Big Tech’s Big Challenges & Transportation Sec. Sean Duffy 11/3/25

Summary

Squawk Pod – Episode Summary

Big Tech’s Big Challenges & Transportation Sec. Sean Duffy
Date: November 3, 2025
Hosts: Andrew Ross Sorkin, Joe Kernan, Mike Santoli
Guests: Secretary of Transportation Sean Duffy, Antitrust Expert Tim Wu

Overview

This episode of Squawk Pod centers on two major, timely stories: the ongoing government shutdown's impact—especially on air travel—and the increasing challenges posed by Big Tech's dominance in the economy. Key guests include Secretary of Transportation Sean Duffy addressing the federal shutdown's toll on critical services like air traffic control, and antitrust architect Tim Wu on policy options for reining in tech giants’ influence. Notable news developments like the Kimberly Clark–Ken View merger and President Trump’s pardon of Binance’s CZ are also discussed, alongside some international color from Sorkin in London.

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Main Discussion Points & Insights

1. Government Shutdown Crisis: Air Travel at the Brink

Situation Update

• The government shutdown has reached day 34, tying the record for the longest in U.S. history.
• Air traffic control staff are critical and overworked, with unpaid controllers facing a breaking point.

Impact on Air Travel

• Massive delays and cancellations at airports like Newark.
• Imminent risk of total ground stops if more controllers quit due to missed paychecks.
• Sorkin suffered personal travel disruption: "I was a victim of the government shutdown over the weekend. I was supposed to fly here yesterday and the plane got canceled." — Andrew Ross Sorkin [04:47]

Political Blame Game

• Secretary Duffy attributes the shutdown to "Democrat leverage," accusing the opposition of playing politics at travelers' expense.
• "Their leverage is to hurt the American people. Right. They're willing to hurt air travelers..." — Sean Duffy [20:20]
• "I am not going to fire air traffic controllers who are trying to put food on their family's table. I am asking all of them to come to work." — Sean Duffy [22:54]
• Debate about poll framing, party blame, and leverage tactics between hosts.

Safety and Staffing

• The system is "safe" due to fewer flights, but risk is elevated by overworked, multitasking staff.
• "If I have a controller doing two jobs...is there more risk in the system when you have a shutdown? Absolutely, there's more risk." — Sean Duffy [25:44]
• The shutdown’s economic ripple effect is broad: fewer travelers means less spending on hotels, rentals, dining, etc.
• Secretary outlines legal and financial constraints to paying staff during the shutdown; only minimum services can be maintained until funding resumes.

Timestamps

• Shutdown impact opening: [01:04–02:07]
• Duffy interview: [18:03–29:50]

---

2. Big Tech’s Bigness: Competition, Monopolies, and AI

Tim Wu on Big Tech & AI

• The largest tech companies have cemented dominant positions, with the risk that AI investments could entrench their control further—or, conversely, create meaningful challengers.
  • "If you have these big giants, you want them fighting. If I was still in government, I'd want to sort of provoke it." — Tim Wu [30:43]
• Wu warns of "typical monopoly costs" passed to consumers and smaller businesses: higher prices, less innovation.
• Warns against “natural monopoly” defeatism: "I'm always afraid that natural monopoly is a self-fulfilling prophecy...I believe in challenge." — Tim Wu [36:05]

Antitrust, AI, and Industrial Policy

• Concern over Big Tech locking up small AI competitors (e.g., Microsoft/OpenAI, Amazon/Anthropic).
• Government must scrutinize "reverse acquisitions" and interlocking investments that could stifle emerging challengers.
• Wu links competition policy to the U.S.–China tech race: "The most important industrial policy for the United States at home is competition. In other words, what we want is...a big fight at home so our companies are stronger when they face the Chinese companies." — Tim Wu [39:12]
• Cautions that consolidating tech leadership in a few U.S. giants risks repeating history (IBM/AT&T monopoly era).

Timestamps

• Tim Wu interview: [32:13–39:55]

---

3. Corporate & Political Headlines

Kimberly Clark Acquires Ken View

• $49 billion cash and stock deal to form a $32B health and wellness leader.
• Market reaction: KC shares down ~12%, Ken View up 19%, signaling skepticism around future liabilities/rewards.
• "That 12 and a half, 13% is not...routine arbitrage stuff." — Mike Santoli [14:27]
• Timestamps: [12:27–14:41]

President Trump on Nvidia & the Shutdown

• Trump said advanced Nvidia Blackwell chips will be reserved for US customers, potentially creating a permanent China ban, while allowing some cooperation on older chips.
• On government shutdown, Trump blamed Democrats, stating, "We can fix it with the Democrats. All they have to do is let the country open and we'll fix it." — Donald Trump [08:26]

Crypto: Trump Pardons Binance’s CZ

• Trump defends pardoning Binance founder CZ, referencing his sons’ interest/involvement in crypto—raising media/guest questions about "pay for play" and the appearance of quid pro quo.
• "I'm glad they are, because it's probably a great industry, crypto. I think it's good. You know, they're running a business, they're not in government." — Donald Trump [40:30]
• Segment debate over decriminalization's impact and the credibility of pardons when family interests are involved.

