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The Pentagon clash with Anthropic and Friday's severe response from Trump and Defense Secretary Hegseth highlights a growing war over who controls military AI. View More

watch nowVIDEO10:2410:24Anthropic trying to put limitations on its AI models 'really has no standing', says Brent SadlerSquawk Box The Department of Defense's clash with Anthropic over the integration of artificial intelligence into military operations, and who sets the limits on usage, reached a peak this week with Defense Secretary Pete Hegseth giving the AI company until 5:01 p.m. ET Friday to cede to the government's demands. Anthropic didn't budge, and shortly after 5pm, Hegseth made the break official in a post on X, declaring that "Anthropic's stance is fundamentally incompatible with American principles" and as a result its relationship with the United States Armed Forces and the federal government permanently altered. Hegseth directed the Pentagon to designate Anthropic a "supply-chain risk to national security," meaning no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic.In the broader context, the battle between military and industry over AI is just getting started. The Pentagon is colliding with the private companies that control AI in a way that has not been tested in the post-World War II era. On Thursday, Anthropic refused Hegseth's demand to loosen certain safeguards of its models for military use, including mass domestic surveillance or fully autonomous weapons, because it violates company policies, though the Pentagon said the technology must be available to support "all lawful uses." "It is the Department's prerogative to select contractors most aligned with their vision," Anthropic CEO Dario Amodei wrote in a statement on Thursday. "But given the substantial value that Anthropic's technology provides to our armed forces, we hope they reconsider."The standoff highlighted the emerging reality that private firms developing frontier AI may seek to set their own limits on how the technology is deployed, even in national security contexts. In July, the Defense Department awarded contracts worth up to $200 million each to four companies — Anthropic, OpenAI, Google DeepMind, and Elon Musk's xAI — to prototype frontier AI capabilities tied to U.S. national security priorities. The awards signal how aggressively the Pentagon is moving to bring cutting-edge commercial AI into defense work. The urgency is reflected in internal Pentagon planning as well. A January 9 memorandum outlining the military's artificial intelligence strategy calls for the U.S. to become an "AI-first" fighting force and to accelerate integration of leading commercial AI models across warfighting, intelligence, and enterprise operations. "There are no winners in this," Lauren Kahn, a senior research analyst at Georgetown's Center for Security and Emerging Technology, told CNBC in a recent interview about the standoff between the Pentagon and Anthropic. "It leaves a sour taste in everyone's mouth."What it does do, though, is mark a shift — a departure from decades of defense innovation during which governments themselves controlled the technology as it was created."For most of the post–World War II era, the U.S. government defined the frontier of advanced technology," said Rear Admiral Lorin Selby, former chief of naval research and current general partner at Mare Liberum, an investment firm that specializes in maritime technology and infrastructure. "It set the requirements, funded the foundational research, and industry executed against government-driven specifications. From nuclear propulsion to stealth to GPS, the state was the primary engine of discovery, and industry was the integrator and manufacturer." AI, Selby said, has inverted that model. "Today the commercial sector is the primary driver of frontier capability. Private capital, global competition, and commercial data scale are advancing AI at a pace that traditional government R&D structures cannot easily replicate. The Department of War is no longer defining the edge of what is technically possible in artificial intelligence — it is adapting to it," he said.   United States Secretary of War Pete Hegseth speaks during a visit to Sierra Space in Louisville, Colorado on Monday, Feb. 23, 2026. Aaron Ontiveroz | Denver Post | Getty Images This reversal in the balance of power over technology carries both opportunity and risk. "We shouldn't be in a place where private companies feel that they have leverage over the U.S. government or Western allies because of the technological capability they are providing," said Joe Scheidler, a former associate director and special advisor at the White House and co-founder and CEO of AI start-up Helios. "Technologists should build and do that responsibly, but governments should be the entities making the decisions." Anthropic did not respond to a request for comment. The DoD provided a link to Hegseth's X post.Why the military needs private AI Public-private partnerships have long supported U.S. defense innovation, from World War II industrial mobilization to modern aerospace and cybersecurity programs. But artificial intelligence is different because the most advanced capabilities are increasingly concentrated in commercial firms rather than government labs. "Strong public-private partnerships are what gives America its edge," Scheidler said. "You will not find a more dynamic and innovative talent pool than that of the American entrepreneurial community. The idea of trying to replicate that level of innovation within government itself … is difficult." That concentration is precisely why governments seek partnerships, but according to Selby, the dependency is also primarily driven by speed. "The innovation cycle in venture-backed firms moves in months. Traditional acquisition cycles move in years. Without commercial AI providers, the government would be slower, less adaptive, and far more expensive," he said.  watch nowVIDEO3:1203:12Here's what's behind Anthropic’s fight with the PentagonSquawk Box Europe When critical national security tools are developed by private companies, "the main change is that the government no longer fully controls the development of its most advanced technological tools," said Betsy Cooper, director of the Aspen Policy Academy and former advising attorney for the U.S. Department of Homeland Security.  Commercial AI systems are typically built first for broad markets rather than military missions, which can create gaps between how companies design their technology and how governments want to deploy it, Cooper said. That misalignment can become more pronounced when corporate policies, reputational concerns, or global customer pressures conflict with government objectives, a dynamic now visible in the Anthropic dispute. "Companies may not want to risk negative reaction from their customer base if their product is used for highly controversial reasons — for instance, to create autonomous lethal weapons or commit preemptive killings before crimes are committed," Cooper said. Government has longer-term leverage Despite the shift toward commercial technology, defense leaders are unlikely to relinquish control over mission critical systems. "The first thing to understand is that from what I have seen to date, the DoD is not going to give up final control," said Brad Harrison, founder of Scout Ventures, an early-stage venture capital firm investing at the intersection of national security and critical technology Innovation. "The government still wants to understand everything that goes into it and all the dependencies and risks."  