SpaceX Bull Ron Baron & Vice President JD Vance 6/15/26

Summary

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Squawk Pod – June 15, 2026

SpaceX Bull Ron Baron & Vice President JD Vance

Hosts: Becky Quick, Brian Sullivan, Robert Frank
Guests: Ron Baron (Baron Capital), Vice President J.D. Vance, Leslie Picker

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Episode Overview

This episode dives into two pivotal headlines: the U.S.-Iran peace deal set to be signed Friday, with Vice President J.D. Vance explaining its implications, and SpaceX’s monumental IPO, analyzed with longtime Musk backer Ron Baron. The hosts discuss immediate impacts on energy markets, market euphoria following the deal, and SpaceX's implications for the broader business landscape, including AI data centers, global connectivity, and Musk’s outsized influence.

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Key Discussion Points & Insights

1. U.S.–Iran Peace Deal: Details & Market Impact

- Breaking News:

• A peace deal with Iran is scheduled to be signed on Friday.
• The agreement promises reopening of the Strait of Hormuz and a long-term commitment from Iran never to develop or acquire nuclear weapons.

- Market Impact:

• Oil Prices: Fell sharply as the deal was announced.
  • WTI dropped to about $80/barrel, Brent to $82.88 (02:11–03:27).
  • Gasoline prices poised to follow, with predictions of $3.25/gallon soon in parts of Texas (05:15).
• Host reflection: lower energy prices could be crucial politically and for consumers heading into the midsummer period.

Memorable Quote:

“It immediately reopens the Straits of Hormuz. We’re already seeing in the past 24 hours more traffic flow. You see oil prices coming down, but you also have the long term commitment that Iran will never develop or procure a nuclear weapon.”
— Vice President J.D. Vance (01:16)

- Deal Mechanism:

• The agreement is based on a two-step verification.
• Iran gains access to the global economy if it abides by strict nuclear commitments verified by inspections (42:09–46:10, 44:14).

- Negotiation Factions:

• Multiple Iranian power centers complicate guarantee of compliance (09:22).
• If hardliner Golubov is at the table, the agreement’s credibility increases (49:38).

Memorable Quote:

“We are now speaking directly to the Iranian system…when you talk to them, you figure out what’s real, what’s fake, what are they serious about, what are they not serious about.”
— Vice President J.D. Vance (50:20)

- Israel’s Reluctant Reaction:

• The deal faces skepticism from Israeli officials, across political lines (09:00, 51:52).
• Vance reassures: “We think this is going to make the whole region safer.” (52:06)

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2. SpaceX’s Record IPO & Ron Baron’s Bullish Case

- IPO Debut:

• SpaceX staged the biggest-ever IPO, shares up 19% on Friday, and up another 4% the following Monday (09:56, 18:15).
• Elon Musk predicted $1 trillion in revenue by 2030, more than doubling annually for 5 years (10:09).

Memorable Quote:

“I think we’re going to make hundreds of billions of dollars…but this is just getting started. This is just where we’re starting, of what this business is going to become.”
— Ron Baron (19:20)

- IPO Mechanics:

• Retail investors comprised about 20% of the allocation, highest retail participation for an IPO ever (10:09).
• Passive indexes expected to own ~30% of the float (ca. $75B) two weeks after IPO due to new fast-tracking rules (12:13).

- Market Innovation:

• SpaceX, described not just as a “rocket company” but as a “data center and global connectivity company with a rocket business on top of that.”
• Starlink’s expansion: from 10,000 satellites to a planned 100,000, with revenue estimates for Starlink alone at $1 trillion within 10 years (35:12).

- Strategic Advantage:

• SpaceX operates 10 years ahead of all competitors in rocketry, AI infrastructure, and compute (19:57, 14:44).
• Baron: “What they’ve done isn’t possible for anyone else to accomplish. Not possible.” (19:55)

- Musk’s Vision:

• Not driven by wealth, but by broad, world-changing ambition—"trying to save humanity" (21:33).
• Starlink enabling global internet access; data centers in space to avoid earthbound political and energy costs (38:08).

Memorable Quote:

“He’s at least 10 years ahead of everyone else…as far as making satellites, as far as making rockets, as far as building networks. I mean, the opportunities that they have to change everyone’s life, changing lives.”
— Ron Baron (20:45)

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3. Baron Capital’s Epic SpaceX/Tesla Bet

- Portfolio Breakdown:

• Baron’s funds have over 50% exposure to Elon Musk companies—SpaceX and Tesla (16:15–16:31, 31:42).
  • SpaceX: 30% of the Assets Fund, nearly 30% of the Partners Fund, 25% of Focused Growth Fund; Tesla: ~20% (16:15, 31:42).
• Total SpaceX exposure now $25 billion after a $1B buy-in on IPO day (19:05).

- Concentration Risk:

• Baron candidly acknowledges: “Should investors be concerned that a fund has 50% in one person? Of course.” (16:35, 31:52)

Memorable Exchange:

Brian Sullivan: “So you’re over half your fund is Elon Musk.”
Ron Baron: “Right.”
Sullivan: “Should investors be concerned that a fund has 50% in one person?”
Baron: “Of course.” (31:44–31:59)

- Wealth Creation Approach:

• Baron focused on “getting rich” rather than just staying rich, embracing “concentration is positive, but it entails risk.” (32:17)

- Culture & Value Sharing:

• Baron Capital established profit-sharing with all employees—including receptionists and cleaning staff—through partnership stakes in SpaceX, aiming for company-wide “millionaire” uplift if SpaceX delivers (34:54–35:12).

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4. The Future: Starlink, Compute, and AI

- Starlink:

• Expanding from 10,000 to 100,000 satellites, targeting even a million in the future (35:12, 36:53).
• Expected to be a trillion-dollar revenue division within a decade, with $7-800B in EBITDA (35:12).

- Data Centers in Space:

• SpaceX plans to move data compute infrastructure off-planet by 2027, gaining energy and cooling efficiencies from solar and vacuum environments (36:45, 38:08).

- AI Compute Leasing:

• Anthropic (AI unicorn) already paying SpaceX $1.25B/month for compute capacity.
• Musk’s strategic edge: massive, purpose-built compute infrastructure supplies AI clients until SpaceX needs it for its own growth (24:43–26:56).

