Cheating in Chess with Ben Mezrich, Taxing AI with Andrew Yang 6/4/26

Summary

Squawk Pod Episode Summary (June 4, 2026): “Cheating in Chess with Ben Mezrich, Taxing AI with Andrew Yang”

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Episode Overview

In this episode, the Squawk Pod takes on two major stories: the future of jobs and taxation in the era of artificial intelligence, and the explosive recent scandal shaking the world of professional chess. Featuring interviews with Andrew Yang – entrepreneur, political figure, and vocal commentator on technology’s impact – and bestselling author Ben Mezrich, the episode navigates questions of fairness, innovation, and how society responds to rapid disruption. CNBC hosts Joe Kernen, Becky Quick, and Andrew Ross Sorkin offer sharp analysis, debate, and a blend of humor throughout.

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Key Discussion Points & Insights

1. Markets & Economic News

Timestamps: 02:25 – 06:12

• The S&P 500 and NASDAQ broke their nine-day winning streaks, suffering their worst day in several weeks, largely due to disappointment in Broadcom’s revenue and the broader chip sector downturn.
• “Crypto winter” was referenced as Bitcoin fell another 3.8%, now just above $63,000, with speculation around whether IPO anticipation (notably SpaceX) is shifting capital.
• The panel discussed the persistent issue of exceedingly high expectations for tech stocks in the AI boom, with notable volatility and regulatory headwinds on the horizon (e.g., potential data center taxes).

2. Geopolitics: Iran, Israel, and U.S. Policy

Timestamps: 07:05 – 09:52

• The House voted 215-208 to restrict presidential military action against Iran— a rare GOP rebuke of the sitting President.
• Israel-Lebanon announced a ceasefire driven by U.S.-led negotiations. Netanyahu’s evasive response on U.S. pressure and Hezbollah’s involvement is noted.
• The ongoing complexity of U.S. foreign policy, Middle Eastern instability, and impacts on global markets were highlighted.

3. Technology, AI Displacement & Tax: Interview with Andrew Yang

Timestamps: 17:58 – 31:12

The AI-Labor Disruption

• Andrew Yang paints a stark picture: "Are we replacing junior analysts, junior engineers with AI? 100%. And if we are doing that, then I guarantee organizations around the country are doing the exact same thing.” (21:14)
• Yang’s real-world experience running a company (Noble Mobile) brings credibility: the “easiest people to fire are the people you haven’t hired yet.”
• Historical analogies are called into question – hosts debate whether AI is different from past waves of technological labor disruption.

Should We Tax AI & Data Centers?

• Yang and Senator Elizabeth Warren (cited from a previous Squawk Pod) advocate for excise taxes on AI computation/data centers as a way to buffer labor losses and fund social safety nets.
• “You tend to tax things you want to discourage… We should actually try to stop taxing labor… and try to tax the AI agents instead.” — Andrew Yang (18:54)
• Industry leaders support this: “Dario Amadei, the CEO of Anthropic, said, Tax us, please. He proposed a 3% token tax.” (22:34)
• Local resistance to new data centers is mounting, with growing moratoriums proposed across various states.

Why Retraining Workers Isn’t the Solution

• Yang bluntly critiques past retraining efforts: “I looked at the success rates of US Government funded retraining programs for the manufacturing works in the Midwest and the general effectiveness rate was 0%.” (23:04)
• Government-funded certificate programs often proved “valueless,” leaving many workers out of the labor force.

Concrete Proposals

• Yang proposes shifting the tax burden away from human workers and incentivizing companies to hire more people:
  • “If I hire a young person, I’m going to pay 7 to 10% in FICA and state unemployment and a bunch of taxes… If you start to lighten those costs and taxes, then people like me hire more people.” (23:54)
• Health care costs are identified as a major drag on entrepreneurship and hiring. Yang supports “getting health care off of companies” to unshackle small business formation. (24:39)
• The hosts debate whether taxing AI/robots should reduce the deficit, fund social services, or support “involuntary entrepreneurs” forced into new ventures after layoffs.

Notable Quotes & Memorable Moments

• “Saying we’re going to retrain workers sounds great as a soundbite, but it doesn’t add.” — Andrew Yang (23:39)
• “If we get tax from the robots… it should go toward creating this wellspring of entrepreneurship that is going to happen here in the US…” — Andrew Yang (29:50)
• Yang distances himself from the idea of a wealth tax, citing high mobility of capital and potential negative unintended consequences. (28:43)

Societal Warning

• “You have this diminishing pool of human workers who are paying the tax revenue looking up, saying, where the heck is the tax going?” — Andrew Yang warns about impending fiscal imbalance if AI/robotics companies evade meaningful taxation. (27:18)

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4. Chess, Cheating, and Viral Scandal: Interview with Ben Mezrich

Timestamps: 33:01 – 42:21

Synopsis of “Checkmate: Genius, Lies, Ambition and the Biggest Scandal in Chess”

• Mezrich recounts the shocking 2022 match: Magnus Carlsen (“the Mozart of chess”) loses to 19-year-old “bad boy of chess” Hans Niemann in St. Louis, alleging cheating.
• The scandal involves not just sportsmanship, but the business of chess — Chess.com’s purchase of Carlsen’s company, Hans’ $100 million lawsuit, and the explosive rumor Hans used vibrating anal beads to receive signals.
• Mezrich humorously details how the anal bead rumor originated: “I track down how that rumor started. And it’s this dude in Liverpool… by night is an Internet troll… Him and his buddies on Reddit were like, you know, it would be funny…” (35:46)

Technology, Cheating, and the Chess Business

• Today, “any 12 year old with an iPhone can beat Magnus Carlsen.” (37:02)
• Hosts and Mezrich riff on “dark factories” and the merging of chess, AI, tech-assisted cheating, and the business gold rush in online chess.
• “Chess is a multi-billion dollar business… Chess.com, a billion dollar business… If you’re in the top 10 in chess, you’re making real money now, like a real sports star.” — Ben Mezrich (39:21)

Notable Quotes & Moments

• “So the story is that he cheated by use of anal beads. They vibrated and gave him moves.” — Joe Kernen, embracing the tabloid angle with comic flair (35:46)
• “At a Grandmaster level, Magnus Carlsen has famously said, if someone gave me one movement, I would never lose again.” — Ben Mezrich (36:58)
• Cultural resonance: Mezrich compares “Checkmate” to his past books “Bringing Down the House” and “The Social Network,” revealing upcoming film plans and the unique cultural cachet of chess in the streaming era.

