Squawk Pod: Elon Musk’s interview with The Economist & Lina Khan’s NYC role - 07/24/26 — Audio Only

[00:00:00] Speaker 1: - Bring in show music, please. [00:00:04] Katie Kramer: - Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. When Elon Musk went on the record, the world's richest man spoke to The Economist on tech, on politics, even his personal brand. We'll talk to the editor who did that interview, Zannie Mitten Beddows. [00:00:20] Andrew Ross Sorkin: - You guys had a lot of debate. I wanna know how it ended. [00:00:23] Speaker 4: - We ended perfectly amateur gab. I hope he'll talk to me again, we'll see. It was really interesting, but I think it was important to push back on these areas where I think it deserves being pushed back on 'cause I just think it's not right what he's saying. [00:00:35] Katie Kramer: - Lina Khan made waves as head of the Antitrust Federal Trade Commission during the Biden administration. Now she's got a new gig running economic development for Zorhan Mamdani's NYC. CEO whisperer Stephen Fulop of the business group Partnership for New York. [00:00:49] Speaker 5: - When you put people in prominent positions that aren't necessarily pro-business, it sends a message to the business community that is mixed at best. And that's kind of where we are. [00:00:59] Katie Kramer: - Plus, trading on Truth. Wall Street firms are paying thousands a month to get a fast track to the president's posts on Truth Social. Wall Street Journal reporter Gunjan Banerjee. [00:01:10] Speaker 6: - Nanoseconds matter. We're talking billionths of a second can make a difference in terms of their profits or losses. [00:01:16] Katie Kramer: - It is Friday, finally, July 24th. Squawk Pod begins right now. [00:01:21] Speaker 1: Stand, Andrew, bye in three, two, one, cue Andrew. [00:01:25] Andrew Ross Sorkin: - Good morning and welcome to Squawk Box right here on CNBC. We're live at the NASDAQ market site in Times Square. I'm Andrew Ross Sorkin along with Melissa Lee hanging out. Joe and Becky are off on what's called a summer Friday. Is that what we'll call it? - Great to be here. - Thank you for coming in and hanging out with us. - Of course, the pleasure. - This early hour, very early hour. President Trump hitting dozens of countries with new tariffs. It's all happening this morning. And Eamon Javers joins us from Washington, D.C. with the latest. What's happening here? [00:01:53] Speaker 1: - Yeah, good morning, Andrew. Just a few hours before those 10% global tariffs expired overnight, the White House announced a new round of tariffs that will effectively replace those worldwide duties with a new set of tariffs. Now, these new tariffs are being imposed under Section 301 of the Trade Act of 1974. This is one of several trade authorities that the president has used. These tariffs took effect at 12:01 a.m. this morning. So they're just a couple of hours old, and they imposed duties of 10 to 12.5% on 60 economies over what the U.S. describes as forced labor practices. Now, bear that in mind, 'cause that's gonna be part of the controversy here. A senior administration official tells CNBC these Section 301 tariffs will not stack on top of existing 232 tariffs. Now, the announcement marks the administration's latest tariff action after suffering a major legal setback earlier this year when the Supreme Court largely struck down President Trump's so-called reciprocal tariffs. Andrew, this is all about this question of how can the president find tariffs around the world that he can use to replace those reciprocal tariffs? He had the temporary tariffs in place. Now he's leaning on this issue of forced labor. The critics are saying, look, this isn't really about forced labor. The president is not really particularly concerned about that issue. What he wants to do is have this blanket tariff regime. And so you can expect that this will be challenged in court [00:03:22] Andrew Ross Sorkin: under those grounds. Okay, so who has standing to bring a case? How would this work? How long does this take? Sort of walk us through the next sort of set of dominoes. [00:03:34] Speaker 1: It takes a long time. And what we saw with the tariffs last time and the legal challenges, people who are impacted have standing to sue. So in this case, you know, somebody who is an importer who relied on some goods that are now being tariffed and this impacts their business, those are the types of people you can see filing a suit. And so you can see lawyers going around gathering up some plaintiffs like that, looking for particularly sympathetic ones in order to make the case. And then and then you bring that. And what we saw with the first round of tariffs is this takes a tremendously long time. And you could go all the way to the Supreme Court again at some point, depending on how things go in the lower court. So this is not going away anytime soon. So if you are one of those people who has to pay this tariff this morning, you're going to have to pay it. And then you're going to have to wait and see what happens in court and whether or not you get these tariff refunds. But we have seen companies getting these tariff refunds throughout the year for the last tariff regime that the president imposed. The administration feels this one is on much more solid ground because the legal the statute is there in Section 301. They've done all the preliminary investigations and everything you have to do under the statute to do it. So this feels to them as something that's a lot more solid and therefore they can really use it as a foundation for this tariff overall sweeping tariff authority. [00:04:56] Speaker 7: And by the way, those tariff refunds don't make it back to the consumer if the consumer is going to be charged more to cover those tariff costs. We haven't seen that float back. But even I'm wondering, you know, if we've heard from China, this makes for an interesting setup ahead of the Xi Trump summit later on this year, because now the effective tax rate on China is higher than it was before. It's like north of 22% or so. [00:05:18] Speaker 1: Yeah. You know, Melissa, I have not seen any reaction from the Chinese side yet. But that said, you know, it's very early in the morning and I haven't had a chance to scour all the media from China. So I don't know if we've seen a statement from them overnight. But, you know, the U.S.