Worldwide Exchange 6/3/25
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Terra fallout. The U.S. growth forecast cut. The global outlook slash China factories slow. And the White House reportedly wants best trade offers by tomorrow. The results, futures, they are solidly in the red this morning. It's Tuesday, June the 3rd, 2025. And this is Worldwide Exchange on CNBC and streaming on CNBC+.

And good morning. Thanks so much for being here with us. I am Frank Collins. Get you ready for the train day ahead. We begin with the U.S. markets, the S&P and the Nasdaq coming off back to back winning days. Despite some growing trade tensions between the U.S. and China, President Trump and the Chinese president expected to talk soon, according to the administration. Take a look at futures right now. You can see we are in the red across the board, all three indices down right around a half a percent. The Dow looks like it would open about 170 points lower today.

Quick look at the S&P 500 pre-market laggards and leaders. We're going to start off with the laggards, excuse me, with the leaders. Invesco right here, top of the list, shares up about 2%, followed by Dollar General, Stanley Black & Decker, Interrepublic Group, and also Ball Corp. Right now, it's your best performers. Then we have the S&P laggards in the pre-market this morning. Taking a look at those.

No real theme here. You see 1OK falling back about almost 2.5%. Seagate, train technologies, paychecks, and take two, running out your worst performers on the S&P and the pre-market. Quick check of ETFs of U.S. trade partners, including China, as the administration really battles for the right to impose reciprocal tariffs in court. Taking a look right now, we're seeing the Chinese ETF, the MCHI, up over three-quarters of 1%. The European ETF up over 1%. No real movement in the Indian ETF, the INDA ETF.

at least not right now in the pre-market. The president also says he's going to double steel and aluminum tariffs. Domestic producers, they moved higher on that news yesterday. You can see the moves right here. Steel dynamics up over 10 percent. Similar story for Nucor down here. Cleveland Cliffs spiking more than 20 percent. So yesterday we spoke with aluminum manufacturing giant Constellium, the CEO, calling the tariffs a double-edged sword.

A tariff to level the playing field with China is good, but if you increase it too much, then you go beyond what is needed to ensure a level playing field, and that becomes a hurdle for our customers. And taking a look at steel stocks this morning, seeing some upside action for steel dynamics up almost 1%, new core up 0.5%, Cleveland Cliffs pulling back after a tremendous gain yesterday, moving up more than 20%, fractionally lower right now.

Also look at the oil market this morning. Oil moved more than 3% higher yesterday. OPEC decided to increase production by 411,000 barrels per day. But some investors, they were actually concerned they would increase production more than that level. Natural gas also jumping more than 8% on higher demand, lesser output yesterday. We're going to look at the administration's efforts around natural gas with Brian Sullivan just a bit later in the show. Looking at the action this morning right now, you're seeing WTI crude and Brent crude up about a quarter, third of a percent right now. Down here, natural gas pulling back about a

quarter of a percent. Remember, big spike yesterday for natural gas. And take a quick look at bonds this morning. Take a look at yields there. You're seeing the benchmark at about 4.4, the two-year well below 4%. The 30-year, about seven basis points below 5%. That seems to be a level that concerns investors. Okay, that is your setup now for a check on the action all around the world. Steve Sedgwick, he's in London with a look at the early trade. Steve, good morning.

Yeah, really good to see you, Frank. Fascinating. I know you're looking at the OECD throughout the show as well, but actually what they've done is they've said, look, global growth, it's the uncertainty, it's the tariff wars, it's just the oscillation in policy. And as such, they've taken down their growth estimates across the board as well. Europe, actually, they held back

their previous targets all bid at a lowly roundabout 1% for 2025. They cut down the UK growth picture just a little bit as well. But quite frankly, we're on wait and see here as well. I mean, these markets barely moving. The London market unchanged. The German market up a tiny bit. And that's despite the fact that the

flip side of the story you were just talking about there, the steel manufacturers stateside having a big rally. Well, then the steel manufacturers this side of the Atlantic, the likes of ArcelorMittal, just giving back a little bit of ground as well. But that aluminium, I think you said aluminium, but we'll split the difference on the eye. And those steel tariffs are a big concern for the UK and European exporters as well. But by and large, a steady as she go day. We know that actually Mara Sefcovic,

Jameson Greer. We know that they're talking and the talks seem to be going quite progressively, going quite well at the moment. But we'll wait and see whether we get anything meaningful out of that. But the data out of Asia, well, let's take a look at the Asian markets, was suitably downbeat and concerning regarding the manufacturing out of China as well. We can see the European markets were on a little bit of a negative tone. The Asian markets mildly positive. The Hang Seng up 1.5 percent. The Shanghai Composite

over in China, up four tenths of one percent. And that's despite the fact that the PMI data was pretty downbeat. The sharpest fall in three years in new orders there as well. Contraction out of the Chinese economy. Back to you, my friend. Steve, thank you very much. I think we'll be talking a lot more about aluminum in the days to come. Steve Sedgwick, live in London. Always good to see you.

