Power Lunch - Power Lunch 5/18/26

Episode Date: May 18, 2026

CNBC’s Kelly Evans and Brian Sullivan take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. ���Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Power Lunge. I'm Kelly Evans. Brian Sullivan is off. Surratt Setti is here with us for the hour. A busy hour. It's going to be, Surat, welcome to you. Some breaking news. Elon Musk losing the court battle against Sam Altman and Open AI. Let's get to Kate Runey outside the courthouse in Oakland, California. Kate? So, Kelly, the jury came to that decision in about two hours here in Oakland. The jury rejecting Elon Musk's claims against Open AI and the CEO Sam Alman. This ended a dramatic chapter that we've seen play out over the past three weeks here in the courthouse behind me and decided that Musk did not file this lawsuit on time, that he was outside of the statute of limitations. He had three years to sue and the jury deciding that he missed that window to file this lawsuit. This was an advisory jury, Kelly. So the way it was supposed to work was the jury is going to come to their decision. And then the judge had the final say. In a surprisingly quick decision, the judge said minutes after.

this jury got decided and made their decision, the judge agreed and said, yes, she's throwing out this lawsuit. The court is led by district judge Yvonne Gonzalez-Rogers. She said that she agreed and that opening out here does not liable. She said the claims of breach of charitable trust and unjust enrichment are dismissed as, let's see, dismissed. I'll put it that way. So she also went on to talk about any sort of appeals process. The lawyers for Elon Musk said they reserve their clients write to an appeal. She said she's prepared to dismiss an appeal on the spot. So she said, basically, there is substantial evidence. There's a substantial amount of evidence to support the jury's finding and suggesting there that she is ready to throw this out and move on entirely. The remedies that

Musk was looking for here, Kelly, were more than $100 billion. He had looked to remove Sam Altman from his leadership position inside the courtroom from our team that was in there, said that the Microsoft, who was a codependent in this, and OpenAI legal teams were slapping each other on the back. They were celebrating, shaking hands. We just saw them leave the courtroom. I believe Open AI's lawyer is going to be speaking here in a minute. But a major sigh of relief for this AI company that is also looking to go public. This had been a massive distraction.

We had Sam Altman here in the courtroom almost every day of this trial. They are able to move on from this despite a lot of drama, a lot of back and forth, and personal attacks on the CEO that we've heard over the past couple of weeks. here, Cal. Absolutely. Kate, thank you very much for now, our Kate Rooney. As we turn to Surat for some reaction from you, how big of a deal is this? I think you have to look at it in the big scheme of things. SpaceX is about to go public. Capital is going to be flowing to companies. And if you think of from Elon's view, where do I want my capital to go? And if I create uncertainty elsewhere in Open AI, where is the capital going to go in terms of, you know, where do I want the best return

of investments? And by the way, this is tied to Microsoft. And you know we have those circularity. So all this kind of, and you can see the reaction of Microsoft just today, intraday, even though it's up a little bit for the year, for the day, was down quite a bit beginning of the day. So I think, you know, having this now as a sideshow removed, people can focus on who's going to go public, whether it's open AI, Anthropic, et cetera. I like what you said, because we're always talking about open AI versus Anthropic and the first, they want to be the first out. They want to set the narrative. They want to get the capital. All of that's true. SpaceX is coming out first. And they are in many ways a competitor.

Look, they own XAI. Do they not at this point because of all of that? They're a competitor with these three companies. And you're right. Musk would love to create the kind of question marks around a rival's name to get the benefit of the capital flowing to his. This was a setback in that effort. And here's the other interest about the S-1 is coming out any day now. The S-1 is going to detail the financials of Starlink and X-A-I.

And what we've read before so far is that X-A-I is not that profitable. This is behind GROC. Right. And GROC is not, you know, as I understand it, one of the top few chat books. So if you create uncertainty and kind of vagueness in the other, you know, competitors, that helps you. But now if you see these companies now actually on a better, you know, what are you going to buy when you buy SpaceX, right? It's not just Starling. But so in other words, the result of this trial by Musk losing, let's say, it actually could make it a little more difficult for the SpaceX IPO to be a blockbuster.

Well, yes, but the other side is, you know, there's a huge following of Elon, right? So I don't think it's going to change people's views. It might not attract additional capital. Right. It might be the people are going to say, I'm reserving capital for what's coming. What's coming also. But now I could give more capital to this because we're uncertain about the future of Open AI. All right.

Laura Martin has been following this as well. I want to bring her into the conversation. Before that, do you want Laura here? Laura Caladni, I should say. CNBC's Laura Caladne was in the courtroom in the courtroom in Oakland, California. So, Laura, you can give us the direct report of what was happening inside in the past few minutes. Hi, thanks. Yeah, it was a huge amount of relief on the part of Microsoft and Open AI and their attorneys. They were just hugging and patting each other on the back with relief as the jury verdict came in,

that this did not meet the statute of limitations. The judge was very thankful for the jury. They had three weeks of a really complex trial, and she said she would be giving them a gift that, you know, She paid for personally just as a token of appreciation and she read a moving quote from a Supreme Court justice, just lauding juries for their public service. But I will clarify that an appeal is still possible post verdict. It's just the judge, you know, said that she does see a lot of evidence to support the jury's finding. And so she was going to, she was going to honor their verdict right away. But there is still a chance Musk team could appeal.

We'll find out more about that in June date. Right. And of course, Laura, that would be hugely important because to the entire discussion we're having, the narratives around SpaceX and Musk, the narratives around Open AI, and the actual financial detail, you know, any vulnerability on Open AI's part is going to be a big question mark around its IPO. So you're saying an appeal is possible. It's still possible. It is still possible.