Harrison, who is a former U.S. Army Airborne Ranger and West Point graduate, said AI could eventually influence decisions such as how to intercept incoming threats, so "the government is going to be extremely cautious with how they let AI interact with those data layers," he said. "Nobody wants to be the person responsible for Skynet," he said, referring to a fictional AI from the "Terminator" universe that caused a nuclear war. Governments also retain powerful tools to influence companies, including procurement decisions, export controls, and regulatory authority. "The government has a lot of leverage," Harrison said. "If you don't want to work with them, they have a lot of ways to make that a very difficult decision," he added. But leverage flows in both directions, at least for now, according to Selby. "In the short term, companies with scarce AI talent and proprietary models may hold significant influence. In the long term, sovereign governments retain regulatory authority, contracting power, funding scale, and if necessary, legal compulsion," he said. The most important question, in Selby's view, is "whether we build a durable public-private compact that treats AI as foundational national security infrastructure rather than just another vendor relationship." Risks in new military-Silicon Valley industrial complexExperts say the issue is ultimately less about whether companies or governments hold permanent leverage and more about how the relationship evolves as AI becomes central to national power. "If we build alignment and resilience into the public-private relationship, AI can strengthen national security while preserving innovation," Selby said. "If we fail to do so, we risk a future in which capability is abundant but alignment is brittle," he added. There are many new forms of risk in the emerging military-Silicon Valley industrial complex. For example, reliance on externally developed AI could introduce vulnerabilities if systems fail unexpectedly or become unavailable, particularly if military units grow accustomed to them during operations. "Over-reliance could prove deadly," said Shanka Jayasinha, founder of Onto AI, a company that develops AI tools for military, healthcare, financial organizations, and enterprise solutions, describing scenarios where special operations units depend on AI-enhanced mission-coordination tools during deployments. If those systems fail after prolonged use, "many lives would be in danger," he said. Vendor lock-in is another concern. As AI platforms become embedded in workflows, replacing them may become difficult. "With the current speed of progress in AI, it is tough to unseat any incumbent," Jayasinha said. Harrison, however, says one risk the Pentagon won't expose itself to is being captive to a single company. "The U.S. government is not going to be dependent on any one Silicon Valley company," he said "They will very methodically test systems, control the data layer, and move step by step." OpenAI CEO Sam Altman, who has had a contentious relationship with Anthropic and Amodei, issued a statement to his employees on Thursday offering some peer-level support for the AI rival's "red lines" that are at the heart of the Pentagon conflict. The Pentagon issued its own very clear statement on the importance of Anthropic or any single company in a post on X from Under Secretary of War for Research and Engineering Emil Michael on Thursday night: "It's a shame that @DarioAmodei is a liar and has a God-complex. He wants nothing more than to try to personally control the US Military and is ok putting our nation's safety at risk. The @DeptofWar will ALWAYS adhere to the law but not bend to whims of any one for-profit tech company." Anthropic had said before the decision became official on Friday afternoon that should the government "offboard" Anthropic, "we will work to enable a smooth transition to another provider, avoiding any disruption to ongoing military planning, operations, or other critical missions."Late on Friday afternoon, President Donald Trump ordered every U.S. government agency to "immediately cease" using technology from Anthropic. "The Leftwing nut jobs at Anthropic have made a DISASTROUS MISTAKE trying to STRONG-ARM the Department of War, and force them to obey their Terms of Service instead of our Constitution," Trump said in a post on Truth Social.The Trump administration said that there will be a period of six months for Anthropic technology to be phased out of critical military usage specifically.One approach likely to receive even greater focus in the future is building what some technologies call "sovereign AI architectures" — systems designed to allow governments to maintain independence from vendors while still benefiting from commercial innovation. "We talk a lot internally about this notion of sovereign intelligence and vendor independence," Scheidler said, contending that the U.S. ecosystem remains broad enough to prevent over-reliance on any single provider. "There are new ideas emerging on a daily basis, and we don't have to rely on one vendor to do that," he said. Powerful Democrats were quick to attack the Trump administration moves against Anthropic, with Sen. Mark Warner (D-VA), Vice Chairman of the Senate Select Committee on Intelligence, saying in a statement on Friday afternoon that Trump's directive, "combined with inflammatory rhetoric attacking that company, raises serious concerns about whether national security decisions are being driven by careful analysis or political considerations." President Trump and Secretary Hegseth's efforts "pose an enormous risk to U.S. defense readiness and the willingness of the U.S. private sector and academia to work with the IC and DoD, consistent with their own values and legal ethics," he stated. Warner also alleged the moves against Anthropic could be a "pretext to steer contracts to a preferred vendor" whose safety and reliability record recently has been questioned within the government, likely a reference to a Wall Street Journal report from Friday about Elon Musk's xAI artificial intelligence tools.At the present moment, Harrison says a lot has changed from the period during the past decade when Big Tech was highly sensitive to uses of its tech within the military, such as the 2018 furor at Google over Project Maven. With an anticipated $1.5 trillion defense budget and other companies in the AI space getting in on massive contracts while showing less resistance, such as Palantir on a U.S. Navy deal worth nearly $500 million, Harrison says hardball from the Pentagon is going to be the stance. Harrison said he doesn't 100% agree with this approach, describing it as "unhealthy" for the relationship between business and government, but added that the message has been broadcast: "'Hey, you're going to do it my way, and if you don't do it my way, you're out,'" he said.

