now. good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen. andrew ross sorkin will join us later this morning. it is monday morning. if you want to check out the stock market right now, you will see the dow is down 26 points. the s&p is indicated up 10. you have the nasdaq indicated up by 74. closed out the month. we are now officially in june. on friday, we did close out the month in positive territory. the dow had its best day on friday since november of 2023. if you were looking at the month, the dow was up 2.3%. the s&p for the month up 4.8%. the nasdaq up 8.9%.

the nasdaq had the best month since 200 since november of 2023. the nvidia stock was up 27% for the month of may. we will have more on nvidia in a moment. if you look at the treasury yields, nvidia shares up another 3% today. treasury market. you will see yields lower. the ten-year yield at 4.47. the two-year yield at 4.87. we have news from opec over the weekend. the allies known as opec plus agreed to extend the output cuts into 2025. that was in line with expectations. members of the group extended a smaller set of voluntary cuts. the ministers will next meet on december 1st. joe, it was a terrible month for wti prices. if you were looking at wti, worst month since -- where is

it? october of 2023. you are now looking at wti down to $76.88. >> did we show it today? >> i saw it over here. it was up almost 3%. >> there it is. >> up untalmost 3% today. over the last month, up 30%. >> closing in on what was its old high of 11.58. there was a question if it had gone too far and big players which had lightened up a little on their position. i haven't looked at gamestop yet. shares of gme soaring after a reddit post by roaring kitty.

deep "f'ing" value. i'm not sure what that means. you can see the last move. a couple of weeks or so, we will see if it continues. that was after he just put a meme of him sitting up in his chair. this has to do with the size of the position. the reddit post showed a stock portfolio of 5 million shares of gamestop worth $116 million. the account showed a position of 120,000 calls in gamestop. call options with a strike price of 20. these expire on june 21st. bought for $5.68 a piece. >> holy cow. >> well into the money right now. the post could not, though, be independently verified by cnbc.

notably, he did not post in the wall street bets chatroom that he frequented during the meme stock mania in 2021. gill's x account posted the image of the reverse card from the game uno. i'm glad i'm not trying to figure this out. i'm glad we can't do anything. i'd be confused. >> yeah. we are also talking about the chip wars heating up. the processors announced in a surprise move yesterday. jensen huang announcing the architecture which is ruben. it comes months after the mara ann march announcement of blackrock. huang said nvidia will release

chip models on a one-year rhythm. that announcement did not provide details. it did say the ruben chip platform will have new gpus. those are the processing technologies to train a.i. systems. at the same conference overnight, amd announcing its line of chips for laptops. it could compete directly with intel and qualcomm. intel revealing a series for des desktops. the announcement comes less than two years after they announced a.i. chips and that stock is up 1.5%. year to date, amd shares are up 15%. >> not after michael ruben? i would think that is a good idea. >> not after the sandwich.

>> you know who it is after? >> no. >> vera florence ruben who discovered dark matter. >> i should have known. >> they have have called it vera, florence, cooper or ruben. discovered dark matter. if you need to know more, the up coming rub even en platform wil the high bandwidth memory. >> i assumed that. >> i'm sorry. i'm wasting people's time. let's get to whiskey. s suntory is buying boston beer. it said the talks are still in early stages. shares of boston beer have plunged 70% in the last three

years. the company has said it overcommitted to the hard seltzer category. i don't like them. >> i'm totally distracted by the guy behind me. >> i'm not really sure he's a human. he as angel wings. >> he's wearing a suit. >> it's a wonderful life. finally got his wings. where was i? dump hl millions of cases that could not sell in 2021. a deal would give suntory a bigger foothold in the market with jim beam and makers mark. >> a different type of boston tea party. >> yeah. i don't know where they dump it. >> harbor. >> you drink any of the hard

seltzer? >> once and a while. i don't like vodka. >> vodka tastes like something you should rub on a sore. >> i don't think any of it. >> kerosene. >> it doesn't taste like that. >> no. you don't need vodka. your liver's like no, no, no. it's going to take three days. >> rubbing alcohol. boeing's first flight with astronauts on board was called off on saturday. the back-updat date was cancele. the agency said the launch was scrub because of the sequence ehr er ror. no word on the next launch. that would make me nervous if i was at the international space

station and waiting for a ride home. >> yeah. no, no, no. have elevator that seems to not be working well? >> yeah. >> you know what the feeling is of four walls. have you ever been in jail? >> no. you? moving on. >> yeah. >> what is that? when we come back, it is jobs week in america. we'll get you ready for the employment data and a busy week ahead for the markets. you see it this morning with the dow futures off 22. the nasdaq is indicated up 76. s&p futures up 10. later, marriott ceo tony capuano will join us with the latest travel trends to watch. "squawk box" will be right back. (♪♪) what took you so long? i'm sorry, there was a long line at the thai place.

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i gotta get this deal... i know... faster wifi and savings? ...i don't want to miss that. that's amazing doc. mobile savings are calling. visit xfinitymobile.com to learn more. doc? it is jobs week in america and joining us right now with the trading week ahead is stephanie link. the chief investment strategist at hightower. there are a few signs of concern, particularly, if you look at chicago pmi. how are you feeling about things overall? >> it's a new week and a new month. i think the economic data last week, becky, was definitely on

the mixed side. i do think we're still pointing toward a soft landing and also above trend growth. something like 2.9% we've grown in the last four quarters. i think it can grow 2.5% or so if you look at what the consumer is doing and you look at what kind of pockets in manufacturing are driving the better than expected growth. when i look at the consumer, the most important thing i'm looking at is jobs and claims. friday is a very big deal. i do look at the spending patterns on personal until up 4.5%. that is decent. in manufacturing, there are pockets doing well, especially tied to aviation and onshoring and grid and power and that sort of thing. i think 2% or 2.5% or 3% this quarter is enough to drive earnings higher and keep margins elevated. >> we have been talking a lot

about nvidia this morning and the amiazing month it had. since may 1st, that chart is up 30%. you are looking at the year to date up 125%. obviously, a.i. is a big driver. what do you think more broadly, not just nvidia, but the rest of the a.i. space? >> it's massive, right? the semiconductor companies, they're able to monetize it. the problem with software and a.i. is they're still in product development. they'll have their day, for sure. that's an area where you want to watch out for and look for bargains. in the semiconductor space, the momentum is huge, becky. it is all about the new products they are announcing. i thought nvidia did a good job at the conference last night recapping the ftc in march in

vir verticals. i thought it had an interesting take on the pc cycle which is also just beginning. they have a number of new products for pcs with a.i. that's five times the performance and much better than qualcomm and intel, according to them, of course. we are starting to hear from dell. we have not had a pc upgrade cycle thin some time. that is where you will see bargains. >> semiconductors are the ones making money on this, but they have the price appreciation that reflects that. we had a couple of convenient tru venture capitalists in here last week saying when you are looking at software companies, they are outrageous because they have not

caught up yet. do you see bargains in those places or do you play to the second or third derivative to find things that make sense right now? >> one area that has been lumpy is in cybersecurity. i actually think cybersecurity is going to be just as big as a.i. yet, those stocks have had nice runs. we saw zscaler and crowdstrike which has been great. i think you want to look at which ones haven't done well because the total addressable market in cybersecurity is $2 trillion plus between now and 2030. i think what you are going to see in cybersecurity is massive consolidation. if you talk to any cto out there, chief technology officers, they are spending on two things. a.i. and cybersecurity because they're afraid of losing their jobs. they are focused on

cybersecurity. a.i., because they are trying to figure out this new technology and what it means for their businesses. i think what you will see with cybersecurity, there are many companies out there and a lot of them don't talk to each other which is why it hasn't wo worked. you will continue to see the big companies get bigger and bigger over nametime. you will own the top five. >> we did see a pullback in the technology names last week. what does this tell you? you look outside technology for other places you want to be? >> last week was sort of interesting. >> salesforce. >> yeah. of course, and dell. the other sectors took up the slack. energy did well. industrials did well. materials did fairly well. nix on consumer.

that, to me, is healthy. if one sector goes down, if you will, it is picked up from other sectors. you are seeing that, becky, because earnings have been good across many different sectors and companies. it is not just all about tech which is what it was last year. >> right, right. stephanie, i'm really intrigued by the new idea you are watching. nike. what is piquing your interest? >> it was foot locker last week. the stock has lagged substantially. foot locker announced big numbers. the biggest partner was nike. the ceo was on your show. she said they have great, new innovation that she was excited about. i did homework on the global market share. that has remained pretty stability. my interpretation before i did

the homework, they were losing share to hoka and rykas of the world. they have in the second half of 2024, a new product innovation cycle story that is just beginning. maybe i'm a little early here, that's why i haven't bought it just yet. once they start that spigot of new products, that is one i'm excited about. >> steph, thank you. have a great week. >> thank you. coming up, high profile departure from the starbucks board of directors. and later, reid hoffman will join us. the co-founder of linkedin. "squawk box" will be right back.

