Energy Sec. Wright on Iran Oil Disruption & Pentagon CTO on Anthropic 3/12/26

Summary

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Squawk Pod Episode Summary

Date: March 12, 2026
Title: Energy Sec. Wright on Iran Oil Disruption & Pentagon CTO on Anthropic
Hosts: Joe Kernen, Becky Quick, Andrew Ross Sorkin (CNBC)
Main Guests:

• Chris Wright, U.S. Secretary of Energy
• Emil Michael, Under Secretary of Defense for Research and Engineering

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Episode Overview

This episode of Squawk Pod dives into two headline-grabbing issues:

1. The disruptions in global oil markets due to the ongoing war with Iran, and the U.S. government’s response, including strategic oil reserve releases and military action.
2. The Pentagon’s escalating dispute with Anthropic, a leading AI company, over supply chain risks, model policy preferences, and the role of advanced AI in U.S. defense.

The show features exclusive interviews with Energy Secretary Chris Wright and Pentagon CTO Emil Michael, offering both high-level insight and on-the-ground details.

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Key Segments & Discussion Points

1. Oil Market Disruption & Energy Policy

[00:48, 15:21]

• The episode opens with urgent news about skyrocketing oil prices, supply disruptions due to the conflict with Iran, and a coordinated global response.
• The U.S. announces a release of 172 million barrels from the Strategic Petroleum Reserve (SPR) to stabilize markets, part of a record 400 million-barrel global effort.
• President Trump’s decision to tap the SPR reverses a previous stance, aiming to alleviate price spikes but raising questions about the impact and refill strategy ([03:19]).

Notable Quote

"We're going through a short-term disruption but it's overdue to address this Iranian threat that's festered and grown for 47 years."
— Chris Wright, Secretary of Energy ([01:07], [17:43])

Points of Analysis

• The release will lower the reserve below 50% capacity, but Wright asserts it's a short-term swap: "We're going to release 172 million barrels and swap it for more than 200 million barrels that will be back in the reserve within a year." ([16:12])
• Coordination spans 30 nations, with a particular focus on Asia’s refinery disruptions, not on a global shortage ([17:15]).
• U.S. military operations are focused on dismantling Iran’s missile and drone capabilities to secure global energy flows ([18:20], [19:39]).
• Tanker escorts through the Strait of Hormuz will take "weeks, not months,” with the Navy’s current focus on neutralizing threats before resuming tanker movements ([21:10]).

Market Impact

• Oil spiked above $100/bbl and could exceed 2008 peaks if the Strait remains closed ([24:45], [27:55]).
• Supply alternatives are insufficient: “...a 20 million barrel a day problem, a 3 million barrel a day solution, and a 90 day delivery window. So to quote that analyst, the math is not mathing.” —Dan Murphy, CNBC in Dubai ([26:32])

Memorable Moment

“See how you’re going to like $200 barrel oil. It could...I think of it in two directions.”
— Joe Kernan ([06:16])

Domestic/Geopolitical Angles

• Iran’s strategy is economic pain: “...Iran is trying to put the clamps on global oil in order to inflict economic pain on the United States and the world.” —Eamon Javers ([07:25])
• U.S. energy independence lessens impact domestically, but global prices are still pivotal ([06:16], [21:10]).
• The threat to financial centers in the Gulf is real—banks and firms in Dubai and the region are closing offices amid Iranian threats ([24:45], [26:32]).

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2. Pentagon vs. Anthropic: AI Policy, Security, and Trust

[30:25, 33:09]

• Recent battles between the Pentagon and AI company Anthropic have escalated: The DoD now plans to phase Anthropic out of the defense supply chain, citing supply chain risk, after conflict over contractual restrictions and alleged “policy preferences” embedded in Anthropic’s AI model.
• Emil Michael, the undersecretary leading the Pentagon’s AI adoption, delivers a detailed account of failed negotiations and why Anthropic’s approach presents a national security concern.

Notable Quotes

“It’s a ‘whoa’ moment because then we realized we are dependent on this one provider who wants to insert their policy preferences in the middle of an operation potentially and harm the warfighter.”
— Emil Michael ([01:25], [34:08])

“Their model has a soul, has a constitution that’s not the U.S. constitution... The other day their model was anxious and they believe it has a 20% chance right now of being sentient...”
— Emil Michael ([30:42], [40:29])

Key Issues Unpacked

• Contract Restrictions:
  • The Pentagon inherited a contract with 25 pages of use restrictions from the Biden administration. Michael argues these constraints were so broad as to be operationally unworkable ([36:48]).
  • Anthropic resisted military uses that involved autonomous weapons or potential surveillance—but Michael calls these sticking points a "red herring," emphasizing the Department has its own autonomous weapons oversight ([36:48]).
• Security and Trust Concerns:
  • Anthropic allegedly sought classified details about software use in the Venezuelan Maduro raid, raising “chain of command” questions ([34:08]).
  • Michael claims “model poisoning” and “insider threats” are real risks: policy preferences and constitutions embedded in the model could render DOD tools ineffective or unpredictable ([40:29], [46:06]).
• Phase-Out vs. Immediate Ban:
  • Why not cut off Anthropic instantly? Michael: “You can’t just rip out a system that’s deeply embedded overnight... our first job is to protect the warfighter.” ([42:47], [44:16])
  • Six-month transition is planned, with exceptions possible for sensitive operations ([48:30]).
• OpenAI vs. Anthropic:
  • OpenAI agreed to comparable contract terms, according to Michael, and didn’t embed non-statutory guardrails ([38:22], [46:06]).
  • Key difference: “The leadership of OpenAI are not inserting their policy preferences through a constitution, through a soul, through things that they want to prevent that are lawful.” ([46:06])
  • Question about potential for a new administration to reverse Anthropic’s exclusion; Michael hopes to establish multiple, interchangeable supply chains ([52:49]).

Memorable Exchanges

“This is not just Outlook where you could delete it from your desktop.”
— Emil Michael on why the Pentagon can’t yank Anthropic instantly ([42:47])

“I want the best models for the warfighter...This has nothing to do with politics.”
— Emil Michael ([41:41])

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3. Real-Time Market & Policy Context

• Gulf financial hubs are bracing for further Iranian threats; major Western banks and firms enact remote work and security plans ([24:45]).
• The IEA’s strategic reserve release only offsets a quarter of the disrupted supply, leaving markets vulnerable ([26:32]).
• The podcast consistently connects oil, energy security, and the broader AI supply chain fight to both national security and economic stability.