President Donald Trump expressed frustration at Iran's refusal to comply with American demands to curb its nuclear program. View More

In this articleUAMYFollow your favorite stocksCREATE FREE ACCOUNT U.S. President Donald Trump stops to speak to the media as he departs on Marine One on the South Lawn of the White House on Feb. 27, 2026 in Washington, DC. Andrew Harnik | Getty Images President Donald Trump on Friday said that "I'd love not to use" the U.S. military to attack Iran, "but sometimes you have to."But Trump also said, "We haven't made a final decision" on whether to attack Iran."We'll see what happens," he said. "We're talking later today. We'll have some additional talks today."Trump's comment to reporters outside the White House came after he expressed frustration at Iran's refusal to comply with American demands to curb its nuclear program. Read more CNBC politics coverageCongress takes on Nvidia, White House as it pushes for chip export limitsWarren calls Trump’s bluff on affordability after State of the UnionHouse Dems project midterm optimism at annual policy retreat following State of the Union "We're not thrilled with the way they're negotiating," Trump said. "They cannot have nuclear weapons.""I'm not happy that they're not willing to give us what we have to have," Trump said, referring to that condition.Asked by a reporter if there could be a long, drawn-out conflict in the Middle East if the United States attacks Iran, Trump said, "I guess you could say there's always a risk.""It'd be wonderful if they negotiate, really, in good conscience, good faith," he said. "They are not getting there so far."Omani Foreign Minister Badr al-Busaidi, who has been mediating negotiations between the U.S. and Iran, met in Washington, D.C., with Vice President JD Vance and other American officials in a bid to avoid war. A statement issued by Oman's government after the meeting put a positive spin on those talks that was not reflected in Trump's blunt comments."The meeting examined the indirect US-Iran negotiations sponsored by the Sultanate of Oman, alongside the diplomatic endeavours seeking to culminate in a just and enduring agreement concerning the nuclear file and to guarantee the peaceful character of Iran's nuclear energy program," Oman's government said."I am grateful for their engagement and look forward to further and decisive progress in the coming days," al-Busaidi said in a post on X. "Peace is within our reach."During an interview with MS Now, when asked if there was a chance of the United States attacking Iran overnight, al-Busaidi said, "I can't answer that question, because I don't know.""I think President Trump is sincerely passionate for a deal," al-Busaidi said. "He wants to have a deal. He wants to have a diplomatic solution, and this is what we are trying to do."But Trump, in a speech later Friday afternoon in Corpus Christi, Texas, said of Iran, "We have a very big decision.""We have a country that's been 47 years blowing people's legs off, arms off," Trump said. They've been knocking out ships, killing people, lots of people, not only Americans, lots of people."Trump said he wanted to "make a deal that's meaningful.""I'd rather do it the peaceful way," Trump said, while calling Iran's government "very difficult people, dangerous people, very difficult people."The U.S. Embassy in Jerusalem earlier Friday authorized non-emergency U.S. government personnel and their family members to leave Israel "due to safety risks."Also Friday, the massive American aircraft carrier, the USS Gerald Ford, arrived off Israel's coast.Also on Friday, the State Department said that Secretary of State Marco Rubio would visit Israel on Monday and Tuesday to discuss Iran and other regional issues.

The deal could ease some of Wall Street's fears about Amazon's monster $200 billion capex spending, and accelerate its development of AI tools. View More