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starbucks saying microsoft's ceo satya nadella has resigned from its board of directors. in a resignation letter, nadella said he would be the biggest fan and has the confidence in the starbucks ceo and leadership team. starbucks would reduce the size of the board by one. starbucks shares down 20% in the last year. joe. media news. disney and our parent company comcast hit a snag to resolve the ownership of hulu. the two sites show a disagreement over how to value the streaming service. the companies are in late stages of the process to determine how much disney should pay to

acquire the one-third stake in hulu that comcast owns. rbc has been tasked with coming up with a valuation estimate to be used to calculate the final total. when we come back, contestants in the national economic challenge will be joining us. we will talk to a couple of high schoolers in the competition and quiz them as they are up to the task. we will have that next. quk x"ilbeig bk."sawbo wl rhtac >> announcer: executive edge is sponsored by at&t business. next level moments need the next level network. to start a business, you need an idea. it's a pillow with a speaker in it! that's right craig. a team that's highly competent. i'm just here for the internets. at&t it's super-fast. reliable. you locked us out?! arrggghh! ahhhh! solution-oriented. [jenna screams]

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good morning. welcome back to "squawk box" live from the nasdaq market site in times square. dow is off a little. friday was a little rough, but

for the month, everything was up, especially for the nasdaq. since november of 2023. >> right. later today, some really, really, really smart teenagers will compete in the national economic council economics challenge. think of it as the econ version of the national spelling bee, but tougher. our really, really, really smart steve liesman, is the quiz master for the event and he joins us with a couple of finalists. >> becky, 7,600 high school students entered the competition. they will faceoff this afternoon. the international counterparts will answer some amazing questions. some of the two finalists are joining us. thanks for joining us this

morning. >> thank you for having me. >> what is your favorite thing from david ricardo? >> the theory of competitive advantage. >> that means what? the country should produce what it's best at? >> precisely. each country will have a lower opportunity cost or how it gives away something to do something. >> here is my favorite part of that. if you are france anxid you produce bread and wine and you are italy and you produce bread and wine. what should you do? >> produce only bread. >> get rid of the wine? >> get rid of it. >> that's what it is. it is science. >> one of my problems with subsidizing industries here is you are going against comparative -- >> hold that thought, joe. >> the only other problem is you

outsource a lot of jobs if labor is cheaper somewhere elsewhere it makes sense. that's why we lost a lot of jobs. it is not absolute. >> nothing in economics is absolute. >> we talked about that before. >> are you in the adam smikt diff smith division? >> i will have to go with his absolute hand that it exists and it is beneficial for the economies. the invisible hand is the idea everyone acts rationally and in the self interests. you have fields of behavior economics highlighting the irrationally and self-interested actors are not best. >> you go as far as the objectivism. would you call yourself an objectivist? >> absolutely. >> if you could just drill one thing in everyone's head that is

looking for capitalism 2.0 or a new verb or it doesn't work. this is how it works. this is the way of the world. >> in order to say that, you need to make a lot of the assumptions that economists deal -- >> did you hear that? >> was it latin? >> it was. >> i took four years of latin. >> we were talking outside about a.i. nobody is more affected by a.i. than these kids growing up. alexi, are you worried about a.i.? does your understanding of economics tell you that we should be worried about artificial intelligence? >> no, i don't think we should be worried about artificial intelligence taking away our jobs. for the productivity function, it includes technology. technology is a main tackfactor how propductive our society is

going to be. the majority of workers use this technology to their advantage. >> doesn't replace them? >> it replaces some. >> talk to joe. he is worried about the si singularity. >> i don't want to live forever. i want to be buy oionic. you are a freshman? >> my mom went there 50 years ago. >> on the topic of a.i., one thing that is super important to consider, in econ, when we see more efficiency, we see a tradeoff with efficiency and equity. it is important when we are dealing with the technologies, we deal with them in equitable ways. >> and training needs to go along with it. >> you know what an economist said to me. if a.i. comes along and does your job better -- the question is this, who owns the a.i.?

>> exactly. >> if you own the a.i., you're on the beach while the a.i. does your job. if the boss owns the a.i., the boss is on the beach while a.i. -- now we will do the questions that we get to today. these are the easier ones. question one -- >> they have not heard these in advance? >> they have not. assume world oil prices are rising and that a country is dependent on importing oil. what will likely happen in the country's unemployment and inflation and what terms do economists use to describe the situation? >> i would say aggregates would increase and stagflationary scenario. >> that's right. >> this is an important one. if your nominal salary is rising at 4% annually and inflation is constant at 1%, how long will it take you for your real income to double. >> rule 72 over 3.

that's 24. >> 24. >> what did you do? describe for people at home the math. >> the real income is the rate of nominal income growth minus the rate of inflation. >> 4 minus 1 to start. that's 3. that's the number you care about at home, folks, your real income. >> rule of 72 which is take 72 and divide by rate of return. >> you got that, joe? >> i got that right. i don't know why you didn't do if your income is rising 4% and like in today's bidenomics and inflation is up 7%, how much are you losing and in ten years, how much less would you be making? i would have done it that way. >> biden is responsible for the inflation and trump's going to fix it? >> yes. hope hopefully. that could be another question. >> what famous book did adam

smith write? >> we learned about this this year in the capital studies class and capitalism. >> it is where you introduce the negative hand and moral sentiment. >> ding, ding, ding. if the nation an suffering from severe unemployment -- >> unemployment in the short run is an inverse relationship with inflation. we want to decrease the unemployment by increasing the inflation rate. they may want to increase the money supply. >> that's not bad. that's not the answer we're looking for. >> on the foreign exchange market, if you want to alleviate unemp unemployment, export more. >> how? >> depressciate the currency. >> depreeciate the currency or

sell more bread. >> only bread. >> only cut rates. >> you could do that, too. >> 45%? >> permansonally, no. >> what did you say, joe? >> nothing. you will get a smart-ass answer. >> that seems a little overkill. >> why wouldn't you want to have a higher capital gains rate than a competitive country? this is not one of the questions you studied. you might want to think about that. >> hmm. i think that -- it's a difficult question. we are thinking about the u.s. economy in a bubble here. we are thinking about the capital gains rate and our country. we think of ourselves on the global stage. when our interest rates are higher, it is worth more. >> what about the capital gains

rate? is capital stuck in a country or move? >> capital can always move. >> can labor move? >> we can always use labor from other countries. >> can labor move to another country? >> we see brain drain a lot. capital is more likely. >> you tax capital less than la labor? >> i like to think so. >> is that fair that a guy sits on his butt? >> that goes back to what we were talking about with the efficiency and equity. >> is it equitiable? >> that's the million dollar question. >> you use equity a lot. that is not something we use -- are either of you freedman people or 2.0 or hyac people? >> i would say i'm more kansian. >> oh, you have time.

>> you better be if you are young. >> when you are 30, you develop your mind. >> it depends on the job. >> these kids are -- >> freshman. i'm blown away. >> thank you for coming out. the national economics challenge. >> do not listen to him. he's a stiglett's guy. >> all of the people who lived all these years ago fighting over government regulation and no government regulations and trying to understand everything adam smith said. when you are opposed. the idea of a force you cannot see is something we grappled with since the end of time. >> you don't need to feel bad. it benefits everybody. >> you see how young they are? and payroll. why would you think mere humans deserve to do their own payroll? because their livelihoods depend on it?

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the campaign raised $48 million hours after the conviction. joining us now is jake sherman, the co-founder of punch bowl news. he is also an nbc political contributor. so many facets to cover with you, jake. we had alan patricoff on last week. he had a cynical view of how some are returning to trump. he said some are returning to their pocketbook. are you worried about $3.2 billion? i think they may have other reasons or less tawdry. maybe it is lina khan.

what do you think it is? >> i wish i had a problem of $3 billion versus $3.2 billion. that is a nice problem to have. number one, it is regulation, to be honest with you. i think a lot of people i talk to see trump as more open to views on curbing regulation for all industries. that's number one. i think, number two, to be honest with you, people who are rich vote republican. it is not more complicated than that. joe, i agree that republicans had a huge boon from the verdict, including the down ballot, too. i don't think there is a lack of money on either side. >> we lost you there at the end. >> jake, i don't know if you can hear us. >> we're not trying to censor you.

i take issue with that. let me know if we get jake back. you heard caviar communist. i think there are many, many rich people that don't have to worry about taxes and making theirs. they don't vote republican. are you with us again, jake? >> yeah. do you hear me? >> yeah. i would say almost the opposite. you can't virtue signal nearly as well when you get rich. you don't have to care about the policies. you want to get invited to the right cocktail parties in new york city. all of the rich people are liberal, jake. >> the regulation piece is an important part of it, to be honest with you. republicans for a long time have been making inroads in silicon validating back to kevin mccarthy and opened that door 10 o15 years ago when i started covering congress. listen, i think trump had all

sorts of councils with business people who he listened to their views. that is probably part of it as well. >> when do we get -- i'm watching the rcp betting composites and it's includes. trump's ahead. i watched the predicted 2024 betting and it flipped initially early on. it's back with trump up two or three percentage points. when do we get the gold standard poll that you would watch to see what the effect of the verdict -- of the 34 felony counts? when do you see the one thing we can actually say i'm banking on this being the real effect of what happened? >> i would say the next ten days. i know people are in the field right now. i'll make as controversial point here. all polls are terrible right

now. especially national polling, joe. this race will be decided on the margins in two or three states. michigan, wisconsin and pennsylvania. the real problem, we all know what biden's shortcomings are. the risk for trump is 20% of voters casting ballots for nikki haley. i don't know if they will come around and show up for trump. if this is a low turn outelection and those voters do not turn out, it will be tough for trump to win. i'll make one more point. i understand they raised a bunch of money for trump from the conviction. i don't think being convicted of a felony is a good thing. i think there are low information voters who are just tuning in now who are seeing for the first time that trump has

been convicted of felonies. that is not necessarily a good thing in my estimation. >> you are right. if you have no idea what's going on, you might think that. >> remember, joe -- >> you might get totally motivated if you do look closely at what happened. he's the only individual in the world where that case would have been brought against. did -- john edwards. he actually used campaign funds to pay off a woman. he didn't -- in this case, it was personal funds misclassified. you know how arcane and the pretzel logic to quote steely dan to be used to get to a felony on this for minor evhe

fence offenses where the statute of limitations has run out. no one is above the law, but no one should be below the law. that's what happened here. that's why alvin bragg was elected. did you see george stephanopoulos? it's amazing how we all involve ourselves. >> joe, remember most voters are not you and me and following this very closely. i don't know the nuances of the argument are going to be made -- >> i see it on twitter. 34 counts. guilty on all 34. they were ledger entries and checks. it is one felony count. it's stretched beyond belief to get to that. maybe you're right. no one ever went broke underestimating. thank you.

when we come back, chinese founded fashion retailer shein is reportedly preparing for a ipo in london. we have details next. later, reid hoffman will join us. he is the co-founder of and muc. "squawk box" will be right back.

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shein is preparing to file for an ipo in london. that's according to a report from sky news that said the listing could value the company at close to $64 billion. that's down slightly from a $66 billion valuation after a fund-raising round last year.

after its attempts to list in new york failed regulatory hurdles and got push back from u.s. lawmakers. senior british lawmakers have been questioning a potential listing there as well. when we come back, the latest data on necaerremes.w nc tatnt we've got details right after this break. ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms.

