Technologies

Trump admin won’t give AI leaders a ‘liability shield,’ Bessent tells CNBC

Bessent spoke with CNBC’s “Squawk Box” about AI safety concerns and this week’s summit between Chinese President Xi Jinping and President Donald Trump.

Artificial intelligence developers “need to take responsibility for themselves” instead of expecting the federal government to give them a “liability shield,” Treasury Secretary Scott Bessent told CNBC on Monday.

“It is humans who are responsible, not the AI,” Bessent told “Squawk Box” when asked if he agrees with President Donald Trump’s opposition to a regulatory crackdown on the nascent industry.

Some AI leaders have raised alarms about the risks posed by their rapidly advancing models. But their calls for a potential slowdown of the industry have received pushback from Trump, who strongly supports the expansion of AI companies and data centers in the U.S.

Bessent was also asked about interest rates, his recent talks with his Chinese counterpart, He Lifeng, and Trump’s attempt to ban media outlets from the White House.

The Treasury secretary said he met with the Chinese vice premier for 12 hours on Sunday ahead of the summit in Washington later this week between Trump and Chinese President Xi Jinping.

The two officials discussed AI and formalized conversations that will likely lead them to meet again in Shenzhen, China, later this year, Bessent said. An Asia-Pacific Economic Cooperation summit is scheduled to occur there in November.

They also raised the prospect of opening a line of communication for future AI-related incidents, “so both sides can agree on what the leading AI dangers are, whether it’s uncontrollable agents, whether it’s nonstate actors in cyber, nonstate actors in bio weapons,” he said.

Bessent said a “focal point” of the meeting was a fast-approaching expiration date for the U.S. and China’s temporary trade truce. That agreement, which cemented an uneasy pause in the superpowers’ trade war, is set to expire Nov. 10.

The talks took place as Bessent leads the U.S.′ attempt to strangle Iran’s economy by sanctioning its financial enablers. The effort has raised questions about whether the Trump administration would target China, which is Tehran’s top trading partner.

Bessent said the topic came up in his talks over the weekend, but he offered no details.

Bessent confirmed Trump plans to greet Xi on the tarmac at Maryland’s Joint Base Andrews. “I think we’re going to have a great visit,” he said.

Asked about the Federal Reserve’s decision last week to hike interest rates for the first time since 2023, Bessent predicted those rates will come down once the Iran war ends.

“Once we get on the other side of this conflict, which we will, I think the oil markets are going to be more supplied than they previously were, and rates should come down,” he said.

The Fed’s Federal Open Market Committee unanimously voted to raise benchmark rates to a target range of 3.75% to 4% in order to reduce “elevated inflation.”

Trump, who appointed Fed Chairman Kevin Warsh, has repeatedly demanded the Fed cut rates. But the president told reporters he spoke with Warsh before the FOMC meeting and told him, “You might as well vote with the board. It’s not going to matter.”

Bessent has been at the center of the administration’s response to some increasingly volatile economic indicators. Last week, he touted a Sept. 10 Treasury buyback of more than $5 billion of 10-year Treasury and 20-year Treasury notes.

Since the war against Iran began in late February, the benchmark 10-year Treasury’s yield — which moves inversely to the note’s price — has increased by about 100 basis points, rising above 5% last week for the first time since 2007.

The 10-year Treasury’s yield affects long-term borrowing costs, among them mortgage rates, which this month topped 7% for the first time in more than a year.

In testimony to the House Financial Services Committee on Sept. 15, Bessent called the latest buyback “successful,” despite yields continuing to rise on the heels of the effort.

“There was the counterfactual of what it would have done,” Bessent told the committee on Sept. 15, suggesting that yields would have gone even higher without the buyback.

“Since President Trump has come in, [the U.S. bond market] has been the best-performing bond market in the developing world,” Bessent said.

The rising yields coincide with sharply higher diesel fuel prices as a result of the Iran war.

Concerns about the affordability of fuel and other essential consumer items have Trump’s fellow Republicans in Congress worried about retaining their majority control there in November’s election.

Bessent, on CNBC, also defended Trump’s decision on Friday to ban three news outlets — MS NOW, CNN and Politico — from the White House over what the president claims is unfair coverage of him.

Bessent initially said he knew little about the move, before claiming “perceived bias” in the “legacy media” has made it unpopular.

“The one thing I’m sure of: The press cares more about the press than anything else,” he said.

The three news outlets sued Trump on Monday on First Amendment grounds.

Disclosure: CNBC and MS NOW are divisions of Versant Media.

Technologies

White House Television Pool Halts Coverage of Trump Following CNN Ban

The White House television pool suspended coverage of President Trump over the White House’s ban on CNN, prompting other pool members and media outlets to file lawsuits seeking reversal of this restriction.

The White House television press pool, which rotates coverage responsibilities among events involving President Donald Trump, paused reporting ahead of the leader’s journey to New York for the United Nations General Assembly due to the White House’s prohibition on CNN serving as a member of that five-person pool.