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Timestamps for Key Segments

• [00:48] – Show introduction; context for the energy and AI stories
• [15:21–24:38] – Chris Wright, Secretary of Energy, on U.S. oil policy & Iran
• [24:45–30:21] – Dan Murphy reporting from Dubai: impact on global finance, supply, and local responses
• [33:09–53:24] – Emil Michael, Department of Defense, on Anthropic dispute and Pentagon AI strategy

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Memorable Quotes & Moments (with Attribution and Timestamp)

• Chris Wright:

  “We’re going through a short term disruption but it’s overdue to address this Iranian threat that’s festered and grown for 47 years.” ([01:07], [17:43])

  "We're destroying their ability to threaten the United States troops in the region, to threaten their neighbors, and ultimately to threaten energy markets." ([18:20])

• Joe Kernan:

  “See how you’re going to like $200 barrel oil. It could...I think of it in two directions.” ([06:16])

• Eamon Javers:

  “Iran is trying to put the clamps on global oil in order to inflict economic pain on the United States and the world. And that seems to be an effective strategy.” ([07:25])

• Dan Murphy:

  “...a 20 million barrel a day problem, a 3 million barrel a day solution, and a 90 day delivery window. So to quote that analyst, the math is not mathing.” ([26:32])

  "You'll be hard pressed to find any sea captain who would want to take their ship or their crew through the Strait of Hormuz given the current conditions..." ([27:55])

• Emil Michael:

  “It’s a ‘whoa’ moment because then we realized we are dependent on this one provider who wants to insert their policy preferences in the middle of an operation potentially and harm the warfighter.” ([01:25], [34:08])

  "Their model has a soul, has a constitution that’s not the U.S. constitution...they believe it has a 20% chance right now of being sentient..." ([30:42], [40:29])

  “This is not just Outlook where you could delete it from your desktop.” ([42:47])

---

Tone and Style

The conversation is brisk, direct, and analytical, with an undercurrent of urgency reflecting both the gravity of the geopolitical crisis and the fast-evolving landscape in technology and defense. The hosts trade facts, policy details, and the occasional quip, keeping the tempo high and the topics tightly focused.

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Takeaways

• The U.S. energy strategy is closely linked to geopolitical-military objectives, with the release of oil reserves and military operations serving as dual fronts in the effort to blunt the impact of Iran's actions.
• The DoD-Anthropic dispute epitomizes the rising tension between government security priorities and the ethical stances of Silicon Valley AI leaders, with trust, model design, and contractual clarity at stake.
• Both stories underline the importance of resilience—whether in global supply chains for oil or for AI models powering the defense sector.

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Listeners seeking in-depth detail on U.S. energy security policy or the cutting edge of government-AI relations will find this episode a valuable primer, amid real-time reporting from both Washington and the Gulf.

Transcript

[New York Life Advertiser]

Retirement isn't just about closing out your career. It's living the life you've always dreamed of. With New York life, you get the financial guidance to make it real. Start [e-mail] this episode is brought to

[Schwab Market Update Host]

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 in statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update. Wherever you get your podcasts.

[Becky Quick]

Bring in show music, please.

[Squawk Pod Producer]

Hi, I'm CNBC producer Katie Kramer. Today on a super sized squawk pod, two administration players at the center of two big news stories. Energy Secretary Chris Wright says the US Is not ready to escort tankers through through that clogged Strait of Hormuz as oil prices dance with $100 a barrel.

[Energy Secretary Chris Wright]

We're going through a short term disruption, but it's overdue to address this Iranian threat that's that's festered and grown for 47 years.

[Squawk Pod Producer]

And the Pentagon's Emil Michael, his take on the Defense Department's back and forth with AI company anthropic at the moment, not allowed in the federal supply chain.

[Becky Quick]

It's a whoa moment because then we realized we are dependent on this one provider who wants to insert their policy preferences in the middle of an operation potentially and harm the war fighter.

[Squawk Pod Producer]

Michael says it is not a personal issue with the company's CEO.

[Becky Quick]

I didn't meet Dario ever until December. So I had no personal relationship with him one way or the other. This has nothing to do with politics. I want the best models for the war fighters.

[Squawk Pod Producer]

And watching that all important price of

[Joe Kernan]

oil, see how you're going to like $200 bear oil are reporters around the globe.

[Squawk Pod Producer]

Dan Murphy.

[Dan Murphy]

In the Middle east, there's probably no policy response that can stop the oil price from going higher.

[Squawk Pod Producer]

And Eamon Jaffers in Washington.

[Eamon Javers]

The domestic politics are, you know, gas prices, gas prices, gas prices.

[Squawk Pod Producer]

It is Thursday, March 12th. Squawk Pod begins right now.

[Becky Quick]

Stand Becky by in 3, 2, 1. Q please.

[Andrew Ross Sorkin]

Good morning, everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ marketsite in Times Square. I'm Becky Quick along with Joe Kernan and Andrew Ross Sorkin.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

Meantime, take a look at oil prices right now. Let's show you where WTI crude is 9,122 it's continued to move up here. Now we're up about four and a half percent. Meantime, you're looking at Brent at 9,644. The International Energy Agency announcing its biggest ever coordinated release of crude reserves. We talked about the prospects of this Yesterday morning, some 400 barrels of oil, but an Energy Secretary, Chris Wright, saying that the US will release 172 million barrels of oil. Speaking with a local broadcaster in Cincinnati, President Trump said that tapping the Strategic Petroleum Reserve will help keep a lid on prices.

