T-Minus One Week: SpaceX’s IPO 6/5/26

Summary

Squawk Pod — “T-Minus One Week: SpaceX’s IPO”

Date: June 5, 2026
Hosts: Joe Kernen, Becky Quick, Andrew Ross Sorkin
Guests: Leslie Picker, Robert Frank, Tim Higgins, Rep. Jay Obernolte, Rep. Laurie Trahan

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Episode Overview

This episode of Squawk Pod spotlights the upcoming SpaceX IPO — one of the largest and most anticipated public offerings of 2026 — and dives into its implications for Wall Street, retail investors, and wealth creation. The hosts also discuss fast-moving AI developments: Anthropic's call for an industrywide slowdown in AI progress triggers a bipartisan conversation with lawmakers about the right regulatory approach to manage risks and spur innovation. The show closes with updates on the AI regulatory framework drafted in Congress, how SpaceX’s IPO could make history, and Apple’s coming AI push.

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Key Discussion Points & Insights

1. Anthropic’s Call for an AI Development Slowdown

[04:49–09:21, 21:01–28:46]

• Anthropic, a leading AI lab, asks peers to slow the pace of development, warning about risks of self-improving AI systems ("recursive self-improvement").
  • Rep. Jay Obernolte (R-CA): "They're worried about recursive self-improvement, where AI algorithms start training themselves. And that's why they're saying we need to be very aware of the potential... I'm kind of an AGI skeptic. I don't think that's in months. I think it's in years, if it happens at all." [01:24, 25:01]
• Skepticism and Debate: Hosts note the practical and competitive challenges of a voluntary industry slowdown, especially across international borders.
  • Becky Quick: "The idea of getting all those competitors in different countries to agree seems basically an impossible task." [06:19]
  • Joe Kernen/Andrew Ross Sorkin riff on science fiction analogies, debating dystopian "singularity" scenarios and contrasting real short-term risks (deepfakes, hacking) with far-off AGI threats.
  • Rep. Laurie Trahan (D-MA): "We are just not willing to be relegated to the sidelines while these companies set the rules of the road." [01:44]
• Regulatory Outlook: Bipartisan draft bill seeks to strike a balance — placing federal guardrails while allowing innovation, with scheduled review for updates as technology evolves. Framework distinguishes between federal oversight of AI development and state-level oversight of AI deployment.
  • Rep. Jay Obernolte: "We're saying that Congress is going to write the laws regulating the development of AI and states are going to write the laws regulating the deployment of AI. And we think that just makes basic sense." [27:19]

Notable Quotes

• Andrew Ross Sorkin: "If I was a science fiction writer... What is something that could happen that would be worst case, bad for society?" [06:34]
• Rep. Jay Obernolte: "Americans need to be protected against the malicious use of AI, particularly by malicious human actors. But also we want to create a regulatory environment that allows all the good things that AI has to bring." [19:14, repeated at 23:56]

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2. Countdown to SpaceX’s IPO

[09:21–18:07, 31:34–41:03]

• Roadshow & Market Impact: JP Morgan hosts a SpaceX event for IPO investors; Elon Musk joins virtually, citing "a massive new growth phase" and the need for capital. [09:39]
  • Elon Musk (via Tim Higgins): "We're embarking on a massive new growth phase and we need capital for that." [10:21]
• Index Inclusion Tactics: NASDAQ fast-tracks SpaceX into the NASDAQ 100, creating instant index-driven demand. S&P 500, by contrast, does not adjust its rules for quick inclusion.
  • Joe Kernen: "NASDAQ has a financial incentive to put it in the index so that they can get the IPO. The S&P does not." [02:26, 12:05]
  • Leslie Picker: "If you do have SpaceX in the NASDAQ 100 but not in the S&P 500, you could start to see a bit of kind of performance diversion between those two." [13:15]
• Retail Investor Dynamics: SpaceX's IPO will allocate up to 30% of shares to retail investors via platforms like Robinhood, Schwab, and Fidelity (with minimums as low as $2,000 vs. the usual $100,000).
  • Tim Higgins: "The hope is that retail investors are going to play a bigger role in this IPO than you normally see. And that kind of gets at one of the core things that Musk is really about: retail investors." [37:19, 13:05]
  • Becky Quick: "Normally Fidelity requires that you have at least $100,000 in your account... I think they're dropping that level to $2,000." [15:37]
• Wealth Creation Machine:
  • Robert Frank: "This SpaceX IPO [is] likely creating the world's first trillionaire... several new billionaires and countless millionaires... People who took below market salaries for years in exchange for restricted stock or options—now finally they'll get the payoff." [32:00]
  • Insider groups of SpaceX employees are banding together to negotiate lower wealth-management fees, potentially setting trends for future tech liquidity events. [34:21]
• IPO Structure and Concerns: Small initial float (4%) is designed to buoy price and benefit from index demand. Discussion acknowledges possible price volatility and divergence from traditional price-discovery norms.

Notable Quotes

• Joe Kernen: "One of the reasons you would only have a 4% float is to buoy the stock... all sorts of things happening in terms of how this whole thing is constructed." [14:28]
• Robert Frank: "He has helped thousands, if not tens of thousands of employees, reach their financial dreams." [32:00]

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3. Apple’s AI Gamble — Next Week’s WWDC Preview

[39:04–41:03]

• Apple’s Place in the AI Wars: The company's upcoming developers conference (WWDC) is expected to focus heavily on generative AI, especially revitalizing Siri, possibly integrating Google’s Gemini model.
  • Tim Higgins: "The hope and the idea and the vision for AI is that it can be your personal assistant... the iPhone could be the device for that, it could be the hardware gateway into this new digital world of AI." [39:35]
• The conversation hints at Apple’s high stakes and strong competition from Meta (AR glasses) and OpenAI's rumored device.
• Changing of the Guard: This WWDC will also be a key moment for Apple’s incoming CEO.

