Podcast Summary: The Exchange (CNBC)

Episode Title: A 'Code Red', A Bitcoin Bounce & A Food Fight – December 2, 2025
Host: Kelly Evans

Episode Overview

This episode of The Exchange covers the latest in tech innovation, financial markets, and disruptions across AI, crypto, and consumer sectors. The conversation zeroes in on OpenAI’s ‘code red’ for ChatGPT, the performance of tech and industrial stocks, Bitcoin’s sharp rebound, and the evolving food delivery wars sparked by Amazon’s entry. Notable guests include tech journalists Deirdre Bosa and Steve Kovach, Barron’s Tae Kim, Piper Sandler's Michael Kantrowitz, Mizuho’s Dan Dolev, Bank of America’s Jill Carey Hall, and Citizens’ Andrew Boone.

Key Discussion Points & Insights

1. AI Arms Race & OpenAI’s ‘Code Red’

[00:45–13:58]

• OpenAI’s Internal ‘Code Red’: Triggered by performance and engagement concerns with ChatGPT, especially as Google’s Gemini surpasses it on benchmarks.
  • Deirdre Bosa (02:47): “It’s sort of just this idea that this is their crown jewel, but also their single point of failure. OpenAI hasn’t diversified all that well. Everything’s still riding on this chatbot. That is vulnerable.”
• Competition Heats Up:
  • Google’s Gemini shows users are spending more time on their platform, highlighting a shift in user engagement.
  • Tech advances are now “weeks not months” ahead; leadership rotates rapidly.
  • Sam Altman’s memo signals imminent release of a new “reasoning model.”
• User Stickiness:
  • Kelly Evans (04:11): “I’m kind of defaulting to chatbots because that’s just where I’ve had my history…”
  • Personalization and memory features of ChatGPT keep old users even amid claims Gemini is superior.
• Bullish Signs for AI Sector:
  • Tae Kim (04:40): “This flurry of media coverage on Gemini… That’s extremely bullish for the entire adoption progress space.”
  • New Nvidia Blackwell clusters expected to boost ChatGPT’s power soon.

Big Tech’s Strategies

• Apple's Unique Play:
  • Integrating AI privately with user data on devices, not chasing traditional engagement metrics.
  • Steve Kovach (05:47): “What if the chatbot could tie into your email, your texts… in a private way? That’s the pitch Apple’s going to make.”
• Concerns on Engagement Tactics:
  • Push notifications and engagement-boosting methods can become intrusive, raising flags over responsible growth.
  • Steve Kovach (07:43): “Huge red flag… When they need to boost engagement, they do some junky things.”

Hardware Competition

• Google’s TPUs vs Nvidia GPUs:

  • Custom processors (TPUs) allow Google and others to drive down costs and boost efficiency.
  • Deirdre Bosa (07:47): “Google is able to do things like distribute [AI] through AI mode to potentially billions of users.”
  • Tae Kim (11:56): “I’m very confident Nvidia is going to be dominant over TPUs.”
  • Limiting factor: Only select companies have the capacity to deploy TPUs effectively. Nvidia remains the go-to for most enterprises.

• Apple’s Approach:

  • Runs its forthcoming AI services on its own consumer chips, making deployment cheaper and more scalable.

2. Stock Market & Macro Perspective

[13:58–21:22]

• Market Rally Context:
  • Michael Kantrowitz (14:38): “The market’s been very focused, of course, where interest rates are going… We started seeing the labor market soften. This is softer employment providing for lower rates.”
  • Lower rates are broadening the market to include manufacturing, housing and transportation, setting up for strength into 2026.
• Reframing Cycles:
  • Kelly Evans (15:50): “In inflationary episodes… once you have employment softening and the Fed’s cutting, that means you’re through the bear market. That actually is the beginning possibly of a rally…”
• Earnings & Sector Opportunities:
  • Industrials (like Boeing, Caterpillar) and healthcare seen as dual beneficiaries of AI adoption and cyclical tailwinds.
  • Small caps’ recent rally has been PE expansion, but sustainable gains will require earnings growth.

3. Crypto Comeback – Bitcoin’s Rebound & Investment Strategies

[23:06–28:12]

• Market Overview:
  • Bitcoin jumps 7% after its worst day since March, pulling crypto-related stocks up.
• Best Plays for Crypto Rally:
  • Dan Dolev, Mizuho (23:42): “If you want to play it when it goes up, you buy Robinhood… You get all the benefit when crypto goes up, but it doesn’t suffer as much on the way down.”
  • Robinhood’s resilience cited—only 20% of revenue is crypto, but enjoys “crypto juice” on rallies.
• What Happens if Bitcoin Drops?
  • Dan Dolev (25:08): “If bitcoin keeps going down, then altcoins are going to go down even more and then the entire sector is going to take a beating… Robinhood remains the best relative play.”
• ‘Yield’/Treasury Companies Like Microstrategy:
  • Embracing leveraged plays on Bitcoin’s price—works only if Bitcoin keeps rising.
  • Dan Dolev (26:37): “When we initiated coverage, we called it a lever for the believer.”
• Stablecoins & Circle:
  • Stablecoin issuer Circle struggles as revenue falls with dropping rates and increased competition.
  • Dan Dolev (27:36): “It’s a great feature. Stablecoins are a great feature… But it’s not a business. It’s only a business when rates are high… Everyone’s going to have a stablecoin, so why do you need USDC?”