-China relationship is just under enormous strain just in the past week. You know, think about, you know, the tariffs here, but also you had the president accusing China of meddling in the election in 2020 that he lost. So this is a relationship where the president is really using China as a scapegoat for political and economic things going on in the country that he doesn't like. All of that pointing ahead to this September meeting here in Washington, where we expect Xi Jinping to arrive. So, you know, does that trip continue? You know, we've had no indication that it's been canceled, but if it happens, it's going to happen under a whole new set of strains. [00:06:13] Speaker 7: Eamon, thank you. Eamon Jabbers in Washington. A bipartisan pair of House lawmakers want AI companies to maintain the ability to shut down their models if things go wrong. The introduction of the AI Killswitch Act came just days after OpenAI disclosed that some of its models went rogue and access another company's proprietary systems. The bill would authorize the Secretary of Homeland Security to issue a shutdown order of AI technology that could cause catastrophic harm. Firms that don't comply could face penalties as high as $20 million a day. [00:06:45] Andrew Ross Sorkin: And a defense tech company, Andrew, reportedly in talks now with investors for a new funding round that could value that company at $100 billion. Reuters saying there has been talk now of Andrew using a two-stage process, which would force investors to commit to financing a second round, effectively, at a higher valuation that could occur within a year and involve Andrew meeting financial benchmarks. $5 billion funding round led by Thrive Capital and Andreessen Horowitz, two months ago, valued Andrew at $61 billion. And I think if you look at the valuation of a Palantir, all of a sudden you'd say, oh goodness. [00:07:22] Speaker 7: Or you can triangulate and go the other way and say Lockheed Martin is $131 billion. [00:07:27] Speaker ?: Right. [00:07:27] Speaker 7: So that's also, yeah, mind-boggling. [00:07:29] Andrew Ross Sorkin: So somebody is a little bit higher or lower than they should be. We'll see. [00:07:34] Speaker 7: The Wall Street Journal is reporting this week that Wall Street firms are paying $100,000 a month to get a fast track to the president's posts on Truth Social. Wall Street Journal lead markets writer Gunjan Banerjee was one of the reporters working on this story. She's also a CNBC contributor, joins us live this morning. So basically, this is a feed that will go straight into a firm's black box. So they get it like milliseconds before? [00:07:57] Speaker 6: Exactly. So this is going to be the very fastest way to get Trump's Truth Social posts. And in this business, for the high-frequency traders, the types of firms that are subscribing to this data, nanoseconds matter. We're talking billionths of a second can make a difference in terms of their profits or losses. So they want to be the very first of these posts and make moves across stock markets, bond markets, derivatives markets. [00:08:22] Speaker 7: So is the advantage just, because the company is saying that they are releasing everything at the same time. So nobody's actually getting anything early, but these firms that sign up, they can theoretically, they get it at the same time, but they are better equipped to trade immediately off of that release. Is that the way to look at it? [00:08:38] Speaker 6: Exactly. So they are saying that all these posts will be available once they become public, right? But how you get the data is very important. And API is certainly going to be faster than say me opening up Truth Social in the morning and then trying to trade off of the news. So one, this could shift the balance of power further towards Wall Street and away from many Main Street investors who might want to trade on this data. And there's entire Reddit boards dedicated to trading on Trump's Truth Social posts. But just zooming out a little bit, these HFT firms do everything in their power to get this data as quickly as possible, even tied to government data releases. Think the labor market reports, you know, inflation data. A lot of them try to put their computers next to the government data buildings around those reports to get it again nanoseconds faster. And that's a practice called co-location. Right. They're also investing in, you know, the most expensive, fastest technology to get this data really fast and trade. The distinction, though, that we're not [00:09:34] Andrew Ross Sorkin: talking about here yet is that the president's putting this news out. And historically, when presidents or other federal officials have put news out, they also haven't owned the device with which people are going to pay to get the milliseconds of news ahead of time. Right. That is a distinction. Yes. That's the big distinction here. So, yes, hedge funds do this all the time. But it typically elected officials are not. You know, we say that there's rules now in the White House that you can't use prediction markets to make money off of what you know before you know it. But truth social is actually going to make money from what it knows before you know it. You could argue it already is to some degree because that's become an outlet for the president to begin with. Is that factored into any conversation you've had with anybody who's actually thinking about this? It's really