Open-Sourcing Meta & Grand Theft Auto VI Pre-Orders 8/10/26

Summary

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Squawk Pod CNBC (August 10, 2026)

Episode Theme: Open-Sourcing Meta & Grand Theft Auto VI Pre-Orders

Episode Overview

This episode of Squawk Pod dives deep into the state of Artificial Intelligence innovation, open-source ambitions at Meta, the anticipated launch and pre-sales of Grand Theft Auto VI, and major shifts in entertainment and finance. Key guests include Vinod Khosla (Sun Microsystems co-founder and new NFL owner) and Strauss Zelnick (CEO, Take Two Interactive), with robust context from hosts Andrew Ross Sorkin and Melissa Lee. The panel also touches on political pressure at the Fed, Paramount-Warner deal intrigue, and the economics of sports and technology.

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Main Discussion Points & Insights

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1. Meta’s AI Initiative and Community Investment

• Meta's Vision for AI: Mark Zuckerberg releases an essay, “The Future Is for Everyone, the Path to a Positive AI Future.” He advocates for AI to focus on invention, not just automation, with superintelligence "broadly distributed" to "empower everyday people" ([02:33]).
  • Quote: “Zuckerberg saying he's hoping that invention rather than automation can serve as the primary purpose of AI… superintelligence is broadly distributed, or at least that's his hope.” — Andrew Ross Sorkin [02:33]
• Open Source Approach: Meta will open-source its new model 'Muse Glimmer' (30 billion parameters), which can run on a consumer laptop ([03:39]).
  • Quote: "You'll be able just to get this open, open weight model effectively for free. Put it, put on your laptop and go." — Andrew Ross Sorkin [03:54]
• $1 Billion Community Fund: Launches the “Future is for Everyone” fund, prioritizing communities surrounding Meta’s data centers (esp. policemen, firemen) amid AI backlash and NIMBYism ([03:35], [04:53]).
  • Quote: “So there's going to become a pool of money and it will be called the Future is for Everyone fund. It will be focused from what I understand, on policemen and firemen and members of these communities.” — Andrew Ross Sorkin [03:39]
• Industry Implications: Observers highlight the importance of making AI relatable and the growing trend to reinvest in communities affected by tech expansion ([04:53], [05:54]).
  • Quote: “How can we get people to believe this is actually a technology that is for them, that's going to better their lives, not take their jobs…” — Melissa Lee [04:53]

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2. Backlash Over Data Centers, Energy, and Community Relations

• AI companies face pushback over rising energy costs and their impact on local communities, with state interventions noted in NY, TX, and VA ([06:03]).
  • Quote: “…it really just underscores how flat footed the AI community was in terms of anticipating how they would be received by local communities and the different issues surrounding it, including higher energy costs.” — Guest Analyst [06:03]

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3. US Federal Reserve Drama: Trump & Lisa Cook

• President Trump renews efforts to remove Fed Governor Lisa Cook, accusing her of making false mortgage statements, despite prior Supreme Court resistance, raising big questions about Fed independence ([07:29]).
  • Quotes:
    • “You don't want to defend somebody, somebody who has done something that is demonstrably wrong.” — Melissa Lee [10:20]
    • “But you should defend the due process. And then the question is, is this a form of due process or meaning send a letter, does that, is that work or not?” — Melissa Lee [10:28]
• Discussion of uncertainty among top economic leaders about how insiders like Kevin Warsh would navigate such a scenario ([09:40]).

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4. Paramount-Warner Acquisition and Movie Industry Fallout

• Paramount may offer to release 30 films theatrically a year and maintain exclusive windows to appease regulators in a prospective Warner Bros. acquisition ([10:43]), as concerns grow over possible forced divestitures.
  • Quote: "Paramount is willing to sign contracts with chains to release 30 films a year theatrically… if the Warner Brothers deal is approved." — Melissa Lee [10:43]

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5. Exclusive Interview: Vinod Khosla on AI & Investment

(Segment begins [15:28])

• Backing New AI Startups: Khosla ventures backs a Google spinout aiming to accelerate AI and science research ([16:02]).
  • Quote: “It's a stellar team out of Google… an area of AI research that really accelerate both AI research and research in the sciences… huge potential to benefit humanity.” — Vinod Khosla [16:02]
• On Catching Up to Tech Giants: Despite incumbents’ head start, Khosla believes new firms can compete, especially in application-specific areas ([16:54]).
• AI Investment Boom: Expects proliferation of trillion-dollar companies as AI's transformative power expands ([18:11]).
  • Quote: “OpenAI and Anthropic aren't the end of this story… we'll see massive expansion of the number of trillion dollar thing companies impacting fundamental areas of society.” — Vinod Khosla [18:11]
• Meta’s Community Model: Praises the idea of AI companies subsidizing local electricity or providing benefits where data centers are built ([19:28]).
  • Quote: "It's a good idea to make sure that people aren't negatively impacted. Their electricity rates don't go up. It's very easy for a hyperscaler to subsidize electricity for people in the communities..." — Vinod Khosla [19:28]
• Accessible AI & Business Models: Affirms ad-supported, free AI tools will co-exist with paid tiers. Subscription economics still viable for in-depth research use ([20:29]).
• Views on SpaceX/Starlink: Praises Starlink and launch business; skeptical but open-minded on space data centers ([21:36]).
• NFL Investment & Live Sports: Khosla discusses NFL (Seattle Seahawks) ownership as diversification, emphasizing live sports' insulation from tech disruption ([22:49]).
  • Quote: "Live sports will be the one area that will be insulated from any disruption causes. So it's a great investment area per se." — Vinod Khosla [22:49]
• On Tax Policy & Inequality: Strongly opposes a California billionaire’s tax; supports taxing ordinary income & capital gains equally to fund a sovereign wealth fund for those affected by AI displacement ([25:12]).
  • Quotes:
    • “There should be no difference because AI is giving capital an advantage, labor a disadvantage, and there's no reason to preferentially favor capital gains.” [25:12]
    • “People making less than $75,000 a year should not pay any taxes. That's only $75 billion and that should be very, very easy to do.” [26:45]

