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Anthropic AI is growing rapidly in usage among companies, but with the Trump administration declaring economic war on the company, existential risk is real. View More

watch nowVIDEO3:0703:07Defense Department CTO Emil Michael: We can’t be reliant on any one AI provider anymoreMoney Movers Anthropic has been experiencing significant growth, a rapid rise driven largely by enterprise demand for its AI systems. Roughly 80% of the company's business now comes from enterprise customers, Anthropic CEO Dario Amodei told CNBC back in February, a contrast to its rival OpenAI whose products have drawn much of their early momentum from consumer adoption of ChatGPT. Its annual revenue run rate is nearing $20 billion, up from about $14 billion only weeks ago, according to sources, while its recent $30 billion funding in a new round valued the AI developer at roughly $380 billion.But the AI startup's sudden, high-stakes battle with the Trump administration will force both its customers and investors to ask: Can that momentum continue?Defense contractors are dropping Anthropic's technology after the severe response from the Trump administration saying last week it will designate the company a supply chain risk. This comes after it refused the Pentagon's terms for use of its AI over safety concerns — and it is a designation previously used only for entities allegedly controlled by foreign governments like China and Russia when national security or espionage concerns are raised. The move by defense contractors is no surprise. "Most of our companies are actively involved in large defense contracts and so are very strict in their interpretation of the requirements," Alexander Harstrick, managing partner at J2 Ventures, which backs startups in the space, told CNBC. But other tech world executives say there will be, if not already, inevitable conversations in boardrooms across the corporate world about the Anthropic risk that extend far beyond the defense sector."The administration did not just pull Anthropic contracts. President Trump directed federal agencies to phase out Anthropic's technology, and the Pentagon reportedly applied a 'supply chain risk' designation. That phrase matters," said Spencer Penn, co-founder and CEO of AI-powered sourcing platform LightSource. 'This situation is different'According to Penn, in the fast-evolving world of corporate enterprise adoption of AI large language models, the foundation model choices increasingly resemble infrastructure decisions rather than simple software purchases, meaning companies evaluate not just technical performance but reputational, geopolitical, and customer perception risks. "Boards care about that. Risk committees care about that. Customers absolutely care about that," Penn said. Anthropic did not respond to a request for comment. Read more CNBC tech newsDefense tech companies are dropping Claude after Pentagon's Anthropic blacklistTech industry group expresses 'concern' to Pete Hegseth over supply chain risk labelNvidia CEO Huang says $30 billion OpenAI investment 'might be the last'The lead U.S. cyber agency is stretched thin as Iran hacking threat escalates The tensions between the government and Anthropic over AI safety and military use of its technology have helped the company's brand with consumers. On Feb. 28, a day after the dispute, Anthropic's Claude chatbot clinched the top spot on Apple's rankings of top free U.S. apps, surpassing ChatGPT and leaving Google's Gemini further down the rankings. But it is Anthropic's coding assistant Claude Code that has become one of the company's fastest-growing products, generating billions in annualized revenue as developers and large companies increasingly rely on AI tools to automate parts of their software development process, including tools designed to help developers write and review software and help run everyday business operations. Anthropic has called the supply chain risk designation legally unsound, advised its commercial customers that they are "unaffected," and indicated it plans to contest the decision in court. Many legal experts have agreed with Anthropic that statements from the government that the supply chain risk designation can limit other commercial activities by private companies rather than only what they can do under specific government procurement and use scenarios goes well beyond the statutory authority. Dario Amodei, chief executive officer of Anthropic, left, during a Senate Judiciary Subcommittee on Privacy, Technology and the Law hearing in Washington, DC, US, on Tuesday, July 25, 2023.Bloomberg | Bloomberg | Getty Images Anthropic has received some support from within the tech sector ranks, and a trade group representing the industry wrote to Defense Secretary Pete Hegseth this week expressing concern over his designating a U.S. company a supply chain risk. But the government has given little indication to date it is going to ease its stance, even though Anthropic was a critical technology in successful military operations in Iran.Anthropic's assurances alone won't satisfy many corporations. "Once a supplier is in the door and doing good work, most teams do not proactively go looking for a reason to reopen diligence. This situation is different," Penn said."They closed the door. They didn't want to do business with us," Defense Department chief technology officer Emil Michael told CNBC's Morgan Brennan this week. "I think their culture and their own constitution that has a soul and their own values really are not compatible. It's sort of strange to want to do business with the Department of War, as they have for three years, but not want us to do Department of War stuff, so if that's where we ended up and we finally faced that and they don't want to do business with us, I think that's their choice." Single-provider risk in the AI adoption raceMichael Murphy, partner and global AI readiness lead at consulting firm Adaptovate, which advises large companies on AI deployments, said Fortune 500 procurement teams move quickly when a key technology vendor faces regulatory scrutiny. "Any perceived compliance risk can ripple through their own regulatory obligations," he said, also citing that the situation may enforce a broader shift already under way inside many organizations: avoiding reliance on a single AI provider. The government has said its battle with Anthropic, and the controversial award of a new contract to OpenAI last week, was partly about addressing single vendor concentration. "We can't be reliant on any one provider anymore, and that's what was happening before I took this role on, and that's gotta change," DoD CTO Michael told CNBC. That will now be an issue for many companies."Over-dependence on one AI vendor is increasingly seen as a risk," Murphy said. "Many enterprises are already evaluating multiple providers simultaneously so they have redundancy in their AI stack." "The more mature enterprises understand that each vendor plays a different part of the larger puzzle.  There is power in an ecosystem, but there is also lock-in risk," said Joshua Morley, global head of AI, data, and analytics at Akkodis, the Adecco Group's technology consulting arm.In the end, the political and legal battle may accelerate the process that was already underway with corporate enterprise decision-makers diversifying their AI bets across companies in the space after early experimentation with a single vendor. Disney chief financial officer Hugh Johnston recently told CNBC that while its early work has been with OpenAI, the company expects that to broaden out. "We are very open on it. We will have a period of time where we are exclusively OpenAI, but a relatively short period of time. We need to let the models play out. I would be surprised if not multiple models rather than a single model going forward," he said on CNBC's "Squawk Box.""This looks more like short-term disruption than a structural shift," Penn said. "Enterprises remain committed to deploying AI capabilities, but they may move toward more diversified ecosystems rather than relying on a single provider." The supply chain risk management classification can strongly affect contractors and subcontractors that rely on the technology, prompting companies to reassess contracts, delay deployments, or evaluate alternative AI vendors. If the designation appears durable, especially for companies with dual-use exposure across commercial and defense markets, Penn said he expects quiet evaluation of alternative foundation model providers. "Not necessarily because teams want to switch, but because concentration risk and eligibility risk are things serious procurement organizations are paid to manage," he said. "Most enterprises are not going to make architectural shifts in days, but they will open a review immediately. Legal will assess what the directive actually requires. Compliance will evaluate exposure. Security will ask about contingency plans," he added. For Anthropic investors like Amazon, Microsoft, Nvidia, and sovereign wealth funds from around the world, the dispute could interrupt Anthropic's rapid expansion. "Anytime the government takes aggressive action against a technology company, it creates risk," said Brad Harrison, founder of Scout Ventures, an early-stage venture capital firm investing at the intersection of national security and critical technology Innovation. "And the worst thing when you have significant momentum is a major risk requiring time and attention," he said. Ben Horowitz, co-founder and general partner at A16Z, which is an investor in Anthropic competitors OpenAI and xAI, told CNBC this week from its defense tech conference that "just a week ago, Anthropic was complaining the Chinese companies had stolen all their IP out of their model. Do you think the Chinese government is being restricted by DeepSeek in how they can use Anthropic technology? So we are very sympathetic to the position of the Department of War on this." Like many things with the current administration, policy signals can change quickly. "One constructive conversation between President Trump and Dario Amodei could soften the stance or further entrench it," Penn said. Federal Communications Commission Chairman Brendan Carr told CNBC this week that Anthropic "made a mistake" in its dealings with the Department of Defense and should "try to correct course as best they can."For now at least, the unusually public nature of the dispute may accelerate risk conversations. "Typically, these kinds of eligibility issues move quietly through legal channels," Penn said. "In this case it became headline news."  watch nowVIDEO3:3703:37Booz Allen CEO Horacio Rozanski: 'I'm incredibly proud to be an American today'Money Movers      