fascinating. When I was talking to traders [00:10:33] Speaker 6: this week, we started the conversation with commenting on how unprecedented this is. Right. We haven't had a president who's profiting from these payments before. But then they went on to say, look, we have to do this. We have no choice but to subscribe to this feed if we want to keep up with our competitors. And many of them said, hey, we're already doing it. We are already doing everything in our power [00:10:55] Speaker 7: to get this data. It's not up to them. I mean, they're playing by the rules that exist currently. I mean, I get the outrage. Right. But is there anything specific that prohibits this from happening? Is there anything that says that information that is, you know, shared by the government is in the public domain and so therefore cannot be profited on? I'm not I don't know what the [00:11:16] Andrew Ross Sorkin: legal ramifications are. The distinction in this case is that the company that is the distributor of the information is also owned by the by the elected official. Right. Andrew, that's that's a [00:11:26] Speaker 6: criticism that Democrats have had. Senator Warner of Virginia said this amounts to self-dealing by the president. He said this creates a two tiered system for for market data. Elizabeth Warren has spoken out against it. So has Chuck Schumer. That is the exact criticism from. I just wonder [00:11:41] Andrew Ross Sorkin: whether there's any firm or individual who will actually bring a case, because interestingly, in this instance, all of a sudden we were talking about who has standing. Right. Who is harmed by this? The the the the investor who's watching us now, who historically had invested based on what they thought the president was saying, could argue now that they are harmed by this in a different way. [00:12:07] Speaker 7: So let's let's play this out then. There are fee there. There feeds like data feeds from the NASDAQ and the NYSE that traders pay for as well. Yes. Yes. The NASDAQ and the NYSE, the information that was pricing information. Right. But they benefit from it. But the question is whether the NASDAQ, [00:12:25] Andrew Ross Sorkin: the NASDAQ and the New York Stocks has no duty to a public citizen to do anything because they're not elected. There's nothing there's no there's not a public official role in this. So that now we're into a an emoluments clause. I mean, there's just questions about how this this works. I mean, there was always a question about the truth social piece of it to begin with, except that that data historically was distributed both on truth social. It ended up on Twitter. It was you could argue it a different there was a different thing happening when you're selling it directly. I just wonder whether there's a larger conversation that will turn into potentially even a legal case. I don't know. I'm not suggesting there should be. I'm just suggesting that there's an interesting debate, at least that I keep hearing about. And I didn't know if that was something that you've heard about. So to the person [00:13:13] Speaker 6: at home arguing, hey, I'm now at a disadvantage, I would argue they've already been at a disadvantage. Wall Street has already been doing this. They have set up complex automated trading systems to screen for words like ceasefire, Iran, even terms like thank you for your attention to this matter. For sure. To act on this information as quickly as possible. They've already been doing this to to say that, you know, the person sitting at home has had an advantage or is on the same playing field as the [00:13:39] Andrew Ross Sorkin: Susquehannas, the DRWs of the world is not true. I'm not disagreeing. All I'm suggesting is that there's a distinction with the elected official element of this. There is, yes. That's the biggest change. [00:13:55] Speaker 6: And we haven't had that in modern history, right? And it's just, it's interesting. It's come up in my conversations with traders. But then it just goes back to, we have no choice. Like their livelihoods depend on getting that data. It's not up to them to be the ethical watchdog. [00:14:08] Andrew Ross Sorkin: I get it. I get it. All I'm suggesting is if every senator or congressperson decided that they were setting up a special website where all their statements were available through their own companies and the only way to get them would be to pay for them if you wanted it early, I think that you would imagine that people would raise their hand and say there's something not right about what's happening [00:14:31] Speaker 7: here. I agree. Santoli and I last, yesterday at 4 o'clock, when we were discussing the story, we were saying, well, what if CENTCOM set up their own, you know, direct feed? Because arguably CENTCOM would have very powerful tweets that impact the markets and use all that money to pay for the war. I mean, there, it's endless, like where this could be carried out. No, no, but you just made a distinction [00:14:52] Andrew Ross Sorkin: that, if you told me that CENTCOM was doing this, and I don't know if I'd be fine with it, but if you said that CENTCOM was doing this and that taxpayers were the beneficiary of it, then you'd be okay with it. I think there's a very different conversation. I think the conversation I'm trying to at least suggest isn't happening, it appears, is that the benefit, the profit, is not to the taxpayer. [00:15:16] Speaker 6: Yeah. No, I agree with that. There is an interesting backdrop here, where President Trump is one of the largest owners of Trump Media, right? He's one of the largest shareholders. The company has not done very well this year. Its stock is down more than 30%, and it's actually venturing into some interesting business areas in order to try to turn its business around. It recently decided to merge with a nuclear fusion company. This is a media company that's merging with a nuclear