And you raised a really great point about must, you know, sort of getting a lot out of this litigation no matter the outcome, this verdict here in terms of, you know, raising doubts about Open AI and sort of taking shots at a competitor. The other thing that happened, interestingly, during this trial is it must form an allegiance with anthropic. You know, they're now renting compute at SpaceX AI's colossic facility in Memphis. So that has been interesting that that emerged during all of this. It sort of almost looks like the enemy of my enemy of my friend. Right. Laura, thanks for bringing us that reporting. Really appreciate it.

Laura, Kaladne, was inside the courtroom as this verdict was delivered. Let's turn to the other Laura now. A top tech analyst, Laura Martin is managing director and senior internet and media analyst at Needham and Co. Laura Martin, what are your thoughts? Hey, you know, how many times is this guy, Sam Altman, been trying to be fired? Remember when the board threw him out in November of 23? This is like the most hated person in the Gen.

AI revolution. He is good theater. Look, importantly, open AI is rushing ahead, which is led by Sam Altman. Musk is trying to catch up with, you know, his XAI venture. He's losing. He's losing the political battle. He's losing the consumer battle. My opinion is this is big egos fighting over maybe vision, but really more money, like economics and competitive position. And so far, Sam Altman's winning sort of in 360 degrees. He keeps keeping his job. And Open AI is running forward. and can actually do an IPO. More importantly, Anthropics, the big winner here. When we have these billionaires getting headlines throwing mud at each other, that's bad

for both of them going public because it will come up in their IPOs. But so, Anthropic wins. Are there as light drama? Just doing it. I heard somebody say they may do a trillion dollars in revenue at Anthropic. Anthropic is a big winner between this fight between Elon Musk and Sam Olman. And also just in the marketplace. I mean, their technology is the one that is.

kind of revolutionizing and arguably lifting the whole semi-trade and everything from the March lows, as many have said. Laura, I'm curious for any of the partners, Apple, Microsoft, are there big implications for the publicly traded, you know, mega-caps? Yes, only insofar as it just put something behind that was, I think, a dark cloud. And I think a lot of capital in public markets is sitting in stocks today that don't want to be there. They want to be in a Gen A.I. play.

But both Anthropic and Open A.I. are private. today and by charter a lot of public, large public institutions cannot invest in private entities. So I think a lot of money moves out of, you know, slower growing, more capital-intensive businesses into open AI and potentially, I guess, you know, Elon Musk's companies when they come public. There are faster growth. Yeah, Surat. So I guess the question for you is, and you kind of, we're talking about it, when all these companies come public, where are we going to get the capital, going to come from. So what sectors do you see? Do you see it from the memory chips coming out? Or do you see it from other sectors within the market? Because that's kind of where all of us are

trying to figure out. You know, obviously, this capital is going to get attracted to the highest return investment. But who's going to be the losers on this? I actually think this is a great point you've raised because what we see, just using media is a case study. Disney, Paramount Fox used to generate about $700,000 per employee. Netflix, which was the disruptor of, from the internet, internet era, $2.7 million of revenue per FTE, per employee. I think Gen A.I is going to double that again. Right now, Meta and Google are about $2.1 million of revenue per employee. I think that's about to double to four. So the point is, any company in the S&P that isn't generating a 20% return on capital, that's going to be the new benchmark, because I think that's where

Gen AI companies return on capital is going to be above the normalized spending level for capital. Right now, they're front-running the capital spending. But over time, we think these companies have a dramatic step up in productivity per employee and per capital. Laura, just to follow exactly the point that Surat was making, I mean, do we need to worry? There's kind of two ways I'd look at this, right? One is, you know, oh, don't worry about, you know, the mega-caps, they're going to be fine. But the other is there are real structural changes. They are changing into more like capital-intensive commodity producers like you're talking about. And now they have these sexy new companies coming on the scene without these problems attached.

If Open Eye puts this behind them, are they, is that a, is that a significant moment that capital could really move out of the Mag 7? So I'm going to go with no, because I think what's happening is we're rebuilding the global infrastructure. And while, yes, they're front-running capital now because they can. And they're creating a new moat for themselves of capital intensity. the payback period might be 10 years, but then nobody can touch them. Globally, okay, ex-China, nobody can touch them. They've created a new moat for themselves because they're first movers. I hate to jump in. We have the lawyer at the courthouse. Just want to go back to that. Laura Martin, thanks very much from Needham. Kate Rooney's at the courthouse with more for us. Kate?

That's right, Kelly. We're here with Williams-Zavit lead attorney for Open AI. It's great to get your thoughts on this. Reactions quickly just on what we heard and how swift that decision was why the jury and then judge? We're delighted with the result, of course, and it is remarkable that it didn't take these jurors who have listened to three weeks of intense testimony and reviewed thousands of documents to take less than a couple of hours to reach the conclusion and the right one that Mr. Musk's claims were not viable. Were you surprised by how swift that was?

I mean, two hours. Is that unprecedented? It's unusual. And I wouldn't say I was surprised. We were very confident in our case as it went into the jury. room. We were pleased that the jury saw the evidence as we did. That is to say, very conclusively tilting in one direction. So it was a happy, it was a happy surprise. There's a little bit of chatter about the appeals process and what that might look like. Do you expect any sort of appeal based on

what the judge just mentioned? I can't say whether Mr. Musk's legal team will pursue an appeal. We are very, very confident in our position should there be an appeal. This also, we should say, is not your first time going up against Elon Musk. You represented Twitter in the lawsuit there. What is your experience, I mean, going up against Elon Musk, cross-examining him, could you give us a little bit of your take on just what it is like to be in a legal battle with Elon Musk? He's a formidable adversary, of course, and he hires terrific lawyers, of course, and he is tenacious in his opinions, of course, and his positions. But we find that the persistent application of legal principles and the remorseless search for evidence