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Memorable Moments & Quotes

• On AI Regulation:
  • Rep. Jay Obernolte: "I'm kind of an AGI skeptic. I don't think that's in months, I think it's in years, if it happens at all." [25:01]
• On SpaceX Wealth Creation:
  • Robert Frank: "This is one of the biggest liquidity events ever... likely creating the world’s first trillionaire." [32:00]
• On Retail Access to SpaceX IPO:
  • Becky Quick: "It's like a lottery ticket, right? If you put in for it, you may or may not—you know, long odds." [15:45]

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Important Timestamps

• [01:24] Rep. Jay Obernolte on AGI skepticism and AI risks.
• [09:39] Leslie Picker describes the SpaceX IPO roadshow.
• [10:21] Elon Musk (via Tim Higgins): "We're embarking on a massive new growth phase..."
• [12:05] Joe Kernen: Index inclusion incentives.
• [13:15] Leslie Picker: Impact of index inclusion on IPO structure.
• [15:37] Becky Quick: Lower minimum for retail IPO participation.
• [19:14, 23:56] Rep. Jay Obernolte and Rep. Laurie Trahan: On tech guardrails and bipartisan AI regulation.
• [27:19] Rep. Jay Obernolte: Federal vs. state roles in AI regulation.
• [32:00] Robert Frank: Scale of SpaceX wealth creation.
• [34:21] Robert Frank: Employee collectives negotiating lower fees.
• [37:19] Tim Higgins: Retail focus of SpaceX IPO.
• [39:35] Tim Higgins on Apple's AI ambitions for WWDC.

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Tone and Flow

• The conversation balances Wall Street insight, policy discussion, practical market information, and the signature Squawk Box blend of skeptical wit and deep-dive questions.
• Hosts are animated and unafraid to push for clarity or call out industry marketing tactics.
• Guest lawmakers are serious but pragmatic, emphasizing bipartisanship and iterativity in regulation.
• Excitement is palpable in discussions about the wealth ripple effect of SpaceX’s IPO — and accessible to both institutional and retail listeners.

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Summary Table: Episode Highlights

| Time | Segment/Topic | Key Points | |----------|---------------------------------------|----------------------------------------------------------------------| | 01:24 | AI Risks | Lawmakers address AGI hype vs. real risks | | 09:39 | SpaceX IPO Roadshow | Musk justifies timing; event details | | 12:05 | Index Dynamics | NASDAQ’s quick inclusion, S&P slow | | 15:37 | Retail Investor Access | Lower minimums, FOMO, “lottery ticket” chances | | 19:14 | AI Regulatory Framework | Balancing innovation, safety, states' rights | | 27:19 | Federal vs. State AI Regulation | Congress sets dev rules, states manage deployment | | 32:00 | SpaceX Wealth Creation | Massive gains for Musk, Shotwell, early investors, and employees | | 34:21 | Employee Wealth Negotiations | Collective fee bargaining for post-IPO windfall | | 37:19 | Tim Higgins on Retail IPO Allocation | Retail’s central role, Musk’s strategy | | 39:35 | Apple’s AI Strategy | WWDC focus, new CEO’s first test, market risks/competitors |

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For listeners who missed it:
This episode is a must-listen for anyone interested in technology investing or policy, offering exclusive insight into the mechanics of the SpaceX IPO, the vast personal fortunes it may create, candid debate about AI’s societal risks, and a close-up of live Washington consensus-building. The hosts balance skepticism, curiosity, and market acumen, making complex topics approachable and engaging.

Transcript

[Tim Higgins]

You never forget your first fan.

[Kyle Martino]

So how was practice, kiddo?

[Tim Higgins]

My mom inspired me to dream big and ask myself, what would you like the power to do? My answers helped me become the soccer player I am today, trusting my instincts and stepping onto the pitch without fear.

[Kyle Martino]

Bank of America champions U.S. men's national team member Tyler Adams and everyone who dares to ask, what would you like the power to do? Bank of America Proud to be the Official bank of US Soccer and FIFA World Cup 2026 bank of America NA

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[Andrew Ross Sorkin]

Member

[Joe Kernan]

Bring in show music please.

[Becky Quick]

This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, Anthropic is urging its fellow AI labs to agree on a slowdown of AI development. Two lawmakers drafting AI legislation weigh in. California Republican Representative Jay Albernolti.

[Representative Jay Obernolty]

They're worried about recursive self improvement, where AI algorithms start training themselves. And that's why they're saying we need to be very aware of the potential for that, but the consequences that we're looking at. I'm kind of an AGI skeptic. I don't think that that's in months. I think it's in years, if it happens at all.

[Becky Quick]

And Massachusetts Democrat Representative Laurie Trahan.

[Representative Laurie Trahan]

We are just not willing to be relegated to the sidelines. While, you know, these companies set the

[Becky Quick]

rules of the road, we are a week out from Space X's IPO on the nasdaq. Wall Street Journal business columnist Tim Higgins joins us.

[Tim Higgins]

Unlike a typical ipo, a larger share of stock is going to be set aside for retail up to perhaps 30%. And so Robinhood should have an allocation Fidelity, Schwab and others.

[Becky Quick]

And speaking of Space X, the S and P will not be fast tracking the company's entry into its index, the s and P500. But you know who did fast track it into its own index? The nasdaq.

[Joe Kernan]

NASDAQ has a financial incentive to put it in the index so that they can get the IPO. The S& P does not.

