good morning! it is 8:00 a.m. at the "vanity fair" new establishment summit in san francisco. it's 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ i spent last night in the arms of a girl in louisiana ♪ ♪ and though i'm out on the highway, my thoughts are still with her ♪ ♪ such a strange combination of a woman and a child ♪ ♪ such a strange situation,

stopping every hundred miles calling baton rouge ♪ welcome to "squawk alley." with me at post 9, kayla tausche. >> a head bop. >> yes. jon fortt is at the "vanity fair" summit and joining me. jason calacanis. good morning to all of you. the clock is ticking to the start of the final presidential debate between donald trump and hillary clinton, 9:00 p.m. eastern time from the university of nevada in las vegas. our own john harwood is on the scene with a preview. good morning again, john. >> reporter: good morning, carl. i want to play for you some of the sound that we talked about last hour showing highlights from the first two debates, which are the most important ones, because the viewership was higher than we expect it to be tonight. in the first debate, the most effective thing donald trump did was make an argument for change, and hillary clinton baited donald trump in ways that paid

off later. take a listen. >> why are you just thinking about these solutions right now? for 30 years you've been doing it, and now you're just starting to think of solutions. >> well, actually, that's -- >> i will bring -- excuse me -- i will bring back jobs. you can't bring back jobs. >> well, actually, i have thought about this quite a bit. >> yeah, for 30 years. >> you wouldn't pay what the man needed to be paid, what he was charging you to do -- >> maybe he didn't do a good job and i was unsatisfied with his work, which our country should do, too. >> do the thousands of people that you have stiffed over the course of your business not deserve some kind of apology? >> now, there hillary clinton put the onus on donald trump's conduct. she got a big assist between the first and second debates with the release of that audio tape, the hot mike tape, where donald trump was talking in lewd fashion about women. that gave hillary clinton something to come at him at in the second debate, but donald trump showed a more aggressive side of his own. >> what we all saw and heard on

friday was donald talking about women, what he thinks about women, what he does to women, and he has said that the video doesn't represent who he is. but i think it's clear to anyone who heard it that it represents exactly who he is. >> if i win, i am going to instruct my attorney general to get a special prosecutor to look in your situation, because there has never been so many lies, so much deception. there has never been anything like it, and we're going to have a special prosecutor. >> now, every indication that we have is that donald trump, who continues to be on the defensive, is going to be more aggressive against hillary clinton. "bright bart news," whose former chief executive is now chief executive of the trump campaign,

has just touted an exclusive interview with a woman claiming bill clinton sexually assaulted her in 1980, 36 years ago. she may be at the debate. we're not sure. but you can expect more tough talk from donald trump for both hillary and bill clinton tonight. >> and we do expect to see meg whitman, amongst some other business leaders as well, john. thanks. be sure to watch our special coverage of the debate tonight. it begins at 9:00 p.m. eastern time on the east coast. turning to business, salesforce had considered 14 possible takeover targets back in may. that's according to documents reviewed by the "wall street journal." the list of targets does not include twitter, was part of a presentation e-mailed to current salesforce board member and former secretary of state colin powell. self-described hactivist group d.c. leaks took credit for leaking the documentation, a 100-page e-mail dump. josh, now we're wondering whether or not they were ever interested in twitter at all. >> yeah, and just kicking things

off, please, go change your password. do not use the same password on every single server, and turn on factor thent occasion. your e-mail has already been hacked. please, use a long, unique password in every service. now, looking at your question, was benioff ever really interested in twitter? as i said last time i was on the program, it happened to be that he talked a lot about this during his big conference week. so you know, benioff likes to mix it up, he's a big twitter user. i don't think that anybody thought that was a real acquisition target. but when you look at the list of other targets on here -- box, demand, hubspot, these are all monthly software as a service, paid by the seat, you know, enterprise software plays that would play very well into what salesforce is doing, and it's clear that he has the ambition to do a roll-up strategy here, and it's a brilliant strategy because consumers, instead of paying $400 at the beginning of the year for software that they