is what wins cases, even against Elon Musk. There was a lot of drama, and I would say mud slung in this case, regardless of the legal merits, you said multiple times that some of the attacks on Sam Altman were irrelevant. Do you think that's damaging to Open AI beyond the merits of this lawsuit? I don't. I don't. I think those attacks will be seen for what they are, which was a court-driven character assassination that's unmoored from reality. Character assassination, you put it well. I mean, we heard multiple witnesses go up and say that Sam Altman live? I mean, is that something you've heard before ever in a case? It seems like so much of the legal case and what we've heard over the past three weeks has just centered on Sam Altman

as a person, as a leader. What has been your experience getting to know him? And does that align with the person you know and you've represented? Not in the least. It's been a great pleasure to get to know Sam a little bit. I think he's a terrific leader. I think he has an extraordinary vision for open AI and the development of artificial intelligence. and his commitment to the mission that he talked about is really fundamental to what he's trying to achieve. That's my observation. And final question, Bill, we've had protesters out here almost every day. The jury talked about really not being a fan of AI. What is your take on just the moment we're in with artificial intelligence? And that really being the elephant in the room in this case.

I think it's a great challenge. I think it's a great challenge because I think there is a consensus that artificial intelligence has the capacity to generate tremendous good. It also has risks. So what's important is that we accentuate the positive and eliminate the negative. And it's what I think is so appealing about Open AI that it is a mission-driven, non-profit-driven organization that is still at the forefront of that technology. I think we'll get there in a good way, but there's a lot of work to do. I really appreciate your time.

Thank you so much. Thank you. Appreciate it. All right, Kelly, back over to you. Kate, thanks very much. Again, Kate Rooney, speaking with Open AI's attorney there, William Savitt, a fascinating, throughout any reaction to what you just heard? No, I mean, I think the lawyers are pretty confident in this case. So it's kind of interesting to see if you do get an appeal where that's going to go. I mean, the judge already said I'm going to squash it. So it seemed like pretty cut and dry. Or from an investor's point of view and Gene Munster made this point, Open AI shares were still trading at a premium throughout the entire trial. So nothing that would really put a dent. Yeah. And I think the market kind of read through that to say, hey, this is just more noise. But. Again, it brings more attention to this space.

So as they all get ready for their IPOs, people are, you know, the retail investors really interested, not just the institutional because you're going to need that amount of capital to spread. These are trillions of billions of dollars anymore. We're looking at numbers that are so large and you've got private investments coming out. Yeah, if SpaceX is 1.75, I don't know what it's going to be. If Open AI is a trillion, if Anthropic is a trillion. Right. But those are valuations. I mean, the money they're raising would presumably be in the tens of billion some portion of that. Yeah. So the liquidity at first is going to be 50 to 100 billion, which again is a huge number. But then over time as those, as people start, you know, getting liquid when private equity firms or venture firms need to get liquid and other people do that, what happens in the secondary markets if they actually end up going public?

Quickly, one more take on this. They are changing the rules. The NASDAQ is to basically try to fast track these listings into more. of the triple Qs and that kind of, do you think that's appropriate because of what we're talking about here? There, there's still going to be this weird math behind the scenes. Christina Prisonevel is going to explain it better than I, where a portion of the, the company's market cap is represented until it can kind of get to the whole thing. So it's amazing to watch how they're having to figure out what to do with these IPOs. I mean, it's interesting because they're using the whole movement to passive investing to

their advantage. Right. So it's not that new why. you put a dollar into the index and you own 7% of Nvidia and 6% of Google. Now you're going to own X% of AI and X% of SpaceX. So it's going to make these indexes, especially the market weighted indexes, even more concentrated amongst the biggest players. And there's, you know, well, the positive is yes, you get the benefit of the negative

is you're going to get so concentrated in an area. Like we were talking about semiconductor, right? 22% of the index is semiconductor. Right. Like every time you see these kind of history tells you that is it a Right. Well, good point to bring in Tim Higgins to talk more about. He's Wall Street Journal's business columnist and author of PowerPlay, Tesla, Elon Musk, and the bet of the century. Tim, let's start there with Elon Musk. Have we seen a reaction from him yet? I haven't, but I've been on the air here with you. So I assume something will come. And, you know, he's not going to hold his tongue. You know, this is going to be something he's probably going to continue to talk about for time to come. In a lot of ways, he won on the first day of the Toronto. He was able to frame Sam Altman in a way that's not so positive at a time that was still the kind of attention was forming around who Sam Albin is.

I mean, we're in Silicon Valley here, and we know who Sam Alman is. But for a lot of people in New York and Wall Street, they don't yet know who this guy is. And their introduction has been this very high stakes, high profile spectacle playing out in this Oakland courtroom. And it hasn't been a good one. And in a lot of ways, the must case was all about emotion, the idea that Sam Altman was a liar, the idea that he stole a charity. And that is kind of his introduction to the world for a lot of people. And yet here he has, as Laura Martin was saying a moment ago, they've tried to throw him out twice, basically, from the company. He's still there.

Everyone keeps saying what a great fundraiser he is. And so he's at the helm. This is now behind him. It sort of solidifies his aura, I guess you could say. Has all of the attention you think been such that it best. benefits SpaceX. It benefits everybody in this complex. Or do you think it'll be a negative ultimately? Well, it was definitely a case that Sam Altman needed to win, right? It definitely helps the lore of Sam Altman. Here's a guy who is known as an operator in Silicon Valley. A lot of his biggest supporters believe that he can get things done when others can't. And this would be probably an example of that. It helps him in that regard. Still, he's going to have a some baggage from this going forward. I have no doubt that his public relations teams are going to be

working to kind of change his image. In part, Sam Altman has become the public face of AI at a time when the general public is not sure what it believes about AI at this point. In a lot of ways, AI has been sold as a job killer. He has something to be afraid of. And Sam Altman is clearly trying to change that narrative. Probably has a lot more work to do for that. But, But at this point, he's kind of the face of AI, whether for the good or the bad, it probably could be a good thing as he makes a narrative stock story heading into an IPO. But for a lot of rank and file people out in the real world, AI is something to be afraid of. Yeah, or certainly, you know, I think you're right.