- Vertical Chip Manufacturing:

• Musk seeks to build his own chips with Intel, investing up to $100B, to avoid Nvidia markups and supply constraints.
• “He thinks he’ll be able to make things 99% less expensively… not so much to do it at lower cost, but what we need is we need way more than the industry is willing to provide us.” (39:53–40:45)

- Ultimate Opportunity:

• Baron: “There will never be another opportunity like this because there’ll never be another man like this.” (28:01)

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5. Notable Quotes & Moments

• On IPO Mechanics:
  “SpaceX’s smooth debut may pave the way for two other mega cap AI companies that have filed confidentially: Anthropic and OpenAI.” — Leslie Picker (10:09)

• On Starlink’s Ubiquity:
  “When people hook into you instead of you hooking, you’re the Internet. This is the Internet….” — Ron Baron (35:12)

• On Musk’s Management:
  “He built this in 122 days—the biggest one that was ever built by four times. And then, and then on top of that, doubles it again in 95 days. I mean, how does anyone do that?” — Ron Baron (27:13)

• On Wealth Sharing:
  “Everyone, receptionists, young lawyers, traders, the cleaning lady, everyone.” — Ron Baron (35:02)

• On AI & Automation:
  “They were replacing $25-an-hour people with 25 cent-an-hour chips. The people who are replacing we’re going to get them other jobs and get them other training.” — Ron Baron (40:52)

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Important Timestamps

• Oil Markets & Peace Deal Announced: 01:00–09:56
• IPO Recap & Market Implications (Leslie Picker): 09:56–13:31
• SpaceX as Data Center/AI Company: 14:09–15:55
• Ron Baron Interview Begins: 18:15
• Baron’s Investment Logic & Musk’s Uniqueness: 19:05–28:01
• Starlink, Compute, Data Centers in Space: 35:02–39:53
• Concentration Risk & Wealth Tax Discussion: 31:42–34:54
• Vice President Vance on the Peace Deal (Deep Dive): 42:09–53:23

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Podcast Tone & Language

• The hosts maintain a mix of market-focused analysis, informed skepticism, and open admiration for entrepreneurial audacity.
• Ron Baron is candid, optimistic, and unwaveringly bullish on Elon Musk and innovation-driven wealth.
• Vice President Vance is precise and diplomatic, highlighting leverage, verification, and a pragmatic approach to peace with Iran.

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Useful For

• Listeners interested in global macro shifts, energy and tech market analysis, and the strategic vision behind the biggest business moves.
• Those curious about how star investors make game-changing bets and share the rewards.
• Anyone seeking insight into the intersection of geopolitics, technology, and capital markets — and looking for both the headlines and what’s behind them.

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End of Summary

Transcript

[Everpure Announcer]

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[Becky Quick]

This is Squawk Pod and I'm CNBC producer producer Cameron Costa. On today's episode two big headlines. First, a peace deal with Iran set to be signed this Friday and Vice President J.D. vance has the details.

[Vice President J.D. Vance]

It immediately reopens the Straits of Hormuz. We're already seeing in the past 24 hours more traffic flow. You see oil prices coming down, but you also have the long term commitment that Iran will never develop or procure a nuclear weapon.

[Becky Quick]

Then Space X's launch into the public markets. Ron Baron, longtime bull on Elon Musk, has half his funds portfolio tied up in Space X and Tesla.

[Robert Frank]

How rich is he now? I don't know more than Thursday and

[Becky Quick]

he is still betting on Elon.

[Ron Baron]

$24 billion.

[Brian Sullivan]

That's across all the funds.

[Ron Baron]

Across all the funds.

[Becky Quick]

Across all the funds. And that was, I'm not sure if

[Ron Baron]

that's 24, 25 billion because we bought another billion on Friday.

[Becky Quick]

It is Monday, June 15, 2026 and Squawkpod begins right now.

[Brian Sullivan]

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

[Becky Quick]

Good morning everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Brian Sullivan and Robert Frank. Joe and Andrew are out today. Gentlemen, thank you both for being here today. It's good to have you. If you take a look at energy prices though, this is the real story because oil prices collapsing overnight. You can see right now that WTI is right around $80 a barrel. It's down by about five and a half percent. $80.23 Brent is all the way down to $82.88. And Brian, you've been watching this very closely. This is your beat. You know what's happening here. Explain.

[Robert Frank]

Okay, well, here's there's a couple things to watch. And this good morning, by the way. We've got the Knicks get a title. We've got what looks to be a peace deal in Iran. Equity futures are soaring. And I've got some even better news for our SpaceX.

[Brian Sullivan]

Pre market is up, is up.

[Robert Frank]

Free market, more trillionaires. That's your beat. Robert Frank, it's like the perfect morning that we're all here. This is incredible. First off, most of our viewers, I know you don't trade or buy barrels of oil, but they probably do put gasoline in their car one year ago today. One year ago today, the price of oil was at $80 and 23 cents a barrel.

[Becky Quick]

And here we stand.

[Robert Frank]

The price of oil right now is $8.23 per barrel.

[Becky Quick]

Wipes out the war premium that's been put.

[Robert Frank]

Wipes out almost the entire war premium. Takes us exactly where we were one year ago. So according to Triple A, where were we with gas prices with oil at 80, 23? One year ago we were at $3.15 national.

[Becky Quick]

So how quickly do oil prices or do gasoline prices follow oil price declines?

[Robert Frank]

It depends on how fast the gas station owner needs to refill their tanks. If they bought a bunch of gasoline a week ago and they've got to empty it, they're not going to lower the price and lose money on what they did. But if they have to refill it in the next few days, you should see pretty immediate relief depending on that. So the price of gasoline, I want to be clear, I don't think it's going to 315 in the next week, but it might go to 325.

[Becky Quick]

And part of this is what the refineries are dealing with too.

[Robert Frank]

That's right.

[Becky Quick]

So it doesn't come.

[Robert Frank]

They bought, they've already bought. More expense, just like the gas station owner, right?

[Becky Quick]

Yeah, it's frustrating when you are a consumer and you're filling your tank and you're watching the prices go down and saying why doesn't this translate immediately?

[Brian Sullivan]

And I wonder, just with mortgage rates, there's that magic psychological number. Anything below six starts to get a lot of activity. Housing market, I wonder with gas prices, as long as there's a three handle on it instead of a four handle, I think politically that becomes much more palatable.

[Robert Frank]

Going into the mid, we're already at threes in this. If you're in Texas, you can get 350, 360 again. I know our early rise California could

[Brian Sullivan]

go under $8 a gallon. Who knows?

[Robert Frank]

A whole is a whole. It's like six bucks. Yeah, yeah, six would be good. Becky. If you're like in L. A by the freeway, you're like six bucks sounds nice. We're already at 35360 in parts of the South. I'm going to go out the national

[Becky Quick]

average, just so you know, I'm a national average was $4.10. So that's where, where the national average is and that's what it is.

[Robert Frank]

And I, and. But that, you know that that factors in California. Whatever. I'm going to say something, you know, you shouldn't predict the price of fuel. But I'm going to do it because this, you never know could be my last time ever on the show. We're going to be advantage of it. 325 a gallon in Houston if we're not already. By tomorrow. By tomorrow in certain stations if they have to buy it because they've got almost no transportation and distribution costs very low because it's very short. But yes, you are correct.

[Becky Quick]

I'm writing this down.

[Robert Frank]

You're going to write this down.

[Becky Quick]

I am still.

[Robert Frank]

Right. I mean I don't, I don't be held to this. I just want to say things. But a couple of things to watch. Number one, the futures contract that we show on TV that we've just shown.

