforms like an Expedia and Booking, for instance, both, by the way, had strong earnings. So all of them had strong earnings. But the argument that you don't need them anymore. Right. It disintermediates that those sorts of platforms. But AI agents can't execute. That's, you know, you can't say, you can say find me the. Find me the itinerary. But how do you actually buy.
[09:18]
Joe Kernen
Okay, so there would be a bunch of people that are ready to rent out their houses and it'd be somewhere other than Airbnb. Just. You'd find it through AI and it,
[09:28]
Melissa Lee
I don't know, it hasn't. I mean, to, to my knowledge. And it could be happening. I haven't seen that yet. And as a consumer, do you want to just deal directly with the homeowner? Not always. Sometimes you want that insurance, you want
[09:41]
Joe Kernen
the vetting process and all these things in five years, I don't know, could be totally different and much better. And it could. Could disremediate everyone.
[09:52]
Melissa Lee
Facebook parent Meta ordered to pay more than half a billion dollars into a mental health fund for teens in New Mexico after a state court found the company harmed children's well being. A judge finding the social media giant had created a public nuisance. He ordered Meta to make changes to protect younger users, including monthly limits on use of Facebook and Instagram and stricter controls on adult Contact with minors online. Meta said it will appeal the ruling. It's preparing for a case in California next week over claims by dozens of states the company designed its products to addict children.
[10:26]
Joe Kernen
Got some details on Open Air's upcoming consumer smart speaker like product which is designed to challenge Amazon and Alphabet. Now according to Bloomberg, the device will look something like a doughnut and be about the size of a hockey puck. And I assume, Melissa, it would be the Taurus type ring donut that they're talking about, not one.
[10:50]
Melissa Lee
As opposed to like a spherical, a
[10:52]
Joe Kernen
color, a twist, a long john, a bear claw, novelty shapes like hearts, stars, seasonal outlines. See I'm using AI that talk about every type of donut. In this case I think if you say donut like it's self explanatory like a bagel. Well that doesn't really have the inside thing. What are those little things called? The munchkins don't really come out of the bagel. It's sort of just an indentation. This would be and I hope it doesn't, these donuts don't taste like a hockey puck, allowing it to easily be carried from room to room. You could carry it like that through the hole. The report says the device will function like an AI enabled computer aimed at helping users fulfill daily tasks. Release a slated for next year and it will be expensive, likely above $300 compares to Amazon's entry level smart speaker device which is about $40 Google's which runs about $100. So do you have any of that? Do you have those?
[11:56]
Melissa Lee
I don't want any device listening to me.
[11:59]
Joe Kernen
It's like who? I'm worried enough about this. Especially when you know, you know I'm talking about something and then, then remedies for foot fungus comes up on here.
[12:09]
Melissa Lee
Why would that happen?
[12:10]
Joe Kernen
It's like, wow, that's why it's called a smurfroot. Cheese will be next.
[12:18]
Julia Boorstin
Coming up on Squawk Pod, how Congress wants to protect American jobs from AI. And yeah, there are politics involved. Chair of the House Progressive Caucus, Texas Rep. Greg Kazar joins us.
[12:29]
Congressman Greg Kazar
There are productive and positive uses of AI. And our bill in fact doesn't tax those things like medical research. We want AI development that's going to help us cure cancer.
[12:44]
Schwab Announcer
Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests and no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more@schwab.com trading what made you confident
[13:13]
Julia Boorstin
that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
[13:30]
Melissa Lee
Life is short and you just gotta think big to accomplish big things.
[13:34]
Julia Boorstin
JULIA Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday.
[13:40]
Congressman Greg Kazar
Wherever you get your podcasts,
[13:44]
Julia Boorstin
you're listening to Squawk Pod. Here's Joe Kernan.
[13:49]
Joe Kernen
New legislation in the House is pushing for a tax on AI to help save workers from what could be mass unemployment. That's the fear, anyway. Joining us now with the details, Congressman Greg Kazar. He chairs the Progressive Caucus and is a co author of the AI Tax and Work Protection Act. And Congressman, it's good to have you on. We're all trying to grapple with, you know, with with how to deal with these things. And as usual, both sides of the aisles probably view it very differently on what the most effective way is in this case. You think it's a tax on AI to, to help retrain workers that could lose their jobs. Is that the rationale?
[14:33]
Congressman Greg Kazar
Good morning. It's good to be here. And we need a tax on A I to 1, disincentivize the current model where these AI companies and big corporations essentially get a tax break for automating your job. And second, we should take that tax revenue to be able to create millions of new good American jobs. And basically, we've structured this tax so that it's very low right now when we aren't facing a mass unemployment crisis. But then would scale up if AI does start putting millions of people out of work. We could scale that tax up to make sure that the unemployment rate does not skyrocket. That's what the CEOs have been warning us about. That's how they actually, in many ways are able to have these high valuations as they are saying they want to put people out of work. And I think that Americans want to work, they want to contribute to their communities. And this bill says we're not going to let a few billionaires become trillionaires while putting us out of work and and us not do anything about it.
[15:39]
Joe Kernen
But that, I think, is just a fundamental, fundamentally different way of viewing what what I could mean to society, I guess, in the future. It, I was just, it made me think when we had, I don't know, agriculture probably employed 100 times the, the number of people it employs now. And we know that it's, you know, we have more food than we've ever had, so, or the auto industry. You know, prior to that we had, you know, we had buggies and horses. If at the time something like this had been done to just maintain the status quo and to make it impossible to move forward with the new stuff, do you think that would have been a positive back, back then to really sort of handicap the, the. You're, you're ahead of the Progressive caucus. This sounds like you should be ahead of the regressive caucus, Congressman.
[16:42]
Congressman Greg Kazar
Well, Joe, as you and I talked about last time, there are productive and positive uses of AI, and our bill, in fact, doesn't tax those things like medical research. We want AI development that's going to help us cure cancer. We want AI that's going to help us make our better and stronger. But we also know that these AI CEOs are out there talking about, quote, the end of work. We know Elon Musk has said people won't be needed for, quote, most things. That's not the kind of society we want where a few of these Silicon Valley billionaires say, well, we will have, you know, Great Depression levels of unemployment, but we'll make that more tolerable with a little bit of universal basic income. That's not what most people want. Whether you're progressive like me or conservative or independent or whatever. We want to make sure we have positive uses of AI, but should not have mass unemployment. So that's why we've released this bill, the AI Tax and Work Protection act, that keeps this tax rate very low right now, but goes upward if there is mass unemployment. And of course, nobody can tell you four years from now exactly what the unemployment rate might be. Four years ago, we didn't even have chat. So we need a plan to make sure that we are prepared. Because Americans are asking us, what is Congress's plan If what the CEOs are saying is going to happen. We saw, for example, block lay off 40% of its workforce, citing AI. If that is going to happen, then what's our plan? And this is a plan we can put in place to make sure we don't have to have mass unemployment in exchange for technological progress.
[18:33]
Joe Kernen
We're back to the fundamental discussion about whether AI is going to, long term be a, a boon to society or not because if you tax it, you'll get less of it. And if we tax it in, China doesn't, obviously we're going to be trailing China eventually. It's a tough one because in certain ways I agree with you that this is different than, than some of the transformations that we saw in the past. I mean, you would have to say not everyone should be in agriculture right now. I mean, we were an agrarian country, you know, centuries ago, and we didn't want to stay like that. I don't think. Congressman, is there nothing analogous to what we're talking about now with this? This is revolutionary. And I don't know whether you can, if you want to cherry pick the good things that you were talking about in terms of medicine and efficiency. I don't know how you can have those, you know, develop as quickly as we would like and then stop everything else that might be disruptive to certain sectors of employment. I don't see how you can really do it that way.