[Becky Quick]

Plus the trillionaire billionaires and many millionaires that IPO will make. And a Votorama on Capitol Hill. It is Friday, June 5th, and Squawkpod begins right now.

[Robert Frank]

Stand Becky by in 3, 2, 1.

[Joe Kernan]

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 Joe Kernan and Andrew Ross Sorkin. And it is Friday. Friday, as we like to say around here.

[Andrew Ross Sorkin]

June 5th, is it?

[Becky Quick]

Yes, you're right.

[Andrew Ross Sorkin]

You said that literally 40 seconds ago.

[Becky Quick]

I thought it was.

[Andrew Ross Sorkin]

Or I said that. No, I said that.

[Joe Kernan]

Not me.

[Andrew Ross Sorkin]

I almost forgot.

[Becky Quick]

Yeah, I thought it was Friday. Yesterday when Andrew said we'll see you tomorrow.

[Leslie Picker]

I what?

[Becky Quick]

We're back here for another day.

[Joe Kernan]

That's scary. Meantime, United States Senate holding a Votarama overnight just before 5am Eastern time. It passed a $70 billion budget reconciliation package to fund immigration enforcement agencies. Republicans defeated multiple attempts to add language to that bill that would permanently BAN President Trump's $1.8 billion anti weaponization fund. And President Trump, responding to pushback on his choice of Bill Pulte to be acting National Director of National Intelligence, saying the appointment is only temporary.

[Andrew Ross Sorkin]

He'll be very good again. It's not a permanent position we're looking at. We're interviewing people right now, but it's somebody just to take it over for a little while.

[Joe Kernan]

And then I asked why he thinks the polti is the best person for the job. Trump said he's a very smart guy and quote, you might find out some things about the rigged elections. So some more grist for the mill, if you will, about what you think Bill Paltry will be doing over the next couple of months.

[Andrew Ross Sorkin]

Say the same thing about the AG Initially, I don't know, maybe not. But that was supposed to be, that was going to be just acting and now that's going to be permanent. You can always change your mind.

[Becky Quick]

My guess is he says acting because there's no way. The Senate is very clearly indicated. There's no way.

[Andrew Ross Sorkin]

You got to see with Todd Blanche to whether there is any way there.

[Joe Kernan]

Anthropic calling for top AI labs to consider slowing the pace of development. And said systems are advancing so rapidly they may soon be able to improve themselves without human intervention. Ways that could pose risk to society. In a blog post, Anthropic said that Claude could complete software tasks in 2024 that took humans about four minutes. Now Claude can manage tasks that take humans 12 hours. Company says it would be a good thing for all frontier AI labs to slow development and give society more time to deal with the implications. But it warns that if a slowdown simply allows the least cautious actors to catch up technologically, it could leave everyone less safe. Now, anthropic solution requires multiple labs in multiple countries to agree to stop under the same conditions. And it's urging development of systems to verify that other companies have stopped or slowed development. Critics called anthropic safety warnings a marketing ploy designed to try to put anthropics or some of the regulatory brakes on open source competitors and potentially tout the capabilities of its own models. We should mention, I don't know if you recall, this must have been at least about two years ago when there was an effort afoot to get a signed letter by all of the AI labs to, to sign a letter like this. And you remember Elon Musk, I think and others were. There was a whole massive debate about this and everybody pushed back on it.

[Becky Quick]

But it's interesting, they said basically you're just trying to keep us from catching up.

[Joe Kernan]

From catching up. But. So this is, and the question is you, Is this marketing? Is this something else?

[Becky Quick]

I mean, on the face of it, it makes sense. You don't want to agree to do it. If not all your competitors don't. But the idea of getting all those competitors in different countries to agree seems basically an impossible task. So.

[Joe Kernan]

Right. So if you know it's impossible.

[Becky Quick]

Right.

[Joe Kernan]

Then is it marketing?

[Andrew Ross Sorkin]

Just if I was a science fiction writer and plenty have tried to predict what's going to. I'm trying to. What is something that could happen that would be worst case scenarios, bad for society. What kind of things are we talking about?

[Becky Quick]

Well, they've been like you said, they've been written about and they've been, I know, played out.

[Andrew Ross Sorkin]

And is it really, you know, what the singularity was based on? We have. It's almost the same thing as a black hole. You don't know what is on the other side.

[Joe Kernan]

We don't.

[Andrew Ross Sorkin]

The beginning of the universe. You don't know what. We don't have the ability to know what happened before or after. And I don't, I mean conjecture. I don't think we have any idea what we're talking about. The potential for something to happen. And what if it really started spiraling and it. I don't know, could it.

[Joe Kernan]

Yes, but I think we're still 10, 20, 30.

[Andrew Ross Sorkin]

I know, I know.

[Joe Kernan]

That's what we talked about. By the way, we were at the CNBC CEO summit earlier this week. That was. The whole conversation was what does it look like? Two professors who were. What does it look like?

[Andrew Ross Sorkin]

What does it look like? Scare me.

[Fidelity Trader Plus Announcer]

Scare me.

[Joe Kernan]

You want me to scare you?

[Andrew Ross Sorkin]

I want you to scare me.

[Joe Kernan]

The concept is not just that the AI models start to train themselves, but we live in an age of robotics. So you have to get to a point where we literally have robots, probably humanoid robots and other kinds of robots behaving in our society. So we robot. So society has. Now we have robots that are helping us. The robots, by the way, are building factories, they're building homes, they're doing things for us and they don't need us. At some point they decide their job is to build the new factory and then the new factory and then they decide and we try to stop them for whatever reason and they believe that they need to do that, then they come after us. That's how it gets.

