Power Lunch 9/14/26

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Kelly Evans (1:04)

Stocks are back in the red this hour as investors reassess the AI trade. Welcome to Power Lunch alongside Dominic Chu. I'm Kelly Evans, Brian Sullivan is off today. The market's other big story, of course, is bonds. The US 10-year treasury yield pushing back above 5 percent for the first time since 2003, a move that raises the hurdle for equities and the economy, and energy is adding to the pressure. With oil back above 100 a barrel, keeping inflation and rates front and center.

Dominic Chu (1:30)

Plus, noted bank analyst Mike Mayo is out with a new call. He says a Fed rate hike could redraw the financials playbook. The six banks, he says, belong on your watch list. And then later on, Teva Pharmaceutical CEO Richard Francis joins us. Those shares, by the way, have surged more than 300 percent since he took over a CEO. Now, as the company executes its pivot to growth strategy, we're going to ask what comes next for that big Teva turnaround effort, Kelly.

Kelly Evans (1:59)

Let's start with the big AI debate, though. Safety warnings are growing as former insiders call for a slower AI race. And over the weekend, Anthropics CEO Dario Amadei outlined a three-step plan to slow the pace of developments, which includes outside evaluators, industry guardrails, and global coordination, including China. Other tech titans chimed in on X. Elon Musk posted Dario is right. Open AI Sam Altman also agreed, saying the company will pace the frontier and match Anthropics' outside oversight plan. But any global plan would need China on board. With President Trump set to meet President Xi next week, could the two superpowers agree to pump the brakes? Joining us now is Adam Kovacevich, founder and CEO of the Chamber of Progress. They're a tech policy coalition focused on innovation and regulate. Is the Trump-Xi meeting definitely happening? I don't know, Adam, but listen, the broader point is this.

The biggest concern about anything that slows down AI here, is that China moves ahead. What do you say about that?

Adam Kovacevich (2:58)

You got it, and I agreed. I mean, I think the pacing very quickly has become the main AI policy debate in Washington, and it's the hardest one that Washington has faced, I think exactly for the reasons you say, because it's the first one that the US can't solve on its own. We can deal with data centers, we can deal with job displacement, we can have policy interventions for those issues, but pacing is a collective action problem, and China is on the other side of it. Every proposal on the table to pace AI runs into the same wall, which is that any restraint only works if everyone does it, and nobody save for some new global enforcement agency can make everyone do it. So I think that's why the debate has moved from what should the law be to who can credibly slow this thing down. You cannot unilaterally legislate your way out of that challenge.

Kelly Evans (3:54)

So last hour, we spoke with a researcher. I mean, he's the one who helped uncover some of the rogue agent activity on that German wiki page.

I asked him this question because, again, he has a lot of sensible ideas that could help with regulation. But I said, what about the idea that we would slow down? He said, if we slow down, it will slow down China, because we have 75% of the world's GPUs. We have the chips, they don't. They're distilling our models. They can catch up our leapfrog because they don't have the wherewithal to match, ultimately, the GPUs. What would you say about that?

Adam Kovacevich (4:25)