[19:44]
Congressman Greg Kazar
Well, that's exactly the question, Joe, that we've been wrestling with here. How can we make sure we develop the good uses of AI, be a leader in the world and technology, but not pay for it with mass unemployment? And when I look around the country, I see all sorts of great work that is worth doing where we don't have folks in those jobs. We have a shortage of teachers, we've got a shortage of firefighters. We've got a shortage of people to care for our elderly. We know there's a lot of people that aren't able to go to work because they don't have affordable child care, or they're not able to go to work because they've got to care for an agent, parents. And so in the age of AI, if we suddenly start losing a significant number of workers and work in a structural way, we can actually have a modest tax on AI use that funding to hire millions of workers. In fact, that's why my bill creates what we call the Work Protection Agency. Just like FDR created the Works Progress Administration and built things like the Hoover dam and the LaGuardia Airport, which actually improved our economy and our country and all of our lives. And Joe, I'm not talking about just stopping all of AI in its tracks. I'm saying we should lead in AI but that doesn't mean we have to be in a country with large amounts of unemployment. Since I was last on your show here in my own district where Oracle is headquartered, they laid off 21,000 people citing AI and I just don't think, and I think that conservatives don't think either that the cost of technological progress should be what we heard from the anthropic CEO, which is Great Depression levels of unemployment. We can make sure we have a fully employed America and lead the world in AI.
[21:32]
Joe Kernen
I was going to ask you about some of the things happening in the Democratic Party as a caucus of the check. I guess we're going to lose a lot of jobs in terms of law enforcement when there's no police left. When we get rid of all that and people employed in prisons.
[21:51]
Keith Lansford
We don't.
[21:51]
Joe Kernen
Let's talk about that. Let's talk about that next time. Some of the proposals we're seeing,
[21:57]
Schwab Announcer
look,
[21:57]
Congressman Greg Kazar
what I think is really important.
[21:59]
Joe Kernen
Talk about job losses. When we shut down all the police departments in prisons and everything else, there's going to be heck. What are all those cops going to do?
[22:08]
Congressman Greg Kazar
We got Joe, come on. You know, look, I came to be on cdc. You're a Texas. That question on fox. What we'll talk about, though, that is so important.
[22:16]
Joe Kernen
Texas Democrat. I don't think. I don't think that's to say I think you're probably looking at some of the stuff we're hearing from some of these candidates and go, whoa, I can't sign on to that. But let's talk, let's talk next time and come back and you're, you know, we'll pass it around. We're out of time, though. I know I introduced that Sounds good.
[22:34]
Congressman Greg Kazar
You can talk AI safety next time we're on because that's a real threat. Thank you, John.
[22:37]
Joe Kernen
All right. All right. Thank you, Congressman.
[22:41]
Julia Boorstin
Next, the surprisingly weak July jobs report and lab made viruses. MIT scientist Kevin Esvelt on the latest breakthrough to make germs.
[22:51]
Kevin Esvelt
This could help replace antibiotics. That's why they did it. It's great work in that regard. The worry is downstream.
[22:57]
Julia Boorstin
What will they think of next?
[22:59]
Joe Kernen
Is it life?
[23:00]
Kevin Esvelt
Kevin we could never agree whether viruses are life or not.
[23:03]
Julia Boorstin
Squawkpod will be right back.
[23:08]
Keith Lansford
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less. Projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update. Wherever you get your podcasts.
[23:37]
Joe Kernen
What made you confident that you could
[23:39]
Julia Boorstin
do something that hadn't been done before? I have no fear of failure, Trailblazing
[23:44]
Joe Kernen
women, changing the game.
[23:45]
Julia Boorstin
One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
[23:55]
Melissa Lee
Life is short and you just gotta think big to accomplish big things.
[23:59]
Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back. This is SquawkPod from CNBC.
[24:14]
Melissa Lee
You're watching Squawk Box on CNBC. I'm Melissa Lee along with Joe Kernan.
[24:18]
Joe Kernen
We are just seconds away from the employment report for July. Rick Santelli is standing by at the CME in Chicago and I don't know Rick, Steve is still mad that Kevin Warsh hasn't called him and told him exactly what he's going to do with this next.
[24:36]
Rick Santelli
None of that is true.
[24:37]
Joe Kernen
It's absolutely true. None of that is true. Rick. Rick, is it possible that with the two year where it is in fed funds where they are that a just removing the easing bias and keeping neutral or maybe a slight tightening bias. Can't you just hope that something positive happens in Iran and that maybe we don't have to get hikes but you've wanted higher rates for a while I think. But I'm still, I'm still hoping that we don't need to choke off the the economy to deal with supply issues with, with that are causing some.
[25:11]
Keith Lansford
I agree, I agree. Well I agree that I've been for Rayming because of deficits but not, but not, but not from the Federal Reserve. I believe that the market rates that's what I ought to be higher to penalize Washington for all the spending. But on the short end why should we make our payments to service debt higher? Why should we try to slow the economy and use a blunt instrument, keep that rate where it is for longer. That's the way to go. Now the wild card is the war. And here we go. Joe, July employment figures populating. Buckle up on this one. Minus minus 23,000 on nonfarm payrolls. I can hear the bond yields falling right now. Minus 23,000. That would be the second worst number of the year outside of the only other negative number minus 156 in February. Now if we look at the two month revision another whopper. Minus 103,000 manufacturing payrolls actually a bright spot. Manufacturing up 5,000. That would be what the best since it was up 15,000 in March and that was the high water mark going all the way back to 23 on the unemployment rate 4.1%, and I'm sure that's because of a labor force shrinkage. 4.1%. That would actually be the lightest of the year. Once again, that would equal June of last year. To find a lower number, you're in January of 25. Now let's look at the participation rate. And this is 61.4. We're expecting 61.6. It's 1/10 lighter in the rearview mirror at 61.5. It equals where we were in February 21st here in May of 2020. Covid era defined a smaller number, but as Treasury Secretary Bessen has pointed out in numerous venues over the last week or so that this is a demographic issue. It's not a weak economy. The rate's falling because of old and young, but that 25 to 54 age range is still doing well in terms of participation. And drum roll, please. The last part of this report is called the underemployment rate, or U6. The other rates called U3. This also dropped 1. 10 from expectations. We were expecting 8. 7.9 arrived, 7.9 equals where we were. We've had several of those readings to the lowest of the year to find a lower number than that year in June of 25.
[27:51]
Joe Kernen
It's beautiful, Rick, Steve Leitzman, are you going to take back any of those three rate hikes that you've instituted as an imaginary Fed chair that you orchestrated earlier in the show? Are you ready? I'm concerned, Joe. Ready to take back any of those?
[28:05]
Rick Santelli
My concern is just people listening on the radio and either don't hear the sarcasm in your voice or see the smile on your face.
[28:11]
Joe Kernen
No, no one thinks you can raise. No one thinks you can raise rates. Although you'd like to.
[28:16]
Rick Santelli
I want to say quickly, Joe, that I am a little less concerned about the negative number here than maybe meets the headline I here. And the reason is because we have this -40k in leisure and hospitality. And it strikes me that a piece of this, a good piece of this could be the unwinding of the World cup hiring. And there was some expectation that it would happen and not many people have really. I don't know how much that was built in. Okay. The other thing I'm scratching my head about, and you know, there's no hair to scratch anyway, but is the -50 on local government education. That's a seasonal thing. You have to go back, by the way, to the pandemic to find a bigger drop on a monthly basis than than we had in this month. So I'm, I'm thinking there's a little bit of seasonal, seasonality in this number. I don't know what's happening. I have to dig in further. What's happening with participation rate? Participation rate as Rick said we thought it was going to be a little bit higher. It ends up being we people thought it was going to bounce back after it did not somebody or some, some group of people are dropping out of the workforce for reasons we have to figure out. And I don't know the place I would look first. As soon as I stop talking Steve is the prime age workers. If that's happening that's a problem. It could though be at the senior end or it could be at the, at the younger end in which case it's, it's less of an issue.
