we had tom barkin, mayor adams. we'll have him back. final check on the markets. you can see, got the nasdaq up just a little bit, but that would be another high, another new high, and then the dow jones indicated a little bit lower. we did five days this week. >> five. full five. >> yeah. >> how about you? >> sick. >> let's think about that four-day week. let's just think about it. put it on the table. join us next week. "squawk on the street" is next. ♪ good friday morning, and welcome to "squawk on the street," i'm david faber with jim cramer. we are live from post nine of the new york stock exchange. carl will be back on monday. let's give you a look at futures as we get ready to start the final trading day of this week. that doesn't do much of anything for me, probably not much for you either. let's move on to our road map, though, because that does begin with a lot of interesting news.

first of all, that a.i.-fueled boom, dell shares surging. nasdaq coming off its first closing high in more than two years. and ray dalio down plays talk of a tech bubble. plus new york community bank corp. is warning of material weakness in its accounting, and it's dragging down a number of other regional banks. that bank stock is also down sharply. >> suboptimal situation. and in the land of lawsuits, elon musk, suing openai, accusing it of putting profit before humanity. >> didn't you ask him about this? >> i did. i did. and we'll cover that. but first, let's get to the markets. obviously, a new month. happy march. >> yes. >> february, obviously, we had a nice run of things. >> jeff marks, my partner for the investing club, happy birthday. >> happy birthday. >> not mine this time.

what do you want to talk about as we look ahead to the month of march? what's in your mind? i want to obviously get to the dell earnings in a minute, but just give me your overall take on where we are and where we're headed. >> sure. i think that we actually, at the end of the month of february, started seeing why nvidia was important. we started realizing that there are companies that are far ahead, because they're using a.i., and there are companies that are being left behind. there are companies that have made it so that they're getting a lot of new customers, and ones that aren't, and i'm going to do something that's a little class-oriented. the big guys have it. and the little guys don't. so, you're going to see, i think, a widening gulf between the rich companies and the small and medium-size business and even though there are companies like adobe that are frantically trying to help the smb, so to speak, only the big guys can

afford what jensen's putting out, jensen huang. >> and so, of course, i mean, it requires enormous computing power to run generative a.i. models. >> and therefore a lot of money. >> or at least given just what you have to actually do. and it's hard to afford an h-100 for most. >> with the h-200 coming. >> won't the application start to filter down eventually to these companies that you're discussing that perhaps are not in a position to have their own servers running and/or paying for the enormous compute that they need to do it initially? >> well, i think that filter down is absolutely right, but right now, and we'll get to dell, but you look at dell versus hpe, which i know you know. dell got the h-100s. dell got the finest -- got the finest chips from amd. >> right. >> which are also a.i.-oriented, and we're talking about a huge amount of storage that's needed. i don't want to get too in the weeds here, but what i'm trying to say is that when you look

at -- i have some companies on. i'm not going to pick on them tonight because they're nice companies. but david, we're aware you can either cover the $100 billion to $300 trillion companies, and the numbers are just extraordinary, whether everything else is 30 or $40 billion. and you find yourself saying, why should i look at a company that only had a billion dollars in revenues? it's unimportant. this is an amazing time, because the big companies, you're talking about revenues that are -- make it so that mag seven actually makes sense. there's, like -- whenever i look at a company, i think, why am i wasting my time? >> well, first of all, that goes against so many of the things you've talked about, which is the opportunities everywhere, jim. you're not going to stop saying that. >> but saying in the last ten days of february, when we sit back and look at the quarter, we realize there are companies like celsius where you can double very quickly on a short squeeze. there are companies that get takeover bids, and then there are companies like dell that

overnight we realized was the one that had the cards, therefore, they have the servers. therefore, they have brought a.i. to a level that i think that is shocking. >> let's talk about dell. >> yes, absolutely. >> orders for a.i.-optimized servers, 2.1 billion in a quarter, after recording just 100 million in the quarter. excuse me, 100 million in orders during the month of october. given the acceleration, a.i. backlog at the end of the quarter was 2.9 billion, up 80% from the last quarter. in addition -- >> remember, that's consecutive quarters. not year over year. >> enabled dell to ship 800 million in a.i. servers in the quarter, up from half a billion last quarter, accounting for roughly 15% of server and networking revenue >> and you also need high bandwidth memory, storage, and you need networking, and that is broadcom, so they're going to distinguish themselves. that could be up a couple

hundred. today, power scale storage is so important. the cost of gpus, no one can afford not to have the right storage, and dell has the storage. it's from the company jeff clark, a remarkable conference call. >> we should make the point, it's not about pcs. this is about a.i. servers. >> what i'm saying is that people are now beginning to realize use cases, where if you have a.i. servers, and you are able to ask your data the right questions, and i mean that, ask your data the right questions, you will get answers that make it so that you're head and shoulders above your competition. so, this is a have/have not market. we back away. the reason i'm talking about this is because what it says is, for instance, ray dalio, i don't know if you saw, he was saying that mag seven is measuring a bit frothy but is not a full-on bubble. when you read about what we have here that's developed, whether it be with salesforce, whether it be with dell, whether it be with hpe that doesn't have it,

whether it be amd that does have it, you realize that these gains, amd is up 30 points in the last few days. dell could be up 40 today. i mean, these are -- >> these are enormous gains. yeah, you see what dalio had to say. this is a guy that's typically talking about the end of the world coming, so i don't know how much we care. by the way, anybody interested in dalio should read that book, "the fund." oh my god. that's some wacky times over there at bridgewater, man. wow. >> really? >> he's no longer there. >> what is it -- what was it about? >> just very cultish. >> guns? >> no, not guns. just crazy. and over his many, many long career, he's -- yeah, his predictions have not -- >> look, i don't want to get away from the rest of the market. >> please don't. >> i'm just saying the first two months of the year, a lot of people would have felt that a.i. was a joke, that it's -- it

became funny. you would read a call from a food company that says, we're using a.i. in the last ten days, it crystallized that there are companies with real a.i., and they're crushing it. servicenow is crushing it. salesforce was down 15% when they reported and closed up first. if you talk to state farm, they're using it to break away from the insurance pack. state farm. you know? you know, state farm, like -- >> i know state farm. i'm just trying to get a sense here, i mean, with dell up that much in terms of what the multiple is going to be. >> okay, 17 times -- >> whether or not higher multiples are deserved. obviously, given these higher growth rates, as a result of what you're pointing to, which is these companies that are seeing meaningful increases in revenues and earnings as a result of a.i. >> but you see, mellius, which has been the best on this, ben rice, he had this early on in dell. he said, look at 2027 numbers,

$152 price target, because why shouldn't they get a 27 multiple? so, again, what i'm saying is that -- >> well, no, ten bucks -- what was his price target? >> this is '27. >> okay. >> but i'm saying that what happened here is that we went from thinking, bubble, bubble, bubble, toil and trouble to, who has it and who doesn't? that's what happened in the first two months of the year. >> yeah. >> and the only other company away from this is lilly. excellent documentary last night by our own melissa lee. >> big shot. >> and lilly, i understand when they get, and it's going to happen this month, approval for the alzheimer's drug -- >> it's fueling so many different narratives,even within the mag seven, of course, because we talk so often about alphabet and whether they have made any number of missteps when it comes to generative a.i. or what threat that represents to their monopoly on search. we've talked about apple a number of times over the last couple days as well, not having it as of yet. what is to come from them?

so, it colors all of the sort of perspective on many of these big companies, whether they're putting the numbers up or whether they're not and will or whether they're missing an opportunity. >> you have to find it in strange places. you find it in the dell quarter, which is jeff clark talking about these numbers that he didn't expect. barry's excellent conference call, the ceo of best buy, it's in this, blah, blah, blah, and someone asks her, what's selling well? the ray-bans. zuckerberg's ray-bans. i knew they were hard to keep in stock. >> i didn't know you could buy them at best buy. >> yes, you can. and the samsung phone taking big share. a.i. that one is loaded with a.i. you can translate. you want to speak to somebody in italy because duolingo can't teach you italian? boom. you're speaking italian. what it says is the 16 is going to have all this, david. the 16 is going to be a step

function for apple, and despite that fact that it was downgraded, i'm ignoring to downgrade. >> got it. >> i'm going to act as if that didn't occur. >> okay. >> i'm going to forget that the downgrade was made. coming up right here, elon musk, speaking of a.i., he sues openai that started all this with their generative a.i. chat bot, and sam altman, the founder of the company. plus a flashback to what musk told me about that start-up. this was last may. we'll give you a look at futures here as we have a lot more "squawk on the street" straight n'gonyeru.yo dot awhe. how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know.