Reflections on Cheating, Technology & Transparency

• Increasingly sophisticated cheating (e.g., tiny earpieces, signal bands, live-stream tactics) threaten the integrity of chess.
• “We’re getting to a point where people are going to have to play naked in, like, a glass booth. Because the reality is the technology is so good.” — Joe Kernen (38:37)
• Discussion of chess’s pandemic surge, mainstreaming on streaming platforms, and future as an entertainment and betting commodity.

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Notable Quotes & Segments (with Timestamps)

• On job loss and AI:
  • “Are we replacing junior analysts, junior engineers with AI? 100%...” — Andrew Yang (21:14)
• On retraining futility:
  • “General effectiveness rate was 0%.” — Andrew Yang (23:04)
• On scandals that go viral:
  • “So the story is that he cheated by use of anal beads. They vibrated and gave him moves.” — Joe Kernen (35:46)
• On generational divides in chess:
  • “Younger people look at, he’s admitted to cheating online many times… But he says there’s a difference between cheating online and cheating in a room…” — Ben Mezrich (35:28)
• On the future of the chess business:
  • “Each time a country locked down… now 600 million people play chess...chess.com, billion dollar business…” — Ben Mezrich (39:21)
• On the pervasive reach of tech in integrity and fairness:
  • “You have this diminishing pool of human workers who are paying the tax revenue looking up, saying, where the heck is the tax going?” — Andrew Yang (27:18)

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Structure & Tone

• The panel blends earnest concern regarding economic and technological change with their trademark banter and wit.
• Both interviews are lively, informative, and reflective, balancing policy wonkiness with pop culture touchstones (from “bad boys of chess” to the viral bead theory).
• The episode pivots seamlessly from macroeconomic issues to the world of elite chess, illustrating how technology, transparency, and fairness are at the epicenter of both.

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Recommended Listening Segments

• Andrew Yang on AI, taxes, and jobs: 17:58 – 31:12 (especially 21:14, 22:34, 23:04, 23:54)
• Ben Mezrich’s chess scandal breakdown: 33:01 – 42:21 (notably 35:46 – 36:58, 38:37, 39:21)

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In sum:
This episode of Squawk Pod delivers a provocative, often entertaining exploration of society’s struggle with rapid technological change and the surprising ways age-old games – like chess – are rocked by the same disruptive forces impacting global labor markets. The combination of expert guests, revealing quotes, and sharp host interplay makes it a must-listen for anyone interested in the future of work, the power of rumor, and the evolving intersection of technology and culture.

Transcript

[Becky Quick]

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[Show Producer/Announcer]

Bring in show music please.

[Cameron Costa]

This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, we're talking AI job displacement and AI taxes with former presidential candidate Andrew Yang.

[Andrew Yang]

I run a company, Noble Mobile. The easiest people to fire are the people you haven't hired yet. So are we replacing junior analysts, junior engineers with AI? 100%. And if we are doing that, then I guarantee organizations around the country are doing the exact same thing then.

[Cameron Costa]

Author Ben Mesrich is out with a new book, the Biggest Scandal in Chess and the Internet Theory on how the 19 year old chess prodigy defeated world champion Magnus Carlsen. A hint. It is definitely not safe for work.

[Joe Kernan]

It's this crazy thing that's not supposed to happen. And the way he might have cheated turned into this viral sensation. Are we allowed to say it?

[Andrew Ross Sorkin]

Yeah, you can say it.

[Cameron Costa]

And that's not the only surprising story today.

[Joe Kernan]

They don't say this every day. Flesh eating screw worm. A flesh eating screw worm.

[Cameron Costa]

Plus the House vote on a war powers resolution to halt US Military action in Iran. And Jamie Dimon is reportedly pitching the SpaceX IPO. It is Thursday, June 4, 2026 and Squawk Pod begins right now.

[Joe Kernan]

Stand Becky by in 3, 2, 1.

[Becky Quick]

All right. Good morning everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernan and Andrew Ross Sorkin. We are back in New York after being in D.C. this week.

[Joe Kernan]

Glad to be here, everybody well rested?

[Becky Quick]

Oh, yeah, we're here. We're here for all of this. Look, all good Things have to come to an end. And that was the case yesterday, at least for the bulls. On Wall street, you had both the S&P 500 and the NASDAQ ending nine day winning streaks. They had their worst day since May 15, I believe the S&P 5 or the Dow was down as well and it had its worst performance since all the way back to March. The Nasdaq under pressure because of the results from Broadcom and the disappointment that's kind of spread through the chip industry this morning. We'll talk more about that in a little bit. But it looks like the N NASDAQ right now is off by just over 300 points and Bitcoin continues to fall. You might want to call this a crypto winter at this point. It's off another 3.8%. Bitcoin sitting just above $63,000.

[Joe Kernan]

Journal. Much of that is really crypto turns bitter cold.

[Andrew Ross Sorkin]

And the question though is how much of that is a function of space X or IPO money going there. Tech pullback, is it? Or is there an actual sentiment change about. Right. I mean you have the Micro Saylor piece, by the way, even though just talking to someone like Mark Cuban, you know, came out publicly and said that they dumped all their shares.

[Joe Kernan]

What I call last week.

[Andrew Ross Sorkin]

You.