[29:44]
Joe Kernen
Is it? Have you come more into Mike and Rick? I don't know. Steve says so many things. You probably disagree, disagree with you. You can take your pick. But do you feel more on my side that maybe we can just wait and maybe I have felt we could wait.
[29:58]
Rick Santelli
You asked if I saw the real easy.
[30:02]
Keith Lansford
Everybody's, everybody's talking about the two year. Okay, the two year high water mark for this cycle and it was obviously all war related was a 4.35% high yield.
[30:14]
Joe Kernen
Close.
[30:14]
Keith Lansford
We're basically on the verge of 20 basis points lower. The moral to that story is is that the big run up in nominal rates that happened on the February 28 and beyond due to the war which affected the rise in real rates can come down rather aggressively. Should we see some more issues in the Mideast get settled out. And therein lies the linchpin between the Neel Kashkari, the Bowmans, all these Fed officials that want to raise rates that before the war didn't want to raise rates. They need to focus on supply chain issues, energy issues, global energy issues and how they may be resolved and impact the market should all these things in the Middle east start to go in a more fine tuned, better optimistic fashion. That is the whole key here in my opinion.
[31:07]
Melissa Lee
A study from the ARC Institute found that after scientists prompt AI created new recipes for virus genomes, when scientists inserted those viruses into bacteria, more than a dozen turned out to be viable with the ability to infect other bacteria. Joining us now, associate professor at MIT Kevin Esvelt. He is an evolutionary engineer and a bioscience defense analyst. Great to have you Kevin.
[31:29]
Kevin Esvelt
It's a pleasure. Thanks.
[31:31]
Melissa Lee
I mean the headline sounds nefarious but this is actually a good development in terms of the fight against drug resistant bacteria. Correct?
[31:39]
Kevin Esvelt
That's exactly right. So what they did is they trained AI on thousands of sequences from viruses that infect one kind of bacteria. And they used AI to predict new genome sequences for viruses that could infect these kinds of bacteria. And remarkably, some of them worked.
[31:56]
Joe Kernen
The bacteriophages, the smallest. Is that the smallest number of base pairs of any. And I'll say living, and I'm putting quotation marks on living organisms. That's the easiest thing to make, isn't it? If you're trying to create life. And is it life?
[32:13]
Kevin Esvelt
Kevin, we could never agree whether viruses are life or not. What matters is that they work.
[32:20]
Joe Kernen
These are bacteria phages. These aren't even full. These are just viruses that infect bacteria. Right. How many genes?
[32:28]
Congressman Greg Kazar
That's right.
[32:29]
Joe Kernen
10, 12?
[32:31]
Kevin Esvelt
Even fewer. So typically five or six for some of the smallest. That's true for some of our viruses too.
[32:38]
Joe Kernen
Right.
[32:38]
Kevin Esvelt
So in principle, you could do this on a human virus, but the scientists here took a lot of precautions. They didn't do it on human viruses. They never trained their AI on any human viral sequences. And as you said, this could help replace antibiotics. That's why they did it. It's great work in that regard. The worry is downstream.
[32:58]
Joe Kernen
Yeah. So, Kevin, this is more than what we think might have happened in Wuhan. I'd be interested in your take on that. Because of the cgg repeating codons in it. This is more than just gain of function where you have an existing virus, where you just change it a little bit so it can maybe infect human cells. This is from scratch.
[33:22]
Kevin Esvelt
It's not quite from scratch because they trained it on 15,000 viruses that normally infect this kind of bacteria. So it's more like imagining if you had trained it on all of the COVID variants, then the AI would spit out new COVID variants and some of those would spread. Now that's a harder problem, but that would be the next phase. And thankfully, right now, due to new government policy, you cannot get funding to run that experiment to actually make the predicted human viruses in the lab. That's no longer allowed. And I think that's a good thing.
[33:58]
Joe Kernen
You obviously saw that David Baltimore passed away a couple of months ago, who was. I mean, in terms of virology, reverse transcriptase and everything. He actually was one of my professors at one point. But do you know when he said that, that smoking gun that we saw in Covid, did he get pressure to walk that back? Because even toward the very end he said, okay, it's not a smoking gun, but it strongly indicates that this would be weird to occur in nature. And I'm sorry to get off topic, but this is something we've been talking about the last couple, obviously, with all the Fauci testimony. What do you make of that?
[34:37]
Kevin Esvelt
I think it was a bit of a travesty, frankly, how much politics got in the way of trying to decide where it came from, when really, even today, we don't have enough information to know. It could have been either route. And the rational thing to do would say we don't know. China won't give us enough information. Either it was their fault because it was a wet market, or it was their fault because they did work in the lab that was unsafe. And in both cases, the thing to do is fewer wet markets and better safety practices in labs.
[35:05]
Joe Kernen
So you would do both in terms of trying to make sure it doesn't. It doesn't happen again. It is a little weird that the first cases were like a mile from the lab. It's a little weird. It's weird in a lot of ways.
[35:16]
Kevin Esvelt
It doesn't make sense either way. Something is strange about it, no matter which hypothesis you prefer.
[35:22]
Joe Kernen
Was it Occam or Occam? I think it's Occam. Occam's razor would say that that was inserted those two codons. But anyway, sorry to.
[35:31]
Melissa Lee
No, no, I think this is a good. But I want to get back to the study that was published in Science. Kevin. And so when you say the problem is downstream, I mean, how concerned are you that if you know in the wrong hands that something more nefarious could result from this sort of experiment?
[35:51]
Kevin Esvelt
So here's the thing. These scientists did everything right. Only works on phages that infect bacteria, not humans. Didn't train their broader AI on any sequences from human infecting viruses. But there is no reason to think that future researchers cannot and will not attempt the same thing for viruses that infect other organisms. Probably not humans at first. That would be too obvious. But maybe other animals, pest animals. And the problem is, if you can predict new variants of a virus that will overcome existing immunity and it would work in a mammal than it probably would work in humans.
[36:34]
Joe Kernen
What was the level of containment that these were done in P4? I mean, it would seem that. And what was it in China? Like a P1. Right. I mean, that was. Right. It was a P2 at most, wasn't it? And pretty shoddy at that.
[36:49]
Schwab Announcer
Yeah.
[36:50]
Kevin Esvelt
So the problem with China is they did a lot of the key experiments in what's called Biosafety Level 2. But here, these experiments were only viruses that can infect bacteria. They have zero chance of getting into a human cell. So these experiments from the science paper were absolutely perfectly safe. There is no way that they could possibly have caused harm to any human. But it would not be safe at all to try to do the same thing for any virus that would even infect a mouse. Because if you can make it work in a mouse, then you can almost certainly make it work in a human. And then you've opened the door to a bad actor doing it in humans.
[37:27]
Melissa Lee
Professor, we have to leave it there. Great to get your thoughts. Thank you.
[37:31]
Joe Kernen
We're toast.
[37:35]
Julia Boorstin
And that is Squawk Pod for today. Thanks for listening. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Big thanks to Melissa Lee for sitting in today. You can tune in on television weekday mornings on cnbc starting at 6 Eastern. Or get the smartest takes and analysis from our TV show right into your ears when you follow Squawk Pod wherever you get your podcasts. Have a great weekend. We'll meet you right back here on Monday.
[38:01]
Joe Kernen
We are clear. Thanks, guys.
[38:11]
Schwab Announcer
Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more@schwab.com trading.