[Becky Quick]

Yeah.

[Robert Frank]

Look at the forward month. Look out November, December.

[Becky Quick]

We're looking at July delivery right now is the current month before expiration. But you've been watching pretty closely the months out that tell us where we

[Robert Frank]

think the market expects 73 right now for November. 73 for November, which would put the national average of gas at about 3 bucks.

[Becky Quick]

That's a pretty good number. So the idea is that, that they can unleash things pretty quickly as long as things move through the straight.

[Robert Frank]

It's like you guys either read my mind or we talked right before the show began. One of the most important thing to watch right now, assuming I know we've got Vice President Vance on the program, assuming this peace deal holds because there's still some bad people in Iran that may have different ideas. I want to make that very, very clear. I've been reporting that from the beginning there's multiple factions inside the country. Like no, no, I'm in charge and I have a weapon. Okay. Assuming this holds the pace of loading in the Arabian Gulf, Persian Gulf states is going to be the most important thing to watch. Kuwait, Iraq, Bahrain. How fast can they load ships? You asked me before the show, Robert, how fast Iran can do it. They've already been front loading, so I don't think they can do it any faster.

[Becky Quick]

So basically the ships are ready to go as soon as the mines are cleared.

[Robert Frank]

And they move, by the way, a week ago, two weeks ago, they all moved. All the ships went from the Strait of Hormuz over to Iraq. If you bring up the marine traffic map, look, you say it and happens. The far left though is what we want. Next time we bring that up, we can do the far left over by Iraq and Kuwait. I can tell you this much, my sources in that part of the region, Kuwait has a lot of oil in what they call reservoirs. The key now is how fast can they load those ships. And I think based on conversations I've had with people that may or may not live there, they can load them faster than we think.

[Becky Quick]

But I think the other question is how quickly do the ships get out, how quickly do they come back in? It has to be traffic that is moving both ways.

[Robert Frank]

It's going to take a while.

[Brian Sullivan]

Can they clear the mines? I mean, part of the 60 day extension is for Iraq, Iran to clear all the mines. You think pretty fast?

[Robert Frank]

Yes. In 1991, the CIA wrote a paper about how we can clear mines pretty quickly because they use these World War I. You know those mines you saw in like cartoons that like look like spy versus Spy. Spy versus Exactly. Mad magazine reference. Nice. Just kind of knock those out of the way. Like they have mine clearers, things like this.

[Brian Sullivan]

So yeah, you look at the Asian markets this morning, way up. Korea is up 6%, Japan up, because those are very oil dependent markets. You've got the airlines up this morning 4 or 5%, semiconductors up. So yeah.

[Becky Quick]

So this is interesting how this is playing out because of heat.

[Robert Frank]

Helium. Exactly. Because helium. We didn't, we didn't, we never thought about fertile. Look at also like a CF industry talk about that on the mosaic.

[Becky Quick]

Helium has to make its way out of the strait as well.

[Robert Frank]

So a lot of other things besides oil.

[Brian Sullivan]

Right.

[Robert Frank]

That are in there. Nobody is happier right now than probably Kuwait, Iraq, a little bit of Qatar, but Qatar's got to rebuild their Ross Lafont natural gas facility. It's not like they can.

[Becky Quick]

China, India, Japan, Europe, all of them pretty happy. The only that's not is Israel at this point. And there are some questions about that we do have J.D. vance, who's going to be joining us later this morning, the vice president. We will talk to him about what's in this deal, what the potential sticking points can be and what we can expect after 60 days as well. Because the Iranians are saying one thing. We're hearing others on this side because

[Robert Frank]

so I don't want to, I know it's this show just began. We got a lot to do. The president of Iran, Pizzashkian, is the one that we're negotiating with. But there's another guy named Galiboff, Muhammad Galyba, sometimes spelled with a G, sometimes with a kid. He reports to the Ayatollah Khomeini, Khomeini son who's alive but injured but getting better. They may have different ideas. That's why you've seen contradictory headlines. My sources in the Middle east are very, very good. And there are multiple people in Iran that may want to take control. Let's hope this holds.

[Brian Sullivan]

It's the first full day of trading for SpaceX after the company staged the biggest ever IPO. Shares jumped nearly 20% in their debut on Friday. They're up again this morning. Leslie Picker joins us now with more. Leslie, good morning.

[Leslie Picker]

Hey, good morning, Robert. As you mentioned, shares are higher again this morning after Elon Musk saying on X that he thinks SpaceX might be able to reach approximately $1 trillion in revenue in 2030. That's about triple the projected revenue that the bankers shared with investors on the roadshow and 53 times the company's revenue from last year. That implies that revenue is essentially more than doubling every year for five years. As you mention, though, Friday's debut went off really smoothly. There were no technology glitches, and the 19% day one gain meant that those who received allocation generated a pretty good return. But the company didn't leave too much on the table either. It's kind of that sweet spot. Retail comprised about 20% of the book, we're told, and continue trading Friday afternoon. According to Citadel Securities, Friday saw the highest retail order activity for an IPO auction ever. SpaceX's smooth debut may pave the way for two other mega cap AI companies that have filed confidentially Anthropic and OpenAI sources I spoke with think it's possible we could see a repeat of that fixed price that they marketed versus a range, but that's not guaranteed. However, it seems pretty likely that retail will continue to be a big player, and that's because retail accounts for an increasingly higher share of daily Trading volume and the institutional side has really just been taken over by Passive and quant, et cetera. But perhaps the biggest question for the Future Mega Cap IPOs as it pertains to SpaceX is whether it can maintain these levels. Because if it dips substantially before they attempt to go public, investors may not be as keen to seek allocations in companies like Anthropic and OpenAI. Guys.

[Brian Sullivan]

So Leslie, there's been a lot of discussion about the passive indexes coming in. Over the next few weeks they're going to have to buy those shares that's going to support the share prices. And then eventually following on that, maybe July or August we'll start to get some of these lockups, basically freeing the insiders or a lot of the shareholders to sell. From a timing perspective, how do you see those two forces playing out?

[Leslie Picker]

Yeah, they're lined up pretty nicely. Now the question is it. A lot of it depends on what happens with regard to Space X trading. If that, if the stock is higher, the flows that will come in from the passive indexes could also be stronger. That'll start to take place over the next two weeks time. And there are estimates out there that about 30% of the float, which is about $75 billion at this point in time, will be owned by passive in just two weeks, which is obviously unprecedented because of those new fast tracking rules. Concurrent with that, just a few weeks later, we'll start to see the lockup releases begin. And this is a kind of a waterfall approach that depends on a lot of things as well. It depends on, well, the first one happens kind of after they report their first earnings. That will happen regardless. But the next one depends on if the Stock has appreciated 30% by the time that lockup is that lockup release is eligible. So there are a lot of kind of forces at play here. A lot of it depends on the stock price. So we'll see which one is is more powerful. The flows kind of into the stock or the flows out of the stock with these lockup releases.