[Becky Quick]

You.

[Joe Kernan]

When I said it last week, you looked at me like I was crazy. What did I say? Dog with fleas. What was that? Wednesday or Thursday?

[Andrew Ross Sorkin]

So that's. I looked at you like crazy for. You've been telling me it's, it's. It's like.

[Joe Kernan]

Well, I saw it happening. Well, I mean it's. Yeah. As you were negative the entire way from 5,000, it went to 125,000. So it's pretty darn great.

[Andrew Ross Sorkin]

Right?

[Joe Kernan]

It's still at 60. I mean even at 63, you know who could be right? Katie Stockton said 59 and we went to 80 in the meantime. Maybe she'll be right about that. She could be right about the S and P. The way things are sort of acting right now at 7100 other people could be. Actually she's below that 7550. I know, but down for the first

[Becky Quick]

time after being up for nine sessions.

[Joe Kernan]

Well, we talked about things like Micron. Micron's down about $60 today. Micro didn't even say anything.

[Andrew Ross Sorkin]

I think we've.

[Becky Quick]

Broadcom did.

[Joe Kernan]

Well, I know Broadcom didn't really say anything that bad.

[Becky Quick]

Just the problem is, is those stocks are trading at pretty. That's why earnings relative. That's why like an Nvidia, which is in the low 20s still. Broadcom was above 30.

[Joe Kernan]

And you ask about Times Forward, I immediately said, what's up in the Dow? The Dow's just, I mean, Cisco's up a couple of points. Walmart's up $2. Amgen's up almost 5. Coca Cola is up a little. It's, it's, it's almost like it's just normal company and normal stocks. Unlike the stilts that we've seen in,

[Becky Quick]

I mean, micron, 4%.

[Joe Kernan]

How much was Micron up in the last year? It went from like 100 bucks to a thousand.

[Becky Quick]

I think Broadcom's up more than 40% over.

[Joe Kernan]

Yeah, but I mean some of these stocks are up, oh, one year. That's what I mean. So it's down today, whatever it is. I don't think this Journal piece on the front page helped either. The data center piece that there's, for a myriad reasons it's not going to be, I mean even permitting, which we talked about yesterday in D.C. right. Still have permitting problems.

[Becky Quick]

And that's before like Elizabeth Warren wants to tax these data centers too. That's before you get regulators that have their hands on any of these things.

[Joe Kernan]

When I read that about Elon Musk, that she's the first person I just thought of why tax trillionaires when you can tax billionaires?

[Andrew Ross Sorkin]

Billionaires when you know, that was why

[Joe Kernan]

they did that opposite in Austin Powers, if you remember. Yes, yes, that's, that was the, the.

[Becky Quick]

Let's get back to Broadcom. Those shares are tumbling. The earnings beat estimates yesterday, but revenue was below what Wall street was expecting and the company didn't raise its full year target of $100 billion in AI chip sales. That came as a disappointment to the Street. You can see that stock is now off by about 12%. However, it jumped 48% from a year ago and the company's current core revenue guidance was higher than Wall Street's forecast. It's just expectations have been incredibly high for all of these chick companies. And if you can't not only meet or slightly beat expectations, you need to blow them out of the water. If not, you see this disappointment that we're seeing on the street and that's certainly the case.

[Show Producer/Announcer]

The yays are 215 and the nays are 208.

[Joe Kernan]

The concurrent resolution is adopted.

[Andrew Ross Sorkin]

Meantime, we got a rare Republican rebuke for President Trump in Congress. The GOP led House voted to restrict the President's ability to continue the war in Iran without Congressional Approval now, the war Powers vote passed 215 to 208 with four Republicans joining Democrats. House Speaker Mike Johnson calling the result a very unfortunate outcome and said it was dangerous at a serious time. Democratic Congressman Ro Khanna saying the vote was the beginning of the end of the war. The bill now heads to the Senate

[Joe Kernan]

and developments in the Middle east are occurring right now. Israel and Lebanon announcing a ceasefire last night. Eamon Javors joins us now with the details. What's up, Eamon?

[Show Producer/Announcer]

Yeah, good morning, Joe. Here's what we know. Israel and Lebanon announced a ceasefire last night as a result of U. S led negotiations on the condition that Hezbollah stops firing at Israel and withdraws its personnel from certain sectors. Now, it was not immediately clear if Hezbollah itself would commit to the deal. That's obviously the linchpin of the whole thing. The news came just a few hours after our Sarah Eisen sat down with Israeli Prime Minister Benjamin Netanyahu in Jerusalem yesterday. And she asked him directly if he had agreed to President Trump's request to stop fighting in Lebanon. At that time, Netanyahu gave a somewhat evasive answer. Here's what he said.

[Becky Quick]

Did you tell him that you would stop in order to get the peace talks going?

[Andrew Yang]

No, I think what we discussed is something else. They were firing. Hezbollah was firing these terror missiles into our cities. You know, they hide behind their civilians and they fire at our civilians. Like Hamas in Gaza. They commit double war crimes. And we are responding. We're targeting the terrorists themselves, the terrorist chieftains, many of them are in Beirut.

[Show Producer/Announcer]

So Netanyahu there saying that he did not commit to that with the president. Now the Iranians have said that any overall peace deal must include a settlement of the violence in Lebanon where Israel is trying to degrade Hezbollah, which of course is an Iranian proxy force. Now President Trump said yesterday that negotiators are making progress on an overall deal with with the Iranians. Now the text of the smaller deal that was released last night said that the parties would work to create what it called pilot zones in which the Lebanese armed forces will take exclusive control of the territory to the exclusion of non state actors. You can read Hezbollah into that. Now the party is also committed to further talks in the week of June 22, they said with a view toward reaching a comprehensive agreement. Back over to you guys.