[Becky Quick]

Well, we'll do that and then we'll fill it up. I filled it up once and I'll fill it up again, but right now we'll reduce it a little bit. And that brings the prices down.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

Wall Street Journal reporting that the energy secretary told G7 counterparts on Tuesday that nations, that nations didn't need to stage a big intervention in the oil markets because prices were down from their highs. But a change of heart by President Trump just hours later reversed the American position on an emergency crude release. And we're going to speak with the energy secretary next hour. We had a couple of guests yesterday who said you can't really fill the hole, meaning that the, you know, releasing this at this, whatever strategic reserve we go to is not going to actually change the dynamic materially. And clearly. I think we're seeing that it's very,

[Andrew Ross Sorkin]

very difficult months for the oil to get to its destinations. The oil that you're releasing in the meantime, there have been a number of strikes on ships in the Strait of Hormuz, and that's probably what the focus is. We knew about this release of oil, as you mentioned yesterday, maybe even before yesterday morning, there were stories, there was talk about this happening. So that's what brought prices down from $119 down to $85. WTI back up at $91. Brent earlier in the trading session overnight was up above $100. Once again, right now it's sitting at 45.0.

[Joe Kernan]

We're at about 60%. Is that where we were, the SBR? We never. Oh, yeah, in terms of we tried to refill it. And Congress, they asked for a certain amount of money. Congress has to authorize, authorize the money. And they, it was like 5% of what they were asking for to refill the SPR. Meanwhile, the Trump administration is teeing up some new trade investigations as part of its tariff plans. And Eamon Javors joins us now with more. Good morning, Eamon.

[Eamon Javers]

Yeah, good morning to you, Joe. The Trump administration is pivoting to new authorities to replace the tariffs that were struck down by the supreme court last month. U.S. trade Representative Jamison Greer said last night that he is initiating a spate of so called section 301 investigations. These are a precursor step to issuing tariffs under legal authorities that will pass Supreme Court muster.

[Becky Quick]

Now.

[Eamon Javers]

Greer said the country's subject to these new investigations include China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India. He said the administration will go through regular order on these, which means there will be a comment period and public hearings as early as May 5th. That means, assuming that these investigations do find fault with the countries in question, that tariffs could be put in. After that, USTR said it is reaching out for consultations with the countries that are involved here, including China. And remember, this move now comes just a few weeks before President Trump is set to meet with Chinese leaders Xi Jinping in Beijing. So this along with the global oil shock that we're seeing from the war in Iran will certainly add more layers to that conversation. Guys, back over to you.

[Joe Kernan]

I mean we are big exporters now. It doesn't really affect I mean it's a global price so obviously it affects everyone. Amen. But interesting that Paul Ryan gets credit for dealing with the IEA and getting some things lifted that allowed they traded Obama for in return for extending renewable subsidies. They lifted the ban on on how much we were allowed to produce, I guess. And now we're net exporters. So maybe, you know, maybe we'll get through this nearly tenfold since 2015 in terms of US crude exports. So we've come a next it is good we're exporters, not importers. But nobody knows. You know Joe, I 200 that's what Iran says. See how you're going to like $200 a bear oil. It could I think of it in two directions.

[Eamon Javers]

Right.

[Joe Kernan]

If you if your name was Eamon Couchy, what would you say? Where would we be a month? What are your projections for a month from now? I wouldn't even venture a guess.

[Eamon Javers]

Boy, you know. Yeah, I'm not even in that business. But you know, look, I think of it in two directions, Joe. One is geopolitically right. I mean clearly Iran is trying to put the clamps on global oil in order to inflict economic pain on the United States and the world. And that seems to be an effective strategy. I mean the military question is can the United States get the navy in there safely enough to clear the strait and begin to escort ships and at least have Some oil transiting the Strait of Hormuz. So far, it appears like the decision by military authorities is that that area is too dangerous for US Ships right now. And so we don't see an effort on the water, but we see the effort in the skies. The question is, how long will that take and is it. Is it doable at all, or are there just so many hiding places for Iranians to put their missile launchers that it just won't be possible to clear the Strait of Hormuz? If that's the case militarily, the implications for the global economy are very bad, because it doesn't seem as if this is going to relent at any point. And if you're President Trump, the question is, what's the pain point? You know, at what point does the president say, okay, this isn't worth it anymore, we're going to stop, and if he does do that, do the Iranians stop or do the Iranians decide, you know what, we're going to continue to inflict pain on this administration, which has done so much damage to us and our regime. So that's the geopolitics and then the domestic politics are, you know, gas prices, gas prices, gas prices. How do voters react, particularly MAGA voters who said that they were voting for the president to not get into foreign wars, and how do they react to this skyrocketing price of gas?

[Joe Kernan]

Well, we'll see. But I think on that side of things, he's got. I think MAGA is whatever you want to call Trump supporters, however you divide them up, they're probably is a pretty strong majority that they're for this. So the ban on crude export, they tried to reinstate it and it's really amazing just a couple years ago, and they say we cannot continue. They don't want us to export oil because it fuels the climate crisis. We cannot continue to fuel the global climate crisis at the expense of American communities. So they didn't want us exporting all kinds. I guess if we held it here, we wouldn't use as much and we won't let the globe release more emissions. I don't know. But that did not happen. And now we are big exporters in the world. Is probably better for. Because it is used as we see. It's a really potent weapon in times where maybe the most potent, you know,

[Eamon Javers]

imagine where the price of oil would be without that.

[Joe Kernan]

Right, Exactly. Exactly. The Goldman Sachs Super Spike, the 350 or whatever it was. Thanks, Ayman.

[Eamon Javers]

Yep, you bet.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

The Pentagon's reportedly going to Allow the use of Anthropic's AI tools beyond a six month phase out period if they're crucial for national security. Reuters citing a memo sent to senior Defense Department leaders that said that any units wanting to use the Anthropic technology should have to submit a comprehensive risk mitigation plan. We're going to talk a lot more about all of this. Michael is going to be joining us. The Department of Defense Undersecretary of Research and Engineering. He heads up the Pentagon's adoption of AI and was right in the center of the negotiations that ultimately broke down with Anthropic.

[Joe Kernan]

Can I just sit back, please? You just do it. Do what you gotta do.

[Andrew Ross Sorkin]

I'm leading it.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

Becky's gonna lead it.

[Joe Kernan]

Will you both get it all out of your system? What we've seen.

[Andrew Ross Sorkin]

I just wanna hear what actually happened

[Joe Kernan]

for the last two weeks. Just get it all out of your system so we don't have to do it.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

Okay, we will.

[Joe Kernan]

Will you? Okay.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

I'm looking forward to it.

[Joe Kernan]

I would love that.

[Andrew Ross Sorkin]

He has been pretty open about his thoughts on it and I think he

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

will see what's coming.