[Brian Sullivan]

Yeah, and also how much of that inflow from the indexes is already priced in. It'll be interesting to watch. Leslie, thanks so much and great reporting last week. We appreciate it.

[Becky Quick]

You too.

[Leslie Picker]

Thank you.

[Brian Sullivan]

All right, we're going to be speaking to long term Space X backer Ron Baron in the next hour. That's going to be great.

[Becky Quick]

Ron's got a lot to say. We're going to talk to him about all points of not only Space X but Tesla too. As a Tesla shareholder, there's been all this talk about whether Tesla gets folded in at some point. But Ronald talked to us about the promise that he sees with Space X. Why he's an investor and why he's such a major investor, made such a commitment to it.

[Robert Frank]

How rich is he now?

[Becky Quick]

I don't know.

[Robert Frank]

More than Friday.

[Becky Quick]

Yeah.

[Robert Frank]

More than Thursday.

[Becky Quick]

More than Thursday. Yes.

[Schwab Announcer]

Right.

[Becky Quick]

And more than Friday. If Space X continues up as it is Right now at 5.7% this morning,

[Robert Frank]

I think what people would shock people about Space X. And when I say people I mean me was just how heavy into the data center side they are. It's a rocket company.

[Brian Sullivan]

Yeah.

[Robert Frank]

But it's a data center company, global connectivity company with like a rocket business on top of that.

[Brian Sullivan]

Yeah.

[Becky Quick]

Rocket business is actually the one that's got a lot of promise at the moment.

[Robert Frank]

Yeah.

[Becky Quick]

Future.

[Robert Frank]

Yeah.

[Brian Sullivan]

And I think they're right to describe themselves as an infrastructure company. And initially when I heard that just like that means nothing. And to your point, that is all those things.

[Becky Quick]

Yeah. The build out, it's. And it costs a lot of money which is why they need the capital, which is why they go public.

[Brian Sullivan]

And if you talk to experts in the aeronautical field, they're like they have a 10 year head start on rockets compared to any other competitor. So you look at a company like in video and they're sort of head start of everybody else. I mean 10 years is incredible.

[Becky Quick]

It is. And that's where the revenue is going to be coming in a big way for these early numbers. Although look, they're doing pretty well with anthropic charging them a lot for what they've built data centers too.

[Robert Frank]

Have you used Starlink? I have, I have.

[Becky Quick]

Yeah.

[Brian Sullivan]

People love it.

[Robert Frank]

What do you think of it?

[Becky Quick]

Love it. And the idea of getting it on planes, I cannot wait because I used

[Robert Frank]

it on a flight. Yeah.

[Vice President J.D. Vance]

It never.

[Robert Frank]

It was. You could stream a movie. It was a. It was incredible. Like as soon as you took off, it worked.

[Brian Sullivan]

Yeah.

[Robert Frank]

And it was fast.

[Becky Quick]

And that's where I would like to see it first and foremost. Like every time I get on a flight the WI fi never works.

[Robert Frank]

Or you pay for it. And then it's like it works a little bit. You're gonna keep you.

[Brian Sullivan]

Yeah.

[Robert Frank]

Keep trying to log in every hour or two. Scream. And then they tie you up with the back of the plane. Wait, is that just me?

[Schwab Announcer]

Nope.

[Becky Quick]

And even on the tie you up in the back of the plane. Yes.

[Ron Baron]

Oh yeah.

[Brian Sullivan]

Even private aviation. I mean the biggest complaint in big private jet companies is the WI fi doesn't work. And I'm thinking, wait for all that money. You still don't have good wi fi and they don't. And that can solve it.

[Robert Frank]

I wouldn't know.

[Becky Quick]

Because you're tied up in the back of the plane.

[Robert Frank]

That's right.

[Vice President J.D. Vance]

Keys will be next.

[Becky Quick]

Next on Squawk Pod, Space X has officially launched into the public markets. Ron Baron. He has been betting on Elon Musk since 2017.

30% of the Baron Asset Fund, almost 30% of the Baron Partners Fund, 25% of the Baron Focused Growth Fund.

[Brian Sullivan]

And then there's. And Tesla is what?

[Ron Baron]

On top of that, Tesla is around 20%.

[Brian Sullivan]

So you're over half your fund is Elon Musk.

[Ron Baron]

Right.

[Brian Sullivan]

Should investors be concerned that a fund has 50% in one person?

[Ron Baron]

Of course.

[Everpure Announcer]

Your data lives everywhere on prem in the cloud, across apps. Bring it all together with Everpure, the platform that acts like a living system, delivering the latest in data, performance, security and innovation without ever slowing you down. Sophisticated enough to anticipate your ever changing data needs, yet simple enough to feel like second nature. Tame your data chaos with Everpure and make storage and data management the simplest part of your business. Visit everpuredata.com to learn more.

[Ron Baron]

Never bet against American grit or American energy through innovation. Venture Global is not only building some of the largest energy facilities in the

[Robert Frank]

world right here in the United States,

[Ron Baron]

but delivering American energy at a fraction of the cost in a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable Energy

[Schwab Announcer]

Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn [e-mail] trading.

[Becky Quick]

You're listening to Squawk Pod Today with Becky Quick, Robert Frank and Brian Sullivan. Here's Becky.

All right, day two, let's take a look at shares of Space X how they're trading after Friday's IPO where the stock was up 19% at the end of the day. This morning they are up another four and a quarter percent. $167.81. Joining us right now to talk about Space X after its historic debut and about Elon Musk himself is Ron Baron. He is the founder, the CEO and portfolio manager of Baron Capital. Ron, of course, is a longtime backer and believer in Elon Musk. He's a major SpaceX shareholder and he's been there for many years. Ron, welcome. It's great to see you today.

[Ron Baron]

It's great to be with you.

[Becky Quick]

So Space X is your largest holding in all of the Baron funds. I think you started buying in 2017. As of Friday, you had how much in shares of space?

[Ron Baron]

$24 billion.

[Brian Sullivan]

That's all the funds across.

[Becky Quick]

All the funds across all the funds. And that was, I'm not sure if

[Ron Baron]

open 24 or 25, but billion. Because we bought another billion on Friday.

[Becky Quick]

Okay, so 25 billion. And that was as of Friday's close, before this morning's gains.

[Ron Baron]

Yeah, I think we're going to make hundreds of billions of dollars, but hundreds. But before that, I was on Friday evening speaking to Elon and to Dan Deese, who is the person at Goldman Sachs who is husbanding this deal. And I was congratulating Dan on what an incredible, credible job Goldman Sachs and Morgan Stanley and JP Morgan have done with this underwriting. Incredible job, figuring out the allocation of it, figuring out how to stabilize the market, you know, doing pricing it appropriately. I mean, it's amazing.

[Becky Quick]

What did Elon have to say?