In this articleAMZNFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO9:5409:54'A very strong, long-term partnership': OpenAI CEO and Amazon CEO on new strategic partnershipSquawk Box Amazon on Friday unveiled a strategic partnership with OpenAI that includes an investment of up to $50 billion, the latest sign of deepening ties between the tech giant and the maker of ChatGPT. As part of the deal, OpenAI will use more Amazon Web Services infrastructure, including a commitment to deploy 2 gigawatts of the company's Trainium artificial intelligence chips for its new enterprise platform, called Frontier. "Today, we now have the two largest AI labs who are both significantly betting on Trainium," Amazon CEO Andy Jassy told CNBC's Andrew Ross Sorkin on Friday.The pact marks a significant shift for Amazon, which has forged a strong relationship with OpenAI's primary rival, Anthropic. Amazon has pumped billions of dollars into Anthropic since 2023, and put up an $11 billion data center campus for the company in Indiana called Project Rainier. The company also partly relies on Anthropic's Claude models for some of its AI products, including shopping aide Rufus, and Alexa+, a revamped version of its digital assistant.Jassy told CNBC Friday that the OpenAI deal doesn't change its relationship with Anthropic."[Anthropic has] always had multiple partners, and we do too," Jassy said. "And so that relationship will stay strong, and we're really excited about the partnership we're building over a long period of time with OpenAI." Amazon and OpenAI also agreed to jointly develop "customized models" for Amazon's engineering teams to power its consumer products. OpenAI will spend $100 billion on AWS over the next eight years, an expansion of its existing $38 billion agreement signed last November. The partnership was announced in tandem with OpenAI's broader $110 billion funding round, which also includes $30 billion from Nvidia and $30 billion from SoftBank.The deal continues a trend of OpenAI diversifying beyond its longstanding partnership with Microsoft, Amazon's top cloud computing rival. Microsoft first backed OpenAI in 2019, and has committed to invest more than $13 billion in the startup. Microsoft also invested $5 billion in Anthropic last November. In a joint statement on Friday, OpenAI and Microsoft said their partnership remains "strong and central.""Microsoft maintains its exclusive license and access to intellectual property across OpenAI models and products," the companies wrote. "Collaborations like the partnership between OpenAI and Amazon were always contemplated under our agreements and Microsoft is excited to see what they build together." The details Amazon's massive investment in OpenAI has some conditions. The companies said Amazon will start with an initial commitment of $15 billion, followed by another $35 billion "in the coming months." The second tranche is contingent upon OpenAI hitting certain unspecified milestones, as well as the company completing "an initial public offering or direct listing of equity securities" in the U.S., according to a regulatory filing. The parties' obligations under the agreement will terminate if Amazon hasn't invested $35 billion by Dec. 31, 2028, "which date may accelerate under certain circumstances," the filing states.One of the milestones may be that OpenAI must reach artificial general intelligence in order for it to receive the $35 billion from Amazon, The Information reported earlier this week, citing people familiar with the matter. Amazon declined to comment on the report. AGI refers to AI that can perform as well or better than humans on most tasks.The strategic partnership represents a major win for AWS, which is competing with Microsoft, Google and Oracle for highly lucrative AI deals for cloud services. It also may help ease Wall Street's concerns around its hefty $200 billion capex forecast this year. The bulk of its spending is expected to go to AI-related initiatives, including data centers, chips and networking equipment. watch nowVIDEO4:3204:32Amazon working with OpenAI is important for it competitively, says Rosenblatt's Barton CrockettPower Lunch Amazon shares sank for nine days straight following its Feb. 5 earnings report, shaving more than $450 billion off its market value. The stock closed 1% higher on Friday. William Blair analysts wrote in a Friday note that with the OpenAI deal, the "bear thesis continues to erode" as AWS now has major partnerships with two of the leading AI labs and both are using its custom silicon. "This puts last quarter's $200 billion capex announcement into context, as AWS rapidly expands to support this new big customer, in addition to expanding with Anthropic and others," the analysts wrote. "This likely means more AWS growth acceleration is on the come." Andrew Graham, managing partner at asset management firm Jackson Square Capital, told CNBC in an email that the Trainium commitment "demonstrates Amazon becoming a larger player in the custom silicon space."It puts Amazon in "direct competition" with other custom silicon makers like Broadcom and Google, and could threaten Nvidia's chip dominance, Graham added. An AI boost Amazon has struggled to compete in the increasingly crowded market for AI consumer and business applications, where others like Google, Anthropic, OpenAI and Microsoft have had a head start. The company released its own foundation models, called Nova, in December 2024. Late last year, Amazon reorganized its artificial general intelligence organization to be led by veteran cloud executive Peter DeSantis, who replaced Rohit Prasad. As part of the overhaul, Amazon also brought its chipmaking and quantum computing research units under DeSantis' organization. The AGI unit oversees Nova development, among other initiatives.On Tuesday, the head of Amazon's AGI lab in San Francisco, David Luan, announced he was leaving the company. The AGI lab will now report to DeSantis.For Amazon, gaining access to OpenAI's models will provide a boost to its AI efforts. It could also spell further collaboration between the two companies in the future, particularly around agentic commerce, which has emerged as the latest frontier for potential AI disruption. While other companies like Walmart, Etsy and Shopify have announced shopping partnerships with OpenAI and other AI platforms, Amazon has remained on the sidelines. The company has blocked dozens of agents from accessing its site, including OpenAI's ChatGPT, while investing in tools like Rufus. In recent months, however, Jassy has signaled Amazon may welcome some third-party agents onto its site or integrate its tools with AI companies. "We have to try to find a customer experience together that's better, and a value exchange that makes sense for both parties," Jassy said during Amazon's latest earnings conference call. "But I'm very hopeful that we'll get there over time. We continue to have a number of conversations." -- CNBC's Ashley Capoot contributed reporting to this article. watch nowVIDEO2:3302:33Amazon is a cheap stock and there's opportunity there, says DCLA's Sarat SethiThe Exchange

WBD employees fear potential job cuts, culture clashes and high debt loads as Paramount supplants Netflix as the company's acquirer. View More