[Joe Kernan]

All right, Eamon, thank you. So here it is. It's a new world. Screwworm has been detected in a cow in Texas. The USDA said it identified the parasitic fly in a three week old calf. The screwworm burrows into the flesh of living animals and can infest livestock and other warm blooded animals, including humans. In Rare cases, the USDA has established a 12 mile infested zone and is implementing quarantines increasing traps for the insects along the border. 26,000 cases have been identified across Mexico already and efforts have been underway to prevent them from spreading. You've got pictures, you've got looking at

[Becky Quick]

the, it's the, the larva that they lay not only in open wounds but also on mucous membranes of the animals that then can burrow into you. The Agricultural Secretary, Brooke Rollins, assured Texas ranchers that USDA personnel have already been called into this. But the Texas Agriculture Commissioner, Sid Miller, has been very critical of the federal response. He says that USDA moved too slowly and relied solely on, on a partial solution that takes years to fully implement. It's this release of sterile flies that they've been kind of putting out there, but that will take time.

[Joe Kernan]

That's interesting that they release sterile flies. That's how you deal with it.

[Becky Quick]

That's the slower way that he's critical of, that he'd like to see. I don't know what the faster way is of dealing with this.

[Joe Kernan]

This is a worry about the cattle or the cattle. It's not like we're not worried about it that we're going to get.

[Becky Quick]

It's very rare that it actually affects humans. But you are already looking at cattle levels at the lowest levels and 75 years in this country, high prices and if you have to then go through and start calling herds as a result, it's going to be a very big issue.

[Andrew Ross Sorkin]

JP Morgan CEO Jamie Dimon will discuss the SpaceX IPO with thousands of the bank's high net worth clients. Today he's going to host a live interactive discussion from JP Morgan's headquarters that's accompanied by Mary Callan, Mary Erdos and a pair of SpaceX executives. The event be broadcast to around 90 JP Morgan locations across 26 states. Just goes to show sort of how everybody's pulling out the stops here. And according to the Space X prospectus, Elon Musk's stake in the company is worth $866.5 billion. On paper, that means the Space X IPO will likely rocket Musk's net worth past $1 trillion. His Tesla stake is worth about $355 billion with options that could be worth more than $100 billion. But you know when you start to therefore go back to the Elizabeth Warren conversation we were having yesterday, if you had to effectively pay a 2% fee.

[Joe Kernan]

Wait a minute.

Wealth tax, 2 cents. It's not 2, it's 2 cents every year.

[Andrew Ross Sorkin]

A 2%. No, but if you have she deliberately. If you have said if you have to pay 2% on that, remember this, there's only a 4% float on the entire thing.

[Joe Kernan]

Yeah.

[Andrew Ross Sorkin]

So there's lots of other.

[Becky Quick]

Couldn't possibly sell 2% every year.

[Andrew Ross Sorkin]

It would be, it would be very challenging in that case to do that because you'd have to actually sell. And what is the impact of the selling so many the rest of the market and other things. This is why I've always thought if you're going to tax people, and by the way, I'm not against different forms of taxation, you have to do it though I think ultimately on realized gains.

[Becky Quick]

Yeah.

[Joe Kernan]

It's because you could be worth half of what you're worth the next year.

[Andrew Ross Sorkin]

Well, that's the other piece.

[Joe Kernan]

Crypto.

[Andrew Ross Sorkin]

Right.

[Becky Quick]

The one thing down 28% for the

[Andrew Ross Sorkin]

one thing that I think is compelling, not about the wealth tax, but the thing that she does say and why I think she's gone this direction is there's so many other loopholes. What's happened here is because nobody is dealt. No, no. Because nobody's figured out a way to deal with the step up in basis at death. Nobody's dealt with the issues around carried interest. Nobody's dealt with any of the actual issues.

[Becky Quick]

The show just keeps getting bigger and bigger and it's a mess.

[Andrew Ross Sorkin]

And it's not just. It's a mess more broadly, it's a mess in favor of. It is a mess in favor of the wealthy on a relative basis to other cities.

[Becky Quick]

It's a mess in favor of anybody who can hire an accountant or a lawyer who can walk you through.

[Joe Kernan]

But that was the whole point. Do everything you want to do. That was my whole point is do everything you want to do. And it doesn't make a dentist. Maybe for optics it does, but it doesn't make a difference. You're going to have to do other things.

[Andrew Ross Sorkin]

But there's a fair question.

[Joe Kernan]

How about if we cut 2 cents, we cut 2 cents of federal spending? Let's do that and see what happens.

[Andrew Ross Sorkin]

But there is a fair question, and I do think it's a real question about you. I know you're going to put air quotes around it, but fairness, like, I think that's a real thing.

[Becky Quick]

If you want to do the tax code.

[Andrew Ross Sorkin]

I often say that the tax code is a manifestation of democracy and it is crazy for people who are of lower at the lower end pay a

[Joe Kernan]

much higher rate because of the billionaires, not because of the tax system, because

[Andrew Ross Sorkin]

it's very even billionaires, by the way, 60%.

[Joe Kernan]

Andrew. It's very progressive. You shouldn't be worried about you of all people living in New York.

[Show Producer/Announcer]

Tease will be next.

[Cameron Costa]

Coming up on Squawk Pod, politician and entrepreneur Andrew Yang on the issue that could make waves in the midterms and well beyond.

[Andrew Yang]

I saying we're going to retrain workers. Sounds great as a soundbite, but it doesn't.

[Joe Kernan]

What are you going to do with the revenue you raise from the taxes? But what good is it to tax it then if you can't do anything to help the people that are getting displaced?

[Andrew Yang]

What we need to do is create incentives for people like me to hire more human beings.

[Cameron Costa]

AIs, labor market impact, the concept of taxes and the future of entrepreneurship in America. Right after this break,

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[Joe Kernan]

AT&T business Wireless connecting changes everything.