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years? or did you see any real quantum advances? there's a big piece in the journal today on what was -- used to be a death sentence talking about different types of lung cancer, and how much more manage, not cured but at least there's some hope. >> yeah, it's a great question. i think you hit it spot on. this is a bit more imkremncreme. i think every year there's progress. i think the key takeaway is immuno therapy continues to be important and new types of antibody drug conjugates, but the beat goes on in biotech. the xbi has had a very nice bounce this year. investors are definitely more engaged in bio tech this year, and there's a lot going on overall in the space. >> michael, did the issue of ai come up, and is it still the --

sort of the potential, or is anything actually in practice yet? >> that's an interesting one. you know, that's been a smaller topic here at the cancer conference burks what might be interesting for investors is, of course, moderna and merck, which are partnered on the cancer vaccine in melanoma, which is presenting the three-year data. moderna says they might be seeking an accelerated filing next year does use an ai algorithm approach to pick the specific antigens that go into each personalized vaccine. early days of course there. >> right. and you mentioned immunotherapy, i'm trying to figure out what the eventual answer is to -- i won't even just call it cancer. i don't know how many diseases it really is.

what about -- what about early diagnosis in looking at markers that can give you early detection. if you get it early, you don't really need to cure it. you just sort of need to get it out. >> yeah. well, look, i think you are -- you're asking the right question, which is early diagnosis. there were, of course, you know, lots to talk about in terms of thinking about swabbing and other sorts of genetic things that are markers. you know, i think today certainly in 2024 they're still talking about trying to slow the cancer or if you get technical more about add you vent or you've taken out the tumors and you're trying to prevent it from coming back for years, obviously that is where the moderna cancer vaccine plays. it's trying to prevent for many years the cancer from coming back. that's kind of where we're at. i think investors today are still engaged in trying to get treatments for cancer b, so ear

days but plenty engaging in wall street for bio tech, and if you would also remind you that many pharmaceutical companies flush with cash having buying these up, whether that's lilly or astro or pfizer. so pharma is buying a lot of biotech. biotech stocks are back in the move today, and we've been optimistic about where the sector can go this year. >> we appreciate it. we've got to run. thank you. good to see you. >> see you later. it is 7:00 a.m. on the east coast, and you're watching "squawk box" on cnbc. i'm becky quick along with joe kernen. andrew will join us later this morning. opec plus agreed to extend their output cuts into 2025. that was in line with expectations. members of the group also extended a smaller set of voluntary cuts. stock markets in india surging to a record high over in asia,

this after exit polls point to a landslide victory for prime minister narendra modi's ruling party in the largest election. and japanese whiskey maker is in talks to buy boston beer. that's the maker of samuel adams that. according to a "wall street journal" report that said the talks are still in the early stages. let's look at the futures this morning, although it's a little bit quiet, we've got the s&p is indicated up a little. the dow has now turned around up six points or so. this will be interesting to watch june after a good month for the nasdaq in may. up almost 7%. it's starting out pretty solid this morning. so far 72 points. h let's get to dom chu with a look at this morning's premarket moo movers, and then i guess we can talk at the end. you see the father/son caddie

combo at the arbc? did you cry a little? >> i think it was for the entire golf community. >> it was pretty cool. >> totally. >> the greenskeeper. he's a maintenance -- he's a greens keeper and his son just won a couple of million dollars. pretty cool. >> it's a life changing event for sure. i will talk with you about, i'm going to get to the business first. a check on the meme stocks, they're back in a big way when it comes to the original one. gamestop shares -- they were up 75% when i checked them last. they're up 98% over 12, 13 million shares of volume. the latest crazy stock move gets its start last night after trader keith gill, also known as roaring kitty, post ed a screen shot showing a large position in shares of the video game retailer. the image showed a 5 million share position in gamestop, which would be valueds at $115 million at friday night's

closing price before this move. it showed a position of 125,000 call option contracts with a strike price of 20 bucks a share that expired on june 21st. they were bought for roughly $5.68 apiece. the validity of the post and position have not been independently verified by cnbc, but the buzz was enough to skyrocket those shares to nearly a doubling. other meme stocks like amc entertainment, sun power, best buy are getting that ripple effect move here, even reddit, is up 6% right now so watch that. and the reason you're seeing some nasdaq moves higher, a surging force in the market. chip maker nvidia are both up in the premarket. both moves are tied to a technology trade conference in taiwan called comp ewe text. amd announced ai chips causen risen ai 300 used for nextgen ai powered laptops.

nvidia announced ruben months after announcing the black well line of chips that will be the successor to the hopper offering. those shares driving some of the nasdaq action you can see up there. let's end on merger monday news, at least a potential one. "the wall street journal" is reporting processing giant waste management is close to a deal to buy medical waste disposal company adding a formal announcement could come as early as today pending any last minute negotiation snags. it's thinly traded but was up roughly 7% in the premarket. and joe, that's it for the morning movers this time around. i will tell you right now i think at the end of the day, it was an awesome story coming out of the rbc canadian. the u.s. women's open in lancaster, it just shows that the difficulty of playing on a major stage. >> i'm glad it gave me like at least a small reason to watch the rbc because that was about

it. dom, i just have a little problem here, so the call strike price was $20, and he paid just under 6 for it, so you load up on those options, and you know, the stock was at about 20. so you don't know what's going to happen. you're not really in the money, so then you release that info, if you're roaring kitty, and your call options are now worth in the money by $23. so do the math. >> times $100 per share per options contract, yeah, uh-huh. >> it's not insider trading per se. i don't know what it is. it just doesn't -- it smells really funny, does it not, to be able to -- i guess it's all legal. what about the people who sold those calls and are now getting squeezed to, you know, they're now worth $23? i mean, they're wiped out.

i don't even know if they can cover at this point, but why is that legal for him to make a couple hundred million dollars by loading up front running and then releasing that on reddit or whatever it is, which is a cesspool to start with. why is that legal? >> because this is -- i'm not sure the regulations -- because there was a generation prior to this where that same kind of thing that happened was known by a specific term, and that kind of activity done was deemed illegal. i'm not sure if regulations have -- >> we asked jay clayton about this. >> regulations have just not caught up with this idea. >> it's not insider trading. he doesn't know exactly how people are going to react to this and follow this. >> some others have called it -- >> at your peril. >> you use that term. this -- >> a big dump that he took

zplchlt zpl. >> if this were to happen right now on internet messaging platforms, i'm not sure you have the construct -- by the way, technology in this electronic distribution front has evolved tremendously. if you want to talk about the reason why maybe things haven't caught up, it wasn't that long ago that we talked about this idea that people were putting stuff out on twitter or x these days. >> that's why he's so cryptic about it. today it's a green reverse uno card. before it was -- >> the guy with the controller. >> it's a great gig if you can do it. i mean, i guess he somehow got the following to be able to do it. >> here's the thing, if the s.e.c. -- >> buyer beware. >> -- considers putting press releases for annual reports and quarterly reports out on twitter as compliant with reg fd, how is this by putting something out there showing everybody at the same time around the world with no kind of preferential access, that is considered now fair

disclosure, right? hey, i'm telling everybody. the tough part about this for me right no is i don't know and i don't have a personal relationship with roaring kitty, i don't know and i don't know of anybody else who has independently verified these screen shots are the position he has. >> if you assume it is, it seems like -- wow, that's really -- that's five times your money. >> by the way, joe, this is fast moving enough where you could put a screen shot out there -- remember, screen shots are balance sheet looks, right? it's a motel in time. what happens if literally two minutes later or even less that position has been traded around or dissolved or added to or whatever. things are just -- they move quickly. technology and faster chips are just going to make it even quicker in the coming years. it's a little mind boggling to me. >> okay, dom, thanks. >> you got it. >> when we come back, we will go inside the ai landscape and check out some of the sky high

valuations that are building in private companies. and in the next hour, linkedin founder and microsoft board member reid hoffman getting into the ai game with a new venture. it's called reid ai. "squawk box" will be right back.

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at altimeter and aporv, let's talk a little bit about what we've seen with nvidia. we have a way of describing this. this is very different than what we saw in cloud computing. this is the semiconductors that are making all of the money at this point, but there is a pyramid that's stacked on top of that. >> becky, thanks for having me. it's great to be here. jensen giving us a preview of rubin is a clear commitment to their move to from a two-year product psychcycle to a one-yea product cycle. going forward we expect them to be on a one-year cycle, which is in lock step with their customers, right? there's two customer segments that i see for nvidia. one, you've got the cloud hyperscalers, and they have to end their capex from 140 billion last year to 200 billion this year, and that growth of 40%, most of that is coming from their investments and building accelerated computing in the

data centers. and secondly we're seeing a lot of startups, and their product release cycles as we have seen with open ai's chatgpt that you and i and our listeners have had the opportunity to use. they were under gpt last year and 4.0 as of a couple of weeks ago. we are seeing this move from nvidia as a real way to be in l lockstep with their customers. >> so are the valuations in the entire ai universe at this point frothy or not? >> look, this is something we talk about every day. are ai valuations frothy? definitely. the questions that i ask are two questions. is it worth the hype? is the sizzle worth the stake? and secondly, how do we navigate that that? they are frothy, however, they are worth the hype. there are two truths that are true at the same time right now. ai will create a lot of value, but it's also not clear where that value will accrue.

as our founder and ceo reminds us in the internet era, you could have invested in alta vista, and a dozen of these search startups that were born before google came out. you would be right about the internet. you'd be right about search. unfortunately you'd have picked the wrong player. investing in the google ipo in 2004 would have delivered 90% of all the search results. that's a little bit of what we are seeing in ai right now. and look, this is not unexpected, right? we've seen this in the internet. we've seen this in the cloud. so the big question we ask is how do we navigate this? >> and what's the answer? >> well w, we are navigating th with caution. there are two places where we see a lot of opportunity. obviously there's a picks and shovel side of this where we've been invested in businesses such as nvidia on the semiconductor layer. the hyperscaler layer we are invested in azure and aws on the

private side and those had are picks and shovels that everybody's using. on the application side, we are proceeding with a lot more caution. the biggest question that we ask is are these revenues and startups that we're seeing, are they experimental, or are they truly recuring, err versus arr. and there's a couple of areas where we've seen incredible value. ai we are deep in customer service. a huge area of spend, $450 billion spend on humans answering phone calls every day. it's a tough job. sometimes those customers are angry. ai can help, a combination of small models and large models. delivering reliable empathy all day long. solving more than half of the calls coming in. helping large enterprise customers working with the hyperscalers, customers like lululemon where you don't need to punch in the number. you don't need to wait online anymore and you get a human like response quickly. >> what's the name of the company again?

