Bring in show music, please. This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, the China-US Summit. US Ambassador to China David Perdue has been in the room with Presidents Trump and Xi.
Being on the inside, you could see how these two leaders are beginning to develop a relationship of some trust and also working on the issues. I mean, this was a very candid and open conversation.
How AI shaped that candid conversation.
It'd be irresponsible not to engage with China, the second largest economy, arguably the second largest military in the world.
And how President Trump addressed concerns about Iran's relationship with China.
President Xi and President Trump have agreed that Iran will never have a nuclear weapon.
Plus, the investor beloved by the internet, Cathie Wood. She's been betting on AI and the future of tech for years.
I do think this idea that it's going to take away everybody's jobs is going to disappear. No, it's going to leverage human beings, leverage them from a productivity point of view.
It's Friday, September 25th, and Squawk Pod begins right now.
Stand by, Joe, in three, two, one. There's Mike Q.
Good morning and welcome to Squawk Box here on CNBC live from the Nasdaq MarketSite in Times Square. I'm Joe Kernen. Kelly Evans is here again, and obviously Becky and Andrew are off today.
Tech titans turning out for a lavish White House dinner for China's president last night. Megan Cassella joins us now with more. And I love all the photos. Do we have video, Megan?
Not that we can show today, Kelly. Just like yesterday, TV pool coverage remained suspended following the president's decision to ban those three outlets. Some press access had been restored, but no TV pool coverage, at least as of now. But it was a black-tie state dinner at the White House last night for China's President Xi. More than 130 guests and at least 27 CEOs. That's according to the guest list provided by the White House. And besides the tech and finance heavyweights that we knew about heading into this, other attendees on that list included the leaders of Paramount Skydance, Pfizer, LVMH, Micron, many, many more as well. Two notes on the guest list. Amid all the tech CEOs, there was no one from Anthropic invited despite all the focus on AI. There were also no Chinese CEOs in attendance. That was something that had initially been expected after President Trump brought a business delegation with him to Beijing in May. Now both Presidents Trump and Xi delivered remarks at the dinner. President Trump going first, speaking of US-China relations that he said had never been better. Xi then called the friendship between the US and China, quote, a worthy cause that holds great promise. And he said that China and the US must act as responsible major countries, meet expectations of our peoples, keep pace with the trend of our times, and explore a new approach for major countries to get along with each other. Now the formal programming is not yet done. There's still a private tea and a National Archives tour on the agenda for today. But what we are still waiting on, guys, are any policy deliverables or major announcements. So far, we've heard about a short-term extension of the trade truce, just two months there, and that two Chinese giant pandas are headed to the Atlanta Zoo. But on things like tariff cuts, Iran, aircraft purchases, nothing to announce, at least for now, guys.
So I thought I had seen video, Megan. Is that coming from the president's Truth Social account?
Yes. So there is a distinction here. The White House is providing some video that it's putting out on its own channels, but given everything that's gone on with this media ban, the TV pool coverage remains suspended because some members of that TV pool have not been restored to full access to White House coverage the way that they had before the ban was announced last week. So until that's resolved, that's why we're not showing anything on our air.
When will we know whether anything with Taiwan, any change in even the tone of discussions about Taiwan? The Wall Street Journal's got a couple of pieces on it. Lead editorial is about...
That Xi is trying, that's why he's here, to try and induce Trump to sort of change that strategic, whatever the hell that is, strategic ambiguity. Nobody knows what it really means. And you know, Biden at one point said, 'Oh yeah, we'd send troops.' And then they said, 'No, no, no, no.' You know, he had no idea what he... stopped the presses, had no idea what he... Taiwan definitely at the top of the list.
How about Mike Gallagher? You see this? He's, you know, he was a very smart guy that we used to love having on when he was a politician. Now he's head of defense at Palantir. And he says that China's drive to dominate AI, along with the island nation of Taiwan and what happens there, is the biggest threat humanity faces.
Yeah, AI and Taiwan both at the top of the list for this Chinese president, and that is why he's here and why we see two more meetings scheduled between these presidents before the end of the year. Both of these men really feel that being in the room, shaking hands, and managing the relationship that way is the best way to get what they want. And what they want for China is for the US to hold off on any more arms sales to Taiwan, to not try to dominate on AI. Xi had some more language about needing to work together. But to your question about when we might hear more on Taiwan, it's interesting that the Chinese put out a full readout of the bilateral meeting early yesterday afternoon in Chinese state media. So we did hear that they were talking about Taiwan, they were pressuring the US president on Taiwan, he was also talking about Iran in that readout, but we haven't gotten anything similar from the White House just yet. So while we know the Chinese were trying to make their voices heard on Taiwan, we haven't heard from the White House directly as to what the response was or what the tone of the conversation was on any of those topics. The president has said it was a great meeting, and I would expect we hear more from him later today. But in terms of announcements or a readout on how these conversations went, we just don't know that from the US side yet.