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6. Take Two Interactive & Grand Theft Auto VI Launch

(Segment begins [30:26])

• Record GTA VI Preorders: Preorder sales "much better than expected." Rockstar focused on exceeding expectations after 13 years since GTA V ([30:58]).
  • Quote: “Preorders have gone much better than expected. So our excitement continues…” — Strauss Zelnick [30:58]
  • “Our Rockstar Games division… understands that as great as the anticipation is, we need to exceed expectations. I believe that we will.” — Strauss Zelnick [31:13]
• Revenue Model & Pricing: Standard edition at $80, premium at $100; more preorders skewing toward premium, but Zelnick emphasizes delivering exceptional value ([32:49]).
  • Quote: "Our job, though, as we see it, is to deliver always way more value to the consumer than what we charge… we want people to be thrilled and we would never want people to feel like this is out of my range." — Strauss Zelnick [33:15]
• Long Tail Sales: GTA V sold 230 million units over 13 years, with price eventually dropping to $20 ([31:50], [34:26]).
• Diversification Beyond GTA: GTA is less than 15% of company revenue; Take Two also leverages NBA 2K, a large mobile gaming business, and multiple other IPs ([34:47]).
• Netflix Partnership Teased: An extended GTA VI trailer will debut on Netflix August 27th, hinting at deepening ties, though Zelnick downplays M&A speculation ([36:11], [37:13], [37:42]).
  • Quote: “Historically, Netflix has not made big acquisitions. They've grown organically… we're very proud of the way we built this company independently.” — Strauss Zelnick [37:42]
• On Expanding into Film: Zelnick, a former movie exec, says he won’t return to the film business directly, prefers licensing gaming IP instead ([38:43]).

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Memorable Quotes

• "OpenAI and Anthropic aren't the end of this AI story. They're the beginning." — Vinod Khosla [01:19], [18:11]
• "If we wanted to exert it, we had a great deal of pricing power. Our job… is to deliver always way more value to the consumer than what we charge." — Strauss Zelnick [32:49]
• "I think it's a terrible idea. I floated an alternative… capital gains and ordinary income should be taxed at the same rate." — Vinod Khosla on California’s billionaires tax [25:12]

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Key Timestamps for Segments

• Meta AI announcement & open-source discussion: [02:33] – [06:03]
• Fed drama, Trump & Lisa Cook: [07:29] – [10:28]
• Paramount-Warner/AG concerns: [10:43] – [12:49]
• Vinod Khosla extended interview: [15:28] – [28:09]
• Strauss Zelnick / GTA VI interview: [30:26] – [39:18]

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Notable, Lighthearted, or Meta Moments

• Melissa Lee jokes about “Sorkin boys” eagerly awaiting GTA VI [30:53]
• Khosla on NFL investment being a “big hedge” away from tech [23:49]
• Zelnick: “Six hours after the [Netflix] premiere, it'll be on Rockstar's YouTube channels.” [36:41]

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Conclusion

This Squawk Pod episode delivers layered context and candid commentary on the shifting AI landscape (Meta's open-source reset, community relations), the economic realities reshaping big tech and entertainment (Take Two, Paramount, Netflix), and timely public policy pressure points (the Federal Reserve, tax justice, and inequality). Major guests Vinod Khosla and Strauss Zelnick provide pragmatic, even provocative forecasts for disruption, value creation, and responsibility.

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Transcript

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[Strauss Zelnick]

Tennessee 2012 bring in show music please.

[Podcast Host / CNBC Producer Katie Kramer]

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, the future of artificial intelligence from a giant in the tech industry. Vinod Khosla, billionaire entrepreneur, Sun Microsystems, co founder and a new NFL owner on the big names writing the history of AI.

[Vinod Khosla]

OpenAI and Anthropic aren't the end of this AI story. They're the beginning. And I suspect we'll see massive expansion of the number of trillion dollar companies impacting fundamental areas of society.

[Podcast Host / CNBC Producer Katie Kramer]

It's what gamers have been waiting for. But the Grand Theft Auto juggernaut is just another part of Take Two's $40 billion plus content business. CEO Strauss Selvick.

[Strauss Zelnick]

All things Grand Theft Auto. The Grand Theft Auto franchise has been less than 15% of our total revenue,

[Podcast Host / CNBC Producer Katie Kramer]

plus Meta's AI for All promises at Paramount. And President Trump reignites his push to fire a Fed governor over mortgage paperwork.