fusion company. And advisors to the company told the Wall Street Journal recently that that was an attempt to turn its stock around. So they do view this as a cash cow for the company, certainly. [00:15:52] Speaker 7: Dungeon, fascinating story. Thank you. Thank you. [00:15:57] Katie Kramer: Cheese will be next. Coming up on Squawk Pod, the interview making the rounds in tech and beyond. Elon Musk's change of heart on artificial intelligence, his willingness to work with his AI peers, his defense of who he calls normal people. [00:16:12] Speaker 8: I'd like to just admonish you and the media for the absurd characterization of the far right. It is false and misleading and nonsense. Please keep this part in. [00:16:25] Katie Kramer: The editor-in-chief of The Economist, Zannie Minton-Bedos, on her 90-minute chat with the richest man in the world. [00:16:31] Speaker 4: He's an extraordinary individual, and there were lots of times when I was kind of slack-jawed, at least inwardly. [00:16:38] Katie Kramer: That's next. Welcome back. You're listening to Squawk Pod from CNBC. We're talking about a pretty buzzy interview. Elon Musk sat down with The Economist insider and spoke with the editor-in-chief there, Zannie Minton-Bedos. That's where we start. [00:16:57] Speaker 8: The most immediate thing that we could do is to have the leading AI companies at least just meet or have some sort of call once every few weeks and just discuss any safety and security issues. [00:17:15] Speaker 4: But why haven't you done that yet? I mean, you don't all like each other very much. We'll know each other, yeah. Yeah, but you're not all, I mean, you're also all competing, right? You all want to be first. [00:17:23] Speaker 8: Yes, but that's where I think the competitors can keep each other honest. So I mean, I think it's quite difficult for someone in the government who doesn't have a deep technical understanding and isn't driving the frontier of AI to know whether something should be released or not. However, the competitors, I think what can, you know, if given sort of a week or two to review a new model, can highlight issues and have an incentive to keep, all the competitors have an incentive to keep the others honest. [00:18:00] Andrew Ross Sorkin: That was Elon Musk going to sit down and interview with The Economist. Joining us now is Zannie Petos, editor in chief of The Economist, who conducted that interview. It's fascinating. Zannie, I thought you did an extraordinary job and we were all, you know, glued to the screen. I'm curious. I mean, you touched on so many things. You touched on the AI piece, the whole idea that he really thinks within five years, AI is going to be even smarter, potentially even than him and what that means to his own power. You got into some of the things that happened with Doge and his role in the government, USAID. What was the thing, what was the moment as you were sitting there where you thought, huh, that really surprised me? [00:18:42] Speaker 4: Oh, so many. I mean, he's, he's an extraordinary individual. And there were lots of times when I was kind of slack-jawed at least inwardly. I was really struck by the, his vision of the future and actually the fact that he now thinks it is inevitable that, as you say, within five years, AI is going to be more intelligent than humans. And that within 10 years, he's painting this picture essentially where, you know, we are, we are like the kind of the Labradors to the AIs. You know, money will be irrelevant. It'll be such an era of abundance, but they will be in control. [00:19:19] Speaker 8: I think AI may exceed the sum of human intelligence in about, in around five years. [00:19:26] Speaker 4: In five years? [00:19:27] Speaker 8: Roughly five years is my guess. Um, so there really won't be anything that AI can't do better than humans apart from being human, perhaps. [00:19:39] Speaker 4: In a more prosaic level, what will life be like? [00:19:45] Speaker 8: The most likely outcome is an age of amazing abundance, uh, where anyone can have anything they can think of. This is, this is, uh, this may sound preposterous, but well, here we are in 2026. Let's see where we stand in 2036. Now, of course, there are things that could, derail this, like a, a massive global thermonuclear war or something like that. [00:20:11] Speaker 4: You know, you know, Andrew, you know, his background and he's, you know, this is a man who 20 in 2015 said on a podcast that that was one of the scariest things he could imagine. In 2023, he wanted to pause AI and now he's, you know, he's, you know, right at the front of this. And I said to him, you know, it sounds like you've given up on your concerns and you're, you're, you know, I was going along for the ride and he sort of gets, yeah, I'm going along for the ride. [00:20:35] Speaker 8: For the longest time I declined to participate in AI or was, you know, you know, created open AI as a, essentially a counterweight to Google. Cause at the time they were, um, they had more or less a monopoly on AI in creating open AI and then having anthropics spin out of that. And now currently anthropics leader in AI. Um, I mean, these actions have actually resulted in knock-on effects that accelerated AI, which wasn't really my intention. So it just seems like all roads lead to acceleration of AI. So then I'm like, okay, well, you can just sort of be sad about it or join the club. [00:21:22] Speaker 4: And he said, he admitted that within a, within one day he would go from exhilaration to terror. But I was, I was very struck by the inevitability. He thought that this technology and the speed with it was progressing would mean that this extraordinary future would, would kind of come within five years. Um, I mean, really struck struck by that. And again, at the same time, he laid out, I think for the first time, and you showed that in your clip, a willingness to work with