Chipmaker Deals with the White House 8/11/25

Summary

Squawk Pod: "Chipmaker Deals with the White House"

Date: August 11, 2025
Hosts: Joe Kernan, Andrew Ross Sorkin, Katie Kramer
Notable Guests: Heidi Heitkamp (former Senator), Mick Mulvaney (former White House Chief of Staff), Alex Heath (The Verge)

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Episode Overview

This episode of Squawk Pod takes a deep dive into the seismic policy shift as top U.S. chipmakers Nvidia and AMD agree to a controversial deal with the Trump administration: paying 15% of their China revenue to the U.S. government in exchange for export licenses. The conversation unpacks whether this move is a tax, a concession, or worse, and what it signals for industrial policy and executive power. The show also covers President Trump’s impending meeting with Vladimir Putin in Alaska, executive authority in economic policy, and the escalating talent war for artificial intelligence leaders in Silicon Valley.

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Key Discussion Points & Insights

1. The Chipmaker "China Tax": Policy, Precedent, and Partisan Friction

(Starts: 02:50)

• News Recap: Nvidia and AMD will hand over 15% of their AI chip sales revenue from exports to China back to the U.S. in return for licenses. This flows out of direct negotiations between Nvidia CEO Jensen Huang and President Trump.

• Skepticism & Economic Questions:

  • Joe Kernan launches with skepticism: “If it was a security concern in the beginning, this doesn’t change anything. If you get a little blackmail money to allow it to happen, obviously...” (03:36)
  • Andrew Ross Sorkin points out: “Once you start to get into a mode where there’s an additional payment for that sort of reading... it undermines the credibility of the national security argument.” (05:04)

• Partisan Push-Pull:

  • Both hosts agree this policy puts both right and left in a bind. Republicans dislike heavy-handed industrial policy, while Democrats may bristle at targeting corporations—yet the revenue could be tempting for deficit reduction.

• Broader Impact & Precedent:

  • Sorkin: “Are other companies going to have to start paying off the United States government to do all sorts of things?” (07:13)
  • Kernan: "It should be all or nothing… Or you should just raise taxes if that's the way you want to do it." (07:26)

• Legal Ambiguity:

  • There’s confusion about legal standing and whether such a deal could be challenged in courts. Sorkin: “Who’s going to sue? ... The only person who could sue is the company.” (08:52)

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2. Executive Power & Industrial Policy: A New Era

(17:39, 21:36, 22:45)

• Heidi Heitkamp’s Critique:

  • Heitkamp frames this as “state-sponsored capitalism” far from traditional market economics:

    “What you’re seeing is not capitalism.” (17:39)
    “This [deal] speaks to a pattern of use of executive power that is going to be hard to roll back unless people in Congress... grow something.” (24:47)

• Race to Executive Power (and the Bottom):

  • She warns that both parties are learning from each other, escalating uses of executive authority for economic intervention—predicting an even more brazen future.

• Mulvaney’s Conservative Discomfort:

  • “Industrial policy is not supposed to be a conservative thing... but that's because the party is no longer conservative. The party is populist. And Heidi is exactly right.” (23:03)

• Populist Incentives:

  • Both guests agree: “The energy in both parties... is in the populist wing.” (24:15)

• Congress’s Abdication:

  • Heitkamp: “Congress has ceded that authority in various statutes by giving emergency authority.” (27:14)

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3. The Putin Meeting: Optics vs. Strategy

(01:32, 16:45, 19:12, 20:11)

• News: Trump to host Putin in Alaska. Heitkamp worried about the optics, with Russia celebrating it as a “major win for Putin.”

  “What troubled me the most is how Russia is celebrating this meeting as a major win for Putin... there has to be preconditions.” (01:41, 19:12)

• Mulvaney Downplays Location & Message:

  • “Alaska was simply the easiest place to meet on short notice... I am interested that Zelenskyy’s not going to be there. I think that’s probably a message to Zelenskyy and the Europeans as much as anybody else.” (01:58, 20:11)

• Debate on Diplomacy:

  • Heitkamp: “Talking is always right, but preconditions are absolutely critical.” (19:12)

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4. The AI Talent War: Winner Takes (Almost) All

(02:08, 28:31, 29:52, 32:39, 34:22)

• Skyrocketing Compensation:

  • Alex Heath: “This is the most intense talent market I have seen in my career. There’s maybe 2,000 people in the world, max, who could build a frontier model that OpenAI needs.” (30:21, 31:55)

• Executive-Style Deals:

  • “These offers... are structured like executive pay... highly correlated to performance. You’ve got some VPs ... already making tens of millions a year and these aren’t even people in the AI field.” (33:11)

• Who's Winning?

  • Heath: “Google out of all big tech is wildly ahead on AI ... Metta I’d actually put number two ... really hard to overstate how behind Apple is right now from a talent perspective.” (34:22)
  • On Apple: “They’re going to need to spend $50 billion plus realistically to get one of these core teams ... not in Apple’s DNA.” (35:13)

• OpenAI vs. Anthropic:

  • “OpenAI got Cursor, the hottest vibe coding startup ... to switch to GPT-5... If you’re Anthropic, you’re at risk of being disintermediated by a company with a better model.” (36:06)

• Lock-In Dynamics and Future Wars:

  • Data and persistent memory may be the true long-term “lock in,” akin to social media’s network effects.

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5. Other Noteworthy Topics

(12:02) The Fed Chair Sweep:

• Trump’s list for Fed Chair grows unexpectedly larger, with up to 10 names now being considered—likened humorously to “American Idol” or “The Apprentice.”