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and stay connected to the things you love. ah, they'll be like this for hours. hello dad, hello dad, hello da. uh-oh. good bunnies. ahh! elon musk had filed a lawsuit in a san francisco court against openai and its ceo, sam altman, for breach of contract. musk alleges that the company abandoned its founding mission to develop a.i. for the benefit of humanity instead of profit. he helped to create it, of course, the maker of chatgpt in 2015, put in as much as, i think

he said, $44 million, maybe as much as $50 million. complaint's interesting, just reading through it. gives you a quick little history if people are interested in the history of a.i. from gary kasparov playing chess against it in the '90s and deep blue to where we stand today. jim, this has not been unexpected. in fact, when i spoke to musk at tesla's annual meeting last may, so, let's call it, what, some almost nine, ten months ago, i asked him, given his previous sort of protestations, whether, in fact, he might sue openai. we can take a listen. >> you're very disappointed in what's happened there in terms of it becoming a for profit. are you going to take any action, sue them in some way? >> i do think that there's some -- look, it does seem weird

that something can be a nonprofit open source and somehow transform itself into a for profit closed source. i mean, this would be like, let's say you funded an organization to save the amazon rain forest, and instead, they became a lumber company and chopped down the forest and sold it for money. and you would be, therefore, like, well, wait a second, that's the exact opposite of what i gave the money for. is that legal? that doesn't seem legal. and if it is -- and in general, if it is legal to start a company as a nonprofit and then take the ip and transfer it to a for profit, that then makes tons of money, shouldn't everyone start -- shouldn't that be the default? >> right. >> and then i also think it's important to understand the -- like, when push comes to shove, let's say they do create some

digital super intelligence, almost god-like intelligence, well, who's in control? and what exactly is the relationship between openai and microsoft? and i do worry that microsoft actually may be more in control than, say, the team at openai realizes. microsoft, as part of the microsoft's investment, they have rights to all of the software, all of the model weights, and everything necessary to run the inference system. >> kind of gives an interesting background to why they would have moved forward with the lawsuit. in fact, there is some, given what he said in that interview, some nine and a half months ago, jim, thought it might have been sooner that we saw legal action. >> i remember that part, and i just said -- i initially said -- and i think to a lot of people said, oh, couple billionaires sitting around being angry at each other, but when you listen to it closely, there's a real disclosure issue here. remember, microsoft's a public company, made it so it's public, and i think that you don't turn a nonprofit into a profit. it's entirely possible you can

say, look, we have nonprofit stuff, but let's spin that off if we find something profitable. maybe you could sending it back the nonprofit? i listen to musk, and it seems like it's obvious that altman did something wrong here. >> it will be very -- it will be worth watching closely. there's no doubt about that. in terms of their reference to the 2015 sort of founding agreement and what it memorialized and what it said. obviously, he was -- musk was the main funder back in the earliest days of the company. unclear what the outcome will be, certainly, at this point, jim, or exactly what it is he wants, musk. you know, i reached out, but i don't expect we're going to hear anything. >> is there any aspect of it that's just, he wants to inflict pain? >> i don't -- i'm not certain. i know that he has been frustrated for quite some time, as you heard in terms of the change and his concern overall that a.i. will be a threat to humanity.

that said, tesla is obviously very much developing its own, and you know, full self-driving is reliant on it. they've taken a new approach fairly recently in terms of using generative a.i. to power full self-driving, i believe. >> right. >> and that could result, finally, in the breakthroughs they need to actually bring this technology to a car near you in a way that musk has promised for many years and not yet delivered. >> it's the authorities that have made this so hard. we're in this mode where cars cause a huge amount of f fatalities that are driven by humans. if one person is killed by self-driving, we shut it down. >> it makes no sense. >> think about what it's like to have some drunk or drowsy person at the wheel. >> what is it, 30,000 people a year? >> you can't deal with local municipalities and the insurance companies. but david, i just want to go

back to some of this. you talked to musk. let's say he doesn't like bob iger. >> well, we know he doesn't. he's frustrated. >> it's personal. >> yes. >> i think a lot of us aren't used to things getting personal so quickly. now, when i listen to him here, it's obviously been simmering for a very long time, but personal usually doesn't figure in business. but musk takes these things to a level where it's insulting to him. >> yeah. but the lawsuit reads pretty well. >> it does. >> yeah. i mean, listen, again, i'm no -- i'm not a legal expert. >> who's he using, do you know? >> i can tell you. it's not -- it's irel -- >> shoot, man, they're good. it's big time. >> big legal team as you might imagine. >> i applied to them once. >> superior court of california, county of san francisco. >> liberal court. >> the relationship between microsoft and openai, obviously, the for profit, even though it's

still a not for profit, bosa talking yesterday about the s.e.c. investigation and what occurred with that very brief period under which altman was pushed out and then returned. there are crazy things going on here. >> altman stuff with microsoft, where i think microsoft obviously, straightforward company, i've never heard them violate any disclosure issues, but altman almost asks as if disclosure is at the behest of him. not when you mix it up with microsoft. >> openai is still a private company. hasa 70, $80 billion value based on the last place of california. >> microsoft has to disclose everything. a la the musk lawsuit where he didn't disclose everything properly to the dissenting shareholders, but again, you and i might say -- i might say, you made so much money. shut up. but that's not the way the law works. >> no.

so, we'll be focusing on this. don't forget, though, of course, tesla in its own -- i mean, they are a huge buyer of your friend, mr. jensen huang's h-100s. >> that last conference call, he said, yeah, nvidia has it. there's nothing we can do. by the way, dell has the 200, which is the next iteration. and that is going to really separate the haves from the have nots. david, this is really huge, the have/have not economy. >> meanwhile, we'll see what chatgpt 5 is going to look like or 6 or 7. >> i use it every morning. used it again this morning. use it every day. >> all right, use it for your "mad dash," then. ask it what you should do for your "mad dash." >> sure, sure. >> that's what we got coming up here. we got an opening bell as well, less than eight minutes away on this friday. last trading day of the week, of course. more "squawk on the street" straight ahead.

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and look forward to a more confident future. voya, well planned, well invested, well protected. >> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. welcome back. let's get to a "mad dash." we suspend a lot of time talking about dell.

can't help but think about hpe -- sorry, hpq, but now we want to move on to hpe, which reported earnings after the bell yesterday as well. >> dell will be up the most of any stock today, and i think hpe is a possibility to be down the most. there was a moment in the conference call where it was just a jaw-dropping moment. antonio, who was on this morning, he says, "first i will touch on our revenue, which was lower than expected in large part because network and demand softened industrywide." untrue. untrue. we know that dell said, network and -- network demand strengthened industrywide. just untrue. "the timing of several large gpu acceptances shifted. didn't get the nvidia. michael dell got the nvidia. additionally, we did not have the gpu supply we wanted, curtailing our revenue upside." weren't able to provide bringing a.i. to you, in other words. these are all things that he

sk screwed up on. "however, gpu availability remains tight." michael dell has the gpus. "and our delivery time has been delayed." broadcom and dell, no. >> so, you need to draw the contrast even more so then. dell is -- was able to get access to h 100s, for example, incorporate them in the servers that their customers want to drive their generative a.i. platforms. these guys work. so, what accounts for that? what accounts for not being on top of that? >> i think that michael dell -- jensen huang wants to give it to everybody, but some customers are more equal than others, and michael dell has a great relationship with jensen. >> so, it really is about having a preferred relationship with nvidia that is going to -- that is going to mean you're up 31% versus down 5%?