[Melissa Lee]

You don't want to defend somebody, somebody who has done something that is demonstrably wrong.

[Guest Analyst / Commentator]

Defend the due process.

[Melissa Lee]

But you should defend the due process. And then the question is, is this a form of due process?

[Podcast Host / CNBC Producer Katie Kramer]

It's Monday, August 10, 2026. Squawk Pod begins right now.

[Strauss Zelnick]

Stand and or buy in three, two, one. Commander,

[Andrew Ross Sorkin]

good morning.

[Melissa Lee]

Welcome to Swackbox right here on CNBC on this Monday morning. We're live from the NASDAQ market site in Times Square. I'm Andrew Sorkin along with Melissa Lee. Joe and Becky are off Today, some

[Andrew Ross Sorkin]

news just out, and this is interesting

[Melissa Lee]

from Facebook's parent, Metta, Mark Zuckerberg laying out a essay with a vision for AI in a new piece. It's titled the Future Is for Everyone, the Path to a Positive AI Future. Zuckerberg saying he's hoping that invention rather than automation can serve as the primary purpose of AI. It's part of a larger theme he's been talking about and a lot of the folks in the AI world have been talking about. And he says that superintelligence is broadly distributed, or at least that's his hope in order to empower everyday people. We've had obviously a lot of backlash. You've seen the booing at, at some of these commencement speeches and the like. Meta though, and this is maybe the most interesting part about it, announcing a $1 billion fund aimed at investing in communities close to where the company operates data centers. So there's going to become a pool of money and it will be called the Future is for Everyone fund. It will be focused from what I understand, on policemen and firemen and members of these communities. Additionally, by the way, Metta announcing that the weights for its AI model called Muse Glimmer will be made open. It's a $30 billion parameter dense model. It says it will be able to run on a consumer laptop. So you'll be able just to get this open, open weight model effectively for free. Put it, put on your laptop and go. Zuckerberg also appraising open source AI, calling it an important force for empowering people and preventing centralization. So it's a couple of things to unpack here. Yes. One, Mark was very early actually on the whole idea of open source open weight models with Llama from the beginning.

[Guest Analyst / Commentator]

Right.

[Andrew Ross Sorkin]

And then seemed to pull back when,

[Melissa Lee]

when everybody seemed to be moving toward these closed source models and is now, I think, leaning in, you know, full on to the open open weight situation, which is just an interesting sort of watching the, the pulling and pushing of what's happening in the industry.

[Guest Analyst / Commentator]

I think what's key here is that this can run on a consumer laptop, an ordinary consumer, you, as opposed to a lot of the other open source models which have been released like a Kimmy K3 or, which are, which are massive. They're like, like the Latest Alibaba is 2.4 trillion parameters and this is 30 billion. But for a consumer, that's what you need. This drives the cost lower for the consumer. Right. And so that's sort of, that's a

[Melissa Lee]

huge, huge benefit, huge step. The Second piece is just both the change in language that I think a lot of people in the community in the past two or three months have sort of moved towards, which is how can we, how can we get people to believe this is actually a technology that is for them, that's going to better their lives, not take their jobs and take their lives away from them. And then the last piece which is interrelated to that is police officers, firemen, members of communities that are now having these data centers. And there's all of this community pushback and backlash that we don't want it in our backyard. And, and here they're saying, look, we're going to put a fund together that's going to be, in addition to whatever we're going to be spending on the construction of these, these, these data centers to give back to these communities. By the way, this is a model that has been, you know, tried and true insofar as for many years companies would live inside communities, they'd give philanthropy, they do all sorts of things. They build communities, they would build communities.

[Andrew Ross Sorkin]

And by the way, that actually stopped

[Melissa Lee]

in the past 20 or 30 years. I mean, it really did shift away from the idea of we need to help the communities that we are actually in.

[Guest Analyst / Commentator]

It really just underscores how flat footed the AI community was in terms of anticipating how they would be received by local communities and the different issues surrounding it, including higher energy costs. I mean, first you have Governor Hochul with the moratorium here, Governor Abbott and Texas, Virginia Governor stepping in on the proposed merger between Next Sarah and Dominion because of higher energy costs. Concern that there would be higher energy costs because of this deal and because of the related data centers in the state of Virginia. So, you know, this really underscores the enormous amount of backlash these guys are facing. Berkshire Hathaway profit rising last quarter. Operating earnings climbed 16% year over year on strength in the firm's energy, railroad and manufacturing businesses. Insurance was a weak spot. Underwriting earnings fell 13% from a year ago. Key takeaway here. Berkshire CEO Greg Abel is starting to put cash amassed by Warren Buffett to work on buybacks and stock purchases. Berkshire bought back about four and a half billion dollars of its own stock during the second quarter, up from 235 million in the previous quarter. The company also reversed a recent pattern of selling stocks. It was net buyer of equities with about $20 billion of purchases in the second quarter. Prior to that, Berkshire had sold stocks for 14 consecutive quarters. The closely followed cash pile fell by about $30 billion. Second quarter included the closing of the company's acquisition of homebuilder Taylor Morrison

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[Melissa Lee]