This, I'm going to send this to James Cameron or something. This is the first two paragraphs, Mike Gallagher. The year 2028, America's facing economic Armageddon. Frontier artificial intelligence development has been halted. Data center construction frozen. The markets in freefall. America's leading AI labs did not decide to pace the frontier. Instead, the Chinese Communist Party did it for them. Then Beijing moved on Taiwan. And the critical vulnerability in the US-aligned AI supply chain has been taken away, first through a blockade, then through an invasion. That's the future. That sounds even worse than Terminator. But is that why the president is, you know, they're all smiles? I mean, on some level, is it because he goes, okay, well, that's option A and this is option B.
I don't know what happens. Do you... I'm glad Palantir's raising the alarm bells, or Mike Gallagher.
Right. I mean, this is the biggest question right now is who places the frontier? Who sets the tone on AI? It is part of why we've seen some criticism of this visit even from a few Republicans, because with so many major issues like this where there's really deep division, they felt, some critics felt that the US shouldn't have been rolling out the red carpet in this way and should have instead been taking a firmer approach on things like AI. We did hear from President Trump yesterday morning on AI before the meeting took place, and what he was saying was that he wanted things to remain exactly as they were. He says that's because that's the best way for the US to remain competitive and to keep leading China. That the US is leading for now, and that we can't have any new regulation or anything resembling regulation. That instead we'll use the DOJ as a backstop, but that because that's the best way for the US to remain competitive. President Trump said President Xi felt the same way. President Xi's comments on AI were a little bit more nuanced yesterday. He was reusing some language that AI must remain under human control that he's been using since the summer. So there was some talk around AI, but guys, you had Treasury Secretary Bessent on just earlier this week on AI talking about this safety dialogue and the incident hotline. We haven't heard that from the presidential level or if that was established. So it was part of the agenda here, but we don't know exactly what was accomplished or if...
Shockingly, I might have been on to something because I kept, every single person I keep asking, do we worry about AI killing us or China using AI to kill us? And this is the biggest threat to humanity isn't rogue AI. It's AI controlled by China. That's the last paragraph. Which would use this transformative technology first to take Taiwan and then displace America as the world's...
What do you mean in all... that's not serious enough for you?
No. No. But knowing the stakes, that if you know this, if this is in the Wall Street Journal, the president clearly knows this. Is there some logic behind having Xi come to the White House, sending us some more pandas, and maybe hoping that if you're the president, that your personality, your friendliness literally buys you more credibility with him so he's less likely to enact that scenario? After that article, you go, well, then I'm glad they're all smiles and Xi Jinping isn't coming in here right now and telling us something about Taiwan. I guess that's the strategy. There's a raging debate about what's more, and we're going to have someone who is in the Obama administration on in a second. I don't... we'll see. But he fully thinks...
Government's got to just control every aspect of AI. Slowdown.
All I'm saying is if the point is that China is actually in such an advantageous situation with this kind of leverage, then maybe the president says the last thing we need to do is piss them off.
Well, that sounds like Neville Chamberlain or something.
That sounds like appeasement. But the argument...
I'm asking what would you do? What would...
What are you more... are you more scared of China or AI?
I'm just saying what would you do if you wanted to capture the benefits of all, you know, innovation, technology, everything continues at pace without China making the Taiwan issue implode the whole economy. You're president, what would you do?
I would... you want to know? I would do what Trump is doing.
That's what I'm saying. No, I would do what he's doing in terms of I would be pushing back on any possibility of us losing at least whatever, however far ahead we are of China. I want to stay ahead.
Exactly. But how would you treat the man personally if you thought that he at any moment, if he could pull the rug out from underneath the global economy with the Taiwan issue?
Could he really though? I don't think he knows. You don't want to poke the... we're the bear still. You don't want to... we're talking about bears again. You don't want to poke the bear necessarily, or even the panda bear, if you're trying...
That's what you know is there...
It's... I don't know, that was 2000. We got a couple of years, so enjoy.
Coming up on Squawk Pod, inside the President Trump, President Xi summit with US Ambassador to China David Perdue. The two powers engaged on Iran, AI, and of course on trade.