I think in many ways to be afraid of and a little cautious, even while they're sort of saying, hey, Gemini, when was the last time? No, Tim, thank you. Oh, absolutely. Thanks very much for now. Tim Higgins from the Wall Street Journal. Ashley Caput is here. She's been following the trial closely for us. She's here on set. Great to have you here. Ashley, welcome. Thanks for having me. All right. So what are your big takeaways? I mean, and what a surprise. We weren't really expecting this today. Two hours. You just heard Kate Rooney talking to Open AI's attorney. He said it was a happy surprise and it is a bit unusual. It is. And I think it's telling about just how effective open AI's lawyers were. I was in the courtroom on Thursday for closing arguments and they did a really effective job of just laying out the evidence in chronological order.

which I think really helped drive home their key points to the jury. Musk's attorneys seemed a little less sure of how to frame their arguments in those last moments. So I think you really kind of saw the disparity take shape there. But it was fascinating to watch. It's been a fascinating three weeks. And I definitely wasn't expecting the jury to arrive at its decision so quickly. Now I'd like to hear more. So you were there last week?

That's interesting what you say about their argument because Musk has made this narrative seem pretty straight. I mean, clear if you follow his messages on social media, it's all about Altman's the villain. They've stolen this company. They said it was one thing. Then they made it another. And this is the original, the OG of AI. Whatever we all use now, it all started with ChatGBT. Yeah, absolutely. I mean, Elon Musk during his testimony really tried to make his case that Altman and Brockman stole a charity. But Altman last week during his testimony really tried to say, you know, Musk had his chance. He was here and he decided to leave. So he tried to make the case that, you know, Musk abandoned Opened AI and left them to find him.

for themselves. So I think that was effective for the jury to hear as well. Surat. So I'm wondering through all this, you know, is it that are we going to just have one or two players or are we going to have multiple players, right? Is Elon trying to kind of checkmate and say, I want to just be the only, because it seems to me like, you know, every time Gemini comes here, then we get claude, you know, they just keep on moving. So I think the, as an investor, it's much bigger than just one or two companies. But I think in Elon's case, I'm going back to the, I got my IPO coming and I need my attention on my IPO because you are going to have a $2 trillion potential IPO. I'm sure Musk wouldn't have minded if this had ended with Open AI's restructuring being unwound or something along those lines where open AI becomes much less of a threat to his companies.

But it doesn't seem like obviously that's going to be the case now. There's going to be at least three or four really strong AI labs out there who are going to continue developing models and staying on the cutting edge. So Musk is going to have his work cut out from there. Tell me about the IPOs, OpenAI versus Anthropic. What are you hearing at this point? They're both targeting this year is the latest that we've been hearing, probably Q4 at the very earliest. They still have a lot of legwork to do, but that's going to be fascinating. I wouldn't be surprised if we see things getting pushed a little bit, just given how much work it's going to be to get these across the finish line. Pushed forward or pushed behind? Backwards next year, would be my guess. Yeah, when we'll see how SpaceX could be in like three weeks.

Yes. Coming up fast, potentially. That certainly seems to be the first one. And so that is going to be. be an AI narrative and all the rest of it. So what else do you think happens now? We've talked about some of the partnerships with Microsoft and Apple. There's been a bit of negative reporting on those friends when it comes to dealing with Open AI. So everyone seems to leave a bit frustrated sometimes in their dealings with the company. Does it matter? At this point, I think OpenAIA has strong strategic partnerships with a number of major tech companies, including Microsoft still, as well as Amazon, Nvidia, and many others. So I think we're going to see them continue to tout those partnerships as core and strategic, and they'll continue to move forward that way.

mentioned throughout you're watching Microsoft. And the shares did kind of move off session lows on this. So clearly, because they were co-defendants. So they need to have this kind of put behind them as well. And they, you know, are not just partners, but they've also got an investment in there. It's on their balance sheets. So like all of them are so related and you kind of need all of them if you're invested in the space to stay up. Because if one of them doesn't, then, you know, what happens to the demand of the chips if Open AI is not ordering in the data center is when the same thing with Anthropic. So they're so tied in that you kind of need all tides to kind of lift. the boats right now. Any last comment, Ashley?

Fascinating outcome, a major, major trial, even if the verdict was reached very quickly. So it's going to be interesting to see how OpenAI and Musk, SpaceX, move on from here. Yeah. Ashley, it's great to have you here. Thanks. Really appreciate our Ashley Caput. Let's now bring in Jim Kramer, who joins us from the New York Stock Exchange, Jim. I cannot wait. What do you make of this verdict? Well, I think that Elon Musk did something very clever. You're three ways for him to win. and one is that he tied up these guys, it's open AI,

so that maybe he can come in first. You want to come first in the shoot because that's when the most money will be. That's the most that's left. Second, it's having been in big time trials, unfortunately, it's just pure torture. And he tortured these guys, but good. I mean, there's nothing like being deposed forever.

It's really rather extraordinary. And then, you know, I think he made it, he could have won. So, I mean, like, he could have won. He got to torture them. The richest man gets to torture everybody. Again, if you ever been deposed, you know it's one of the most embarrassing, horrible things you can do. And now he gets first in the queue, so he gets the most money and not worry about whether people are out of money because these deals are big.

Maybe he pulls in like $4,000, $5 trillion. $4,000. I'm not kidding, if they price anything wrong, it is to a sliver. It's entirely possible. It gets to be $4 trillion, $5 trillion. As absurd as that it is. But I think it was kind of a strategy. And it was a good one.