never use, they now pay $1 a day. and you know, they pay 30 bucks a month and they can cancel at any time. it's really been a revolution in how software is purchased, and that's really what drives the m&a opportunity. >> john, but then there's adobe, and this morning, jim cramer when i asked him whether salesforce plus adobe would equal a deal that we would actually see, he said, no, benioff and nerine, as is workday, also on the list. so, what do you make of all of that, adobe being a $55 billion company? jon fortt? >> are you asking jason? yeah, jon's not there. >> i'm sorry. i didn't know you were talking to me on that one. on adobe and salesforce, that wouldn't make a ton of sense. as you mentioned, adobe is really big, probably too big for the likes of salesforce to swallow. workday is another question,

though. yes, neil busri and marc benioff are very close. but when it comes to whether or not twitter was ever on the radar for them, i wouldn't take this presentation as evidence one way or another. when i talk to ceos and cfos, particularly enterprise, they always have certain targets on their radar, they're tracking stock price movements, they're looking for potential opportunities with those. and then every once in a while something pops up out of the blue that might have been interesting to them but maybe not on the list of targets they were tracking and expecting, perhaps, to come up as a possibility. so, it could have been that twitter was one of those, but you know, that could also be why a lot of investors in salesforce did not want them to pursue any kind of transaction with twitter, kayla. >> although tablo's up about 7% having been included on that deck, guys. next, new reports this morning that apple is gearing up for a new product launch. according to re/code, the company plans to unveil new versions of the mac at an october 27th event, just in time

for the holiday shopping season. apple has not refreshed the majority of its mac lineup in more than a year. you can see shares down about 22 cents this morning. jason, what do you think this means? and specifically, in the broader picture, too, for what the mac will be to them in the years to come? >> yeah, i mean, if you just think about what's the primary computing device for most individuals today, it's going to be their phone, maybe their tablet, and then falling back to their desktop computer. and in fact, you know, people are coming out with keyboards and monitors that hook up to android phones. so, in the future, two or three years from now, it's completely possible you'll come to work with this device and just put it on your desk and it will connect to your monitor and keyboard, and that's the only device you'll ever own. apple doesn't seem to care about the desktop computing environment. they haven't been updating it on any regular cycle, which is kind of unforgivable in my mind, because i think there's a big opportunity there still. people want to upgrade their computers, they want the powerful computers, and they're just another focused on it. then you have the whole ports controversy. you know, i just bought the

iphone 7. i got rid of my regular headphone jack, now i'm using lightning. new computers have usbc connectors and a regular headphone jack. so, it's just a mess. they don't seem to have any overarcing strategy here. and you know, i don't know that besides this little keyboard they're coming out with if there's going to be anything compelling in terms of innovation. it's the end of the desktop cycle. >> yeah, i want to take the other side on this. i think this is a cycle where the mac is potentially more important to apple than it's been in the past because the smartphone has pretty much flattened out when it comes to growth, even dipped a bit. and you know, for every mac that you sell, average selling pricewise, it's worth about 2 1/2 iphones. they're also very profitable. and it's been a long time since they've upgraded them, so there's potentially a lot of pent-up demand. so, if apple does well with this particular cycle, given the fact that the iphone 7 maybe has a little bit more of a tailwind

than people expected, thanks to samsung and thanks perhaps to it just being a better time in the upgrade cycle than people expected for smartphones, then that could be really significant in q-4 and q-1 for apple in a way analysts might not expect and really adds to gross margins, guys. >> that's going to be interesting to watch, if in fact, it turns into a big seasonal gift, especially with what they said about the chip cycle in q-4. for bezos, one week after launching amazon music unlimited, amazon announces a deal with country superstar garth brooks. he is the best-selling solo artist in u.s. history, one of streaming's biggest holdouts. he talked to us on cnbc on may about streaming. take a listen. >> the industry has changed night and day. radio. i mean, record labels were just on the brink of extinction until streaming came, and now whoever has the most catalog wins, which is the record label, so they're back in charge now. >> jason, we talked earlier in

the week about what they were spending if this was really going to be a $10 or $4 product. that's a big fish to land. >> yeah, i think music's completely irrelevant in the conversation. none of these albums are driving people. no individual artist is driving sales of these products, unlike when you look at the tv shows. i mean, if you have "game of thrones" or "walking dead," "transparent," "house of cards," the marvel series on netflix, people will buy netflix, amazon, hulu, hbo, based on a specific series that will pull them in. artists are largely irrelevant. and if you look at it, the spotify family plan is 16 bucks for six accounts, not just for my family, but my two brothers and my mom. we're spending $2.50 a user to have unlimited music. and i think it's about commodity tiesed and people defending the album, the oldsters, they are not relevant anymore. >> jason, you're from san francisco -- >> this is a sign -- wait a second -- >> here we go.