[Ron Baron]

So I was talking to him. One of the things I kept thinking about is after what he's accomplished so far, which everyone thought was not only improbable but impossible, he's being congratulated on this. And I'm thinking about from his point of view, this is just getting started. This is just where we're starting, of what this business is going to become. And when I was looking this morning on the news, it said that he thought that we would do a trillion dollars of revenues in 2030. Trillion. And last year was 19 billion. So 50 times by 2030. And when I think about the opportunities this company has and how no one else, all you have to do is get the prospectus. It's 500 pages, so it's not that easy to go through. And it used to be they would give you red herrings and there were little books. You could go through it and you can easily mark it up. But now when I'm looking at these prospectuses, I have a prospectus like that, 500 pages, and you go through it. It's so hard to do it. And. But if you read that and you get probably 20, 30, 40 pages in, you realize what they've Done isn't possible for anyone else to accomplish. Not possible. And so he's at least 10 years ahead of everyone else as far as making satellites, as far as making rockets, as far as building networks. I mean, the opportunities that they have to change everyone's life, changing lives.

[Becky Quick]

Do you think he felt a sense of satisfaction on Friday? Because obviously he's not driven by the same things as everybody else.

[Ron Baron]

Well, if you're worth a trillion or two or three trillion or five, what do is it make? And, and that's not what he's interested in. He's, he's trying to save humanity. And when I was listening to the interview that he did with Jamie Dimon on Friday night, I guess it was, or Thursday night for the roadshow in the J.P. morgan headquarters, by the way, J.P. morgan, that's the most incredible building I've ever been in my life. And so I was listening to the interview and the last question was, so, so, Elon, every time I talk with you, I learn something. Every time I talk with you, I learned something. And so, so, you know, what do you, what do you think about this? And he says, well, I'm hoping that some future, I will say, not a bad job for human. And so, so his goal is not the way other people's goals are outlined. And so when he's talking about what he's done so far, that's just the beginning. And so when I think about Starlink and Starlink is if you want to have some kind of broad distribution of wealth, if you want to have equal wealth, then people have to be smart. How do you get smart? You have to have the Internet. How do you have the Internet when you live in the jungle or you live in the desert or you're flying or you're in the ocean, how do you, how do you do that? And so what he's done is when he's creating this is the Internet for

[Becky Quick]

the entire planet, what is that? What excites you most about SpaceX? What is the aspect that gets you most fired up?

[Ron Baron]

It's just everything is the Starlink is one, the compute AI is another. Making these chips less expensively than other people can make them and use them. The fact that you have this AI within Anthropic. So his idea behind the AI, behind the large language models behind Anthropic and Chachi Beat, who, by the way, both of those people who found those companies, he hired him. He hired them and trained them, and then Google, Gemini. So when I think about those entities and we have Grok inside. So what Elon said was the problem that you were going to have here, LLMs, large language models, that's software. You can do that, other people can do that. It's hard, but you can do it. But other people can't do the rockets and can't do the giant rockets. And so when I think about what, what is on his mind, he says, okay, other people can do that, what can't they do? And what they can't do is they can't make compute. He's got the biggest compute in the world, cohesive compute down in Memphis. And now what he does is I'm going to spend my effort right now on getting compute, which is what the barrier to these growth of these AI, artificial intelligence LLMs is. I'll, I'll build a compute and people will, that will put me ahead, that will make me win.

[Becky Quick]

Well, and it's almost a fight against the commoditization of any of these large language models down the road.

[Ron Baron]

Yes, they're all going to get commoditized. Yes.

[Becky Quick]

It puts you in a different, it puts him in a different perspective, in a different place.

[Ron Baron]

There is this giant market though is trillions. And everybody's got 20 trillion, 25 trillion. Yeah. So, but, but what, what he's going to have is he's going to have this compute that other people need. So Anthropic, for example, has just gone from $9 billion of annualized revenues in December to 45 billion now for a three or four year old company and they're going to go public for eight or nine hundred billion dollars.

[Schwab Announcer]

Right.

[Becky Quick]

And they're paying, what is it, one

[Ron Baron]

and a quarter, one and a quarter a month. Billion dollars a month, $15 billion a year.

[Schwab Announcer]

Right.

[Ron Baron]

They were paying, so what they do

[Becky Quick]

space X for the power.

[Ron Baron]

So they go, he's a good guy. Good guy.

[Becky Quick]

Dario Hamodi. He's under pressure from the US government, the administration at this point.

[Ron Baron]

Well, the government has a right to be concerned. When you develop something that can crack the code of everyone and find out where there's weaknesses and flaws, you got to make sure that this doesn't get into wrong hands. But, but we're to go back to what we have with this compute, then what happens is that he comes to Anthropic, comes to Elon.

[Becky Quick]

Are you an investor in Anthropic now?

[Ron Baron]

No, no, I wish I was.

[Becky Quick]

Will you be when they go?

[Ron Baron]

I don't know. I haven't been to visit him yet. I've been trying to arrange it. One of the guys who works with me, one of his friends, best friends, went to go work for him. And we're supposed to go visit for maybe a month already. I haven't done it yet. Yet. But I will soon. But. But we're back where they are. Is that so he comes to Elon and says, I'm short of compute. I need compute. I can't satisfy my buyers, my customers, if I don't have enough compute, which is what Elon's been saying. It computes the barrier. And so he says, okay, I'll rent you compute for six months or nine months or a year until I need it for myself, for my groceries. So I would do that. And he rents to him for 1.25 billion a month, 15 billion a year. What did that compute cost in Mississippi, In Memphis? It cost him somewhere. My guess is 12 to 15 billion. So it cost him 12 to 15 billion. He's renting out for $15 billion.

[Becky Quick]

Make it. He'll make it back in a year, right?

[Ron Baron]

For one.

[Becky Quick]

Yeah.

[Robert Frank]

And then he had, he had the energy because Elon Musk saw the demand. Again, not whatever, but all AI stories are just energy stories, I think, in disguise. And Elon saw that demand coming, acquired that in the Memphis area, and now others are willing to pay for it.

[Ron Baron]

He was. He bought a vacuum cleaner factory for 800,000 square foot factory. He buys it when other people buy data centers. They buy data centers that pay a lot for them. Our guy buys just a big empty building. And when you build, when you build something and he built it, other people take two and three and four years to build. It takes 40 or 50 billion dollars. We built this in 122 days. The biggest one that was ever built by four times. And then, and then on top of that, doubles it again in 95 days. I mean, how does anyone do that? But that's, that's the. So he's a builder build stuff.

[Becky Quick]

And that is your, your faith is in Elon Musk the man, and has been for a very long time. I think you've said that. There's never going to be another opportunity like this because there'll never be another man like this.

[Ron Baron]

Not in my lifetime. And so people say to me all the time, so tell me about the next Elon Musk. The next SpaceX. Tell me about the next. There is no next. There's one. That's it. It's a one. And you know, this is a historic person. And the things that he does. I mean, when you. Okay, so New York we win the championship, right? And Nick's. And people go crazy and they light school buses on fire and there's 63 stabbings and 16 shootings. And why are they.