[Becky Quick]

All of these AI labs have run experiments where they try and shut them down.

[Joe Kernan]

Right?

[Becky Quick]

They don't like being shut down, they

[Joe Kernan]

don't want to be shut down.

[Andrew Ross Sorkin]

Then they design a pathogen that wouldn't even touch them.

[Joe Kernan]

Yeah, and maybe, maybe they do that. By the way, you won't like this one because I know you have different views about climate, but there's.

[Andrew Ross Sorkin]

Oh, please.

[Joe Kernan]

No, there's an argument that they decide that they just industrialize the entire planet and therefore don't care.

[Andrew Ross Sorkin]

What do you mean I don't like climate? That's such a preposterous. I'm saying that CO2 is not the boogeyman. That's all I'm saying.

[Joe Kernan]

I understand that, but the. One of the arguments is that they industrialize the planet to such a degree that the planet becomes so hot and because they don't care about humans on Earth, that we all live in this other.

[Andrew Ross Sorkin]

From the.04% CO2.

[Joe Kernan]

You can debate that with the robots when. When you're the ubiquitous gas, when your skin burning essential for you can have that conversation with them.

[Andrew Ross Sorkin]

It's not correlated in the past. The SpaceX IPO roadshow is underway and CNBC's Leslie Picker is with us. This morning is the countdown to the space Giants listing on the NASDAQ one week from today. Hey, Leslie.

[Leslie Picker]

Hey, Joe. I heard your conversation about the numbers there and the pricing. I had asked my sources the same question. Was there anything to the 135 and the 555? It sounds like there wasn't. It was just the math that got them to the $75 billion raise. But to your point, JP Morgan hosting a SpaceX event last night for prospective investors in the IPO. Chairman and CEO Jamie Dimon interviewed surprise guest Elon Musk, who joined virtually. The conversation opened with a question about why SpaceX is going public now, to which Musk responded with an answer. About 100,000 satellites in the future of energy generation in space. But then he summed it all up in this exchange.

[Andrew Ross Sorkin]

We're embarking on a massive new growth

[Tim Higgins]

phase and we need capital for that.

[Andrew Ross Sorkin]

Okay, okay.

[Tim Higgins]

Number two, another thing is the revenue.

[Andrew Ross Sorkin]

Like, I also feel pretty good about like the revenue projections. Meaning like, like before, like revenue was

[Tim Higgins]

a little unstable, but now I feel like the revenue's like much more predictable.

[Leslie Picker]

We were also able to get an exclusive sneak peek at how JP Morgan decked out its new headquarters with moon rocks and 40 foot rockets in the elevator banks. You could see that there. And space themed sculptures around the lobby. However, there was another surprise that dropped last night as well. Guys. S and P Global saying it would not change the rules for entry into the s and P500, which is a blow to SpaceX by preventing it from fast entry into that benchmark. And that stands in contrast to what the NASDAQ did for quicker inclusion into the NASDAQ 100, which is seen as a tailwind for SpaceX, creating a cohort of forced buyers who track that index. However, the S and p has about 20 times as many assets tracking that benchmark than the NASDAQ 100. So it's very, very meaningful for this IPO.

[Andrew Ross Sorkin]

Guys think everybody stays private longer. The amount raised is getting bigger and bigger and bigger and everybody's going to get in more quickly eventually.

[Becky Quick]

The SpaceX rules were for three months. You had to be there for three months before they made an exception for SpaceX. I think the S&P 500 global is tougher, right, Leslie? You have to be there for at least a year and you have to meet revenue and potentially earnings numbers as well.

[Joe Kernan]

But I think there's a larger issue.

[Leslie Picker]

Yeah, no, that's exactly right.

[Joe Kernan]

The larger issue I was going to say that we should be talking about is NASDAQ has a financial incentive to put it in the index so that they can get the ipo. The question is, who is The S and P does not. So you have. The people who do not have the incentive are not doing it. The people who do have the incentive are doing it. Who are they serving?

[Andrew Ross Sorkin]

You think it's a real advantage for.

[Joe Kernan]

It's an absolute advantage to put it in that quick 100%. It is not just an advantage. It is not.

[Andrew Ross Sorkin]

Not forgetting the deal.

[Joe Kernan]

But it's an advantage to get to the deal because the New York Stock Exchange was not willing to do it

[Andrew Ross Sorkin]

because people need to buy it.

[Joe Kernan]

But this is a natural. This is an empirical experiment. You can see New York Stock Exchange wasn't willing to do it. NASDAQ was willing to do it. Okay, so who won nasdaq? You'll see. We'll see what the price is. But you're asking, like, what the incentive you have to always look behind the curtain and figure out what's happening immediately.

[Andrew Ross Sorkin]

Need to think it's, you know, conspiracy.

[Joe Kernan]

Conspiracy. And it's out in the public. It's, it's. You can see it in front of you.

[Becky Quick]

Leslie, what were you going to.

[Andrew Ross Sorkin]

I'm a homer. I like the net. I'm glad.

[Leslie Picker]

I was just going to say that the deal is really constructed in many ways for index inclusion. For example, you know, to Andrew's point, it creates this market of forced buyers very quickly after it goes public, which is a bullish case to actually buy into the ipo. And then they have this lockup structure to increase the float a bit quicker to make sure that it's a bigger weighting into the NASDAQ 100 index as well, which was part of their rule change. So the entire structure of the deal is kind of made a retail in mind. It is seen as such a big tailwind. And then the other thing that I'd point out too is that if you do have space x in the NASDAQ 100 but not in the S&P 500, you could start to see a bit of kind of performance diversion between those two if it comprises, you know, as it becomes a bigger and bigger part of the NASDAQ 100, but not in the S&P 500.