Summary6 min read

Squawk Pod – August 7, 2026: AI-Made Viruses, July Jobs Report & Meta’s Child Harms Case

Episode Overview

In this episode, the Squawk Box anchors dive into urgent topics shaping the business, tech, and political landscape: the worries about artificial intelligence (AI) both creating and destroying value (and possibly jobs); the shockingly poor July jobs report; the legal and ethical reckoning for social media titan Meta over alleged child harm; and the cutting edge (and controversial) emergence of AI-designed viruses. Special guests include Congressman Greg Kazar, architect of the proposed AI Tax and Work Protection Act, and MIT evolutionary engineer Kevin Esvelt, who unpacks a new study on lab-created viruses aided by AI. Throughout, the hosts parse the impact of AI on business models, labor, regulation, and biosecurity.

Key Discussion Points & Insights

1. Market Movements, AI’s Impact & Macro Overview

Hosts: Joe Kernen, Melissa Lee
Timestamps: [03:00]-[05:52]
- Light banter opens the show, with Joe noting optimism in the markets and discussing how both AI and onshoring have buoyed S&P 500 performance.
- Joe suggests that recent economic resilience can largely be credited to AI and deregulation:
  
  "I think it has more to do with AI. I think it has to do with deregulation... and obviously AI on top of all those things, huge." – Joe Kernen [05:04]
- Melissa points out sector churn within the S&P 500, noting some stagnation beneath index-level highs.

2. Geopolitical Tensions: Strait of Hormuz

Timestamps: [06:20]-[07:00]
- Iranian draft plan to ban US/Israeli ships in the Strait of Hormuz and the implications for oil and global stability are briefly discussed.

3. Company Deep Dives: Airbnb and Meta

a. Airbnb’s AI Transformation

Timestamps: [07:09]-[09:52]
- Airbnb’s earnings surge; CEO Brian Chesky credits AI as an inflection point:
  
  "AI is the best thing to have happen to Airbnb. I think we're becoming an AI native company." – Citing Brian Chesky via interview [08:00]
- Discussion of how AI might disintermediate platforms—Melissa raises questions about whether AI agents could one day bypass platforms like Airbnb entirely, but concludes consumer trust and vetting still matter for now.

b. Meta’s Child Harms Case

Timestamps: [09:52]-[10:25]
- Meta is ordered to pay over $500 million to a New Mexico teen mental health fund after being found to have created a "public nuisance". Judge orders monthly limits on Facebook/Instagram use by minors, and stricter adult contact controls. Meta intends to appeal.
- This lawsuit precedes a major upcoming California case regarding alleged addictive designs for children.

4. Product News: OpenAI’s "Donut" Smart Speaker

Timestamps: [10:25]-[11:58]
- OpenAI to launch a hockey puck-sized smart speaker "shaped like a donut," aiming to challenge Amazon and Google.
  
  "I hope these donuts don’t taste like a hockey puck." – Joe Kernen [11:30]
- Melissa Lee expresses distrust of always-on listening devices:
  
  "I don't want any device listening to me." – Melissa Lee [11:55]

5. Policy Spotlight: The AI Tax and Work Protection Act

Guest: Rep. Greg Kazar (Chair, House Progressive Caucus)
Timestamps: [13:48]-[22:33]

Why a Tax on AI?
- Congressman Kazar advocates for a tax on AI that would scale up if automation triggers mass job loss.
  
  "We need a tax on AI to...disincentivize the current model where these AI companies and big corporations essentially get a tax break for automating your job." – Rep. Greg Kazar [14:33]
- The tax revenue would be used for job retraining and to create new positions, echoing FDR’s Works Progress Administration:
  
  "In the age of AI, if we suddenly start losing a significant number of workers...we can actually have a modest tax on AI use, [and] use that funding to hire millions of workers." – Rep. Kazar [19:44]
- Kazar emphasizes exempting positive/prosocial uses of AI (e.g., medical research):
  
  "Our bill, in fact, doesn’t tax those things like medical research. We want AI development that’s going to help us cure cancer." – Rep. Kazar [12:29]/[16:41]
- Joe debates historical precedents, questioning whether such intervention would have stifled past technological leaps:
  
  "If something like this had been done to just maintain the status quo...do you think that would’ve been a positive...?" – Joe Kernen [15:38]
- The exchange closes with light tension as Joe jokes about “regressive” policies and Kazar referencing AI safety as a conversation for next time.

6. AI-Generated Viruses: Science and Threats

Guest: Dr. Kevin Esvelt (MIT evolutionary engineer)
Timestamps: [31:07]-[37:27]
- A new study (ARC Institute) demonstrates that AI can design genetic "recipes" for bacteriophages (viruses that infect bacteria), and new, viable viruses were made in the lab.
- Dr. Esvelt frames this as a beneficial breakthrough for fighting antibiotic-resistant bacteria, but warns of “downstream” risks:
  
  "The worry is downstream." – Kevin Esvelt [32:16] "There is no reason to think that future researchers cannot and will not attempt the same thing for viruses that infect other organisms. Probably not humans at first. That would be too obvious." – Kevin Esvelt [35:51]
- Joe draws parallels (and distinctions) with the COVID origin debate, prompting Esvelt to call for better lab safety and less politicization:
  
  "It was a bit of a travesty, frankly, how much politics got in the way of trying to decide where it came from..." – Kevin Esvelt [34:36]
- Esvelt explains the current study was safely conducted only using bacteria-infecting viruses:
  
  "These experiments...have zero chance of getting into a human cell...But it would not be safe at all to try to do the same thing for any virus that would even infect a mouse..." – Kevin Esvelt [36:49]

7. July Jobs Report: Sharply Negative Surprise

Timestamps: [24:14]-[30:13]
- Rick Santelli and team dissect a dismal July report:
  - Nonfarm payrolls declined by 23,000—second-worst result this year.
  - Participation rate at lowest in five years (61.4%), “U-6” underemployment at 7.9%.
  - Seasonality and post-World Cup labor unwinding cited as possible factors.
  - Bond yields expected to fall in response to weak numbers.
  "Minus minus 23,000 on nonfarm payrolls. I can hear the bond yields falling right now." – Rick Santelli [25:11]
- Discussion focuses on demographic participation shrinkage, not just economic weakness.

Notable Quotes & Memorable Moments

On AI’s Future:
- "Americans want to work, they want to contribute to their communities. This bill says we're not going to let a few billionaires become trillionaires while putting us out of work and us not do anything about it.” – Rep. Greg Kazar [14:33]
On AI-Driven Lab Risks:
- "There is no reason to think that future researchers cannot and will not attempt the same thing for viruses that infect other organisms…If you can make it work in a mouse, then you can almost certainly make it work in a human." – Kevin Esvelt [35:51]/[36:49]
On Consumer Technology:
- "I don't want any device listening to me." – Melissa Lee on smart speakers [11:55]
Humor & Personalities:
- "I hope these donuts don’t taste like a hockey puck." – Joe Kernen on OpenAI’s new product [11:30]
- "It's a no win job." – Melissa Lee on sell-side analysts [04:13]

Segment Timestamps for Quick Reference

Introductions/Warm-Up: [01:01]-[03:00]
S&P 500, AI, & Markets: [03:00]-[06:07]
Strait of Hormuz / Oil: [06:20]-[07:00]
Airbnb & AI: [07:09]-[09:52]
Meta’s Child Harms Ruling: [09:52]-[10:25]
OpenAI’s Donut Smart Speaker: [10:25]-[11:58]
AI Tax Policy w/ Rep. Kazar: [13:48]-[22:33]
AI-Generated Viruses Discussion: [31:07]-[37:27]
July Jobs Report: [24:14]-[30:13]

Bottom Line

This episode threads together the excitement and perils of AI, not just as an economic tool but as a disruptive force capable of transforming—and challenging—society at large. From serious calls for AI-targeted taxation to chilling proof-of-concept experiments in the life sciences, the show offers a panoramic view of where policy, business, and scientific innovation are clashing—and occasionally, cooperating—at the cutting edge. The episode is a must-listen for anyone tracking the parallel rise of AI regulation, economic adaptation, and biosecurity risks in 2026.