  “With American Idol, you don’t go back and… double it to eight again.” (13:32)

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Notable Quotes

• Joe Kernan (on the tax):

  “If it was a security concern in the beginning, this doesn’t change anything. If you get a little blackmail money to get to allow it to happen, obviously...” (03:36)

• Andrew Ross Sorkin (national security policy):

  “Once you start to get into a mode where there’s an additional payment for that sort of reading... it undermines the credibility of the national security argument.” (05:04)

• Heidi Heitkamp (on executive power):

  “What you’re seeing is not capitalism… [this] speaks to a pattern of use of executive power that is going to be hard to roll back unless people in Congress... grow something.” (17:39, 24:47)

• Mick Mulvaney (GOP shift):

  “That’s because the party is no longer conservative. The party is populist. And Heidi is exactly right…” (23:03)

• Alex Heath (AI labor market):

  “There’s maybe 2,000 people in the world, max, who could build a frontier model that OpenAI needs.” (31:55)

• Joe Kernan (on the shifting political spectrum):

  “Now you like capitalism. And this stuff that Trump's doing is … so now you like it.” (21:18, joking with Heitkamp)

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Timestamps of Key Segments

• Nvidia & AMD-China “Tax” Analysis: 02:50–11:57
• Trump’s Executive Power & the Fed Chair ‘Sweepstakes’: 12:02–14:16
• Panel with Heitkamp & Mulvaney: Putin Meeting, Industrial Policy: 16:45–27:30
• AI Talent Wars with Alex Heath: 28:31–37:53

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Memorable Moments

• Kernan’s Humor: “With American Idol, you don’t go back and… double it to eight again.” (13:32)
• Populism Diagnosis: Both Heitkamp and Mulvaney, from opposing parties, concurred on the rise of populism driving executive overreach.
• Heitkamp’s Stark Phrase: “Resistance is futile, Joe. Resistance is futile.” (28:00)

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Tone & Atmosphere

The episode is energetic, snarky, and deeply analytical, with hosts volleying pointed, sometimes exasperated remarks on executive overreach and policy whiplash. Heitkamp brings sharp criticism dressed in dry wit, while Mulvaney provides insider clarity mixed with a populist critique. The AI segment is brisk, almost awestruck at current compensation levels and market dynamics.

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Summary

This episode delivers a dynamic, high-octane discussion surrounding a historic shift in U.S. tech policy: U.S. chipmakers now bound to share China revenues with Washington, a move fraught with legal, economic, and geopolitical ramifications. The conversation uncovers rare bipartisan unease at executive power’s expansion, explores the contentious optics of U.S.-Russia diplomacy, and marvels at Silicon Valley’s feverish AI talent scramble. The show stands out for its sharp, witty exchanges and expansive debate—reflecting upheaval not just in tech, but in the nature of American capitalism and governance itself.

Transcript

[Keith Lansford]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, 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.

[Thumbtack Advertiser / Mick Mulvaney]

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[Andrew Ross Sorkin]

Bring in show music please.

[Katie Kramer]

Hi, I'm CNBC producer Katie Kramer. Coming up today on Squawk Podcast, major chip makers Nvidia and AMD agree to pay 15% on sales in China back to the U.S. is it a tax, a concession, or worse?

[Joe Kernan]

The left and right are going to have problems.

[Andrew Ross Sorkin]

Well, I would think the right should have a lot of problems.

[Katie Kramer]

Industrial policy and speaking of chips, Intel CEO Lipp Bhutan is headed to the White House today amid President Trump's social media posts calling for his resignation.

[Andrew Ross Sorkin]

How surprised would you be if at the end of this meeting, Tan says, you know, I'll pay you 15% a.

[Joe Kernan]

Day if I can keep my job?

[Katie Kramer]

President Trump and Russia's Vladimir Putin prepping for a meeting in Alaska this week. Former Democratic Senator Heidi Heitkamp is wary of the optics.

[Heidi Heitkamp]

What troubled me the most is how Russia is celebrating this meeting as a major win for Putin. And so I think it's always good to talk, but there has to be preconditions.

[Katie Kramer]

Why on American soil? Mick Mulvaney, a former acting White House chief of staff, says, don't read into it.

[Thumbtack Advertiser / Mick Mulvaney]

My guess is, and it's an educated guess, Alaska was simply the easiest place to meet on short notice. It's really, really hard to move the president.

[Katie Kramer]

Plus, the artificial intelligence talent war is big tech. With the Verge's Alex Heath, it's really.

[Alex Heath]

Hard to overstate how behind Apple is right now from a talent perspective.

[Katie Kramer]

And all the rest of today's news, the list of possible Fed chairs got.

[Joe Kernan]

Surprise bigger with American Idol or the Apprentice. When you're down to four, you don't go back and double it to eight again.

[Katie Kramer]

It is a busy Monday, August 11, 2025. Squawk Pod begins right now.

[Andrew Ross Sorkin]

Stand Andre by in three, two, one, two.

[Katie Kramer]

Andrew.

[Andrew Ross Sorkin]

Good morning and welcome to Squawk Box right here on CNBC. We're live @ the NASDAQ marketsite in Times Square. I'm Andrew Osrkin along with Joe Kernan. Becky's off today.

[Joe Kernan]

Let's get to this story, though, because I'm still working through it. Today's top corporate story. Reports say Nvidia and AMD have agreed to give the US government 15% of the revenue that they generate from exporting AI chips to China. In return, the companies will receive export licenses to sell chips in China. The news followed follows a report and that meeting between Nvidia CEO Jensen Huang and President Trump at the White house last week. 15% of Nvidia's revenue from selling H20 chips to China could amount to billions of dollars. Okay, I have thought of everything you could possibly say and then you probably have some more concerns even than I've.