[Cameron Costa]

Welcome Back to SquawkPod. AI data centers are famously greedy beasts. They demand enormous amounts of energy and water to run, and that demand has sparked protest in many communities where they're being built around the country, communities concerned about water supply and higher home energy prices, not to mention job displacement, are speaking up to their local leaders, and the issue is becoming an important one for the upcoming midterms. Some municipalities have instituted moratoriums on new data center projects, and states like New York, Maine, Maryland, Vermont, Georgia, Michigan and others have introduced legislation to do the same, though none have successfully passed said legislation, at least not yet. At this point, the answer to the data center conundrum may be taxes. Former presidential candidate Andrew Yang made news on our air back in March with this idea.

[Andrew Yang]

You tend to tax things that you want to discourage, that you want less of, and we're going to be in a position where we want to shore up labor in every quarter, in every organization and environment. We should actually try to stop taxing

[Becky Quick]

labor because it's the agents instead.

[Andrew Yang]

The AI agents. Yes, exactly, Becky.

[Cameron Costa]

And he's not alone. The way many see IT, taxes on AI and on the data centers that provide AIs compute power, could fund social services, and could ultimately cushion AI's blow to the labor market and community resources. Senator Elizabeth Warren, in her conversation with our anchors just yesterday, proposed exactly that.

[Becky Quick]

I've proposed, for example, an excise tax on the data centers themselves, the place where all of this is being produced, so that in effect, they internalize the cost of what they're doing. And that's money we can then spend on health care. It's money we can spend on child care. It's money we can spend on education. Education so that people can train for.

[Andrew Ross Sorkin]

But shouldn't we be doing that?

[Cameron Costa]

You can hear the rest of that conversation on yesterday's squawk pod. Senator Bernie Sanders recently suggested an American AI sovereign wealth fund to give Americans access to the success of these AI companies. It's worth noting that he also proposed a ban on new data center construction in his state of Vermont. It is a longer conversation, as we say, one we'll have right now with Joe Kernan, Becky Quick, and Andrew Rossorkin

[Joe Kernan]

join us now. Andrew Yang, CEO of Noble Mobile and founder of the Forward Party. It's good to see you. Every day we go back and forth about the two assumptions for AI that we've heard about every other technological revolution from. You know, no more farmers, okay, now they're doing this. No more buggy whip makers. Oh, but look at the automotive end. So we always hear that the disruption is going to pay off. No one necessarily thinks that. It could be different. It could be staring us right in the face. But if everything AI does, basically is designed to do without humans, how can it possibly not be the most disruptive thing to the labor market ever? Is that what you think will happen at this point?

[Andrew Yang]

I do, Joe. And if you look at the numbers, you're going to spend, let's call it even, $1 trillion on infrastructure and data centers and the like, you have to get hundreds of billions of dollars in cost savings from corporates. And where is that going to come from? Headcount, Scott. I mean, it's obvious. And the powers that be have said, look, we got to stop talking about kicking workers to the curb because people are starting to hate us. People are protesting data centers. Someone threw a Molotov cocktail and took a shot at Sam Altman's house. So then the message has gone out, look, this is going to be fine for workers, but we know different. It doesn't make any sense. And I'm going to say, too, I run a company, Noble Mobile. The easiest people to fire are the people you haven't hired yet. So are we replacing junior analysts, junior engineers, with AI? 100%. And if we are doing that, then I guarantee organizations around the country are doing the exact same thing.

[Joe Kernan]

So you just. And I was going to say, but if you tax something, you're going to get less of it. Most people think that you're saying that's not necessarily a bad thing to get less AI because the promise of it is in drug development and in. There are cases that can be made that this genie's not going back in the bottle and it's going to be great in a lot of ways. So we want to go forward. So should we sacrifice labor to do that?

[Andrew Yang]

Look, this is not just me talking. Dario Amadei, the CEO of Anthropic, said, Tax us, please. He proposed a 3% token tax. Now, you can argue about what the appropriate level is, but I think that drug is going to get discovered. If you have.

[Joe Kernan]

What do we do with the.

That's the other thing I wanted to ask you. Historically, when we have tried to ease the disruption to the old workforce, when there's a new technology, when we've tried to design reskilling or job programs, has it ever really worked effectively?

[Andrew Yang]

That has been a total bust. Joe, in the past, I looked at the success rates of US Government funded retraining programs for the manufacturing works in the Midwest and the general effectiveness rate was 0%. And I know, Becky, it's painful, but if you look at it, what happened was someone would start a certification program in the Midwest, give those certificates to workers and then shut down. The government would pay that school, the school disappears, and then workers are left with valueless certificates. A lot of those people left the workforce, went on disability, et cetera, et cetera. So like saying we're going to retrain workers sounds great as a soundbite, but it doesn't add.

[Joe Kernan]

What are you going to do with the revenue you raise from the taxes? What good is it to, to tax it then if you can't do anything to help the people that are getting displaced?

[Andrew Yang]

What we need to do is create incentives for people like me to hire more human beings. Check it out. If I hire a young person, I'm going to pay 7 to 10% in FICA and state unemployment and a bunch of taxes. I'm going to pay another 8 to 11% for their health care. And then that worker is going to be spending 15 to 25% on income taxes. You're talking about almost half of the total money that's getting allocated to that worker that's not going to the worker. So if you start to lighten those costs and taxes, then people like me hire more people. And this would be the most effective way to get the private market bringing more people into companies and opportunities.

[Becky Quick]

So how do you deal with things like health care which are already unaffordable based on just where we've seen trends take us?

[Andrew Yang]

Yeah. So healthcare is a massive burden on companies that are, you know, essentially like killed before they get started because there are a lot of talented workers out there that might start a company if they didn't have to provide health care to their families through their employers. It's tax on employers from actually hiring people. So you have to get health care off of companies and then you have to try and lower the tax. Sure. I mean, as long as, as long as private companies are paying for it, it's terrible for business formation for job portability, which is a good thing, and for actually hiring.

