Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, a market selloff, tech stocks routed across the globe. We have a special interview with noted investor Philippe Laffont of Coatue. With 90 billion under management, his bets are worth paying attention to, like a stake in SpaceX.
Mining is going to move to space. Tourism is going to move to space. Telecom is going to move to space. Data centers and real estate are going to move to space. So it feels like just a really big idea.
All the stuff around agents and the ability to have thousands of people working for you. That sounds like one of the bigger ideas at least in my investment career.
What Laffont is betting on next.
Are we going to work with Chinese AI companies? Most likely not. I think you'll have the Western AI on one side, you'll have the Chinese AI on the other, and only countries like maybe Brazil, India, and Indonesia will sort of do a bit of both.
Plus, all the rest of today's news that got us squawking — from Wall Street to Washington to the social media back and forth between Elon Musk and Congressman Ro Khanna, who had big accusations for the world's richest man. Musk immediately took issue with that and all weekend on X there was back and forth. It is Tuesday, June 23rd. Squawk Pod begins right now.
Good morning everybody. Welcome to Squawk Box right here on CNBC. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernen. Andrew is out today.
Asian markets giving up early gains today, ending deep in the red. South Korea's Kospi led the decline, falling 10% in a session that included a 20-minute trading halt. The Kospi though has shot up this year, nearly doubling since January 1st. So keep that in mind.
Yeah. Key AI names SK Hynix, Samsung both fell more than 12%. Shares of those companies have also multiplied this year. The Nikkei in Japan fell three and a half percent following eight straight sessions of gains.
So then check out the charts and put today's sell-off in perspective.
We are also watching shares of SpaceX. That stock coming off a 16% drop yesterday following declines of about 5% and 4% respectively last Wednesday and Thursday. This morning the stock is trading at about $149. That is just below the opening price of the IPO of $150. Shares began trading about six sessions ago. SpaceX stock jumped in its first few days with the company's market value surpassing Amazon's and briefly Microsoft's. This pullback that we've seen over the last few sessions is a decline of about $600 billion in market cap. SpaceX also turning to the bond market for the first time as it looks to raise more money post-IPO. Reports say that the company will probably issue more than $20 billion in bonds with maturities of somewhere between 5 and 30 years. The company says that it will use proceeds from the debt sale in part to pay back a bridge loan before this IPO.
You know what's interesting about this? There has been so much concern about what was going to happen when this stock was going to go into the NASDAQ index. It was 15 days. So all of this activity has happened before it's gone into the NASDAQ. I think there was another index somewhere along the line that put it in earlier, but all of this movement that we've seen to the upside and then the downside was before it got put into the NASDAQ index.
So if you were pricing the 30-year bonds, what do you think you'd need to offer to get someone to take a 30-year piece of paper for SpaceX?
I mean, you think it's tougher because maybe you don't get the retail investors that you get. I guess in 30 years they ought to be doing great. It's just a long way off.
My guess would be you'd have to offer a little more just because retail investors are going to go to the equity, not into the bond.
I don't know. That's a good question on the rating.
I saw some ridiculous thing — it's classic. I don't even want to mention the aggregator because it's so annoying. I wish I'd stop looking at it completely. I know what you're talking about. I'd like to never click on it again so they never get a click.
One of the things they say — so on Drudge, yeah, they don't care if what they say is either false, misleading, or just completely pointless.
Gets lowest rating possible.
So I'm like, oh — is this for the ESG rating? And I think someone who knows SpaceX says — it might have been Elon — said, 'Yeah, we're not launching a lot of electric rockets at this point. There might be a couple of emissions.' But you know, for Drudge, doesn't matter. They could care less about ratings and they'll probably — now I'll be on there, some god knows what.
Shares of Google parent Alphabet coming off their worst day in more than a year. The stock dropped 5% yesterday. Alphabet dealing with two high-profile employee exits last week. Google's vice president of engineering announced he was leaving the company to join rival OpenAI. Friday another top engineer said he would leave Alphabet for Anthropic. In addition, a Wall Street Journal interview with Microsoft CEO Satya Nadella may be spooking investors that he called for less dependence on what he called AI giants. And — do you have any interest in AI, giants, futurism, or just that technology stuff?
Philippe is going to be — Philippe — last time Philippe Laffont was on, I think — I think we were asking, you know, he went to MIT, he was a Tiger Cub, he started this thing in 1999 with I think $10 billion. Last time he was on I think we said he had 55, he said no, I got 70, and today it's 90.
It's 90. And although maybe a little less with the selloff globally this morning.
Maybe, I don't know. Yeah, but he'll be on at 7 in studio. And he's got some huge bets on like ASML. He's got Nvidia — I think he sold almost — well, he's got like 2% of what he had. So 98% I would call a lot, something like that. And has moved into — he's got some — he was in Vernova, which is going to be, you know, they're getting all the orders to power the data center. So long before people figured out, and it's tripled since he's been in. These are huge numbers — big numbers. When he takes a stake in something — I think ASML is like — I don't know — a lot. 600, yeah, a lot.
Yeah, it was a lot. I read through those notes too, just where he sees things headed, because he's always thinking like the next — ahead of anybody else figuring it out.