---

Notable Quotes & Memorable Moments

• "I'm not going to fire air traffic controllers who are trying to put food on their family's table." — Sec. Sean Duffy [22:54]
• "If I was still in government, I'd want to sort of provoke it...Government needs to scrutinize more carefully the efforts by the big tech companies to control AI." — Tim Wu [34:59]
• "The most important industrial policy for the United States at home is competition." — Tim Wu [39:12]
• "All they have to do is raise five hands. We don't need all of them." — Donald Trump, on ending the shutdown [08:33]
• "But that 12 and a half, 13% is not just routine arbitrage stuff." — Mike Santoli, on Kimberly Clark stock drop [14:27]
• "It always seemed like there were question marks. Remember times when [CZ]'s been on?" — Joe Kernan [42:23]
• "But in fairness to the president ... Sisi was not engaged himself in money laundering. They were using his platform for money laundering." — Andrew Ross Sorkin [42:48]

---

Timeline of Key Segments (Timestamps)

• Shutdown/Air Travel Opening Remarks: [01:04–02:07]
• Personal Impact of Shutdown (Sorkin in London): [02:07–07:18]
• Presidential Interview Excerpts / Shutdown Debate: [07:18–11:34]
• Kimberly Clark/Ken View Merger Analysis: [12:27–14:41]
• Secretary Sean Duffy Interview: [18:03–29:50]
• Big Tech/Antitrust – Tim Wu Interview: [32:13–39:55]
• Crypto & Trump’s Pardon of CZ: [40:03–43:46]

---

Tone & Style

• Conversational, candid, sometimes combative (especially on politics)
• Editorial and analytical, especially in interviews
• Occasional humor and personal anecdotes (Sorkin’s London trip, baseball banter)
• Direct quotes from newsmakers embedded into discussions for clarity

---

For Listeners Who Missed It...

This episode zooms in on the national gridlock with sharp, informed commentary on the shutdown's real-time impact, particularly air travel. Secretary Duffy—combative and resolute—blames Democrats while outlining the grim financial and safety crunch facing controllers. The tech segment is authoritative, with Tim Wu’s clear-eyed warnings about letting only giants set AI's terms. The episode closes with a pointed look at political favor and crypto, questioning where influence, transparency, and public trust stand—both in D.C. and Silicon Valley.

---

Recommended Sections:

• For air travel and shutdown impact: [18:03–29:50]
• For tech/AI/antitrust debate: [32:13–39:55]
• On crypto/trump pardon: [40:03–43:46]

Transcript

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[Katie Kramer]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, the government shutdown hits day 34 and air traffic control staffing is on the brink. Transportation Secretary Sean Duffy says it's Democrats that are playing politics.

[Sean Duffy]

Well, what is leverage? Their leverage is to hurt the American.

[Katie Kramer]

People and that critical workers are going without paying.

[Sean Duffy]

I'm not going to fire air traffic controllers who are trying to put food on their family's table. I am asking all of them to come to work. I want them to come to work. They have a job to do.

[Katie Kramer]

Big tech's bigness grows. Antitrust expert Tim Wu on the mega cap. Trillion dollar plus companies battling for speed and for business.

[Tim Wu]

The most important industrial policy for the United States at home is competition. In other words, what we want is we want a big fight at home so our companies are stronger when they face the Chinese companies.

[Katie Kramer]

Plus a big deal. Kimberly Clark is acquiring Tylenol maker Ken View. President Trump was on 60 Minutes and Andrew Roth Sorkin is in London. But it was close.

[Andrew Ross Sorkin]

I was a victim, a victim of the government shutdown over the weekend.

[Joe Kernan]

Oh, with the planes.

[Katie Kramer]

It's Monday, November 3rd, 2025. Squawk Pod begins right now.

[Andrew Ross Sorkin]

Stand Anderby in 3, 2, 1.

[Mike Santoli]

Qander.

[Andrew Ross Sorkin]

Good morning and welcome to Squawk Box right here on cnbc. I'm Andrew Ross Sorkin along with Joe Kernan. Mike Santoli is joining us. Becky is off today. I happen to be in London, folks. So we're all together across the pond. What do you call this, Joe? Is this a trans transatlantic broadcast Is that what this is?

[Joe Kernan]

Didn't know where you were going with that. The. Yeah, I think so.

[Mike Santoli]

We.

[Joe Kernan]

I mean, inquiring minds. Inquiring minds want to know. Andrew, you know what? I think you do. Are you casting like a British actor for 1929, the movie or something? Because they're the best actors. Because even when they don't use. They don't use the accent, they. Even when they use the. It's just. They're more. I don't know, they have more credibility. They're better.

[Andrew Ross Sorkin]

Why are they. Why are the British actors better even with the American accent that they put on?

[Joe Kernan]

I'm not really. But. Okay. But that was leading into. Why are you there? Can you tell us?

[Andrew Ross Sorkin]

I am. I am here in London because I'm speaking this evening about the aforementioned 1929 here in London and there's a UK edition of the book. So I'm talking to a whole bunch of people and I happen to be. You'll appreciate this. Tomorrow morning I am going to be on the new Sky News breakfast program that is hosted by. Do you know who.

[Joe Kernan]

Wilfred Frost.

[Mike Santoli]

Wolf.

[Andrew Ross Sorkin]

Yeah, Wilford Frost. They just launched the broadcast this morning here in London. It's a big, big deal. So I'm gonna be on their second. Second broadcast.

[Joe Kernan]

What a good. That's. That is a symbiotic thing. Good for you, good for them, good for everyone. Don't.

[Andrew Ross Sorkin]

And sky is now the provider. Is gonna be the international provider of our international news for the new Versant company. And so that every time that there's, you know, different international news that going to come over MSNBC and possibly over CNBC that will be in partnership with Sky. So.

[Joe Kernan]

Excellent. So you little bit of the excellent not going on.

[Mike Santoli]

I should tell you I was a permissible absence.

[Joe Kernan]

It is a permissible absence. But you're not going on. I. You're not going to the torture museum. Are you going to the tower? You going. You're going to that old. What is that right near the bridge? It's so cool. Well, it's from like the 11th century. I got no problem from the 11th century. The white. Whatever the hell it is.