[Becky Quick]

It's just that that doesn't get at the increasing cost we've seen with health care all along.

[Andrew Yang]

Well, I'd suggest it would because what happens is a lot of the device manufacturers and the health insurance companies are public companies. They have to show growth. So how are they going to show growth? They're generally going to jack up their prices. And so we. So what happens is companies around the country like mine end up paying more and more to help insurance over time, while outcomes aren't really going up in the same direction.

[Becky Quick]

So the answer is not giving devices to people, not giving the latest medical advances like any of these GLP1s or anything along those way.

[Andrew Yang]

Hey, if they're delivering better outcomes, then we get that money back many times over. The issue right now is we're actually increasing the expenditures and it's unrelated to outcomes. It's just about companies sometimes.

[Becky Quick]

It's going to be a long term issue, though.

[Andrew Ross Sorkin]

Like we were having this fascinating conversation. You were so right, by the way, because I saw there was a whole back and forth on Twitter about it. Later yesterday, Becky raised the issue about how GOP1 specifically are costing, you know, municipalities extraordinary amounts of money in the short term. In the short term. And they're not seeing a quote, unquote return in the short term because the truth is, long term, somebody who's, you know, 40 or 50 years old, who, who, who loses £100 in that moment, there's no ROI on that. The ROI is when they're 80 or 90, that they're not in the hospital or whatever the. You see. And so the question is how that. Math, maths.

[Joe Kernan]

The downside is suddenly everyone's going to live the 90 and that's going to end up prohibitively more expensive. So in a perverse way, this goes

[Andrew Ross Sorkin]

back, you know, Bill Gates, many, many years ago.

[Becky Quick]

Alzheimer's.

[Andrew Ross Sorkin]

Oh, I wasn't going with Alzheimer's. He said everybody should just smoke. You know, if you wanted to run the country, you would just have everybody smoking cigarettes.

[Becky Quick]

Because his point was Alzheimer's. On that very same conversation. His point was that you can live with Alzheimer's for a very long time and it's a very expensive proposition to take care of somebody on Alzheimer's, that, you know, these diseases kill you off and then you're no longer a burden on the public payrolls, which is a terrible way of looking at humanity.

[Andrew Yang]

Yeah, I mean, I have elderly parents, obviously. Obviously we want them to Live long and fruitful lives. But I want to paint a picture for you guys that I think you all get that there are dark factories in China right now where they didn't bother having light switches because they're all robotic. So you have this robotics wave that's coming this direction and the AI wave. These two technologies are going to do tons of work in our economy, and a lot of those companies are not going to pay meaningful taxes. So what you're going to have is you're going to have this diminishing pool of human workers who are paying the tax revenue looking up, saying, where the heck is the tax going?

[Joe Kernan]

So tax robots.

[Becky Quick]

I mean, what's the answer?

[Andrew Yang]

Tax the A.I. tax the robots. Stop taxing human workers, try and make it so that folks like me, employers, actually can hire people, and more of that money gets to the person I'm trying to employ, as opposed to the pipes, the taxes, the health care, et cetera, et cetera.

[Becky Quick]

But taxing still exists. It just goes after those who are making the most efficiencies with AI and

[Andrew Yang]

is going to do so much work. Robots are going to do so much work, and right now those companies are not going to pay meaningful taxes. So what you're going to see is the worst of all worlds where people are paying and then scrambling to try and keep jobs. Young people are not going to be finding jobs because those jobs are going to be replaced by AI. And the AI and robotics companies are not going to be paying taxes. And then we're going to be fighting with each other, saying, where did the money go? When it's obvious the money is going into the cloud, toward the AI companies and in a few years, toward the robotics companies.

[Becky Quick]

You agree with Elizabeth Warren about the idea of a wealth tax?

[Andrew Yang]

I think a wealth tax is a bad idea because capital is portable. Human beings are portable. Wealth taxes on a state level are super dumb. But in a tax, again, this is not just Andrew Yang. This is Dario Amadei, this is Vinod Khosla, this is John Arnold. Even Elon's like, hey, we're going to head toward universal high income because of the abundance created by both AI and robotics. So the question is, how do we start moving in that direction as quickly as possible before the pitchforks come out, before our young people come home and just waste away in the basement.

[Joe Kernan]

We're going to pay people to dig holes and fill them back up again to some type of work, or we want productive labor or else capital is being wasted.

[Becky Quick]

Well, I would suggest you transition it to health care and to teaching and to.

[Joe Kernan]

But you said it's never worked to reskill people.

[Becky Quick]

Well, you know, those are places where we don't pay those people enough. They're very hard jobs. If you're somebody who is an Aiden, either a health care aid or an aid and special needs or something along those, we don't pay those people enough money and they're very hard jobs. And I don't see a robot doing those jobs.

[Joe Kernan]

How about taxing it and using it to offset the deficit spending?

[Andrew Yang]

Hey, I, you know, I mean if, if we get tax from the robots and it should go to reduce the deficit, it should go towards creating this wellspring of entrepreneurship that is going to happen here in the US the problem is that a lot of these folks are involuntary entrepreneurs. They get laid off as a middle manager and then they say, you know what I'm doing, I'm going to start a business. So you're going to see record levels of business formation. The issue is whether those looks great, but can they make money, actually make money and can hire people. And so those are the conditions you have to try and create as quickly as you can.

[Becky Quick]

That's why I always wonder about business formation. How much of it is a great thing and how much of it is out of necessity because people can't find jobs other places.

[Andrew Yang]

Becky, the key measurement is how many of those businesses hire another person. And right now if you look at the first number, it looks great because a lot of new businesses are forming. But if you look at the second number, it's not so good.

[Andrew Ross Sorkin]

Because unless you believe the Sam Altman view that you can become a billion dollar company with one person, that has

[Andrew Yang]

happened at least a few times already. But that's not going to happen for the vast, vast majority of people we're talking about. You know, there'll be outliers. They're always outliers.