President Trump reviving his efforts to fire Fed Governor Lisa Cook. In a letter to Cook that was dated mid last week, White House aide Dan Scavino saying that the president is considering removing Cook from the Fed's Board of Governors because there is, in the words of the letter, sufficient reason to believe that you made false statements or one on one or more mortgage agreements. Scavino asking Cook for a written response within three weeks. These are the same allegations that President Trump brought up, but when he first moved to fire Cook from the Fed last year. The Supreme Court, if you remember, backed Cook in June. But Chief Justice John Roberts said the court's decision didn't stop the president from trying to remove Cook as long as her constitutional due process rights were respected. And the concept here is that that is at least an effort to do such a thing. In a statement, an attorney for Cook telling cnbc the allegations against her are, quote, as baseless now as they were a year ago when President Trump tried to remove Governor Cook and interfere with the independence of the Federal Reserve. You know, interestingly, I was out in, in Aspen at the Aspen Economic Strategy Group's meeting last week, and there were a number of FOMC members there, as well as the former treasury, four or five former treasury secretaries. And in the hallways, one of the conversations was going to be actually about, was about this issue and what would happen if the President went after Cook. Most interestingly, the question that they all had was how would Kevin Warsh react, right, in terms of the independence of the Federal Reserve, Would he back Cook? Would he back Cook publicly? Would he say nothing? Would he Walker in I don't know what, what the various permutations this could take, but in terms of these big questions about the independence of the Fed, what role and how would, how would Kevin handle that particular question was something that, that clearly was on their minds. And this was even before, I think they must have had hints that something like this could come down.

[Guest Analyst / Commentator]

What did those former Fed folks say war should do to preserve Fed?

[Melissa Lee]

Well, I think a lot of them and, and just to, just to put some context on it, people like Jay Powell were at this meeting. People like Hank Paulson were at this meeting. Janet Yellen was at this meeting. Steve Mnuchin was at this meeting. Tim Geithner was at this meeting. There was a whole, a bunch of people in that, in that category. I think there was a, was a sense that you needed to protect the independence of the Fed and therefore protecting Cook to some degree. I mean, I think there's still a question and I think we don't know ultimately what happened and what Cook did explicitly or didn't do or didn't do.

[Guest Analyst / Commentator]

Right.

[Melissa Lee]

And so I don't. Look, you don't want to defend somebody, somebody who has done something that is

[Guest Analyst / Commentator]

demonstrably wrong, defend the due process.

[Melissa Lee]

But you should defend the due process. And then the question is, is this a form of due process or meaning send a letter, does that, is that work or not?

[Guest Analyst / Commentator]

Right. All good questions. We'll see, I guess what Worsh says or doesn't say.

[Melissa Lee]

Paramount Skydance reportedly ready to make some commitments to movie theater chains in its campaign to acquire Warner Brothers Discovery. Bloomberg reporting. Paramount is willing to sign contracts with chains to release 30 films a year theatrically if the Warner Brothers deal is approved. That would include exclusive movie theater rights for films for 45 days and no streaming for 90 days. The report says. Paramount has offered three year commitments to AMC and Regal Cinemas and the company could face penalties if it were to break its word. The commitments are similar to public ones already made by Paramount CEO David Ellison, but this time they would be in writing. The question is whether this would be enough or sufficient to satisfy these state AGs. I think there's been a real question as to whether ultimately they would actually have to sell off pieces of the studio business, either big, big pieces of ip, they're parts of the DC comic world or the Dune world or something to a third party. And there have been examples of times where companies have been forced to effectively stand up a competitor, if you will. But it wouldn't surprise me if, if ultimately they were forced to find a way. Maybe it's a combination of a private equity player, you know, a Sony or an A24, some other kind of studio that would then become a bigger studio by taking some pieces that might solve some of the AG's issues around the movie side of it. Then there's still the TV side of it and whether on the linear end you'd want to get rid of tbs. The conundrum on the cable side is the cable assets produce a lot of cash for them. And given the loan covenants and there's a lot of debt in this deal, they almost need some of those assets simply to be kicking off cash to pay the loans. And so the question is how you'd actually make all that happen.

[Guest Analyst / Commentator]

It is amazing that this deal was consummated basically on the notion that this would go through faster. Right, right.

[Melissa Lee]

And that was, that was the, that was the conceit.

[Guest Analyst / Commentator]

Yeah. Major duration

[Melissa Lee]

teas will be next.

[Podcast Host / CNBC Producer Katie Kramer]

Coming up on Squawk Pod venture capitalist Vinod Khosla, he is backing a new startup derived from all the AI staffing changes it Google.

[Vinod Khosla]

Google has a very deep bench of researchers so I'm less worried about Google. They have so much strength and they have younger researchers who get an opportunity

[Podcast Host / CNBC Producer Katie Kramer]

to step up the tech veteran on the big names in Silicon Valley investing today and much more when we come back.

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[Melissa Lee]

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[Podcast Host / CNBC Producer Katie Kramer]

You're listening to Squawk Pod from CNBC, here's Andrew Ross Sorkin.