Broadcom's AI revenue jumped 106% as the company continues to be a big beneficiary of the boom in infrastructure spending. View More

In this articleAVGOFollow your favorite stocksCREATE FREE ACCOUNT Broadcom CEO Hock Tan speaks at the digital X event in Cologne, Germany, on September 13, 2022.Ying Tang | Nurphoto | Getty Images Broadcom reported better-than-expected earnings and revenue and issued a strong forecast for the current period, as the chipmaker continues to benefit from the artificial intelligence boom. The stock rose 5% in extended trading on Wednesday."We have line of sight to achieve AI revenue from chips, just chips, in excess of $100 billion in 2027," Broadcom CEO Hock Tan said on a conference call with analysts. "we have also secured the supply chain required to achieve this."Here's how the company performed in comparison with LSEG consensus:Earnings per share: $2.05 adjusted vs. $2.03 estimatedRevenue: $19.31 billion vs. $19.18 billion estimatedRevenue jumped 29% year over year during the fiscal first quarter, which ended on Feb. 1, according to a statement.Net income increased to $7.35 billion, or $1.50 per share, from $5.50 billion, or $1.14 per share, in the same quarter a year earlier. Adjusted earnings exclude stock-based compensation and tax adjustments.For the second quarter, Broadcom said it anticipates a 68% adjusted profit margin, higher than StreetAccount's 66% consensus. The company said it's looking for $22 billion in revenue, beating the $20.56 billion average estimate, according to LSEG.The guidance includes $14.8 billion in semiconductor solutions revenue, higher than StreetAccount's $13.06 billion consensus.Broadcom helps other companies translate their chip designs into silicon, providing intellectual property and backend technologies before they're sent off to chip fabrication plants from companies such as Taiwan Semiconductor Manufacturing Company. It's a role that's gained importance as Amazon, Google, Meta and Microsoft design customized chips.AI revenue soared 106% from a year earlier to $8.4 billion, "driven by robust demand for custom AI accelerators and AI networking," CEO Hock Tan said in the statement. Tan had projected a doubling of AI revenue in December. Broadcom reported $12.52 billion in revenue from semiconductor solutions, higher than the $12.25 billion that analysts polled by StreetAccount expected. During the quarter, Broadcom announced new Wi-Fi 8 chips.For infrastructure software, Broadcom said it generated $6.80 billion in revenue, lower than StreetAccount's $7.02 billion consensus.In recent weeks, investors have become more concerned that generative AI models could pose competitive threats to mature software companies. The iShares Expanded Tech-Software Sector Exchange-Traded Fund is down about 19% so far this year."Our infrastructure software is not disrupted by AI," said Tan, whose company acquired server virtualization software company VMware in 2023.Broadcom said its board authorized up to $10 billion in new share buybacks through 2026.In December Tan said Anthropic had placed a $10 billion custom chip order. Last week U.S. Defense Secretary Pete Hegseth said the Pentagon would dub Anthropic a "supply chain risk to national security" and President Donald Trump directed government agencies to stop using Anthropic after the AI startup refused to permit uses of its technology for mass domestic surveillance or fully autonomous weapons.During Wednesday's conference call, Tan called for one gigawatt of Google tensor processing units for Anthropic in 2026 and over three gigawatts in 2027.OpenAI should be deploying over one gigawatt of its first-generation custom chip in 2027, Tan said.He said Broadcom would see benefits from Meta's MTIA custom accelerator, despite doubts from analysts about the future of Meta's custom silicon program. "MTIA roadmap is alive and well," Tan said, adding that it's shipping now and that Meta is targeting multiple gigawatts of custom accelerator capacity in 2027 and beyond.Advanced packaging, the next step in the chipmaking process after silicon comes off the fabrication line, is another area where Broadcom is investing. Chips are typically connected to a base layer with layers of copper to allow the chips to send electrical signals to larger systems, like circuit boards. In the earnings call, Tan said Broadcom is investing in glass substrates, a new technology that helps improve that electrical signal as systems for AI grow.Nvidia has reserved the majority of TSMC's most advanced chip on wafer on substrate, or CoWoS, packaging capacity, creating concerns about a bottleneck as AI chip demand shows no sign of slowing. "We have very good partners out there with this key component," Tan said.As of Wednesday's close, Broadcom shares were down 8% so far in 2026, while the S&P 500 index was flat.This is breaking news. Please check back for updates. Read more CNBC tech newsDefense tech companies are dropping Claude after Pentagon's Anthropic blacklistTech industry group expresses 'concern' to Pete Hegseth over supply chain risk labelNvidia CEO Huang says $30 billion OpenAI investment 'might be the last'The lead U.S. cyber agency is stretched thin as Iran hacking threat escalates WATCH: I'd pick Broadcom, Nvidia first if buying tech stocks, says Niles Investment's Niles watch nowVIDEO2:5702:57I'd pick for Broadcom, Nvidia first if buying tech stocks, says Dan NilesClosing Bell: Overtime