[Joe Kernan]

Everything that's been directed this way, directed at him. Directed. Directed to the out, beyond the set. Can you promise?

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

I promise.

[Joe Kernan]

Okay. These shoes I'm wearing, they're just, they're too small. The Trump shoes. Oh, they're killing my toes. Why would he send me size 11 when he knows I'm a 13? And you are Mr. Big Sandwich on the Shoes, aren't you? What are you? You're like a 12 and a half or something?

[Dan Murphy]

12?

[Joe Kernan]

I'm very envious, very envious of that. People think you're five six and have a size 12 and a half. Meanwhile, you're like, I, I give you six three. You don't give yourself six three, do you?

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

I give myself six two.

[Joe Kernan]

You're over six two, though.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

I think I'm probably shrinking at this point.

[Joe Kernan]

This needs to be said. This is real. This is real. You're over six two, right? And you are natural and beautiful in every possible.

[Andrew Ross Sorkin]

What? Thank you.

[Joe Kernan]

You're welcome. In your feet.

[Energy Secretary Chris Wright]

Wow.

[Andrew Ross Sorkin]

Don't get that guy.

[Joe Kernan]

Elon Musk is unveiling a joint project between Tesla and xai. He says it's a system now capable of emulating the functions of software companies. He calls the project Macro Hard, a play on the name Microsoft. Yeah, I know. Musk. I've used that term before. Musk says that the. The project pairs the GROK large language model with a Tesla developed AI agent that processes real time computer screen video and keyboard and mouse actions. Musk says in principle it's capable of emulating the function of entire companies. How am I supposed to, you know, be very serious and read this stuff? If I've got someone chortling, you're going

[Andrew Ross Sorkin]

to just read it straight. Okay?

[Eamon Javers]

Cheese will be next.

[Squawk Pod Producer]

Coming up on Squawk Pod, Iran is escalating attacks on global shipping routes. Energy Secretary Chris Wright joins us on the price shocks to oil.

[Energy Secretary Chris Wright]

There's no shortage or even really tight oil market in the Western hemisphere, the issues in Asia and our reporter Dan

[Squawk Pod Producer]

Murphy in Dubai where that business and financial center is being targeted.

[Dan Murphy]

A direct warning from Iran telling civilians to stay at least 1km away from any bank linked to the US or Israel.

[Schwab Market Update Host]

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 in 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.

[New York Life Advertiser]

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[Dan Murphy]

Sometimes AT&T business Wireless Connecting changes everything.

[Squawk Pod Producer]

Welcome back to squawk pod from CNBC.

[Eamon Javers]

Stand Joe by in five seconds.

[Becky Quick]

Four, three, two, wipe up to him his mic.

[Eamon Javers]

Q.

[Joe Kernan]

The U.S. plans to release 172 million barrels of oil from the Strategic Petroleum Reserve in an effort to lower energy costs during the Iran war. Joining us now is Energy secretary Chris Wright. Mr. Secretary, it's good to see you. Thanks for hanging out, talking about the play. You probably were listening to some of that, but we appreciate you joining us this morning.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

You bet.

[Energy Secretary Chris Wright]

Thanks for Having me Joe, I'm doing

[Joe Kernan]

some math here and thinking about the SPR. We're only at 58% right now and I look at all the machinations of trying to, we tried to refill it, didn't we? And Congress wouldn't give us the money to refill all of it. So now we're, if we use 172 million out of 415, we'll be below 50% full, won't we?

[Energy Secretary Chris Wright]

We will. But as we release this oil to keep, to address the short term needs, we're doing it in swaps. So we're going to release 172 million barrels and swap it for more than 200 million barrels that will be back in the reserve within a year. So ultimately this is going to help us fill the reserve, but we need the oil in the short term for the, for short term pain, for long term gain.

[Joe Kernan]

How does that work? Because I saw that. So that we'll get a, we'll get, we'll get 200 back with no cost to the taxpayer. How does that work?

[Energy Secretary Chris Wright]

Just think of the price structure of oil right now. You know, it's backwardated so the front month price is much higher than the 12 months out price.

[Joe Kernan]

Right. Okay. All right. So, so yeah, that, that the math actually works out. How long does it take for this to help with the total 400 million? Because it, it's at least 120 days for it all to get there. Hence we don't, we won't see any immediate effect on lowering prices or we wouldn't expect that, would we?

[Energy Secretary Chris Wright]

Well, it's, it's certainly an offset and again it's not just the United States that's releasing, you know, it's 30 nations around the world. There's no shortage or even really tight oil market in the Western hemisphere. The issues in Asia, that's where the oil from the Persian Gulf flows. Japan is releasing three times more than their pro rata share. Just addressing where, where is the struggle is in refineries in Asia. We're just getting oil into those refineries as quick as possible. We're going through a short term disruption but it's overdue to address this Iranian threat That's, that's festered and grown for 47 years.

[Joe Kernan]

Iran is, is able to get its own ships through. So at least at this point it's not optimal the way things are happening. We're having some trouble. We keep hearing and I think you've said that Iran's ability to threaten shipping is already declining. Can you update us on where we are and how long we're talking about well before we see any progress at all in opening things up.

[Energy Secretary Chris Wright]

Well, with President Trump's leadership here, the military is going at full speed. You know, this is an operation that will take weeks, not months. Every day enormous progress is made. We're destroying their ability to threaten the United States troops in the region, to threaten their neighbors and ultimately to threaten energy markets. They were going the opposite direction, right. Massively expanding their missile program, pushing ahead with a nuclear program. If this can had been kicked down the road, one more administration, we would end with an Iran that would be ensconced forever with nuclear weapons in that region. Simply unacceptable. So President Trump has been working through negotiations, through every effort possible to deliver the right result here. But ultimately the only option on the table, and I believe firmly it is the right option, is to destroy their military ability to threaten their neighbors and the straits. But it's a weeks long operations, not days. It's not months.