>> this is a sign that amazon is really serious in music. i mean, garth brooks was a holdout, but when amazon talks about their music strategy and their advantages, they talk about the fact that they actually sell cds and do downloads, and now they're doing streaming. garth brooks was a holdout because of the business side of things and not seeing the advantage. if amazon is able to show him that advantage, then they're going to push that to other types of artists that are a little bit on the fence about streaming. so, i think this is important because amazon's after the share of wallet play and garth brooks' audience, as i'm sure kayla is about to say, is not just that coastal audience, it's that middle america audience that amazon really needs for its big-time ambitions. >> i think those people already have amazon prime, you know? there's 70 million amazon prime members. sure, maybe this gets them 2 or 3 million more, max. i don't think it's relevant. >> jason, i'm shaking my head here, but that's because there are so many people that i have

just heard from this morning that will be signing up for amazon prime music because of garth brooks. our courtney reagan points out, he sold more albums in the u.s. than any other artist except for the beatles. if you are going to make a big splash with your first big exclusive, there is no one bigger that hasn't been gobbled up as of yet than garth brooks. >> listen, i don't know if garth brooks fans all have computers yet. this is the laggards of the laggards. these are the last people to get online, so, let's not act like this is some huge driver of music. >> oh, my goodness. >> or culture. it's not. >> apparently nothing is sacred today. the pc cycle, garth brooks -- >> you're as right about this as you were about lebron james. >> it's all over. let's talk about artificial intelligence. let's talk about self-driving cars, stuff that's not relevant. garth brooks is not relevant. >> jason, you always light the fires. thank you so much, jason calacanis joining us from one market today. meanwhile, the equity markets are getting a lift, largely in part to crude oil,

which has broken below $52 a barrel after the latest crude oil inventory numbers which showed a sizable draw. so, you are now seeing the dow and the s&p up a fraction of 1%. the nasdaq is in negative territory. part of that is because of intel. check out shares of intel, getting hit hard despite a third-quarter beat on the top and bottom lines but disappointment over the q-4 guidance and the data center growth rates are weighing on that stock today. when we come back, a cnbc exclusive with goldman's top tech banker to george lee from the innovators summit. we'll get his take on everything m&a next. and walt mossberg on the pixel and why it's the best android smartphone he eefers tested. and later, we'll go to the new establishment summit and jon will sit down with chamath palihapitiya in a first on cnbc interview. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary.

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i rent this place and then i started home sharing. my roommates help out all the time. they are glad to meet the guests and that opportunity that airbnb has given me is such a priceless gift. i was able to take three months off to take car of my family during a family tragedy. the extra income that i get from airbnb has been a huge impact in my life. tech m&a heating up as the new year approaches. david faber is at the builders and innovators summit in california with a special guest. david? >> thanks, carl. i'm joined by george lee, chairman of the tmt practice at goldman sachs, also the chief information officer at the investment bank. >> the investment bank, yeah. >> sort of an interesting responsibilities on both fronts there. >> it is very unusual to have an operating role and an advisory role at the same time. and you think about it, they're pretty synergistic.

having insight from dealing with my banking clients on all the changes going on in technology, the tools that are being built and thinking of how we can harness that to serve our clients better and more efficiently, so there's a lot of synergy to it. >> and developing things inhouse that they can then use out of house. >> precisely. one of the big themes for us is taking our analytical platforms and making them available to clients on their desktops, which really changes the nature of the relationship between a banker and their client. so yeah, it's really fun. >> well, some of the guys back at the nyc know that i've been very focused on artificial intelligence lately. it's sort of a joke that we have, but where the future is going. but out here it's not a joke. i mean, we hear the ai, we hear machine learning, our viewers hear about the internet of things, but this is real, this is happening, and it also is favoring prominently into the advisy work you do, i would assu assume, in terms of companies and the choices they are making. >> the themes sound fantastical and futuristic and a glimpse into the future. actually in silicon valley i'd