Loading summary

Transcript129 lines

[00:00]
Schwab Announcer
Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests and no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more@schwab.com trading EVER check different weather
[00:29]
Julia Boorstin
apps and get different forecasts? That's kind of what cloud transformation can feel like. Different priorities, different technologies, different opinions. That's why you need CDW's expert guidance and support every step of the way because your cloud strategy deserves clearer skies. And when your team feels calm, cool and cloud protected, that's when amazing things happen. We configure, optimize and deliver the tech that runs business. CDW make amazing happen.
[00:58]
Joe Kernen
Bring in show music please.
[01:02]
Julia Boorstin
Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, can we blame AI for everything? The US economy unexpectedly lost 23,000 jobs in July, with a labor participation rate the lowest in 5 years.
[01:17]
Keith Lansford
Buckle up on this one. Minus minus 23,000 on non farm payrolls. I can hear the bond yields from
[01:26]
Julia Boorstin
falling right now, taxing AI companies that cut jobs to create a new era. Works Progress Administration Congressman Greg Kazar of Texas joins us.
[01:37]
Congressman Greg Kazar
I'm not talking about just stopping all of AI in its tracks. I'm saying we should lead in AI, but that doesn't mean we have to be in a country with large amounts
[01:47]
Julia Boorstin
of unemployment and AI created viruses. Haven't we been through enough? A new study on just how willing artificial intelligence is to create biological weapons. MIT scientist Kevin Esvelt.
[02:01]
Kevin Esvelt
There is no reason to think that future researchers cannot and will not attempt the same thing for viruses that infect other organisms. Probably not humans at first. That would be too obvious.
[02:12]
Julia Boorstin
Plus the rest of today's news, the clogged strait of Hormuz, Airbnb's Rise and OpenAI's new smart speaker will be shaped like a donut.
[02:22]
Joe Kernen
Spherical, a color, a twist, a long darn claw, a bear claw. Novelty shapes like hearts, stars, seasonal outlines
[02:32]
Julia Boorstin
it's Friday, August 7, 2026. Squawkpod begins right now.
[02:37]
Joe Kernen
Standby Joe in 3, 2, 1. His mic Q good morning and welcome to Squawkbox here on cnbc live from the NASDAQ market site in Times Square. I can't help it. Try to not smile, but it's impossible. I'm Joe Kernan along with Melissa Lee. There goes again. Becky and Andrew are off today. Why does that happen?
[03:01]
Melissa Lee
What? When certain people are gone. You're smiling.
[03:04]
Joe Kernen
Well now you're actually on with. No, I was doing it in a positive way because you're here.
[03:10]
Melissa Lee
Thank you.
[03:11]
Joe Kernen
You know that I'm happy to be here. I think it is it years of this that we've shared together. Is that what it is?
[03:17]
Melissa Lee
It feels like it.
[03:21]
Joe Kernen
And I was talking about you. You have people on all the time on your multiple shows. Not all of them at the beginning of the year were at 7,700 or 7,800 or 8,000. No, somewhere in the sixes. A lot of them my favorites because they're sell side people. They don't really. They really aren't able to make very good calls and they don't even try.
[03:44]
Melissa Lee
What was your call at the beginning of the year? A lot has changed during the nobody could have guessed in January or February.
[03:50]
Joe Kernen
I don't. You know luckily we just get to second guess other people.
[03:53]
Melissa Lee
Exactly.
[03:54]
Joe Kernen
Which is good. However, I don't know if I would just take where the market closed and say that's my target until it goes the SP goes up 100 and then I raise my target. Well, you have to feel for.
[04:06]
Melissa Lee
My point is you have to feel for the.
[04:08]
Joe Kernen
They make money. They tell their poor retail sales force that they pretend they actually know something they don't.
[04:13]
Melissa Lee
It's a no win job.
[04:16]
Joe Kernen
You know who does know are buy side people because they look right at their what they have and they go oh God, why did I buy that? They know they bought it a year and a half ago. They know they bought something sick like some of your traders. I think they feel because they're able to change they actually it's not according to I use this term a lot and luxury beliefs. Everybody has a luxury belief that doesn't cost money. You can be negative on bitcoin from all the way up and you can still say and it doesn't cost you a penny to be negative. Then it finally comes down and you start pretending that you call it coming down. Which predictions you want from me. Well, I think it has more to do with AI. I think it has to do with deregulation. I think it has to do with the big beautiful bill and expensing. I think it has to do with this is heretical. But. But onshoring and some of the. There have been some realization re industrialization and obviously AI on top of. On top of all those things huge. And I think that and I said it about a week and a half ago that when we had had the, the pullback in AI and we started to okay, this is the beginning of the unraveling. A lot of people thought that hits my after it comes back a little and we're at new highs again, that's the hardest time to buy. The easiest thing to do at that point, that's what all the sell side people do would be, you know, I think we need and to buy things that have been breaking out the new highs is harder.
[05:53]
Melissa Lee
That's true. I mean although we had sat on the S&P 500 at 7,500 for about 11 weeks.
[05:59]
Joe Kernen
Yeah.
[05:59]
Melissa Lee
I mean it was a long time just churning around like at the index level with a lot of the sectors and it was turning around underneath.
[06:08]
Joe Kernen
But it never a long time to sort of a lot of people are at 70, 100. It never really threatened to go back. It looked like it could a couple of times, but it never did. Do you want to continue? It's up to you.
[06:21]
Melissa Lee
Thanks for monitoring developments out of the Middle east alongside the price of crude oil. Iranian State News publishing a draft plan for the Strait of Hormuz that would ban US and Israeli ships from transiting the waterway. And the draft also says other nations that harmed Iran would not be allowed to sail through the strait until they paid compensation. Iran State News said the plan is under review by a parliamentary committee. President Trump said yesterday he thinks the Iran war will end, in his words, pretty soon. Iran's chief negotiator accusing the president of staging what he called theater diplomacy.
[06:53]
Joe Kernen
Yeah, got a lot of factions over there and some of them are hardliners. Do any of them really care about the Iranian people?
[07:01]
Melissa Lee
No.
[07:03]
Joe Kernen
Airbnb shares jumping on better than expected unless they consider the Revolutionary Guard.
[07:09]
Melissa Lee
Right.
[07:09]
Joe Kernen
The Iranian people, and I think they do. Expecting second quarter results, the company's current quarter sales forecasts also topped estimates. Airbnb raised its full year projections for both revenue growth and adjusted EBITDA margins. And in an interview with cnbc, CEO Brian Chesky credited AI for the company's acceleration. I think a year ago it was really a question, is AI good for Airbnb or is AI bad for Airbnb? The verdict was out last year and I think now it's safe to say AI is the best thing to have happen to Airbnb. I think we're becoming an AI native company and I think that is probably the number one explanation for our results. Trying to figure out exactly how you'd Use it. Do you understand it? I guess I could Airbnb how you would use AI to streamline everything at Airbnb, I'm going to think about. Regarding AI and staffing at Airbnb. Chesky said the company's philosophy is not to employ fewer people, but to use the technology to make people more productive. And I say this because we have an interview coming up with a former chief information officer of Lululemon who wrote a book about, on the one hand, AI. There is a lot of promise, but there's a lot of companies that are already saying, oh, yeah, it's amazing. When it's really. They're just saying that, saying it's real. And there are other kinds, she points out. There are other places that, yeah, you can use it, but you need a lot of human supervision and, you know, employing it the right way and making sure that it's functioning properly. You got to roll your sleeves up and really work hard for the payoff that hopefully is going to take a
[08:50]
Melissa Lee
big smile, I think, for AI. I mean, originally the argument was that AI would displace Airbnb. It would displ. The online travel platforms like an Expedia and Booking, for instance, both, by the way, had strong earnings. So all of them had strong earnings. But the argument that you don't need them anymore. Right. It disintermediates that those sorts of platforms. But AI agents can't execute. That's, you know, you can't say, you can say find me the. Find me the itinerary. But how do you actually buy.
[09:18]
Joe Kernen
Okay, so there would be a bunch of people that are ready to rent out their houses and it'd be somewhere other than Airbnb. Just. You'd find it through AI and it,
[09:28]
Melissa Lee
I don't know, it hasn't. I mean, to, to my knowledge. And it could be happening. I haven't seen that yet. And as a consumer, do you want to just deal directly with the homeowner? Not always. Sometimes you want that insurance, you want
[09:41]
Joe Kernen
the vetting process and all these things in five years, I don't know, could be totally different and much better. And it could. Could disremediate everyone.
[09:52]
Melissa Lee
Facebook parent Meta ordered to pay more than half a billion dollars into a mental health fund for teens in New Mexico after a state court found the company harmed children's well being. A judge finding the social media giant had created a public nuisance. He ordered Meta to make changes to protect younger users, including monthly limits on use of Facebook and Instagram and stricter controls on adult Contact with minors online. Meta said it will appeal the ruling. It's preparing for a case in California next week over claims by dozens of states the company designed its products to addict children.
[10:26]
Joe Kernen
Got some details on Open Air's upcoming consumer smart speaker like product which is designed to challenge Amazon and Alphabet. Now according to Bloomberg, the device will look something like a doughnut and be about the size of a hockey puck. And I assume, Melissa, it would be the Taurus type ring donut that they're talking about, not one.
[10:50]
Melissa Lee
As opposed to like a spherical, a
[10:52]
Joe Kernen
color, a twist, a long john, a bear claw, novelty shapes like hearts, stars, seasonal outlines. See I'm using AI that talk about every type of donut. In this case I think if you say donut like it's self explanatory like a bagel. Well that doesn't really have the inside thing. What are those little things called? The munchkins don't really come out of the bagel. It's sort of just an indentation. This would be and I hope it doesn't, these donuts don't taste like a hockey puck, allowing it to easily be carried from room to room. You could carry it like that through the hole. The report says the device will function like an AI enabled computer aimed at helping users fulfill daily tasks. Release a slated for next year and it will be expensive, likely above $300 compares to Amazon's entry level smart speaker device which is about $40 Google's which runs about $100. So do you have any of that? Do you have those?
[11:56]
Melissa Lee
I don't want any device listening to me.
[11:59]
Joe Kernen
It's like who? I'm worried enough about this. Especially when you know, you know I'm talking about something and then, then remedies for foot fungus comes up on here.
[12:09]
Melissa Lee
Why would that happen?
[12:10]
Joe Kernen
It's like, wow, that's why it's called a smurfroot. Cheese will be next.
[12:18]