[Andrew Ross Sorkin]

No, I'll tell you my thoughts.

[Joe Kernan]

You don't really. I mean, I've already thought about left versus right and who thinks, I mean, you know, we need money, obviously, but if it was. You're going to, if it was a security concern in the beginning, this doesn't change anything. If you get a little blackmail money to get to allow it to happen, obviously. Why just chips are you going to do this with? Why just AMD and in video? I mean there's so many. And it's more industrial policy, which Republicans don't, don't really like.

[Andrew Ross Sorkin]

You just want to steal all my lines at one time.

[Joe Kernan]

I know you. Okay, I've already thought of all this and I'm sure you have other concerns. And instead of just embracing that, we're basically taxing a US Corporation and getting great revenue to try to reduce the deficit. Suddenly even the left is going to have problems with this.

[Andrew Ross Sorkin]

So here's where I stand.

[Joe Kernan]

The left and right are going to have problems.

[Andrew Ross Sorkin]

Well, I would think the right should have a lot of problems.

[Joe Kernan]

Industrial policy.

[Andrew Ross Sorkin]

The industrial policy piece of this is now, now we're not even macro managing. We're micromanaging. I hear you at a sort of.

[Joe Kernan]

I thought of this. I told you, I don't. I'm working through it.

[Andrew Ross Sorkin]

No, I through.

[Joe Kernan]

I like the money.

[Andrew Ross Sorkin]

I guess I like the money too.

[Joe Kernan]

For, for the coffers, sure.

[Andrew Ross Sorkin]

But I think the, the issue is there's the national security issue which we, which was already on the table. They decided to overlook that issue or to decide that it was actually in the best interest of the country for Nvidia to be selling into China. Right. If that is true that it is in the best interest of the United States to be selling it to China for competitive reasons to. Because we don't want China to ultimately be able to own the AI business, the industry, that, that could be a fair and valid reason. I'll go along with that. Once you start to get into a mode where there's an additional payment for that sort of reading, if you will, that's where it becomes. Because it undermines the credibility of the national security argument.

[Joe Kernan]

Oh, it definitely undermines and that's to me but I took it one step further.

[Andrew Ross Sorkin]

Okay, you go.

[Joe Kernan]

We're not stopping China and I. There's, there's no way. And I don't know, it'd be nice to win, but we could use some of this money to prepare to, to.

[Andrew Ross Sorkin]

Deal with for ubi.

[Joe Kernan]

What to prepare for.

[Andrew Ross Sorkin]

For the eventual singularity.

[Joe Kernan]

Prepare for the security we're going to need to compete against China and for the government we're going to need. I mean we're going to need to defend ourselves theoretically from powerful AI.

[Andrew Ross Sorkin]

And what about OpenAI? What about Microsoft? What about any company?

[Joe Kernan]

Hopefully we're going to win, but we're not going to hold China back. And I guess we might be going.

[Andrew Ross Sorkin]

To hold our companies back by charging them a tax.

[Joe Kernan]

I would think that's another. That's something but that's something to worry about. I would rather have in video and AMD reinvesting that in their own business. Now I sound. That's what a conservative. That's what a Republican one.

[Andrew Ross Sorkin]

Right.

[Joe Kernan]

They need to do it. This is like there's a buyback story today. There are actually people that say companies shouldn't be able to do what they want to do with, with their own money if they want to do. But they should be hiring more people. They should be raising. They should be raising. They should be raising salaries for people. That's not the way it should be. They should be able to do that. And I'm saying I'm, I have problems.

[Andrew Ross Sorkin]

I have the payoffs. To me the thing is it just.

[Joe Kernan]

Looks like a payoff.

[Andrew Ross Sorkin]

That's. That's actually does for me that's the.

[Joe Kernan]

Only thing and I'd rather have companies. But then again.

[Andrew Ross Sorkin]

And I don't know where this goes. That's so to me it's the payoff and I don't know where this goes because our other company is going to have to start paying off the United States government to all sorts of things. Forget about the foreign corrupt practices. No, that's what it is.

[Joe Kernan]

It should be all or nothing. Nobody should do this. Or you should just raise taxes if that's the way you want to do it. I guess corporate taxes. I know. I thought of all these things. You know, I don't. But then again, we come down to be nice to have 40, $50 billion to do all the great things that liberals want to do.

[Andrew Ross Sorkin]

We got about what liberals want to do.

[Joe Kernan]

Do childcare, do it, give it. Give people a rebate. You know, do all these things. That's. That's why Trump thinks. He doesn't. He does. I don't think he present. I don't think he thinks necessarily money is money. Money in the court, in the, in the federal government's coffer.

[Andrew Ross Sorkin]

But now he wants to give it back. And we've been talking. We have this debt we got to deal with. I mean, it's just, it's.

[Joe Kernan]

I know. Now suddenly liberals are worried about the debt. I know.

[Andrew Ross Sorkin]

Not liberals. I'm worried about the debt. I don't know.

[Joe Kernan]

They were. Democrats were worried for the last four years.

[Andrew Ross Sorkin]

That's true. They weren't and they should have been.

[Joe Kernan]

I know. I don't know. Is this really going to happen? I don't know if it's even really going to. I mean, there's nothing in the constitution that says anything. But you're going to hear people say it's.

[Andrew Ross Sorkin]

There's nothing in the constitution that says that the US Government can ask Nippon Steel for golden shares in their. In. In the company either.

[Joe Kernan]

That's, that's true too. So I would think that they've talked to lawyers about whether you can even do this. Wouldn't you think? Or.