[Becky Quick]

I didn't know these.

[Ron Baron]

My guy was telling me this. He's a former policeman, okay. And have all these numbers and New York is a state dangerous place. And say, how come it's so dangerous that here he does it from Texas. He talks to us from Texas. So something's really crazy in the world where you have to worry about safety the way you do.

[Becky Quick]

Well, let me ask you about the billion dollars in SpaceX shares that you acquired on Friday. How much did you ask for? And is this money that was kind of plowed into the funds because people were trying to get access to Space X?

[Ron Baron]

I asked for a billion and I got a bill. And they said, Ron, there's, there's two different kinds of orders here. There's your orders and everyone else's orders. And so, you know, how much do you want? And I said, I want a billion. And then Esha Levin, who is the analyst who. And that billion.

[Becky Quick]

Is that because you've been a supporter and involved for so long that they looked at your orders first?

[Ron Baron]

I didn't want to get diluted. So we own one and a quarter percent of Space X. They're doing $70 billion. I wanted a billion dollars. Keep our percentage the same. And, and I think the reason. It's all about trust and about objectives and about. So here people know I'm an investor in a business. I'm not buying Stone Trading, doing things that, you know everyone well. Stocks up 4%, great. But I think that what's now being valued for $2 trillion, I think it's going to be valued in 10 years. 10 years, 20 trillion, 30 trillion, $40 trillion. And people at the company think I'm low. So basically that's what I think is going to happen in 10 years. And there's a.

[Robert Frank]

Is that going to be new money they create then, Ron, or is that going to be taken from other companies?

[Ron Baron]

New money you're creating growth. So normally our economy doubles roughly every 10 years. And what he thinks is by the innovations and the work that he's doing, he's going to make the economies grow 10 times in 10 years, not double. That's what he thinks is going to happen. So, so you're. That leads to sustainable abundance. That's, that's his new code. Sustainable abundance 10 times in 10 years.

[Becky Quick]

I think your, your assets under management were about 10.7, 5% of total were invested in Space X. Is that still.

[Ron Baron]

That's personal.

[Becky Quick]

That's your personal. I thought it was 10 points of how much?

[Ron Baron]

How 10.75% of the assets we manage, which is 75 billion is mine. And then on top of that we have invested in Space X, it's our largest holding now. It's now about 24, 25 billion and our cost is about 2 billion plus the billion we just spent.

[Brian Sullivan]

It's about a third of the Partners fund, right?

[Ron Baron]

About.

[Brian Sullivan]

More about 30%, 29% and about 25% of your other fund.

[Becky Quick]

30% of the Barron Asset Fund, almost 30% of the Baron Partners Fund, 25% of the Baron Focused Growth Fund.

[Brian Sullivan]

And then there's. And Tesla is what on top of

[Ron Baron]

that, Tesla is around 20%.

[Brian Sullivan]

So you're over half your fund is Elon Musk.

[Ron Baron]

Right.

[Brian Sullivan]

Is that you worried about that or should investors be concerned that a fund has 50% in one person?

[Ron Baron]

Of course then. So I'm still. So when you get rich, when you are rich, you have to manage your money differently than when you're trying to get rich. Rich. I'm still trying to get rich. And

[Brian Sullivan]

concentration is the positive.

[Ron Baron]

Well, concentration is positive, but it entails risk.

[Robert Frank]

Can you. And there's a lot of politicians watch the show, Ron. And there's been a lot of cries for the wealth tax. And I'm not pro or con the wealth tax, but Europe tried it, they largely abandoned it. This is your world, Robert Frank. Because the cost of administrating it, everyone's like, well, if we just tax so and so, we'll get all this money for all this stuff that we need. It's not really how it works. Just quickly can you explain the difference because you're a very rich guy. A difference between wealth and income and how the IRS would look at that.

[Ron Baron]

I don't understand how you're going to figure out what anything is worth. Normally income is when you sell something, you buy something and sell it and then you have a capital gain or loss. And if stocks go up and down, how do you tax wealth in a given year? And plus that's an anti tax. Where do you think jobs come from? They come from people investing in their businesses over and over again and foregoing profits to become larger businesses. One of the things that was important to me at Baron Capital is that I didn't want at some point people to say, you know, who work at Barron Capital. There's 240 people. And I didn't want them to say at some point, well gee, look how successful David and Michael have been, my sons and their children and how come because of me is how they're able to do that, how come? And so what I want to do is make sure that everyone at Barron Capital participates in the success of something like a SpaceX for example. And so what I did is that for I think 160 or 170 people who are below a break point that I regarded as a high level, but, but still $600,000. I said if anyone is below that level and it's 160 people maybe, then what I did is every time we did some kind of offering for the past three or four years or five years, I put $12,000 a piece into a partnership that retains them and also becomes appreciates with how well SpaceX has done. And those are now worth, if you've been there for four years, $800,000. And I told each one, and I told everyone that you're all going to get to be millionaires if I'm right, if we're right. And so this is still just the beginning of what's going to happen to everyone who works.

[Becky Quick]

So it's not just the SpaceX millionaires we're talking about at this point, it's the Baron Capitol millionaires who have kind of profited along the same way.

[Ron Baron]

Everyone, receptionists, young lawyers, traders, the cleaning lady, everyone.

[Becky Quick]

That's great.

[Ron Baron]

That was my idea. So, but let me just a couple of things about value. I still have the camera. So, so Starlink. So Starlink, what I think is going to happen in 10 years is that as I said, it's going to be the Internet for the entire planet. When people hook into you instead of you hooking, you're the Internet. This is the Internet. And so basically they were going to go from 10,000 satellites to 20,000. They're now going to 100,000. Because the demand for these services from, from, for data is so strong, it's now going to be 100,000. And I think that in 10 years the revenues will go from 13 or 14 billion from, from starting to, to about a trillion. So I think there'll be a trillion dollars of revenues in 10 years and about 7 or $800 billion of EBITDA and that's going to be worth some around $14 trillion. 14 trillion. The whole company is now valued for 2 trillion. That is just Starlink. So basically you're going to make seven times your money just for Starlink. Then in addition to that you have, that's still an inventory business. Then have compute AI. That's data centers in space. Man, this is so cool. If you want to have, you know, you know, I. You have to have data centers. Data says you can't build on Earth anymore, on our planet anymore, on the United States anymore, without political disruption.

[Becky Quick]

Right. Nobody wants it in their backyard.

[Ron Baron]

Right.

[Becky Quick]

How soon do you think we get to the point where we have data centers in space?

[Ron Baron]

27. 20.

[Becky Quick]

2027. That's a lot sooner than most people think.

[Ron Baron]

And then I think over the next three years they're going to have to describing to you the 10,000 to 20,000 satellites that you're going to have for Starlink. And now going to be 100,000. This is going to be a million satellites. A million.

[Becky Quick]

If we aren't and don't have data. Yeah, we don't have data.