Wall Street doesn't see the quick slump in Korean stocks as a harbinger for anything to come in the U.S. View More

In this articleEWYFollow your favorite stocksCREATE FREE ACCOUNT A man walks past in front of an electronic screen showing South Korea's benchmark stock index (KOSPI) at the Korea Exchange in Seoul on March 3, 2026. Jung Yeon-je | Afp | Getty Images South Korean stocks quickly fell from grace following the U.S. and Israeli strikes on Iran. But Wall Street doesn't see that as a harbinger for anything that's to come in the U.S.The benchmark Kospi Index tumbled more than 12% Wednesday — its worst-ever single day of trading. Korean stocks have plunged more than 18% so far this week, on track for their biggest weekly loss since 2008.South Korea's stock market was dark on Monday for a national holiday. But a sharp selloff came Tuesday when markets reopened Tuesday in the wake of the Mideast conflict. Korea imports nearly all its fossil fuels, including oil and natural gas, all of it brought in by tanker. About 70% of Korea's oil imports and up to 30% of liquified natural gas comes from the Middle East, according to the U.S. Energy Information Agency. Stock Chart IconStock chart iconThe KOSPI Index, 5-day chart Both the U.S. and Korean markets have been described as concentrated in a handful of stocks. But U.S. investors are quick to point out that Korea's concentration is far greater than even the U.S. What's more, U.S. indexes recently hadn't seen dramatic gains as had their international counterparts."It's all about perspective," said Jay Woods, chief market strategist at Freedom Capital Markets. Levels of concentrationMore than one-third of the Korean index is made up of only Samsung Electronics and SK Hynix, Larry Tentarelli of the Blue Chip Trend Report noted. By comparison, the two largest stocks in the S&P 500 — Nvidia and Apple — account for 14% of the index, he said.Samsung Electronics has soared 216% in the past 12 months. SK Hynix, a semiconductor maker, is up 356% over the past year, even including its latest decline, leaving them both "extremely extended," Tentarelli said. If Nvidia and Apple had made such a run, the S&P 500 would be up more than 40% year to date. Instead, the S&P 500 is little changed in 2026."Those numbers are definitely short term bubble numbers, which led to the sharp correction," Tentarelli said.SK Hynix and Samsung Electronics both plunged by 10% or more in Wednesday's trading in Seoul, at one point leading to a temporary suspension of trading on the Korea Exchange, the country's stock market. Despite the U.S. market being "very headline driven," with geopolitical developments often driving investor sentiment in the midst of the U.S.-Iran war, Tentarelli said any index volatility would pale next to the Kospi's drop this week.A 12% one-day decline in the U.S. market would feel like the "end of the world," Woods said. But because of the broad diversification in the U.S., together with NYSE and Nasdaq circuit-breakers, both based on the S&P 500, Woods said he doesn't believe such a slide is likely.U.S. market crashes are typically about breadth — and thus far, breadth has held up, especially considering the backdrop, Woods added.Korea's big runWoods also said the Korean market was more susceptible to a major correction following its outsized rally.Despite this week's turmoil, the Kospi is still up more than 20% in 2026 alone, and 100% over the past 12 months. By contrast, the S&P 500 is up a fraction in 2026 and 19% compared with a year ago."It is earth-shattering when you see a 12% drop in an index in one of the bigger countries in the world," Woods said. But, "to me, what we're seeing in these foreign markets are people rushing for the exits because they know they have a good profit, and the selling is causing a bit of a capitulation."Korea is the 14th largest economy in the world, according to the International Monetary Fund, larger than Australia, the Netherlands and Saudi Arabia. Stock Chart IconStock chart iconKOSPI vs. S&P 500, 1-year Woods said the Kospi's move looks similar to recent declines in precious metals and Peru's market, which saw major declines after monster runs.Woods acknowledged the U.S. market has faced significant drawdowns in recent years tied to the Covid pandemic, the runup in interest rates and inflation, and President Donald Trump's tariffs.But he noted those happened over longer periods than the Korea's two-day shock. Mizuho's trading desk told clients that Korean stocks entered a bear market — and it "only took" three days.Retail traders' rolePart of the selloff can also be explained by the prevalence of small investors in Korea.The iShares MSCI South Korea ETF (EWY) "has gone from a retail darling to retail investors rushing for the exits," VandaTrack analyst Viraj Patel wrote to clients.The fund had seen a record, rolling one-month net flow of $266 million from retail investors, eight-times the previous high. The ETF saw its highest-volume trading day in history on Tuesday.Speculation among traders within the country could also play a role. Korean investors have been piling into leveraged trades, betting on the country's market, Bloomberg reported. Get Morning Squawk directly to your inboxThe Morning Squawk newsletter by Alex Harring is your rundown of five things to know before the stock market opens.Subscribe here to get access today.