[Joe Kernan]

All right, Andrew. And we've got Andrews, a couple of coandrews to you.

[Andrew Ross Sorkin]

Never mind.

[Andrew Yang]

I was until I got to college and then I tried to mature it up a little bit, you know, for the ladies.

[Andrew Ross Sorkin]

Ever a Drew.

[Andrew Yang]

For the ladies. For the ladies.

[Joe Kernan]

That's cool.

[Andrew Yang]

I was never a Drew.

[Joe Kernan]

You were a Drew but not an Andy.

[Cameron Costa]

Temporarily.

[Andrew Ross Sorkin]

I tried to be.

[Becky Quick]

I can't

[Cameron Costa]

still to come a grandmaster storyteller on the massive scandal in chess. The Social Network author Ben Mezrich Magnus

[Joe Kernan]

Carlsen, the greatest of all time, he's like the Mozart of chess, sat down in a match against this 19 year old bad Boy of chess. There are bad boys of chess.

[Cameron Costa]

We'll be right back.

[Andrew Ross Sorkin]

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department of Health and Human Services and the Ad Council.

[Andrew Ross Sorkin]

This is Squawk Pod up and Andrew Q.

[Joe Kernan]

Is Mike.

[Andrew Ross Sorkin]

You're watching Squawk Box on cnbc. I'm Andrew Oz Sorkin along with Joe Kernan and Becky Quick. Ben Mezrick's new book involves explosive accusations, bizarre rumors and so much more. We're going to talk about it. It is called Checkmate. Genius, lies, ambition and the biggest scandal in chess. Ben, of course, also wrote the Accidental Billionaires and Dumb Money and so many other books that we've enjoyed over the years. And we would love having you on. This is quite a scandal. Joe's been trying to ask the last two hours. Well, he hasn't read the book yet.

[Joe Kernan]

No, you haven't read the book.

[Andrew Ross Sorkin]

I had no idea about even what this. What happened. What happened in the Give us a praises, a synopsis if you will, without giving away the ending.

[Joe Kernan]

I won't give away the ending.

That's too much to detail on.

Too much detail.

Where the signal.

I mean, weren't we just talking about those worms? The screw worms?

[Andrew Ross Sorkin]

Yeah.

[Joe Kernan]

Okay, so the story of Checkmate is a cheating scandal, right? Where Magnus Carlsen, the greatest of all time, he's like the Mozart of chess, sat down in a match in St. Louis against this 19 year old bad boy of chess. There are bad boys of chess. He's like a Hotel trashing 19 year old American kid, you know, fluffy hair. He wasn't paying attention. The kid was chewing gum through the whole match. And he destroyed Magnus and Magnus accused him of cheating. And it became this very big scandal because behind all of this is this rise of Chess.com into this billion dollar center of chess. Chess.com was about to buy Magnus Co. And make Magnus the face of the company. And so they actually put out a report trying to prove whether or not Hans had cheated. So there's a lot of layers to this. Hans eventually sued them and everybody for $100 million. But it's a crazy story because it's at the heart of chess. It's this crazy thing that's not supposed to happen. And the way he might have cheated turned into this viral sensation which is still kind of going on today. But.

[Andrew Ross Sorkin]

And what do you think?

[Joe Kernan]

Whether he cheated or not? Yes, I think that you have to read the book. But I will say that there is evidence on both sides. So some people will read it and come out of it saying, I'm sure he cheated. And some people will read it and come out of it and saying, I'm sure he didn't cheat. I think there's a generational thing going on because Hans is this kid who built this streaming career. You know, he's a twitch streamer. And that's become the economy of chess now. So younger people look at, he's admitted to cheating online many times, like in

[Becky Quick]

100 games or so.

[Joe Kernan]

Well, chess.com says that he cheated 100 times online. He's now said he's cheated a dozen times online. But he says there's a difference between cheating online and cheating in a room

[Andrew Ross Sorkin]

with someone you think is going on in chess in person like this? Yeah, with either earpieces or other weird things.

[Joe Kernan]

Other things. So the story is that he cheated by use of anal beads. They vibrated and gave him moves. But I actually, and I think I should get a Pulitzer for this alone. I track down the anal beads. Well, not the actual anal beads, but I track down how that rumor started. And it's this dude in Liverpool who is by day takes tickets on a train and by night is an Internet troll. And he sits in his room all night trying to figure out how do I get something viral. He saw this cheating scandal and him and his buddies on Reddit were like, you know, it would be funny, it would be funny if we were talking about anal beads. So then they chat bombed a chess streamer who said Anal beads. They tweeted it. Elon Musk retweeted it, and that's how that story actually came about.

[Andrew Ross Sorkin]

That would require, by the way, somebody else.

[Joe Kernan]

You need a partner. You need a partner and if you read my book, actually, there's potential partners. So that's one of the pieces of evidence that may or may not sway you one way or another. All you need is one move given to you. So at a Grandmaster level, Magnus Carlsen has famously said, if someone gave me one movement, I would never lose again. So you're playing the game, someone else is watching it, they shoot you one little vibration.

[Andrew Ross Sorkin]

But the question is, what are they using to figure out what the move is?

[Joe Kernan]

That was what I said.

So now what's wild is you remember back in the 80s, Kasparov played a computer, Deep Blue, and it was a close match. Today, any 12 year old with an iPhone can beat Magnus Carlsen. The AI has gotten so incredible at chess that these chess engines, they're called, are so far beyond any human. It's like the canary in the coal mine for all AI in a lot of ways. But you're watching two people play. But the reality is a computer could slaughter everybody. It wouldn't even be.

[Becky Quick]

How could you signal a vibration queen to.

[Joe Kernan]

Well, all you actually need is to show that there's a move there that the guy hasn't seen. So if someone's playing chess and there's something on the board and he's about to do something, or he's looking at the board, if you signal him in a way that there's something going on there, to look again before that move. And actually, if you analyze cheating, you see that they make a quick first move and then a bunch of slow moves after while people who don't cheat make a very slow first move and then quick.