>> i don't know why hpe didn't get the chips. the graphics cards. i do know that to say that network and demand industrywide softened is just -- >> it's not true. >> it's an ill-advised way to portray what happened this quarter. it was very strong for dell, their direct competitors. do i know about -- how do we know that they didn't make their bed with another wayto do it? just so you know, michael dell also got all the good amd. amd has great a.i. >> so interesting, jim. >> i'm just saying that hpe may have a view that the industry has softened, but michael dell, look at what he's telling me today, how strong the demand is. i'm not buying what hpe is selling. >> yeah. that's -- i mean, okay, so, that gets to a level where we simply lose our ability to fully understand, frankly, what exactly -- other than just saying, execution. >> that's why i'm going out to see the keynote of jensen. i want to understand, because jensen is a fair man.

i mean, i remember at one point he said, listen, meta wants a lot, and they've really come to us and said, look, we really want to embrace, and we're going to help them. frank slootman, formerly the ceo of snowflake, goes to jensen. it's not a pilgrimage. jensen is not like that at all, but what it is is a recognition. maybe their stuff -- look, i was -- i went out there several times just to demonstrate the technology that nobody wanted. that jensen -- nobody wants this, jim. tell me what to do. i said, i don't know, i'm a reporter. he said, well, talk to this thing. >> i know, i know. don't start talking about digital twins. i don't want to hear it. i don't want to hear it. >> okay. now, the -- well, i was going to talk about it. >> i knew it. nobody knows what you're talking about when you talk about digital twins. you always go there. >> well, it's the a.i. factory. now i feel bad. >> i'm sorry. i didn't mean to make you feel bad. >> look, and you can say, jim, you're so focused on this.

but what i'm telling you is that when you sit down with apple or dell or salesforce or servicenow, this is it. then you sit down with lilly and it's glp-1s. >> all right. there you hear it. can't hear much else. at the big board, gbtc. we will speak with grayscale ceo michael. >> that will be important because we want to know about ethereum etf. >> next hour. over at the nasdaq, fin front, a digital asset mining company, celebrating a listing via spac. they're still doing the spac thing. >> yes. time, i guess, to make it so that people -- >> they're still doing them. >> it's ill advised, we know. >> you know what the problem is? we have this ceo on yesterday, sara and i, and he was, like, listen, i have no -- i wanted to go public the traditional way,

but i have no certainty. spac gives me certainty. >> $7 billion deal? >> yeah, $7 billion deal. >> no certainty? >> that's kind of odd. we're not seeing a lot of ipos for whatever reason. >> dave cody with vertiv. >> you're going way back. >> i'm saying there's only two spacs. >> i could name maybe three. draftkings, vertiv, and -- i'll come up with it. >> oh, really? there are 300 of these, and you're having trouble. >> you're right. >> and yet there's people -- they'll say, oh, digital miner. i want a digital miner, let me go buy that. good luck to you. these are not stickered the way cigarettes are. but i want to help people, not hurt people. the odds do not favor buying spac. >> your buddy, that's a success. >> you and my wife. last night. attacking me. >> it's not -- no.

just saying. i'm not attacking you. by the way, dwac has been a great performer and that deal is going to happen. it's -- >> treasury secretary, would you say that? at dinner. if you asked to be treasury secretary, would you say no? i want to know right now. i said, what the hell are you talking about? i'm under contract. >> chairman of the federal reserve. that's what jim's going to go for. >> i know jay powell. >> he's not going to renew powell. yeah, never mind. let's move on. let's move on to something more important. >> lilly? >> nycb, jim. new york community bank corp., down 29.5%. let me get to a few -- >> really good idea for them to get that signature last year. >> we've been talking about nycb for some time, but then there was new news. we thought they might be done, so to speak, out of the woods. but we get this release yesterday. >> well, it's too early to buy that stock.

>> they have a new ceo. i'm told, by the way, danello is a very serious guy. he steps in as ceo effective immediately. they got rid of their old ceo. they have also made a number of other appointments, but you know, they had some control issues, let's leave it at that. >> we can't leave it at that. this is a multi -- the assets sh t , the apartments may be worth a great deal. the federal reserve, it was a gunshot marriage. >> bring people back here. this is not a large bank. that said, it acquired the portfolio of loans from signature bank, which almost a year ago at this point, if you recall, when we had that mini banking crisis with svb, signature bank and then first republic all going out, they took on signature's loan portfolio. it hasn't gone well for them, particularly given what is already an outsize position in

commercial real estate, particularly office. a number of loans brokered by this firm, meridian, which is very big here in the cre space in the new york area, a company called new mark, apparently, acting on behest of the fdic is the one that found these buyers, but what in the world were they thinking, sending this portfolio to nycb? >> i think it was a momentary, let's get this deal done. >> and let's not do a big bank because we're under a lot of political pressure not to reward the large banks? >> we already did one with jpmorgan. let's give it to small. this was a bank, by the way, that was always viewed as being a lender that was aggressive, so it did not -- anyone who's involved with this should have known the quality of how these -- the bookkeeping, by the way, the charges from 2008, pre-2008. >> almost come up on the anniversary of the demise of silicon valley bank, though, it

does, of course, raise recollections of that. the question here is, will deposits start to flee or not? now, previously, when they first acknowledged that there were some issues with the loan portfolio, and taking higher losses than they had anticipated originally, the deposits didn't really flee. >> no. >> so, most of the companies yet again, will they? >> analysts were pretty positive about the company, and i don't know why anyone would be positive. this company has never -- no. this company, for 20 years, did lending that i felt was aggressive. and yet, they got this signature? i just was astonished when they got it. >> yeah. >> we didn't even know it was in signature's portfolio. >> even the bulls are like piper sandler that had been, like, situation without a doubt feels a bit uncertain right now. >> can i just say -- >> that's the kind of analysis we rely on. >> that's very helpful. if anyone wants to say this is going to spread, this was an outlier bank to begin with.

that does not make it so it's an inlier or liar. maybe change the word there. >> it deserves to be paid close attention to. again, not necessarily to your point that it's going to spark a conflagration, but it's always something that is in people's minds as we come up only ten days from now to the anniversary of the crisis at silicon valley bank. >> i want people to read charlie scharf, the ceo of wells fargo, on that last quarter, describing actual commercial real estate issues and how small they are in the banking system, because of how widespread they are. by the way, tadavid, remember, this is not office. this is actual apartments, and we have a shortage of apartments, so maybe there's just a loan to value issue here. >> it is. to your point, it's not systemic. certainly, we don't think, in any way, it would be, but it's a name we've been watching closely. jim, let's move on. what else are you keeping an eye on this morning that we haven't

yet mentioned? >> broadcom, again, is the big beneficiary. two upgrades today. price target up huge. and then, david, lot of people trying to get ahead of next week's retail earnings. jpmorgan raises its price target. huge. 125 to 157. citi raises williams sonoma, and they don't even like it. citi takes up rh. that's been a while. pvh. these are all retail names ahead of next week when the consumer's supposed to be strapped, so to speak. no. >> well, we've been getting different reads on the consumer in terms of the they're strapped. >> we have. >> sara always brings a lot of comments from companies that have -- report earnings, and it's a mixed bag, i guess, in terms of the commentary from those retailers that have already reported. >> i think that walmart was amazing. costco, amazing. amazon, amazing. again, i come back to this, who has the money to do a.i.? who has the money to be able to take in giant amounts of inventory?

if the sku is limited at costco, but the answer is the big guys with the balance sheet. i'm just saying, we have to emphasize that this is about balance sheet, not just technology. who can afford the technology? and by the way, david, apple, long knives still out. >> yes, they are. >> not stopping. >> yes, they are. wasn't there something else -- there was another couple of kind of more negative than positive pieces so to speak? >>yes. >> goldman. >> people just feel they have nothing special. there was a piece this morning. sternlicht, very good about how often people would use the vision pro, and i end up hearing she uses it on an airplane, which is when i want to use mine because i'm dog tired of watching somebody's backseat or having people hear what i'm doing. that's vision pro. >> apple is moved from the conviction by list by goldman. >> but look what they added.

nothing like a good lock company to replace apple. the technology for aggregates versus the technology in vision pro? i mean, come on, stonehead. >> it's true. the vision pro, spending $3,500, though, jim, on something that's going to make your flights a little -- make your flights a littlenicer, that's got to be a limited audience. >> you take pictures. you get the app. you get the special photo. take pictures on it. it looks flat on the phone but it's 3d glasses. let's say that you have grandchildren. you take pictures, and you can save them in your vision pro, and you watch them and it's 3d. it's like, well, i like looking -- how much i wish they had the vision pro when my late mom was around so i could remember what she sounded like. >>yeah. >> just saying. >> you know, you'll never leave. i mean, even when you're gone, you're going to be around. there's so much tv time of you, we could just have you playing forever. >> that's the game, my friend. >> you'll live in the cloud forever. >> you bet. >> yeah. >> they know nothing.