the other frontier model makers to have some kind of, and he wants it an informal, typical Elon, right? He wants them all to get on a call and talk to each other and test each other's models for a week. And, you know, if they come up with security floors, tell the model maker that's got them. And only then if, if the model maker doesn't, you know, do anything, then go to the government. But I was struck how similar that is actually to the proposal by Devis Asabes last week for a FINRA style public, private partnership. And I think this really now has legs. I think this is going to go somewhere. [00:22:19] Andrew Ross Sorkin: Uh, he did seem to suggest that he'd be even open, uh, to talking to Sam Altman, uh, at some level. Um, absolutely. Absolutely. I mean, hinted at that, uh, given... [00:22:30] Speaker 4: No, no, more than hinted. He said that. No, he absolutely said that. Because I said, look, you know, you are all massive, not just massive competitors. You know, many of you dislike each other and you're, you know, frankly, you know, slagging each other off on social media quite often. And he said at the end, he said, well, he explained to me why he disliked Sam Altman. But then he said at the end, um, you know, yeah, maybe we should talk for the good of humanity. And so I think there is a, a sense of responsibility that he recognizes that, you know, the leading model makers do have to do this. And I said, does this have to happen quickly? And he said, yes. And I said, well, yeah, people are telling me this has to be done within the next six months. He said, six months is a very long time. It has to happen now. [00:23:11] Andrew Ross Sorkin: Right. Um, I want to show a clip of, uh, another piece of this that's going viral, has to do, uh, with, uh, I think you might've used the word right wing, uh, politics at some point, and he, uh, did not react well. Let's show that for a second. [00:23:25] Speaker 8: It's just more people. And, um, the, and, and here are the principles and, and tell me, which of these sound terrible, um, that we should have secure borders, that we should have safe cities, uh, that we should have sensible spending, which of those three are far right fringe. I would like to just admonish you and the media for the absurd characterization of the far right, which is false and misleading and nonsense. Please keep this part in. [00:23:56] Speaker 4: We'll keep all of this in, but let me, let me, let me, don't cut this part. Let me push back on that. Let me push back on that because you have nonsense. Elon, you have, what is it? Close to 250 million followers on X. Yeah. You say things like, quote, civil war in Britain is inevitable. Just a question of when? On the current trends, yes. I mean, when were you last in the UK? [00:24:19] Andrew Ross Sorkin: Um, a few years ago. Okay. So, um, you obviously reacted in the moment, but now you've had even more time to react and think about that. You kept it in. Uh, so we all got to see it. Uh, what do you think? [00:24:32] Speaker 4: Well, of course I kept it in because I, you know, I think people should see the whole of the interview. I said to him that he supports not just the populist right in Europe, but the far right, fringe groups that are, you know, nowhere near the mainstream and do actually propagate, not just, you know, the three characteristics he said, but, but really divisive far right politics. I think that's undoubted. And I think many of these politicians wouldn't be anywhere without Elon Musk's support. And I asked him why. And the reason I did that is because he also propagates a kind of caricatured view of Europe, that it is some sort of hellhole overrun with Muslim immigrants, incredibly violent. And as, as you heard him say, he has said that England is heading for civil war. And I wanted to know when he was last there, because I, I feel very strongly that this is a profound mischaracterization of Europe and not, it's irresponsible for someone who has 240 million followers to propagate things that are simply not true. He put up, as you know, for 48 hours on X, a film, Citizen Vigilante, which is glorifying vigilante violence and has a completely dystopian picture of Europe. And this is having consequences, Andrew. There are many people I come across in the U.S. now who are worried about coming to London, who are worried about allowing their kids to go to London because they think that Europe is a sort of dangerous place. It's just not true. On the facts, you know, London is a safer place than major U.S. cities. Europe is not the hellhole he's painting it to be. And I just, I got exercised about it, probably more exercised than I should have done, because it seems to me that this is not just wrong, it's irresponsible, and it's having really serious consequences. And I think it's just unfortunate that someone who is so farsighted and expansive and thoughtful, if slightly terrifying, on where AI could go, can kind of basically play in this sort of dystopia about Europe and say things that are just not right. [00:26:27] Andrew Ross Sorkin: And you've known Elon for a long time, I've known Elon for a long time, and I think we both agree that in many ways he's very brilliant and very thoughtful. And so my question to you, to the degree that you disagree with him about his assessment, where do you think that assessment comes from? Why do you think [00:26:43] Speaker 4: he thinks that? So I think he has a very firmly held belief that if you have a large-scale migration of people from cultures that then don't integrate, it is going to have problematic consequences for a society. And, you know, to some degree, one can agree with bits of that. Uncontrolled migration is sort of societally untenable. But that's not what's happening in Europe. And my issue with him is his, I think, erroneous and caricatured description of what's actually going on in Europe. And, you