say it's a glimpse into the present. these things are far more pervasive and impactful today than you would guess. we talked earlier about our artificial intelligence and machine learning. if you're a company that's developing software that's designed to offer insight into clients and you're not into that learning, you're way behind the times. i think over the next three or four years, we'll see all the software and analytical platforms we use just getting smarter and smarter and of higher utility to humans that are using them. >> right. but for that to happen, they need data. >> they need data. >> and we're going to have data running off of more things than i guess we've seen for some time. >> there's an old saying in the data world, to find needles, you need haystacks. and you think about the people most successful in the world in machine learning and artificial intelligence, they've aggravated tons of data, they scan through that data, they find interesting insights that result from the conjunction of data points and those different sets, and you're absolutely right, it's one of the magic pieces of artificial

intelligence machine learning is can you find the data to create insight. >> right. now i like to think about theoretically in terms of where we're headed as a species. but specific to investment banking and dealing with companies that are making the chips or that are involved in the internet of things or are trying to figure out how ai is going to impact their business. i mean, what are you stressing as the theme? >> well, i think just this idea of investing heavily in these areas and, you know, being cognizant of the opportunity to make your software or your service better, smarter and faster through the use of these technologies. that's a consistent theme across our clients. the other interesting thing is there's a bit of a replatforming going on, too, because in order to deliver that insight, you need technology that allows you to manage data at scale, you need potentially new chip architectures that help you run at an extremely parallel way to make those computations faster and better and smarter. and so, there's a lot of change

in the compute stack that will help accommodate this revolution. >> there are some who say, george, that ai will actually be a more important advancement than was the internet. >> right. >> which seems a bold statement. >> right. >> is that something you think is true? >> no -- well, i think it's a momentous, momentous development that will change our world and even the course of our species, as you and i were talking about earlier, in ways that are hard to predict today. you might even say that as awesome as the internet has been, it will be best remembered as really the predicate for machine learning and deep learning and other things, the ability to have constructed, compute at scale in a network and as a way to collect data that's used to train all these algorithms. they're very parallel, but i think it's going to be nearly as momentous, if not as important. >> so, in this great landscape of companies we have, so many of them from out here, who are the winners in all of this? >> well, we're lucky here. we're today at this builders and innovators conference that we've done now for five years. and part of our effort in

hosting this conference of bringing together 100 great entrepreneurs from the u.s. is to find people that are leveraging these technologies across different sectors to make really interesting and innovative companies, and that's actually one of the themes i think's most interesting. we see it live here at this conference because we have entrepreneurs from across sectors, is technology as an investment theme now is cutting across every sector of our economy. technology, artificial intelligence, mobility is making every business better. and so, we see it across the landscape at 100 awesome young companies we have here. >> well done. george, thank you for joining us, appreciate it. >> thank you. >> george lee, chairman of the t&t. we will be spoking with ceo lloyd blankfein later in the day. look forward to that interview. for mow, send it back to you guys. >> david, thank you very much. david faber out in santa barbara. we are getting a news alert here and we'll go to dominic

chu. >> we have t-mo, the third biggest wireless carrier in america, agreeing to a settlement with the fcc for a $48 million fine, which includes relief for customers, this after the company pretty much said that it was -- it did not disclose properly how it capped user usage of its unlimited data plans. and again, t-mobile saying it will pay $48 million for not letting customers know about whether or not they capped certain data usage for their mobile plans after users hit a certain number of gigabytes that they downloaded or uploaded in any given month. as part of this, customers will get discounts on usage of certain data and what not. but again, this coming across right now, kayla. back over to you guys. >> thank you so much, dominic chu on that news. still to come on "squawk alley," shares of google hitting all-time highs, and walt mossberg says the company's new pixel is the best android smartphone he's ever tested. find out why, up next.

and stick around for a first on cnbc interview with one of silicon valley's top venture capitalists. his take on what he calls frontier investing. that's coming up. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments

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nearly eight years after the first android phone went on sale, google has put out a phone that combines hardware, software and a cloud ecosystem, and walt mossberg took it for a test run. google's parent company, alphabet, at the same time moving toward all-time highs today. and walt joins us now. of course, he is the executive editor of "the verge." walt, i'm wondering what you found so special about the pixel phone, besides, perhaps, its timing? >> well, it doesn't blow up. that's one really important thing to get out of the way right away. you know, kayla, i think it's fascinating that, basically, google is adopting apple's playbook of being vertically integrated, of controlling the

hardware and the software and the ecosystem, which allows them to make a million little constant tweaks that make the whole experience faster and more fluid and saves battery life and a million other things, and that in their first try at doing that, i think they kind of hit the target. they hit the bull's eye. they got themselves right into, in my opinion, right into the ballpark of the best premium phones, the iphone and the samsung s-7, galaxy s-7. and for that to be something you do your very first try is impressive. >> walt, it's jon. as you, of course, know, it took apple years to build up the global distribution that they needed to get the iphone to where it is today. plus, they've got those retail stores. >> right. >> even samsung had to build up a sort of store/in-store

presence in the likes of best buy to get to the scale where they got. how quickly with this great phone can google get to that scale of distribution where they really start to take share from anybody, i guess preferably for them samsung, since they've got most of it in android? >> that's a great question. google's internal dna, their bias is to sell things directly. it is being sold at best buy and verizon stores, among others, but they love to sell things directly on the internet. they have a lot of faith in that. and yet, as you know, jon, i think people like to feel particularly a brand-new phone that they're unfamiliar with, they like to look at it and feel it. it actually looks almost exactly like an iphone at first glance. but nevertheless, people want to see it. and i think it's going to take them some time. and on the other end, it's going to take them some time to get to

understand customer support. google has no experience in customer support. you couldn't even reach them until now, and they still don't have 400 stores or 500 stores or whatever apple has and genius bars, which are a big, big thing, you know, plus for apple that i think gets underestimated. so you know, chat support and phone support is going to have to be fantastic. >> hey, walt, i don't know if you noticed, yesterday google hit an all-time high, and it's doing it again today. i know we normally don't turn to you for price action analysis, but does this open up a truly new chapter for them? and do you think that's what investors might be tuned to? >> well, i can't say what investors are going to be tuned to, but i am tuned to the fact that it opens up a new chapter for them. you know, a year ago, 11 months ago, almost to the day, i wrote a column saying they needed to

make their own hardware. they couldn't leave android in the hands of, whether it was samsung or the chinese devicemakers. they had to make their own hardware. and, so, i personally think it's exactly the right thing to do. i think the right model for this kind of world we're in now, this po post-pc world, is to make your own phones, make your own home devices like the google home, which is the next thing to come out, which is the competitor of the amazon echo. they're making their own routers, smart routers. and they're going to be making a bunch of things. so, i think it's exactly the right direction. it's a new direction. they've built a new division or group inside google, headed by rick osterloh, who used to run motorola. and you know, i think that may be part of what investors are

factoring in because it's worked so well, obviously, for apple. >> well, now we know the secret -- listen to walt, your stock will go up. well heeded. walt, we'll see you soon. take care. >> take care! >> walt mossberg from "the verge." counting down to the close, actually just past the close in europe and the uk. seema's at hq. hey, seema. >> modest moves in the european markets, as investors await tomorrow's highly anticipated ecb meeting. no action is expected. mario draghi is widely expected to defend the european central bank's massive qe program. meantime, watch the currency market. the euro is falling to its lowest level against the dollar since july 25th, holding on to $1.09, a key support level. on the earnings front, a couple names in focus. dutch paints and chemical company akzo nobel beating quarterly results but falling after saying challenging conditions remain in several countries and segments. another key company to keep an eye on is reckitt benckiser

after postingwarer-than-expected sales growth. and for carrefour, they beat expectations boosted by growth in latin america. that stock up 5%. now on to politics. uk prime minister theresa may continues to defend her intentions to find the most optimal deal with the eu when it comes to trade. >> and the government is very clear that the vote on the 23rd of june was a vote to ensure that we had control of movement of people from the eu into the uk, but also we want to see the best possible access for businesses for trading and goods and services with and operating within that european market. that is what the government will be aiming for, and we will be ambitious in that. >> and from the uk to germany, chancellor angela merkel holding a summit in berlin today with the presidents of russia, ukraine and france. the talks are intended to revive

broken-down peace negotiations between the ukrainian government and the kremlin. keep in mind, this is vladimir putin's first visit to berlin since russia annexed crimea in 2014. carl? >> seema mody back at hq, thanks. when we come back, why one of silicon valley's top vcs says he's investing in companies focused on oceans, air and space. later on, more and more social media stars are signing big contracts with mainstream media. their secret to success, coming up.