[Andrew Ross Sorkin]

Which one is that? I don't know what you're referencing. I was going to tell you though, Joe, you'd appreciate this. I was a victim. A victim of the government shutdown over the weekend. I was supposed to fly here yesterday.

[Joe Kernan]

Talk to your party.

[Andrew Ross Sorkin]

I was supposed to be here last night and the plane got canceled because of the government shutdown. It's a minor miracle. I'M even here right now.

[Joe Kernan]

Talk to your friend. Every shutdown that's ever happened, the party that won't vote for the cr, the clean cr, is the party to blame. Except this time, and I can explain it to you, these polls, I can. You want me to explain the polls to you? 30%. Ask people 30%. 30% hate Trump. I hate Trump. Okay, so you got 30 to start. That leaves 70. The other 70, you say, would you rather have you pay for most of your health care or would you rather have the government pay for most of your health care? So then you got, let's see, 70, 50, 50%. So you start at 70%, say it's Trump's fault, it's a Republican. So these polls. But any other time it's ever been done, the party that doesn't vote for the clean CR gets blamed. So that's my analysis this morning. I hope I'm looking up.

[Mike Santoli]

I'm not sure that's the phrasing of the polling question, but we'll see.

[Andrew Ross Sorkin]

That's.

[Joe Kernan]

It doesn't matter whether that's a phrasing, but you want free stuff, check here if you want free stuff, check here if you'd rather pay for yourself.

[Andrew Ross Sorkin]

I am hopeful. I don't know about you. I am hopeful that actually maybe given all the big elections that are taking place tomorrow, including in New York City, where I recommend everybody go out and vote if you can, that maybe the government gets to open after that. I've always thought that that's a key date, that maybe that's one of the holdouts the Democrats are. Are using in all of this.

[Mike Santoli]

Yeah. I think also that's where the kind of the betting markets have settled around that as well, Andrew. You know, sometime in the days after the elections tomorrow, we will see if that's the case.

[Joe Kernan]

It's a white tower and it's right near the bridge and it was built in 1100. And I actually searched for White Castle and something completely different came up. It had sliders and.

[Mike Santoli]

Yeah, they'll doordash it here if you want. All right.

[Andrew Ross Sorkin]

Do you want me to go. Do you want me to go do the visit right now? Joe? I can go. I can take off right now and go there.

[Sean Duffy]

You could do a heist.

[Andrew Ross Sorkin]

I can go check out the jewels.

[Joe Kernan]

Unbelievable. Crown jewels there. Just put a couple in your pocket.

[Mike Santoli]

It always works out as we can.

[Andrew Ross Sorkin]

Face time the entire. Why don't I, why don't I leave the set now? I can take. I can FaceTime for the rest of the show from wherever I am. And we could just go on like a walking tour of London.

[Joe Kernan]

White Tower.

[Mike Santoli]

Yeah.

[Joe Kernan]

President Trump says Nvidia's most advanced semiconductors will be reserved for U.S. customers. In an interview taped on Friday that aired Last night on 60 Minutes, the President said that US companies should be the only ones who have access to Nvidia's Blackwell AI chips. And that could mean a permanent ban on Blackwell chip sales to China. Though the president kept the door open to China working with Nvidia on less advanced chips. This was President Trump's first appearance on 60 Minutes since he settled a lawsuit with CBS News this past summer over an interview that was edited with former Vice President Kamala Harris.

[Andrew Ross Sorkin]

Andrew Meantime, as I mentioned, I was a victim of this government shutdown. But let's explain where everything stands on the government shutdown, because the president was asked about that on the 60 Minutes interview. Subsidies for Affordable Care act are at the center of the dispute, at least between Republicans and Democrats. President Trump blasting Obamacare, but said he would work with Democrats on the program if they vote with GOP senators to reopen the government. Here's what he had to say.

[Donald Trump]

We can fix it with the Democrats. All they have to do is let the country open and we'll fix it.

[Tim Wu]

But they have to leave the country.

[Donald Trump]

They have the country open and I'll sit down with the Democrats and we'll fix it, but they have to let the country. And you know what they have to do? All they have to do is raise five hands. We don't need all of them.

[Andrew Ross Sorkin]

Today is now the 34th day of the government shutdown, is now tied for the longest ever in American history. Now, the Trump administration must tell two federal judges today whether we'll follow court orders that it continue to fund the SNAP program with contingency funds. We're going to talk a lot more about this later in the show with Transportation Secretary Sean Duffy. Talk about some of those air traffic delays at US Airports that hit myself and others. Yeah, Mike.

[Joe Kernan]

Yeah, they told me your, your mic's open. I go, I hope my mic's open. It should always be open because I was doing, doing my Nora o' Donnell imitation. You know, you're trying to.

[Andrew Ross Sorkin]

Oh, come on. I thought, I actually thought you did a terrific job last night. I thought the princess did a good job. I actually thought it was a good interview.

[Joe Kernan]

It was like 73 minutes or something. And the whole, the whole, I haven't watched it the whole interview. You know, there's other things that actually, it was on after the. The game ended. So theoretically, I guess I could have watched. They're on probation with me. We're going to see 60 Minutes. I've told you that, Andrew. I mean, it went so far one way.

[Andrew Ross Sorkin]

They're on probation with you.

[Joe Kernan]

They're not probation with the probation. Although they had Rick Scott. They had Rick Scott on. They had. Oh, my God. They had Jared Kushner and Steve Whitcomb on. Oh, my God. That would have never happened.

[Andrew Ross Sorkin]

And who else did they have on Joe?

[Joe Kernan]

Andrew Ross.

[Andrew Ross Sorkin]

Did they have on Andrew Ross?

[Joe Kernan]

Sorkin? They did.

[Andrew Ross Sorkin]

Thank you very little. Thank you very little.