know, the fact that he hasn't been here and the fact that he is reposting things and propagating things that are just not true kind of reinforces this negative spiral, particularly on X, which I think paints a picture of the continent which isn't accurate and which is in turn feeding, you know, the whole MAGA view that, you know, there's civilizational erasure in Europe. We're all, you know, it's a dying continent that's in a catastrophic shape. Of course there are problems. And I'm the first person to admit that there are problems. There are free speech issues in this country. There are problem areas in this country. There are problems with definitely some problems with migration, but it is not what he paints it to be. And nor, frankly, is he being disingenuous when he says that all he is in favor of is, you know, secure borders and limited spending and safe cities, because on two of those three, [00:28:08] Andrew Ross Sorkin: Europe does better than the US. You also got into a bit of a fiery exchange [00:28:13] Speaker 4: with him over Doge and USAID. Well, we did that. He got fired. I was just really just asking him. And he mentioned that, you know, his view that Doge was just the USAID was a political organization. And he said zero, there had been zero deaths as a result of shutting down USAID. And I simply pushed back and I said, you know, it happened overnight. USAID was a very big, you know, provider of health care funding in Africa. I find it very hard to believe that there were no deaths and no suffering. And he you heard him. He just had zero, zero deaths. And again, I think that's, you know, you can you can agree that USAID needed reform or perhaps even needed shutting down. But the way it was done clearly to me, to my mind, and I think indisputably has led to unnecessary suffering. [00:29:09] Andrew Ross Sorkin: When you think about SpaceX, the IPO just happening and Tesla, we keep having a sort of a parlor game about whether he ultimately buys that business. What do you think? [00:29:19] Speaker 4: Does it all become one? We didn't talk about it explicitly, but my strong sense from the way that he described his vision was that it was it was one set of businesses. And when he talked about the reason for his control, and this was really interesting, because I said, you know, you have whatever is over 80 percent of voting shares and you essentially you can go crazy and you still can't be removed. And he talked about why he needed this control. And he spoke about it in in a five to 10 year time horizon. He said, I need it for the next five to 10 years because we have to, you know, extend consciousness to the to the universe. And he described all the elements, which included elements from SpaceX and from Tesla. [00:30:01] Andrew Ross Sorkin: You could tell, I think, that he has a lot of respect for you, but you guys had a lot of debate. [00:30:07] Speaker 4: I want to know how it ended. Oh, I think you saw it at the end. It ended perfectly amicably. He said, at least I'm not boring. And then we carried on talking for another 15 minutes while he had his pictures taken. I mean, look, I think he's an extraordinary individual. I am not a Musk hater. I think he's an extraordinary, extraordinary individual who has done probably more than any other person to build the future. So I'm I love talking to him. It was an incredible privilege to have, what, 90 minutes talking to him. And, you know, we ended perfectly amicably. I hope he'll talk to me again. We'll see. It was really interesting. But I think it was important to push back on these areas where, you know, I think he deserves being pushed back on because I just think it's not right, [00:30:46] Andrew Ross Sorkin: what he's saying. Zannie, it's always good to see you. We appreciate it. And congratulations on the [00:30:51] Katie Kramer: interview. Thank you. Great to see you. Still to come on Squawk Pod Partnership for New York, Stephen Fulop. Business leaders in the Big Apple are buzzing over the Biden-era FTC Commissioner Lena Kahn's new role in New York, what it means for business regulation, and how to mobilize voters in [00:31:09] Speaker 5: the largest city in the country. When we go to kind of these town halls with companies, what you'll find is most are voters, most vote in the presidential elections, and very, very few are involved in local elections or local primaries. And that is something that we really need to change. We'll be right back. [00:31:27] Katie Kramer: This is Squawk Pod. [00:31:33] Andrew Ross Sorkin: Thanks for watching Squawk Box on CNBC on this summer Friday. I'm Andrew Ross Sorkin along with Melissa Lee in for Becky and Joe. She's doing the job of both of them, if you can believe that. We're splitting it. Wall Street facing a major shakeup of New York City's situation this after Mayor Mamdani named former FTC chair Lena Kahn as economic development chair. Joining us to discuss what this means for New York City's business climate. Steven Phillip is president and CEO of partnership for New York City. We said earlier that this might have come as a surprise. I don't know if it should have come as a surprise because she was involved in the transition. What do you think? [00:32:15] Speaker 5: I mean, I think it's a fair point. I know we always spoke about the positive relationship and the closeness between Lena Kahn and Mayor Mamdani. Look, we have concerns and trepidations that she's in such a prominent role. And the question is going to be really how much does he lean on her in this new EDC position? [00:32:32] Andrew Ross Sorkin: So that's the big question. And what kind of changes or things are you already hearing or not that could be good or bad for business? [00:32:41] Speaker 5: I mean, look, you know, when he came in, he kind of redefined the position of economic development around economic justice. And we had a lot of questions around what does