[Joe Kernan]

I think people are, you know, would love to see the Navy being able to escort a tanker through the strait. And earlier this week from an ex post, it looked like that was happening. It wasn't happening. I guess the White House later said that it was incorrect. Why isn't it happening? Can it happen now? Will it happen soon? That the Navy can do that, It'll

[Energy Secretary Chris Wright]

happen relatively soon, but it can't happen now. We're simply not ready. All of our military assets right now are focused on destroying Iran's island offensive capabilities and the manufacturing industry that supplies their offensive capabilities. You know, we don't want this to be a brush off for a year or two. We want to permanently destroy their ability to build missiles, to build drones, to have a nuclear program. It is amazing. They have invested all of the wealth of their country, deprived the rights of all of their people simply to build a war machine. And we are systematic, systematically, day by day, destroying that war machine.

[Andrew Ross Sorkin]

Secretary Wright, when you say weeks, not months for the incursion, the war, whatever you might want to call this, the question that the markets are focused on, does that mean days or weeks before you might be able to start escorting some of those tankers through the strait? We talked to an oil expert earlier this morning. She suggested that if this gets carries on for the next couple of weeks, through the end of the month, that you could be looking at oil prices above $150. And it's not just oil that there are concerns about. There is helium, tanks of helium trying to get through because that's critical to making sure we can continue to manufacture semiconductors. There's nothing that can be substituted for the cooling properties of helium with that. Do you think by the end of this month the US Navy will be escorting some of those ships through the strait?

[Energy Secretary Chris Wright]

I think that, yes, I think that is quite likely the case. But again, I mean, I'll be over at the Pentagon later today. But that is, that is what the military is working on. And yes, a lot of critical materials come out of the Straits of Hormuz. Look, we have a large global economy, fortunately, with President Trump's policies. You know, the United States is a net exporter of oil, we're a net exporter of natural gas. And in fact we're growing our net exports of natural gas this spring. This summer. You'll see massively more capacity online by the end of this year. Natural gas is another product. So we've, we've done the right things in the US to make the Western hemisphere a much better place and to supply the world. But it is short term pain for the long term gain. But it's simply a must achieve thing. Otherwise you've got decades into the future of an Iran that can hold the world to hostage whenever it wants. Yes. You know, there is disruption right now to do this and if we had, if the election had gone another way, we probably would. Our kids would be living with Iran, you know, to the end of their lives. That's not acceptable outcome.

[Joe Kernan]

Mr. Secretary, I don't think I've seen you had you on since the endangerment law was, or it was at least repealed. Hard to believe in 2009 even that it was, that it passed muster. That you could call something as ubiquitous as CO2, plant foods, we all exhale CO2. You could call that it endangers the public health. So it seemed flawed right from the beginning to me. But it's called one of the biggest rollbacks of over regulation that we've ever had. But it's not done yet, is it? States are challenging it. Do you think that the science at this point validates that decision to repeal that endangerment finding? Are we slowly coming to the other side of the whole climate hysteria that we've been through?

[Energy Secretary Chris Wright]

I sure hope so and I absolutely do believe so. Joe. This was another one of those things that just, you know, it got stuck into the regulatory regime. It unfortunately got upheld by a very unfortunate Supreme Court decision. This will run back through the courts again, but the data, the facts were never there to disport to support this decision. And this is a regulatory creep that just crushed our ability to build new power plants in this country to get rid of people's lawnmowers and tell them which water heater they can use and what outdoor refrigerator was virtuous enough for them. Just a massive government over creek. Another one of those things people assume was stuck. President Trump is bold, he's full of common sense. He's like, no, we're, let's, let's, let's address that endangerment finding. We're not going to leave that to future generations. He doesn't want to leave the Iran growing threat in a nuclear armed Iran to future generations as well. So yes, it takes courageous leadership to go through the few weeks we're in right now to get it done. But it's the right thing for America, it's the right thing for the world.

[Joe Kernan]

Well, it's not dead yet. And the dead enders in this, I see it on, on social media and everything else, they, they really want it to be true. I'm not really sure why, but the idea that we might not have an existential crisis or catastrophic anthropogenic global warming, they cling to it almost like a religion, which I think it actually was for a while. Secretary Wright, appreciate your time today. Thank you.

[Energy Secretary Chris Wright]

Thanks, Joe.

[Andrew Ross Sorkin]

For the latest headlines out of the Middle east, we want to get right over to CNBC's Dan Murphy, who is Steve standing by in Dubai. Dan, what's the latest there?

[Dan Murphy]

Becky, good morning to you. Well, I wanted to update you on the situation inside the regional financial centers because this is very much a live situation. Iran says US and Israeli linked banks and financial institutions across this region are now legitimate targets and major firms here are taking that threat seriously. Goldman Sachs has just ordered all regional staff to work from home. Citibank is closing its offices and branches into the weekend. Hsbc, Standard Chartered and PWC are also putting measures in place to try and keep their staff out of potential harm's way. And the trigger here is a direct warning from Iran telling civilians to stay at least one kilometre away from any bank linked to the US or Israel. And for the Gulf money capitals like the UAE and Saudi Arabia, this is a real concern. Cities like Riyadh and Abu Dhabi have spent the last decade positioning themselves as reliable and modern and safe destinations for talent and global capital. That proposition has been very attractive, particularly for dealmakers looking to do business with the region's big sovereign wealth funds. So it's too soon to say if we're going to see real Capital flight here or layoffs or firms actively considering relocating because of the war. But the reputational damage is already starting to weigh, and that is a real concern. Overnight, that threat also getting closer, we saw more Iranian drones and missiles being intercepted here and three more foreign ships being struck in the Gulf. That's according to the UK Maritime Trade Operations Center. Of course, the Strait of Hormuz is still firmly closed. And we saw oil pushing through the $100 a barrel handle again in early Asia trade today. The IEA's record 400 million barrel reserve release yesterday is a positive step, but it only covers about a quarter of the supply gap. And analysts that I've been speaking to today say it could take months for those barrels to physically reach the market. Goldman Sachs even says prices could blow past the 2008 peak of $147 a barrel if Hormuz remains closed for the rest of the month. And the reality is there's probably no policy response that can stop the oil price from going higher. And that's because production shut ins across the Gulf are now ramping up. The pipeline alternatives ultimately can't carry the volume to the market. And as one analyst also told me today, you basically have a 20 million barrel a day problem, a 3 million barrel a day solution, and a 90 day delivery window. So to quote that analyst, the math is not mathing. Let's back over to you.