When you read the piece in the journal today, you just say, wow, their lawyers just made, you know, they just pulled the wings off the flies that are open AI. And, you know, it's kind of a terrible thing. If you ever been deposed like that. A lot of people were saying immediately for the past hour or so, what a win for OpenAI, you know, what a win for Sam Altman he survives. And you're saying that we need to think about this as a strategic move by Musk, right? You're talking about that IPO still, it's the first, it's the biggest.

Right. But you want to have, if you need, let's say they do 10% of the thing. I mean, it's a huge amount of money that they need to bring this deal. And you don't want people to be out of money by the time they get to the third guy. I mean, Open AI may now be the third after Anthropic. And you want to be first. Whoever is first wins. So, yeah, I think it was a good strategy.

Look, I think it's great that Open AI had a quick victory. But did they? I mean, I think that you really wanted to do is you wanted to hold up open AI. You wanted to torture Sam Altman. You obviously hated. You want to torture all those guys against you hate. And you have unlimited, unlimited firepower. He's got more money in the government. So he can just like, you know, just depose him till kingdom come. And at least I think the judge kind of got to handle on things. But when you're deposed, you're kind of just, you're naked. And boy, did he get them naked? Wow. It's right. Jim, what do you think? I'm just saying, like, I mean, I don't know if you guys have.

ever been sued. I mean, unfortunately, it's some awful situation. When it happens, you realize that you wake up in the middle of night. It's very Kafka-esque. So everybody in OpenA, I had a real dose of Kafka. And Kafka's no, you know, you don't want Kafka. It's Kafka bad. So they got Kafka and they got Kafka. And as far as I'm concerned, wow, even rich people get Kafka. Jim, what do you think about the IPO in terms of the retail investor? Because normally when these come out, It's institutional institution. How do you think that's going to plan? Well, they use market orders and they get killed and, you know,

take a look at the deal we had last week, the cerebris, they used market orders. They were down a quick 100 within, you know, a couple hours. They forget what it's like or they weren't in 2000. They don't remember 19, 2009, 2000. So I don't want lambs to the slaughter. I don't know how much you can teach these lamps. I had a lamb shank last night. Delicious.

These people do not understand what's about to happen. So they obviously want to be with Elon. But that's a big deal. Who doesn't want to be with Elon, right? And look at Twitter after all of, I'm sorry, look at Tesla after all these years, Jim. The valuation still is incredibly high, especially given anyway, all that is. But do you think just as a lamp to the slaughter? But you got very excited.

I know because I said, listen, don't buy it and went down. And eternal opprobium from Elon. But that's okay. You know, as long as my wife likes me. And I feel very strongly that people have to learn how to do. be disciplined. And unfortunately, they're going to have to learn how to be disciplined in the cerebrous way, which is to realize that if you put the marketer, like the Figma way, I mean, these are disasters for people. And we got to stop it. And we got to explain to people you need

discipline. Or we just say, you know what? Let the hedge funds fleece them. And I don't want to do that. I feel like I have some responsibility to people watch the show. Right. But you look at the size of Invidia. They don't know how to put a limit order in it by market order. It was like, inviddydy is actually interesting down here. I love the fact it's not up going to We would have all thought it was crazy, right, if NVIDIA went public at two, and it's worth 4.4. So I guess we're all asking how big can the numbers be at this point? Invidia paid its dues. I mean, it was in the, you know, it was like, you know, it wandered in the desert for 40 years that thing.

I mean, I remember when I was talking to Jensen and I don't know, about a decade ago, it was in $2. And we were looking at each other trying to figure out how to get this dog to hunt. And then we decided to name it in Vidia by dog Invidia and then it started hunting. I'm not kidding. This thing did not go. Remember. The long-term chart and you realize, wow, Nvidia was not built in a day. No.

And to your point, some of these newer companies, you know, very fresh on the scene. We were supposed to talk Intel, Jim, speaking of Nvidia and chips. Can we or do? Do we have to, like, have a break or something. No, absolutely. Let's do it. You spoke to the CEO. I mean, wow.

Think about the president saying he said to him, I want 10% of the company for free. And then he goes, I guess I should have asked for more. Jim, well, that was the president. He should put a limit order. He should put a market order in. I do, I like that. Look, Intel is run by a really special guy, Lip Bute, and Lipu has done, this is his second big turnaround.

He turned around cadence for 3,200 percent gain. That's a nice percentage. He's turned around this when he came in dramatically lower. And I just want you to listen. He understands where the market is going. And if you listen to this, you'll understand that this is a CPU, not GPU, bonanza. And he explains it very well in this clip. CPU is highly demanded.

And that's a good part for me. I cannot even ship enough to the customer. And in fact, used to be CPU to GPU ratio for training is 1 to 8. And now, because of the inference and the genetic AI and more agent that you have to manage, orchestration and reinforced learning, CPU actually better. so that becomes one to four and one to one, and maybe some people even talk about four to one. And so that's a huge opportunity for me

to really drive the CPU requirement. Four to one for CPU would be remarkable. It would mean that there'd be multiple years of great numbers for Intel. And I know Intel's down today. It did go parabolic, but you have to back in Lipo. Jim, we see you sitting with him. We think, is this the next Nvidia? he's great friends with Jensen.

Look, I think this stock could be up far more than it is now. It's a half a trillion, but you're dealing with a real genius here, Lipputon. He's also a very humble man. What he's going to do with the CPU is extraordinary. No one really thought the CPU is going to be so important in the data center. It will be. I'm not saying buy it here. The stock's all the way up.

I am saying that he's great. The interview's in two parts. First part is about how he saved a great American icon, a national treasure. And the second part is how he's going to take this thing to the stratosphere. And it's not there yet in his mind. He's a remarkable man. And I can't wait for everybody to see it. Jim, thank you for, look, it's going to be on mad money tonight.