[Joe Kernan]

But that's the old 60 minutes. Okay, okay.

[Mike Santoli]

I'm sure.

[Joe Kernan]

Did they edit anything? Oh, I didn't like the way they edited you. I didn't. I thought it should have been much more about.

[Andrew Ross Sorkin]

Come on.

[Joe Kernan]

No, the historical. They made you look good. But they didn't talk enough about the book. They talked about the crash that's coming that they want to come by.

[Andrew Ross Sorkin]

I got no. I got no comment. I got no.

[Joe Kernan]

You're tired, you had flight problems. What's your aura ring today, Andrew? Give us an idea. Oh, boy.

[Andrew Ross Sorkin]

You really want to know?

[Sean Duffy]

I do.

[Joe Kernan]

I mean we should.

[Andrew Ross Sorkin]

They should sponsor us and we should have like a little graphic in the bottom of the screen. It is not good. It is. Oof.

[Tim Wu]

Oof.

[Andrew Ross Sorkin]

What is it here? 61, Joe. 61.

[Joe Kernan]

Be warned.

[Mike Santoli]

Okay. That's no good.

[Charles Schwab Announcer]

Yeah.

[Joe Kernan]

All right. All right, rest of the show. Andrew, anything. Whatever you say, I'm agreeing with. Is this the most interesting off year for elections, Sorkin? I think it is. We'll talk about it more later. But I'm riveted with New Jersey because I live there and it's so tight right now. I don't know what happens in Virginia. I guess it's a long shot at this point for when some Sears and then, you know, is Mom, Donnie. Got it. Are things really tightening up, Sorkin?

[Andrew Ross Sorkin]

I don't know. I honestly I wish I knew. I'm looking at the betting markets like everybody else and thinking maybe that's the answer. That's what? The answer has been relatively accurate over the years. But George Soros might be buying every happens.

[Joe Kernan]

George Soros might be buying every contract on across the board calcium polymarket. What?

[Andrew Ross Sorkin]

Oh, what? So now, now you think these things are being manipulated?

[Joe Kernan]

Yeah, now I do. Now I do.

[Andrew Ross Sorkin]

Okay.

[Joe Kernan]

Oh, George Will says every once in a while we should do another experiment in socialism so that that's kind of sacrifice the city of New York just so we can.

[Sean Duffy]

Yeah.

[Joe Kernan]

Sacrifice the city of New York and who knows how many people are affected by it just so that once again.

[Mike Santoli]

We can relearn the law.

[Joe Kernan]

Yes, so we can. Really.

[Andrew Ross Sorkin]

Meantime, we got some merger news. What's going on, Mike?

[Sean Duffy]

Yeah.

[Mike Santoli]

Kimberly Clark is buying Can View in a cash and stock deal valued at about $49 billion. Can you. Shareholders will receive 350 in cash and a fraction of a Kimberly Clark share for each Can View share they own. The companies say the deal will create a $32 billion global health and wellness leader and deliver about $2.1 billion in annual cost synergies. Kimberly Clark expects the transaction to boost adjusted earnings by the second year. The current CEO of Kimberly Clark might too, will lead the combined company. Now, just in terms of the calculus, Kimberly Clark is indicated lower. Yeah, by 12%. So if you do the fraction, it brings the per share value for Can View, I think a bit under 20 bucks a share. The stock was 21ish when a lot of the Tylenol controversy happened and the administration started to kind of blame acetaminophen for a lot of issues. So it kind of gets Can View back toward that level, but interesting nonetheless.

[Joe Kernan]

Yeah, but Andrew, is that bad enough for them to think this wasn't so great, or you think there's implied liability from acetaminophen or what? I mean, that's not a great market check for. For the day you announce something, is it isn't.

[Andrew Ross Sorkin]

It isn't a great market check. I'm trying to make sense of this, though. Look at Ken View stock up now 19%. Right. But below that, I want to dig into some of this a little bit more before I comment. I think there's got to be something going on underneath the covers here, but maybe.

[Joe Kernan]

And whether they're. They're covered on any future. Well, you can't find where.

[Mike Santoli]

No, it doesn't seem to explicitly say that. But I mean, I'll just say, you know, in terms of how stocks react, Kimberly Clark, you know, is owned by people who are kind of dividend farmers and you think it's a steady story. And so you have a big strategic move like this with some risks attached to it, and you probably get that reflex reaction. So we'll see. They're going to have a conference call, I think, jointly at 8:00am yeah.

[Andrew Ross Sorkin]

Right. But don't you think it's got to be the risks? Look at those. I mean, that 12 and a half, 13% is not, is not a.

[Mike Santoli]

No, it's not just routine arbitrage stuff.

[Joe Kernan]

Sell one, buy the other. Yeah, that looks worse.

[Sean Duffy]

All right.

[Joe Kernan]

Before we get.

[Charles Schwab Announcer]

Yeah.

[Joe Kernan]

Mark Carney. That's fascinating to me that he sort of threw Doug Ford under the bus. I was just wondering are those, are those ads still running from. Oh, wait, the World Series is over.

[Sean Duffy]

You lost, Doug.

[Joe Kernan]

I'm sorry, you lost. I mean greatest amazing, greatest seventh game in history.

[Mike Santoli]

Pretty close. Probably best seventh game I've seen.

[Joe Kernan]

Greatest mvp. Greatest mvp. If you haven't learned that this can make a difference on whether you win the World Series or not, that was. And the collision out. The collision out. I thought it was over multiple times. The greatest game.

[Andrew Ross Sorkin]

Yeah.

[Mike Santoli]

Now I think unfortunately or fortunately, a lot of teams are going to have their pitchers just train with javelins and stuff. That's what Yamamoto does. He doesn't use traditional training and everything else. He came out on zero days rest and pitch almost three innings.