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i'm courtney reagan and here's your cnbc news update this hour. about 1 million more people are expected to enroll in obamacare next year. that's the latest estimate out today from the health and human services department. 12.7 million people register for the obamacare exchange in 2016. well, starbucks is doubling the number of itzkoffie shops in china. the company says it's on track to have 5,000 stores by the year 2021. starbucks ceo howard schultz saying china could one day surpass the u.s. as its largest market. fiat chrysler recalling more than 200,000 2016 and 2017 model year jeep wranglers. automaker says a wiring problem could prevent the airbags from inflating during an accident.

and there's a proposal in miami beach to use bats to control the mosquito population in an effort in the fight against zika. under the plan, they put a special bat house on the beach. now, bats are known to eat a large number of insects, but it's unclear whether they'd be effective as mosquito control. that's an answer i would want first. that's our "cnbc news update" at this hour. let's get over to "squawk alley" and jon. all right, thanks, court. i'm here at the "vanity fair" new establishment summit with chamath palihapitiya, venture capitalist with social capital, first head of growth at facebook. thanks for joining us. >> great to be here. >> so, let me kick it off asking about growth. seeing this amazing period where facebook has grown 1.5 billion, what'd yap, instagram, now we've got snapchat growing huge. is the era of growth, at least for this type of company, for social, for messaging, is that over now? are we sort of seeing these companies locked in and now taking advantage of what they've

got? >> yeah, i think the way to think about this is that what facebook and a couple other companies did was define a use case, and there was deep demand for that use case. over the last eight to ten years, they've consolidated basically most of the users in the world that want to either communicate or share content in that very specific way. and now i think what we're seeing is the slowing growth as these businesses mature, as they consolidate all of the available user populations, which then begs the interesting question for people like me, what's next? and i think that it means that it's roughly time for the new emergent use case to come around. >> and so, you're investing now in what you call frontier companies. is that what's next or is that after what's next? and how do you define that, exactly? >> yeah, so, we invest across all sort of categories. there's a couple of my partners that focus on what they believe will be the next generation of consumer. but to be honest, where i spend my time is more moonshot type of areas, so we call that area frontier. and there i'm spending a lot of my time on things like climate change and machine learning and

ai and trying to sort of move that ball forward. >> speaking of climate change, that's an issue that's come up in this presidential election cycle. you were initially hoping mike bloomberg would jump into the race. he didn't. what does hillary clinton, who's sort of become silicon valley's default choice, need to do to seal the deal with the american people and i guess get silicon valley actually excited about her candidacy, rather than just sort of resigned? >> here's what i'll say about hillary, i think that she is fundamentally prepared for the job. i think she has a temperament to sort of bring people together and create a more pluralistic and inclusive government. so, frankly, i think she just has to not trip up between now and november 8th, and i think she'll win. and i think from my perspective, what i would love to see her do is really think about a broad coalition of people in her cabinet that really can demonstrate quality thoughtfulness, leadership, youth, energy, and frankly, start to bring about what people on both sides really want, which

is someone not of structural change from the entrenched interests. >> from the e-mail leaks we're seeing, there is some indication that folks on hillary clinton's team were checking in with google and apple on the wording of what they were saying about encryption. from silicon valley's perspective, is that a good thing that she was checking in on these things or is it a bad thing that shows a level of influence that perhaps would be improp improper? >> i think half the people in silicon valley don't know what encryption is. and so, the reality is, these are very difficult nuanced, technical concepts. and i think when you have a public stage like she does, and frankly, any politician does, i would hope they would call the experts, not just on encryption, but if you're talking about health care, if you're talking about education policy. because otherwise, you're just spouting off a bunch of things that may not necessarily represent the facts. and those kinds of misleading concepts can be detrimental to actually making progress. so, the fact that she's taking the time to learn i think is really good. >> artificial intelligence. how much when you look at that is opportunity and how much is