In this articleNFLXPSKYWBDFollow your favorite stocksCREATE FREE ACCOUNT An American flag flies at Warner Bros. Studio in Burbank, California, on Sept. 12, 2025.Mario Tama | Getty Images The Warner Bros. Discovery board may have enriched its shareholders Thursday when it chose Paramount Skydance's acquisition offer over Netflix's, but it also terrified a lot of its employees.While some of those people own WBD shares and may prefer the financials of Paramount's $31-per-share bid to Netflix's $27.75-per-share offer, CNBC spoke to 10 WBD employees in a variety of different roles at the company. All 10, who asked not to be named for fear of potential backlash, expressed concerns about potential job losses and questions of who would ultimately run their divisions if Paramount and WBD are eventually merged."It's fair to say people are deflated by the news," said one long-term WBD executive.Nonetheless, a WBD-Paramount merger "is not a done deal," as California Attorney General Rob Bonta said yesterday. The transaction must gain regulatory approval both in the U.S. and in Europe. WBD CEO David Zaslav acknowledged at an all-hands meeting Friday that the deal may still be blocked and expressed sympathy for those experiencing a sense of whiplash going from Netflix to Paramount, according to people familiar with the matter."The deal may not close. If it doesn't close, we get $7 billion, and we get back to work," Zaslav said, according to leaked audio provided to Business Insider. watch nowVIDEO0:3800:38Paramount Skydance & Warner Bros. Discovery enter definitive merger agreementClosing Bell: Overtime Still, several WBD employees told CNBC they wished Netflix had acquired WBD, citing several factors.While Paramount and WBD both have core competencies in news, sports, theatrical film and streaming TV, Netflix has far less overlap. Netflix co-CEO Ted Sarandos repeatedly said he planned to leave the WBD business alone, keeping its theatrical business separate from Netflix while also keeping HBO Max as a separate, independent streaming service for the foreseeable future. Netflix also wasn't acquiring WBD's linear cable business with its bid. Employees at CNN, TNT Sports and the old Discovery networks would have remained in their jobs to forge a path as a standalone publicly traded company.Now, WBD employees are staring at potentially massive job cuts. Paramount executives have previously stated they plan to cut $6 billion by eliminating "duplicative operations" on "back office, finance, corporate, legal, technology, infrastructure, et cetera," according to Chief Strategy Officer Andy Gordon. Both WBD and Paramount have already gone through thousands of job cuts in recent years. There are also questions about culture and leadership. While Mark Thompson currently runs CNN, Bari Weiss is the editor-in-chief at CBS News and could plausibly have CNN added to her purview. The Wall Street Journal reported in December that Paramount CEO David Ellison promised President Donald Trump he'd make sweeping changes at CNN if he gained control of the network. Three CNN employees who spoke with CNBC said there's rampant fear among their colleagues about Weiss making dramatic changes to the cable network's anchors and tone."Despite all the speculation you've read during this process, I'd suggest that you don't jump to conclusions about the future until we know more," Thompson wrote in a memo to employees Thursday. CNN media reporter Brian Stelter noted CNN "is a highly profitable business, and it would be foolish for any owner to put that at risk."On the entertainment side, WBD employees fear there may be too many proverbial cooks in the kitchen, which could bog down creativity and innovation for both film and TV. One WBD executive noted that Paramount's President Jeff Shell, Chair of Direct to Consumer Cindy Holland and Chair of TV George Cheeks are all used to being senior leaders in their organizations. Shell was CEO of NBCUniversal. Cheeks was co-CEO of Paramount before it merged with Skydance. Holland was a top executive at Netflix, where she worked for 18 years. How that mix meshes with WBD's entertainment leadership group is an open question and could lead to culture clashes.TNT Sports is run by Luis Silberwasser and has largely steered WBD toward younger audiences with its programming decisions and investments, including Bleacher Report and House of Highlights. CBS Sports, meanwhile, is driven by the demographics of those who watch CBS and has historically catered to an older audience. This could lead to culture clash, or the divisions could mesh nicely as complementary assets.While Silberwasser will have to work with CBS Sports President David Berson on employee duplications, like every other department, there's some reason for optimism in the sports division, because WBD and CBS have worked together for many years producing March Madness, the NCAA men's basketball tournament. That's given the units some degree of familiarity with each other. WBD also lost NBA rights last season. Combining with CBS' robust portfolio of sports rights, including the NFL and the Masters, makes WBD a major player again in sports, even if it's as a subsidiary of CBS. One other repeated concern among employees is the $64 billion in debt coming as part of the $111 billion enterprise value for the deal. Several employees said servicing large debt loads has hindered WBD in recent years, and they feared this could lead to more of the same. Two employees noted there's comfort being a part of a giant company like Netflix, with a market capitalization of more than $400 billion. Paramount Skydance's market valuation is just $15 billion.

U.S. Treasury yields were lower on Friday as investors reacted to wholesale inflation that came in above Wall Street estimates. View More