[Andrew Ross Sorkin]

Well, the question is who's. I thought about this.

[Joe Kernan]

You asked your dad?

[Andrew Ross Sorkin]

No. Who's going to sue? Who has standing to sue? I don't believe the taxpayer. Just like a random third party has standing to sue. The only person who could sue is the company. And given that we are one.

[Joe Kernan]

Agreeing to do it though.

[Andrew Ross Sorkin]

Correct. And they're agreeing under some form of.

[Joe Kernan]

Duress to be able to do.

[Andrew Ross Sorkin]

And they could not go public and say, we hate you, Mr. President, we don't like this. We're not doing this.

[Joe Kernan]

Right.

[Thumbtack Advertiser / Mick Mulvaney]

Right.

[Andrew Ross Sorkin]

Because we now live.

[Joe Kernan]

They'd rather have 85% than nothing.

[Andrew Ross Sorkin]

That's the position they're taking.

[Joe Kernan]

I understand that. I thought about all this and dreaded this whole conversation.

[Andrew Ross Sorkin]

How's it going so far better than you thought?

[Joe Kernan]

No, I mean, I knew what all the concerns would be and I'm grappling with them and I don't know what the answer is.

[Andrew Ross Sorkin]

Okay. We've got other news. Intel CEO also under attack from the president. He's going to reportedly visit the White House today. That talk about a conversation you'd want to be a fly on the wall for. Just a few days after President Trump called for his resignation. The Wall Street Journal saying that he is expected to brief the president on his personal and professional background in a Thursday morning Truth Social post. We brought it to you, I think live as it was happening. President Trump calling Tan highly conflicted and said that he should step down immediately. That concern with questions from Republican Senator Tom Cotton, who had come out claiming that Tan has connections to Chinese companies and potential ramifications for US national security. How surprised would you be if at the end of this meeting Tan says, you know, I'll pay you 15%.

[Joe Kernan]

15 if I keep my job. You want a 15% that's getting down into.

[Andrew Ross Sorkin]

Okay. I don't know. Just saying you wouldn't have. You would have been surprised by this news before The Journal reporting 10 may also use today's meeting with the president to propose to some new ways the government intel could work together. That hasn't been working so well so far until saying it would not comment when cnbc how about contacted them.

[Joe Kernan]

How about it's an export tax.

[Andrew Ross Sorkin]

Yeah.

[Joe Kernan]

A lot of countries do that to us with, with other things. Electricity, oil, potash, all kinds of different things. But normally it'd probably be. It would affect everyone.

[Andrew Ross Sorkin]

Everybody.

[Joe Kernan]

Yeah. If you do it.

[Andrew Ross Sorkin]

Everybody. Look, if you, if you want to have a tax on the AI industry.

[Joe Kernan]

Right.

[Andrew Ross Sorkin]

Maybe that's okay. Except we've just been saying for the.

[Joe Kernan]

Past get less of it if you tax it.

[Andrew Ross Sorkin]

Yeah. Past year we want to be the number one in the world. And so I don't understand why we're trying to punish our, as you would say, punish our best companies.

[Joe Kernan]

You could say that. You know, Trump thinks the tariffs are raising a lot of money for the federal coffers. He does think this would raise money for the federal coffers. He's not getting so, I mean, at least in the back of his mind he's aware that we have a problem in terms of.

[Andrew Ross Sorkin]

Totally.

[Joe Kernan]

But that's a good thing.

[Andrew Ross Sorkin]

Sure. But then let's not get into the dividend story because you're giving it back.

[Joe Kernan]

To people that's like you know, populist single time.

[Andrew Ross Sorkin]

But that's a ridiculous way to do. If we were going to deal with the debt, let's deal with the debt. If we're not going to deal with the debt, why are we going to tax the company?

[Joe Kernan]

It is possible to throw a lot of stuff up against the wall and see what sticks.

[Andrew Ross Sorkin]

It's a strategy of sorts. President Trump reportedly expanding his list of contenders for the top job at the Federal Reserve, the Wall Street Journal said, saying the president's team considering tapping former St. Louis Fed President James Bullard for the job of Fed chair. Or former George W. Bush economic adviser Mark Summerlin. The paper saying the list of candidates now numbers about 10 people. So that's up from where we were just a week ago when we spoke to the president on this broadcast. Treasury Secretary Scott Besson expected to lead initial interviews with those candidates. And then President Trump will speak with finalists. Names already floated for the next potential Fed chair are the two Kevin's, National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh. Those are the two Kevin's, and then current Fed Governor Christopher Waller. So we're going to see who else is on the list. Interestingly, Summerlin, there's a report that said that he was offered the opportunity at some point, I think back in the old Trump administration to be potentially nominated for one of the roles on the Fed in tandem with Judy Shelton at the time. And that he declined it back then and that because of the controversy actually around Shelton's nomination, which had been taking fewer took months and months and months and months and months and months that he didn't want to be involved in that he obviously has a business and wanted to continue with that. So it'd be very interesting to see where this all heads. Would you like, who do you like?

[Joe Kernan]

No idea.

[Andrew Ross Sorkin]

Get your polymarket out.

[Joe Kernan]

I'm not. Yeah, it's, we thought we had the final, you know, with American Idol you don't go back and start or the Apprentice, you don't, you know, when you're down to four, you don't go back and double it to eight again.

[Andrew Ross Sorkin]

Well, it just means you're not happy with the current crop.

[Joe Kernan]

Does it? That's what I meant. You don't know that, but.

[Andrew Ross Sorkin]

You don't know that. But why would you do it otherwise?