He is, I know. Um, and he's French. I talked to him a little yesterday. I said, and you're French — and, well, he laughs when I say that. It's capitalism. It's like, you know — he understands capitalism, right? Maybe not totally comfortable with it, but anyway.
We're going to get a long time to talk with him, which is very exciting. Um, by the way, the question they had on SpaceX bonds — they're triple-B tier.
They are. Moody's, Fitch, and S&P are all rating them triple-B.
No, not at all. It's investment grade.
On this vote, the yeas are 85 and the nays are five. The motion to concur is agreed to. The Senate passing that housing bill that would limit the number of single-family homes that major investors can buy. The measure passed 85 to five and followed months of debate spanning both chambers of Congress. We've talked about it all along. We had Senator Scott on just a couple days ago talking about it. And this is kind of not just his baby, but one of his babies — meant to make homes more affordable. At a time when both major political parties are trying to spotlight their work to bring down the cost of living ahead of the midterms, last week lawmakers found middle ground between the House version of the bill, which was viewed as more friendly to Wall Street, and the Senate's version which included more restrictions on institutional investors. And the House is expected to vote on the bill later this week. President Trump has signaled his support for the measure and he could sign it soon.
Bipartisan — crazy. I — that makes me think it can't be that great.
Elizabeth Warren was talking about — I say I'm proud to be a member of the Senate. Maybe that's why I think it might not be so great. We are closer than ever to passing the biggest housing bill since 1990, when the average price of a home in America sold for $150,000. Today, 36 years later, the average home is selling for over $500,000.
Well, look, there are things that you can do that both parties can agree on and kind of move them quickly to improve it. I'm all in favor of it. I'd love to see more bipartisan things because there are things that make complete logical sense and if you can get enough of those 535 people to agree on it, great.
Well, there's — they want to approach housing differently. There's a lot of red tape. That's what the Republicans want to get rid of. But President Trump, in one of his populist streaks, doesn't want big institutional investors buying up and raising the price of houses. But a lot of times they're refurbishing rentals for people. People got to live somewhere whether they own a house or not. And I mean, you don't want to totally take the big money out of — and that's why the president has come back to this idea of you need to lower interest rates too, because lower interest rates would make it more affordable on a mortgage percentage. And you wonder how long Kevin Warsh will have before he gets pressured on that again.
Money — 95, 90, 85, 80, 75, 73 — talking about oil.
I was like, what are we talking about? You lost oil. So, well — 73 comes down significantly. Suddenly it's not like — if I was doing dot plots I definitely would — well, he's not going to do a dot plot.
He's not, but the idea of raising is I think getting less and less.
I agree. But if you're looking for a quick fix to make the price of a mortgage cheaper, that's the easiest way to go at it, right? And you know, when everything else takes more time to develop and to show up in the marketplace, like the ultimate answer is you've got to build more housing. To build more housing, if there's a bigger supply, it will bring down the prices because it will meet demand.
The reason that — and that takes a long time. The sea change and what we thought the next move in interest rates would be when we went from a cut to no action to a possible raise — a lot of that was oil.
So now oil is 73, but we still got how many — how many years we've been above 2%. So — what was it, 63 months.
63 months. So the problem is still there, still ingrained, still built into whatever — right? The stickiness.
So yeah, so oil can't solve that, but it at least moved us back to where we weren't absolutely sure the next move was going to be a raise.
California Democratic Congressman Ro Khanna challenging Elon Musk to a televised debate over the impact of spending cuts that Musk led during the Department of Government Efficiency push. In an interview with CNBC, Khanna said that he wanted to get into what happened at DOGE with Musk and explained why he supports a wealth tax. Earlier yesterday on his social media platform X, Musk said that Khanna should be sued or even jailed. Musk took issue with Khanna's recent citing of a study in The Lancet that claims cuts to the US Agency for International Development could contribute to the deaths of more than four and a half million children. DOGE effectively shuttered USAID as it worked to slash spending. On X yesterday, Musk said the standard applied by DOGE was very simple and easy: provide contact information for the recipients of aid so that we can confirm that it is not fraudulent.
This all really started over the weekend when Ro Khanna made some comments on a podcast where he said, you know, Elon Musk was responsible potentially for the deaths of four and a half million children. Musk immediately took issue with that and all weekend on X there was — he called him the robber. He said that his stock trades were the most of any — well, the — yeah, but the actual quote — no. Yeah, Elon called Ro the robber but it was on the 'I've Had It' podcast. And the exact quote was: 'They're celebrating that he created 4,400 millionaires but they don't talk about the four and a half million children around the world who he possibly sentenced to death by dismantling USAID.' Called for Musk to be subpoenaed. And then he — he did — he said that it didn't dismantle it. You just had to prove that it wasn't fraudulent, because we know how much fraud was actually found.
One of Elon Musk's responses on Twitter was, look, we found a lot of aid that was being funneled to politicians and to others and some of them pled guilty with some of the things that went through too. But it got heated very quickly. Ro Khanna came on yesterday and said, 'I thought he was a defender of free speech. I should be able to say these things. Let's do it together.' But Ro Khanna is also kind of vying for the White House potentially.