>> what version would you like of you? kind of in your 40s, your 50s? 60s? >> we made a panoply last night, doing an evergreen in the business, and it had me with my sister when she was 9 and i was 6, waiting for my father to come home from work on saturday. it was just precious. precious view of my life. >> yes, it was. >> when will daddy come home? he worked every saturday. >> you know, i'm looking at our mega cap tech. meta is the outperformer right now, along with nvidia. >> that's the best buy. >> meta is up 1.5%. you think it's up partially on those comments from best buy? >> have you used them? david, they look like ray-bans, but you can text, you can take pictures, you can talk. it is just a wonder. it's the eighth wonder of the world. >> what is going to be -- given the price point is far lower than the vision pro, obviously -- >> ray-bans. i mean, mark's giving them away. zuckerberg's giving them away. >> so, is that going to be the far larger selling product?

>> that is. >> versus the vision pro? >> it's an amazing product, because if you're an instagramer, you're taking it, book, anything you see. and you're not -- it's not like they're goggles. they're just -- >> you're taking a picture. >> right. >> and then you're able to post it. >> yeah. my daughter's into this thing like there's no tomorrow. >> really? >> yeah. just very cool. they're very cool. what can i tell you? that's why best buy runs out. that's why when i call meta, they said, listen, we can't keep them in stock. no one cares. remember, this is part of that weird business that they have. >> remember, zuckerberg's product review of the vision pro a couple weeks back. >> brilliant. now, you know, there's a big move to start thinking that he's cool and then there's like the -- the fallout shelter from 1961 thing. so, there's people just every day, back and forth, saying, is he cool, is he not cool? >> yeah. seems a little more human lately. >> that's the deal. >> yeah, definitely. >> i advised him. >> you did?

>> i said, be more human. >> that's what you told him? >> i thought it was good advice. >> how many years had you been telling him that before he took your advice? >> never mind. i shouldn't have said i advised him to be more human. >> jim gives advice to a lot of ceo, by the way. i don't know who takes it. >> none. >> all hours of the night, they're calling. >> that's true. but i'm up all hours of the night, so everybody knows it. >> eli lilly shares up 2.8% after our documentary last night. also, some positive comments out there. i think one firm's got what i see on your list here, raising their price target to -- >> i'm telling you, this is about, now, alzheimer's, dementia. >> why? because of what they have working there? >> this is a serious drug. not a reversal. but stave off. i have radnett on tonight, mris. you got a lot of plaque in your brain? you're going to want to be on this lilly alzheimer's drug.

>> what phase are they in for the lilly alzheimer's drug? >> it is -- this is an any-day approval by the fda. any day. >> it is? >> between now and the end of march. this is going to be so huge, and people think -- i didn't think it was, but i did this american brain foundation stuff and got friendly with a lot of doctors. people very ready to start this. >> the move we're looking at there now is almost solely a result of the success of glp-1s, mounjaro, zepbound now. >> zepbound is now widely available. >> you're saying today's move is on the hopes for an alzheimer's drug. >> yes. >> that doesn't just, what, slow the progression of the disease? >> let's say it looks like that you're going to get it when you're 75. if you start taking it now, there's a chance that it's delayed, and if you have alzheimer's, dementia, they're seeing some positive results. now, dave ricks, the ceo, will not hype this thing because he's

too great a guy, but the early word on this is it's a serious drug that a lot of people are going to want to take. >> as you well know, finding something that would truly deal with alzheimer's -- >> holy grail. >> yeah. bigger than the glp-1s, potentially. >> i want to emphasize that dave ricks is not your typical pharma guy. i have tried to press them over and over again, going deep into the bowels of the company, please say something that gives me the ability to say there's hope. they will not do that. they do not play that game. >> that's what you -- underpromise, overdeliver. >> have to play upod. lilly is a phenomenon of which, by the way, kenny langone, isolated when the company was about $300 million. >> to be fair, lilly shares did nothing for a long time. >> because they had a cancer franchise that was comme ci, comme ca, diabetes. >> langone hung on through it

all and stayed an enormous profit as a result. >> the thing about lilly that people should realize versus one of the new magnificent seven in europe is they have the balance sheet to build all the plants you need for zepbound, and that's very, very important. there is zepbound widely available. and they've got a giant plant in north carolina. they're building a second plant in north carolina, building a plant in europe. they can meet the demand. >> yeah. >> nobody else can. >> right. i mean, 20 years. now, that may be it holds out hope for the likes of pfizer. >> why? >> because you can go along -- you can go a long time and then maybe you find something. >> yeah, and i'm a big believer in seagen. i worked with them. my mom died of kidney cancer. >> it's not going well for pfizer right now as you see over 20 years. >> it's not. it's a dividend. >> horrible, horrible, disastrous. >> bristol myers, merck, meanwhile -- >> merck is -- >> just -- and you isolated that

early on, that rob davis has reinvented that company in a very positive way. >> yeah. >> some great acquisitions too. i think that -- i thought that amgen was going to have terrific glp-1-like, but it didn't. >> it will potentially. all right. group-wise, jim, anything in terms of, you know, financials or -- >> no. >> we're talking to drugs. industrials? >> no. yes. industrials. industrials, we're still getting the infrastructure money coming from the government. and those who bet against the industrials, again, you know what kind of invitation i'm expecting for those who bet against -- an invitation to the funeral. parker hanifen was upgraded today. i won't even mention the firm that was sell on it because i'm a kind man, but td cowen upgraded it to market perform from sell. they had a sell on it. take a look at parker, ph. this is a great american

industrial. david, there's a revival of cleveland that people keep telling me about. >> cleveland. >> you and i are going to go there. >> cleveland! all right, let's do it. >> from the rock and roll hall of fame, and we're going to rockefeller's original house. >> great. >> original street. >> can't wait. >> the ceo who is -- >> crazy. >> whoa! >> just out of his mind. love that guy. let's get over to rick santelli now. i think you got some data for us. good morning, rick. good morning, david. inn indeed, our february final read on s&p global manufacturing pmi, the mid-month read was 51.5, which happened to have been the best since september of '22. well, it improved. 52.2 replaces it. that's now the best level since june of '22 in terms of strength over 50, and do keep in mind this comes now the second in a row over 50 in expansion after last year.

we had ten out of the 12 months under 50, so a nice improvement, and it doesn't end there, folks. we still have university of michigan final reads and the ism pmis for february to still come out at top of the hour. "squawk on the street" will return after a short break.

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million bankrupt ftx. it was trading at 10 when the company went bankrupt. it had collapsed. now it's 132 based on this recent rally, of course, that we've seen overall in crypto. that's worth 7 plus billion dollars. imagine the recovery for the bankruptcy. that value is going up fast and in terms of getting full recovery, that possibility is greatly increasing as well. i thought -- >> i'm glad you did that. >> look, we try to analyze it every day, like investment, not this one. if there's an ethereum etf i would buy. >> he's in prison, but the value of solano is according to some reports giving advice on crypto to the guards and the like and the inmates. >> is he? >> solano -- >> what's he saying in. >> 55 million coin. >> what's he got?