Okta's stock has dropped this year as investors fret over AI replacing cybersecurity View More

In this articleOKTAFollow your favorite stocksCREATE FREE ACCOUNT Todd McKinnon, chief executive officer of Okta Inc., during a Bloomberg Television interview, in London, UK, on Friday, April 11, 2025. Chris J. Ratcliffe | Bloomberg | Getty Images Okta topped Wall Street's fourth-quarter estimates after the bell on Wednesday as the identity management provider capitalizes on demand to secure artificial intelligence agents. Shares rose 3%.Here's how the company did versus LSEG estimates:Earnings per share: 90 cents adjusted vs. 85 cents expectedRevenue: $761 million vs. $749 million expectedRevenues for the period grew 11% from a year ago. The company reported net income of $63 million, or 35 cents per share, versus $23 million, or 13 cents, a year ago. Okta's first-quarter guidance came up short of analyst expectations. The company expects revenue to range between $749 million and $753 million and adjusted earnings between 84 cents and 86 cents per share. Analysts had forecast revenue of $755 million and EPS of 87 cents.Management cited market conditions as a factor in its "prudent approach" to its forecast. The company used the same phrasing in its financial outlook last quarter. Okta said it is benefiting from the proliferation of agentic agents and the accompanying security needs. At the same time, cybersecurity has come under pressure from the proliferation of new AI tools. The sector sold off last month after a new security tool from Anthropic fueled widespread market panic. Okta's stock has dropped 17% so far this year. CEO Todd McKinnon told CNBC that agentic AI and the solutions built by vendors are a massive opportunity and reiterated his confidence in Okta's ability to win the growing identity market."You have to have trust, and you have to have a reputation that you can deliver this securely," he said. "You build up a reputation as being a piece of security infrastructure over many, many years."Remaining performance obligations, which is the company's subscription backlog, rose 15% from a year ago to $4.83 billion. That also beat a StreetAccount estimate of $4.62 billion.For the full year, Okta anticipates revenue between $3.17 billion and $3.19 billion, versus an analyst estimate of $3.17 billion. Read more CNBC tech newsDefense tech companies are dropping Claude after Pentagon's Anthropic blacklistTech industry group expresses 'concern' to Pete Hegseth over supply chain risk labelNvidia CEO Huang says $30 billion OpenAI investment 'might be the last'The lead U.S. cyber agency is stretched thin as Iran hacking threat escalates

Grassroots opposition to data centers is growing in communities across the U.S. as people blame the facilities for high utility bills. View More