>> the company is called parloa. >> how do you spell that? >> it's spelled as p-a-r-l-o-a. >> i can understand in a situation like customer service because if you can actually turn it over to machines and not have humans that you're paying for tho those, i can understand how that can get to the bottom line quickly. the question is is it good enough? i get really mad when i get sent into customer service hell where you can't get out of this loop and you're dealing with what you know is a computer or some cyclical level where you're never going to get out and get to a human. >> i'd welcome all your listeners and you to try it out on their website. you can get a demo on parloa. it delivers reliable empathy. you know, it's a combination of small and large language models that understand the reason you're calling, where you're calling in from, and so we save a lot of the work that you would have done otherwise. typically today you're greeted with hey, punch a number to call

for a rep or punch a number to call for returns. we have skipped all of that with the latest advancements in generative ai. >> all right, beyond that, when you start trying to figure things out, is it safe to say that you're being very choosy about where you would place bets outside of the big infrastructure plays? >> definitely, definitely. we've been -- while we've been making investments, we've been very cautious. there's a couple of areas, customer service is one. the other area we're studying deeply is coding ai, you know. i am certainly much more productive using github co-pilot now. that's another area where we see incredible value being created. what is less clear is how that value gets captured with microsoft making great advancements in the space. >> apoorv, when you look around, we know that venture capital is often a place where when you start getting into a frenzied environment, the due diligence

is much lighter. it has to be because it's like trying to buy a house in a hot housing market. you don't get a chance to necessarily do your inspection or another buyer will come in and snap it up. is that what it feels like right now? >> there's certainly some element of that. we've got some startups raising at 50 to 100 times revenue, deal processes moving fast where in the same time where public software is valued at four to six times forward revenue. as buffett says when things speed up we're slowing down. most of the investments we have made tin this space have been i startups where we've had a chance to evaluate over months. it's one where we're proceeding with a lot of caution. >> apoorv, thank you for joining us. it does feel like a similar story we're getting from a lot of venture capitalists these days that there's something here. it's still early days and hard to figure out exactly what it's

going to look like. thank you for joining us. >> thank you for having me. coming up, if you're looking to get away this summer, marriott probably still has some rooms to book maybe. up next, the hotel and lodging giant tony capuano will join us on set. we always look forward to this. he's in new york occasionally d usually makes a visit. jac "squawk box" is coming right back. meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley.

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a news alert for you, bill ackman's pershing square capital is selling a 10% stake for $1.05 billion to a consortium of investors including arch capital. btg pactual and consulta limited and establishing an independent board of directors. as americans look to get away this summer, there are concerns that higher prices could impact consumers making travel plans, with more than 30 brands in the portfolio at marriott, there's no one better to ask about this year's summer travel trends than our next guest marriott president and ceo tony capuano. >> thanks for having me. >> is it a good environment for

you? >> it's a great zblieenvironmen >> for us inflation is a double-edged sword. hotel rates contribute to inflation. as you know, through the recovery the pricing power we've seen has been pretty remarkable. the flip side of that is as consumers feel pressured by the impacts of inflation, they get a little more cautious in terms of their spending. >> you know, i don't like to admit that i like luxury brands, but god, i love luxury brands, and you have a lot -- >> we do. >> you have quite a few. is it bifurcated now? is that a better place to be? >> i don't know if it's better, but it is certainly one of our strongest segments. we're lucky to have the industry's largest both footprint and pipe loline of luxury. we have 500 luxury hotels globally, another 250 in the pipeline. the resilience we've seen for luxury travel has been one of the bright spots in the

recovery. >> ritzat its worse ritz carlto great. >> the worst hawaiian islands is still the best place. >> and st. regis too. >> we have addition, we have w, we have our partnership with lvmh for the bull garry brand, which just opened its ninth hotel in tokyo. >> the business traveler, how important is business traveler to high end luxury, and how much of that is consumer? >> yeah, so business travel is the tortoise in the tortoise and hare of recovery. you almost have to look at the business traveler in two buckets. small and medium-sized business recovered to pre-pandemic levels years ago. the big multinationals have been slower, but neeven in q1 we saw globally 1% increase in revenue available per room and business transient. it depends on the business where they land in the quality tiers.

>> was there a time when you didn't rent -- there were rooms available, but you didn't rent them because you couldn't staff the hotel to the level that you -- >> i think it was less about staffing and more about in the early days of the pandemic unfolding. we had a quarter of our portfolio shuttered. we had a big chunk of the portfolio running single digit occupancy, and so if you're in those sorts of dire circumstances, you're probably only operating a few floors in the hotel. >> and that's not the case now. >> no, no, no. >> what about hiring people and do you have to pay up for good people? >> yeah, in many markets wage rates continue to increase. if you look at the number of open positions in the u.s., our biggest market pre-pandemic versus today, we're essentially back. we're never fully staffed, even though we have industry leading low turnover, you still -- it's an industry that does have some measure of turnover, and so we've on any given day, we've

got 4 or 5,000 open positions. >> if i was on the federal reserve, and i was trying to figure out how inflation is going to be faring, i'd be asking you about those wage increases. are they outstripping the level of inflation that people are expecting these days, and do you think that will add to pressures to inflation? >> they were for the last couple of years. they're starting to settle into a little more normal kind of inflation parallel pace of wage growth. >> how's international and where is it -- >> international is huge -- >> there's a horrible war still going on. >> to be sure. in the first quarter globally we saw rev par growth of 4.2%. only about 1.5% here at heome, 11% internationally. across asia-pacific, we were up over 16%, so that's where we're seeing the strongest demand patterns right now. >> i have to laugh, obviously

you need to visit a lot of these places as the ceo. do you have a favorite luxury spot? and i'm going to get back to business, but do you have a -- where you've been. you have to go. >> i have lots. >> you have to go to check it out. >> obviously i'm partial to italy so i love the st. regis and rome, i lover the new b bulgary in rome. across asia-pacific we have remarkable properties. i've been lucky enough to go to the maldives. >> i'm waiting for you to go. >> i know. i got a lot of places to go. i hear that derotto beach. >> rich carlton reserve in puerto rico. that's a great hotel, one of the original rock resorts. >> how often are you opening a new hotel in china? has that slowed? >> it slowed as a result of the pandemic, but what was interesting is we saw little to

no fallout in the pipeline, and we've got a big pipeline. we've got over 400 hotels in the china pipeline, some of those projects were on hold, but for the most part they've really -- >> 400? >> yeah. on top of over 500 open. >> a lot of people, i think, 400 in the pipeline. 400. >> so we're quickly on our way to a thousand hotels in china. >> we were talking taylor swift in the commercial break ahead of time. can you talk a little bit about what the taylor swift effect is? because we hear it has an impact on a city like chicago, huge boom. >> well, she's a force of nature to be sure, and we're very proud to have a partnership with her for this leg of the eras tour. smith travel did a study last year and suggested that the impact of her tour actually ra raised revpar or two, which is remarkable. with increasing frequency, people are planning their travel around big events. whether that's an f-1 race,

super bowl, taylor swift, another concert, and that's been a big driver of leisure demand. >> i think she's in france now. >> that's right. >> she's in sweden recently. >> comes back here for a little while, but i don't think -- >> i know she's going to be in miami, i don't know what other cities. >> and you've seen one of her concerts, right? >> of course. >> can you imagine doing that one night and then doing it again the next anynight. >> three or four concerts in a row, it's remarkable. >> you have to really like -- >> the broadway shows do two on with enzs. >> wednesdays. >> you have to like doing it i think. if you were gearing up for what's going to happen this summer, are people -- i mean, are people driving and staying at marriotts? are they flying and staying at marriotts? >> thankfully both. you mentioned at the introduction we have 30 brands. we operate across multiple tiers. reach just this year entered the

mid scale tier for a more value focused consumer. fly two destinations. when i look at the forward bookings for july 4th weekend, we're up a couple points over extraordinarily strong 2023, and then when i look at outbound into western europe, our forward bookings are up about 7% into france, italy, greece, spain, those types of destinations. >> so as a -- you know, let's say you want to be the best ceo in the united states, what do you need to do? is it logistics? is it your back? is it your computer system? >> i think it's all of the above. do you have to have great food, great restaurants. >> it's all of the above. >> is it? you must be busy. >> yeah. for us it's really making sure we have the right product everywhere our guests and members want to go for every trip purpose. so you mentioned your affinity for luxury, but when your kids were younger. >> i aspire to that.