[Joe Kernan]

That's what I mean. That's what it kind of, you know, it's sort of what you'd think in the back of your mind that, you know, looking for out of the candidates you've talked about. That's.

[Andrew Ross Sorkin]

I don't remember ever watching the Apprentice where they had like three people left and then they like edit some people into the room and you added some.

[Joe Kernan]

People in or American Idol. That doesn't happen until next season.

[Andrew Ross Sorkin]

Tease will be next.

[Katie Kramer]

Coming up next on Squawkpot. It's all politics to us. Former Democratic Senator Heidi Heitkamp argues Nvidia's 15% sales revenue deal with the US government symbolizes a shift in executive power.

[Heidi Heitkamp]

Just basically speaks to a pattern of use of executive power that is going to be hard to roll back unless people in Congress. You know what? Grow something.

[Katie Kramer]

Plus, the world awaits President Trump's meeting with Russia's Vladimir Putin. A veteran from the first Trump White House, Mick Mulvaney weighs in.

[Thumbtack Advertiser / Mick Mulvaney]

I am interested that Zelenskyy's not going to be there. I think that's probably a message to Zelenskyy and the Europeans as much as anybody else.

[Katie Kramer]

We'll be right back.

[Keith Lansford]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, 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 podcast.

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[Katie Kramer]

Welcome back. This is Squawk Pod up and Andrew.

[Andrew Ross Sorkin]

Hugh, you're watching Squawk Box right here on CNBC on a summer Monday. A summer Monday? Is that what this is? It's not a summer Friday, I'll tell you that.

[Joe Kernan]

Hot.

[Andrew Ross Sorkin]

Yeah, sort. And Joe Kernan is here. Becky's off.

[Joe Kernan]

President Trump getting ready to meet with Russia's Vladimir Putin on Friday in Alaska. Joining us now on that story and others, former Democratic U.S. senator Heidi Heitkamp. She's now the director of the University of Chicago Institute of Politics and a CNBC contributor. And Mick Mulvaney, former acting White House chief of Staff, now Actum Strategic Advisors co chair. And we'll talk about some of the business stuff, too. But we can start with what I did in that intro, Senator. And I'm feeling very, I don't know, I, I'm considering both sides of everything lately, which is annoying. It's annoying for me. I don't know whether, you know, Andrew, as Langone said, has made a lot of progress with me. Maybe I'm making, maybe you're making progress with me. Yeah, go ahead.

[Heidi Heitkamp]

I was just thinking, Joe, that, you know, it has gotten to the point where there's a great story about state sponsored capitalism and at the bottom, you're a capitalist and what you're seeing is not capitalism. Right. And so, of course, you're seeing both sides of it.

[Joe Kernan]

Okay, I am. But even on this, I understand that Putin is a brutal tyrant that really hasn't made amends, apologies for anything he's done. So inviting him to the US without any concessions could be seen as, you know, not a good thing. But then I immediately think of what Democrats used to say about meeting with Obama and Ahmadinejad back then, you have to talk to these people to try to try to get where you want to go. To end bloodshed, to end a war, you can't do it through conflict. So I can always think of both sides. What about. So you would have to say this is a positive. But then Democrats just say Trump wants to win a Nobel Prize and he doesn't really care about the bloodshed. He just wants to win a Nobel Peace Prize, which is worthless now, obviously, because Obama got one for nothing. See, I'm going back and forth. I'm like hitting both sides, like, oh.

[Thumbtack Advertiser / Mick Mulvaney]

You don't even need us anymore. You can do this by yourself.

[Heidi Heitkamp]

You don't even need us this morning. You can just debate yourself.

[Andrew Ross Sorkin]

Yeah, we do that.

[Joe Kernan]

Easy doing that in high school anyway. Go ahead, Heidi.

[Heidi Heitkamp]

Well, I mean, I think talking is always right, but preconditions are absolutely critical. And the fact that the president of Ukraine may not be there. Zelensky tells you something about, you know, is this an opening salvo? But what troubled me the most is how Russia is celebrating this meeting as a major win for Putin. And so I think it's always good to talk, but there has to be preconditions, and we don't see those preconditions in this dialogue.

[Joe Kernan]

That is true, Mick. And it's annoying because we do. You know, we try to figure out how to feel in this country by looking at how the other country. Like, even I did that. When France and other EU countries were mad about that deal, I was like, wow, I love it. Must be a great deal that we got with the EU on trade, because they were whining so much about it. So in this case, Russia is celebrating. Does that mean that we're getting taken advantage of now?

[Thumbtack Advertiser / Mick Mulvaney]

I think there's something that's missing here, which is Trump wanted to have a meeting as quickly as possible. He wanted to have a meeting for a long time. My guess is, and it's an educated guess, Alaska was simply the easiest place to meet on short notice. It's really, really hard to move the president. It's especially hard to move the president overseas. It would have taken weeks, probably, to set up meetings in, say, Helsinki or Rome or something like that. We could set it up. My guess, it's probably going to be at a military base in Alaska. It's just the simplest logistic place to do the meeting. So I wouldn't read too much into it. I am interested that Zelensky is not going to be there. I think that's probably a message to Zelensky and the Europeans as much as anybody else, which is, look, Trump has said it before, they don't have the cards. If the US, Russia and the EU want this war to stop and the price for the war stopping, as Crimea becomes officially part of Russia, the war is going to stop and Crimea is going to officially be part of Russia. Ukraine simply doesn't have the cards, as Trump says, to participate as a full member. They're relying too, too heavily on the US and the EU for their own defense here, which is why they, as of right now, they don't have a seat at the table.