[Melissa Lee]

Okay, we've got a great new guest on the program. We haven't seen him in quite a while. A tech pioneer who's backing a unique

[Andrew Ross Sorkin]

startup that he says could have a

[Melissa Lee]

great impact, maybe even a greater impact

[Andrew Ross Sorkin]

than Google or Open Air.

[Melissa Lee]

Joining us right now is Khosla Khosa Ventures founder.

[Andrew Ross Sorkin]

Good morning to you, sir.

[Vinod Khosla]

Good morning.

[Andrew Ross Sorkin]

It's nice to see you. You did make a big investment, or you've been made a lot of investments. But this, this investment from last week, turning lots of heads in part because there's a big impact potentially on Google. So maybe you can speak to it all.

[Vinod Khosla]

Well, it's a stellar team out of Google, a team you seldom get to invest in. It's an area of AI research that really accelerate both AI research and research in the sciences. So it has this huge potential to benefit humanity through accelerated science. What's not to like?

[Andrew Ross Sorkin]

Well, here's the question that I had and I was thinking about this. You know, I would think that both Google and Anthropic and OpenAI are so ahead of everybody else. We keep talking about AGI and the singularity that if in fact they are that far ahead of everybody else, by the time that almost anybody starts something today, will they be able to catch up and do something that's genuinely unique?

[Vinod Khosla]

Well, we think so. I think in this particular area of accelerated scientific research, a great team like this can absolutely not only catch up, but get ahead of the curve.

[Andrew Ross Sorkin]

What do you think the impact on on Google ultimately will be? We keep talking about some of these big names leaving the company.

[Vinod Khosla]

Well, I do think Google has a very deep bench of researchers. So I'm less worried about Google. They have so much strength and they have younger researchers who get an opportunity to step up. So I'm still bullish on Google's ability to make progress in the AI area. But this is a unique team and absolutely the team that got them a long, long way and so very excited about this particular one without it hurting Google in a significant way.

[Andrew Ross Sorkin]

You know, what do you think more largely about the economics of what's taking place in the ecosystem. Ecosystem right now we have a potential anthropic IPO later this year. Obviously, big questions about what that valuation will look like, what the valuation of Open Air will look like.

[Melissa Lee]

There's conversations about circular financing.

[Andrew Ross Sorkin]

How do you see it right now?

[Vinod Khosla]

Well, as I look at the investment opportunities and we invest with a very long investment horizon, so when we Invest, we expect seven to 10, 10 years before getting any liquidity. In that time frame, many, many companies will be started now that are worth hundreds of billions and trillions of dollars. I think we have seen the beginning of this. This is not the end of it. OpenAI and anthropic on the end of this story. They're the beginning and I suspect we'll see massive expansion of the number of trillion dollar thing companies impacting fundamental areas of society. So still lots of opportunity to invest in new companies.

[Andrew Ross Sorkin]

What do you think though of sort of the data center ecosystem we saw Mark Zuckerberg put out a fascinating essay this morning, but not just an essay about trying to make AI for people and these new open weight models, but

[Melissa Lee]

also putting together a billion dollar fund

[Andrew Ross Sorkin]

effectively to try to pay communities, policemen, firemen and others to want to build data centers in their backyard. Something that's not happening right now in the state of New York and even in the state of Texas.

[Vinod Khosla]

Well one, there's enough states that want this growth and investment. I am not too worried about datacenter investment, but I do think in general it's a good idea to make sure that people aren't negatively impacted. Their electricity rates don't go up. It's very easy for a hyperspector hyperscaler to subsidize electricity for people in the communities where they're setting up data centers. So that's a good idea.

[Guest Analyst / Commentator]

Vinod, I also wanted to ask you about another notion within Mark's piece and that is that everyone will have free or affordable access to AI tools. So he sees a world in which people should have access to these tools and in a world in which people want more compute power that there would be a dynamic auction process to make sure the costs are as low as possible. If that comes to fruition, does that change the economics of how we are investing in AI and how these models are constructed in the subscription model that we have currently?

[Vinod Khosla]

No, it doesn't. And it doesn't because you can have an advertising model. OpenAI has a free ChatGPT available and Mark is well versed in advertising models. So here I think there will be a free model and then there will be paid models. If I'm doing serious research, then I do want to go much deeper and, and spend a lot more money. So you know, whether I want somebody to give me a search answer in 5 seconds or take 50 minutes or 5 hours to do research, it'll result in a different kind of payment method and enterprises definitely will use paid services just as they have in traditional enterprise software.

[Andrew Ross Sorkin]

What's your reaction been to the price of Space X and what that says either about. And look, there's so many component parts of that business. There's the AI piece, there's the data center piece, there's data centers in space, there's Starlink. I don't know where to begin.

[Vinod Khosla]

Starlink is a great asset. The space launch business is a great asset. Because space launch capacity is limited for the next five to seven years. We invested in Rocket Lab for full disclosure, I'm very, very bullish on rocket lab. And SpaceX is a good business. Starlink is a good business. I think data centers in space are yet to be proven. I'm somewhat on the skeptical side of it. The launch costs decline well below a few hundred dollars a kilogram. Why would one low price launch there? If there's shortage of capacity further out, it may be possible to go much lower in cost and many providers will do that. I have not looked at the economics of SpaceX so couldn't comment on its valuation.