>> and you look for more value focused. our objective is to offer a terrific experience across all price points everywhere you want to be. >> and you're -- you have more brands than anybody else. you have more rooms than anyone else. >> we have about 1.6 million rooms. >> the late great arnie gets a lot of credit for that. >> no question. he was, as you know, not only a great ceo but a remarkable man. >> he really was and we miss him. >> good person. >> but we love having you on. >> love to be here good to be back in the studio. >> will we see you again before -- you might make a stop over at -- we're going to be there at the olympics, broadcasting. >> as will i. should be a fabulous event. we've got a great footprint in paris and the teams are ready. >> you do. thanks again. >> thanks for having me. when we come back, elon musk trying to sway shareholders to vote for his pay package.

we'll look at the drama that's unfolding on x. "squawk box" will be right back.

shares of sam adams owner

boston beer now are down, in fact, now falling. s santori holdings said it's not in negotiations to buy the company. that shut downs a report from "the wall street journal" on friday that the company were in deal talks. so now down 11%. >> never mind. >> elon musk has been lobbying tesla shareholders on x to vote in favor of his pay packages. that's the compensation plan thrown out by a delaware judge in january, now up for reauthorization at the company's annual meeting on june 13th. to encourage shareholders to vote for the pay package, musk shared a sizzle reel of tesla's vehicles speeding through the desert and said he needs enough shares in the company to maintain control over it, especially as it ramps up its artificial intelligence efforts. in the 8:00 hour, we will speak with tulane law professor ann lipton about the shareholder vote. coming up, a new month and a new countdown to the latest jobs

report. on friday we're going to talk to ed yardeni of yardeni research about what's ahead in the rks t smemaetasheumr -- for the markets as the summer approaches. "squawk box" will be right back. ♪ ♪

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all right. welcome back, everybody. let's talk markets right now as we kick off a new trading month and get ready for the jobs report later this week. ed yardeni is the president of yardeni research, and ed, good morning to you. >> good morning. >> let's talk a little bit about what we see post-earnings season. i think you point out that 98% of the s&p 500 have reported. that leaves only ten companies left. pretty good time to take assessment of what happened and what we should expect for the rest of this year. >> well, all in all, i'd say that the results were better than expected. coming into the earnings season, the analysts were looking at something like a 1 to 2% increase in earnings, s&p 500 earnings on a year-over-year basis, and it came in more like 6 to 7%. there's still a few more companies to report, but clearly a much better result, and we definitely are seeing that in analysts' estimates of earnings for this year, next year, and the following year. they've been raising their numbers. so all in all, this certainly

justifies the bull market. >> yeah, you've got year end targets of 5,400 for the s&p 500 by the end of this year. 6,000 by the end of next year, and i think it's 6,500 by the end of 2026. that is part of your roaring 20s analysis, we're not talking 1920s, we're talking the 2020s this time. you still see a long way to go with this bull market. >> i do. i think it's actually fairly early on. some people are talking about it being mid-cycle, a bull market or getting near the end of the story. but i don't think that's the case. i think we're going to continue to see surprisingly strong productivity. we're not seeing that obviously in the first quarter numbers. last year we had very strong productivity, and i think that's going to continue into this year and beyond, so yes, i think there are similarities between the 2020s and the 19 -- and the 1920s, and that's technology-led productivity that increased

standards of living, which i think we're seeing now. >> and profit margins as a result are going to continue to climb too? >> correct. for many years prior to the maybe past ten years, everybody thought that the profit margin was just a very cyclical variable that just went sideways. the trend's actually been to the upside, and we're thinking that we could be seeing something like 13 to 14% profit margin for the s&p 500 in the next couple of years. >> i mean, that's pretty amazing for the short, maybe even the medium term, but we know how the 1920s ended. >> yes. >> do you see a similar sort of crash coming? and if so, what would cause it? >> no, i mean, at this point, it's hard to see that far ahead, but if we use that analogy, the problem that we had in the 1920s, the reason it ended so badly is because congress and the president at that time,

hoover signed the holly tariff in june 1930. if you look at a chart of the dow still average the great crash started in october of 1929, but then in early 1930 we actually reversed that and regained about half of what we lost. so it was no big deal until the june 3rd, 1930 passage of smoot-hawley and that caused a big crash. other factors were porimportanto but that was a big one. >> it's a good thing nobody is talking about tariffs these days. >> you're absolutely right. the risks are largely geopolitical in nature, in addition to the wars between russia and ukraine and the middle east, certainly seeing the potential for a trade war, and so that is something to be aware of. look, my base case is that there will be the 2020s, but i'm not going to tell you that it couldn't slip into something

more like a 1930s environment as we saw at the beginning because of trade -- because of tariffs. >> it's only 2024, i guess we can enjoy it while it's here. ed, thank you for joining us this morning. >> thank you. coming up, qualcomm's ceo laying out his vision for the aipc. jon fortt joins us next with his latest comments and maybe the other hand -- no, wait, monday. won't do that. he might, though. we'll be right back. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot. are you interested in safeguarding your investments with gold? alamos gold is a growing canadian gold producer with a long track record of outperformance. alamos gold. invest with us. our growth sets us apart.

her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they 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. qualcomm's ceo unveiling his vision for ai pcs, and jon fortt joins us now with one hand. >> i know. >> one hand. >> there's always another hand, joe, but just not formally this morning. the computex conference in taiwan has been going on over the weekend. there's a flood of announcements

having to do with chips and ai. we've heard from nvidia and amd both announcing both new server data center chips and a faster annual cadence for releasing those, but meantime, qualcomm's ceo cristiano armond underscoring his ai pc vision. qualcomm pushing this generation of high performance chips to challenge intel, amd and others, and i talked to him about exactly how big an opportunity financially he thinks this is. take a listen. >> let's start talking about size of the market. i'm very optimistic. the reason i'm optimistic is because you've seen now a change that happens from the pc to the co-pilot plus pc, and you see microsoft trying to drive that change, and i'm hopeful that everything that is happening with the co-pilot plus with the microsoft co-pilot is going to

drive an upgrade cycle. we come in with a solution that we design across multiple price points. we announce not only the x elite but the plus, and we can go $600 and above with leading battery life. the only solution that can run the co-pilot plus right now in performance. and it's all new for qualcomm. all new. we don't need any heroic market assumptions to be a player and have a significant contribution. >> joe, my default setting is skeptical with this. a.i. pc, what is that? who needs that? turns out here's the argument. say you're writing adobe software. you're editing video. photoshop, that kind of thing. more and more a.i. features, firefly, built into that. these pcs will run that faster. doing productivity software, microsoft office, helpers that come in, they're generating graphics even if you're not

graphics-capable, and the argument is, now you're going to need a pc just as a general office worker that your graphics creative worker would haven't needed in the past. that's what qualcomm is trying to solve. >> companies think that's the case? i wouldn't need it. for -- >> well -- here's how you might need it. >> and companies that do the buying. >> here's how you might need it. yes. say you get a big annual report in pdf form. right now adobe in acrobat says would you like me to summarize for you? pullous facts and data within that giving you a summary of a document. >> i don't want -- i wouldn't trust that. >> i know. we wouldn't, but a lot of people would, right ask we like to dig in, find the facts ourselves. we journalists are a different breed. getting ready for a big meeting and joe's got a report -- >> pcs, aren't they already able

to do -- setting you up for an "on the other hand." >> easy setup. always another side. no. not as quickly. right? >> you're really taking me seriously. i did it. i was able to turn this into -- >> i do this in my head all the time, with everything. drives my wife crazy. >> i don't think you should do "on the other hand" with your wife, jon. only one answer for wives. only one answer. >> and she's right. >> exactly. on the other hand, you try that. >> and cristiano amon thinks he's right on this one, though. >> thank you. when we come back, chinese companies and the government, military entities going to great lengths to rebrand to protect u.s. business interests. talk how regulators are trying to deal withhi ts trend. "squawk box" will be right back.

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chinese companies facing regulatory challenges in the united states. setting up affiliates to try to protect u.s. interests. while the actions to rebrand are legal regulators are taking notice, because they can't enforce the law if the

owner/operator is unclear. joining us now director at the rhodium group working with clients screening these chinese companies and can you explain in a little more detail what's happening? chinese companies or extensions of chinese companies that would be illegal but the companies somehow rebrand and change what they're calling themselves, maybe some of their corporate entities, as a result to try to not lose what they've built up here. how does that work? >> yeah. really no surprise there. chinese companies, you described, trying to redomicile, creatively restructure their entities. a way to stay sticky in supply chains, stay relevant in trends and really we saw a lot of this scrutiny pick up around 2020 or so as chinese companies, of course, were reading the room. they saw scrutiny building on them and during the trump administration, if you recall, lots of darts thrown at beijing.

right? chinese entities, but still a lot of smoke in the room. so there was still room, so to speak, for chinese companies to try to rebrand themselves, and hope they could fly beneath the radar. that's now becoming a lot harder, though, under the biden administration. >> when you say "rebrand," you think of a company that used to have a chinese name. all of a sudden it becomes u.s. first international supplier? or something like that? is it more than a name change? is there actually a change in the ownership structure? >> yeah. tried to create several degrees of layership here, where you can, you can layer out your ownership structure. right? to stay below thresholds that can trigger more scrutiny. the problem with has is the u.s. scrutiny ever chinese ownership thresholds varies depentding on what issue you're looking at. for example, ira criteria for

decarbonization technologies are stringent conditions, and, for example, for ev tracks credit eligi eligibility. other than thresholds but it's a moving target for a lot of chinese entities. it's not easy to stay right below in a threshold and try to disguise yourself. also, there's inbound investment screening by cfius, an interagency review, and that screening has been building up as well to look at different types of transactions, patterns of transactions, multistage transactions as well. so overall, this is going to be, it's going to be harder for chirnese company to do especially in strategic sensitive areas where industrial policy focus also is in the u.s. >> sounds like more than rebranding. selling ownership to u.s. investors what do they do? make sure they still have majority owned by the chinese parent company? trying to think of something people know and come back to

bytedance and tiktok in the united states. >> yeah. in some cases you have, you know, subsidiaries, affiliates, that are falling below certain ownership thresholds, partnering with american firms and trying to rebrand themselves as well in name to be perceived, at least, as an american company. but, you know, due diligence tools are getting better at tracing those degrees of ownership, and trying to understand what's the degree of chinese ownership. you're seeing this reflected also in u.s. legislation. where you're seeing a number of policy calls saying for any blacklisting or red flagging of chinese entities you're not only looking at the direct entity itself and its direct ownership structure, but any subsidiarsub, affiliates and successors to that entity. there's this overall preemptive approach to trying to capture more of this ecosystemal to say that even if a chinese company is trying to rebrand itself or

restructure itself, if they fall into one of these sensitive areas that could be effectively restricted. >> it's not illegal, regulators are frustrated by it, but what can they possibly do about it? >> that's where on the policy side you're seeing more emphasis on transparency requirements. right? so -- or investors to understand, what is the full ownership structure? is there any linkage to chinese military industrial complex enty, for example? and if that cannot be effectively screened, then, you know if you're in a sensitive industry that may require certain due diligence and restrictions to say that if you have reason to believe there could be some linkage to a military entity you should go ahead and avoid doing business with them. this is harder to do in the investor space, obviously, but there are restrictions on publicly traded securities

through a treasury list called nscmic list with potential to expand, but overall i think the emphasis right now is on transparency requirements and disclosures. >> thanks a lot. >> thank you. meantime it is 8:00 a.m. on the east coast. just pat it. you're watching "squawk box" on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen. nvidia announcing a new line of a.i. chimps. just months after the previous line of a.i. chips were unveiled jp gamestop shares soaring after trader keith gill known at "rory kitty" posted a screen shot worth more than $115 million as of friday's stock price. that stock is on the move up close to 80% right at this moment. then waste management buying medical waste disposal company stericycle for $5.8 billion.