[Andrew Ross Sorkin]

Could I buy 100 shares as a retail.

[Becky Quick]

You can try. You can. There's.

[Andrew Ross Sorkin]

Supposedly it's easier, but I know he's given more to. I can't imagine you could buy. What's it, 135. I can't imagine. Look, there's places average person could buy

[Becky Quick]

and Charles Schwab and Robinhood are all going to have some.

[Andrew Ross Sorkin]

But that's what I mean. There's just no way, though it's going to be the same.

[Joe Kernan]

But then the other piece of this is you have only a 4% float. Think about that. One of the reasons you would only have a 4% float is to buoy the stock. I mean, there's all sorts of things happening in terms of how this whole thing is constructed on a relative basis to the full size of the company that are built around this. By the way, I could argue to you the idea that they are going to allow more retail investors into this. They're able to. One of the reasons arguably they're able to do that and think that it's going to work is because of the index buying on the other end. So typically they. Retailers are not retail investors are considered sort of fast money that they will sell right into the IPO if you know on the other end that you have an index that's going to be buying for it. All I'm suggesting is all of the sort of classic price discovery processes that take place in the IPO are going to diverge. In this case it's just different giving

[Andrew Ross Sorkin]

more to retail and the demand was going to be there. I don't even think you need to do anything to try to cheat on the demand. The demand is going to be ridiculous.

[Becky Quick]

Normally Fidelity requires that you have at least $100,000 in your account for it. I think they're dropping that level to 2000.

[Andrew Ross Sorkin]

You still can't. I guarantee you can't get any.

[Becky Quick]

It's like a lottery ticket, right?

[Andrew Ross Sorkin]

Yeah.

[Becky Quick]

If you haven't you put in for it. You may or may not, you know, long odds but you might be able to get.

[Joe Kernan]

By the way, if I was just to be 100% clear, if I was Elon Musk and SpaceX, I would be doing this. This is absolutely what they should be doing. There's nothing wrong with what they are doing. I'm just suggesting that the other sides of this, their incentives and their motives are not necessarily fully aligned in the same way that you would have thought around the way they used to think about these things.

[Andrew Ross Sorkin]

We have seen so many times we try for price discovery but you look back a year and it's like who knows? Remember Google was initially was not nearly as hot as. And then look where it is.

[Becky Quick]

And it depends on the fortunes of a very fast growing company. I think AI under the underwriter's own expectations, AI revenue has to increase 100 times. I mean this is a fast growing company and it's hard to get your arms around where it's going to be in a year's time.

[Andrew Ross Sorkin]

Did we bury the lead? Let me just check in this. Andrew. What's that? National Donut Day.

[Joe Kernan]

It is, it is.

[Andrew Ross Sorkin]

Well, did we bury the lead for you?

[Joe Kernan]

What I didn't know is.

[Becky Quick]

By the way, thank you Leslie. I don't know if she's still there.

[Joe Kernan]

Thank You, Leslie?

[Andrew Ross Sorkin]

Yes. Thank you.

[Becky Quick]

L A M D E. So you're welcome and sorry. If you were here, you'd get a donut, I think.

[Andrew Ross Sorkin]

Did you see what's in there?

[Joe Kernan]

I do not know.

[Andrew Ross Sorkin]

You didn't stop by to make a room? You get your makeup out here. But there's a.

[Joe Kernan]

There's donuts.

[Andrew Ross Sorkin]

A very good smell of. Of kind of a. It's a cronut caramel mixed with bacon smell. You know that smell.

[Joe Kernan]

Me too.

[Becky Quick]

They're cronuts. They're.

[Andrew Ross Sorkin]

Because there's bacon on some of them.

[Becky Quick]

There was before Joe got into the makeup.

[Andrew Ross Sorkin]

I haven't touched them. I haven't done any. I haven't done any.

[Joe Kernan]

Today is National Donut Day. There's apparently. What I learned today is there may be a second National Donut Day.

[Kyle Martino]

What?

[Joe Kernan]

I don't know. I need to look into this.

[Becky Quick]

No one would argue with this.

[Andrew Ross Sorkin]

I'm going to ask you one last time.

[Joe Kernan]

Yes.

[Andrew Ross Sorkin]

Don't you like having the feeling that you would love a donut? Do you wish you looked at a box of donuts and back to the GLP1 discussion?

[Joe Kernan]

That's not. I've had this conversation with people who take this medication. That's not how they feel. They want the donut and some of them will still have a donut as

[Andrew Ross Sorkin]

much as I want the donut.

[Joe Kernan]

They just won't have a dozen.

[Andrew Ross Sorkin]

They want the donut as much as you want it.

[Joe Kernan]

I don't know. I think. I just think you're so wrong about how it acts.

[Andrew Ross Sorkin]

I like my muscle mass.

[Becky Quick]

Coming up on 15 years. I think next.

[Andrew Ross Sorkin]

I like my 15 years. I don't want to lose this show. I also like my pancreas.

[Becky Quick]

Next month is the fifth.

[Andrew Ross Sorkin]

I looked this morning. Andrew. I looked this morning whether I should be on it. My BMI does not. I would.

[Joe Kernan]

It would be a bad.

[Andrew Ross Sorkin]

If I didn't have a comorbidity. If I didn't have a comorbidity, it would make no sense for me to be on that microdosing or not.

[Becky Quick]

Andrew's been on the show 15 years next month.

[Andrew Ross Sorkin]

Is that true?

[Tim Higgins]

Okay.

[Joe Kernan]

I think this is next month.