[Andrew Ross Sorkin]

Okay, that's fair. And then we should talk about football. You've gotten involved in football, I see. By the way, there are people on Twitter asking you they want grass, they want real grass. And are you going to be managing whether you're going to be putting grass on the ground or are you going to be coaching, managing? How's this all going to work?

[Vinod Khosla]

Look, the Seattle Seahawks is a great franchise and the 12, which is their local fan brand, is one of the best brands in the NFL. And live sports will be the one area that will be insulated from any disruption causes. So it's a great investment area per se. As to grass or not, that's for management to decide, not for me to decide.

[Andrew Ross Sorkin]

Are you, are you a huge football fan? How did this happen?

[Vinod Khosla]

I'm a huge football fan. Me and my son have gone to most NFL games in Bay Area probably since he was 4 or 5, maybe more than half the home games. And so it's a great opportunity, do a family thing and make an investment. That's diversification away from AI and technology in general, which is sort of my belly. But it was in its one, it

[Guest Analyst / Commentator]

was like a nine and a half billion dollar hedge to your portfolio if

[Vinod Khosla]

you know it's a big hedge.

[Andrew Ross Sorkin]

How about the NBA by the way?

[Melissa Lee]

What do you think?

[Vinod Khosla]

Well, I've always enjoyed the NFL more than the NBA personally.

[Andrew Ross Sorkin]

Okay, so you're not, you're not going to be trying to buy a team?

[Vinod Khosla]

I'm not buying in the team, in the NBA. Look, live sports is a great area for investment, insulated from a disruption and technology disruption. So life sports is going to be a good area. Beyond that, it's what you have passion for. An NFL is what I have passion for. And a great brand like Seattle is a great franchise to buy.

[Andrew Ross Sorkin]

By the way, what do you make of what's happening in Seattle though? Because there's a lot of business leaders

[Melissa Lee]

that are very frustrated with what's happening in Seattle.

[Vinod Khosla]

A lot of business leaders frustrated in many cities, including San Francisco, California. Billionaires tax so the society will have to sort this out. I do think we will need to do more for more people so they get the benefits of technology and progress and others. I do think that's a national issue, not a Seattle issue or a San Francisco issue.

[Andrew Ross Sorkin]

What, what do you think of the billionaires tax in California these days where things.

[Vinod Khosla]

I think it's a terrible, it's a terrible idea. I floated in alternative, which I think is much, much better, which is also radical. In op ed in the Financial Times recently, I argued that capital gains and ordinary income should be taxed at the same rate. There should be no difference because AIR is giving capital an advantage, labor a disadvantage, and there's no reason to preferentially favor capital gains. It really distributes income the wrong way to the rich people. 40% of capital gains is paid by people making more than 10 million a year.

[Andrew Ross Sorkin]

I read that piece and my follow up question to you therefore was going to be what was the reaction that you got from your friends in the Valley?

[Vinod Khosla]

I don't care much about reactions. I care about what's right and what I think is the right solution. There is a real need to have a large sovereign fund to help people who might be displaced by AI and this is one way to create it. Three to $400 billion a year can be created. Extra taxes by levelizing and making capital gains be the same as ordinary income and that then has enough funds in a revenue neutral way to take care of the people impacted by AI. I think that's the right solution.

[Andrew Ross Sorkin]

I want to try. Go ahead.

[Vinod Khosla]

People making less than $75,000 a year should not pay any taxes. That's only $75 billion and that should be very, very easy to do. And by the way, it's the same number of people impacted by that as voted for Trump, 75 million or so.

[Andrew Ross Sorkin]

Let me ask you a related question. I was going to try this out on you and I know you have the $75,000 cap. And I know you want to equalize capital gains and income taxes at the same level. Obviously one of the rationales for a lower capital gains tax is to incentivize investment. Is there under your plan, a way to think about a two tiered model where maybe the first, I don't know, a couple hundred thousand dollars in capital gains on any given year might be at a lower rate, but anything over that gets taxed at the income level.

[Vinod Khosla]

Yes, in my op ed I do say gains on primary income or farms, sort of smaller gains, which every normal person has, should be exempt from this increase in capital gains tax.

[Andrew Ross Sorkin]

So what would the rate be there for? I mean, what would be the cap?

[Vinod Khosla]

Well, frankly that can be much, much lower or zero.

[Andrew Ross Sorkin]

Vinod It's a, it's a fascinating one and it's a longer conversation. We love having you on the broadcast

[Melissa Lee]

and look forward to talking again very, very soon.

[Vinod Khosla]

Yes, much longer conversation. I hope some presidential candidate takes up my urging in the Financial Times.

[Melissa Lee]

Thank you.

[Andrew Ross Sorkin]

Talk to you soon.

[Podcast Host / CNBC Producer Katie Kramer]

Still to come on an interview with Take two Interactive CEO Strauss Zelnick. It's going to be a big autumn for video games. Grand Theft Auto 6 will finally hit consoles in November after being announced back in 2022, and an extended trailer of the game that's out exclusively on Netflix in just a few weeks. Is it just the beginning for a Netflix partnership?

[Strauss Zelnick]

I think historically Netflix has not made big acquisitions. They've grown organically and they've done a great job at it. And as far as us, you know, I don't know. I think we're very proud of the way we built this company independently.