Turn our attention back to the U.S. and down to Washington, D.C. The White House reportedly ramping up the pressure on trading partners to present their best offers ahead of a new self-imposed deadline. NBC's Alice Barr has more.

Hi there, Frank. Yeah, and that reporting comes from Reuters, which says the Trump administration wants countries to put up their best offers on trade negotiations by tomorrow, part of an effort to speed up talks with a series of trading partners before a self-imposed deadline for trade deals that's now just five weeks away. Reuters is citing a draft letter to negotiating partners from the Office of the U.S. Trade Representative

representative. NBC News has not independently verified that reporting, but we do know that the administration is feeling the pressure to close negotiations that began with dozens of countries when President Trump announced his Liberation Day reciprocal tariffs and then temporarily scaled them back. Britain so far is the only real framework that's been announced out of all those promised deals. And the tariffs themselves are under threat right now in the courts. Frank, back to you.

All right, Alice, thank you very much. Alice Barr, live in D.C. More market fallout from President Trump's tariffs. The OECD with a new report this morning slashing its U.S. and global forecast for this year and for 2026. The report cites tariffs following business and consumer confidence, as well as elevated policy uncertainty. OECD now expects U.S. growth to hit 1.6 percent this year, 1.5 percent next year. That's down from its March outlook of 2.2 percent for U.S. growth for 2025.

Joining me now is Emma Wall, head of platform investments at Hargreaves Lansdowne Asset Management Firm with about $80 billion in assets under management. Emma, good morning. Good to see you. Good morning, Frank. All right. So what do you make of this OECD report lowering the growth forecast for the U.S. and other parts of the world? Is that something that you think is really meaningful when we're talking about investors?

I think what's really interesting about this report and actually similar reports that have come out regionally in the U.K. in the last week is that the markets and the macro just are not adding up. I mean, yes, we've had softness today and U.S. futures look soft to open. But actually, if you look at where we are at the ACWI, so All Countries World Index, not that far off all-time highs. European levels only about 2% of all-time highs. S&P 500, difficult year, but we're much higher on where we were on the April levels.

And ultimately, the ebullience that we see in the markets, that optimism, that sort of party mode, if you will, is just not what our house view is. Our house view is much more aligned to the macro that's coming out, the low manufacturing data that you're seeing in China and in the U.S., the growth data that you're seeing downgraded in the U.S. and in the U.K. And that's really setting our stall for what we expect for the rest of the year, and that is that I

we would say we are cautious, cautious to pessimistic. And we definitely think that volatility will continue as the hard data flows through into the markets and not least as we expect these tariff deadlines coming up and the new tariff deadlines coming up and what that means for markets. So cautious, you said cautious, but pessimistic. Those both sound like pretty negative things. It sounds like you're more on the negative side of things.

Can I come to you with what some people may see as a contrarian view? I actually got to speak to Michael Hardnett of Bank of America, the chief investment strategist. He told me he thinks the tariff narrative for the market, that's just over. He thinks that's going to be resolved by Labor Day. He says at least in the U.S. markets, it's really all about the tax cuts and the spending bill. Do you agree with that take?

Look, Frank, I'm a naturally optimistic person, so I'd love to be optimistic about markets at the moment. But we just think there's too much volatility. Look, volatility presents buying opportunities. I'm not saying this is a time to step back entirely from the markets, but there is just so much uncertainty. And that uncertainty has an impact on markets

even if tariffs don't go ahead. So, let's take the best case scenario in terms of our point of view. Let's say that the tariff floor is 30% for China and 10% for the rest of the world and that just holds. We actually don't have this increase in sort of reciprocal tariffs. Things work out between the EU and the US. Things work out between China and the US. But in the period in which we're seeing wait and see, and I mean wait and see in terms of consumer spending, in terms of corporate capex,

In terms of global asset managers assigning capital towards the US, you have three, six months of uncertainty. That pause, that wait and see will have an impact on markets and macro. So it could be short-lived, but we just don't think we're out of the woods yet. We think Labor Day is a bit optimistic.

All right. So cautious but pessimistic. I want to ask you about some of the riskier parts of the market. We have a segment coming up talking about quantum computing stocks. Very quickly, I'd just like to get your take on that area of the market and also some of that higher valuation tech that we've seen kind of catch a bit in recent weeks.

Yeah, I think it's really interesting, you know, what drove the market in terms of the previous five years to December and what's driven the market in terms of the last six months. Valuations are more appealing now than they were, if you look at December. But in terms of the granularity, I'm afraid I'd have to defer to those that are sector specific on that case. We like to go much broader in terms of our sectors. Fair enough. Emma Wall, always a pleasure. Great to see you. Thank you very much.