Everyone should catch it. But before we let you go, Jim, just for, I just, I feel like I need one more take from you about Musk, about Altman and about everything that just happened. Well, look, I think that these lawsuits are high, you know, their high stakes high profile. But in the end, if you want your law, if you want to, if you wanted to make it so open, AI had a solid chance of not coming faster than your own, you tie them up. And then, I mean, I don't even know if he looks at the legal bill. I mean, honestly, I mean, does he even know that it happened? You know, here. I mean, I don't even, you probably has direct deposit.

But Jim, to your point, the marketing dollars that were spent are going to be worth so much more than what the actual dollar spent, right? Because he's in the news and we're talking about it for last half an hour and it's going to be on every show. Just put it in the marketing department, the legal cost. For the next two days, that's all we're going to be talking about. Every paper is And my lip-butan talks him all the time. He talks them every week, me, that point to me. Look, I think Elon Musk is amazing. And if I'm right about his tripartite strategy, well, he won. He being, he being Musk. He tortured them. He probably enjoyed that. And he kept them from doing their IPO. He'll come first. Oh, yeah, so he lost. I mean,

what was he going to get? Then it would be appealed and appealed and appealed. No, this is good. He kept him as busy as possible. He made them feel awful. He belittled. He had his lawyers belittle of them. He's a rich people. They don't like that.

They're not like you and me. I don't like it either. But Jim, thank you very much. It was really good to see you this afternoon. He's got Kafka. He's got been telling you he's got it all. English major, Jim Kramer. For the full exclusive interview with Intel CEO, Lip Butan,

please make sure to tune into Mad Money with Jim Kramer tonight at 6 p.m. Eastern. Coming up a power player in the airline industry, Delta CEO Ed Bastion. He's going to talk about some challenges, opportunities. You just heard that Berkshire is taking more of that position. We'll talk to him next. Welcome back. We are very pleased to be joined by another key guest here on set with us on Power Lunch this afternoon, Delta Airlines CEO Ed Bastion here with Surrott Setti. It's great to have you both along. Great to be here. I mean, some big headlines. When Berkshire takes a position, do they give you a heads up? I don't imagine they do. They do not give you. So you find out about it, how?

We read about it just as everyone else did when the form came out Friday afternoon. Yeah, and I mean, who knows if it's still active? We were very excited. We sensed we saw some activity in the stock that was, you know, we didn't know. And I think we had our fingers crossed, but you never know until it's out. I mean, it's interesting to see that because in the past, you know, when Buffett was running it, he did own it. Then he kind of makes those statements like you, you know, make a million dollars, invest 10 and a. Yeah.

But how do you think it changed along with Berkshire? Well, when COVID hit, Berkshire was our largest investor, our largest owner, and got a chance to spend a fair bit of time with Warren over that period. And when he got out of the airlines, he didn't get out of the airlines because he necessarily thought the airlines were a bad investment, he just wanted to realize it was going to be very complicated. And as he shared with me, he didn't want to be a stumbling block in terms of of us getting any kind of assistance that we would need in any form.

And so he just kind of said, I'm just going to put it down. And that was always one of my checklist things is to kind of get to the other side of this and see if there was a way that they would return and they have returned. And we're very appreciative of that. When you talk about, let's just talk about the industry now, you own the refinery, you move to premonization. What are some of the key things that are working right now with an environment, where, yes, you're getting travelers traveling, but oils up.

And how are you kind of focused on that running the operations? Well, it's interesting. Even though we've got a war going on in the Middle East and fuel prices are high and it's our need to do our best to cover the cost of the higher fuel, the demand set is really strong, probably the strongest I can recall in my 30 years at Delta. No sign of a consumer slowdown because of higher. Not with us. You know, the TSA, everyone looks at their TSI.

TSA headcount coming through. It's kind of flattish on a year-over-year basis. So I think there's a small bit, but not the premium end, certainly not the business end or the international end. And as a result of that, I think it's a statement about what we've built at Delta that even with a lot of unusual circumstances going on, people want our product.

They want to invest in themselves. They want to invest in the experience economy. They want to travel. And they're not going to wait to see what they, outcome of what the next bit of news is going to be. They're out and going and getting ahead and making their summer plans right now. When we look at the five-year charts of the airlines, I believe we can check me if I'm wrong, the only Delta and United are positive over that time frame. Everybody else is down in some cases significantly so. And we saw what happened with Spirit. What's the

difference? I mean, is this just a high class story. It's just premium business traveler. That's a sustainable business model and everything else. Maybe not. Well, I think there's two things. I think that That absolutely is our strategy, differentiation and breaking out of the pack. The second thing is the cost of entry has gone up enormously post-COVID. Labor's up. Fuel prices are up. The cost of airplanes are up, airports, the technology. So to be anywhere with a low fare model, it's just really hard to make ends meet.

And almost everybody on the bottom half of the sector hasn't made a nickel going back since COVID. Wow. And that's a bunch of years. And that eventually what led to spirits demise, it wasn't the oil price. spike of the last couple months. They were already on that, on that path heading, heading south. And I'm not suggesting, oh, there's a going that path, but what you see is investor appetite for those models, isn't there. So talk about primization, you know, you've always had free Wi-Fi. It's worked great. Now United comes up and Starlink's kind of like, that's their new

toy. Yeah. Shiny toy. Can you talk to us about how Delta is depreciating, you know, you're using Amazon's Leo product and kind of what the advantage. that you see compared to kind of what United is now saying. Yeah, well, we're a leader in making that free, fast Wi-Fi at global scale. In fact, I think still today, we have more free fast Wi-Fi planes over 1,200 than the rest of the industry put together. So we're already looking at what the next generation is going to be. And Starlink is a good product. We know the Starlink product well.