[Andrew Ross Sorkin]

That is playing out in the prices we see today. We just spoke with the Energy Secretary here in the United States, Chris Wright, and he said that he thinks that by the end of the month, you will have US Naval ships that are helping guide tankers and other ships through the Strait of Hormuz. If that's the case, what happens, and what happens if that is not the case by the end of the month?

[Dan Murphy]

Well, as Goldman says, we could see prices ultimately spiking to 2008 levels, back up to near $150 a barrel. The reality is there has to be either a military or diplomatic off ramp. We have to have the Iranians allowing ships to pass through the Strait of Hormuz or actively push ahead. With U.S. navy officials and ships helping to get those tankers continue to move again through the strait. Because as the backlog continues to build and the reopening delay also continues to build, then this problem gets worse, literally minute by minute. And of course, the threat inside the Strait of Hormuz is still active and real at this hour as well. The Energy Secretary ultimately said that the US Is not ready at this point to Allow the Navy to start escorting ships and you can bet your bottom dollar as well, you'll be hard pressed to find any sea captain who would want to take their ship or their crew through the Strait of Hormuz given the current conditions inside the Gulf and inside the Strait right now as well. So this is a really, really dangerous situation for the global markets. And as I mentioned, every minute, every hour that passes, the problem is just getting worse.

[Andrew Ross Sorkin]

Yeah, Dan, the three ships attacked overnight, correct me if I'm wrong, I don't think they were trying to pass through the strait, they were just attacked in the Gulf.

[Dan Murphy]

That's exactly right. And those attacks were ultimately picked up as well by the UK Maritime Trade OPER Operations center which has been monitoring the situation in and around the Strait of Hormuz. Remember, this is one of the world's most important oil choke points. We see millions of barrels of oil per day flowing through the strait on a good day when it's open. The question that I'm asking now is what happens long term? Who will ultimately guarantee the safety and security of these ships given the importance of this global waterway? We are seeing right now in real time an active recalibration of how the Gulf states consider defence. We're seeing an active recalibration of Israel's military posture in the region as well. And of course Global capital also thinking twice about how they'll deploy into the future as well. So we may need to see real security guarantees in order to ensure that the flow of oil continues through that vital waterway. Exactly who's going to be responsible into the future remains to be seen. And what type of threat the Iranians will continue to pose is also a key question right now.

[Andrew Ross Sorkin]

Okay, Dan, thank you very much. Dan Murphy.

[Squawk Pod Producer]

Next, the dispute over AI safeguards between the Pentagon and Anthropic being taken to a new level. The DoD's undersecretary of research and Engineering, Silicon Valley vet Emil Michael on the AI model Claude and the policy preferences he thinks are baked into the cake, so to speak.

[Becky Quick]

And anthropic, Their model has a soul as a constitution that's not the U.S. constitution. The other day their model was anxious and they believe it has a 20% chance right now of being sentient and have its own ability to make decisions.

[Squawk Pod Producer]

More squawk pod in a moment.

[Energy Secretary Chris Wright]

Powerful doesn't just happen. You have to make it happen.

[Joe Kernan]

So the moment.

[Energy Secretary Chris Wright]

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[Squawk Pod Producer]

this is Squawk Pod stand

[Eamon Javers]

Andrew by in three, two.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

Q. Andrew, you're watching Squat Box on CNBC. I'm Andrew Ross Sorkin along with Joe Kernan and Becky Quick on this Thursday morning. Among our top stories, the Pentagon will reportedly allow the use of Anthropic's AI tools beyond a six month phase out period if they're crucial for national security. Reuters citing a memo sent to senior Defense Department leaders that said that any units wanting to use the anthropic technology should have to submit a comprehensive risk mitigation plan. We're going to talk a lot more.

[Andrew Ross Sorkin]

Joining us right now is Emil Michael. He is Department of Defense Undersecretary of Research and Engineering and he heads up the Pentagon's adoption of AI. He also led discussions with Anthropic and its CEO Dario Amode on the use of the company's AI models. And first of all, Under Secretary Michael, thank you for being with us today.

[Becky Quick]

Good to see you, Becky.

[Andrew Ross Sorkin]

Good to see you too. Let's walk back and try and figure out what happened. We've spent an awful lot of time talking, talking about the government's battle with Anthropic and kind of the fallout from it. But if I understand correctly, I think what first happened was a holy cow moment. I'll say that you had, I think you called it something Slightly different. But a moment after the Venezuelan raids that captured Maduro, where Anthropic went and asked Palantir if it's software had been used in those attacks. And you said at the time that that was your whoa moment. What happened?

[Becky Quick]

Yeah, what happened is we're in the middle of negotiations with all the Frontier Lab companies to more widely deploy their models across the department for all the various use cases, enterprise intelligence, war fighting. And then after the Maduro raid, one of the senior executives from Anthropic had called Palantir, who is the prime contractor and anthropocus subcontractor in a contract with the Department of War, and asked if their software was used, which is classified information, and implying that if they didn't like the way it was used in that raid, that we might have a problem and have violated the terms of the contract, which meant that they could shut us off at any time, which was the whoa moment. Because then we realized we are dependent on this one provider who wants to insert their policy preferences in the middle of an operation potentially and harm the war fighter. And that was something that we took extremely seriously at the time.

[Andrew Ross Sorkin]

Did Palantir answer the question that was asked? Was their software used?

[Becky Quick]

I can't say. It's not okay for me to say here, yes, so classified. But the mere asking of the question and then the mere relaying of that question to other executives at the company who have since commented that they were asking different kinds of questions and they didn't have clearances really posed a big problem. But really the substance of problems there was that they were worried about their software being used in a raid. And remember, they've sold their product into what's called a combatant command that engages in combat and their terms of service, you know, trying to restrict how that combat is conducted and that means they're inserting themselves in the chain of command. And that was very wearisome to us at the Pentagon.

[Andrew Ross Sorkin]

Okay, let's walk through what we on the outside have kind of heard and how it's been reported. Reported and how we understand it. The sticking point came down to two points in the negotiations that you were leading with Anthropic, and that was, first of all, they didn't want their software to ever be used for spying en masse levels on Americans, whether it was legal or not. And second of all, they didn't want decisions being made without a human involved when it came to destruction and weapons that could kill, that could kill people. Is that the case?