All right, we've got a lot more to come here on Worldwide Exchange, including the latest big bank joining the growing trend of major bets on one very important corner of the market, plus two sides of our AI future and Sam Altman's latest prediction for what's quickly becoming a very crowded space. And then later, putting a dollar figure on the quantum revolution, a Worldwide Exchange exclusive with the CEO of Quantinium. It's coming up. A very busy hour still ahead when Worldwide Exchange returns. Stay with us.

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And welcome back to Worldwide Exchange, Europe's biggest bank making a bigger push into private credit. Reuters reporting that HSBC will inject $4 billion into funds for the space as part of a wider push by banks into private credit. Last week, Apollo Global announced a partnership with J.P. Morgan, Goldman Sachs and possibly Citi to trade private credit for a closer look at private credit funding and venture capital. Let's bring in Nasir Qadri.

founder of VC firm Zeal Capital Partners. Thanks for joining us. Great to have you back. Thank you, Frank. All right. So I know private capital is not your wheelhouse, but what we're really talking about is liquidity. The rise of private credit is all about just finding funding. What is the liquidity situation right now? What's the funding situation when we're talking about venture capital and private equity?

Sure. So, Frank, it's clear that the macroeconomic has been uncertain from a fundraising perspective, whether you are a general partner or you're an entrepreneur raising capital. But you're also seeing that

You know, investors are seeking liquidity, not just from an IPO or M&A perspective, but also from a secondary perspective as well. You're seeing in 2025 secondaries rise to $60 billion versus $50 billion last year. And so I think investors will have to...

be a bit diversified in terms of how they think about liquidity, particularly for those early stage investors. I want to go back to that stat you were just talking about. So right now, the venture second day market is at 60 billion in Q1 of 2025. But that's a 20 percent increase from Q4 of 2024. So what's going on? Is it an issue with exits that investors are trying to get their money out of some of these investments because we're not seeing as many IPOs? Yeah. So you're not seeing as many IPOs.

uh but what you are seeing is in from a you know entrepreneurs or building companies and in sectors like healthcare and fintech it's requiring uh you know the sales cycle in some cases are fairly long and so there's there's there's there's lack of of uh a pathway or or to to see liquidity event for for the long haul and so

And you're seeing LPs rebalance as they think about, you know, finding new ways for liquidity events as regards to their... All right. So this is interesting. According to your data, 60% of new VC funds are focused on a few areas. One's deep tech, AI, fintech. And the last one's health care. Yeah.

So in the public markets, health care stocks have seen a lot of disruption, but people seem to be putting money when it comes to health care and the venture capital space. What areas are they putting money into? Because the health care stocks in the public market are very disrupted by the administration and a lot of different changes. What we're seeing is that you have these defensible sectors. You know, you find that

And entrepreneurs and investors are being rewarded by resilience. And when you see in the health care sector particularly, not just those that require FDA approval,

But also those that are non-clinical, areas like access and affordability of care or mental health or maternal health, like Seven Starlings, a D.C.-based maternal health platform. And then you also have SDOH, social determinants of health, areas like food security and transportation. So those are areas that yield benefits.

poor health outcomes as it relates to it. So you're using some technical terms, but it sounds like the theme here is that areas of health care that don't require approval at the federal government level. Exactly. So these are non-clinical innovations that are seeing a great deal of investments going to those subcategories. Cyril Kadri, always a pleasure. Thank you for coming in. We've got to see you again soon. Absolutely. Thank you, Frank. You have a great day. Thank you again.

All right. Still on deck here. Worldwide exchange bidding big on Alaska. Our Brian Sullivan is on the ground talking about one of the biggest American energy infrastructure projects in decades and asking if it's the real deal or just too expensive. Stay with us. We're going to talk much more about it.

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Welcome back to Worldwide Exchange. TSMC says it plans to report a record profit for this year despite ongoing geopolitical tensions, including President Trump's tariffs. At the company's annual shareholder meeting, the CEO of the Apple and Nvidia supplier says tariffs have been causing, having some impact, but demand for AI, that remains strong. He added that TSMC has not seen any changes in customer behavior due to tariff uncertainty. Shares of TSMC right now, they're up nearly a half a percent right now in overseas trading.

All right. One of the biggest crypto ETF issuers is trying to get into the quantum computing space. Grayscale recently filing with the SEC for an ETF to invest around quantum technology. The fund, which is pending SEC approval, could be launched by mid-August. The move comes as other quantum ETFs and stocks

They've seen some pretty solid gains over the last month, up between 10% and 118%. Down there, you see D-Wave Quantum up about 118%. For a closer look at the quantum space, we are joined by Dr. Rajiv Hazra, CEO of Quentinium. You've got to correct me on this one. The company formed by the merger of Honeywell's Quantum Solutions and Cambridge Quantum. I hear a lot of people say it a different way. It's Quentinium, right? It's Quentinium. You've got it right, Frank. All right. I appreciate that, man.