necessary cost share? because what we got from hollywood, aside from rosie, the jetsons, we get ultron, we got how 9,000. where are you on that? >> to be honest, where i focus is on a very different form of artificial intelligence. yes, there can be maybe the robots that basically dominate us all. i suspect that that is hundreds of years away. what i think is more practical is that there are very different ways of building software and products. i'll give you an example. so, today we can use artificial intelligence to fundamentally manage diabetes writ large for every single person in the world. we can build an intelligent pancreas. we can use the data from all of the millions of existing diabetics. we can harvest that. we can learn how to titrate, dose, so you can nip that disease in the bud. >> but if mylan is still raising the prices of the epp pen -- >> yeah. >> do the right economic ince incentives even exist to deliver that?

>> that's exactly the point. that's why things like machine learning around ai are the control measures that are necessary. so, when you have people that are extracting pricing power in things like formulary, it's incumbent on people like me, which is why we spend so much time in figuring out how software and hardware can come to solve that same problem in a way that's much fairer for large swaths of population. so, when i think about machine learning and ai, what i'm asking myself is what can we do today that isn't the robot death zombie but that can actually solve a very practical problem in a fair way for many people? >> all right. well, i'm glad you're thinking about it, chamath. always great to have you. >> thanks, jon. >> back to you. when we come back, monetizing social media. how one sensation is taking its talents from vine and youtube to hollywood. but first, rick santelli, what are you watching? >> you know, i'm watching interest rates, i'm reading about norway, and i'm coming to the conclusion that when the entire globe has liabilities that keep growing and the funds to pay off those liabilities

keep shrinking, you know what it results in? desperado investors, and that's what we'll be talking about after the break. ♪ a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

got another huge day coming up in what's been a huge week for "the halftime report." today at noon, jim chanos on the news from tesla. he is short that stock. plus, keith meister on positions in his portfolio, including yum! brands, pandora, williams and others. and nelson peltz on several of the stocks in his portfolio as

well. we'll talk some ge, a lot of other stuff as well, top of the hour on "the halftime report." carl, see you in about 15. >> can't wait, scott. thanks. let's get to the cme and check in with rick santelli and get "the santelli exchange." rick? >> good morning, carl. i had a guest today and we wanted to talk about the fed. i couldn't get the fire out of him, but he doesn't believe the fed holds any blame for much of the conditions of the issues that have been caused by negative interest rates. they do. yes. most of what's structurally wrong can only be fixed from the business side, but it took our central bank years to figure that out and other central banks are much more worried about perpetuating the game than fixing the problem. listen, whether you're a family unit, a private pension, public pension, state pension or just any type of country like norway, when you have liblts, you need to fund those liabilities, and funding those liabilities is next to impossible because there's no lip service paid by the ecb or by the japanese or by

the chinese or by janet yellen or by carney as to why aren't we talking about the spending side of this equation? because if we don't fix that, it doesn't matter about any of the other issues. as a matter of fact, what matters then is only perpetuating the game, hints from janet yellen about buying stocks here. let's put some numbers from this. this summer we learned from calpers, and i pulled this from dow jones, but it was everywhere. their fiscal year ended in june and target up 7.5%. they're in the process of lowering that. it's unrealistic. their actual return was 0.6%, which meant they had a shortfall of 6.9%. keep in mind shortfall. now, let's look at norway and let's be fair with norway. unlike japan and many others, norway's central bank runs their sovereign wealth fund, but they don't invest in norway. i give them kudos for that. that's $875 billion, which is 2 1/2 times the size of their entire economy.

they're allowed to spend up to 4.5%. their return over the last ten years has been 3.4%. it was much better the first five than the last five of the ten, so if you looked at the rate of change, it's depressing, okay? and now they expect over the next 30 years the rate of return's going to be closer to 2%. that means nobody's talking about the fact that they need that 4% to spend to pay for services. nobody talks about the fact that in california, these liabilities are already established. this type of shortfall, somebody has to pay for it. then you think chicago and all the various points in between that are having these shortfalls! now, how much do you hear janet yellen talking about that? how much do you hear carney talking about that? how much do you hear draghi talking about that? this is creating desperado-type investing. and when you add in that norway's biggest export, of course, is oil, you know what the price has done there. we need to address the issues in a quantitative way. nobody is. it's all about keeping the music playing. and trust me, there aren't enough chairs, there aren't