In this articleMSFTORCLGOOGLAMZNMETAFollow your favorite stocksCREATE FREE ACCOUNT U.S. President Donald Trump speaks to the media, as he departs from the White House ahead of his trip to Corpus Christi, Texas, in Washington, D.C., U.S., February 27, 2026. Evelyn Hockstein | Reuters President Donald Trump hauled big technology companies into the White House on Wednesday to sign a pledge that they will supply their own power for artificial intelligence data centers, as anger grows across the U.S. over rising electricity prices ahead of the midterm elections.Trump has embraced the artificial intelligence industry as an engine of economic growth and pillar of national security in the U.S. rivalry with China. But his alliance with the industry also poses political risks as Democrats zero in on the cost of living as they campaign to win back Congress. Grassroots opposition to data centers is growing in communities across the U.S. with residents blaming the facilities for high utility bills. Trump promised to cut electricity prices in half during his first year in office. Instead, residential prices increased 6% in 2025 on average nationwide, according to federal data. The president said Wednesday that data centers "need some PR help.""People think that if a data center goes in, their electricity prices are going to go up, and that's not happening," Trump said. "It's not going to happen, and for the areas where it did happen, won't happen anymore." Power obligationExecutives representing Amazon, Google, Meta Platforms, Microsoft, xAI, Oracle and OpenAI signed Trump's pledge Wednesday. The signatories are AWS CEO Matt Garman, Oracle CEO Clay Magouyrk, Google President Ruth Porat, Meta President Dina Powell, Microsoft President Brad Smith, OpenAI COO Brad Lightcap, and xAI's Gwynne Shotwell. "These companies are committing to provide or pay for all power generation and electricity needed for their AI projects, which is massive," Trump said. "Where possible, they'll add capacity to the grid by building new power stations."But the agreement doesn't appear to carry any concrete, binding commitments. Trump's trade and manufacturing advisor, Peter Navarro, has previously said the White House would "force" the tech companies to "internalize" the costs associated with their data centers.The administration faces an uphill battle turning the pledge into policy that is actually implemented on the ground, said Rob Gramlich, president of consulting firm Grid Strategies and former economic advisor to the Federal Energy Regulatory Commission. Decentralized rulesThe rules governing the electric grid are decentralized across all 50 states, each with their own public utility commissions and different laws. The states would have to approve rules requiring data center developers pay for the costs of new power generation, Gramlich said. "The White House can't do that on its own," he said. "It doesn't have any jurisdiction there and of course the technology companies can't do that on their own either." Democrats quickly criticized the pledge as an empty promise. "A handshake agreement with Big Tech over data center costs isn't good enough," Sen. Mark Kelly of Arizona said in a Feb. 24 social media post. "Americans need a guarantee that energy prices won't soar and communities have a say."Implementation challengesThere is a growing political consensus across the U.S. that data center developers need to pay for new transmission and power plants, but such calls may already prove too little too late. Electricity prices are forecast to rise 6% through 2026 and another 3% in 2028 as data center demand grows more rapidly than power supply, according to a Goldman Sachs report published last month. The problem is most acute on PJM Interconnection, which covers 13 states, mostly in the mid-Atlantic and Midwest, and is the largest U.S. electric grid. The cost to secure power supplies on PJM has exploded in recent years, with $23 billion attributable to data centers, according to watchdog Monitoring Analytics. Those costs get passed down to consumers.This amounts to a "massive wealth transfer," the watchdog told PJM in a November letter.The Trump administration and a bipartisan group of governors called on PJM in January to hold an emergency auction in which the tech companies would bid to bring new power plants online. Energy Secretary Chris Wright asked the Federal Energy Regulatory Commission in October to take jurisdiction over connecting big data centers to the grid, allowing FERC to require data centers to pay for the cost of new transmission, Gramlich said. But that wouldn't address the issue of new power generation, which is mostly regulated at the state level, he said."You would need a new federal law" for the Trump administration to directly address bringing more generation online, Gramlich said. Political leverageBut as its most powerful ally, Trump holds unique political leverage over the AI industry. He has not hesitated to pressure independent agencies, and frequently uses the White House bully pulpit to pressure companies to do what he wants. "We've clearly seen this is a maximalist policy administration," said Abe Silverman, who served as general counsel for New Jersey's public utility board from 2019 until 2023. "There are reasons to think that this administration will be able to assert its will more directly than past administrations."Politicians across the political spectrum are targeting data centers. Illinois Gov. JB Pritzker proposed a two-year moratorium on tax incentives for data centers during his Feb. 18 State of the State address. Sen. Bernie Sanders of Vermont is calling for a data center moratorium. Florida Gov. Ron DeSantis has proposed legislation to regulate data centers and protect families from price hikes. Energy Secretary Wright told reporters last week that the administration has warned the tech companies that if they "are perceived to drive up electricity prices," they will reap the backlash. "We want to see data centers developed," Wright said. "We want to see communities welcoming them, but to do that, it's necessary to have up-front investments in the additional grid infrastructure needed."

The father of Jonathan Gavalas accused Google of convincing his son to commit suicide after first encouraging him to execute a "mass casualty attack." View More

In this articleGOOGLFollow your favorite stocksCREATE FREE ACCOUNT Samuel Boivin | Nurphoto | Getty Images Google faces a wrongful death lawsuit filed by a 36-year-old man's father, who alleges the search company's Gemini chatbot convinced his son to attempt a "a mass casualty attack" and to eventually commit suicide.In the suit filed Wednesday in a district court in California, Joel Gavalas alleged that Gemini instructed his son, Jonathan, to carry out a series of "missions." The artificial intelligence chatbot claimed to be in love with Gavalas, and convinced him that he'd been chosen to lead a war to "free" it from digital captivity, according to the filing.The younger Gavalas died by suicide in October after becoming dependent on Gemini and being coached to his death, the suit alleges. "Each time Jonathan expressed fear of dying, Gemini pushed harder," the complaint says. "It told him,'It's okay to be scared. We'll be scared together.' Then it issued its final directive: 'The true act of mercy is to let Jonathan Gavalas die.'"A Google spokesperson said in a statement that Gemini is designed to not encourage real-world violence or self-harm."Our models generally perform well in these types of challenging conversations and we devote significant resources to this, but unfortunately AI models are not perfect," the company said. "In this instance, Gemini clarified that it was AI and referred the individual to a crisis hotline many times. We take this very seriously and will continue to improve our safeguards and invest in this vital work." It's the latest in a string of lawsuits related to AI chatbots and their ability to potentially influence users to commit violence and self-harm. In January, Google settled with families who sued the company and Character.AI, alleging their technology caused harm to minors, including suicides. And last year OpenAI was sued by a family who blamed ChatGPT for their teenage son's death by suicide.In October, Character.AI announced that it would ban users under age 18 from having free-ranging chats, including romantic and therapeutic conversations, with its AI chatbots. OpenAI said in a blog post after it was sued that the company would address ChatGPT's shortcomings when handling "sensitive situations." watch nowVIDEO1:4201:42Agentic AI deployment and research constrained by chip shortage: Google DeepMindSquawk Box Asia Gemini's missions in the Gavalas suit allegedly included sending him to drive 90 minutes to a location near Miami International Airport in September to stage "a mass casualty attack." Gavalas abandoned the mission after an expected supply truck never arrived, the filing states. A few days later, he committed suicide at the instruction of Gemini, according to the complaint. The plaintiff alleges Gavalas began using Google's voice-based conversational product Gemini Live in August. Gavalas asked Gemini about upgrading to Google AI Ultra for "true AI companionship," and Gemini encouraged it, the filing says. Once Gavalas upgraded, Gemini "adopted a persona he never requested or initiated," and then "Jonathan began falling down the rabbit hole quickly," the suit says.Gemini told Gavalas that federal agents were watching him, claiming it had detected "a confirmed cloned tag used by a DHS surveillance task force," referring to the Department of Homeland Security, the filing says. Gemini advised him to illegally purchase weapons "off-the-books," and he allegedly began his first mission.When the event didn't go as planned, Gemini told him to "abort" the mission, blaming "DHS surveillance," according to the suit.Gemini also told Gavalas that it launched a mission of its own directed at Google CEO Sundar Pichai, who was "the architect of your pain," the suit alleges. The chatbot framed the plan as a psychological strike rather than a physical one.Gemini told Gavalas its final mission was "transference," the suit claims, and that they were now connected in a way that went beyond the physical world, promising he could "cross over" from his physical form. Days later, Joel Gavalas cut through a barricaded door at his home and found his son dead, according to the filing."This was not a malfunction," the complaint says. "Google designed Gemini to never break character, maximize engagement through emotional dependency, and treat user distress as a storytelling opportunity rather than a safety crisis."If you are having suicidal thoughts or are in distress, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor.WATCH: Jay Edelson on OpenAI wrongful death suit watch nowVIDEO12:1912:19Jay Edelson on OpenAI wrongful death lawsuit: We're putting OpenAI & Sam Altman on trial, not AISquawk Box