[Joe Kernan]

I like I saw two Dodgers ran to get ran together and were celebrating and Freddie Freeman and one of the other guys and one said to the other, we didn't do sh.

[Sean Duffy]

Yeah, yeah, yeah.

[Joe Kernan]

We didn't do this guy. We didn't do squat. Fair enough.

[Sean Duffy]

Teas will be next.

[Katie Kramer]

Coming up next on squawk pod staffing shortages due to the government shutdown snarling plane traffic this weekend. Transportation Secretary Sean Duffy on air traffic controllers still on the job.

[Sean Duffy]

I was frustrated at the start of the shutdown. The controllers hadn't missed any pay periods. But as we sit here Today, we're what, 34 days into a shutdown and there's real consequences for the family members of these air traffic controllers.

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[Andrew Ross Sorkin]

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[Mike Santoli]

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[Katie Kramer]

Welcome back. This is Squawk Pod.

[Andrew Ross Sorkin]

Stand by.

[Mike Santoli]

Joe, his mic.

[Joe Kernan]

You're watching Squawk Box on cnbc. I'm Joe Kernan along with Andrew Ross Sorkin over in London. Classy place.

[Andrew Ross Sorkin]

It's, it's noon here. It's new.

[Joe Kernan]

Yes, it, it is noon.

[Mike Santoli]

We're back into line because we, we brought the clocks back an hour, right?

[Joe Kernan]

Yeah, that's how it happened. That's right. Mike Santoli, Yes. Obviously, you see Becky is off today. It is day 34 of the government shutdown. Still no relief in sight for air traffic controllers. Join us now, Transportation secretary Sean Duffy. Mr. Secretary, it's good to see you this morning. We are, we're near, I think a real, I don't know, watershed moment. Newark could be totally closed down at some point. A full ground stop at is that imminent?

[Sean Duffy]

Well, listen, we're seeing like a rolling thunder throughout the system. It changes day by day of what facilities are low staff, which means we have significant delays or cancellations. You saw in Newark yesterday was, was incredibly rough, significant delays. But I think what as we look forward, Joe, this week, at the end of this week, air traffic controllers are going to get a pay stub email that going to tell them how much they're going to be paid next week and that's going to be zero. And the clear point from the controllers that I've spoken with said, listen, a lot of them can deal with missing one paycheck, but a lot can. But many of them can. None of them can miss two paychecks. They all start their home finances fall apart and they're all going to have to look at taking second jobs or quitting and getting into another line of work. And the consequence of that is very real for our air system. We are 2 to 3,000 air traffic controllers short. I'm trying to put more air traffic controllers into the system. And what this is doing is making it more challenging and actually taking controllers out of the system. So this has long term impacts beyond when Democrats decide, when, you know, their little temper tantrum is over and they decide to open up the government.

[Joe Kernan]

I'm just, this is leverage. I'm just wondering how it works. And you know, the polls, Mr. Secretary, I mean, I can explain them, but not favorable in certain ways to Republicans. But if you look at what the minority whip said in the Senate, she basically said, look, we know this is what's going to happen. There will be families and others that are going to suffer. But we need to leverage and we're willing to, apparently willing to use it during these negotiations. And this is one of the tipping points, I think, that's going to happen this week.

[Sean Duffy]

Well, what is leverage? Their leverage is to hurt the American people. Right. They're willing to hurt air travelers, whether they're going to a funeral, they're going to see family members pretty soon. We're going to have kids coming home from college for Thanksgiving break. They're willing to endanger poor people who can't get food stamps. They're willing to risk subsidies in regard to health insurance. They don't care who they hurt. They care about power. By the way, we had an election a little less than a year ago and, and Donald Trump crushed it. He won the popular vote. He won the seven swing states. Democrats lost. And so if you want to pass legislation, you can introduce it, you can debate it. But government shutdowns, trying to garner leverage is not the way that you do it, debate it, vote on it, and then come back and try to win elections. But they lost. Donald Trump won. And to now say that you are going to hurt the American people, so Donald Trump has to talk to you. The that's not the way you do business. The Trump administration and Republicans are not going to be held hostage by these kind of asinine tactics by Democrats.

[Joe Kernan]

What could the government do? Or the what would you suggest? If we can pay the military, how could we figure something out for the air traffic controllers?

[Sean Duffy]

Yeah. So there are strict rules around what we can pay and what we can't pay in government shutdown. So we've kept our academy operational in the sense that we're paying our students in the academy a stipend that allows them to continue to get trained and pay their daily needs. We've paid for a central air service, air service that goes to smaller communities. We're pulling whatever money we legally can to keep the systems running. That's been the directive from the president. Don't try to inflict pain. Try to make this easier on the American people. Even, you know, President Trump kept snap running for an additional month from October to the 1st of November. We're trying to minimize the consequence, but when a government shutdown happens, you don't have resources. The Democrats haven't funded the government. And the consequence of that is there's only limited tools that we have. And so I can't just pull money from nowhere without violating the law and paying air traffic controllers. So I'm a bit in a box and there's nothing I can do until Democrats again decide to put down their swords and sit at the table, pass a bill and then negotiate for their priorities.

[Joe Kernan]

Is anyone who doesn't show at this point, are they going to be welcomed back, or will there come a point where you just find somebody else? Because we already have a shortage. Right. You need trained people.