In this articleUS10YUS2YTLTIEFFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO2:0302:03Core wholesale prices rose 0.8% in January, much more than expectedSquawk Box U.S. Treasury yields fell Friday as investors reacted to a stronger-than-expected January wholesale inflation report, and a tumbling stock market amid rising fears of artificial intelligence hurting the economy. The benchmark 10-year Treasury yield fell more than 5 basis points to 3.962%, while the 30-year Treasury bond yield dropped more than 3 basis points to 4.631%. The 2-year Treasury note yield was lower by more than 5 basis points at 3.389%.One basis point is equal to 0.01%, and yields and prices move in opposite directions. The latest data point on the economy showed core wholesale prices, stripping out food and energy, rose 0.8% in January, according to the Bureau of Labor Statistics, far above the 0.3% increase economists polled by Dow Jones were anticipating. The headline reading, including all price components, increased 0.5% last month, again higher than the expected 0.3% gain, according to a Dow Jones consensus estimate. "Markets did not need the bad inflation news this morning and stocks extended their losses," said Chris Rupkey, chief economist at FWDBONDS. "Bond yields fell below the psychological 4.00% level before the producer prices report and you can bet your bottom dollar that bond yields are not going to move back above this key level anytime soon."Rising fears that artificial intelligence will lead to large job losses, eventually contributing to economic stagflation, in which rising prices are coupled with slowing economic growth, are also hurting economic sentiment. The Dow Jones Industrial Average tumbled more than 500 points, or 1.1%, spurring some investors to move to bonds for safety and consequently pushing yields downward. The potential of AI disruption has increasingly weighed on investors this year, with software stocks slammed on concern that agentic AI will make legacy companies obsolete. The iShares Expanded Tech-Software Sector ETF (IGV) dropped almost 10% just this month, and is nearly 31% off its recent high. Investors fear layoffs in the sector are looming, especially after Block said Thursday it's laying off more than 4,000 employees, or roughly half its workforce. Further unsettling markets are President Trump's unclear tariff policies and military tensions between the U.S. and Iran. On Friday, Trump said that he'd "love not to" attack Iran, "but sometimes you have to."—  CNBC's Pia Singh contributed to this report

With Netflix out of the picture, a Paramount and Warner Bros. Discovery deal may have fewer obstacles to regulatory approval. View More

In this articleNFLXWBDPSKYFollow your favorite stocksCREATE FREE ACCOUNT The Paramount logo is displayed above an entrance to Paramount Studios on Feb. 23, 2026 in Los Angeles, California. Justin Sullivan | Getty Images A day after Paramount Skydance emerged as the winner to take over fellow media giant Warner Bros. Discovery, questions are mounting about the companies' regulatory path forward.The WBD board said on Thursday that Paramount's revised $31-per-share offer was superior to an existing bid from Netflix, prompting the streamer to announce that it was walking away from the deal entirely and clearing the way for Paramount. Paramount's raised offer — up from $30 per share — was the latest in a series of moves it made after it launched a hostile bid late last year to buy WBD. It had initially lost out on a bidding war to Netflix, which offered $27.75 per share.Paramount's latest bid also included a $7 billion breakup fee if the deal doesn't win regulatory approval. And according to a Friday filing, it has already paid the $2.8 billion breakup fee that WBD owed to Netflix if the deal fell through. But media industry experts said it's looking more likely that the Paramount deal will get through government scrutiny than it did when Netflix was in the picture. watch nowVIDEO9:2009:20Paramount wins bidding war for Warner Bros. Discovery: Here's what to knowSquawk Box Netflix vs. Paramount Netflix co-CEOs Ted Sarandos and Greg Peters said Thursday that it was "no longer financially attractive" to match Paramount's raised offer. Though Netflix executives had said they were "highly confident" that their deal would win approval, the merger would have brought together two top streaming services — Netflix and Paramount+ — and could have potentially raised prices for consumers and decreased competition.In early December, Trump said the Netflix-WBD deal "could be a problem" because of the increased market share Netflix would gain, saying he would be involved. He walked back those comments earlier this month, saying the deal would be at the sole discretion of the Department of Justice.And while the size of a combined Netflix and WBD entity was one of the companies' largest antitrust obstacles, that issue could still be raised for Paramount. Both Paramount and WBD have sprawling portfolios of TV networks, in addition to Paramount+ hitting 78.9 million subscribers, according to its most recent earnings report, and HBO Max counting 131.6 million subscribers through the end of 2025.Paramount executives argued one of the pros of their offer was that a deal with the media company would garner less government scrutiny. Paramount Skydance CEO David Ellison's father, Oracle co-founder Larry Ellison, is known to have close relations with President Donald Trump. Trump's son-in-law, Jared Kushner, is backing the Paramount deal, according to a filing with the Securities and Exchange Commission.Still, Paramount's proposed deal had come under criticism for potentially being funded by the sovereign wealth funds of Saudi Arabia; Abu Dhabi, United Arab Emirates; and Qatar. The company has previously said that those entities have agreed to forgo all governance rights, including board representation.California Attorney General Rob Bonta, a Democrat, warned on Thursday night that the merger was "not a done deal" and that the California Department of Justice, which has an open investigation into the deal, will be vigorous in its review.And Democratic Sen. Elizabeth Warren of Massachusetts said in a statement that the Paramount and WBD merger is "an antitrust disaster threatening higher prices and fewer choices for American families." A potential for fewer concerns Analysts from Raymond James said they believe the Paramount-WBD deal could pose far less of a risk for regulatory approval than a Netflix tie-up.In a Friday note, the analysts said the regulatory path forward for Paramount is "meaningfully easier" than Netflix's, though it would not be a "cakewalk.""Of course, there are new challenges with this deal around news, cable networks, international linear networks, etc., but we still feel the WBD/PSKY deal is more palatable all-in," the analysts wrote. "And, particularly following the reaction to the WBD/NFLX agreement, we believe PSKY's political standing with the current U.S. administration is much stronger than Netflix's."The analysts noted that questions remain about how the competitive market for the companies will be defined by the DOJ, and they speculated that Netflix likely decided not to match Paramount's superior offer because of what was "likely to be a brutal regulatory review."A Friday note by Morningstar analysts echoed those thoughts. The analysts said the move was right for both Netflix and Paramount because they believed Netflix was unnecessarily overpaying for WBD's streaming and studios.Notably, Paramount aimed to buy the entirety of WBD, including its pay-TV networks, such as CNN, TBS and TNT, while Netflix only wanted the company's studio and streaming assets."This is the best outcome for Warner shareholders, in our view, as we've felt that, with a higher likelihood of prompt regulatory approval and uncertainty surrounding the value and risk of the network business they would have retained, the best offer would have been $30 in cash," the analysts wrote.The analysts added that they don't expect Paramount to face any regulatory issues during the approval process. 'Horizontal consolidation' Joseph Kalmenovitz, an assistant professor of finance at the Simon Business School at the University of Rochester, said Paramount's timing for the bid was likely strategic."David Ellison didn't just outmaneuver a Hollywood board — he timed the regulatory cycle perfectly," Kalmenovitz said. "The populist, big-is-bad philosophy is out; the deal-friendly establishment is back in."Still, Paren Knadjian, a partner at advisory firm EisnerAmper, said the regulatory path forward for Paramount remains nuanced and isn't a done deal. While concerns over the Netflix-WBD deal focused largely on library content, the Paramount-WBD deal is far more of a "horizontal consolidation" effort between cable TV, sports, streaming and news, he said."I think the biggest thing we're going to focus on is the concentration of intellectual property under one roof," Knadjian told CNBC. "What power does that give this new entity in terms of the ability to charge more?"Knadjian said Paramount will also be facing political concerns, not only from state and federal politicians, but between CNN and CBS combining under one roof, in addition to concerns over blockbuster franchises like "Star Trek" and "Harry Potter."Ultimately, the approval of the deal will come down to which concessions the two companies will have to make in order to assuage any fears over a possible media monopoly."The regulatory pressure, the political pressure, those are the things that will certainly delay the deal and will make it more complicated, and I think there's going to have to be significant concessions for it to go through.There's so many factors to this. It's much more complicated than many of the other deals we've seen in the past," Knadjian said.– CNBC's Lillian Rizzo contributed to this report.