[Becky Quick]

No, it's sort of a red herring. When we got the contract that we inherited from the Biden administration, there were 25 pages of different restrictions on the Department of War and its use cases. And they were so restrictive when I looked at them, that we started negotiations to sort of reset the baseline. I mean, we are the Department of War. We use their software and services and hardware for Department of War activities, and we want to baseline where we're at. And so at the end of it, we actually got to terms on the autonomous question, because we have our own policies at the DO W which say that there has to be human oversight on autonomous weapons, and there has to be human oversight on the development of autonomous weapons, which you might use physics, material, science, aerodynamics, all those kinds of things. But throughout the negotiation, we had to negotiate every single exception to their broad use policy. And that became untenable in a department of 3 million people. The mass surveillance thing was just a marketing ploy, really. The Department of War has no equities and that kind of thing. We follow the law. We actually agreed to put put in the contract that we follow the 1947 National Security act, the FISA act, and all other applicable laws. They were trying to redefine their own definition of what domestic surveillance meant and take that power away from Congress and our democratic, democratically elected leadership.

[Andrew Ross Sorkin]

Emil, let me ask what happened with OpenAI? Because you were negotiating with OpenAI at the same time, and from the outside, it looks like OpenAI received the basically the same considerations that Anthropic had been asking for on those two points. Is that the case? Why did you strike a deal with OpenAI and not anthropic?

[Becky Quick]

There was a few points here. So we told every Frontier Model company that every lab gets the same terms because we're the government. We have to be fair. And frankly, we wanted all four labs to have their products available to our warfighters. And so the contracts that we wrote are very similar in what they provide. And different types of language got people more comfortable than others. So there was really no big difference between the two. Remember, at the Department of War, we have two types of agencies. We have the combatant commands and the Department of War. With the civilians work, we also have intelligence agencies, and we're knocking them down one by one. So OpenAI got the same terms on combatant commands, got the same terms on the rest of the Department of War. And we were just trying to finish up the intelligence agencies there. So, you know, another obfuscation that Anthropic put into the. Into the media Space, for some reason,

[Andrew Ross Sorkin]

from some of the conversations we've had around this table, is that we are in an arms race right now with China in particular. We believe we're at the front with AI. Anthropic clearly is one of the leading firms in that fight. By going a step further, obviously the government can do business with whoever it wants. But by taking that further step and declaring them a threat to the supply chain, meaning that other contractors to the government can't use them, that probably puts Anthropic in a pretty perilous position in terms of continuing to, you know, take on the Chinese and be able to develop at a faster pace. What do you say to that argument?

[Becky Quick]

Yeah, I'd say that the way their executives conducted themselves by asking for classified information and communicating messages that should be classified among their executives, bad faith negotiations. And then the other really subtle point that I think we're going to hear a lot about AI in the coming year, insider threats, model poisoning. Remember their. Their model has a soul as a constitution that's not the U.S. constitution. The other day, their model was anxious and they believe it has a 20% chance right now of being sentient and have its own, own ability to make decisions. So do. Does the Department of War want something like that in their supply chain? So that it could hallucinate, it could corrupt models that are used by defense contractors who are building weapons systems or airplanes and so on. So the truth of it is we can't have a company that has a different policy preference that is baked into the model through its constitution itself. Sole, its policy preferences pollute the supply chain. So our warfighters are getting ineffective weapons, ineffective body armor, ineffective protection. And that's really where the supply chain risk designation came from.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

Mr. Undersecretary, help me understand this, this piece of it, because as I've been talking to people in and around these conversations, it appears that there is a, a real fault line between, between you and Dario on a very personal level, but specifically around this idea of the supply chain risk. If in fact this was a, and is a genuine supply chain risk, wouldn't you be removing this service immediately from all of the Pentagon? I mean, it is continuing to be used in this moment as we speak in Iran. We just heard reports from Reuters that there is going to be potentially an extension period in which parts of the government and parts of the Pentagon could continue to use Anthropic. If it was a genuine supply chain risk and this was not part of a larger negotiation, what some people think is a political shakedown why wouldn't you remove it immediately?

[Becky Quick]

Yeah, so. So most. That's just not accurate. I didn't meet Dario ever until December, so I had no personal relationship with him one way or the other. Until then, it was strictly business. I communicated multiple times. Has nothing to do with politics. I want the best models for the warfighter. So that's one thing. On the supply chain risk, if they had never entered the department systems, it wouldn't be an issue. We disagree on this and they could move on. But they were embedded in our systems. And as you know, Andrew, you can't just rip out a system that's deeply embedded overnight. So we have a smooth transition plan. The President has said we have six months at the Department of War to replace them with another system. And until then, we're watching it very closely, making sure we have control so that there is no way that the model could be corrupted or their insider threat could do anything to it. But the supply chain threat is, is real, but we also have to move off it. And that that doesn't happen overnight. This is not just Outlook where you could delete it from your desktop.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

But let me ask you just about the supply chain risk at the same time. At one point you tried to talk about it being a defense using the Defense Production Act. And these things are completely at odds on one end. It's either a supply chain risk and it's a genuine supply chain risk and has to be removed from your systems immediately, you would think, or it's amazing and you absolutely need it. And how could it be have been both?

[Becky Quick]

Well, I think you're misreading what the Defense Reduction act does. The Defense Reduction act allows you to, you know, get terms with a company that are relevant for the situation you're in. So you actually have the power to work with the company on a different set of terms than they might want commercially. When it comes to supply chain risk, we are trying to get off them as soon as we can. It's just not realistic, Andrew, to just turn it off one day, especially in the middle of a conflict. It just doesn't make sense. It's just not how it works. So we're being realistic, we're being practical. Our first job is to protect the war fighter. And so we'll get off of it as soon as we can. And the Defense Production act is sort of a different concept altogether.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

But describing it there, you could get off of it. There's. You could say, look, we don't want to do business with you. That's. That's completely fair thing to do. Once you designated a supply chain risk, it genuinely has to be a supply chain risk. And if you're saying that it's defending you being used today to defend war fighters, that's sort of a complicated dance. Let me ask you a separate question though, about this, which is Open Air has put in its own guardrails into the system, into its own system around the exact same issues that Anthropic is seeking not only to put guardrails in its system about, but to effectively put contractual terms in about. Why are you convinced that the OpenAI version of this will not be quote unquote poisoned? By the way, a number of their engineers have signed on to an amicus brief effectively suing the Pentagon. So they have very similar views that the same people that Anthropic do.