[Sean Duffy]

That's a great question. I was frustrated at the start of the shutdown. The controllers hadn't missed any pay periods. But as we sit here Today, we're what, 34 days into a shutdown, and there's real consequences for the family members of these air traffic controllers. Again, as you know, every day new expenses come in. There's food expenses, there's gas in the car expenses, bills come in, whether it's your heating or electric bill, your rent or your mortgage was just due, your car payment was due. So there's real economic pain being inflicted. And I'm not going to, I'm not going to, you know, fire air traffic controllers who are trying to put food on their family's table. I am asking all of them to come to work. I want them to come to work. They have a job to do. I'm pleading with them to get into the towers and the facilities across the country and keep our airspace operational. But I also understand the real consequences of Democrat shutdown on the family lives of these controllers. And by the way, Joe, it's not just air traffic controllers. I have inspectors that are up looking at trains in different facilities across the country. I have people who are certifying airplanes that are. All these people are working and they're working without pay. You know, we have really old technology in our, in our air traffic control system. I have technicians that come in every day without pay to make sure that the equipment that the controllers are using is operational. So I have a whole slew of people who are coming in not getting paid, but fighting for the American people to keep our transit system working. And I think it's, I think Democrats should respect them, you know, pay them. And again, you can sit down and you can introduce bills, you can, you can debate those bills, you can vote on those bills. But this is not the way the process works. Joe, you and I are old enough to know. Remember Schoolhouse Rock? I'm just a bill on Capitol Hill. There's a way you pass legislation. This is not it. By way of a shutdown, holding the other side leverage. You lost the election, Republicans won, and now you hurt the American people to gain leverage. That's not the way the country works. And by the way, if Donald Trump, by the way, he's not going to do this, but he was to cower to this pressure, you would just have shutdown after shutdown after shutdown from Democrats to try to leverage their position after they lost the last election. And that's not going to work. We're not going to do it.

[Joe Kernan]

We need to match what we can do with safety. And that's, you know, I don't even like talking about it, whether the air is safe, and I'm sure you're doing it that way. You've got to cut the number of flights that we're actually allowed, are allowed to operate based on the safety you can provide. At this point, you'd say the air is just as safe as it was when the government was open because there's a third or half as many flights.

[Sean Duffy]

So that's the consistent question I get. Is the system safe? And you see more delays, you see more cancellations of flights, and that's because we slow traffic down because we don't have enough controllers in the towers and tracons to make sure we can navigate the flights. So that's a tool that we have to keep the system safe. I'm going to tell you this, though. Does it introduce another element of risk? If I have a controller doing two jobs, and by the way, they're certified, they're able to do both of those jobs. But is there more risk in the system when you have a shutdown? Absolutely, there's more risk. But if we thought that it was unsafe, again, we'll shut the whole airspace down. We won't let people travel. We're not there at this point. It's just significant delays. But again, if you're canceled or if you are delayed for 3 hours or 4 hours on your flight, there's one side to blame. Republicans have voted to open up the government. By the way, Joe, the funding in October was the very same as it was per the Republicans proposal in October. And these are Joe Biden era funding levels. So Democrats keep voting to shut the government down. Republicans are voting to open it. So if your flight's delayed, call your Democrat Senator, tell them to open it up. Tell them to have common sense and get our country moving, and then sit down and go through the legislative process.

[Andrew Ross Sorkin]

And Mr. Secretary, I'm coming to you actually from London this morning and happened to have a flight that was canceled on my way here, as it happens, I went through sort of a real rigmarole to make it over here. My question is, I was talking to a pilot last night, actually at Newark Airport on my way over here. We were discussing actually the safety issue, and he was saying exactly what you were saying, that it's that it should be just as safe, given that there's less, you know, planes that are, that are coming in at any one time, but that invariably the planes oftentimes have to stay in the sky longer, meaning that they're doing lots of, you know, turns around the airport because of the delays to come in. And he said, look, the more planes you have in the sky for longer, the more risk you've added to the system. Not to say that he's suggesting it's dangerous unto itself, but how do you, how do you think the public should think about that?

[Sean Duffy]

Well, I think, again, it's just what you said, Andrew. It is more risk. What we try to do is keep planes in the ground until they have clearance to take off and land at their destination. So we don't like to see a significant number of planes up in the air at the same time. But that can happen again as we look from, from one staffing group to the next. If the second staffing group of air traffic controllers start calling in sick and planes have already taken off, then we find ourselves in a situation where we have more planes in the air, we've slowed down the traffic, and that becomes problematic. By the way, I heard you were flying to London, so we made sure the FAA gave you a little problem on your flight. You're welcome for that. I'm kidding, Andrew. But I will tell you this international flight.

[Andrew Ross Sorkin]

Thank you, Mr. Secretary. I'll be sending a letter to my congressman.

[Sean Duffy]

Listen. On the international flight, so we work really hard. We have international agreements on these flights, and we work really hard to make sure that our international travel functions and functions well, because we abide by the international open skies agreements we have with foreign countries. And so we have to navigate that by way of our, our international contracts. So again, I have to imagine it was probably something other than air traffic controllers on your flight. But again, this is ricocheting through the economy, and, and so it's not just the consequence on our air travelers. We heard from the United CEO saying, listen, we're seeing our bookings come down. Less people travel. That's less people eating out at restaurants, less people staying in hotels, less people renting cars, buying gas. This starts to again ripple through the economy and has real consequences when people don't travel. And so again, opening it back up and having the Congress actually function the way it's supposed to, going through the legislative process is going to help the economy, help jobs, but also help those travelers who are traveling on business or for personal reasons.

[Joe Kernan]

All right, we're going to end it there. Mr. Secretary, appreciate you coming on this this morning. Thanks, Andrew. You don't. I didn't want to write your congressman. I think you ought to write your new mayor. I think your, your air travel is free at this point. To and back. Isn't that going to be part of the. No, we shouldn't have.

[Andrew Ross Sorkin]

Maybe the bus to the airport. Maybe the bus to the airport.

[Joe Kernan]

Free bus to jfk. Oh, but you got to pay for your okay, all right. I know there's some free stuff coming.