economic justice mean when you think about, you know, incentivizing businesses to grow here in New York City. You know, we had a lot of hope that we would get somebody in the EDC leadership that we were familiar with. We got it in one of the two positions that he appointed. We felt great about Tony being in the president position. But there's only one boss, Andrew, as you know. And the question is going to be, who does the mayor lean on? And we know that he has a history with Lena Kahn that is very close. [00:33:16] Speaker 7: She's known at the FTC, Stephen, as you know, as being sort of adversarial to big business. And so I'm wondering how, you know, what are the major concerns that you have in this new role that you can actually make life more difficult for businesses operating in the city? [00:33:29] Speaker 5: Yeah. I mean, look, this is a major shift if you pursue a regulatory environment with the organization, the EDC, that is rooted in a history of incentivizing business and growth here. You know, there's a lot of questions around the DSA and a democratic socialist mayor. And you've seen some companies say over the last couple months that they're going to grow elsewhere, Texas, Florida. And language matters from the executives. So when you put people in prominent positions that aren't necessarily pro-business, it sends a message to the business community that is mixed at best. And that's kind of [00:34:05] Speaker 7: where we are. Do you think this makes a difference? I mean, if a business were making a decision today is whether or not to expand or relocate or establish a presence in New York City, that disappointment is bad? It would be a negative input into that decision-making process? [00:34:21] Speaker 5: Look, I think it's kind of everything is incremental, positive and negative. And, you know, you see people making decisions in hedging. So you've had some positive indicators. The job growth in New York City over the last couple months has been great. New York City is a resilient place. But at the same time, you see a long-term trend of wealthy people leaving. That's from independent entities kind of citing that. And you have companies like Apollo, like Goldman Sachs, like JP Morgan, Citadel talking about scaling up elsewhere. So it's a mixed bag. And all of these things are additive in a direction of positive or negative. So I would put it on the negative side, her being there. But is it going to be the overwhelming decision-making factor? Probably not. But it will move people [00:35:08] Andrew Ross Sorkin: closer in that direction for sure. What do you think the relationship is right now? I mean, when you go to when you go to City Hall, what is the relationship better, worse, frosty? Are there things you can point to that they're doing that you like? Are there things? Yeah. I think we just [00:35:25] Speaker 5: want to understand what it's actually like in the room. Yeah. I mean, look, you know, a couple days ago, the mayor changed the regulatory environment around small businesses, making it easier for small businesses to open. We were a cheerleader and continue to be a cheerleader for that. You know, we've had several one-on-one conversations. And, you know, he's been to the partnership before. And he's a talented communicator. There's no question about that. He would point to things like American Express opening or breaking ground on a new headquarters here in New York City as a positive indicator. And we would say that's great news. The city is very resilient. You know, American Express has been here over a century. However, those things are performative when you go to kind of ribbon cuttings and groundbreakings. I mean, we're looking for places to overlap, whether it's on child care, AI and job displacement, housing growth that are concrete and encouraging the private sector to [00:36:21] Andrew Ross Sorkin: grow. We just haven't gotten there yet. So I was surprised. The mayor put out a tweet yesterday. I don't know if you saw it. It said, if you have a second home in New York City worth more than five million dollars, check your mailbox when you're back in the five boroughs because you've got mail. Today, we sent notification letters to property owners letting them know that our new pied-a-terre tax is coming soon. And the reason I mentioned this is just more the tone of it, you know, especially after what the back and forth with with Ken Griffin, maybe I shouldn't be surprised about it. But, you know, I thought that he had actually taken a more conciliatory tone, but more of a tone of, look, we want all New Yorkers, people, if they want to be in New York and have a pied-a-terre, we'd love for you to have a pied-a-terre and we want you to pay the tax and that's great. And if you want to live here, that's great. But this seemed to indicate that he wasn't so happy that you were even here if you had a pied-a-terre. [00:37:19] Speaker 5: Yeah, I mean, look, the tax the rich conversation is red meat to his base. They had huge wins, the DSA and the far, far left, a couple of weeks ago in the primaries here. And that was largely driven by the mayor's support. And over the last week or so, you saw the rhetoric around taxing the rich increase. You saw, you know, the rhetoric around Israel and Netanyahu, despite the fact that the mayor has no input over international or federal issues increase. So, you know, those are campaign language. And, you know, we would hope that the priority remains keeping the city safe and, you know, paving streets and encouraging economic development. [00:38:02] Andrew Ross Sorkin: So that's an interesting question. So let me ask you, on the Netanyahu piece of this, as you watched all of that play out, and you're right, that's red meat for his base, but also then riles up the rest of the city. Somebody said, somebody actually compared him to our president the other day and said, because I was making