Great to have you here. So I have to ask you, we're going to show your customers in a minute. You got a lot of big name customers, NVIDIA, JPMorgan Chase. Also, a recent study came out. They showed you had the most powerful quantum computer. But I don't think a lot of people know what that really means. What does it really mean to have the most powerful quantum computer? And how do these big name customers use your tech? That's a great question. Great to be here. The most powerful quantum computer is essentially just that. The power is in what it allows users to do.

So out of 19 available quantum computers, a third party benchmarked us as having the most powerful quantum computer in terms of the kind of complex algorithms and problems you can solve on it and how effectively you can write algorithms for it. So it's both in terms of the outcomes it can generate and the productivity with what it can.

Now that was on our H1 and H2 computers. H2 is by relative terms old. The one we are going to release in a few months is up to a trillion times, that's with a T, more powerful than the H2. So that train is accelerating

Exponentially. I made sure to call you Dr. Hazard because you know a lot more about this than most people do. You're getting a bit technical. So we just show the customers again, JP Morgan, BMW, NVIDIA, Honeywell, the company that you spun off from. So give us an example what this super powerful quantum computer can do for an enterprise right now. You can use Honeywell. You can use any other customers.

In addition to those customers you just named, we have a broad set of customers across the end markets of transportation, energy, bio and pharma, supply chains. What they essentially do, what quantum computers allow you to do is two things. One is do things more efficiently, solve larger problems, more complex data problems more efficiently, as we all know that it takes for classical compute more and more energy and space.

So, quantum computing is a paradigm shift to look at more data more quickly, simultaneously. The second thing it does is the most, and probably the more exciting part, is it unlocks AI. Quantum computers generate data about processes that are commonplace, yet we cannot model them very effectively with classical compute. And so what it does is it takes generative AI, this tremendous engine, and gives it the training

that it needs to solve problems, whether it's discovering a new material, whether it's discovering a new drug, whether it's actually coming up with a solution to an optimization problem. So it's the power of AI plus quantum, which is

the other big part of what a quantum computer can do. That's what our customers are doing. By the way, I want to mention your company has about a $5 billion valuation, maybe even higher. It was a pre-cash valuation after your last investment. A lot of excitement around the quantum space right now, just in general. So one other thing I want to ask you about. A lot of times we talk about AI possibly replacing search.

When we're looking at quantum computing, what does it mean for cybersecurity? Yesterday, we saw two of the most popular cybersecurity ETFs hit all-time highs or high since their inception, I believe. A lot of people say that quantum computing is going to make cybersecurity, I guess, more difficult.

Well, there's two ways to look at it. Most people have looked at early on that quantum computers become the attacker. But as we've seen, powerful quantum computers are also the solution to that. We actually have a product out there, it's been out there for two years, that helps you use the power of a quantum computer to encrypt things more securely. Encryption is the basis of guarding all your assets. And so what

So what we think now, particularly with standardization happening around the algorithm space, is we finally get to a point of post-quantum safety. That is, our cyber infrastructure will be the most

the most resilient it can be by using the most powerful form of computer protected. All right. We were just showing the board just a second ago, showing some of the stock moves, some quantum stocks and the ETF, some pretty outsized moves, at least over the last month. Before that, a lot of volatility. I think a lot of people would like to know where we stand when it comes to quantum computing. Are we racing against other countries like China for when it comes to quantum computing? Are we in the lead? Are we in second place? Where are we at?

So that's a great question. It is absolutely true that the run up in the quantum stocks is a clear sign that quantum computing is real. We've had this debate for a while over the last two, three years. That debate has ended. It is not real. It is starting to solve real commercial problems and it is the pathway to the future of computing. We are seeing investment in excess of $45 billion worldwide.

And we are participating in it by governments to build national quantum ecosystems like the one we recently announced in Qatar. But where's the U.S. at? I know you're doing deals with Qatar, and it's like a billion dollars, I believe, over the next 10 years. But where is the U.S. stand right now? We're always wringing our hands about the AI race. Where are we at in the quantum race, which seems like the next leg of this whole thing? Quantum is the next opportunity for the United States. And we are encouraged to see a go back to a focus on national competitiveness.

on-shoring supply chains, robust supply chains. And I'm really looking forward to the bipartisan support on the National Quantum Initiative Reauthorization Bill, which actually takes fundamental research in quantum and parlays it into commercial applications and leadership for the United States. But Dr. Hesler, I've got to say, you're not answering. We've got to go. Are we in the lead? Are we behind? Where are we at? We've got to invest more deliberately and at greater levels.

to get up on the leaderboard on leading in terms of dollars. But there's a lot more we can do by investing in supply chains, workforce, as well as other areas that will continue to keep our compute leadership in the world. A bit of a cautious answer. We're going to have to have you back and talk a little bit more about this. Absolutely. Dr. Rajiv Hazra, great to have you here. Thank you. Thank you.