[Joe Kernan]

Heidi, anything additional that you want to. I'll start with you on, on capitalism, because I love it. Now, you and all your socialist minute you get a chance to throw capitalism in a capitalist face, you do it. So now you like capitalism. And this stuff that Trump's doing is so now you like it. Now you like it all.

[Heidi Heitkamp]

I always love capitalism. I've always loved capitalism.

[Joe Kernan]

Well, your friends on the coast do not. Your friends on the coast do not. Elizabeth Warren and others do not.

[Heidi Heitkamp]

Well, let me tell you what Trump is doing. There's this article about state sponsored capitalism especially fascinating because it really puts a ribbon around everything that's going on. And if you think that the lesson Democrats are learning is that we need to return to some semblance of normal, the lesson they're learning is they haven't been brazen enough. And so this is going to be a race to the bottom. If we get a president who is on the, on the left side, I could see them saying, look, you want to sell coffee? We're going to tariff coffee at 150% or 100% and then you are going to have to unionize. And so this is not a good thing. And it's never been a good thing. And I have to tell you, on tariffs, I was one of the few people who said Congress needs to claw back that authority and worked really hard to try and do it. But it's going to be really hard now, given that Trump has, I think, really extended the, the look of how you, how you exercise executive power.

[Joe Kernan]

Is there anything to that, Mick? I mean, in terms of industrial policy or there's the latest thing with Nvidia and amd, we've seen other companies sort of go to the White House and it sort of, the President's demanding some concessions. You know, people call it.

[Thumbtack Advertiser / Mick Mulvaney]

There's a lot of Republicans, myself included, who don't like it. Industrial policy is not supposed to be a conservative thing. The Defense Department taking multi hundred million dollar investments in rare earth minerals companies is not supposed to be a Republican conservative thing. Sovereign wealth funds are not supposed to be Republican conservative things. But that's because the party is no longer conservative. The party is populist. And Heidi is exactly right. The risk here that you run is that the populist wing of the Democrat Party is learning lessons from the populist wing of the Republican Party. And the message they're, they're taking away from it is they're just not doing enough. And she's absolutely right. I mean, if Trump can spend $400 million investing in rare earths, why can't the Defense Department invest $3 trillion in solar panels? I mean, that's just, that's, that's where this is going. It is going down the wrong road.

[Andrew Ross Sorkin]

But, Mick, here's the political question right now, right now, our president has an extraordinary amount of power, as you know so very well. You may not like what you're seeing for whatever reason. And by the way, there may be people in the House and the Senate who don't like what they're seeing that are on the Republican side. But. But none of them are raising their hand.

[Thumbtack Advertiser / Mick Mulvaney]

Yeah, but that's because the populist. The populist. The energy in both parties, Andrew, is in the populist wing. That's the populist Democrats. You see it in New York. It's the populist Republicans. You see in Washington, D.C. right now, it's different. The parties are changing and there is no real place right now for the conservative. There's no place right now for the sort of the moderate Democrat that Heidi used to be. So. Or probably still is. I'm sorry, Heidi. Yeah, that's. That's where the energy is right now in both parties. And it does create new challenges for both of them.

[Joe Kernan]

Nick, to the end. Go ahead, Heidi.

[Heidi Heitkamp]

I was going to say with everything that the president does, this Nvidia taking 15%, all of that just basically speaks to a pattern of use of executive power that is going to be hard to roll back unless people in Congress, you know what, grow something. And they aren't looking like they're going to do that one way or the other. And the Democratic base now is saying, look, you got to fight fire with fire.

[Thumbtack Advertiser / Mick Mulvaney]

But Heidi, the Democrats don't want to roll it back. I mean, you and I were together in the House of Representatives for the State of the Union where Barack Obama said, look, if Congress doesn't act, I have a pen and a phone. And he got a standing ovation from the Republican elected officials.

[Joe Kernan]

Heidi, the Democrats invented this. And it's even worse because in the last administration there were all kinds of stuff that Biden did. Unfortunately, it was somebody, probably not him. It was some auto pen guy. It was like Zeitz or Zients or whatever his name is that was doing it.

[Heidi Heitkamp]

The whataboutism. It doesn't even compare.

[Joe Kernan]

You always say that. It's not hypocrisy, it's what about ism? So you can do whatever you want, slash and burn for four years under Biden. And then if a Republican. Go ahead, Mick.

[Thumbtack Advertiser / Mick Mulvaney]

Whataboutism is just a comparison that you don't like.

[Alex Heath]

That's all it is.

[Joe Kernan]

Yeah. What about it is a comparison that you don't like that hits home, especially when we're talking about that.

[Heidi Heitkamp]

I can tell you. Let me tell you, this administration on executive power is on steroids. And that wasn't true over the last.

[Joe Kernan]

Systems on steroids, stopping every single executive.

[Heidi Heitkamp]

Anyway, Joe, I mean, come on. I mean, you know, you've seen them.

[Joe Kernan]

You've seen the numbers. You've seen the numbers, right? You've seen the numbers for how many things. How many, Mick, compared to previous administrations that have these. Yeah.

[Heidi Heitkamp]

Well, how do you feel, Joe, how do you feel about that tariff action in the D.C. circuit Court that, you know, this is being led by Republicans, by conservative organizations who think this has gone too far. There's a lot.

[Joe Kernan]

They'll just find another way.

[Heidi Heitkamp]

People like Mick, who understand that this is a historic moment and it's going to be really hard to roll this down.

[Joe Kernan]

The president is granted wide powers for trade. And if this, if it does go south in the Supreme Court on this, the way they're doing it now, they're going to be able to do it another way. He's allowed to do a lot of those things for trade, I think, or at least that would be the bottom.