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[Andrew Ross Sorkin]

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[Melissa Lee]

welcome back to Squawk Pod up and Andrew Q. Watching Squawk Box right here on CNBC. I'm Andrew Ossorkin along with Melissa Lee. Take two interactive reporting higher sales but widening losses. First quarter the big headline was strong preorder sales for the long awaited Grand Theft Auto 6. It is due out in November. I've already said the Sorkin boys are awaiting this. Maybe a little too much. Strauss Zelnick is here, CEO of Take two Interactive.

[Andrew Ross Sorkin]

Yeah, there's a lot of people who

[Melissa Lee]

want this and what are you seeing?

[Strauss Zelnick]

Good. So obviously preorders have gone much better than expected. So our excitement continues to and you

[Andrew Ross Sorkin]

have to deliver though. I mean I assume you think that

[Melissa Lee]

you've nailed this thing because this has

[Andrew Ross Sorkin]

been a long wait.

[Melissa Lee]

Trust me, my children will tell you about the wait.

[Strauss Zelnick]

You know we never claim victory before it occurs. I know that our Rockstar Games division has tried to innovate and understands that as great as the anticipation is, we need to exceed expectations. I believe that we will.

[Andrew Ross Sorkin]

How much do you think of this as a front loaded?

[Melissa Lee]

I was actually thinking about this over the weekend. I knew we were going to see you.

[Andrew Ross Sorkin]

How much of this is like, like, like a movie? Like, like 50% of the sales of something like this happen in the first couple of weeks and then it sort

[Melissa Lee]

of it drifts off or is it actually go the opposite way over time?

[Strauss Zelnick]

It really depends on the title. So in the case of Grand Theft Auto 5, it's continued to sell. We've sold 230 million units and it's continued to perform through three console generations. So in that case it was and remains the standard bearer not just for our company but also for the industry over 13 years now. Of course we could never project that to occur again. But that, but that is an historical fact.

[Guest Analyst / Commentator]

Go ahead said that Pre orders have been unprecedented, but you don't know how it'll translate into sales.

[Strauss Zelnick]

You just, to the point, Andrew Smith, you just can't tell.

[Guest Analyst / Commentator]

So people might actually buy it in the.

[Vinod Khosla]

Oh, no, no.

[Guest Analyst / Commentator]

I think even more.

[Strauss Zelnick]

I think odds are very high that the preorders turn in sales. I think to Andrew's point, we can't tell if that's demand that was pulled forward because of initial excitement of, you know, the most avid consumers or whether it reflects something very different. There's just no history from which to extrapolate.

[Guest Analyst / Commentator]

Right.

[Melissa Lee]

How do you think about pricing for this. For this particular title?

[Strauss Zelnick]

So we've established a $80 price point, $100 price point for the regular edition and the premium edition. And I think most people felt that if we wanted to exert it, we had a great deal of pricing power. Our job, though, as we see it, is to deliver always way more value to the consumer than what we charge. And we want to do that over and over and over again. We understand that a consumer experience is the intersection of the thing itself and what you paid for.

[Melissa Lee]

Right.

[Strauss Zelnick]

And so we want people to be thrilled and we would never want people to feel like this is out of my range.

[Guest Analyst / Commentator]

Are they Pre ordering the $99.99 1 or the 79?

[Strauss Zelnick]

Both.

[Guest Analyst / Commentator]

Both equal.

[Strauss Zelnick]

Actually, it is skewing more to the premium edition, but that might be a reflection again of the fact that the most avid consumers are the ones who are pre ordering.

[Melissa Lee]

What do you get in the $100 version that you don't get in the.

[Strauss Zelnick]

You get additional content.

[Melissa Lee]

And then the other question I had is what kind of discounting you think is going to happen or not around Christmas? Because obviously this is coming out in November. Is there a shift in pricing as people get closer to Christmas or do you try to hold. Hold the price?

[Andrew Ross Sorkin]

How much of it is up to

[Melissa Lee]

you versus retailers, etc.

[Strauss Zelnick]

Well, we obviously establish our pricing.

[Schwab Announcer]

Right.

[Strauss Zelnick]

And then storefronts can do what they wish. We don't have any ability to control that. So if they reduce the price, they're obviously reducing their margin on the sale. There are situations where certain retailers will price down to drive demand for other things that they sell. And I can't tell what will happen. I will tell you that we preserved our pricing on Grand Theft Auto 5 for a very long time, much longer than a standard release of an entertainment property.

[Melissa Lee]

What's happened to the pricing of that product now?

[Strauss Zelnick]

Well, eventually it comes down over time, sure.

[Melissa Lee]

But how much does it come down?

[Strauss Zelnick]

Well, it depends. I mean we've offered it for as low as I think $20.

[Melissa Lee]

Okay.

[Strauss Zelnick]

But it varies. There'll be promotions, but again that's 13 year old title. It's been our catalog for a very long time.

[Melissa Lee]

Okay.

[Andrew Ross Sorkin]

So my other question is, given that

[Melissa Lee]

so much of this company has become this, this one particular game, are you already on to the next version of it?