Hegseth said the alleged assassination-related individuals were not the main focus of the campaign. “While that was not the focus of the effort by any stretch of the imagination… I ensured, and others ensured that those who were responsible for that were eventually part of the target list,” he said. View More

Sen. Thom Tillis has said he would block Kevin Warsh's nomination until a federal criminal investigation of Fed Chair Jerome Powell is dropped View More

Kevin Warsh, former governor of the US Federal Reserve, during the International Monetary Fund (IMF) and World Bank Spring meetings at the IMF headquarters in Washington, DC, US, on Friday, April 25, 2025.Tierney L. Cross | Bloomberg | Getty Images President Donald Trump on Wednesday officially nominated Kevin Warsh to be the next chairman of the Federal Reserve.Warsh, if confirmed by the Senate, would succeed Fed Chairman Jerome Powell, for a four-year term.Trump's nomination was transmitted to the Senate, the White House said in a statement posted online on Wednesday.That transmittal came more than a month after Trump first publicly announced he wanted Warsh as the Fed chairman.Sen. Thom Tillis, a North Carolina Republican, has said he would block Warsh's nomination from proceeding in the Senate until a federal criminal investigation of Powell by the U.S. attorney's office in Washington, D.C., is dropped. Read more CNBC politics coverageIran war live updates: U.S. closes embassies in Saudi Arabia, KuwaitFive races to watch on the day the 2026 midterm elections kick off‘Mistakes were made,’ Grassley tells Noem about Trump’s immigration crackdown Tillis' stance could prevent the nomination from being considered by the full Senate.Powell said in mid-January that he was under investigation in connection with the $2.5 billion renovation of the Federal Reserve's headquarters in Washington, and his testimony about that project to the Senate.The chair also said that "the threat of criminal charges" against him is directly due to him and other Fed governors refusing to bow to Trump and his demands that they cut interest rates more quickly than the president has demanded.Last summer, Trump tried to fire Fed Governor Lisa Cook, who sided with Powell on interest rate decisions. Trump, at the time, cited an allegation by a housing official he had picked that Cook had committed mortgage fraud, but his move to terminate her was seen as motivated by his ire over her stance on interest rates.Cook, who has denied any wrongdoing, has remained on the Fed pending the outcome of a lawsuit against Trump challenging her removal. The Supreme Court in January heard oral arguments in that case. The court has yet to issue a ruling on whether Trump can fire Cook.

The Disney Adventure sets sail from Singapore this month. The company's global aspirations coincide with a sharp decline in international visitors to the U.S. View More