the argument he can't do this, meaning this is before he came out and said he couldn't do it. And they said, well, you know, he's going to say things he can't do just the way the president sometimes says things that he's not going to do or can't do. And that this is just this is this is this is the new politics. [00:38:45] Speaker 5: Well, I don't necessarily agree. I don't agree with that, Andrew. I think that I think the president, [00:38:50] Andrew Ross Sorkin: when he says something, I'm not defending it. I'm just suggesting this is sort of become this. Maybe the Overton window has now shifted for everybody. [00:38:57] Speaker 5: You know, look, I think that there is an anti-Semitic component of the extreme left and extreme right, for that matter. And at times, you know, you see, you know, politicians inflaming that because it's a passionate, passionate base. Unfortunately, I could tell you that the business community and the leadership here is very, very concerned about the anti-Semitism increasing and the language coming out of City Hall with regards to a focus and an obsession with Israel, to be honest with you. And we would hope that the priority would remain keeping New Yorkers safe and improving the climate around business and growth here. And when you speak directly [00:39:39] Andrew Ross Sorkin: with them about that particular issue, what's the response? [00:39:42] Speaker 5: I mean, look, we, our chairs and myself had a conversation a couple of months ago around the buffer zone bill, which we were very supportive of, which limited space that you could protest around synagogues. And the mayor had a different view. And we were very, very clear that we disagree on that. And we are going to be vocal. And we spent money on that. I would think that the business community is going to increase communication with our employees and more broadly around policies over the next year. It's a big, big factor of why I'm here. And one of the things that we want to do is organize more in that middle to make sure that we're communicating with kind of that pragmatic base that should be concerned about jobs fleeing. I mean, the affordability crisis is real. We all acknowledge that. But, you know, the best way to solve it is to grow paychecks. And you only grow paychecks by increasing the opportunities for businesses to be here. And I think we're missing that. [00:40:36] Andrew Ross Sorkin: I want to read you something. This is from Charles Kushner, who was the ambassador. Obviously, his son is Jared Kushner. Josh Kushner, his other son, who's in the venture capital business. He says he's leaving New York. He's going to Florida. I haven't heard it articulated this provocatively or maybe specifically. A lot of people say they're going to Florida and they don't say much. He says, I don't want to pay taxes and live in a city with a blatantly anti-Semitic mayor and his anti-Semitic wife, period. And then more, I don't know, maybe just as interestingly, he says, I also don't want to live in the city with the people who voted for him. Yeah. What do you think of that part? [00:41:23] Speaker 5: Well, I've known Charlie Kushner a long time. He's still very invested in the region, building buildings in Jersey City. He owns properties in New York. I can't speak to the specific language, and I'm not going to get into calling somebody anti-Semitic, specifically the mayor or his wife. I can tell you, though, that people do speak about leaving the city with regards to crime or anti-Semitism increasing, where people just feel unsafe. So you have a tax environment, you have a regulatory environment that are difficult, frankly. And then on top of that, when you have anti-Semitic rhetoric, people do feel uncomfortable. So I'm not surprised that Charlie said that. I'm actually not surprised that he was that frank and honest about it. I mean, [00:42:09] Andrew Ross Sorkin: that's how he is. I thought the most interesting part was actually the second part, the part where he said, I don't want to live in a city with the people who voted for him. [00:42:17] Speaker 5: Well, let me say that that's going back to what I said is an important part about this whole thing. You have less than 15 percent of the eligible voters voted for the congressional candidates in that last primary. And so you could interpret that as saying that an extreme lefty October 8th, which basically, you know, you cannot argue that you're against Bibi if you went to an October 8th rally. You're basically condoning rape, hatred and murder, was elected. And yes, you could say that people supported her. Clearly, they did. But we need to do a better job of motivating the other 85 percent of eligible voters to come out and be engaged. We haven't done that, frankly. And when we go to kind of these town halls with companies, what you'll find is most are voters, most vote in the presidential elections. And very, very few are involved in local elections or local primaries. And that is something that we really need to change. It's a priority for us. [00:43:17] Andrew Ross Sorkin: Steve, I want to thank you for joining us. I always appreciate hearing your perspective. Thank you. Thank you. I got to thank you for hanging out on this summer Friday. Have a great weekend, [00:43:28] Katie Kramer: everybody. Make sure you join us on Monday. That is Squawk Pod for today and for the week. Thanks for listening. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern. Listen to Squawk Pod wherever you get your podcasts. And please hit that follow or subscribe button and get this podcast in your feed every day. Have an extra second this weekend. Give us a five star rating or write a quick review on Apple Podcasts. That really does help other listeners find us. That's it. We'll meet you right back here on Monday. Have a great weekend. [00:44:06] Speaker 1: We are clear. Thanks, guys. [00:44:17] Speaker ?: Thank you.