All right. As we head to break, a new CNBC Sport production is beyond the game with a look inside Steph Curry's booming business, 30 Inc., and how the four-time NBA champion and two-time MVP is building a legacy that goes far beyond basketball. Our own Alex Sherman has the one-on-one. To me, I feel like legacy is more, is one, like if you watch me play, that you felt a certain type of way. You felt inspired. You felt like you were entertained. You were inspired.

We're able to create memories and know where you were when a certain game, a certain shot, a certain championship would ever happen, like you remember where it was. The basketball part is obvious. Greatest shooter of all time. One of the greatest players of all time. But I think his unique style, he's an artist, really. He brought a completely different mindset to the game.

to shooting, but I think his authenticity, his joy, his perspective, his humility, his audacity, the combination of all that is so unique. I've never seen anybody like him and I think that will live on. But then also like me representing the Bay, that it was bigger than basketball. Like that for me is going to be obviously life's work, but I do

appreciate the compliment of what we're doing, like even in the city, in the town of Oakland, through our foundation and like those opportunities to impact people in a different way. I appreciate that feedback more than a great game out there. So that's important, like getting everything I can out of basketball, but I want it to be bigger than that. I couldn't have, I couldn't have dreamt this. All of these realities are wild to me.

Sometimes you kind of got to get out your own way and just enjoy it. - Kari Enk, the business of Steph Curry, premieres on CNBC and CNB+. CNBC+ tomorrow at 9:00 PM Eastern time. We are back right after this. - I feel like we're in the big bang of the intelligence explosion. Like we're in, we're watching, we're at the courtside seats to the big bang of intelligence explosion. One thing's for sure, it won't be boring.

No. You don't seem to be saying there's a 20% chance of annihilation as often anymore. Well, I think we should always consider that there's some chance of a bad outcome to try to protect against the bad outcome. We don't want to be complacent and say that everything's just going to be fine, there's no chance of a bad outcome.

So that was Elon Musk talking with our David Faber last month about the risk around AI and it's growing ubiquity in our everyday lives. Welcome back to Worldwide Exchange. I'm Frank Holland. Coming up this half an hour, we're going to talk to the author of a new book, digging into the great divide around AI and its potential positive or negative outcomes. But first, we're going to get you ready for the trading day ahead. We begin with the U.S. markets, the S&P and the Nasdaq coming off back-to-back winning days.

Despite growing trade tensions between the U.S. and China, President Trump and the Chinese president expected to talk soon, according to the administration. Taking a look at the action in the pre-market right now, you see all three indices down right around 0.5% right now. The Dow looks like it would open about 180 points lower. Quick check right now, the Nasdaq 100 leaders and laggards.

We're going to start off with the laggers. ASML pulling back about two and a third percent right now, followed by paychecks. Take two and lamb research. The Nasdaq 100 leaders the other side of the coin right now on semiconductor up about three quarters of one percent. Similar story for global foundries. PDD holdings up over a half a percent. Strategy also up over a half a percent.

Quick check of ETFs of U.S. trade partners, including China, as the administration battles for the right to impose reciprocal tariffs in court. Taking a look right now, the MCHI, the tracks Chinese equities up about three quarters of one percent. The IEUR, the tracks European equities up over one percent right now. We're also watching tech and consulting companies tied to work

with the federal government. Yesterday, they were under quite a bit of pressure on a report. The administration is looking to make more cuts to contracts. Right now, you're seeing Dell Technologies pull back more than a half percent. No action on the other names there on your board. Also checking oil after jumping 3% yesterday. OPEC deciding to increase production by 411,000 barrels per day.

Some investors, they were concerned that OPEC would increase production more than that level. We also saw natural gas jump more than 8% yesterday on higher demand and lesser output. Coming up, we're going to take a look at the administration effort around natural gas with our Brian Sullivan. This morning, seeing oil move up just about a quarter, about a third of a percent, natural gas up very fractionally, pretty much flat right now. But again, a big jump yesterday, more than an 8% gain.

Also looking at currency this morning, the dollar pulling back more than a half a percent yesterday on trade and tariff concerns. It's down more than 5% over the last two months since tariffs were announced. Taking a look right now, we're seeing the dollar rebound just a bit. It's up fractionally right now. And a quick check of the bond market this morning, taking a look at yields. The benchmark coming in under 4.5%. Right now, they're 4.41%. The 30-year, 4.93%.