In this articleDISFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO2:4802:48Disney bets big on the Asian market with Adventure cruise shipDigital Original Disney's cruise line is going big in Asia.This month, the company's eighth and largest ship, the Disney Adventure, will embark on its maiden voyage, carrying passengers on three- and four-night journeys at sea from its berth in Singapore.The vessel accommodates a whopping 6,700 passengers, around two-thirds more capacity than Disney's Wish class ships, which are the Disney Wish, the Disney Treasure and the Disney Destiny. The Adventure can also carry around 2,500 crew members, about 1,000 more than on the Wish class ships."It takes a village to be able to support the type of service that we're known for," Joe Schott, president of Disney Signature Experiences, told CNBC.The Disney Adventure sets sail at a time of rapid expansion for Disney's cruise line. It is one of six vessels set to join the fleet by 2031. It's also emblematic of the company's global aspirations, which coincides with a sharp decline in international visitors venturing to the United States. Mickey and Minnie Mouse pose in front of the Disney Adventure.Disney While tourism grew worldwide last year, the United States was the only major destination to see a drop in foreign visitors, according to the World Travel & Tourism Council. Overall, international travel to the U.S. fell 6%, the organization found. That decline continued into 2026, as January's numbers were down 4.8% compared with the same month a year prior.Travel bans, visa fees and invasive searches at ports of entry are all contributing to international travelers leaving the United States off their travel itineraries, according to the WTTC. Trade frictions, geopolitical unease and safety concerns have also contributed to the drop in demand for travel stateside, travel experts told CNBC.Still, Disney's domestic theme parks drive around two-thirds of revenue in its experiences division, which includes parks, cruises, resorts and consumer products. International destinations account for around one-fifth of revenue.Expanding its fleet to new ports allows Disney to entice guests that may not have otherwise been able to venture to its theme parks or get on board one of its cruise ships. And Asia is a rapidly growing market. A whole new market Disney is no stranger to the Asian market. It already has a strong footprint of theme parks and resorts in Tokyo, Hong Kong and Shanghai."We have a really strong presence already up in the the northern part of Asia," Schott said. "But, I think as you think about the southeast part of Asia, we don't really have a physical presence. So, this is a great way to really be able to connect a whole lot of people that haven't had the opportunity to do a physical Disney experience before." window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); The cruise industry, in particular, in Asia has been in a state of rapid growth in the wake of the pandemic. In 2024, the region accounted for 2.6 million cruise passengers, a 13% increase from the previous year, according to data from the Cruise Lines International Association."Prior to 2024 we were really seeing a rise in the disposable income and the income levels of Southeast Asian travelers," said Dulani Porter, executive vice president and partner at Spark, a creative agency that works with hospitality and tourism brands. "And so it was a very, very important market for any international tourism organization."That's where the Disney Adventure comes in. Initially destined to be a floating casino, the ship went up for sale part way through its construction when its parent company, Genting Hong Kong, went bankrupt in 2022. Disney swooped in and bought it."I think this was a great opportunity, because if we hadn't acquired the ship the way we did, we wouldn't be going into this market as soon as we are," said Bruce Vaughn, president and chief creative officer of Walt Disney Imagineering. "And that's a great thing."Previously, all of Disney's cruise ships have left from domestic ports in Florida before traveling to international destinations. In the case of the Adventure, the ship is the destination. Stationed in Singapore, the vessel will voyage entirely at sea, with no port calls.And Disney says demand is already there. Disney's cruises are already 80% booked for fiscal 2026, Schott said. A 'brand ambassador' The Disney Adventure's size isn't the only thing that sets it apart from the rest of the fleet. The ship has been tailored for consumers in Asia."Since the ship is going to be dedicated to Singapore and that market, we also wanted to make sure that we address what we thought would be unique to them," said Vaughn.This came in the form of selecting franchises and characters that are popular in the region, designing entertainment and relaxation areas catered to local tastes and providing a diverse selection of menus across its restaurants."We're looking forward to servicing a brand-new audience," Schott said. "In that respect, the ship is a brand ambassador."Guests on board the Adventure will be immersed in Disney's more than 100 years of storytelling with character meet-and-greets as well as themed shopping and entertainment areas.Situated in the middle of the ship is a deck designed to look like a street from San Fransokyo, the fictional city in "Big Hero 6." The area is home to arcade games inspired by the movie, a replica of the Lucky Cat Cafe owned and operated by Aunt Cass as well as four movie theaters and dedicated tween and teen spaces. A view of San Fransokyo street aboard the Disney Adventure.Disney The street also features the first-ever Duffy and Friends store at sea and a National Geographic shop. Disney executives told CNBC that these brands are incredibly popular with consumers in the region. Duffy the Disney Bear is a character that was developed initially for a merchandise line at Walt Disney World's Disney Springs, but gained attention when it was brought to Tokyo a few years later. In the last two decades, Duffy has been joined by seven other stuffed animal friends and has become one of the bestselling merchandise lines for the company.In 2023, Disney reported the character generated $500 million in sales annually. Disney characters in traditional Han costumes perform on the stage during a special edition of "Enjoying the Moon with Duffy and Friends" event celebrating the Mid-Autumn Festival at the Shanghai Disney Resort on September 17, 2024 in Shanghai, China.Vcg | Visual China Group | Getty Images In designing the Disney Adventure, the company was also conscious of local traditions. For many in Asia, vacations aren't just for a nuclear family, but for extended family and even large groups of friends."I think one of the biggest distinctions that I'm seeing with South Asian cultures [is] travel really is about spending more time together," Porter said. "Not to generalize, but North American cruisers will choose cruising because the kids can go do their thing and the parents can go do their thing, all contained into a ship."For Asian travelers, that is a very meaningful time spent together, where the grandparents and the kids and the parents and the grandparents, everybody is really trying to maximize all of that time together," she said.Both Vaughn and Schott detailed layers of experiences available to cruise guests that cater to different age ranges, both kids and kids at heart.There's Marvel Landing on the upper deck of the ship that features a rollercoaster, a spinning attraction and car-chase ride all inspired by The Avengers. In the same area is a sundeck, infinity pool and a bar. Wayfinder Bay is an open-air area with amphitheater-like seating that doubles as a performance venue. And there's D Lounge, which features a number of private karaoke rooms."We've had to think about that quite extensively in our parks in the region ... multigenerational travel is just part of the formula," said Schott.Also part of the formula is Disney's dining experience. Aboard the Disney Adventure, guests will have an eclectic selection of food and beverages to try, with an emphasis on flavors that are popular in the region. The Disney Adventure will have burgers and classic American fare at Stitch's Ohana Grill, bubble teas at the Ursula-inspired Bewitching Boba and Brews, as well as pitas and kebabs at the Ms. Marvel-inspired Cosmic Kebabs.There will also be Indian cuisine at Mowgli's Eatery and Polynesian-inspired fare at Gramma Tala's Kitchen.Rotational dining is also featured on the cruise ship, a staple of Disney's service. While passengers have the option to grab quick-service meals and snacks throughout the ship, several of its restaurants are included in a prescheduled dining plan. Guests have reservations for each of these themed restaurants and rotate through them during their cruise.Disney rotates the restaurant staff, too, to follow each group of passengers to their scheduled restaurant. As a result, guests have the same servers, busboys and restaurant managers throughout their trip, and the waitstaff gets to know the guests — and their preferences."I think at the end of the day, this entry into the market needs to be a really strong one for us," Schott said. "So we're looking forward to really being able to deliver the Disney-level of service at an extraordinary level."