Julia Boorstin
Coming up on Squawk Pod, how Congress wants to protect American jobs from AI. And yeah, there are politics involved. Chair of the House Progressive Caucus, Texas Rep. Greg Kazar joins us.
[12:29]
Congressman Greg Kazar
There are productive and positive uses of AI. And our bill in fact doesn't tax those things like medical research. We want AI development that's going to help us cure cancer.
[12:44]
Schwab Announcer
Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests and no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more@schwab.com trading what made you confident
[13:13]
Julia Boorstin
that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
[13:30]
Melissa Lee
Life is short and you just gotta think big to accomplish big things.
[13:34]
Julia Boorstin
JULIA Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday.
[13:40]
Congressman Greg Kazar
Wherever you get your podcasts,
[13:44]
Julia Boorstin
you're listening to Squawk Pod. Here's Joe Kernan.
[13:49]
Joe Kernen
New legislation in the House is pushing for a tax on AI to help save workers from what could be mass unemployment. That's the fear, anyway. Joining us now with the details, Congressman Greg Kazar. He chairs the Progressive Caucus and is a co author of the AI Tax and Work Protection Act. And Congressman, it's good to have you on. We're all trying to grapple with, you know, with with how to deal with these things. And as usual, both sides of the aisles probably view it very differently on what the most effective way is in this case. You think it's a tax on AI to, to help retrain workers that could lose their jobs. Is that the rationale?
[14:33]
Congressman Greg Kazar
Good morning. It's good to be here. And we need a tax on A I to 1, disincentivize the current model where these AI companies and big corporations essentially get a tax break for automating your job. And second, we should take that tax revenue to be able to create millions of new good American jobs. And basically, we've structured this tax so that it's very low right now when we aren't facing a mass unemployment crisis. But then would scale up if AI does start putting millions of people out of work. We could scale that tax up to make sure that the unemployment rate does not skyrocket. That's what the CEOs have been warning us about. That's how they actually, in many ways are able to have these high valuations as they are saying they want to put people out of work. And I think that Americans want to work, they want to contribute to their communities. And this bill says we're not going to let a few billionaires become trillionaires while putting us out of work and and us not do anything about it.
[15:39]
Joe Kernen
But that, I think, is just a fundamental, fundamentally different way of viewing what what I could mean to society, I guess, in the future. It, I was just, it made me think when we had, I don't know, agriculture probably employed 100 times the, the number of people it employs now. And we know that it's, you know, we have more food than we've ever had, so, or the auto industry. You know, prior to that we had, you know, we had buggies and horses. If at the time something like this had been done to just maintain the status quo and to make it impossible to move forward with the new stuff, do you think that would have been a positive back, back then to really sort of handicap the, the. You're, you're ahead of the Progressive caucus. This sounds like you should be ahead of the regressive caucus, Congressman.
[16:42]
Congressman Greg Kazar
Well, Joe, as you and I talked about last time, there are productive and positive uses of AI, and our bill, in fact, doesn't tax those things like medical research. We want AI development that's going to help us cure cancer. We want AI that's going to help us make our better and stronger. But we also know that these AI CEOs are out there talking about, quote, the end of work. We know Elon Musk has said people won't be needed for, quote, most things. That's not the kind of society we want where a few of these Silicon Valley billionaires say, well, we will have, you know, Great Depression levels of unemployment, but we'll make that more tolerable with a little bit of universal basic income. That's not what most people want. Whether you're progressive like me or conservative or independent or whatever. We want to make sure we have positive uses of AI, but should not have mass unemployment. So that's why we've released this bill, the AI Tax and Work Protection act, that keeps this tax rate very low right now, but goes upward if there is mass unemployment. And of course, nobody can tell you four years from now exactly what the unemployment rate might be. Four years ago, we didn't even have chat. So we need a plan to make sure that we are prepared. Because Americans are asking us, what is Congress's plan If what the CEOs are saying is going to happen. We saw, for example, block lay off 40% of its workforce, citing AI. If that is going to happen, then what's our plan? And this is a plan we can put in place to make sure we don't have to have mass unemployment in exchange for technological progress.
[18:33]
Joe Kernen
We're back to the fundamental discussion about whether AI is going to, long term be a, a boon to society or not because if you tax it, you'll get less of it. And if we tax it in, China doesn't, obviously we're going to be trailing China eventually. It's a tough one because in certain ways I agree with you that this is different than, than some of the transformations that we saw in the past. I mean, you would have to say not everyone should be in agriculture right now. I mean, we were an agrarian country, you know, centuries ago, and we didn't want to stay like that. I don't think. Congressman, is there nothing analogous to what we're talking about now with this? This is revolutionary. And I don't know whether you can, if you want to cherry pick the good things that you were talking about in terms of medicine and efficiency. I don't know how you can have those, you know, develop as quickly as we would like and then stop everything else that might be disruptive to certain sectors of employment. I don't see how you can really do it that way.
[19:44]
Congressman Greg Kazar
Well, that's exactly the question, Joe, that we've been wrestling with here. How can we make sure we develop the good uses of AI, be a leader in the world and technology, but not pay for it with mass unemployment? And when I look around the country, I see all sorts of great work that is worth doing where we don't have folks in those jobs. We have a shortage of teachers, we've got a shortage of firefighters. We've got a shortage of people to care for our elderly. We know there's a lot of people that aren't able to go to work because they don't have affordable child care, or they're not able to go to work because they've got to care for an agent, parents. And so in the age of AI, if we suddenly start losing a significant number of workers and work in a structural way, we can actually have a modest tax on AI use that funding to hire millions of workers. In fact, that's why my bill creates what we call the Work Protection Agency. Just like FDR created the Works Progress Administration and built things like the Hoover dam and the LaGuardia Airport, which actually improved our economy and our country and all of our lives. And Joe, I'm not talking about just stopping all of AI in its tracks. I'm saying we should lead in AI but that doesn't mean we have to be in a country with large amounts of unemployment. Since I was last on your show here in my own district where Oracle is headquartered, they laid off 21,000 people citing AI and I just don't think, and I think that conservatives don't think either that the cost of technological progress should be what we heard from the anthropic CEO, which is Great Depression levels of unemployment. We can make sure we have a fully employed America and lead the world in AI.
[21:32]
Joe Kernen
I was going to ask you about some of the things happening in the Democratic Party as a caucus of the check. I guess we're going to lose a lot of jobs in terms of law enforcement when there's no police left. When we get rid of all that and people employed in prisons.
[21:51]
Keith Lansford
We don't.
[21:51]
Joe Kernen
Let's talk about that. Let's talk about that next time. Some of the proposals we're seeing,
[21:57]
Schwab Announcer
look,
[21:57]
Congressman Greg Kazar
what I think is really important.
[21:59]
Joe Kernen
Talk about job losses. When we shut down all the police departments in prisons and everything else, there's going to be heck. What are all those cops going to do?
[22:08]
Congressman Greg Kazar
We got Joe, come on. You know, look, I came to be on cdc. You're a Texas. That question on fox. What we'll talk about, though, that is so important.
[22:16]
Joe Kernen
Texas Democrat. I don't think. I don't think that's to say I think you're probably looking at some of the stuff we're hearing from some of these candidates and go, whoa, I can't sign on to that. But let's talk, let's talk next time and come back and you're, you know, we'll pass it around. We're out of time, though. I know I introduced that Sounds good.
[22:34]
Congressman Greg Kazar
You can talk AI safety next time we're on because that's a real threat. Thank you, John.
[22:37]
Joe Kernen
All right. All right. Thank you, Congressman.
[22:41]
Julia Boorstin
Next, the surprisingly weak July jobs report and lab made viruses. MIT scientist Kevin Esvelt on the latest breakthrough to make germs.
[22:51]
Kevin Esvelt
This could help replace antibiotics. That's why they did it. It's great work in that regard. The worry is downstream.
[22:57]
Julia Boorstin
What will they think of next?
[22:59]
Joe Kernen
Is it life?
[23:00]
Kevin Esvelt
Kevin we could never agree whether viruses are life or not.
[23:03]
Julia Boorstin
Squawkpod will be right back.
[23:08]
Keith Lansford
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less. Projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com MarketUpdatePodcast or find Schwab Market Update. Wherever you get your podcasts.
[23:37]
Joe Kernen
What made you confident that you could
[23:39]
Julia Boorstin
do something that hadn't been done before? I have no fear of failure, Trailblazing
[23:44]
Joe Kernen
women, changing the game.
[23:45]
Julia Boorstin
One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
[23:55]
Melissa Lee
Life is short and you just gotta think big to accomplish big things.
[23:59]
Julia Boorstin
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back. This is SquawkPod from CNBC.
[24:14]
Melissa Lee
You're watching Squawk Box on CNBC. I'm Melissa Lee along with Joe Kernan.
[24:18]
Joe Kernen
We are just seconds away from the employment report for July. Rick Santelli is standing by at the CME in Chicago and I don't know Rick, Steve is still mad that Kevin Warsh hasn't called him and told him exactly what he's going to do with this next.
[24:36]
Rick Santelli
None of that is true.
[24:37]
Joe Kernen
It's absolutely true. None of that is true. Rick. Rick, is it possible that with the two year where it is in fed funds where they are that a just removing the easing bias and keeping neutral or maybe a slight tightening bias. Can't you just hope that something positive happens in Iran and that maybe we don't have to get hikes but you've wanted higher rates for a while I think. But I'm still, I'm still hoping that we don't need to choke off the the economy to deal with supply issues with, with that are causing some.
[25:11]
Keith Lansford