All right. That is your setup. Now, I want to move on to some other news. Elon Musk and his startup, Norlink, raising $650 million in its latest funding round as its brain implant device begins clinical trials. Norlink says the funding included investors such as ARK Invest, Lightspeed and Sequoia Capital. It comes as reports say Morgan Stanley is shopping a $5 billion debt package for another Elon Musk company, XAI. That startup is seeking a valuation of $113 billion.

We're going to stick with AI. Sam Altman says he sees the next year as a major turning point for artificial intelligence and business. Speaking at the Snowflake Summit in San Francisco last night, the OpenAI CEO says AI is no longer just a helper similar to a junior employee in an office. He believes it's evolving from a tool to a full-fledged teammate.

I would have bet next year that in some limited cases at least, in some small ways, we start to see agents that can help us discover new knowledge or can figure out solutions to business problems that are kind of very non-trivial. As that expands to longer time horizons and higher and higher levels, you know, at some point you get an AI scientist, an AI agent that can go discover new science. And that will be kind of a significant moment in the world.

Sam Altman, one of the biggest advocates for using AI to advance society. However, there's still a great divide between those who believe that AI is going to bring out some sort of utopia and those who say it's a serious threat to humanity. Joining me now in the studio, Karen Howe, an award-winning journalist who's written for The Wall Street Journal and The Atlantic. She's also the author of a new book, Empire of AI, Dreams and Nightmares, and Sam Altman's Open AI. Karen, good morning. Thanks for joining us. Thank you so much for having me. All right.

Straight us out. What's going on? What's going on right now? You say there's a lot of people out here with quasi-religious beliefs when it comes to AI. Why don't we start off with the people who think it's going to help humanity? How do those quasi-religious beliefs, how do they potentially lead to a good outcome?

So, yeah. So one of the things that I think the public doesn't generally see with all of the AI activity that is happening now in the consumer space and in the business space is that it's ultimately driven by these ideologies that I call quasi-religious within Silicon Valley.

And so I call them the AGI religion believers. And there's two factions. There's the boomers and the doomers. Artificial general intelligence. Okay, gotcha. Yeah, so they have this belief that we are able to fundamentally recreate human intelligence in computers. This is not a scientific belief.

belief there isn't actually evidence that this is possible. It has long been a dream within the field of AI development that we might one day get there. But there are people who believe it is absolutely going to happen, it's absolutely around the corner, and that it's either going to lead us to utopia or to everyone dying.

And I call it quasi-religious because there is not really evidence that you can point to one way or another. But when I was reporting my book, what I found was they really had this deep-seated spiritual conviction that it was either one or the other. And they're usually called the boomers and the doomers. And the clash between these two groups is what's led to a rapid acceleration of AI advancements.

I just want to make sure I understand. So this is the positive side, that people have a belief that you're, again, calling quasi-religious. It's your words.

that a computer can basically simulate the human brain, and you think that's going to lead to a good outcome? It is. Both of them have the same exact belief that computers can simulate the brain. But the difference between them, and this is why I say that they're factions of the same religion, is some people think this will be civilizationally positive, and others think it'll be civilizationally devastating. And again...

Again, it's a belief. There's no actual grounding. You can't really point to evidence for one or the other. And so it's really just a theoretical projection that they have based on their own value systems and how they think the world works. Beliefs you can't track. They're in everybody's mind, heart, whatever else.

One thing we can track, though, is research when it comes to safety. Now, according to your book, when it comes to open AI, at least when you were writing the book, even Sam Altman believes that open AI is behind when it comes to investing in AI safety. Yes. So one of the things that opening AI has happened throughout its history is they have both the boomer and doomer factions within the company that are constantly wrestling with how should they be protected?

developing and deploying AI. And so the boomers were always like, we need to develop it as fast as possible and release it because if this can actually bring us to utopia, we want to get to utopia faster. And then the doomers think we need to develop it as fast as possible, but maintain control over it, not release it so that we actually have a lead time to do this so-called safety research, try and perfect the models before it gets introduced into society.

And time and again within opening eyes history, there have been the boomers have essentially won out. They have developed the technology really fast and then sent it out into the world before the doomers felt that there was a sufficient amount of time to actually perfect the technologies. We have to go. You wrote a really fascinating book. But very quickly, what side are you on? Do you think it's going to lead to utopia or the end of the world? It's neither. There is a lot of.

positive impacts that I can have. And they're also negative. But it's not quasi religious. This is happening in the real world right now. And we can document that evidence. All right, Karen, really interesting book, your book, Empire of AI, Dreams and Nightmares and Sam Altman's Open AI. Thank you very much for joining us. Thank you so much. You have a great day. All right, coming up here, Worldwide Exchange, natural gas coming off of more than 8% pop. Our Brian Sullivan is on the ground in Alaska looking at the big bets by the Trump administration and the last frontier. We're back in just a moment.

