Squawk Pod — October 29, 2025

Episode: Gary Cohn on the Shutdown & AI’s Impact on the Labor Market

Hosts: Joe Kernen, Becky Quick, Andrew Ross Sorkin
Guests: Gary Cohn (IBM Vice Chair, former National Economic Council Director), Robert Frank, Christina Partsinevelos

Overview

This episode dives deep into the state of the U.S. economy amid an ongoing government shutdown, explosive growth in tech company valuations (notably Nvidia), and the controversial impact of AI on the labor market. The discussion is further enriched by conversations about class division, the New York mayoral race, and shifting attitudes toward corporate layoffs. Featuring Gary Cohn, the conversation deftly weaves together macro trends, corporate strategy, and personal insights from top economic minds.

Key Discussion Points & Insights

1. The Trillion-Dollar Tech Era & Nvidia’s Meteoric Rise (04:00–09:55)

• Nvidia’s Market Cap: Nvidia hits a $5 trillion market cap in early trading, having recently expanded partnerships and investments (notably with Nokia, Palantir, Oracle, Uber, and the US Department of Energy). The company expects $500 billion in GPU sales by the end of 2026 and is beginning to produce Blackwell AI chips domestically in Arizona in addition to Taiwan.
• Broader Impact: Apple fluctuates above $4 trillion, showcasing the rapid acceleration of tech megacaps. The hosts marvel at how quickly the narrative has shifted from $1 trillion to $5 trillion companies.
• Quote:

  “When they're partnering with everybody and building themselves into the infrastructure of everything that matters... once you put your equipment into these things, it's really hard to get it out.”
  – Becky Quick [09:01]

2. Economic Division, Shutdown Politics, and Class Rifts (09:55–12:00, 16:08–17:40)

• Class Tensions & Civil War Rhetoric: The group references Ray Dalio’s warnings about a coming "civil war"—not geographically, but between classes and economic strata.

  “The class struggle... not between the north and south... let them eat cake, guillotine, Gotham type stuff.”
  – Gary Cohn [05:37]

• Shutdown Stalemate:
  • The government has been closed for a month, with major effects on federal workers and farmers.
  • Cohn argues the deadlock is a side effect of the "resist mentality," where opposition persists in the face of strong economic numbers.
• K-Shaped Recovery: The hosts debate whether today’s economic divergence is truly unprecedented or part of a broader historical trend.

  “The dichotomy between the two... is as wide as has ever been.”
  – Joe Kernen [17:38]

3. Corporate Layoffs, AI, and Labor Market Evolution (14:02–15:39, 18:44–25:46, 41:05–44:13)

• Layoff Cycle: Current round of corporate earnings are paired with significant layoffs (over 160,000 jobs in just a few weeks), especially in logistics (UPS), consumer goods (Nestle), and big tech.
• AI’s Real Role:
  • The narrative that AI is causing layoffs is often exaggerated; much is a correction after COVID-era overhiring, as explained by Perplexity and CoreWeave CEOs 41:37.
  • Nonetheless, AI’s evolution does threaten routine jobs, especially coding and HR functions.
• Productivity & Market Cap: To justify high valuations, tech companies must deliver on productivity, which likely translates to fewer workers.
• Quote:

  “The only way to make your quarterly numbers work is to squeeze some cost out. And it feels like the cost that people are squeezing out right now is labor cost.”
  – Gary Cohn [19:19] “The skill and uniqueness of writing code is going to become an obsolete skill in our near term... the code assist programs are so good.”
  – Gary Cohn [23:34] “We haven’t gotten AI to sort of being the revenue producer... yet. We've got it to be the cost-saver.”
  – Gary Cohn [24:28]

• Transition to Quantum & General AI:
  • Quantum computing will catalyze a shift in AI from cost-saving to revenue-generating, accelerating the evolution.
  • “When we get into the quantum space, AI will go from the cost saver to the revenue creator.”
    – Gary Cohn [24:39]

4. Shutdown Endgame: Government Workers, Air Traffic Controllers & TSA (25:46–27:48)

• Shutdowns tend to end when essential workers (like air traffic controllers or TSA) refuse to work—the “pain point” that pressures Congress to act.
• Proposed bills to keep key workers paid during shutdowns may prolong stalemates by removing pressure points.

5. The New York Mayoral Race & Class/Wealth Dynamics (35:41–40:58)

• Billionaire Spending:
  • The race pits billionaire donations ($40M+) to anti-Mamdani PACs against a smaller, grassroots war chest.
  • Notable donors discussed: Joe Gebbia (Airbnb), Bill Ackman (hedge fund), Lauder family (Estée Lauder), Dan Loeb, John Hess, Steve Wynn, Alice Walton.
• Class Messaging: Mamdani leverages the anti-billionaire sentiment, using the PAC money as political fuel.

  “He is actually prided himself on the number of billionaires who are giving to Cuomo... they've given more than I'm going to tax them.”
  – Robert Frank [37:55]

• Tax Policy & Exodus: Debate over real impact of high earners leaving New York—"algebraically," even small outflows can devastate city revenues.
  • “Whenever I see something like that... polymarkets at 99%. So if someone is fixing that, then it’s self-fulfilling.”
    – Gary Cohn [40:28]

Notable Quotes & Memorable Moments

• On Corporate Layoffs:

  “It's the natural cycle... not for the people that are losing their jobs.”
  – Joe Kernen & Gary Cohn [21:42]

• On AI and the Future of Work:

  “The HR bot’s going to be able to take care of 95% of what that person needs.”
  – Gary Cohn [23:19]

• On the Political Left and “Guardrails”:

  “You have to hope that he would govern, right, with guardrails... that means we're dependent on the city council, the state legislator, and the governor to be guardrails.”
  – Joe Kernen [29:08]

• On Economic Division:

  “Why are they cutting jobs?”
  – Christina Partsinevelos [44:13]

• On Billionaires and NYC Politics:

  “New York is doing better right now than I’ve ever seen... and that's what they're trying to protect.”
  – Robert Frank [02:04], [38:33]

Timestamps for Important Segments

| Timestamp | Segment | |-----------|---------| | 04:00–09:55 | Nvidia and Trillion-Dollar Tech Companies | | 15:39–18:44 | Gary Cohn on Economic Divisions and the Shutdown | | 18:44–25:46 | Layoffs, Labor Market, and the Impact of AI/Automation | | 25:46–27:48 | How Government Shutdowns End: TSA & Air Traffic Control | | 35:41–40:58 | New York Mayoral Race: Money, Messaging, and Class | | 41:05–44:13 | Are AI Layoffs Real? CEOs Sound Off | | 23:34 | The Fate of Jobs in Coding and HR with AI | | 37:55 | Mamdani's Messaging & the Billionaire Backlash | | 24:39 | Quantum Computing and the Next Leap for AI |

Overall Tone & Takeaways

The episode is marked by rapid-fire banter, policy insight, and a blend of analytic skepticism and humor—especially in Gary Cohn's and Joe Kernen's exchanges. The conversation feels urgent, reflecting the high stakes and looming transitions for the American economy and workforce.

Listeners are left with both a sense of awe at technological advancement (Nvidia, AI) and apprehension at its consequences: from government paralysis and class divisions to the seismic changes awaiting the labor market. The episode serves as a timely reminder that seismic technological, political, and economic trends are colliding in 2025—and nobody, not even the show’s seasoned hosts and guests, has all the answers.