I agree, I agree. Well I agree that I've been for Rayming because of deficits but not, but not, but not from the Federal Reserve. I believe that the market rates that's what I ought to be higher to penalize Washington for all the spending. But on the short end why should we make our payments to service debt higher? Why should we try to slow the economy and use a blunt instrument, keep that rate where it is for longer. That's the way to go. Now the wild card is the war. And here we go. Joe, July employment figures populating. Buckle up on this one. Minus minus 23,000 on nonfarm payrolls. I can hear the bond yields falling right now. Minus 23,000. That would be the second worst number of the year outside of the only other negative number minus 156 in February. Now if we look at the two month revision another whopper. Minus 103,000 manufacturing payrolls actually a bright spot. Manufacturing up 5,000. That would be what the best since it was up 15,000 in March and that was the high water mark going all the way back to 23 on the unemployment rate 4.1%, and I'm sure that's because of a labor force shrinkage. 4.1%. That would actually be the lightest of the year. Once again, that would equal June of last year. To find a lower number, you're in January of 25. Now let's look at the participation rate. And this is 61.4. We're expecting 61.6. It's 1/10 lighter in the rearview mirror at 61.5. It equals where we were in February 21st here in May of 2020. Covid era defined a smaller number, but as Treasury Secretary Bessen has pointed out in numerous venues over the last week or so that this is a demographic issue. It's not a weak economy. The rate's falling because of old and young, but that 25 to 54 age range is still doing well in terms of participation. And drum roll, please. The last part of this report is called the underemployment rate, or U6. The other rates called U3. This also dropped 1. 10 from expectations. We were expecting 8. 7.9 arrived, 7.9 equals where we were. We've had several of those readings to the lowest of the year to find a lower number than that year in June of 25.
[27:51]
Joe Kernen
It's beautiful, Rick, Steve Leitzman, are you going to take back any of those three rate hikes that you've instituted as an imaginary Fed chair that you orchestrated earlier in the show? Are you ready? I'm concerned, Joe. Ready to take back any of those?
[28:05]
Rick Santelli
My concern is just people listening on the radio and either don't hear the sarcasm in your voice or see the smile on your face.
[28:11]
Joe Kernen
No, no one thinks you can raise. No one thinks you can raise rates. Although you'd like to.
[28:16]
Rick Santelli
I want to say quickly, Joe, that I am a little less concerned about the negative number here than maybe meets the headline I here. And the reason is because we have this -40k in leisure and hospitality. And it strikes me that a piece of this, a good piece of this could be the unwinding of the World cup hiring. And there was some expectation that it would happen and not many people have really. I don't know how much that was built in. Okay. The other thing I'm scratching my head about, and you know, there's no hair to scratch anyway, but is the -50 on local government education. That's a seasonal thing. You have to go back, by the way, to the pandemic to find a bigger drop on a monthly basis than than we had in this month. So I'm, I'm thinking there's a little bit of seasonal, seasonality in this number. I don't know what's happening. I have to dig in further. What's happening with participation rate? Participation rate as Rick said we thought it was going to be a little bit higher. It ends up being we people thought it was going to bounce back after it did not somebody or some, some group of people are dropping out of the workforce for reasons we have to figure out. And I don't know the place I would look first. As soon as I stop talking Steve is the prime age workers. If that's happening that's a problem. It could though be at the senior end or it could be at the, at the younger end in which case it's, it's less of an issue.
[29:44]
Joe Kernen
Is it? Have you come more into Mike and Rick? I don't know. Steve says so many things. You probably disagree, disagree with you. You can take your pick. But do you feel more on my side that maybe we can just wait and maybe I have felt we could wait.
[29:58]
Rick Santelli
You asked if I saw the real easy.
[30:02]
Keith Lansford
Everybody's, everybody's talking about the two year. Okay, the two year high water mark for this cycle and it was obviously all war related was a 4.35% high yield.
[30:14]
Joe Kernen
Close.
[30:14]
Keith Lansford
We're basically on the verge of 20 basis points lower. The moral to that story is is that the big run up in nominal rates that happened on the February 28 and beyond due to the war which affected the rise in real rates can come down rather aggressively. Should we see some more issues in the Mideast get settled out. And therein lies the linchpin between the Neel Kashkari, the Bowmans, all these Fed officials that want to raise rates that before the war didn't want to raise rates. They need to focus on supply chain issues, energy issues, global energy issues and how they may be resolved and impact the market should all these things in the Middle east start to go in a more fine tuned, better optimistic fashion. That is the whole key here in my opinion.
[31:07]
Melissa Lee
A study from the ARC Institute found that after scientists prompt AI created new recipes for virus genomes, when scientists inserted those viruses into bacteria, more than a dozen turned out to be viable with the ability to infect other bacteria. Joining us now, associate professor at MIT Kevin Esvelt. He is an evolutionary engineer and a bioscience defense analyst. Great to have you Kevin.
[31:29]
Kevin Esvelt
It's a pleasure. Thanks.
[31:31]
Melissa Lee
I mean the headline sounds nefarious but this is actually a good development in terms of the fight against drug resistant bacteria. Correct?
[31:39]
Kevin Esvelt
That's exactly right. So what they did is they trained AI on thousands of sequences from viruses that infect one kind of bacteria. And they used AI to predict new genome sequences for viruses that could infect these kinds of bacteria. And remarkably, some of them worked.
[31:56]
Joe Kernen
The bacteriophages, the smallest. Is that the smallest number of base pairs of any. And I'll say living, and I'm putting quotation marks on living organisms. That's the easiest thing to make, isn't it? If you're trying to create life. And is it life?
[32:13]
Kevin Esvelt
Kevin, we could never agree whether viruses are life or not. What matters is that they work.
[32:20]
Joe Kernen
These are bacteria phages. These aren't even full. These are just viruses that infect bacteria. Right. How many genes?
[32:28]
Congressman Greg Kazar
That's right.
[32:29]
Joe Kernen
10, 12?
[32:31]
Kevin Esvelt
Even fewer. So typically five or six for some of the smallest. That's true for some of our viruses too.
[32:38]
Joe Kernen
Right.
[32:38]
Kevin Esvelt
So in principle, you could do this on a human virus, but the scientists here took a lot of precautions. They didn't do it on human viruses. They never trained their AI on any human viral sequences. And as you said, this could help replace antibiotics. That's why they did it. It's great work in that regard. The worry is downstream.
[32:58]
Joe Kernen
Yeah. So, Kevin, this is more than what we think might have happened in Wuhan. I'd be interested in your take on that. Because of the cgg repeating codons in it. This is more than just gain of function where you have an existing virus, where you just change it a little bit so it can maybe infect human cells. This is from scratch.
[33:22]
Kevin Esvelt
It's not quite from scratch because they trained it on 15,000 viruses that normally infect this kind of bacteria. So it's more like imagining if you had trained it on all of the COVID variants, then the AI would spit out new COVID variants and some of those would spread. Now that's a harder problem, but that would be the next phase. And thankfully, right now, due to new government policy, you cannot get funding to run that experiment to actually make the predicted human viruses in the lab. That's no longer allowed. And I think that's a good thing.
[33:58]
Joe Kernen
You obviously saw that David Baltimore passed away a couple of months ago, who was. I mean, in terms of virology, reverse transcriptase and everything. He actually was one of my professors at one point. But do you know when he said that, that smoking gun that we saw in Covid, did he get pressure to walk that back? Because even toward the very end he said, okay, it's not a smoking gun, but it strongly indicates that this would be weird to occur in nature. And I'm sorry to get off topic, but this is something we've been talking about the last couple, obviously, with all the Fauci testimony. What do you make of that?
[34:37]
Kevin Esvelt
I think it was a bit of a travesty, frankly, how much politics got in the way of trying to decide where it came from, when really, even today, we don't have enough information to know. It could have been either route. And the rational thing to do would say we don't know. China won't give us enough information. Either it was their fault because it was a wet market, or it was their fault because they did work in the lab that was unsafe. And in both cases, the thing to do is fewer wet markets and better safety practices in labs.
[35:05]
Joe Kernen
So you would do both in terms of trying to make sure it doesn't. It doesn't happen again. It is a little weird that the first cases were like a mile from the lab. It's a little weird. It's weird in a lot of ways.
[35:16]
Kevin Esvelt
It doesn't make sense either way. Something is strange about it, no matter which hypothesis you prefer.
[35:22]
Joe Kernen
Was it Occam or Occam? I think it's Occam. Occam's razor would say that that was inserted those two codons. But anyway, sorry to.
[35:31]
Melissa Lee
No, no, I think this is a good. But I want to get back to the study that was published in Science. Kevin. And so when you say the problem is downstream, I mean, how concerned are you that if you know in the wrong hands that something more nefarious could result from this sort of experiment?
[35:51]
Kevin Esvelt
So here's the thing. These scientists did everything right. Only works on phages that infect bacteria, not humans. Didn't train their broader AI on any sequences from human infecting viruses. But there is no reason to think that future researchers cannot and will not attempt the same thing for viruses that infect other organisms. Probably not humans at first. That would be too obvious. But maybe other animals, pest animals. And the problem is, if you can predict new variants of a virus that will overcome existing immunity and it would work in a mammal than it probably would work in humans.
[36:34]
Joe Kernen
What was the level of containment that these were done in P4? I mean, it would seem that. And what was it in China? Like a P1. Right. I mean, that was. Right. It was a P2 at most, wasn't it? And pretty shoddy at that.
[36:49]
Schwab Announcer
Yeah.
[36:50]
Kevin Esvelt
So the problem with China is they did a lot of the key experiments in what's called Biosafety Level 2. But here, these experiments were only viruses that can infect bacteria. They have zero chance of getting into a human cell. So these experiments from the science paper were absolutely perfectly safe. There is no way that they could possibly have caused harm to any human. But it would not be safe at all to try to do the same thing for any virus that would even infect a mouse. Because if you can make it work in a mouse, then you can almost certainly make it work in a human. And then you've opened the door to a bad actor doing it in humans.
[37:27]
Melissa Lee
Professor, we have to leave it there. Great to get your thoughts. Thank you.
[37:31]
Joe Kernen
We're toast.
[37:35]
Julia Boorstin
And that is Squawk Pod for today. Thanks for listening. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Big thanks to Melissa Lee for sitting in today. You can tune in on television weekday mornings on cnbc starting at 6 Eastern. Or get the smartest takes and analysis from our TV show right into your ears when you follow Squawk Pod wherever you get your podcasts. Have a great weekend. We'll meet you right back here on Monday.
[38:01]
Joe Kernen
We are clear. Thanks, guys.
[38:11]
Schwab Announcer
Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more@schwab.com trading.