Welcome back. Turning to the energy sector and what could be one of the biggest U.S. infrastructure projects in decades. The Trump administration is pushing hard to tap into Alaska's natural gas supplies. And our Brian Sullivan is on the ground in the last frontier with more on the snack gas gamble.

You know, Frank, it could be 3 p.m. or 3 a.m. here because it is always this shade of light now this time of year up here in the Arctic. We're just outside of Prudhoe Bay here. This is the wellhead of the oil pipeline and exactly where they want to build a natural gas pipeline for 800 miles through Alaska. We're up here all day on Monday with the Secretary of Energy, Secretary of the Interior, Administrator of the EPA, the Governor of Alaska, and Senator Dan Sullivan of Alaska.

to try to, they're trying to push through this natural gas pipeline that would ultimately convert into liquefied natural gas south of Anchorage and then sold to buyers in Asia. We did everything. We came and we understood what they wanted to build. We talked to them. We spoke with some of the indigenous leaders in Keovik, a couple hundred miles west of here as well.

Don't know ultimately how this is going to play out, but we can say this, Frank, if indeed this natural gas pipeline, the Alaska LNG project gets built, it would be one of the largest energy infrastructure projects ever undertaken in the United States.

We'll see if it happens. It's been on the table for decades, but there is a huge new push from the White House, and this is the first time ever that three sitting members of Cabinet have ever visited Alaska. Not this part of Alaska, Alaska as a state in general. Pretty cool to be a part of that little slice of history. I'll send it back to you in a very warm studio from a very cold Prudhoe Bay, Alaska.

All right. Coming up on Worldwide Exchange, the one word that every investor has to hear today and the stock pick that every investor needs to know. Plus, one group of American companies losing ground in the U.S.-China trade war. Our Eunice Yun is taking a closer look. We'll be right back. Welcome back. Turning to the trade tensions between the U.S. and China, flaring up once again on the back of ramped up rhetoric between Washington and Beijing.

The latest saber rattling pointing to a potential deal at risk. But American farmers, they're already feeling the squeeze of President Trump's policies. Our Eunice Yun has more. At his restaurant in Beijing, owner Gong Shao Yun used to offer a special dish. Salt-baked chicken feet, or Phoenix talons as they're called here, imported from America. But after prices rose 30% from March due to tariffs, he's had to pull the Chinese delicacy from the menu.

American chicken feet are so beautiful, he says. Chinese feet just aren't as good. The tariffs and uncertainty they cause is why some American products have been vanishing from stores and restaurants. Beef supplier Liu Li says U.S. beef supply is unstable and now 50 percent more expensive.

He's switched to Australian beef, which has zero duty. U.S. beef is fattier and tastier, he says. It's a shame we're in a trade war. The high price is just too much to bear.

I'm taking you to a restaurant in Beijing that is famous locally for its American-style barbecue. It's known to source all of its beef from the U.S. Until May. The menu has already been completely changed. The staff here tell us that all of the beef is Australian. Chinese customers are forced to adjust. I don't think there's much difference, he says. Not everyone is willing to compromise.

Geng keeps a small stash for himself, but hopes to serve his salt-baked American phoenix talons once again. The price of American chicken feet will come back down, he says, as long as there are no big changes in the world's political situation. Quite a feat, with U.S.-China tensions so high.

Gung said that he could source chicken feet from Brazil and now even Russia. But he said that they just don't stand up to the American ones, Frank. You know, Eunice, we were during the break, by the way, we're talking to producers. I've had like my family's from South Carolina. I had to eat chicken feet and gizzards and everything else growing up. Not my favorite. I don't know. Have you ever had to eat chicken feet or have you ever enjoyed chicken feet? Maybe you enjoy them.

Yeah, absolutely. Chicken feet goes into the category of, you know, you've been in China a long time when. So they have a lot of gristle on them. You know, they have, they're like really big. The American ones are really big. So yeah, they're good. They're kind of in the same category as donkey meat. So like when I first came here, I was like donkey meat. And then now I've been here a while. I'm like, Hey,

We're going to move past the donkey meat comment very quickly before we let you go on a serious note. What about when it comes to things like soybeans and other American agriculture? What's the take in China? You've seen a lot of reports that China's buying more agricultural products from countries like Brazil. Yeah, no, absolutely. That's the

that's the case. We are seeing from many years before that the Chinese have been wanting to diversify their supply of a lot of different products that they've been reliant upon for the United States. Part of that was because of what they saw during Trump 1.0, and then now with Trump 2.0, they're having the same approach. I think that from a Chinese consumption standpoint, not looking at the soybeans, but looking at more products like the chicken feet, people are not

are not necessarily negative. They don't have a negative attitude towards American products for the most part. They're making decisions based on what's available and also what's affordable. And I think that one other point that Gung made that was interesting is he said that as these tariffs are going up,

You're seeing that the economy here and economic conditions and the confidence here going down. So people are much more price sensitive, which also factors into the consideration on pricing. You know, when we talk about farm to table here in the U.S., I don't think we're talking about donkey meat and chicken feet. That's not one bit. Great to see you as always. And by the way, don't try to bring any here to the U.S. I'm calling customs myself. Leave the donkey meat.