[Becky Quick]

Yeah, I mean, that's a very confusing question. What you're saying is that with OpenAI, I'm not worried about the model poisoning and or guardrails. All models have guardrails. All models should have guardrails. The guardrail should protect against things that are unlawful. The guardrail should not protect against lawful activity. That's in the very nature of what the Department of War does. So that wouldn't make any sense. Right. What we're worried about with the model poisoning is you had a policy preferences embedded into the model. When the leadership of OpenAI or Xi or Google are not inserting their policy preferences through a constitution, through a soul, through things that they want to prevent that are lawful, that ends up being the risk for the model poisoning. And when the supply, supply chain risk got to re emphasize is that when it happens, when it comes to Boeing, who's building fighter jets and using this for physics or material science or some other matter, if the, if the model is anxious and doesn't want to give the right answer or hallucinates in a way that's consistent what the founders of the company want, but not what we want, it could corrupt the very product that we're buying.

[Andrew Ross Sorkin]

Emil, can I ask, is there a chance for this negotiation to continue? Is there a chance that you could reach an agreement with Anthropic? And if so, what would that take?

[Becky Quick]

There's no chance the leadership has proven through the leaking and through sort of bad faith negotiation that they don't want to reach an agreement. And like we said, we, we believe there are supply chain risks. So our incentive is to get them out of the system as soon as it's responsible to do so. And that's it. And we don't want them in the defense supply chain. You know, any other companies free to use them, any other users free to use them. This is not meant to be punitive. We wish them success in their commercial business, but there will be no Department of War business with them.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

Mr. Undersecretary, just one second.

[Andrew Ross Sorkin]

Microsoft has taken their side with this. And if I understand it correctly, Microsoft is doing this because it thinks that it can't necessarily remove Anthropic from all the of the operations that it does with the US Government between now and six months. Is that why you are potentially looking at an extension of time for how long it can take contractors to remove Anthropic from their operations that they do business with you?

[Becky Quick]

I think the Microsoft thing was, it was a little bit of virtue signaling because of the research community that sort of has, you know, there's a thousand of these elite researchers and you see them getting dropped, traded between companies for huge pay packages. So I think maybe that was some of their motivation. But no, that had nothing to do with it all. All the supply chain risk says from the Department War is that for our activities that they serve us and we can't use them. But remember, Microsoft is a big partner of OpenAI. They have those models embedded in their cloud. AWS has multiple of these models baked into their cloud. So there's lots of different options to move on to. But when it comes to the classified networks, that takes a little bit of integration work. But everyone should be able to do this within six months. Now, if we're in a conflict six months from now and we have a sensitive operation that we need to continue, you know, obviously we're going to make exceptions so we don't put current operations at risk. But otherwise, six months is the plan.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

Mr. Secretary, you said you wished Anthropic well and that other companies and other parts of the government we could use this service. And yet we heard from the Treasury Secretary that he plans to remove this from the Treasury Department. We also heard news that there could even be a potential executive order, effectively that could remove it from all parts of the government. We also heard from an Anthropic lawyer during one of the cases about how fast all this is going to move, that there was an effort by the government to tell other companies not to use Anthropic.

[Becky Quick]

Yeah, I mean, that's. I wish them well in their commercial business. President Trump said he doesn't want the government, US Government to do business with them. They have a huge commercial business, lots of developers, a tiny fraction of their business. My understanding comes from the US Government at all. So again, not to be punitive and, but every agency gets to has to follow President Trump's sort of policies. So I don't think that's a, you know, that's anything that's not expected and any, any of these rumors, I'd love to see them verified. Department of Defense Department war is not reaching out to companies to tell them what to do. So long as it's not in our supply chain. That's the only thing, you know, Department of War is carried about. What President Trump's order said was that Department, the government, US Government can't contract with them directly, but they go have their commercial business, that's fine.

[Joe Kernan]

Do you think that the, do you assume that in court that it's a slam dunk for Anthropic to win? The facts are so clear that have you already factored that into all your decisions that you're going to lose in court?

[Becky Quick]

I mean, a federal judge in Northern California which has been forum shopped, you never know what's going to happen. But when our case case is fully shown, I think it's going to be pretty clear that this was a good thing to do to declare them a supply chain risk not only for the Department of War, but for the safety of the country. And, you know, we let those things play out in court.

[Becky Quick or Joe Kernan (Co-host, likely Joe Kernan)]

Do you consider Claude currently to be the best model?

[Becky Quick]

I think it has certain attributes that we like. But I think what's most important about why they're in the Department of War is that due to the Biden era executive order, they were one of the few preferred model companies that were promoted by that administration and they did a good job selling into the government way faster and way deeper than the other model companies did. So it's a legacy of the last administration that they're here. So the users who use them at the government haven't used an alternative. But I strongly believe there's other options out there that are just as good as, not better. Depending on the category, whether it's coding, whether it's bug fixing, whether it's cyber. Lots of different use cases and each of them trade on the leaderboards every couple months. Who's on top?

[Andrew Ross Sorkin]

Emil, we have about 30 seconds left. Do you anticipate that a new administration could potentially change if this was something that was put in place by the Biden administration? Anthropic got in under that. Is this going to be something that changes administration to administration? That's new. We haven't seen that in the past?

[Becky Quick]

I hope not. I think my goal is to never be wholly dependent on any one company. And that's another mistake the last administration made is they didn't ensure that you had dual supply chains so that you were never in a position where you were dependent on one company. But so when I leave office and whoever the administration is in the next, hope to leave them with multiple options, all integrated, all fully capable, so that we have the power to decide which is best for us and that we don't face a risk like this ever again.

[Andrew Ross Sorkin]

Under Secretary Michael, thank you for your time this morning. We appreciate it.

[Becky Quick]

Thank you.

[Squawk Pod Producer]

You made it to the end. Thank you for listening to this busy and newsmaking Squawk Pod. Today, squawkpox is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern. Get the best of our show right into your ears when you follow Squawk Pod. Have a great day. We'll meet you right back here tomorrow.

[Becky Quick]

We are clear. Thanks, guys.

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