Yeah. It's not good to indirectly, you know, someone once said that, you know, I killed 100,000 people because of COVID — yeah — for supporting Donald Trump. So it's not good to make that leap, do you think?
No. That you're killing people.
I mean, these loose lips — think ships? Is that where you're headed?
Let's see. Yeah. Anyway, this is something that I'm sure we will see more of and we'll continue to hear about it.
Tease will be next. Coming up on Squawk Pod, $90 billion under management, a track record of big successful bets on technology. It's Tiger Cub Philippe Laffont, founder of Coatue. That was one of the bigger mistakes I think that I've made — Nvidia, selling it. Even he regrets a few things. At what price? I think the question — should we buy it? But at what price? It's already so cheap. Plus, Coatue's bet to buy land for data centers and its investment in SpaceX, right after this.
Welcome back to Squawk Pod from CNBC. I'm producer Katie Kramer. We bring you today Philippe Laffont. He's the founder and portfolio manager of Coatue, an investment vehicle that is both a hedge fund and a venture capital arm, with $90 billion under management. Laffont made a name for himself at a different investing firm, Tiger Management. He's one of the Tiger Cub cohort — that's a group of investors who learned from the late Julian Robertson at Tiger. Tiger was one of the very first hedge funds. Now, for Laffont, Coatue has been on a tear. About a year ago, it launched the Coatue Open Fund, which got a boost from $1 billion of seed money from the offices of Michael Dell and Jeff Bezos. That fund's holdings include things like Anthropic, OpenAI, Amazon, Samsung, Kospi, Micron, and SK Hynix, South Korea's most valuable company. Also, Coatue launched a venture called New Frontier that began snapping up land for data centers. Turned out to be a pretty good idea. Coatue's portfolio includes SpaceX, Anduril, Databricks, and many others, and almost 60% of its holdings are in AI. The second most represented sector is financials. Now, here's our Joe Kernen on set with Becky Quick kicking off an extended conversation with Philippe Laffont.
You're very young to be this incredibly accomplished and wise and everything else. MIT, right? Um —
I'm not sure about wise. That's the only thing.
Pretty darn wise, Philippe. But it's great to have you, especially on a day like this for an extended interview. I guess maybe the first thing I'd ask you before we get into the details of today is — we saw Elon the other day talk about the size of the economy in 10 years, the global economy, an unbelievable number. You have been early, I think, in identifying just how powerful this transformation that we're seeing is. And I think the last time you were on, wasn't that long ago, were you at $55 billion or so? Now $90 billion. Things are moving in your way.
You know, when you're at the center of everything, it's actually — I'm more nervous now than when I'm on the edge. I don't like being in the center of everything. But I think that AI really has the chance of being this really big wave. And as I think about the economy long-term, I think you had the sort of industrial age, maybe a couple hundred years. Then you sort of had the information age, maybe that was the last 40, 50 years. And now we have this sort of intelligence age. And it just feels to me in terms of the big trend, this is really a big trend. In the past, we got the gas utility, we got the water, we got electricity, we got transportation, we got broadband. Now it seems like intelligence is going to become this utility. For $50 or $100 a month you just get hooked up to this sort of intelligence network. And so the world is moving very quickly and so to your question, is the world going to also grow faster because there's just that much more intelligence? And even if it grows faster 1% or 1.5% a year, over 10 or 20 years the numbers can get big. And that's probably what Elon is referring to.
But you were early and — in looking at some of your varied and sundry investments — you saw — when did you start with GE Vernova? When did you make your first purchase?
I think when I look back at sort of what I've done, I started in 2000 — right, with Coatue — late '99 obviously. Pretty bad timing, but I've only come up in the last 30 years with about five good ideas. And people say, how many good ideas do you come up with? Probably had five.
I came up with like the internet stocks a while ago. And then we came up with like the mobile internet and Apple. And when I got to Apple, it was like this onion and you just peel the onion and all these ideas fall off. Just the one big idea — people want the internet in their pocket. And so when you go now to AI, you can sort of pick one idea. Okay, AI is going to be big. But then it's like, okay, these brains, these GPUs, they need a house — okay, data center. They need food — okay, electricity. They need cooling like humans would. So you go and look at this and I think these big trends — what's important as a tech investor is to try to really go deep and sort of unwrap all the different layers. And so obviously energy now is obvious, but maybe a year or two ago people didn't think how much energy we would need to run all these GPUs.
We are. Where the data centers need to be. How do you figure out where they're going to put the data center? I think if you go back upstream all the way to the beginning, right? So you think, okay, I need the GPUs, the GPUs need to be connected, we need data centers, we need turbines, and then obviously we need land. And part of land is we also need the electricity, and then we need the regulators, we need the approvals, we need the zoning and all of that. And obviously, there's a lot of pushback now around that. So there's always a battle and we can talk a bit about that. But it feels like potentially we'll need 100 gigawatts or more of power over the next X number of years. And so it'll be interesting to see how much of it gets approved, how much of it gets approved on Earth, and will any of that also go in space?