per share price, $62 representing a premium of 24% to the price from may 23rd, which was the last trading day before a deal had been rumored. >> interesting, andrew. good to see you. most interested in this call position, and i don't remember what the number of calls was, but it was at 20 strike price. >> right. >> what we just said, that it was worth $115 million on friday, he's got a bunch of calls. strike press of 20. that he bought for 5, and it's now at 43. so -- that's in the money by $23. just -- that's a good deal, if you can get it. right? and immediately that causes a lot of controversy. how is this any different than some hedge fund guy that loads up on a position, and comes on cnbc and touts his position. doesn't it seem too good to be true to be able to do that? if you load up on those calls.

i'm not sayi-- say it's you hav hundreds of those calls. >> and is he catching up? right? cashing out. right? if he's cashing out all quote/unquote followers, he's not really in line with them. >> and people on the other side sold the calls. they're just -- you know? it's at 43 and they got, provided 20. but is it -- i don't know. do we need new, need to look -- >> new rules. new regulatory rules for -- talked about this, though. the question is what is he doing -- >> he's not saying anything. signaling things. >> he's signaling things. by the way, there are folks, there are short sellers, there are long investors. >> same thing. >> could have an analyst report saying we believe this stock is worth double. or we think this stock is worth -- >> remember the days allowed to do that long.

no one said a word. someone comes on and muddy waters or something it's a whole different issue for people. >> sure. >> you're short. it's un-american. a lot of money. it's no longer 115, whatever we said it was. those calls. >> haven't verified this either. >> we don't know if it's true. >> bigger problem, and i i don't know what rule the s.e.c. would use. making a mockery to some degree of the markets. >> joe said it before. it's like a pump and dump. turn around sell it. hold on to it, it's one thing. >> futuring this morning. we have, last time we looked green across the board. after a pretty solid may, and that's still the case with on the nasdaq now. almost 90. treasuries and it -- will be an interesting week given that -- a late -- what's friday? it's like -- one of the later jobs numbers, though. usually get it in the first

couple of days of the month. but it will be jobs friday. get to mike santoli for a look at the markets still in positive mode last month, mike. >> sure, joe. actually one of the first conconfer confer -- questions coming into the week, the pop friday. s&p up 1% in the last hour. a big month-end rebalancing, index rebalancing day and mcnichol reallocation, maybe unwind in the morning monday. not yet. seeming it's going to happen you pointed out futures. big picture, yes, strong month of may. last month down one half of 1% but been a two-month sideways-ish period. kind of just been digesting gains of the prior seven months. there's been a lot of talk about the differentiation, a split market with, again, some measures of the breadth of the rally kind of falters just a little built. it's not clear to me that's necessarily a dangerous thing looking forward.

look here at the equal weighted russell 1000 against the long-term treasury etf as well. buying yields go up, prices go down. seems to hit the breadth of the market not necessarily the headline nasdaq 100 driven by secular companies. see the harmony between what bonds are doing and the average stock is doing, even as the overall market plays defense goes. nvidia. one stock second or third on a given day largest weight in s&p 500 almost a mind of its own and act like its own asset class. a big, i guess, asterisk you might put in. bellwether cyclical areas of the market treading water. banks on a year-to-date basis. banks, home builders and transports. one of the reasons people look at intern action and saying what's the macromessage? deceleration that's favorable because of a soft landing and

fed eases, yields come down? or a little wear and tear on the expansion? so far market's treating it as a net positive. see how that goes, joe. >> like that. big asterisk, as you said earlier. talk more about the market. specifically what options, equities. love doing this. head of derivative strategy at rbc capital markets and it's always fun when the tail is somewhat wagging? isn't it? >> that's not wagging. >> and ignored at your own risk. what is it telling us right now overall? >> so i would say a few things. i would say right now investors are kind of facing sentiment, joe. gamestop news certainly will trigger that further. one thing we had seen probably in the last month since earnings had happened was the right sucked out of the market.

scooberens. fomo, momo associated with a.i. nvidia did well, as you could out of the market. looks like we may trigger another meme frenzy. high knows if that stay? sentiment whiplash experience in the the options market, something very prevalent this year and keeping investors on their toes. >> i can't remember the nuance of last time. some taken out of the market, but was there still no hedging on the down side? >> so that's also changed. we kind of talk about the left tails, down-side protection being a little asleep. people not focused on hedging at all. it started to tick up. part of it, i think, an earnings season people waiting to finish, facing a summer of more macro economic news and obviously the u.s. election cycle but a notable pick-up in skew. like s&p. telling you people are getting nervous under the surface.

>> there is a little bit of divergence between the nasdaq and the dow at least. s&p, too? >> yeah. look, this comes down to how the meat is made. right? the qs or in the s&p the that component weight of your a.i. stocks of your nvidia, your apple. obviously that filters down on the etf level, too. essentially seeing people make bets overall that say, look, we're a little worried about the turn. then obviously positioning-wise. people are more long. simply more to hedge. also we can create function of a steep skew. >> and i can paint kind of a bearish fundamental picture that makes me wonder about how fast and how far the market has come, and it's based on sticky inflation, and slowing growth. which is, you know, neither one of those is very positive. >> sure. you know, and then i think someone on the trader, inside, pcu better than expected, this

part of the consumer base seems resilient. nuance on the options side is that the left tail is fatter. what i mine by that is we've thrown in a lot of unknown unknowns. i think kind of the prosecution of the u.s. election cycle is going to be one of those unyoan unyoans. particularly with the outcome of the trial. when those left tails are fatter i think folks who focus on the risk itself and that probability is why they're starting to go to options. >> thinking whether that's a real thing an "unknown unknow." is it? >> yeah. you don't know what you don't know. >> an unknown -- >> exogenous risk, if you will. investors are good to a degree. quantitative to say what does pce apply to the fed rate cut? but how do you prosecute what do we do with an election cycle potentially one candidate is in jail or potentially there's a court appeal going on, something

else? it's these, like, geopolitical risks and pulisic risks i would say the market itself is worse at quantifying, and that's why your left tail gets fatter. >> and every day you read the headlines, read it like it's normal. we've never seen a lot of this stuff before. >> yeah. one of those, you don't like to say unprecedented but feels a little unprecedented. that's mirrored into the market isn't through the stock market itself. it's through the rising of these tails. that left tail steepening to me is this idea of there are all of these things we can't affecter. median line is still things are going to be fine, because we look back in history. that is what has happened, but then these exogenous risks are shocks somehow we have to bake into the system. >> amazing. we've seen more as we've seen paris, all of these things in the market. two days later, back on. >> short-term memory.

>> crazy. thank you. >> thank you. coming up when we return, elon musk lobbying shareholders to vote in favor of this pay package. talking to ann lipton about the upcoming vote that has billions of dollars hanging in the balance for tesla's ceo. and later reid hoffman here at the table to talk about the a.i. race, latest venture to join the competition with his own digital twin. y you'll meet him. the real one and the a.i. version. don't miss it. "squawk box," coming right back after this.

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welcome back to "squawk box." tesla's highly anticipated shareholder meeting is happening next week among items on the agenda shareholder vote on elon musk pay package. joining us now, someone very outspoken about this. number of debates. i imagine we'll continue that. professor in business law and entrepreneurship at tulane, ann, nice to see you.

some supporters in glass lewis, a number of big, big shareholders on the other side of it. a morgan stanley report this morning suggesting that majority of tesla shareholders actual li want to vote in favor of the package. what say you? >> shareholders are welcome to vote however they want. my position is more that it's not obvious that the vote will do what they think it is. it's just -- it's legally questionable whether or not he can undo the judge's ruling of this vote. we may be headed to a lot more litigation. >> can you explain to the audience if, in fact, you are right, and that no matter what the outcome of this vote is, that somehow it is going to be brought to court and that a judge is going to overturn the vote. what would happen next? let me also ask you from a governance perspective what you think should happen? meaning, i imagine you think

elon musk should be paid something. i imagine you think he should probably be paid a lot. maybe not as much, i imagine, because you think it's waste at this point, put what is supposed to happen at this point? >> well, i mean, okay. so let's start with -- i mean, if -- if -- if the shareholders vote in favor of it. >> yes. >> there will be challenge in delaware chancery before the same judge claiming the vote simply, you can't undo this prior rules for various reasons including that you can't award someone this much money for services they've already performed, that the shareholders are essentially being blackmailed into voting for the pay package, because he's threatening he's going to take tesla resources and develop a.i. in his other companies. so there are going to be those legal challenges if shareholders vote in favor. we don't know it would have that affect. what kind of pay package he should get i'm not a compensation expert.