nearly enough chairs when the music stops. the one positive, though, is with the size that big, if they upgrade their equities, if the central bank takes the proposal by december and says, yes, you can increase your equity presence from 60% to 70%, that's almost they can invest in global equities. dls an up side. global equities will find a lot more buyers where, in the end if governments are going to protect that investment where does that leave true pricing for equities in the big picture? that's the question. kayla, back to you. >> thanks, rick santelli. coming up on "squawk alley" how one social media star says he plans to take over hollywood. jake paul up next. aflac pays ca. aflac! isn't major medical enough? no! who's gonna' help cover the holes in their plans? aflac! like rising co-pays and deductibles... aflac! or help pay the mortgage? or child care? aflaaac! and everyday expenses?

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social media is taking over hollywood. many attempting to make it on to the big screen with their millions of followers, whether those followers are on instagram, youtube, or vine. our next guest was a social media break-out star with more than five million followers on vine alone. also, an actor on the disney channel. we welcome jake paul. jake, thanks for coming on. >> thank you for having me. good morning. how are you? >> how do you translate six seconds of fame into a career for yourself? >> lots of hard work. i had to transition off of the platform and develop, like, the acting skills, and it was a good, like, kickstart to my

career,ing and i this to, like, use that to get into these big rooms in hollywood, and then once i was in these rooms, i had to, like, show my full potential and the acting skills that i have. >> i imagine the people that you were sitting across from in those auditions weren't necessarily millenials who had been tracking your every move on social media. how did you explain to them what you had been doing and how you had built up your skill set? >> yeah. i think the numbers are what speak for themselves. when they would hear that i had, like, 50 million total followers, they -- that, like, touched them. tleld go home and ask their kids if they knew who i was. a lot of them would say yes, and so that was powerful to them. even though they didn't know who i was. >> how useful do you find it

today versus a few years ago, vine? >> vine was super, super popular a couple of years ago, and it's on its, like, dwindling edges, along with twitter, but they're still both very powerful platforms, and it's just about translating your content on to other platforms. now, like, instagram and facebook and snapchat are super popular. i just create content on those platforms and grow an audience there. social media is kind of the same across the board. you just have to know how to engage your audience. you'll be popular on any platform that comes up. >> the other goal, jake, of course, is to translate that into money. can you share with us how much you're actually making from social media? is it six figures, seven figures? what can you say? >> so starting out it was six figures. then moving up into seven figures. >> hello. >> as you get to -- yeah. as you get more and more popular and start to build a brand name for yourself in the space, you start working with big fortune

500 companies misdemeanoring dea -- merchandizing deals. you can tour. if you have millions of fans and you can convert, like, even 5% of them to pay for something of yours, you're in the seven figure range. >> you've obviously figured it out, jake. not many people, if any, can say they started out making six figures, but we wish you the best of luck, and we want you to come back and see us. >> thank you. i appreciate that. >> jake paul. >> when we come back this morning, find out what bill belichick thinks of that microsoft surface tablet. dow is up 63. upgrade your phone system and learn how you could save

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new england patriots head coach bill belichick sounding out about the microsoft surface tablets that are used throughout the nfl. this is what he said yesterday at a news conference. >> you know, as you probably noticed, i'm done with the tablets. i've given them as much time as i can give them. they're just too undependable for me. i'm going to stick with pictures, which several of our other coaches do as well because there just isn't enough consistency in their performance of the tablets, so i just can't

take it anymore. >> it got kicked around a lot on social media, although this morning cramer talked about whether or not apple is in a position to try to take that contract when it's up in 2018. >> although there have been complaints about wi-fi in the stadiums. if you wonder if the old line strategies are better than using tablets at all. >> another big show for the judge. let's get over to "the half" back at hq. >> carl. thanks so much. welcome to ""the halftime report."" i'm scott wapner. keith miteser of corvex on the set with us as our guest host for the full hour. >> great to be here. congratulations. zoo thank you very much. nelson peltz coming up in a few minutes. jim chenos is as well. he is in the "vanity fair" conference out in san francisco. he is the famous short seller. we'll get his take on the tesla news. more new