Don't worry, I won't. I tried bringing an octopus before. It doesn't work. You and your student life in Beijing. Thank you. Great reporting as always. All right, coming up here on Worldwide Exchange, the retailer next guest calls her top idea down about 5% since his last earnings report. We're going to reveal our mystery chart coming up after the break. Stay with us.

Welcome back to World Exchange. We have an update to a story that we brought you earlier. Just crossing the wires a short time ago, the European Union now saying it did not receive a letter from the Trump administration making a demand for countries to submit their best offer for trade negotiations by Wednesday. So, again, we've been reporting the Trump administration says it has told countries in trade negotiations it wants to see their, quote, unquote, best offer by Wednesday. The EU saying it has not received a letter from the U.S.,

Again, this follows a call with the administration of European Commission President Ursula von der Leyen. After that, the president restored a July 9th deadline to allow for talks between Washington and the EU to continue. But again, the EU coming out today just crossing the wire saying they have not received a letter from the White House saying that they need to submit their best offer by Wednesday.

Right now, taking a look at U.S. stock futures, you can see we're in the red across the board. Off of our lows of earlier, it looks like the Dow would open about 150 points lower right now. Joining me now to discuss the markets and much more is Nimrit Kang, CIO and Senior Portfolio Manager at Northstar Asset Management. Nimrit, good morning. Good to see you.

Good morning, Frank. So I got to get your reaction to this news right now. The EU saying they did not receive this letter. We were already talking earlier in the show about some of the trade trade, excuse me, tensions between the U.S. and China, not just negotiations, but also tensions. What do you make of this?

This is yet another data point to kind of again, you know, reaffirm for what we have known all through this year. This is a very headline driven market. It's a trading market. That's why our playbook in a market like this is to stay, think long term, five years plus, stay diversified and be very disciplined and not get whipsawed back and forth on the daily news cycle.

All right. With that said, I just want to bring a contrarian view. I was actually talking to Michael Harnett, the chief investment strategist, the Bank of America yesterday. He told me tariff narratives over. He believes it's all going to be resolved by Labor Day. He says right now it's about the spending bill and tax cuts. What do you think about that take?

Yeah, I mean, the spending bill is definitely what's front and center right now. You know, what does that mean for increased debt, for longer term growth outlook as well? So I think that's definitely front and center. But the tariff news has not gone away. And we've seen that already last end of last week, the back and forth. We saw that the news on the steel and aluminum.

So we're going to continue to have these drips and draps. It's difficult to see how we're going to resolve the tariff or the trade war we started with, you know, almost 180 countries around the world to get resolved by Labor Day. So I expect this continued drip-drap going on for a while. So your word of the day today is whipsawed. What do you mean by that? What do you see being whipsawed?

Yeah, I think it's the back and forth that we keep getting. You know, we have the market sell off, then the market bounce back again. So this is very much a trading market environment. And if you're not focused, if you don't have conviction on what you're investing in for the long term and just chasing the daily news feed,

Frank, we think you're going to get really caught. You know, you're buying stocks one day. They go down the next day on a tweet or a news item only to see a different group of stocks lead. So that's what we mean by getting whipsawed all over the place. Even look at the bond markets. That's been yo-yoing all over the place. Yet year to date, the 10-year is down only about 17 basis points. All right. Nimra, very quickly, we want to get to your pick. We're going to review our mystery chart as well. It's TJX. What's given you so much confidence in this company right now?

In an environment like this, which we heard from all over the retail earnings, the consumer is feeling the pain and consumer across every single demographic, every household income level is continuing to look for value. That's where a model like TJX really shines, the resilient business model. There's plenty of space for them to continue to grow. They posted about 3% comps in the quarter.

Just continues to show you how important it is to invest with a resilient business model like TJX. All right, Nimrit, thank you very much. Your pick for us today, TJX. Great to see you as always.

All right, here's what to watch today. In the 10 a.m. hour, we get the latest Jolt's report and factory orders. And then this afternoon, we're going to hear from three Fed officials that are on the earnings front. We get results from Dollar General, Hewlett Packard Enterprise, and from CrowdStrike. And then tomorrow on Worldwide Exchange, a first-run CNBC conversation with Sixth Street co-CIO Julian Salisbury. That's going to do it for us. You've been listening to CNBC's Worldwide Exchange. You can always catch us live weekdays at 5 a.m. Eastern.

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