We've worked with them in the past. But we're looking for something different. We're going to certainly get the Leo capability that Amazon will be putting this guy over the next couple of years. but we're also interested in working with Amazon in terms of bringing value to our customers on board the planes. When you think about it's not just a pipe that Starlink is bringing, now we have the pipe, but then we have all the entertainment, we have merchandising, we have gaming, we have everything that Amazon is with Delta in a unique partnership position with, and by the way, it's also our largest corporate customer in the world is Amazon. So we have very close to partnership. And so when you think about it, it's not about the Wi-Fi. The Wi-Fi is going to be multiple times faster

and it's going to be significantly cheaper than today. But it's all the incremental value and the opportunities that we get to create. So as a consumer, if I did the Delta Wi-Fi on Leo and Starlink, I wouldn't see a different. I mean, it would be. I think Amazon, well, we'll see what Starlink does, but the commitments we have from Amazon will be faster than Starlink. And Starlink's already a great product.

But then you bring the offerings that Amazon. has with Prime and you've got the world's leading merchandiser. And one of the great things airlines have never been able to figure out is now you've got people in an airplane. You got them seatbelted in. They're bored out of their mind. They're there for hours on end. What can you bring them to actually make their time more valuable, whether it's shopping, whether it's gaming, whether it's live TV of multiple iterations? And that's what we're working with Amazon. So true. So let's go back to the share price and some of the laggards that this may not be economical. In that sense, do you, I mean, do you care, so to speak, if United an American were to merge? Because if these, if the people on, on kind of

this lower cost, or I know American has a lot of debt, maybe there's some other issues, is consolidation the answer to help at least keeping the industry with a number of different players? What's going to happen? I don't know that consolidation is the answer, Kelly. Rationalization is probably more the answer. There's, on the lower end, there's too many seats looking for low-end customers, and there's not enough low-fair customers in terms of the price points relative to the cost that they need to charge. And so that was the problem the spirit had, and that's the problem why many of these smaller airlines. Not all smart. And you've got some like Allegiant that just did a deal with Sun Country that's making good money, and they've got a

model that works. The low-end has to find new and unique ways in which to seek customers. Because I'm just thinking about, you know, the administration and you reference in COVID. Didn't they take a stake in the airlines briefly? And that was why. There was a warrant deal issue as part of some of the support they provided. Right. But now, of course, there was potentially going to be maybe a deal with spirit to help shore it up. Then the other regional players said, okay, well, then maybe us too. But from the administration's point of view, they're looking for low-cost tickets and, you know, keeping that.

I think that's right. But I hear what you're saying that there may be, there's too many seats. There's not enough. Like the whole model in that range, it sounds like, so what's going to happen? The ticket prices are probably going up then or availability will be diminished. Well, at today's fuel environment, tickets prices are up for us, are up somewhere between 10 and 15 percent on a year-over-year basis. And I'd say that's probably where most of the industry needs to get to. We're anticipating covering about half of the oil bill, which is up double just this quarter. And hopefully over the rest

of the year, we'll figure out the rest of it. But you've got the carriers that do not have brand recognition, do not have strength, do not have the balance sheet to get through this time. If the fuel spike continues on a six, 12-month basis, there's going to be some trouble there. Do you see any traffic move your way after Spirit, or is that a customer base that's very different? It's very different. There's not too many people deciding between Spirit and Delta. Yeah, although those who had to find some, I know, in that whole... We offered rescue fairs, and we were out there.

We've hired some Spirit employees. they have slots here at LaGuardia that would be interested in. So, you know, there's some interesting. She said, I got you right on Delta when my last minute ticket. It was a great experience. Yeah, and we offer a lot of low fares in basic economy. So it's not as if we don't, we just don't have the real dirt cheap fares that you can't make money on. Maybe we could stand.

Still think about that model sometimes. Ed, seriously, thank you. Thanks for coming in. Always good to be with you guys. Thanks. Bastion of Delta. Let's get over to Christina. Parts and Eveless now for the CNBC News update. Christina. Well, days after the South Carolina Supreme Court overturned the murder convictions of disgrace lawyer Alex Murdoch, he filed a civil rights lawsuit against a former

court clerk. The court ruled Murdoch was denied a fair trial over allegedly killing his wife and son because the clerk exerted improper influence on the jury. In the suit, Murdoch's legal team claims he suffered $600,000 in monetary damages as a result of her act. A ship filled with humanitarian aid from Mexico and Uruguay arrived in Havana today, according to a Cuban government statement. The supplies included food and personal hygiene items. Cuba is facing a worsening economic and energy crisis since the U.S. cut off its oil supply from Venezuela and insisted on fundamental changes to the regime in exchange for future assistance. And its official, Aaron Rogers, will be a stealer next season. The team announced today the future Hall of Famer quarterback who has signed a one-year.

year deal with the team. According to ESPN, the 42-year-old will earn between $22 and $23 million with the potential to make a cool few million more just in incentives. I call that pocket change. Kelly? See if they can call it a comeback, depending on how it goes. Oh yeah, that too. That would work. Yeah, Christina. Thanks. Still ahead, one investor with exposure to the big AI players. Jeff Meskin is a partner at Brown Brothers, and he'll join us to talk through his angles, I should say, on the markets. That's next. Welcome back. We heard from OpenAI's lawyer, William Savid, a little bit earlier this hour, with our Kate Rooney, who's back in front of the Oakland courthouse with Elon Musk's attorney, Kate. That's right. Kelly, we do have Mark Toberoff here. Mr. Toberoff, thank you for doing this. We'd love to get your quick reaction to the outcome here of what has been a long three weeks and back and forth between Musk and Open AI. What's your reaction? I have a one-word reaction. Appeal. It reminds me of

how this country was founded. The Battle of Bunker Hill was a terrible loss for the Americans. The siege of Charleston terrible loss for Americans, but who won the war? This war is not over. I would say this is just the first step.

