Microsoft's Nadella on OpenAI Drama, Pre-Black Friday Earnings, Countdown to Nvidia's Results 11/21/23

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Carl Quintanilla (0:31)

Market Moving Insight and Analysis Join Jim Cramer, David Faber and me, Carl Quintanilla on the opening bell hour of CNBC Squawk on the Street.

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Bulls try to extend the S&P's five-day win streak at the Nasdaq 100 at a 22-month high.

Reports this morning of a possible Israel Hamas ceasefire and hostage release and, of course, NVIDIA tonight. Our roadmap begins with the ongoing OpenAI shake-up drama. Microsoft CEO hinting he's still open to Sam Altman rejoining the company, but says governance needs to change.

David Faber (1:05)

Plus NVIDIA results are on deck. Share is hitting a record high as investors expect a surge in revenue for the quarter, boosted by what else? Demand from AI.

And we got a mixed retail picture this morning. Best Buy is saying consumer demand is uneven and difficult to predict. Lowe's cuts in sales outlook. Meanwhile, Abercrombie, Dix and Burlington all beat quarterly expectations.

Carl Quintanilla (1:30)

Let's begin with the drama surrounding OpenAI and its ousted CEO, Sam Altman. Microsoft CEO, Satya Nadella, telling our John Fort last night the company remains committed to the ChatGPT parent and Altman, but adds the governing structure at the startup needs to change. This is Nadella on partnering with OpenAI.

Satya Nadella (1:47)

I care about just making sure that we can continue to innovate.

And as I said, I feel very, very confident. Quite frankly, Microsoft has all the capability to just do that on our own. But we chose to explicitly partner with OpenAI and we want to continue to do so. And so, and obviously that depends on the people and of OpenAI and staying there or coming to Microsoft. So I'm open to both options.

Carl Quintanilla (2:11)

Jim, the plot kind of thickened last night between Nadella's comments and Benioff's saying will match any cash equity offer.

Jim Cramer (2:16)

Well, I think Benioff is concerned about something that is just not talked about and it's driving me crazy.

Why doesn't anyone know what Sam did? Why was he fired? What was the material fact that caused his termination? I think if we knew that, the whole discussion might be very, very different. This discussion might be about, I don't want to presume what he necessarily did, but when I look at the people on the board, I mean, they must have seen something or heard something that made it so that everything was in question with the guy. And it just bothers me that we're all like, David, he's fine, whatever he said is fine.

He didn't. He did something that you or I would do, we'd be gone.

David Faber (3:03)

You think, but we don't know, Jim, we don't know. It's not fair to assume, because we simply don't know.

Jim Cramer (3:09)

The statement that they gave is so damning.

David Faber (3:12)

Yeah, listen, I can only rely on the reporting of others here, I don't have any great insight, I wish I did.

Jim Cramer (3:17)

But what are you hearing?

David Faber (3:18)

I mean, it would seem as though it's a compilation of different things, perhaps his pursuit of other businesses, for example, cheap chips where he was raising money, certainly from either SoftBank and or he was in the Mid East as well.

Jim Cramer (3:30)

Doesn't anything disqualify you?

David Faber (3:33)

Other efforts he may have been making, I don't know.

Jim Cramer (3:36)

Is this Charles Strickland from the moon in six pence?

David Faber (3:38)

All we do know, Jim, is that the decision by the board has backfired in a way we have rarely if ever seen.

Erasing more value than we can even imagine at this point. I'm not saying this company's a zero, but it's probably somewhere between, I don't know, it's certainly not 86 billion or 90 billion dollar value that it seemed to be inhabiting previously.

Jim Cramer (4:00)

What happens if a great person does something that let's say is dishonest? Do you just say, you know what, he's so smart, we're just gonna overlook it?

David Faber (4:10)

No, but you seem to be in, do we know that that's the case?