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her uncle's unhappy. fund investment objectives, i'm sensing an underlying issue. it's t-mobile. it started when we got him under a new plan. but then they unexpectedly unraveled their "price lock" guarantee. which has made him, a bit... unruly. you called yourself the "un-carrier". you sing about "price lock" on those commercials. "the price lock, the price lock..." so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.

all right. stop trading. >> a lot of controversy about cyber security how strong it is. zs excellent company, zero identity, people saying business is weak. if you read the commentary you would say that is untrue and buy zscale and jay who is a good executive. >> why is the stock down 10%? >> there are people who are reading through and saying the buildings were short, buildings should not be the object. that has no longer been a good metric. okta said the trust is strong. these aren't as strong let's buy okta and not this. i think zscalar is a good company and let it settle and buy it. >> i'm trying to figure out food inflation and eli lilly and ai and literally i would say maybe

one of the best businesses in the world, mris, radnet. if you can have an mri or a subway franchise which would you take? >> mri every time. >> exactly. >> have a great weekend. >> you too. >> okay. >> enjoy myself. enjoy them. >> good. >> vision pro on and take pictures of them. >> no. they were sold out when i tried to get it. >> maybe one day there will be grandkids. >> really? >> wouldn't it be great? >> i would love it. >> don't want to leave on a negative note. >> we don't have a while for is chicago fed president austan goolsbee will be up soon. ♪♪ ♪♪ ♪♪

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the future is nothing but power and it's all yours. the all new godaddy airo. get your business online in minutes with the power of ai. happy friday. good morning. welcome to another hour of "squawk on the street." i'm sara eisen with david faber, live from post nine of thenew

york stock exchange. carl is on assignment. take a look at stocks. we're starting the month of march kind of mixed way. dow is down 100 points but the s&p is higher thanks to technology with the nasdaq starting after a very strong month up a quarter of 1%. taking a look at treasuries as well. got a bid yesterday after the inline pce report that kind of continues the 10-year yield to 4.25, 2-year yield is 2-year note bought a little more after european inflation data only showed the trend continues of lower inflation rates. >> we've got economic data that is crossing the tape and rick santelli has it for us. rick? >> yes, indeed. watch yields slip as the data surprises a bit. construction spending, this is january, expected to be up 0.2%. big disappointment. down 0.2% instead. the last down number that we had in construction spending was a while ago. this takes us back to october

of '22 to find a bigger negative month over month change. keep in mind that last month we had 0.9%, up 0.9%. university of michigan sentiment february final reads, we take the readings from two weeks and modify them a bit. in this case, the modifications are to the downside. 79.6 was our mid-month headline read. it's now 76.9, going back to under 70, 69 and change december of last year. as we look at current conditions, 79.4, that takes us back to the end of last year as well. and if we look at the expectations or what lies ahead, big drop, 78.4 was our mid month read. 75.2. 75.2. same scenario. december the end of last year. the pop in strength that we had

seems to have disappeared to some extent. now let's take the inflation numbers, shall we. 3% was the mid-month read. it remains at 3%. that's one-year. 5 to 10-year inflation remains at 2.9%. now let's go to the ism pmi. february fresh. we don't have mid-month read. expecting 49.5. we end up with 47.8. that means it's the 16th consecutive month under 50. under 50. now if we look at the prices paid component, 52.5. lower than expected, lower than 52.9. that's actually a good thing. that's a good thing. so 52.5 will be the lowest level considering 52.9 our january read was the first read above 50 going all the way back to may of last year. now let's go new orders, 49.2.

that's on the weak side as well. we are at 52.5 our last look. and 49.2 takes you all the way back to december of last year when it was 47 and finally employment may be the most important considering next week we have adp and the big jobs report. 45.9. that is the weakest level going back to july of last year. as interest rate moves down, 10-year yield closed at 4.25, last night and last friday and trading pretty much unchanged on both. back to you, sara. >> rick, thank you. a lot of misses there on consumer confidence, on manufacturing, but as rick said, importantly the good news in there, is that the prices paid component, inflationary component of manufacturing, was lower. good. because we're on high alert for high inflation. >> right. >> and that inflation expectations in university of michigan stayed unchanged.

also good. we don't want to see that move up. i want to give you one chart of the day from ray dalio, linkedin, been at it for more than 50 years, spotting bubbles. >> although he spotted way more bubbles than have occurred. way more. >> okay. >> he says we're not in a bubble now. >> he's been talking about bubbles since the '70s. >> he has this proprietary index based on sentiment and pricing and conditions, and he doesn't exactly share what is it in but goes through the ideology and says that we're not in a bubble right now. sentiment looks moderate and goes through the mag seven in detail and says there are -- it looks a little frothy, but again, he's not willing to go there. nvidia, cisco comparison on stock prices and said very different. nvidia's forward p/e 27, market cap has grown ten times. cash flow is in a different

space. cisco's p/e was 100 times. >> when it was topping over half a trillion in market cap in 2000. yeah. those are fair comparison. i would point out that his own track record, mr. dalio's is mixed when it comes to his predictive powers. >> one thing -- >> cycles in history and sort of thinking about the big picture, and still making a lot of money. >> well, i'm not sure about that either. >> bridgewater. >> not because they had huge up years. >> the most successful. >> you have to read this book "the fund". >> i'll read the book and pay attention to the linkedin post. >> we have more clues on what the fed is thinking, interview from steve liesman. he has a special guest. over to you. good morning. >> hey, sara, good morning. here at the chicago school monetary policy for the u.s. and i have chicago fed president austan goolsbee. >> great to see you again. >> less than -- a little more than 24 hours since the pce inflation numbers yesterday. some people ready to throw it in and say inflation is

reaccelerating, others saying it's an anomaly. where do you come down? >> i say one month is no months. it wasn't a great month. but it was showing something quite different than the previous seven months in a row. we just have to keep watching the inflation. i wouldn't be surprised if we found out there was a lot of noise component in it, but if we get multiple more months especially on the housing side, that's the thing that's really been weird. i mean, the goods inflation is back down to where it was prepandemic. services inflation, which we always think is a little stickier has actually come down over a longer run period, and the thing that we got to keep an eye on because we don't fully understand why it hasn't dropped more is the housing side. >> what do you do with that? we have other private sector reports that show market rents are coming down. >> exactly. >> there is anomaly why it's not

showing up? >> in a way, i thought that mechanical hey, it's just how the data are computed. i've been saying that for some months. every month it goes by that it doesn't start matching to the market's data, i got to reevaluate a little bit what i think. i still think mostly it is going -- i think we're on this path that it -- just look over the last seven months, inflation has definitely improved. 2023 was a -- was one of the biggest drops in core inflation that we've seen in modern memory. >> when you see something like the january data does it change your outlook on monetary policy? >> i mean, the monetary policy we're data dependent and so if the data start changing on a trend basis, it's got to change your thinking. one month is no months. you definitely should be careful

over indexing on one data point, especially if it's in january when they're rebalancing things. i kind of think part of what this is, is the time -- cnbc time and fomc time, those are on different time scales, and so it's -- the fomc measures of are we getting on path to get inflation down to target, that's measured over months, not minutes. >> right. >> we got a little bit of that. >> i'm not going to quote the phrase that the long term is made up of a lot of short terms. we'll leave it there. >> it was just an observation. not a criticism. >> i agree. the question i have is whether or not you think we may have played through all of that supply side improvement that we had in the inflation numbers and that '24 is a year of less progress because that process is

played snout. >> -- out? >> this is a critical issue. there's one world view you can look at '23 and say yes, we had great gdp growth and unemployment didn't go up much while simultaneously inflation came way down, but that just because the supply chain was healing and it's not going to heal again. my take on that is, we learned on the way up that inflation was more persistent from negative supply shocks because they spill over from one industry to the next industry to the next, and maybe that same dynamic would work this way. as you got improvement. the new york fed's supply -- measure of supply chain index is now back to zero. it's now back to where it was prepandemic. but the impact of that is not instantaneous. i still think there is a -- quite a possibility that it could flow through and part of the supply shock is on labor supply.