[Robert Frank]

The rings around there. Are you going to go out in the Earth? They're going to see these rings. What's that? Debris? Comets? No, no.

[Ron Baron]

Even more amazing as he actually thinks he's going to do a million a year at some point. But I mean a million satellites.

[Becky Quick]

But 2027 is long before most people think is going to happen. They're thinking more five, six years down the road. Is that a problem? That's what I was going to say. How, how does this tie in? Does it change your own thesis if we're not there by 2027?

[Ron Baron]

No.

[Becky Quick]

Okay.

[Ron Baron]

He says I'm often, you know, I accomplish the impossible.

[Becky Quick]

Yeah.

[Ron Baron]

Often not on time, but. But I accomplish it.

[Becky Quick]

Right.

[Ron Baron]

So when. So Gwen Shotwell was telling me that when he started talking about bringing rockets back and landing them on Earth again. Where's he going to land them? He wants to land them on a barge in the ocean. Bringing it back, turn, shooting around, coming back. Landing on a barge in the ocean.

[Becky Quick]

Possible.

[Ron Baron]

How is that possible? Just every single thing he thinks about other people and it all ties to together anyways. Compute AI is that we're going to put these data centers in space. You're not going to have any cost for electricity because you got the sun and not going to have any cost for cooling because you got space. And those are the two biggest cold out there. And then in addition to cold, dark. Right. Bring a flashlight. So. So it's really. It's not a friendly environment.

[Becky Quick]

Would you ever want to live in space? In space? On Mars? On the moon?

[Ron Baron]

I think he's tempted. I'm not.

[Robert Frank]

Which one takes longer to get to on a Friday afternoon?

[Ron Baron]

Depends on how you get there.

[Robert Frank]

Well said.

[Ron Baron]

Yeah, so. So, so that one, when I was describing to you $1 trillion in revenues for Starlink, I think multiple trillions. Multiple trillions for compute AI in space, data centered. Multiple trillions, 70, 80% profit margins. That's business. Number two. The number three, he goes to TSMC and Samsung and says, you know, I need 50 times as many chips as you're now producing for the entire world. Fifty times as many as TSMC says, yes, great, Elon, but we can't do it. We have this really good point. Profitable business growing, we can't do that. And then he goes to Samsung, same thing. We can't do that. It's too much. And so Elon says, okay, I'll do it myself. So then he partners up with intel and he's going to invest 55 billion and then ultimately going to be 100 billion in total. But what we're going to do is we're going to have this opportunity for making chips. So right now we buy chips from Nvidia and we buy chips from Nvidia, we use, they make an 80% profit margin and we use roughly 6% of the content on those chips. 80% margin. So he thinks that with his innovations and making things, he's great at making stuff.

[Brian Sullivan]

Yep.

[Ron Baron]

So. So with his innovations, he thinks he'll be able to make things 99% less expensively instead of if they're a chip made for everyone. A chip only made for a couple purposes, like robocars, like robots and like data centers. That's all we need. And so we only need a couple of purposes, not everything. And so we're going to do that and we're going to have not so much to do it at lower cost, but what we need is we need way more than the industry is willing to provide us. And what that means is that we can't grow as fast as we want unless. Unless we have these chips.

[Becky Quick]

And the necessity is always the mother of all invention. And that's what Elon has, is always tackled. Ron, we are out of time.

[Ron Baron]

The last thing I would do is with the biggest thing of all, that's the anthropic and the ChatGPT and the Gemini, that is the AI. And that's something that they describe in a perspective, read this prospectus. And it's something like $25 trillion a year of annual revenues. They're addressing with enormous profit margins. And what they could do, they're emulating human behavior. And what they could do is they were replacing 20 and 25 dollars an hour people with 25 cents an hour chips. And the people who are replacing, we're going to get them other jobs and get them other training. We're still hiring more people at Space X and a Tesla than we did before. We're having a hard time hiring as many as we want, but we do get for I guess they hire between these two companies, they probably hire 30,000 people a year. They get 4 million applicants for 30,000 jobs a year. Anyway, thank you for having me on again.

[Becky Quick]

Thank you for coming in and congratulations on a very successful IPO and what you all have seen. We appreciate your time Ron and we look forward to talking to you again soon.

[Ron Baron]

Thanks.

[Becky Quick]

Thank you.

Coming up on Squawk Pod, the US And Iran have agreed to a peace deal to be signed this Friday. Vice President J.D. vance joins us with the details.

[Vice President J.D. Vance]

The agreement is fundamentally built around a two step verification process. We say to the Iranians, you are welcome to have access to an unsanctioned economy. You're welcome to be reinvited into the world economy, but only if you honor the commitments that you make in this agreement.

[Everpure Announcer]

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[Ron Baron]

I'm honored to make history and to

[Becky Quick]

make my community proud.

[Robert Frank]

Oh, what a brilliant tackle from Naomi Kerma.

[Becky Quick]

What would you like the Power to do? Bank of America Proud to be the Official bank of US Soccer bank of

[Ron Baron]

America NA Member FDSE this episode is

[Vice President J.D. Vance]

brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.

[Becky Quick]

This is Squawk Pod.

You're watching Squawkbox on cnbc. I'm Becky Quick along with Brian Sullivan and Robert Frank. Joe and Andrew are out today. The United States and Iran reaching a peace deal with the agreements to set to be signed on Friday Joining us right now to talk more about it is Vice President J.D. vance. And Mr. Vice President, thank you for being with us this morning. I think there's still a lot of confusion about what exactly is in this deal. Can you lay out the terms for us?

[Vice President J.D. Vance]

You know, first of all, good morning, everybody. Thanks for having us. So first of all, I think it's a great day for the American people because what this deal does fundamentally is two things. It immediately reopens the Straits of Hormuz. We're already seeing in the past 24 hours more traffic flow. You see oil prices coming down, but you also have the long term commitment that Iran will never develop or procure a nuclear weapon. Those are two very big wins for the American people. I think the important thing to understand is that the agreement is fundamentally built around a two step verification process. We say to the Iranians, you are welcome to have access to an unsanctioned economy. You're welcome to be reinvited into the world economy, but only if you honor the commitments that you make in this agreement. So that's the leverage point and simultaneously the enforcement mechanism we have over their nuclear program. And if you step back, the last point that I'd make about this is that we have affirmatively and comprehensively destroyed their nuclear program from what we've done over the last year and a half in the Trump administration. What this agreement does is say to the Iranians that you don't have access to the money to rebuild that nuclear program. But if you're willing to give up that program long term, if you're willing to accept the inspections and verification regime that's necessary to give us the confidence you're never going to have a nuclear weapon, then we want you to be a prosperous country and we will reinvite you into the community of nations. And that's fundamentally the two step process, the choice the Iranians have to make. Do they want access to the world economy. If so, they're going to have to give up the long term nuclear ambition. If they don't want access to the world economy and they don't give up that ambition, they're never going to have the resources to rebuild it from where it is today. So it's a big win for the American people. And I think the Iranians fundamentally have a good choice here in front of them whether to be a normal country or whether to be a country that continues to be to pursue a nuclear weapon, which they now have no capacity to do.