all i can say, he has -- one of the points made by glass lewis, he has 13% of the company right now. he has lots and lots of incentives to bring the stock price up without additional pay package, and also this is not a pay package going forward, and every reason to think there will be a new pay package going forward. that one will be done until accordance in the way these are usually done. talking to a compensation analyst and that's on the table going forward. it's not clear what ratifying the past package would do. >> here's the hard part for me. i believe that elon musk was working under the assumption and under a contract an actual contract. now, contract has been undone, but a contract nonetheless. he worked all of those years under that contract. and now he's not getting paid

that money. do you believe that he could, and i believe there's a fair -- i won't say what i believe. do you believe he could sue the company? >> this has been floated. i mean, anyone can file a lawsuit. no one's barring the doors of the courthouse. asking whether the lawsuit is likely to be successful. the problem with that, definitely a legal theory that says i performed work for you, a benefit for you and, therefore, you should pay me in fairness to compensate me for my efforts. he could absolutely file a lawsuit claiming something along those lines. >> not just that, but that the contract itself was -- he was working under, working under a specific contract with specific metrics he was supposed to hit. >> right. the problem with that, with the contract theory is that you can undo contracts. governance contracts. if they were created in violation of fiduciary duties

and that's what you got. violated fiduciary duties to tess. >> larry: interfering with the board and misused details of the contract and, therefore, you can undo contracts in fairness on that and then you're left with a general theory if you perform work for somebody and you haven't been paid they should pay you the value of your services. >> right. that's what i want -- i want to ask about that. a slightly different question, because you've also suggested they can't pay you back, in, like, back pay. that doesn't make sense to me in that there's a lot of people that pay people bonuses end of the year that is effectively the equivalent of back pay. that's what it is. also the suggestion somehow he's blackmailing folks. i'm not even suggesting he is or isn't, but i would say every employee to one degree or another has the opportunity at any moment to say, i'm out. i don't want to do this. that unto itself sounds like, to

you, would be considered blackmail? i don't really understand that, because everybody has that right technically. >> but that's not at all what i'm arguing. he absolutely has the right to say i will walk away from tesla if i don't get my back pay. problem is, he hasn't said that. ex-cles italy he's not said that. nothing the company has ever said that. mccormick has no intention walking with tesla. he is saying pay me or i will remain at tesla while taking tesla's resources to use in my private companies. that, no employee gets to do. no employee gets to say, if you don't pay me i will stay here and take your resources away from you and put them into -- >> i'm not sure that's what he said. i think he's said, look, already started xa.i. and you could have a debate whether you want your ceo and other people a part of your management teams to be able to participate in what might be

described as extracurricular activities, some you might think are competing with your own business? >> that's the part that's the problem. the competing. if you want to open upa dance studio we'd ask whether he was distracted but not taking tesla the resources. the problem is that he and the board have said tesla's future is a.i. setting up a competing a.i. company pitched as using tesla's data to develop its own technology. that is the part where -- >> hold on. separate that. i don't bly xai is planning to use tesla's data, using data from x. >> no. bloomberg reported he said he was using tesla's data. that's the public information that i have. >> if he was not using tesla the data would you feel differently? >> no. because he's already been using tesla's engineers. that's another resource. and -- competition is considered a violation of fiduciary duty. not supposed to directly compete

with the companies that you head. so that's the problem with -- if he were saying, i will quit, and this is what you need to get me to stay, that would absolutely be fine. so as far as handing employees bonuses end of the year, those kind of things. those all had that same forward-looking component. moat slatetivates the employee forward. tesla saying we're not negotiating this package. >> he worked five years doing that. >> he did that for five years while having -- we're not five years -- the point is -- >> nobody ever brought that case had he not hit the numbers. that's what's so wild about this bizarre situation. >> i think they brought the case before the ultra numbers were hit. the problem here is that at this moment in time tesla said we did not negotiate and we did not say this a forward-looking package and may still design a package

and almost certainly will put in place a forward-looking package. if that's going on, we're still left with, what are you paying this old package for? that, again, a court, may be overturn and appeal but not yet. a court found he violated his fiduciary duties to achieve. >> we got to go. it will continue at least another week. perhaps we talk about it again between now and then. appreciate it. >> thank you. when we come back, will consumers power through higher prices and continue to shop? or are they about to drop? we've got summer retail winners and losers, next.

all right. welcome back, everybody. now to the retail shakeout. this earnings season crowned big winners and more than a few big losers. joining us to talk all things

consumers, jwwe, kniffen. somebody behind us all morning. fun. angel in a suit with a rubber chicken with him, too. >> oh, he did? >> not sure where that was headed. welcome. welcome to the party this morning. let's talk a little built about what w -- bit about what we're seeing and winners and losers in retail. i don't remember another earnings season you saw swings of 20-plus percent in a retailer, and a series of retailers as they reported erpings. seems like everybody is on tender hooks waiting to see how the consumer is holding up for each of these individual brands? >> kind of the stock market froth, right? retailers themselves reported not that exciting either way numbers. we saw pretty solid consumer. if you looked at walmart numbers

were good. right? that's the consumer writ large. look at smaller pieces, even the gap had good numbers. clearly they're coming back. abercrombie reported good numbers. haven't were that great in the past either. so dick's sporting goods reported very good numbers. considering that's a tough market right now for sporting goods. so if you look across the group, you certainly see plenty of people reporting good numbers. in retailing, we always have people that aren't winning, and we see that as well when we report. if you look at what the consumer did. the consumer did exactly what they'd been telling us. they're keeping the spending going. you can only stop them by scaring them really badly. we haven't managed to yet. by shutting off their credit and even at 21% short-term borrowing rate, 14 pre-covid, haven't stopped them there and destroy their jobs. clearly, the job market is still pretty good and people are still

getting raises that stay on the job. and people that change jobs are getting better raises. until some of that changes, this consumer is going to do what you heard a while ago, and you talked about, this is the roaring '20s. this is the roaring '20s. >> just going to bring that up with you. it plays into what we heard from ed yardeni. not mid or late cycle but early cycle and it will continue for years. would you buy into that in terms of what you follow with the consumers? >> telling you the roaring '20s since that started and this is going to be that consumer, because the same kind of things are driving it. the roaring '20s were post-war and post a huge pandemic. consumers said wear shot skirts, dance my heart out and spend money, and we're doing all the same things right now and now seeing taylor swift instead of going to some speakeasy

someplace. in fact, the consumer is acting the same way psychologically. if you're going to keep them from spending hit them in a head with a 2x4. i.e., take away their jobs. despite what the fed has done, high interest rates relative to pre-covid the consumer has kept going, and you can finally stop them, if we keep rates high enough long enough. we will slow down jobs. we will make it hard. right now, like i said, you're paying 21% credit. moved across the street bought the exact same house you're living in, payments will double. know they're there. consumer knows they're there, too, but basically said, long as i have the capacity to spend i'm going to. so now it's just a questionof, where do you spend it? people like walmart have said spend it with me. i'm going to lower prices to you because aye know you're

struggling with think 20% raise you're facing pre-covid. >> you think walmart is best retailers out there right now. can you explain why? >> walmart best. costco second. home depot third. dick's sporting goods may be fourth. i explain that because walmart had capacity to reinvest in their business and have done it all through covid and right up to now. developing better technology to get the consumer in their store, to keep them in their store and give them better deals than ever done before. they're adopting a.i. faster than any other retailer, and they're making, therefore, their distribution system more efficient. and, boy, when you're the biggest player and you've got the most money and the lowest cost to capital, and you're doing the right things, you and amazon can mop up the world sort of and they're doing everything amazon has done right. put in marketplace, basically said we're going to be just like amazon and going in 5,000 stores

and closer to you than they are. it's a huge battle, and when elephants like that dance, people's toes get smashed. we're seeing a lot of smashed toes. >> smashed toes. thank you. we'll have you back to talk more about it. great to see you. >> thank you. coming up, we'll see a boring summer for the fed with powell hanging out watching data. something else, central bank's summer plans, next. and then linkedin co-founder reid hoffman launching his own digital twin, read a. reid a.i. he joins us straight ahead. "squawk box" will be right back.

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it's jobs week and joining us now to discuss among other things friday's government report, the fed's fight against inflation, "wall street journal's" chief economics correspondent. good to see you, nick. start with something that struck me interesting last week. when someone made the case that the risks really are symmetrical, and they were talking, i was thinking, why is the fed so dead set on cutting

right now? given all of the things that we're seeing in the market and, you know -- just seems like a pretty good time. gdp-wise, consumer spending. they said because you're starting to see the other side of the mandate come into play. where? where are we seeing employment show signs of cracking? are we? >> well, i think the first question you asked there is, why is there this bias or this desire to cut? and i think it's because nobody really thinks 5 to 5.5 quarter is neutral. how far above neutral are we? just age little bit or a little more than that? i think that's why you've seen fed chair powell and others on the committee. certainly beginning of the year, on their front foot ready to ease. you don't want to overstay your

welcome at 5.25 when inflation's been coming down, but i think the fed will be boring for a change. you can take the summer off. the committee is united around doing nothing right now. that doesn't mean everybody feels the saum me way. some are uncomfortable about cutting and earlier overstaying their welcome at 5.25 to 5.5 neutral weight. wait and see, autopilot, until they're told to do something different. >> in the eye of the beholder whether or not you think we're restricted. seems we, like we have a lot of breathing room on the employment side of things. do we need what -- when the mandate says full employment, do they mean 3%? do they really mean full employment? we've never really had an employment -- unemployment numbers stay this low for so long, nick. seems we got breathing room there. inflation? i have no idea if they're ever

getting down to 2%. in a year, in two years. i have much less confidence in that than we're starting to see a slowdown in labor. so i don't see why the risks are symmetrical. >> yeah. i think you're right. there's a debate right now. it's the same debate we've been asking for the last year. it hasn't been resolved. one side saying, look, longer you stay here the more likely you are to create weakness in parts of the economy. just completely unprepared for the rate shock we had in '22 and '23. that would be commercial real estate, regional banks and the longer you do interest rates here the more that you will tighten the economy passively and something could break. the other side. this is something that goldman have been on the last year, rate cuts are optional. the economy's fine. you're past the peak impulse from the rate shock, and so businesses have had time to

adjust. households are adjusting. e co consumer's doing well. your last guest explained that well. this hasn't been a credit-driven expansion, it's wealth and incomes. asset prices are strong. consumers feel wealthier, spending more, and so until jobs and incomes change, it's hard to see how you have a slowdown that a lot of people have been anticipating. >> so in your gut, nick, and you follow closely in addition to having access, you're pretty sure that the default move will be a cut? there's no way we're going back to a stop/start? maybe because i was a child of that era, i know how easy it is to think that you've, you know, put a stake in the heart of inflation, and you really haven't. you're convinced the next move will eventually be down? >> well, never say never, but i think you have to ask yours,