[Heidi Heitkamp]

Congress has ceded that authority and various statutes by giving emergency authority.

[Joe Kernan]

You still want. You're waiting for the. You're waiting for Congress to allow Trump to take out those Iranian nuclear sites at this point, huh? That's not the way it works.

[Heidi Heitkamp]

Do I think, do I think Congress is fleckless and ineffective and ridiculous? Absolutely. Absolutely. I think that's true.

[Joe Kernan]

Right. Because the Republicans are in charge.

[Heidi Heitkamp]

Yeah.

[Thumbtack Advertiser / Mick Mulvaney]

At some point, the Democrats are going to be back in charge. And during my life, then it won't.

[Joe Kernan]

Be fecalus anymore, and it won't be because they stick together. They do everything they want, like the Borg Collective. All right, Heidi, thank you. It is. It is. How many votes did Jeffries get?

[Heidi Heitkamp]

Resistance is futile, Joe. Resistance is futile.

[Joe Kernan]

Resistance is futile. Good one. So you watch your fan. All right, thank you both.

[Katie Kramer]

Next on Squawk Pod, all the headlines you need to start your week. And artificial intelligence is forcing the hand of Silicon Valley companies to hire superstars and keep them happy. OpenAI is offering special bonuses of millions. Journalist Alex Heath joins us on the brutal and busy Talent wars.

[Alex Heath]

You've got some VPs at some of these big tech companies that because of the run up in the stock price, they're already making tens of millions a year. And these aren't even people in the AI field. So the money that's in tech right now is already very bubbly.

[Keith Lansford]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key 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.

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[Katie Kramer]

You'Re listening to Squawk Pod from CNBC Today with Joe Kernan and Andrew Ross Sorkin.

[Andrew Ross Sorkin]

Here's Andrew the battle for top AI talent is in full swing among big firms like OpenAI, Meta Anthropic and as Robert Frank told us last week, it's creating billionaires at a rapid clip. Joining us right now is Alex. He is the deputy editor at the Verge. Thank you for waking up early, Alex. Love all of the things that you write. What is really going on? We talked to Sam Altman on Friday and we're trying to understand sort of how big a pool there is among these, these talents.

[Alex Heath]

Definitely this is the most intense talent.

[Joe Kernan]

Market I have seen in my career.

[Andrew Ross Sorkin]

But if you think about the economic.

[Joe Kernan]

Value being created by these people and.

[Andrew Ross Sorkin]

How much we're all spending on compute.

[Joe Kernan]

You know, maybe it, maybe the market stays like this.

[Alex Heath]

I'm not, I'm not totally sure what's.

[Andrew Ross Sorkin]

Going to happen, but it is like a crazy intense comp for a very small number of people right now. And I want to know what it is that they know that nobody else does.

[Alex Heath]

I watched that interview, Andrew. He didn't really answer your question about the size of the market, did he? In reality, it's very, very small. It's smaller than most markets. OpenAI, for example, their research team is probably two to 300 people, their core research team. The people getting these really insane, you know, sometimes nine figure, even eight figure offers. So this is basic supply and demand. You know, the people that build these frontier models, there's just not enough of them given the capex that's going to them just from the hyperscalers alone. If you're paying Steph Curry at the NBA 60 million a year in a market like the NBA, that's doing 12 billion a year in revenue. Why doesn't it make sense to spend a billion on the core team? That's in an industry where the hyperscalers are going to do over.

[Andrew Ross Sorkin]

Are they all Steph Curry, though? I mean, that's, that's the thing that I'm trying to understand. And I'm also thinking, if I wanted to be Steph, the Steph Curry of AI, what would I have to do to learn to be that? Meaning what is the experience that you'd actually need to have that kind of value prop?

[Alex Heath]

It's someone who could potentially invent something like this new test time compute, this reasoning paradigm that we've seen with the latest OpenAI models, Google's models, those kind of step changes in how the models behave, where the companies that deploy these models can eke out billions more of revenue from them, can really generate a lot of hype. And this industry is just really new. There's just not a lot of people that have been studying this stuff. And so if I had to actually put a number on it, and I've talked to people who have a sense of it, there's maybe 2,000 people in the world, max, who could build a frontier model that OpenAI needs. So when you look at that kind of supply and demand with the capex being spent here, it actually makes a lot of sen sense.

[Joe Kernan]

Right.

[Alex Heath]

And there's a lot with how Mark Zuckerberg has been structuring these offers that it's also not as insane as people think he's going to ask you.

[Andrew Ross Sorkin]

We Hear these numbers, $1 billion here or hundreds of millions of dollars there. And you also start to think about the culture wars that would take place inside a business where you have somebody come aboard if they know that they're, they're getting these kind of big paydays. I'm not sure why they wouldn't put their feet up on the desk.

[Heidi Heitkamp]

Risk.

[Andrew Ross Sorkin]

And by the way, what about the person who's in the cube right next to them, who's not getting that payday?

[Alex Heath]

Well, what's not being reported about a lot of these offers, especially the ones Met has been making, is that they're structured like executive pay. These are not your typical restricted stock unit offers that big tech employees get, where it's guaranteed on a vesting schedule. These are, you know, highly correlated to performance targets, both at the company level and at the individual level. You know, they're structured like executive pay. You've got some VPs at some of these big tech companies that, because of the Run up in the stock price. They're already making tens of millions a year and these aren't even people in the AI field. So the money that's in tech right now is already very bubbly and I just adds a lot onto that.

[Andrew Ross Sorkin]

Alex, help us with this. Metal platforms actually on my screen, not yours. Metta, Amazon, Apple, Alphabet. Alphabet obviously has an investment in Anthropic along with Google. How would you stack Rank right now given that I know You've played with chat GPT5. I did it all weekend by the way. Joe, I still have not managed to make your app as well as it needs to be done. We'll work on that.