you see in labor force participation much higher than where -- was expected to be right now and we know that the lag on wage effects is longer even on prices in the supply chain. >> give us the goolsbee view of the balance of risks. do you worry yat all that you'r going to overstay your welcome at 538 basis points. >> no. >> and have these great growth numbers and low unemployment numbers and then that -- you know, nobody on the fed seems all that worried to me about the possibility that you're going to overstay your welcome at rates being too high. >> i was only laughing at the notion that what me, overstay my welcome? but i -- we're in a -- i believe that the fed funds rate, the real fed funds rate, my fed funds minus inflation, is quite

restrictive. if you look sdpl-- >> exactly. >> the longer we stay at that, if inflation continues falling we have to start thinking about the employment side of the mandate. i think that's going to be on my thinking over the course of this year, how long do we want to stay in that restrictive environment. the answer, i think, should be only as long as we have to, that we're convinced that we're on path to get to target inflation. >> i know sara what'seants to g. one of your colleagues say you should not be preemptively cutting interest rates. is that something you share or do you think that as inflation has fallen, you remain more restrictive than you should be and you should be adjusting rates to get it down to a place where it's less restricted because you don't need to be that restrictive? >> i only speak for myself. >> sure. >> i don't speak for anybody else on the committee. sounds like the word preemptively is doing a lot of

work in that sentence. preemptive of what? if you are asking should the fed keep applying the brake until inflation has actually gotten down to 2%, i think that would be a recipe of high danger of over shoot. you want to get on the path to 2%, but you know there are lags. if you just keep pressing the brake until you've actually met it, then the impact of that tightening and restrictiveness would continue. you would probably end up overshooting on the price target. >> sara has a question. >> president goolsbee, good to have you on the show. >> hi, sara. >> hi. if we're restrictive what's normal in this economy? >> feels like you're toicitchin get back to normal. what rate is that? >> nobody knows that. what's the natural rate we're going to settle back into and leads us back into the religious wars of the previous 10 or 15

years is are we going back to zero or are we going to settle at something else? i don't totally know. i do think that level of restrictiveness we're at now is restrictive. fed funds minus inflation is higher than it has been historically, and it's -- you just take the median sap, what does the median sep think the long run neutral rate or what's the long run real fed funds rate? we're well above that. so -- >> but the economy is not getting -- >> that's a reasonable approximation. >> the economy is doing well? the labor market has not shown a lot of stress. the consumer has shown to be very resilient. >> indeed. >> where are you seeing strength in the economy? >> well, wait. the question is, is it restrictive relative to neutral. you will to be careful characterizing when you know there are positive supply shocks

happening. you have to be a little careful with interpreting quantity data like well but the unemployment rate the jobs number was strong, some component of why the data side look as strong as they do is precisely we're getting supply shock. when you see prices moving, the inflation coming in better than expected and output coming in higher than expected, when they're moving in opposite directions like that, it would make you think about the supply side. >> so austan, the money question i guess do you see rates coming down this year? are you happy with how the market now has come to the fed with now expecting around three rate cuts? >> it's what we always say, steve. we go through these periods where the market disagrees with what the fed is saying or the sap and for the most part that doesn't stress me out in the short run because they're going to find out. the market is going to find out paul volcker my old mentor said,

our job is to act and their job is to react and let's not get the order mixed up. >> right. >> i kind of feel like that. it's worth remembering median sap from december said inflation for '24 would be 2.4% and we would have three rate cuts with 2.4% inflation. if it was.4% -- 2.4% in '24 that's higher than the run inflation rate was previous so janua january. there's nothing wrong with us being on a path to 2% that involves a be little bit of wiggling up and down, and it's up from what the flow rate was, and we're still cutting rates in the year. if that's how the data play out that's totally fine. it all depends on how the data play out. >> one of your colleagues on the board mentioned the 1995 example

of cutting rates which was very gradual. one of your colleagues yesterday talked about a gradual or methodical decline of rates. is that something you think is a process the fed can follow? >> as i say, i don't speak for the committee or anybody else on the committee and my thee sar russ skills are not the greatest of what worded to describe it. if you look at the median sap, i can't get past, it shows progress to inflation, we made remarkable progress getting inflation down. one year ago, at this conference, nobody was saying, maybe we can dramatically cut core inflation without having a big recession without having the unemployment rates soar. >> true. >> part of how we were able to pull that part of it off was we got positive supply side

developments and part of it remains that the fed's credibility in establishing inflation expectations that even when inflation got up, headline inflation got up to 9%, the fed said we're going to do what it takes to get back to target and we're doing that. we just got to stay on this path, and i think it's going to be a relatively gradual process over this year and next year. >> officer, thank you so much for joining us. >> steve, love to see you. >> come back next year. sara, back to you at the new york stock exchange. >> thank you, thank you austan goolsbee, but steve, while we have you, if we could keep you. you spoke to tom barkin today, what's your takeaway after now two big interviews in this sort of sea of fed speak this week? >> you know, i think the way to think about the fed right now is nobody is really dogmatic about anything right now. it's very hard for me, and i'm interested in your answer to the

same question, sara, very hard for me to pigeonhole anyone as a hawk, as a dove. i thought of austan as one of the more sort of dovish sort of guys. you don't hear him screaming rate cuts. you hear him quoting the average sep. you don't hear him having concern with the idea that you may be staying too high for too long. that's not in there. barkin is a guy who is listening to companies and what they're saying about raising prices and hearing less of that. i see the fed right now, the median fed official, willing to move where the data brings them and not very dogmatic about their overall view of policy being hawkish or dovish. >> i agree. you're right. it feels more nuanced, but i think goolsbee did strike a few dovish notes in the interview where he said that at some point, if inflation rates keep falling we have to worry about jobs. i mean, you don't hear a lot of

other sounding alarm about jobs because we've been getting incredible jobs report. also that we're very restrictive that notion which i'm sure is up for debate right now, up for debate on wall street, up for debate on the fed, which is how restrictive are we and, you know, that's why i'm sort of wondering where the normal level is right now because this feels like a very different economy than we had before covid. >> i think you're 100% right in how you characterize austan. i would throw it back at you it sounded to me, if the numbers come in lousy next month, austan is going to be on the side of those who say we shouldn't be cutting and cutting that fast. i don't hear him saying we need to be whole hog, like full steam ahead and hard headed about this. you remember, sara, there were times when there were discern discernible hawks and doves. i read those minutes and it's hard for me to find the camps

out there to know who is who on this. austan did talk about the idea that maybe we have to worry about the employment mandate but that was all down the road. it wasn't right now. >> agree. nobody is calling for different policy. everybody is on the patient -- everyone is on the patience path. >> the patience spectrum and learn how patient they are as we get more data. thank you very much. good to get those interviews as always. >> as we head to break our road map for the rest of the hour. new turmoil at new york community bancorp sending shares of the regional bank down about 30% today on top of already a huge slide. details on the fallout coming up. elon musk is suing openai and ceo sam altman. why and what may be at stake for both sides. >> bitcoin posting nice gains last month and now almost 50% so far this year. there is one area of the crypto market outperforming bitcoin. big show still ahead with the dow down 21 points but the s&p