4. Small Caps and Earnings Recovery

[33:40–38:23]

• Bank of America’s Bullish Take:
  • Jill Carey Hall (33:40): “Profits have finally recovered and they’re expected to continue to recover so that they outpace large cap profits growth next year.”
  • Small caps typically outperform in early cycle recoveries—analysts now revising earnings upward.
  • Carey Hall (35:11): “Small caps’ earnings get hit harder in earnings recessions and then see a bigger bounce.”
  • Tailwinds: Rate cuts, recovering profits, potential deregulation, and positive manufacturing data.
  • Watch-outs: Thin margin for error and sensitivity to credit quality.
• Active Management:
  • Carey Hall (37:10): “90% of small cap funds underperformed this year.” Passive strategies may be safer, but next year’s broader rally could lift more boats.

5. Real Estate: Falling Rents and its Implications

[39:27–41:15]

• National Rent Data:
  • November saw a 1% decline in national median apartment rents (fourth monthly drop); rents are down 1.1% YoY and 5% from 2022 peaks.
  • Vacancy rates at 7.2%, near record highs due to post-pandemic construction boom.
  • Diana Olick (40:57): “It looks like they [rents] will [keep falling] until we get this new supply out of the system, which could be through next year.”
  • Weak demand, especially as new household formation slows among young renters (many living with parents).

6. Food Fight: Amazon Ups the Ante in Grocery Delivery Wars

[41:15–46:29]

• Amazon’s Strategy:
  • Testing ultra-fast (30 minute) grocery delivery and integrating fresh food offers more directly into the Amazon experience.
  • Poses risk for Instacart and DoorDash—both seeing share fluctuations on the news.
• Challenges and Opportunities:
  • Andrew Boone (42:22): “Amazon itself without Whole Foods does $100 billion of grocery sales… But the question is how do you get more of that perishable?”
  • Amazon reluctant to cede ad revenue or user experience to third-party delivery firms (like DoorDash).
• Host’s Frustration:
  • Kelly Evans (42:51, 44:03): “I wish Amazon would just put Whole Foods on DoorDash… For anyone who wants to just get Whole Foods delivered, it takes forever and it’s a horrible process.”
• Differing Perspectives:
  • Boone notes the experience is better in suburbs where people can plan for wider delivery windows.
  • Quick turnaround likely depends on improved logistics and increased consumer awareness.

Notable Quotes & Memorable Moments

• On AI Competition:

  • “The models are no longer the moats that they used to be.”
    —Deirdre Bosa (02:47)

• On User Loyalty in AI:

  • “I have my history, I have my searches. It knows me, and I don’t want to spend that time with someone new.”
    —Kelly Evans (04:11)

• On Crypto Investment:

  • “Robinhood remains kind of the best play… having it but not suffering from it.”
    —Dan Dolev (24:12)

• On Stablecoins:

  • “It’s only a business when rates are high, and it’s going to be raining stablecoins.”
    —Dan Dolev (27:36)

• On Economic Cycles:

  • “In inflationary episodes… the Fed’s cutting means you’re through the bear market. That actually is the beginning possibly of a rally and a broadening.”
    —Kelly Evans (15:50)

• On Small Cap Funds:

  • “90% of small cap funds underperformed this year. So, what does that tell investors? Just go with the index.”
    —Kelly Evans (37:10)

Timestamps for Important Segments

• AI & OpenAI’s 'Code Red': 00:45–13:58
• Macro Market/Earnings Outlook: 13:58–21:22
• Crypto (Bitcoin, Robinhood, Stablecoins): 23:06–28:12
• Small Caps Outlook: 33:40–38:23
• Real Estate – Falling Rents: 39:27–41:15
• Amazon Groceries/Food Delivery: 41:15–46:29

Episode Tone

• The episode maintains a fast-paced, newsroom-style analysis punctuated by lively, sometimes wry commentary from the host and guests.
• Tone is direct; the discussions aim for clarity and actionable insights amid often complex subject matter.

Conclusion

This episode showcases the interconnectedness of tech, finance, and consumer behaviors—from the fierce AI platform competition and crypto market dynamics, to supply-driven housing shifts and the continued disruption of everyday services like grocery delivery. The conversations offer insight into both headline business stories and practical impacts on investors and consumers.