And we firmly believe that what happened with OpenAI was wrong on a very, basic level that you can't raise millions of dollars in a publicly subsidized charity. And when it suits you, just turn into for-profit operation where the officers and directors of the charity enrich themselves to the tune of billions. And that's what actually happened here. And that's just wrong.

And but for Elon Musk, they'd be getting away with it. So this is by no means over. in our view. The judge, though, seemed very firm about the not necessarily being open to an appeal or just her opinion on feeling like she came to a decision. Does that discourage you at all? No, no, that's incorrect. She wasn't firm about being not open to appeal. She assumed there would be an appeal. And she's just considering whether we could appeal now or wait till the rest of the case. I thought from her tone in there, it sounded like she was ready to basically say that it was not an option. Is that?

Incorrect. That's incorrect. So you do plan to file an appeal and that is, what else? I wonder, there have been people and commentators that have said that Elon Musk, his goal in this was actually to disparage opening. Not necessarily to win a legal case. What's your reaction to that? That's nonsense. It's just nonsense. This isn't about Elon Musk. This is about the defendants. and what they did was right or wrong. And he was not alone. During this case, there were all sorts of people from all sides of the political spectrum and beliefs who were not billionaires. There was Encode, which is an international youth-oriented group that was up in arms about this abuse of the charitable form. There was whistleblowers that were represented by Larry Lessig, a Harvard professor, who came forth and wrote an amicus brief that this was wrong. There was a 40 plus a group of charities, charity professors, labor organizations, all agreeing with Elon Musk that this was wrong.

They were not billionaires. They have no dog in the fight. They just recognize what most people recognize that you can't, you know, use a charity in a charitable form to raise publicly subsidized funds and use that as a new form of startup money. Well, one of the things that came out in this trial, at least even in jury selection, was preconceptions against Elon Musk for political views and against AI. I mean, we have protesters walking back and forth through the shot now. Do you think that all affected the outcome? I can't, I have no comment on what affected the outcome.

I just know that the defendant's playbook was to try and make this all about Elon as opposed to making it all about them, the case about Elon is not a defendant in the case. They are. At the end of the day, it did come down to statutes of limitations. I mean, just timing. How did you expect that? And it seems like that really was the crux of this, that they just missed the window or Musk missed the window to file that lawsuit. That was an issue, but it was acknowledged in the case that a charity can engage in for-profit activity as long as the money flows to the charity, which initially they were raising amounts of money, and Elon felt that it was okay. It was when they pretty much fully converted to a for-profit operation with $10 billion investment and all sorts of other changes

to their structure that he filed suit. I wonder about AI safety, too. We heard Elon Musk say on the stand that he worried about a Terminator-style event and what all of this means for AI safety. Do you have thoughts on this now that Open AI seems to be the winner? Does that make you worried about the future of AI and humanity, honestly? Very worried. If Mr. Altman remains a CEO and they're the first to reach AGI, you only reach AGI once because AGI is so smart that no one can ever catch up. So yes, it is a great concern. Mr. Chobroff, we'll leave it there. We really appreciate your time. Thanks for chatting with us briefly. Thank you. Kelly, we will send it back over to you on that note. Kate, thank you very, very much. Really appreciate it. Before we go, we just want to get reaction here from Jeff Meskin. An open AI investor among many hats, he's a partner at Brown Brothers Harriman. They manage $120 billion across stocks, Moody's private credit and more.

Jeff, I apologize, we don't have a lot of time. So what are your reactions to what you've heard as an investor and just in general? Well, as an investor, we're certainly, we have a small exposure to open AI to anthropic. We believe in the trend. The overall trend is irrefutable. And we're participating in a number of ways. We're participating in helping to finance the infrastructure. We're big investors in asset-backed securities. The amount of capital that is going to be required to get to agentic AI, the endpoint that

the lawyer was just talking about. We're helping to finance that due to the extraordinary amount of capital that needs to be raised. We're finding some good value there on occasion, and we think that it'll be more. It's going to take a flood of capital to be able to accomplish what all of these companies want to. And of course, we want to be there for our clients. When you look at the capital structure of the alternative investments, where are you finding opportunities? I know we're talking about AI here, but what are some of the other opportunities in kind of the alternative world that you guys play really well in? And it's some of technology, but one thing that's really interesting to us right now is sort of the secondary market. You see a lot of that with the

opening eye pricing that we saw earlier. All of those securities are trading on the secondary market. But the secondary market is about a 200 plus billion dollar a year market. The most interesting part of that that we're seeing are the GP continuation funds. So if you have a great investment and you're a private equity or venture capital manager and you want to continue on with that, but your original limited partners need liquidity, we're stepping in right there, which we feel is very attractive because this theme is going to take years and decades to play out. What are the kinds of returns you can get from that? We think that, well, first of all, the J curve is a lot more shallow than it is in the originating investments, because

because they're mature investments, and you're picking out the ones that the GPs believe are the best. So we think it's just about the same as private equity, maybe a little more muted to private equity, but you get those returns more quickly and with less J-Curve. In our final moment here, what else are you really excited about right now? Excited. We manage money for decades and generations.

So we're seeing value across a lot of the fixed income landscape. There are sort of unique, times right now for significant families who are living particularly in states where there are high tax jurisdictions to lock in total returns of six and a half to seven and a half percent just buying muni bonds. We like a lot of the asset-backed securities that are financing the growth economy and that are financing the economy in general. The general trend of moving away from bank financing to the structured credit world is one

that we think is a theme that's going to play out for a long time. It's needed by all these AI companies and everybody else. Great point. Right in the middle of it all. Jeff, thanks. A dramatic hour. I think we could say, Sarat really appreciate. It's been fun as well.

Surat's study joining me here. Thanks for watching Power Lunch and closing bell starts right now.