[Becky Quick]

Oh, that's interesting.

[Andrew Ross Sorkin]

People's body for. I mean, look.

[Joe Kernan]

So.

[Andrew Ross Sorkin]

No, no, but here's what I would say. For example, there are these things like you're going to give away magic. Magic, yeah. There are these bands you can get for your arms that certain magicians use. That can be. Sometimes you'll see people do things with dice or they have to know numbers or things like that, where there's an assistant who can actually send you a signal to your arm and it will literally pulse four times for four or pulse seven times. So you can be telling people, messaging like that. The question is, do they actually follow what's.

[Joe Kernan]

Yeah, we're getting to a point where people are going to have to Play naked in, like a glass booth. Because the reality is the technology is so good. You can get this tiny little earpiece. And for the book, you know, we get. We went into this. That goes so deep in your ear that you can't even see it. You can't scan for it. They do wand everybody. Now they have a delay on the live stream in case you had someone helping you that was watching a live stream. But the reality is the technology is getting so good that there's almost no way.

[Andrew Ross Sorkin]

So how would somebody watch it if they can't see it on the live stream?

[Joe Kernan]

So this match, there was a live stream with no delay. And that was why this match was interesting. But there are other matches where the live stream is delayed and then you need someone in the room separately.

[Andrew Ross Sorkin]

Since we are a business network, how big a business do you think chess is going to become?

[Joe Kernan]

Chess is a multibillion dollar business. What's chess.com story? Which I tell as well. These were two kids in a dorm room, BYU, Mormon kids. And one of them said, I want to do a chess thing. Everyone laughed at him. He told his friends and his friends thought he said cheese.com and they were like, that's a great idea. Sell cheese on the Internet. And he was like, chess. And they were like, no, nobody likes chess. But then the pandemic hit. And you can [e-mail] their numbers went crazy. Each time a country locked down, everybody now 600 million people play chess. A couple hundred million people are on Chess.com's site. It's a billion dollar business. If you're in the top 10 in chess, you're making real money now, like a real sports star. Millions of dollars.

[Andrew Ross Sorkin]

How does this compare to, like, watching? I mean, I don't really like to watch poker on tv, though people do watch poker.

[Joe Kernan]

It's going to grow way beyond poker. I actually think chess, they say that 7 out of 10 people on Earth have played chess. Chess is something that everybody can do. And because now there's a way to do it online that is very addictive.

[Andrew Ross Sorkin]

Checkers.

[Joe Kernan]

Well, checkers with the anal beads would help more in checkers, actually, because you could get some really good moves. But in chess, like, it's just grown and grown and grown and grown to the point where, I mean, everyone I know has at least played chess once or twice in the last week. It's just gotten to be, yeah, everyone plays now. So I do think it's a very big economy that was kind of missed. Nobody saw it coming. And none of the investors wanted to invest until now, after Covid. Now there's money pouring in.

[Andrew Ross Sorkin]

Okay. Do you think this book.

[Becky Quick]

In Time. You can cheat, though.

[Andrew Ross Sorkin]

Do you think this book is better than what I think your best book is? Bringing down the House.

[Joe Kernan]

Oh, Bring it down the House. So I.

[Andrew Ross Sorkin]

Bringing down the House is the best book you've ever written. Can we say that?

[Joe Kernan]

You don't think that's kind of you. I think Bringing down the House is.

[Andrew Ross Sorkin]

That's the best book that was.

[Joe Kernan]

I was running around Vegas, hanging out with, you know, MIT card counters. I think the Social Network is a story that resonated, probably culturally, more. But I do think. I think I agree with you. It's hard to choose between my children, but Bringing down the House, to me is.

[Andrew Ross Sorkin]

Where do you think this ranks? How does it stack up?

[Joe Kernan]

I personally believe this is in that vein.

[Andrew Ross Sorkin]

That's why I mention it.

[Joe Kernan]

I've written in a very long time. I think it's up there. I think it's a story that combines stuff from Bringing down the House and the Social Network in a way. I spent a year running around with these chess prodigies. I went to Paris. They actually all meet again in Paris. It's the only time when all my characters hung out again across the street

[Andrew Ross Sorkin]

from the movie together.

[Joe Kernan]

And it's gonna be a very cool movie with Nathan Fielder and Emma Stone are making the movie with a 24. I think it's my best book in many, many years. I don't know if I could Bring it down the House in this. If you're gonna pick up two of my books, I would pick up these.

A chess movie will work. That was a series, I guess.

Queen's King's Gambit was very hot, which also was a big reason that chess has risen so high. But this is like an absurd comedy almost, because you have these larger than life characters. If you meet Hans, he's like a rock star. The kid is crazy. He wants to be Bobby Fischer. He spirals out. There's a scene where there's also a movie. He's playing chess against someone. He breaks the head off the king. It's. It's a wild story with really big, big Hollywood characters.

[Andrew Ross Sorkin]

Go check it out. Ben Mezrick. Thank you.

[Becky Quick]

Hey.

[Joe Kernan]

I love that I'm launching this with you guys. You guys are my home here.

That's cool. You are welcome anytime. Second home.

Second home.

You're pied a terre. You're going to be taxed. Yeah, you're going to be taxed for coming here.

[Cameron Costa]

That's Squawk Pod for today. Thank you for listening. Squawkbox is hosted by Joe Kernan, Becky Quick and Andrew Rossorgan weekday mornings on cnbc starting at 6am Eastern. The best bits of that three hour TV show live here on Squawkpod for free and you can catch it anytime as long as you follow Squawkpod wherever you're listening now. We'll meet you right back here tomorrow. Have a great day.

[Show Producer/Announcer]

Now we are clear.

[Joe Kernan]

Thanks guys.

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