[Strauss Zelnick]

Oh. So let's be clear in terms of the percentage of our revenue, all things Grand Theft Auto. The Grand Theft Auto franchise for quite some time has been less than 15% of our total revenue. So we have a big diversified company. We think we have the best collection of owned intellectual property in the business.

[Andrew Ross Sorkin]

But one of the things that's been fascinating is the stock has been almost

[Melissa Lee]

as, almost like tracked what's going on with that game? Am I wrong?

[Strauss Zelnick]

I mean I think we're very profitable company and I think we do trade on the fundamentals. I mean I do think we trade on our earnings this year. We expect to deliver over $1 billion of free cash flow by the end of the fiscal. We expect to be a net cash company again. I mean we're not a story stock. We trade on the phone.

[Andrew Ross Sorkin]

No, I know, but, but if you,

[Melissa Lee]

if you follow all the headlines and what, what some of the investor class,

[Andrew Ross Sorkin]

they seem to be very tied up

[Melissa Lee]

in the future of this game.

[Strauss Zelnick]

Absolutely. And I think, you know, some expectations are very, very high and I hope they come true. My point is that even in the event we have an extraordinary situation, something way outside of anyone's expectations, we still have an enormous business in mobile and console and PC. Outside of all things Grand Theft Auto, we've diversified the company meaningfully. We have 11 intellectual properties that have each sold over 5 million units in an initial release. We have an enormous, more than $3 billion top line mobile business with enormous hits and hopefully more coming.

[Guest Analyst / Commentator]

And NBA 2K was a huge.

[Strauss Zelnick]

And the A2K set records this year with 12 million units sold in and recurring consumer spending was up 7% year over year.

[Guest Analyst / Commentator]

I want to ask you about something that seems very different in terms of what you're doing with Netflix on August 27th. So it's GTA 6, an extended look. What is this? Can you tell us a little bit about this? I mean, is this like an extended, is it a game trailer? Is it a movie? Is it a show?

[Strauss Zelnick]

I mean what you have asked all the questions that will be answered on the 27th and I expect to show

[Andrew Ross Sorkin]

a little bit of a hint.

[Strauss Zelnick]

The hint is I think it's really worth watching. It's really worth watching. And six hours after the initial premiere, it'll be on Rockstar's YouTube channels. And of course, it will make its way all over social media.

[Guest Analyst / Commentator]

Can you pre order through the.

[Strauss Zelnick]

I don't think you need to.

[Andrew Ross Sorkin]

Do you think sign on? Because I think of you as a media mogul and when I first saw

[Melissa Lee]

this, I thought to myself, do you think Netflix, I mean, is Netflix really going to get into the gaming business? Business in a whole new way? They've already, they're already a little bit in gaming. Could you see Netflix getting into gaming even more?

[Strauss Zelnick]

Look, they've hired some talented, experienced interactive entertainment executives and we've made a bunch of deals with them. We've distributed many titles on the Netflix platform. And I think, you know, I don't think it's any secret that their goal is to have as many subscribers as they can, and they want to deliver the best entertainment to those subscribers. So it stands to reason that they would make their way into the business.

[Melissa Lee]

How do they do that?

[Andrew Ross Sorkin]

Yeah, do you think they need to

[Melissa Lee]

buy a company, like maybe a company called Take Two. Take Two.

[Strauss Zelnick]

So you'll have to ask Ted and Greg, not me, about where they want to go with that. I think historically, Netflix has not made big acquisitions. They've grown organically and they've done a great job at it. And as far as us, I don't know, I think we're very proud of the way we built this company independently. We're now the largest pure play that's public in the space worldwide. You know, expect to have over 8 billion in revenue this year. We generate profits year in, year out. I don't mean to imply that that's easy or even predictable. We have to get up every morning and do it. But I think if anyone deserves to be an independent company, we do.

[Melissa Lee]

Let me flip it around in another sort of media mogul question for you. If David Ellison called you and said, look, I know you're in the gaming business, I got to stand up another film business. Like I need another company. I got to sell some of my, some great IP to, to ameliorate these, these state AGs, would you want to get into the film business?

[Strauss Zelnick]

I would say the film business.

[Andrew Ross Sorkin]

I know he'll say, maybe he'll sell you Dune, some DC characters, some other things like that.

[Strauss Zelnick]

Look, Andrew, I made a decision in 1993, before many of your viewers were alive, that it was time to exit the film business and go into what I believe would be the next huge entertainment business, the interactive entertainment business. Thankfully, it was a good career move. I was right. And that was a tiny little business in those days. Look, from my point of view, the motion picture business is a very difficult business economically. It's a wonderful business creatively. Now and then selectively, we expect to bring our intellectual property to the motion picture and television business with other people's money, not our own. And I think that tells you how I feel about it.

[Melissa Lee]

Okay. Straw Selnick, it's great to see you. This is great to see you. Thank you for coming in. Appreciate it.

[Podcast Host / CNBC Producer Katie Kramer]

That's Squawk Pod for today, this Monday. Thanks for listening and thanks for starting your week with us. Squawkbox is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern or follow Squawk Pod wherever you get your podcasts for the best of our show every day and listen anytime you want. We'll meet you right back here tomorrow.

[Strauss Zelnick]

We are clear.

[Melissa Lee]

Thanks, guys.

[Strauss Zelnick]

Foreign.

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