AI-Made Viruses, A July Jobs Report, & Meta’s Child Harms Case 8/7/26

AI-Made Viruses, A July Jobs Report, & Meta’s Child Harms Case 8/7/26

Squawk Pod – August 7, 2026: AI-Made Viruses, July Jobs Report & Meta’s Child Harms Case

Episode Overview

Key Discussion Points & Insights

1. Market Movements, AI’s Impact & Macro Overview

2. Geopolitical Tensions: Strait of Hormuz

3. Company Deep Dives: Airbnb and Meta

a. Airbnb’s AI Transformation

b. Meta’s Child Harms Case

4. Product News: OpenAI’s "Donut" Smart Speaker

5. Policy Spotlight: The AI Tax and Work Protection Act

6. AI-Generated Viruses: Science and Threats

7. July Jobs Report: Sharply Negative Surprise

Notable Quotes & Memorable Moments

Segment Timestamps for Quick Reference

Bottom Line

Squawk Pod – August 7, 2026: AI-Made Viruses, July Jobs Report & Meta’s Child Harms Case

Episode Overview

Key Discussion Points & Insights

1. Market Movements, AI’s Impact & Macro Overview

2. Geopolitical Tensions: Strait of Hormuz

3. Company Deep Dives: Airbnb and Meta

a. Airbnb’s AI Transformation

b. Meta’s Child Harms Case

4. Product News: OpenAI’s "Donut" Smart Speaker

5. Policy Spotlight: The AI Tax and Work Protection Act

6. AI-Generated Viruses: Science and Threats

7. July Jobs Report: Sharply Negative Surprise

Notable Quotes & Memorable Moments

Segment Timestamps for Quick Reference

Bottom Line