The average IRS tax refund is up 10.2%, based on early filing data. Here's what filers need to know. View More

Andreypopov | Istock | Getty Images The average tax refund is 10.2% higher so far this season, compared to about the same period in 2025, according to the latest IRS filing data. The year-over-year percentage change is down from the 14.2% increase reported last week.As of Feb. 20, the average refund amount for individual filers was $3,804, up from $3,453 about one year prior, the IRS reported on Friday. The total amount refunded was about $109 billion, up 6.9% from 2025, according to the IRS release. But the total returns processed were down by 2.4%. Read more CNBC personal finance coverageAverage 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 qualifiesTrump accounts aren't exactly 'tax-free,' as the president said. How they workTrump said beef, egg and chicken prices are falling. Here's what the data showsTrump pitches new retirement plan with a match of up to $1,000 — who may benefitThink of active managers and index funds as portfolio 'teammates,' not 'rivals': CFPMany workers want a career change. Are you one of them?ACA health coverage subsidy lapse hit 22 million people. Here are some of their storiesTrump's $2,000 tariff dividend checks just got a lot less likely, experts sayStudent loan forgiveness is taxable again. How to plan for a five-figure IRS billWhat the Trump administration's Harvard lawsuit could mean for future applicantsHomebuyers are paying more for credit checks. Here's whyCNBC's Financial Advisor 100: Best financial advisors, top firms ranked Amid consumer concerns about affordability, the Trump administration has emphasized how Trump's "big beautiful bill" may impact the size of tax refunds this season. In a late January release, the White House said average tax refunds could increase "by $1,000 or more," citing several media reports that reference early October research from investment bank Piper Sandler.  A Feb. 26 report from Oxford Economics estimates that tax refunds will jump by nearly 20% this year, with more benefits flowing to middle- and upper-income households than usual, based on changes enacted via Trump's 2025 tax cuts.However, individual refunds could vary based on 2025 paycheck withholdings and which of Trump's provisions impact their family's situation, experts say. Average tax refunds typically increase by late February By law, the IRS can't send refunds claiming the earned income tax credit or the refundable part of the child tax credit, known as the additional child tax credit or ACTC, until Feb. 15. That means the agency's first two filing season statistics releases, reflecting data through Feb. 6 and Feb. 13, respectively, did not include the millions of refunds with these credits."As we head into late February, the average refund size pops — it gets larger," said Andrew Lautz, director of tax policy for the Bipartisan Policy Center, a nonprofit think tank. watch nowVIDEO4:0804:08Trump tax laws to produce higher refunds in 2026Personal Finance From Feb. 13 to Feb. 20, the average tax refund size jumped from $2,476 to $3,804. But with limited tax filing data, it's too early to make conclusions about average tax refunds this season, experts say.For 2025 returns, the maximum EITC is worth up to $8,046 for filers with three or more qualifying children. For 2024 returns, the average EITC payment was $2,916, according to the IRS. Trump's tax cuts did not change the EITC for 2025.Trump's legislation made permanent a higher child tax credit and boosted the maximum tax break to $2,200. The refundable portion, ACTC, will continue to adjust to inflation, but Trump's cuts did not change the amount from 2024. The ACTC is worth up to $1,700 for 2025.