[Becky Quick]

Okay, sir, let me just make sure I understand this though. This is 60 days that they will have to kind of discuss and debate the issues surrounding the nuclear question. But for now, they are saying that they will reopen the strait. The United States is saying it will take down its blockade at the same time that there will be free passage, that no one will have to pay anything to go back and forth through this. The Iranians, I think, have suggested that this is just for the next 60 days. Do you get the sense that this is a more permanent situation where the strait will be reopened even beyond that 60 day period?

[Vice President J.D. Vance]

Well, our expectation is that the strait is going to be opened in a toll free way for the long term. And that's the sort of thing that we're going to figure out in these technical negotiations. You know, there are a lot of very important details to figure out that we're actually going to sit at the table and discuss together and figure out a path forward on these details. For example, they've committed to destroy and dispose of their stockpile of highly enriched material. That's the highly enriched uranium that they accumulated over the Obama administration and over the Biden administration. And what we've said is, okay, let's talk about how exactly we're going to do that. They want access to an unsanctioned economy. We've talked about, okay, we're open to that, but that would require a long term commitment to the inspection and verification regime that I just talked about. So a lot of these details are going to be figured out during those 60 day talks. We feel quite confident that we're in a strong position here. Fundamentally, we have the leverage. We have the diplomatic, economic and military leverage. But we also are extending an open hand to the Iranians and saying if you guys negotiate in good faith and you make that long term commitment not to develop nuclear weapons, then we are going to make sure that your country is successful. If, however, you refuse to meet us halfway, then we're going to continue to apply the pressure that we've seen build up economically in particular, and that's going to be bad for them. And fundamentally it's going to be bad for the region. So we hope they make the right choice. We feel pretty confident about where we are and we're going to just sit down and talk with them and see where they're willing to concede, where they're willing to make concessions and make some progress from there.

[Becky Quick]

Who's going to be signing this agreement on Friday from the United States and from the Iranian side of things? Because there's been a lot of questions about who's in charge in Iran and whether, when we're talking to someone, whether they represent all of those parties.

[Vice President J.D. Vance]

Well, one of the interesting things about what's happened just over the last few months is that our relationship with Iran has fundamentally transformed. You hear the president talk about the fact that we're dealing with a totally different group of people. That's absolutely true. If you go back to the Obama administration, we never had the direct line, really, over the past 47 years. We've never had this level of direct connection where the people at the highest levels of the United States government are talking to the people at the highest levels of the Iranian government. We expect the negotiating team from the Iranian side is going to be the speaker of the House, Golubov, and also the foreign minister, Arachi, along with a number of security officials and people who represent the different constituencies within their country. But we actually see, this is a very interesting thing about these negotiations is you see people, both the hardliners but also the more political people, saying, our relationship with the United States over the past 47 years has been a mistake. Let's turn over a new leaf. We're of course, going to verify that they actually mean it. But if they're willing to turn over a new leaf, the president of the United States has said we want them to be a successful country, and that's what we're aiming to negotiate towards.

[Robert Frank]

Mr. Vice President Brian Sullivan, thank you again for coming on the program. I want to follow up with that because I think it's incredibly important, what you just said, that if Mohammed Galiba, who is seen as a more hardliner, is at the table, that would be construed as an even better symbol, a better sign of where this negotiation may go. Would you agree with that, that that getting somebody like Mohammed Golibouff, the Speaker of the House, who is seen as more of a hardliner internally, would be viewed as the best possible outcome here, rather than one of the more moderates that might be seen as a little more pro White House. And yet you still might have this division and factions inside of Iran.

[Vice President J.D. Vance]

Well, I think the best outcome is a good deal for the American people, which we have. Fundamentally, we're dealing with everybody in the Iranian system. You know, there's the irgc, the sort of regime hardliners, the military side, there's the political leadership. And within the political leadership, you have people who are more hardline and less hardline. We expect to have a full spectrum of representatives at the negotiation on Friday. Again, we've been Talking to these people, sometimes indirectly, but sometimes directly. And that's what's fundamentally changed under the President's leadership. We are now speaking directly to the Iranian system. We have some good relationships there. So this is going to be a successful negotiation because, you know, we're not passing messages through various back channels anymore. We're actually talking to them. And when you talk to them, you figure out what's real, what's fake, what are they serious about, what are they not serious about. And the thing I'd add to that is we fundamentally have all the cards here. We don't have to give the Iranians anything if they don't make the commitments that we want long term on the nuclear program. And even if we just stopped here, what would be true? Their military is destroyed, the Straits of Hormuz are open, their nuclear program has been destroyed. And we have incredible economic leverage over them that we didn't have a year and a half ago. So we've got a lot of leverage here. But we also have the President saying to them, we're extending an open hand. If you guys want to meet us, if you guys want to change your relationship with the United States, we will change our relationship with Iran. That's the offer. And we're going to have to see whether they meet us there.

[Becky Quick]

Mr. Vice President, what do you do about Israel? Both the right and the left in Israel has been not thrilled with this deal. They've called us it a bad deal. Do you get them in line and how do you handle them when it comes to Lebanon? Because they're still there at the moment.

[Vice President J.D. Vance]

Well, first of all, I think there are elements within Israel that like the deal quite a bit. And I also think there's been some misreporting about the deal. One of the interesting things about the Iranian state media is that sometimes you'll have hard line elements really aiming at a domestic audience trying to sell the deal and in some ways honestly misrepresent the deal. And then sometimes you'll see certain elements in the Israeli media pick that up and run with it. I think when people see this deal, we hope to release the text this week, they're going to realize that this is going to make the whole region safer. And this is another way in which this is a transformative agreement. If you go back to, for example, the Obama jcpoa, what did we see? The entire Gulf coast coalition hated that deal because they felt like it empowered Iran to be a bad actor. What is the Gulf Coast Coalition saying about President Trump's peace deal, that they love it because they see it as an opportunity to build and create a new Middle east, not just for the next few years, but for the next generation. So I think that new Middle east, certainly Israel, is going to have a seat at the table. We think this is going to be great for everybody in the region, but most importantly, we think it's going to be great for the American people. And that's what we're aiming to do.

[Becky Quick]

Vice President Vance, thank you very much for joining us this morning. We appreciate your time and the upper on where things stand. And we'll be watching. Thank you.

[Vice President J.D. Vance]

We'll keep you updated. Talk soon.

[Becky Quick]

That's Squawk Pod for today. Thank you for listening and for starting your week with us. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin weekday mornings on cnbc starting at 6am Eastern. To get the best parts of that three hour TV show right into your ears, please follow some Squawk Pod wherever you get your podcasts. We'll meet you right back here tomorrow. Have a great day.

[Ron Baron]

We are clear.

[Brian Sullivan]

Thanks guys.

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