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welcome back to "squawk on the street." look at shares of new york community bancorp plunging again this morning after the company found, quote, material weakness in its internal controls related to its loan review. the company is replacing its ceo and revising its quarterly loss to ten times higher than what it stated citing goodwill impairment tied to transactions

from 2007 and before. the latest tur adding to fears about commercial real estate exposure. a month ago the bank reported a loss that sparked a broad selloff in bank shares and renews fears about the health of the industry nearly a year after the collapse of silicon valley bank and first republic march 2023. >> first republic was a few weeks later. it's amazing. almost the anniversary of that period and then we moved through and, you know, there's an argument to be made, that it was very unique in terms of certainly silicon valley bank. its depositors being very sort of specific, not to mention where it was taking in assets from in terms of where it was making its loans. that said, given the turmoil that's been around this bank for some period of time now, at least call it the last month or so, there is concern about deposit flight. it didn't really happen when they first sort of acknowledged

there was weaknesses in the portfolio of assets they received from signature bank, but, you know, you have to wonder about the underwriting and what took place and question the fdic and the agents it used in the signature bank portfolio. this is the last thing you want to see happen. the portfolio you were taking from a failed bank actually is going to cause or be part of potential stress at another institution. we'll keep a close eye. deposit flight is one of the key questions here. didn't happen when they first reported the loss. >> although, the more the stock falls the more you wonder about deposit flight that causes that concern. i will note lack of contagion where all the regionals were down on that news and the bigger banks got hit on. it you're not seeing that because what the regulators came in and did last march was a really important psychological step where they guaranteed

basically deposits. >> basically. didn't ever get there to actually say it, but we all expected it. yeah. there's not the belief at this point that there's anything systemic should this worsen. by the way, apparently the guy who was chairman, became the chairman, now ceo, is capable but is a little too long, little too little too late here. >> that's why this is a surprise. seemed to stabilize the situation. we'll keep watching it for you. cryptos soaring over the last year after the sec approved the first ever spot bitcoin etf that was in january. bitcoin and ethereum have more than doubled. the number of crypto related stocks surged. grayscale's ceo will join us to discushow s far the rally can go from here. we'll be back in a moment. h. of course, the hot sun can be tough on vehicles too. you need weathertech. laser measured floorliners and cargo liner will shield the carpeting from sand and snow. for your interior, there's seat protector and sunshade.

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post nine and rang the opening bell in celebration of the bitcoin trust etf. welcome. good to have you. >> thanks for having me. it's wonderful to be here. >> why do you think bitcoin has had an amazing run here to start the year? >> a lot of pent up demand based on the spot bitcoin etfs coming to market. uplifted in january of this year and opened doors to a lot of other spot etfs coming to market and we're seeing tremendous flows and investor demand and that's really also outpacing the supply of bitcoin coming into the market every day which is being added to the price. >> aren't you specifically at grayscale seeing outflows? i've seen data, bloomberg said $7.4 billion of outflows in the last 30 days? >> it's important to think about how it came to market. it came to market with $30 billion of assets and investors of all shapes and sizes. we anticipated some outflows as opposed to the new products coming to market starting from zero. i do think, though, if you zoom out and look at that investor,

it is like we've never seen such say shahble demand providing access to a new asset class like here. >> the certain might be there are a lot of other options. blackrock seeing inflows. some of the big banks like wells fargo and morgan stanley are looking at getting into these products as well. >> yeah. we're just at the tipping point. i think many of my colleagues in the industry have called for a new wave of adoption as bitcoin etfs become available through advised wealth channels. there's 40 trillion dollars and they have not been participating in bitcoin or the crypto asset class broadly. we think we're in the early innings of this. only a couple weeks in spot bitcoin etfs came to market. >> how do you plan to stay competitive? >> gbtc has one of the most diverse shareholder bases throughout in the market for ten years. we have some of the tightest spreads and largest liquidity

out there and so it does bring a differentiated value and that track record a lot of investors are looking for when making those allocation decisions. >> now you're pressing the sec to take it a step further and approve options? >> correct. >> on the etf? why is that, as you say, vital. >> it really is vital. what we see is another situation where perhaps spot coin etfs are not being treated fairly. we have a robust ecosystem of bitcoin etfs, options traded on those products, but there are not options approved on the spot coin etfs. we believe this is a feature we need within this ecosystem. price discovery, investors being able to manage their positions effectively, this is something that we know a lot of investors want and at grayscale that's what we do. we advocate for our investors. >> what type of investor base are you seeing coming into the etf? >> well, it's really a broad base. we have direct retail investors that are trading fortheir own account, adding bitcoin to their

portfolios. >> wasn't the hope that this would gin more interest from sno institutions is. >> absolutely we have some of the largest hedge funds and pensions. it's a wrapper they know well, that works well for them. when they try to put on large or take off large positions in bitcoin a large liquidity etf like gbtc allows them. >> it helps bitcoin has had a tremendous start fueled by the interest in the etf. >> sure. >> but when it comes to -- if and when there's a down turn in the price of bitcoin, what are your expectations and how do you prepare to tell people this was safe and the rights move? >>, of course. myself grayscale we've been in the market ten years now and weathered all types of cycles and had conversations with clients throughout thundershower cycles. -- throughout those cycles. the conversations we're having is a little bit more focused on the future. we're about a month and a half away from the next bitcoin which

has been an important price catalyst for bitcoin and a lot of investors are focused on that and what it may mean for bitcoin this time around. >> when will they do ethereum etfs. >> that's coming down the pipeline. the sec due to make decisions about spot ethereum etfs this summer and grayscale is in that as well. our ethereum product, ethereum trust has applied to list right here to the new york stock exchange. >> keep us posted on that. >> i will. >> michael sonnenshein from grayscale. up next, elon musk suing openai and ceo sam altman. we'll tell you why straight ahead. speaking of tech, watch apple shares as we head into march. negative on the year. nearly 5% off their february highs. today goldman sachs, removes the stock from their conviction buy list. important to note they still call it overall a buy. stock is down 1.5% in an up market. "squawk on the street" will be right back.

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♪ welcome back to "squawk on the street." i'm bertha coombs with your cnbc news update. hundreds of people gathered outside of the moscow cemetery where russian opposition leader alexei navalny was buried today. navalny's allies accuse the kremlin of trying to derail the funeral saying they struggled to secure a venue and find a hearse willing to care his body. he died last month in an arctic penal colony. former president donald trump back in court today. this time in his federal case in florida over his handling of classified documents and national security secrets. the judge could schedule a trial

date in the case this morning. trump's legal team is pushing for it to begin mid-august while prosecutors want a july start. a federal judge ruled a new arizona voting law is not discriminatory. it requires counties to verify the status of registered voters who have not provided proof of u.s. citizenship. the judge issued that opinion today saying arizona does have an interest in preventing voter fraud. david, back over to you. >> thank you, bertha. and welcome back, everybody, to "squawk on the street." elon musk is suing openai, and its ceo sam altman alleging they breached the company's founding agreement by putting profit ahead of what was the original idea, namely developing ai for the benefit of humanity. musk saying openai's post relationship with microsoft is undermined that original mission. for context, musk helped fund

oly openai in its early days on the board from 2015 to 2018, essentially co-founded the company and it is something we discussed last may when we did a long sit down interview in which musk did address some of his issues with openai. take a listen. >> i am the reason openai exists. >> how much money did you give them? >> so i'm not sure of the exact number but some number on the order of $50 million. man, fate loves irony, next level. i used to be close friends with larry paige and stay at his house and we would have these conversations long into the evening about ai and i would be constantly urging him to be careful about the danger of ai, and he just -- he was really not concerned about the danger of ai and was quite cavalier about it.