[Joe Kernan]

People are one of.

[Andrew Ross Sorkin]

I know they want that app. I know. Alex, which of these I mean when you sort of stack Rank, the quality of them and how close they are or not in terms of quality, what does it look like to you?

[Alex Heath]

I mean in terms of the names on this screen, it's definitely Google number one. Google out of all of big tech is wildly ahead on AI. You've got matter. I would actually put it number two. Given the talent density, especially in the last few months, Amazon and then Apple, it's really hard to overstate how behind Apple is right now from a talent perspective.

[Andrew Ross Sorkin]

And where would you put open AI if it was on the screen?

[Alex Heath]

I would put open AI right with Google but they're definitely it's OpenAI anthropic Google. Those three are always kind of neck and neck as the top place for talent but in terms of the public companies, Google is has a huge amount of talent density. I think I've heard is that they're actually not even matching a lot of these open air or metal offers. They're letting people go because they know they have such a deep bench and Gemini is doing so well for them.

[Andrew Ross Sorkin]

What do you think Apple ultimately does then?

[Alex Heath]

They need to make an acquisition. The problem is is Apple has not been active in this space. They don't do investments. So the names that they would need to buy Anthropic is probably the most obvious one. Anthropic is has a huge ownership position on their cap table from Amazon. Google's also an investor. So the hyperscalers have already really put their names down on all of these big private labs and Apple just hasn't been in this game and they don't like to spend big. They're going to need to spend 50 billion plus realistically to get one of these core teams and have we ever seen them do something like that? Not to say they couldn't, but it's just not in Apple's DNA. And they've also just been so out of the loop on this talent market today, it's really hard to see chat.

[Andrew Ross Sorkin]

GPT5 good enough to. I mean, some people said it could be an anthropic killer if it got the coding piece of this right.

[Alex Heath]

Well, something people didn't really notice last week is that Open Air got Cursor, the hottest vibe coding startup in the world right now, which I've heard is maybe a third of Anthropic's revenue, to switch to GPT5 as their default model. Which really shows how plug and play these models have become. And if you're Anthropic and you're just at the model layer and you don't own the consumer interface, you're really at risk of being disintermediated by a company with a better model, which OpenAI showed with cursor last week.

[Andrew Ross Sorkin]

Okay, final question, which to actually, now that you're raising these issues, I always thought that the lock in effect for this kind of stuff long term would be the persistent memory. That's something that OpenAI does have right now, and I would imagine the lock in effect that maybe Google could have given all the data they already have from you so that you wouldn't actually be swapping in and out depending on where the model is. You believe that or no, I think.

[Alex Heath]

That'S totally right, but we're still so early in that. I mean, yes, ChatGPT has memory. It still doesn't work with all your apps, it doesn't work across your devices, on your phone the way that it should. Google doesn't work across all its properties the way that it should. Write Gemini can't work with your Google Calendar. I think, personally, I don't think it works as easy as it should. So yeah, that is the lock in effect is data and scale and network effects. Almost like what we saw with social media.

[Andrew Ross Sorkin]

Right.

[Alex Heath]

Which is why you see these AI labs also thinking about social media and GROK being put into X, for example, it's that data flywheel. And so, yeah, OpenAI needs to do a lot.

[Andrew Ross Sorkin]

They're playing the music out. So last question, we asked it to Sam Altman, to Elon Musk, making this comment online about how Microsoft, or rather OpenAI is going to eat Microsoft's lunch even though they're partners. What do you think he was trying to say and what do you think of whatever he was saying?

[Alex Heath]

He just, he wants to eat open air alive So I think he's definitely going to say that.

[Andrew Ross Sorkin]

Okay, Alex, thank you. Appreciate it.

[Alex Heath]

Thank you.

[Andrew Ross Sorkin]

See you.

[Joe Kernan]

Do you watch Polymarket on this?

[Andrew Ross Sorkin]

I watch Polymarket. I watch Kalshee. Yeah.

[Joe Kernan]

On who's got the Best. I'm.

[Andrew Ross Sorkin]

Yes.

[Joe Kernan]

They're saying Gemini.

[Andrew Ross Sorkin]

Gemini. A lot of people think Gemini is great.

[Joe Kernan]

It flipped with the introduction of the one.

[Andrew Ross Sorkin]

I will say that I don't know if Alex is still with us. Chat GPT5 for me has been a.

[Joe Kernan]

Little bit slower and it because Gemini after that Gemini is now it's interesting.

[Katie Kramer]

And that is Squawk Pod for today. Thank you for starting your week with us. Squawkpox is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern. Get the very best of our TV show right into your ears when you follow Squawk Pod wherever you like to get your podcasts. Have a great Monday. We'll meet you right back here tomorrow.

[Andrew Ross Sorkin]

We are clear. Thanks, guys.

[Joe Kernan]

What made you confident that you could.

[Heidi Heitkamp]

Do something that hadn't been done before?

[Andrew Ross Sorkin]

I have no fear of failure.

[MeUndies Advertiser / Julia Boorstin]

Trailblazing women, changing the game. One of my favorite pieces of advice, think about out what your boss's boss needs.

[Katie Kramer]

Leadership can look in many, many different forms.

[MeUndies Advertiser / Julia Boorstin]

It really does come down to just trusting yourself.

[Heidi Heitkamp]

Life is short and you just got.

[Katie Kramer]

To think big to accomplish big things.

[MeUndies Advertiser / Julia Boorstin]

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