While I'm encouraged, it's going to be a bumpy road over the next year until we establish independence again on rare earth elements, magnets, pharmaceuticals, commercial shipbuilding, all the things that we have fallen into a single-source dependency on.
We'll be right back.
Welcome back to Squawk Pod from CNBC.
You're watching Squawk Box on CNBC. I'm Kelly Evans along with Joe Kernen. Becky, bless you, and Andrew are off this morning. Is that ice or is that hot, by the way? Oh, he can't even talk. Among today's top stories, Iran is offering to reopen the Strait of Hormuz and to resume nuclear talks with the US within seven days if the Trump administration agrees to its conditions. Last night on Fox News, the president of Iran said this to Bret Baier.
The problem is that America, instead of conducting dialogue, they descend into the arena by bombing us first, by blocking every pathway. We are ready. This is not the way to conduct yourself on the world stage. They can have free access to see whatever we have, but not to put us under such pressure, under blockades, deny us access.
Chinese President Xi's first US state visit in 11 years wrapping up the day following yesterday's White House meeting and a state dinner. Joining us now, US Ambassador to China, David Perdue. Wow. You're in the spotlight this week. Mr. Ambassador, can you give us some color on what it's been like to be part of all this?
Very historic. You know, we had the Busan pull-aside last October, and we had the May summit in Beijing, which was spectacular, but I think Trump outdid himself with this one. Being on the inside, you could see how these two leaders are beginning to develop a relationship of some trust and also working on the issues. I mean, this was a very candid and open conversation. And every time they talk, I think we see a different level of intimacy about these difficult issues that we're dealing with. It's a bumpy road to reach strategic stability. And what we're talking about is that constructive strategic stability does not mean status quo.
The old term isn't strategic stability, it's strategic ambiguity. And I wonder if it's any less ambiguous given that they've been talking. And at the same time, Mr. Ambassador, here's the front page of the Journal. That's what I was doing. Iran, you know, all that great stuff you're saying, Iran has a secret weapon in the war with America. Help from China. Can't they talk about that and get a heart-to-heart on that with President Xi? It's like, cut it out. Help.
Believe me. Believe me. Much of my personal time and much of President Trump's time over the last month has been that very topic. We made it very clear to them weeks ago that any help that they would give Iran, whether it be direct or indirect, whether it be intelligence or parts or military equipment, was totally unacceptable. President Trump made that very clear again yesterday. This is an ongoing drumbeat that we have made very clear to them, and we're not letting it tie into anything that we are doing or any commitments we have with Taiwan either. This is an independent issue, and President Trump's made it very clear what our interests are with regard to Iran.
What does President Xi say, or does he make some type of motion with his hand when the president says that stuff, or like...
Yeah. Does he seem to be getting through to him? Does he...
Yeah, let's put it in perspective. You know, a year ago we didn't have the following three things, and after May we do now. President Xi and President Trump have agreed that Iran will never have a nuclear weapon. They also agreed to open up the Strait of Hormuz and that no one ever would be allowed to have tolls inside that strait. So that's major progress. We continue to talk about it privately, and we've seen progress. We've seen evidence that they have listened to us. They pulled some things down, and we have evidence that they pay attention when President Trump talks about this particular issue. So China hasn't been helping them keep the strait closed.
Look, there's been indirect support, we think, but there's no direct evidence. We're very concerned about this indirect work, and we've made that very clear, Joe.
Okay, let's move on to AI. We kicked this around, and you know, thank God you had a lot of business experience so you can figure this stuff out. Do you think President Xi would sort of self-regulate AI because of the CCP and what it would mean to the... you know, we all have different interests, and the United States has different interests. China's interest in AI, I understand it, but it's got to be colored by the CCP staying in power, and I would think that would make for a different approach than we might have here in this country.
Well, of course, it's a different approach. We have two different systems. You know, what we talked about is developing a dialogue, and that is in the Secretary Bessent, Ambassador Greer channel with He Lifeng. We established that in May in Beijing. We reaffirmed that here. We've established this dialogue and also a crisis mechanism between the two countries. That's historic. Look, we don't know what we don't know in this area. AI, or SI as President Trump is now calling it, super intelligence, is an area that's very dangerous for all of us. It has huge opportunity, but there's an unknown out there that goes beyond the nation-state, Joe. And so what we're trying to do is engage with them. It'd be irresponsible not to engage with China, the second largest economy, arguably the second largest military in the world, on this issue. So I'm encouraged that we've at least moved the ball down the court a little bit with regard to cooperating and at least exploring how we can work together on that.