and at the time, google, especially after the acquisition, had three quarters of the world's talent, lot of computers and lot of money. the person who controls that does not -- or at least did not seemed to be concerned about ai safety, that sounded like a real problem. so -- and then the final straw was larry calling me a speciest for being pro human consciousness instead of machine consciousness. i am. i am a speciest. >> so right. you helped the creation of openai. >> yeah. >> as much as $50 million. >> more than helped. it wouldn't exist withouh the n. openai refers to open source. the intent was what was the opposite, what's the opposite of

google, what would be an open source nonprofit because google is closed source for profit. that profit motivation can be potentially dangerous. >> profit motivation or profit is the focus of the company, though still a nonprofit. you know, people are interested, i would encourage them read the complaint. it's a good read. some of these lawyers are -- they write quite well and learn a lot. it is from one side. we haven't seen what rebuttal is. it goes on at length talking about founding the company, what the purpose of the company was, and it wants specific performance. essentially it really at the end if they were to be successful they want them to unravel the arrangement with microsoft. >> right. he's suing -- claims breach of contract, breach of fiduciary duty, unfair business practices against openai and the two founders altman and brockman and wants them to basically make the -- make openai, and its

resource and development open which is what it was supposed to do. >> what it was supposed to do. >> that said and, obviously, musk continues to have great fear about what artificial general intelligence will mean to humanity overall and that's something we did discuss last may towards the end of our interview. you know, when it comes to sort of right now, tesla is very much involved in developing its own and/or buying a lot of h-100s from nvidia to power whole self-driving and the technologies it is introducing and the generative ai it's using to fuel self-driving. >> this question we've been asking about the structure of the company as a nonprofit. >> yeah. >> that came into focus when altman was canned and brought back and the governance issues and what that means and why it is nonprofit and how that works when you have an investor like

microsoft who is essentially now able to call some shots. >> 49% of it and very much involved there and clearly was very much involved during that previous period where mr. altman was removed as ceo, as deirdre bosa reported yesterday, we still know very little. unusual to say the least. >> i do wonder if that musk will get traction. one thing everyone can agree on the stakes for humanity are high for ai. >> as you heard, he constantly refers to that conversation with paige. stuck in his head where paige called him a speciest for saying you want the human race to succeed. what about the machines? >> i feel like we're all speciest. >> maybe not larry paige. although i haven't heard from him. >> we have to hear his side of the story. explain why you're not a speciest. we'll continue to follow with the rebuttal. waiting for openai to respond. >> it could be a little bit. we'll see what they have to say in response to that. >> up next taking a look at the

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if you are asking should the fed keep applying the brake until inflation has actually gotten down to 2%, i think that would be a recipe of high danger of overshoot because you want to get on the path to 2%, but you know there are lags so if you just keep pressing the brake until you've actually met it, then the impact of that tightening and restrictiveness would continue. you would probably end up overshooting on the price target. >> that was chicago fed president austan goolsbee. he was with us earlier this hour discussion, of course, that balancing act of containing inflation. >> yeah. i think he was showing a little bit of his dovish stripes there.

worried about the overshoot, worried about being too restrictive, worried about what would happen to the job market if they continue. he's not a voter this year. nobody is talking about cutting now. it's kind of a spectrum of how patient do we want to be and how restrictive we actually. i'll just note that the june rate cut odds, which is the next time we're watching for, they have moved up to 64% today. that is a jump from 54% yesterday and below 50% on monday. why? we got in-line pce. wasn't hotter than even expected and weaker data. sim data on manufacturing this morning was a little weaker and consumer confidence was a little weaker. now we go into 60s for the odds of june. >> we think 25 basis points at a time. >> that's what we think. >> not that "60 minutes" -- >> that was made up. >> i know. i told you. >> we're not going to say anything that was not said by

jay powell himself in that interview and was not in the transcript. therefore, nobody's talking about 50. >> okay. let's move on now to our next guest. as you heard, some expectations of rate cuts. what does it all mean for this record-breaking stock market rally? let's bring in jeffries chief market strategist david. david, love to get your response from goolsbee and sara's analysis as well, do you agree? >> i largely agree. i think you also had barkin on earlier today so you had two fed speakers that are important. i guess my takeaway is not that different from what you guys have been talking about today. i think there's a very calculated, relatively slow rate cut desire. but i was taken by goolsbee's

comments about the supply side. he really pushed on the supply side story, saying that what we saw with the negative supply shocks and the creation of inflation were a lot of follow-on effects. they hit one industry, go to another industry, go to another industry. he talked about the reversing of that, which opens up the door that maybe some of these sort of positive supply side surprises, which have been the real story of 2023, that created the lower inflation, have some more knock-on effect. i think he's still looking for kind of a goldilocks outcome for a while longer based on that view. and, therefore, i don't think there's a big rush to do anything. even though he is talking restrictive, restrictive, restrictive and worried they might make a mistake on the other side. the typical economist on the one hand -- >> on the other, makes it fun. david, here's the thing. they don't know when they want to start cutting and the market doesn't really know when the cuts are going to start because

we just don't know how the data is going to shake out. this hotter inflation january, i think, threw the market for a loop. now we wonder if it's going to stay stubbornly high, if it's going to tick up more, if there's acceleration building to start the year. it feels like we have these big question marks and we have to wait for february and march data. >> that's probably right. the pce was probably a little better news, at least not bad news. you pointed out the index today was lower, so that was good. and certainly the expectations data in michigan were okay. so, i think we're on the right track. we've fallen from 9% inflation to 3.1% inflation over the last 18 or so months. it's been a big move. it's been very positive. i think everybody's feeling very good about it. whether it takes a little longer to get on the trajectory for cuts, we don't know. i come back to the reviews we put out at the beginning of the

year. it doesn't really matter when they go or how much they go. the reality is they can go. there's a backstop in the market. if things get really messy and there's a shock of some sort, whatever that is, geopolitical, environmental, you know, viral, all those things, we can respond again. in 2022 the fed couldn't really respond to anything negative because they had to fight this inflation battle. >> right. >> it's not if they will cut, it's that they can cut. i think that's a very supportive thing for the market. it's an insurance policy and we haven't had one. >> a lot of people in the commercial real estate industry would hope they cut as soon as possible. i mention that because when you talk about shocks, david, we're going to anniversary that mini banking crisis. we're watching new york community bank. doesn't appear to be in any way systematic. i'm curious to get your thoughts on that and the continued weakness in certain pockets, certainly the banking industry? >> look, i really think there are some people who are -- and sectors that are going to hurt

because of the way this has fallen out on the rate side and the restrictive policy on the rate side and how long we've stayed up here. commercial real estate is certainly at the forefront of that. i agree with you, david, it's not systematic. i think there is pain in the equity piece of this commercial real estate capital structure. and it's a lot of people being reluctant to write that down. and they're going to have to. it's okay. by the way, i think it's in a lot of the private equity world, too. there's a lot of equity in the private side that needs to get written down. i really -- i think that's not a systematic story. they've had a great run for a long time. they've enjoyed zero rates and very low rates for 15-plus years. they can take one on the chin for a little while. i don't really think it's symbolic of what's going to be happening in the rest of the economy. i want to add one last thing. >> real quick, yep. >> i go back and i've said this a few times to you guys, i

really think that goolsbee, barkin are missing one big thing, that is the balance sheet at the fed is still extremely accommodative. that's really the story. that's a lot of the story of why we've been able to sustain these high rates without the economy going into a tailspin. still very accommodative liquidity in the system. until they come own, rates aren't going to be needing to come down that much. they may stay high for a lot longer than you think. they're already talking about tapering qt pretty soon. i really think that's the story. i'm pushing that hard with our clients. >> okay. david -- >> $1.6 trillion as of today. >> always appreciate it. in the last minute we have here, let's go to dom chu looking at the major indices ending february in the green. >> the outperformers from a sector perspective are going to be the ones that are the mag 7 related technology, communication services and consumer discretionary. as you can see here, all solidly

higher over the last month period. as for the stocks that were the outperformers here, maybe it's no surprise here nvidia was up there, but believe it or not, check out constellation energy and ralph lawyeren, both posted better one of my month returns earnings catalyst over that period. take a look at mega cap technology stocks, specifically apple and microsoft. apple getting removed from goldman's conviction buy list. still buy rated but better opportunities elsewhere. i'll send things back over to you. >> they've lost a little conviction. don't miss the ceo of autodesk after the break. hitting a 52eehi.-wk gh market coverage continues after this. , these guys are intense. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? after last month's massive solar flare added a 25th hour to the day, businesses are wondering "what should we do with it?" i'm thinking company wide power nap.

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the all new godaddy airo. get your business online in minutes with the power of ai. >> you good friday morning and welcome to "money movers." i'm sara eisen with mike santoli live from the floor of the new york stock exchange. today citigroup's chief global economist on why moderating inflation around the globe won't do much to change central policy. zealen pharma soaring after promising weight loss drug results. the ceo is with us