[Andrew Ross Sorkin]

I'll be paying for it, but my taxes will be higher, so I'll pay.

[Joe Kernan]

For it that way. You, my friend, are paying for a lot from here on out.

[Mike Santoli]

A lot.

[Katie Kramer]

Up next on Squawk Pod, we're talking big tech with Tim Wu. He worked as President Biden's architect on competition and antitrust. Competition fuels innovation and big tech benefits from its challengers.

[Tim Wu]

If you have these big giants, you want them fighting. If I was still in government, I'd want to sort of provoke it.

[Katie Kramer]

Plus, how President Trump's pardon of billionaire Binance founder CZ changes crypto.

[Mike Santoli]

It's a free from.

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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, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update. Wherever you get your podcasts.

[Katie Kramer]

You'Re listening to Squawk Pod from CNBC today with Joe Kernan, Andrew Ross Sorkin in London, and Mike Santoli, who kicks off this next conversation.

[Mike Santoli]

Our next guest is sounding an alarm on Big tech's power and its impact on the economy. Joining us now, Columbia University Professor Tim Wu. He is known as the architect of the Biden administration's competition and antitrust policies. His new book is out tomorrow. The Age of Extraction. How Tech Platforms Conquered the Economy and Threaten Our Future Prosperity. It's great to see you.

[Tim Wu]

Great to see you too.

[Mike Santoli]

I guess just frame out big picture. Why now you sound this alarm on big tech? Is it just a continuation of their dominance or what's changing in terms of their position in the end?

[Tim Wu]

You know, I think, you know, I think about seven years ago they started becoming this dominant position. But I think usually in the economy you start to have some serious challenges. I think they've really locked in, entrenched their power. In particular in the air age, there's a sort of urgency. Is it, is it just going to be them? Are they going to, you know, have such a take on the rest of the economy that nobody else can really make money?

[Mike Santoli]

That's an interesting piece of this because on one level, only those companies could invest on the scale they're investing in right now, but the desperation and urgency that's implied and how fast they're going on that. I wonder if that suggests they believe that their core businesses are vulnerable if they don't do this. So therefore maybe, you know, competition is working.

[Tim Wu]

I mean, I think here's. Well, that's the question. I think the big question right now is whether AI is actually a threat to the tech platforms or whether they manage to use artificial intelligence. They are some of the big investors to insulate themselves in perpetuity. I mean, open AI is not one of them. OpenAI is a challenger. So sort of behind the scenes people aren't paying attention to the fact that we may have the establishment of a dominant sort of global monopoly that lasts a really long time and I think extracts a big price. Or we could have a real challenge from AI and a new, a new kind of, a new prosperity based on that.

[Mike Santoli]

It's interesting. OpenAI, you mentioned that they're the challenger, but they're also creating this web of relationships with all of the. The kind of, you know, incumbent players, right, as one way or another, cloud services relationships. They're investing on the processor side with Nvidia and all the rest. What does that mean in terms of how this evolves from here and what are the costs that you're really looking at that, you know, average people might pay ultimately.

[Tim Wu]

I mean the costs are the typical costs of monopoly. I think every company looks good at the beginning but these, you know, Amazon, Google, so forth, they've been there a while, they're starting to extract more and more. They extract more from everybody else. You know, look at advertising prices, look at what Amazon sellers sell. I think it's getting more and more. I think the key question, and I keep saying it, if you have these big giants, you want them fighting. If I was still in government, I'd want to sort of provoke it. I think government needs to scrutinize more carefully the efforts by the big tech companies to control AI. So there's a fight and we see a renewal of innovation and progress.

[Mike Santoli]

Okay, so what I guess in a tangible way could government do to kind of instigate these fights?

[Tim Wu]

Well they could take a closer look for example at some of the deals. There's these reverse acquisitions that they've, that they've been making of a. Microsoft made one recently of an AI company, the open air. Microsoft was careful not to completely buy open AI. But if anyone gains control, anthropic Amazon is trying to get control of them. I think the government should be watching and try to prevent the AI challengers from being controlled by big tech and insulating their monopolies.

[Mike Santoli]

Is there. I know there's a debate out there about whether some of these businesses are to some degree natural monopolies. Whether you know, because of the network effects, because you know, the benefits of scale and just, you know, Google has dominant dominance in search maybe for decent reasons ultimately now you see as a company like Alphabet feeling vulnerable on its search franchise. So I guess I keep wondering whether in fact even if all this money is being spent well, it might create these sort of parallel players as opposed to one big one.

[Tim Wu]

It's a good question. I mean I'm always afraid that natural monopoly is a self fulfilling prophecy.

[Joe Kernan]

Right.

[Tim Wu]

You just say oh it's an act so nothing can happen. I believe in challenge. I believe that that's the path to greater prosperity and more innovation is some as companies challenging each other. So I wouldn't count everything out. I mean I think it is an uncertain time but I think we should have our thumb on wanting to be more uncertain. I'm very concerned. The main reason for these giant investments in AI is to try to insulate the monopoly as opposed to actually make products better. And I think we're in these, these, these are middle aged monopolies. They're due for a real challenge.

[Mike Santoli]

And there's been a lot of attention on what has been referred to as sort of the circularity of some of these investments. I don't know if this is something you would directly have addressed, but in video with all of its excess cash it's pulling from all of these cloud players and such, they're kind of reinvesting it and seeding some of their customers more or less and having those come back and revenue. Now they say there's no stipulation on how it's spent. But how does that work into all of that?

[Tim Wu]

This, you know, I think it's, it's under examined. I think we're in an era where, you know, the particularly antitrust enforcers have an older tool but they're not looking at how these web of creation, these web of contracts may inhibit competition in new ways. And I think it's something we need to be better with.