[Becky Quick]

And over the course of time. Do you remember National Donut Day when you actually ate like 17 donuts? We had the donuts.

[Joe Kernan]

I do. There was a time and I got older and they don't eat as many donuts.

[Andrew Ross Sorkin]

You ate seven or eight last year.

[Joe Kernan]

Yeah.

[Andrew Ross Sorkin]

How many?

[Joe Kernan]

I don't know. Today I'm not. I'm going to be good.

[Becky Quick]

Well, These are, these are not the glazed ones that you can eat.

[Andrew Ross Sorkin]

A bunch of Maple, maple, bacon maple. That was the word.

[Robert Frank]

Cheese will be next.

[Becky Quick]

Coming up on Squawk Pod, the bipartisan group on Capitol Hill that's working on AI legislation. California Republican Representative Jay Albernolty.

[Representative Jay Obernolty]

Americans need to be protected against the malicious use of AI, particularly by malicious human actors. But also we want to create a regulatory environment that allows all the good things that AI has to bring.

[Becky Quick]

And Massachusetts Democrat Representative Laurie Trahan.

[Representative Laurie Trahan]

Congress needs to work in a bipartisan way so that we put proper guardrails in this early phase.

[Andrew Ross Sorkin]

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[Joe Kernan]

AT&T business Wireless connecting changes everything.

[Becky Quick]

Welcome back to squawkpod.

[Joe Kernan]

Bipartisan lawmakers have unveiled a draft for a national AI framework aimed at streamlining regulation and managing catastrophic risks. The proposal seeking to temporarily override state laws for three years while establishing a federal oversight center to balance safety and innovation. Joining us right now with co authors of that legislation, Congressman Laurie Tran and Democrat from Massachusetts, Republican Congressman Jay Overnot. Good morning to you of California. We're all trying to understand the risks of AI in this moment. The big news, by the way this morning is that Anthropic, which of course is going public this fall saying there should be a pause, a stop to development because of the worries of where this could all go. I'm curious if you'd weigh in on that. But Also, maybe more importantly, you know, what kind of bipartisan support you think this bill that you've written now has?

[Representative Laurie Trahan]

Well, thank you for having us on. I think the news that you just shared about anthropic, coupled with OpenAI putting out a framework earlier this week and the White House executive order has all signaled what Congressman Obernolty and I know to be true, that this technology, while has a lot of promise, also creates threats. And so, you know, we welcome more people to this conversation because at the end of the day, you know, Congress needs to, you know, work in a bipartisan way so that we put proper guardrails in this early phase so that we prevent the risks to our cybersecurity, our national security, certainly to workers and the American people.

[Joe Kernan]

Is your sense, though, that there's a clear and present danger today? Do you think that the danger is in multiple years from now, decades from now? How do you, how do you all see that?

[Representative Jay Obernolty]

Well, there are a number of hazards that AI poses to Americans, particularly in the hands of malicious human actors. And we want to make sure that Americans are protected against those risks while still setting the groundwork for an industry that's going to have tremendous positive impact on American consumers, American economy and our national security. So we think the discussion draft that we put together accomplishes that, where we're balancing the guardrails that need to be put in place against still creating an environment that allows this industry to flourish and to bring all the good things it's going to bring to Americans.

[Joe Kernan]

And that's the big, that's the big question, which is, you know, oftentimes you hear folks, big proponents of AI, both in industry and elsewhere, say we are in this grand race against China, and frankly, if you put any, you know, stops in the system, we could potentially lose that race. What do you both think about that?

[Andrew Ross Sorkin]

Right.

[Representative Jay Obernolty]

Well, I mean, I think what you see in the proposal that we've put out is some balance, right? We, we are accepting that Americans need to be protected against the malicious use of AI, particularly by malicious human actors. But also we want to create a regulatory environment that allows all the good things that AI has to, to bring. And we think that what we've achieved here balances that very nicely.

[Andrew Ross Sorkin]

Congressman Overdolf, we saw a couple of weeks ago, and we were, you know, duly impressed with your Caltech degrees in UCLA and AI and all that. And you brought up something interesting. I guess, near term, it's, it's a malicious human that it could do. I mean, I don't even want to Think about it in terms of pathogens or however you want to hacking something, however you want to think. How long as someone who knows about it as a, you know, an advanced degree, how long before we. It's not a human, but it's actually a malicious AI entity itself that would do something.

[Fidelity Trader Plus Announcer]

That's got to be.

[Andrew Ross Sorkin]

Is that decades?

[Representative Jay Obernolty]

Well, I mean, that's something out of a Terminator movie, right, where an army of evil robots rises up to take over the world. And honestly, what you're talking about is what computer scientists call AGI, artificial general intelligence. And what you saw anthropic talking about is related to that. They're worried about recursive self improvement where AI algorithms start training themselves. And that's why they're saying we need to be very aware of the potential for that. But the consequences that we're looking at. I'm kind of an AGI skeptic. I don't think that that's in months, I think it's in years, if it happens at all. And I won't give you my hour long monologue on why. But what we're looking at is the short term negative consequences. And by the way, that's why the proposal that we have put out sunsets everything in the proposal related to regulation in three years. Because we want to make sure that Congress stays engaged on this issue. We can't regulate such a fast moving technology without taking a look at it frequently and making sure that the updates that need to be made get made as this technology evolves. And that's our intention.

[Joe Kernan]

Obviously there's been.

[Representative Laurie Trahan]

And I'll just.

[Joe Kernan]

Oh, go ahead.