where is the reacceleration going to come from? could come from wages, but we see wage growth slowing down. >> well --opec -- >> could come from a shock. certainly i think a shock is the most realistic way you get this. look at oil right now. it's not -- it's not threatening, you know, $100 or something we were talking about last fall. you could have inflation expectations move up. that would get committee members' attention at the fed. or you could have a global growth reacceleration. i think all the things you need to see to put heights back on the table, they're not really bargaining that right now. >> well, a successful soft landing, and that's all we needed, and we're back at cutting and the market's going to love it, and what a orld! i just -- nothing else is going right inthe world. maybe this will be a real happy ending, so to speak. >> yeah. i think the path for a soft landing has narrowed some, because the inflation we saw in

the first quarter made the fed reluctant to do the soft landing mid-cycle adjustment. it means there's a greater risk we're going to wait to see something break in the labor market before they start cutting. >> yep. >> they have, i think, trauma. a little ptsd from not just the inflation surprise of 2021, but then the second half of last year where they thought they would need to really slow down the economy to get the kind of disinflation we saw, and instead got disinflation with strong consumption growth. so when the fed or when central banks just aren't confident in their ability to forecast inflation, look what happened in the uk. the bank of england was ready to cut and then they got a bad services inflation number. >> right. >> ecb will cut this week but they got a services inflation number last week. there's a little ptsd here, which just makes them more data-dependent, more reactive to the high frequency numbers because they don't have

confidence in the forecast. >> a lot to mull over, nick. appreciate it. thanks. none of us have taken it off, but, thanks. coming up, reid hoffman. first, a message from not reid hoffman but reid a.i. hoffman. >> hi. i'm reid a.i. reid hoffman's digital twin looking forward to our chat coming up next on "squawk box." i'm just here for the internets. at&t it's super-fast. reliable. you locked us out?! arrggghh! ahhhh! solution-oriented. [jenna screams] and most importantly... is the internet out? don't worry, we have at&t internet back-up. the next level network. i sold a pillow!

i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put

finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

welcome back to "squawk box." talking all things artificial intelligence. reid hoffman is here, co-founded linked inn. today on the board of microsoft and last month launched reid a.i. his own digital twin. very nice to see you, sir. >> great. great to be here in-person versus reid a.i. >> hang on. you don't know this. maybe you do know this. i did an interview with reid

a.i. myself, and so i -- do you want to talk first? so people can see what you -- >> okay. >> know what you're like? this is the real reid. >> this is the real reid. we have to get the holograms right. >> a lot of questions for you, but a different question i asked reid a.i. >> so you studied 20-plus years of reid's writings speeching and interviews. what podcast interview do you think reid conducted most impressed you? >> that would be the podcast reid conducted with brian chesky the ceo of airbnb on masters of scale. brian shared his journey of transforming a simple idea into a global phenomenon. reid's inciteful questions overcoming challenges and fostering creativity made this episode inspiring and instructive. >> reid a.i. likes the real reid hoffman, seems like. >> yeah. >> a little too praising, i think. makes me cringe a little.

i'm insightful. >> how do you create this? >> well, so we used off the shelf technologies. video from 11 labs and a special bot trained on 20 years of my writings. all essentially what anyone could do going to these three commercial entities. >> and from a processing power perspective, how long does it take to create even the -- i asked the question and then i know we had to do work behind the scenes to create the answer. how long did it take to process, for example, that 30 or 40-second answer, to you think? >> most of it's creating the video. everything else is closer to, not still quite realtime in the convey we have the, kind of 200 milliseconds of real time interaction, but the video, the video's probably 30, 40 minutes. >> for that 30-second -- >> even 20 now. >> what was the biggest lesson for you in doing this, and what does this spell for the future, in your mind?

>> i think part of the thing we need to look at is, we've made this technology, available through opensource and a bunch of different things. the future is coming. we need to figure out how to steer it and part of why i wanted to do it. interesting for me. literally what could be positive in this? for example, gives me language superpowers. i gave a speech and released reid a.i. in arabic, japanese, indy. speaking chinese. strange. that kind of human connection is actually possible here and one of the positive features of what is otherwise known at deep fake technology. >> how scared are you of the deep fake side of this? >> if i could wave a wand this year and not have anyone able to generate video, not having uncertainty including people claiming deep fakes when they're

not at part of this. >> do you think there's a technological solution? people talk about crypto being of part of this, stamping it. is that possible? >> it is possible and a technological solution that creates a kind of like what is the real providence of this? re things? reid is really here talking with "squawk box," and there's a certificate that asserts that, that goes, we trust that certificate. i don't think that the ongoing battle of, i have a video technology that can tell you, looking at it if it's deep fake or not, that's an uncertain ground. >> how far away are we from making this feel really real? when you sat down, becky was saying it -- >> it sounded a little flat. it didn't have the same inflections that you have. the first answer sounded closer to you. >> we're months away -- >> just months? >> because it improves. the lip syncing gets a little better, the gesturing gets a

little better, the ability to go soft or loud or aggressive, all of that's just improving at the pace that software is improving. >> can i ask, though, you mentioned politics and the problems that that could pose in a year like this. warren buffett brought it up at his annual meeting for berkshire, the idea that you could have a fraudster that emulates someone like him and gets a scam started to steal people's money. it seems like there are massive problems that could be unleashed by this just on daily life. scammers get so much better and it's already so easy to fool people into giving you money. >> one of the things that you should think of is solutions. when you think of scammers that are using things on the phone, what if you had an a.i. assistant that was yours that was listening on the phone and says, this one sounds like it could be dangerous. ask the following question. so, i think we will figure out the technology defense. it would just need to do it in the right time frame. >> we have had a number of

guests recently talk about, when you think about a.i., especially from an investment standpoint, that the chip makers are clear winners. nvidia, clear winner. less clear who the winners are in the software universe and whether all of this either becomes commoditized or something else happens. what is your gamble on that? >> well, i have -- >> and you're a board member of microsoft. >> yes. >> so, i'm -- i have a seat at the table, both at microsoft, you know, cofounding inflection, a variety of a.i. investments, a stack of things. every single thing that uses a computational item, and it's not just your phone or computer, but also like your speakers and your cars and everything else, everything is going to get massively more intelligent, so the product -- the benefits and productivity, the benefits in quality of advice is going to be huge. >> are we overstating, though, sort of idea that we're going to

sent s -- maybe it's just great at creating emails or this is just going to become -- do you think this becomes a helper or a replacement in truth at the rate you're seeing the development of this go now? >> part of reason i wrote "impromptu" is i think the baseline is human amplification. i think it's going to be a helper for years. that doesn't mean that there's zero replacement. for example, when we have jobs that are basically trying to get human beings to act like robots, robots act like robots better than human beings. like customer service. i'm following a script and i'm supposed to be following this exact script. a robot does that better. >> how do you stack rank, who's got the best technology right now? if you were to say, there is chatgpt, which obviously is in business with microsoft, you have google and gemini, you have anthropic, inflection is now part of microsoft, you have mistrel, aws apparently is

building their own. what do you -- perplexity is out there. if you were to say, one, two, three, this is where it is and you think it's going to stay that way, that's the question. >> it's dynamic. everyone's investing a lot and building, so saying it will stay that way necessarily is foolish. and also, i'm not trying to complexify the question, but it's better at different things. i've heard that gemini is better for writing fiction, that openai is better for the quality, the analysis, and the search results. those kinds of things. even that might change in two or three months. i think there's a number of high-quality efforts. >> do you think they all need to be independent? i ask because right now, none of them are owned specifically by any of these companies, really, though i think microsoft's developing its own technology, frankly, one day to compete with openai, but there's a big sort of question mark about whether regulators would ever allow it but whether they need to

actually own the businesses. >> well, i think, look, obviously, google owns gemini and whatnot. amazon's building its own. i think that there is going to be lots of competition here, which i think is the really good thing, so owning or not owning, and there will be a bunch of different partnership deals that will work in this. but i think the root of all of the very complex area of the question you're asking is, it's good that there's going to be a bunch of competition, both for society and for businesses that have alternatives for what they can build on. >> last quick question, which is, for all the folks out there who are either starting new businesses or thinking, i need to invest in a.i. or whatnot, given the fact that there's this view that maybe one day all of the motes of all these businesses will disappear because a.i. will be able to build your app, what would you invest in? what wouldn't you invest in? >> i'm still an active investor at greylock. and things like network effects or enterprise integrations or things that humans know how to use in various ways, i think

those kinds remain. >> thank you, the real reid hoffman, and maybe later we'll show you some remo reid a.i. appreciate it. "squawk box" returns after this.

all right, folks, let's take a look at shares of gamestop this morning up 72% this morning to just under $40. $39.76. this came after a post on reddit from the trader, keith gill, appeared to show a large position in equities and options in game stock. that stock at $39.85. it's been on fire all morning, and we've been watching very closely. year to date, it's up 127%. keith gill never actually saying too much about all of these things on another social media, he posted a green reverse card from uno, and people can read what they want to into these things. >> i don't know. do you know uno? >> oh, yeah. draw four. we play it all the time. just means the reverse play. it means if you get reverse instead of going clockwise, the game will now go counterclockwise. >> okay, so, apply that to gamestop and tell me what the hell that means. >> i don't know what that means. does that mean he sold his

options? i don't know. i have no idea. final check on the markets, and don't forget what happens on friday. we are now down 10 on the dow. great month last month, almost 7% for the nasdaq, up another 89 points. there it is. 4.6% on the ten-year. that could change on friday. make sure you join us tomorrow. "squawk on the street" is next. ♪ good monday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at post nine of the new york stock exchange. we do quick off the month of june. these first couple weeks will be busy. futures are pretty solid after friday's monster closing rally. ten-year is back below 4.5%. our road map begins with the a.i. race. the rivalry intensifying over the weekend as nvidia and amd preview these new generations of chips powering the global a.i. boom.