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Economists question whether such moves signal a broader shift in the labor market or simply reflect company-specific adjustments. View More

In this articleXYZFollow your favorite stocksCREATE FREE ACCOUNT Jack Dorsey, co-founder and chief executive officer of Twitter Inc. and Square Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, on Friday, June 4, 2021.Eva Marie Uzcategui | Bloomberg | Getty Images Block CEO Jack Dorsey's move to cut nearly half the company's workforce is shining a spotlight on a growing question for corporate America: whether advances in artificial intelligence will ultimately mean fewer workers.In an earnings call Thursday, Dorsey said Block will cut about 4,000 jobs.Dorsey framed the move as more than a cost-cutting exercise, instead describing a shift in how companies operate as artificial intelligence becomes more central to business decisions.He also suggested other companies will follow suit."I don't think we're early to this realization. I think most companies are late," he said. "Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively."Economists, however, question whether such moves signal a broader shift in the labor market or simply reflect company-specific adjustments."This is a function of lax judgment during a period of rapid expansion and the retrenchment that follows," said Joseph Brusuelas, chief economist at RSM. "It should be understood within the unique context of that firm, and it does not signal risk to the broader U.S. labor market."Doubts about jobsThe layoffs come amid broader questions about the employment picture.Though job cuts have remained low and the unemployment rate is a relatively healthy 4.3%, openings have contracted sharply and hiring in 2025 largely flatlined, with average payroll growth of just 15,000.Still, the tech-related picture looks relatively healthy.The information sector, one proxy for the tech industry, saw its unemployment rate fall to 5% in January, down 0.7 percentage point from a year ago. Job openings have declined in the sector, but demand for some roles remains firm: Postings in software development are up 12% from a year ago, according to Indeed.Most economists remain sanguine on the labor market, even in the current "low-hire, low-fire" environment. Claudia Sahm, chief economist at New Century Advisors, said Friday on CNBC that while it is "healthy" to discuss AI's potential impact, it is important not to overinterpret individual company decisions."I would not extrapolate from Block to the whole U.S. economy," Sahm said. "It's important to understand that these AI tools — the direction you go with them really depends on the leadership. Automation, mass layoffs is not necessarily the only path forward."AI's broad impactA widely-discussed speech earlier this week by Federal Reserve Governor Christopher Waller also underscored the challenges and opportunities AI presents.While discussing the Fed's internal use of the technology, Waller said AI is more likely to enhance productivity than eliminate jobs outright."When ATMs were first introduced, they didn't eliminate bank tellers. Instead, they changed how banking worked," he said. "The real impact wasn't automation alone — it was how institutions reorganized around technology. AI is similar. The biggest gains won't come from simply adding AI to existing processes. They'll come from rethinking workflows, roles and systems."But even if layoffs are not yet widespread — and Dorsey's warnings are not necessarily a broad harbinger — companies are beginning to rethink how they allocate resources.Tech jobs account for only about 5% to 7% of the total labor force, but AI technology itself is spreading far beyond the sector."Some jobs are apt to be disrupted by AI" as companies reconsider the balance between labor and technology, said Laura Ullrich, director of economic research for North America at Indeed Hiring Lab."Companies are really shifting their investments toward capital spending and away from labor," Ullrich added. "They're investing in AI with the hope that it can replace jobs."

Block, Jack Dorsey's payments company, will cut 6,000 of its 10,000 workers as it embraces AI. CNBC's Steve Sedgwick says it's the biggest story of the week. View More

In this articleXYZFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO1:4801:48Block shares jump as CEO Jack Dorsey links major job cuts to AIMoney Movers In a week where the News Gods have given us a cornucopia of stories, it's a fool's game to pick out the biggest one.Was it Trump's extraordinary State of The Union? The phenomenal Nvidia results that failed to answer questions over whether the enormous hyperscaler splurge will result in significant profits further down the line? The rising tensions between Iran and the U.S.?Let me play the fool for a moment, because I think the news from a medium-sized tech payments company might have longer term tremors and be a warning of societal upheaval far greater than other stories of the week.Block, a $33 billion company, surged in extended trading on Thursday after cofounder and CEO Jack Dorsey, best known for cofounding Twitter, told the market he is laying off nearly half his workforce.He wrote to shareholders that 4,000 of the 10,000 were "being asked to leave or entering into consultation" to leave. Again: That is nearly half his workforce!Block CFO Amrita Ahuja said the job cuts would position the company "for our next phase of long term growth.""We are choosing to shift how we operate at a time when our business is accelerating and we see an opportunity to move faster with smaller, highly talented teams using AI to automate more work," Ahuja wrote.Job cuts happen all the time, but what Dorsey had to say should be a wake-up call for everyone. watch nowVIDEO1:0001:00Block shares pop more than 20%, announces plan to reduce workforce by almost halfClosing Bell: Overtime He said he expects other companies to similarly overhaul their workforces as they see more efficiency gains from "intelligence tools."Let that sink in: Dorsey expects other companies to similarly overhaul their workforces as they see more efficiency gains from "intelligence tools.""Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes," he wrote.Do the math: 10,000 jobs to just under 6,000 replicated across industries across the nation, across the world.So a new, growth company, not an old economy business, has just said companies will cut huge swathes of their workforces as new intelligence tools become diffuse.I keep getting told on CNBC that AI will create new jobs to replace those being lost. I've been asking the same question for years now. "What are those jobs? Where are the mass of jobs for the millions whose roles are set to be made redundant?" And I hear the same old trope every time – "oh those jobs haven't been created yet."I think it's time we got a better answer, no?