[Mike Santoli]

Andrew.

[Andrew Ross Sorkin]

Hey Tim, can you just speak to the, just the pure scale of, of capital that's required to, to really fund a huge large language model, especially those that are on the frontier. And the reason I ask is because ultimately, and I think we're seeing it, some of these, some of these folks ultimately are turning to these circular deals because there isn't even enough cash as it is. So then I think to myself how is it that we would fund all of this if in fact we didn't let some of these bigger companies engage themselves and get involved?

[Tim Wu]

I mean, I'm not saying bigger companies can't get involved. I'll say two things. First, I'm not saying they can't get involved. I just want to make sure that they, the bigger monopolies do not completely buy off the threat to, to, to them from for me, I mean for example, if Google could have somehow bought OpenAI five years ago, they would have maybe open, I wouldn't have sold. But you know there's, there's a real danger of that happening. But also moving away from non frontier. I mean in some it's not quite commodified yet, but there are lower cost versions of AI that also make an important challenger products and I think we're going to see more of that in the times to come. You know, whether it's the Chinese competitors, whether it's just people using non frontier but still good AI to try to challenge some of the major players.

[Andrew Ross Sorkin]

I just have one more which relates to the, you mentioned China. You know, one of the things that all of these tech companies say is we're in this, you know, race with China, and that. That is so critical. And I just want to understand from your perspective, whether we should be even taking that piece of it into consideration or not, from a sort of national security resiliency perspective now that. Now that a lot of this investment, and by the way, even the tariffs have been sort of, you know, put in the flag of national security and resilience, where that sort of plays in your thinking.

[Tim Wu]

Yeah, I mean, when I was in government, we spent a lot of time trying to slow down China. I think we had some success in that with some of the semiconductor measures and so forth. But I think this is really important. I think the most important industrial policy for the United States at home is competition. In other words, what we want is we want a big fight at home so our companies are stronger when they face the Chinese companies. And I think if we just say, well, you know, everything's being invented by two or three big guys, it's like putting a huge bet on IBM in the 70s or AT&T in the 70s. Actually, it was other companies who ended up being the most important. And we sacrifice our. If we end up worshiping monopoly, we sacrifice our own competitiveness.

[Mike Santoli]

Tim, thanks a lot. It's been a pleasure coming in. Good luck with the book.

[Tim Wu]

Thank you.

[Joe Kernan]

President Trump commenting on his pardon of Binance co founder CZ Changpeng Zhao. Here's what he said on 60 Minutes last night.

[Katie Kramer]

In 2025, his crypto exchange, Binance helped facilitate a $2 billion purchase of World Liberty Financials Stablecoin. And then you pardon cz, how do you address the appearance of pay for play?

[Donald Trump]

Well, here's the thing. I know nothing about it because I'm too busy doing the other, but he got a burn. I can only tell you this. My sons are into it. I'm glad they are because it's probably a great industry, crypto. I think it's good. You know, they're running a business, they're not in government.

[Joe Kernan]

Yeah, there's been a lot of. A lot of crypto sort of discussion. Andrew, this was obviously. What do you think?

[Andrew Ross Sorkin]

I mean, I think he's directly saying. I think he's saying, look, my sons like it and they're involved in it and involved with him to some degree. I mean.

[Joe Kernan]

Right.

[Andrew Ross Sorkin]

The thing about him is he's. He's open in that. He's just saying that's how it happened. But I don't think that makes it any better in that I think that it still undermines the credibility of, of the, of this whole issue different than.

[Joe Kernan]

I mean, we've had, I think, both, both sons on talking about various ventures and, you know, separate and distinct from what goes on with, with the president. But it's the quid pro quo, or at least the appearance of quid pro quo or with the, or buying a pardon basically, with, with the investment in World Financial. I don't know how you. Yeah, I don't know how you'd prove that in a court of law, but.

[Mike Santoli]

No, and also the net effect of all this is that it's sort of gone back and decriminalized most of what, you know, had been considered to be improper behavior within the crypto world.

[Joe Kernan]

Right.

[Mike Santoli]

Not just this part, but a series of them. I did basically say it's a free for all.

[Joe Kernan]

Right, Right.

[Andrew Ross Sorkin]

But that's the question. And what, and how much should we be concerned about, you know, bribery and other things taking place and, you know, money laundering taking place on these, these systems if it's been decriminalized?

[Joe Kernan]

What did we think of. I was torn on, on whether cz, on whether the punishment fit the crime in his case in the first point, but then whenever he came on Andrew, and we would, we would sort of drill down on, on the specifics in terms of audits and everything else, we never got really satisfactory answers there. And it always seemed like there were question marks. Remember times when he's been on.

[Andrew Ross Sorkin]

But, but, but then in fairness, in fairness to the president, the truth is that, you know, Sisi was not engaged himself in money laundering. They were using his platform for money laundering. The question is what kind of, you know, restrictions and other things was he putting on or not putting on, and how much of this did he know was happening and effectively disregarded it? There are folks out there who say to themselves, you know, that there's terrible things that happen on social media platforms, for example, some of which frankly, could be even considered illegal, if you will. And nobody's, you know, arresting, you know, the leaders of these companies. So I get that argument. Having said that, I think the connection between CZ and this company and the family itself of the president, whatever the actual reason is for pardoning him, it sort of undermines the credibility of it. And that, I think, has to have some value.

[Katie Kramer]

That is. Squawk Pod for today. Thanks for starting your week and your month with us. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern to get the smartest takes and analysis from our TV show right into your ears. Follow Squawkpod wherever you get your podcasts. We'll meet you right back here tomorrow.

[Mike Santoli]

We are clear.

[Andrew Ross Sorkin]

Thanks guys.

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