[Representative Laurie Trahan]

I'll just add that, you know, at the moment, you know, we're not at the table right there. We don't have visibility, we don't have a reporting structure, we don't have an auditing structure. And you know, we are, you know, just not willing to be relegated to the sidelines while, you know, these companies set the rules of the road. So taking the best laws that have been passed by states to date and making them the national standard so that Congress can get more of an iterative approach around what the harms are today, what they may be tomorrow, and keep pace with the technology that's rapidly moving is the goal.

[Joe Kernan]

One of the other things I wanted to ask you about is what is a debate about states rights? You guys do represent different states. There is a number of states that would like to regulate this, that believe that states should have the ability to regulate things in their own states. There's also another argument to be made that states create almost a competitive regulatory structure. I'm not always in support of that, especially when there are national issues at play. But how do you think about that and what do you tell legislators in your own states about that?

[Representative Jay Obernolty]

Well, you know, this proposal does not completely preempt the states from regulation. We're trying to take a thoughtful approach that balances the need of the states to regulate some things against our obligation as members of Congress to regulate interstate commerce. So what we have proposed is a solution that's very similar to what we do with vehicle safety, where the vehicle manufacturing restrictions are regulated only once at the federal level because cars are mass produced in factories for distribution across all 50 states. But individual states write their own traffic safety laws, and that's a system that works very well. We're doing exactly the same thing with AI. We're saying that Congress is going to write the laws regulating the development of AI and states are going to write the laws regulating the deployment of AI. And we think that that just makes basic sense.

[Joe Kernan]

Okay, I'll just add one more, please.

[Representative Laurie Trahan]

We do make the distinction, as Jay mentioned, between development frontier development, model development and deployment and use. But also, you know, I think it's important to recognize that, you know, no one or two or three states are going to be able to protect our national security, our cybersecurity, our financial security. And so we need to, you know, incent Congress to come together and do something in a bipartisan way so that we have that strong federal standard complemented by what the states are doing in terms of mitigating risk on deployment and use of AI.

[Joe Kernan]

Want to thank both of you. We will follow the progress of this and so much more in the space. Appreciate it.

[Becky Quick]

Next on Squawk Pod, more Space X.

[Robert Frank]

This is one of the biggest liquidity events ever.

[Becky Quick]

CNBC's wealth reporter Robert Frank on the money to be made and Tim Higgins, Wall Street Journal business columnist and a CNBC contributor and an author of multiple books on Elon Musk. He weighs in.

[Tim Higgins]

The hope is that retail investors are going to play a bigger role in this IPO than you normally see. And that kind of gets at one of the core things that Musk is really about is retail investors.

[Becky Quick]

Plus, Apple's Developers conference is next week, too. A lot more on Squawk Pod right after this break.

[Keith Lansford]

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

[Joe Kernan]

Hey there.

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Sometimes AT&T business Wireless Connecting changes everything.

[Becky Quick]

This is Squawk Pod with Joe Kernan, Becky Quick and Andrew Ross Sorkin. Here's Andrew.

[Joe Kernan]

Welcome back to squawk box. The SpaceX IPO expects to lift off next Friday and it's going to be a big payoff for Elon Musk and many, many, many, many others. Robert Frank takes us inside the Space X wealth creation machine. We're going to have trillionaires, billionaires and a whole lot of millionaires. A whole lot of millionaires.

[Robert Frank]

Andrew, A lot of wealth being created because this is one of the biggest, biggest liquidity events ever. This SpaceX IPO likely creating the world's first trillionaire. We know that, but several new billionaires and countless millionaires. The expected share price of $135 will bring Elon Musk's net worth to over $1 trillion. We know that by now. The president of Space X though, Gwynne Shotwell, she's has shares that will be worth $1.7 billion. Bret Johnson, the CFO, also joining the 3 comma club, officially with a stake worth $1.2 billion. Luke Nosek, he's the venture capitalist and one of the PayPal co founders. He made a $20 million investment in Space X back in 2008 that could now be worth $4.5 billion. And the biggest winner next to Elon is Antonio Gracias. He, of course, the longtime ally of Elon's and the Space X board member. He and his company, valor Equity, owns 7.3% of SpaceX, bringing the potential value of that stake to over $130 billion. Other board members hold stakes worth hundreds of millions of dollars, not to mention the investors in Barron Funds, Ark Venture Fund and other early investors. For the full breakdown of the stratospheric wealth being created by SpaceX, you can sign up for the Inside wealth [e-mail] inside wealth a lot of focus on Elon becoming a trillionaire. What people miss is that he has helped thousands, if not tens of thousands of employees reach their financial dreams. They'll now be able to help their kids buy a house, they're going to travel, they're going to start companies. And so they've these are people who took below market salaries for years. That was the deal at Space X. You took below market salaries in exchange for restricted stock or options. Now finally they'll get the payoff.

[Joe Kernan]

There is a. There was a fascinating story earlier this week about this idea that the employees of Space X were almost acting as a collective with some of the Wall street banks about how the Wall street banks that are all trying to get their money.

[Robert Frank]

Yep.

[Joe Kernan]

From, from this would give them a below rate or different rate fee structure if they all worked together. What is going on there? Because that's fascinating.

[Robert Frank]

You're teasing my story. That going to be on Wednesday because I've done a lot of digging on this. You're absolutely right. It's the first of its kind. Employees of Anthropic are also doing it now because that IPO is coming up. It's a group of a couple hundred employees now with about $20 billion in assets. They've gone around not just to the broker dealers but mainly to the RIAs saying we want lower fees. We're acting as a collective. It's unclear how that's going to work out for Everybody but they want a lower fee. And it's, it's, it's setting a model for employees of IPO companies that we've already seen in anthropic and we may see with other companies down the road.