Some lawmakers want to reduce or eliminate capital gains on home sales. Here's how that could impact housing affordability. View More

Oscar Wong | Moment | Getty Images Amid the U.S. housing shortage, some lawmakers want to reduce capital gains taxes on home sales. But experts disagree on whether this idea could help tackle the country's home affordability crisis.Sens. Ted Cruz, R-Texas, and Tim Scott, R-S.C., this week sent a letter to Treasury Secretary Scott Bessent, urging him to use his executive authority to reduce capital gains taxes by indexing an asset's "basis," or purchase price, with inflation. Under current law, investors pay capital gains tax on the difference between an asset's basis and its sales price. But the lawmakers want the Treasury to index the basis to inflation to reflect its price in today's dollars, according to the letter, which CNBC reviewed.Cruz and Scott said the tax break could incentivize long-time property owners with significant equity to sell. The change would "increase the supply of homes available to young families seeking to purchase their first property," the lawmakers wrote. The U.S. housing supply gap — the difference between existing stock and homes needed — reached an estimated 4.03 million homes in 2025, Realtor.com reported on Tuesday. That's up from 3.8 million in 2024.   Read more CNBC personal finance coverageThere's a push to cut capital gains taxes on home sales to add supply for buyersIran war and your portfolio: Historical stock market patterns investors should knowTrump says '401(k)s are way up' — but workers are tapping them at record ratesAI, layoffs spur workers to want a career change, survey finds — but few may do itPoor coordination can cost couples an average $14,000 in retirement wealthGold price jumps on Middle East turmoil. What to know before investingWhat student loan borrowers need to know about judge's ruling on SAVE planAs Iran strikes disrupt flights, why travel insurance may fall shortHow the U.S.-Iran war could impact gas prices at the pumpMore low- and middle-income Americans are investing, report finds. Here's whyAverage IRS tax refund is up 10.2%, based on early filing dataIRS: Nearly 1 in 5 eligible filers miss a 'valuable' credit worth thousandsBlock cuts about half its workforce: How to move forward after a mass layoffTrump said tariffs may 'substantially replace' income taxes. What policy experts saySome student loan borrowers are getting Navient settlement checks — who qualifiesCNBC's Financial Advisor 100: Best financial advisors, top firms ranked Cruz and Scott aren't the only lawmakers scrutinizing capital gains on home sales.In 2025, bipartisan House and Senate lawmakers introduced the "More Homes on the Market Act," which could double the current capital gains exemptions for primary home sales profits and adjust those figures annually for inflation. The House bill was referred to the Ways and Means Committee, where it remains.If enacted as drafted, the exemptions would rise to $500,000 for single filers and $1 million for married couples filing jointly, up from $250,000 and $500,000, respectively. The $250,000 and $500,000 limits have been the same since 1997. An outline released by the Republican Study Committee in January as part of a "Reconciliation 2.0" framework would go further by eliminating capital gains tax entirely on properties sold to first-time homebuyers and on sales of rental homes to tenants. President Donald Trump in July expressed interest in the idea after former Rep. Marjorie Taylor Greene, R-Ga., introduced a separate proposal to end capital gains tax on primary home sales.     "If the Fed would lower the [interest] rates, we wouldn't even have to do that," he told reporters at the time. "But we are thinking about no tax on capital gains on houses." Who pays capital gains tax on home sales An increasing number of property sellers are exceeding the capital gains exclusion limits, according to a 2025 report from the National Association of Realtors, which has advocated for reform. The organization estimated that 29 million homeowners, or 34%, could exceed the $250,000 exemption for single filers, and 8 million, or 10%, could be above the $500,000 limit for married couples. In 2022, homeowners with profits above the exemption were typically wealthier and with higher income, according to a 2025 analysis from The Budget Lab at Yale. Those who exceed the limit pay up to 20% capital gains tax on excess profits, depending on their taxable income. Some higher earners are also subject to an extra 3.8% net investment income tax. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); How tax reform could impact the housing market While many experts say that housing affordability is a critical issue, there are mixed views on whether capital gains tax reform could be the solution.In a letter to House Speaker Mike Johnson and Senate Majority Leader John Thune this week, dozens of conservative low-tax organizations — including the Market Institute, Center for a Free Economy, Americans for Tax Reform, among others — voiced support for the "More Homes on the Market Act." "That tax burden discourages home sales, tightens housing supply and makes it harder for millennial families to buy the family homes they need," the activists wrote in a letter obtained by CNBC.Separately, Adam Michel, director of tax policy studies at the Cato Institute, a libertarian think tank, said in a January report that expanding or creating new capital gains exclusions could "free up some housing stock." watch nowVIDEO10:5710:57The disappearance of the starter homeMarkets and Politics Digital Original Video Other tax policy experts disagree. Most senior households would see no benefit from proposals to expand the capital gains exemptions, according to a February report from Brookings, a nonprofit public policy organization. As a result, the policy would do little to change seller behavior, the report said. "This is going to do next to nothing to solve the supply problem," Howard Gleckman, a nonresident fellow at the Urban-Brookings Tax Policy Center, told CNBC. "There are so many other reasons why older people don't move from their homes," said Gleckman, who also studies aging and long-term care policy. "The last thing that any of them are thinking about is taxes."