[Andrew Ross Sorkin]

Like what is 1% as 1%, the regular fee.

[Joe Kernan]

They're, they're seeking half of that.

[Andrew Ross Sorkin]

Right.

[Robert Frank]

It's, it's a sliding. So anything over $5 million investments typically like 50 basis points, they want to go down to 30 basis points. And so they're saying, look, we're, you know, you want our business and this is a huge amount of wealth that will continue growing, so it may be worth it.

[Andrew Ross Sorkin]

Bargaining power of size of money. Sounds like, sounds like Medicare purchase.

[Joe Kernan]

Are you surprised that Gwynne shot was not going to make more money? I was, I was instinct looking at that was. I was thinking she's been running this thing day to day.

[Robert Frank]

I what. That was the one thing what how many years everyone's told me that Elon's been great at the. Spreading the wealth to employees and we're going to have thousands of millionaires from this IPO. I was surprised at 1.7 billion compared

[Joe Kernan]

to nothing to seize at.

[Robert Frank]

But no, no, I mean, you're right. And that's what I tell myself is like, why am I even sort of saying that? That's not, I mean, 1.7 billion, that's extraordinary. But you're right, compared to what she's contributed to that enterprise value, it's a lot.

[Joe Kernan]

Robert, thank you.

[Robert Frank]

Thank you, guys.

[Andrew Ross Sorkin]

Apple's developers conference also kicking off on Monday. Joining us now to break down the headlines is Tim Higgins. He is Wall Street Journal business columnist and a CNBC contributor who has written books on Elon Musk and Apple. We were looking for a renaissance man that would have the ability to, to talk about both. Tim and you're up for the task, I imagine.

[Tim Higgins]

I'm here on National Donut Day.

[Andrew Ross Sorkin]

You are. I'm the only one who's, who's taken a bite of a donut so far, which is, it's. I don't, I don't understand. Tim. The. We know about how important retail investors are to Elon Musk. The first thing I just want to ask you, if I call up Robin Hood and say I want to buy 100 shares, I can't get 100. Well, we couldn't do that anyway. But there's no way, there's no way I could get any of this stuff. It's still not open to. I'm speculating Is there, I'm asking you, is there any way I could get in and get a round lot of this of Space X at the IPO price?

[Tim Higgins]

Unlike a typical ipo, a larger share of stock is going to be set aside for retail up to perhaps 30%. And so Robinhood should have an allocation. Fidelity, Schwab and others, depending upon the way they allocate it, you should be able to get some and not maybe not everybody, but definitely that's the hope is that retail investors are going to play a bigger role in this IPO than you normally see. And that kind of gets at one of the core things that Musk is really about is retail investors. It's helped him so much at his other company, Tesla over the years. Not just in the stock but also in social media out there as a cheerleader for whatever he does. He has said in recent years that there was a push to take SpaceX public. Those fans on social media were doing it. Musk has said, hey, I want retail investors involved because they have been so important to me over the years.

[Andrew Ross Sorkin]

Yeah, I know how it works. And the, the biggest client in the office, the office has 500 shares. It's like almost like giving a guy who does a lot of trading. It's different now because trading doesn't help necessarily but, but usually it's the most well heeled people in the, in the might or the biggest broker be able to allocate it to his best client or something like that. Sure.

[Tim Higgins]

I mean there's probably going to be a lot of, there's going to be a lot of FOMO here which probably gets into the reason why as SpaceX has said in its filing, that they expect potential for volatility in that share price in those early days as people are out there selling and buying and all sorts of wildness could occur on

[Andrew Ross Sorkin]

the same day that just to talk Apple for a second, the same day that we're going to talk with you about what they're going to introduce. The Journal's talking about Apple hopes for AI dominance. Man, they got a long way to go. I mean that, I mean how about baby steps?

[Joe Kernan]

Yeah.

[Andrew Ross Sorkin]

By fixing its malign chat bot. Will there be something exciting that they're able to tell us at this point? Because there's been false starts about fixing.

[Tim Higgins]

A lot of attention is going to be on AI in the iPhone, especially what they can do with Siri. You remember Siri was that chat bot, that chat kind of interface that was introduced more than 15 years ago that really has been kind of a dud. And this is the opportunity to breathe new life into it. Apple has a deal with Google's Gemini to be one of the foundation model behind that and really looking to see just how integrated it is, what you can do with it. The hope and the idea and the vision for AI is that it can be your personal assistant that can help offload tasks. And the bet here is that the iPhone could be the device for that. It could be the hardware gateway into this new digital world of AI. And the risk is if Apple can't figure it out, there are a lot of people who would love to take that position. The gateway to the digital world, Meta is out there with its glasses. Mark Zuckerberg making the argument that the glasses are the new computing paradigm. You've got others who are coming. OpenAI has talked about its own device. We don't know what it looks like or how it will be, but this is a spot that's going to become increasingly competitive and it's very important for what Apple is going to be doing. And it's going to be the test for the new CEO who's coming in in September. That's one of the things I'll be looking for next week is just kind of how he's involved in some of the pomp and circumstance.

[Andrew Ross Sorkin]

Exactly. We could talk about either one of these things till 9 o' clock with you. I know, but they just told me we got to go, so I don't know, we got to do something. Tim, thank you.

[Becky Quick]

That does it for Squawkpod for today and for the week. Thank you for tuning in. Squawkbox is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern to catch them live. To get the best bits of that three hour TV show right into your ears, please follow Squawkpod wherever you get your podcast. Podcasts, have a wonderful weekend and we'll meet you all right back here on Monday.

[Robert Frank]

We are clear. Thanks, guys.

[Keith Lansford]

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