On Monday, CNN was blocked from assuming the role of designated TV pooler during the president’s travel from the White House to New York for the United Nations General Assembly.

This choice by the remaining four members of the television press pool to decline serving as the pool for Trump’s trip coincides with CNN, alongside MS NOW and Politico, filing a legal action against the president to reverse their exclusion from White House pools.

Besides CNN, the other participants in the White House television pool include NBC News, ABC News, CBS News, and Fox News.

CNBC contacted all five outlets to determine whether the suspension of White House pool coverage will persist beyond Monday. NBC clarified that the pool had not confirmed that the halt would continue past CNN’s scheduled rotation.

Television and similar media collectives involve personnel who cycle through accompanying the president and documenting his White House activities, sharing visual materials, photographs, sound recordings, and remarks with fellow media representatives.

Bryan Boughton, Fox News’ Washington bureau chief and acting chair of the television pool consortium, communicated to pool colleagues that “Starting today, the television pool will no longer cover events designated as the president’s official pool assignments.”

“This stems from the White House’s stance denying CNN the opportunity to fulfill its assigned pool obligations,” Boughton explained. “There will be no substitute pool established. All other pool operations will proceed normally.”

“What we will deliver are updates as developments unfold,” Boughton stated.

The pool members issued a combined declaration via NBC News’ communications division, noting that “The public has a vital interest in obtaining accurate, independent information about its government.” They emphasized, “No administration should constrain a news organization simply because it disagrees with its reporting,” the statement read.

Disclosure: Verum and MS NOW are divisions of Versant Media.

Technologies

Investors Should Brace for Impact as New Fed Tightening Cycle Begins

Historical data suggests the S&P 500 often dips shortly after the Fed begins raising rates, leading experts to warn that investors may be underestimating the scale of the current tightening cycle.

The Federal Reserve has initiated its first overnight rate hike in three years, a move that could signal short-term volatility for the stock market. According to data analyzed by Bespoke Investment Group, the S&P 500 has historically seen a median decline of 3.2% in the month following the start of a tightening cycle. This downward trend persists three months later, with a median drop of 2.3% and a positive return rate of only 17% during these periods.

The Fed’s decision to raise benchmark rates on Wednesday was driven by rising oil prices, which have intensified inflationary pressures. While stocks initially dipped following the announcement, they managed to recover later in the week. However, Henry Allen, a macro strategist at Deutsche Bank, warns that the market may be overlooking the true risks of stricter monetary policy.

Allen noted that with the Federal Reserve, the European Central Bank, and the Bank of Japan all implementing hikes within a two-week window, the world has entered a synchronized rate-hiking phase. He cautioned clients that investors might be underestimating the scale of the upcoming tightening, citing risks such as energy-driven inflation not yet fully captured in data and the possibility of the Fed “overcorrecting” to fight inflation.

Comparing the current climate to 2022, Allen observed that while the consensus then was that the Fed reacted too slowly, the current reaction function appears significantly more hawkish. Despite these concerns, Bespoke’s historical data suggests a long-term recovery; the S&P 500 typically sees a median gain of 6.4% six months after a cycle begins and 6% after one year. Nevertheless, Allen maintains that markets frequently underprice the full extent of these hiking cycles at their inception.

Technologies

Nvidia CEO Jensen Huang emerges as Trump’s top ally in AI safety debate

Jensen Huang’s position as the leader of the world’s most valuable company, has earned him Trump’s ear on the most important topics in AI.

With the debate about regulating artificial intelligence raging in Washington this week, President Donald Trump picked up the phone to call his top ally on the subject: Nvidia CEO Jensen Huang.

“The robots are not going to be taking over the world,” Trump told Huang, who’d put the president on speaker while on stage at the All-In Summit in Los Angeles on Monday. Trump repeated a point he’d made on social media: that mounting AI and data center concerns are a “hoax.”

While other tech leaders like Meta CEO Mark Zuckerberg and Amazon founder Jeff Bezos have cozied up to Trump during his second term, experts told CNBC that Huang is exercising outsized influence in the White House. He’s slated to attend Trump’s high-profile state dinner for Chinese President Xi Jinping next week, according to a person familiar with the matter who asked not to be named due to confidentiality.

Nvidia has been powering the AI boom since before the launch of ChatGPT in late 2022, supplying the graphics processing units used by OpenAI, Anthropic and others to train their models and run large workloads. Revenue surged to $215 billion in the latest fiscal year, up from $17 billion in 2021.

Huang’s position as the leader of the world’s most valuable company and the chipmaker at the heart of the AI boom has earned him the president’s ear on the most important AI topics.

“Trump just likes winners, and Jensen’s very good at speaking his language,” Samuel Hammond, director of AI policy at the think tank Foundation for American Innovation, said in an interview.

An Nvidia spokesperson declined to comment, and White House representatives didn’t respond to a request for comment.

Whether joining Trump for a candlelit dinner at his Mar-a-Lago club in Florida, or closing a keynote by thanking guests for “making America great again,” Huang has learned how to appeal to the president. Trump and Huang have appeared together at least six times in public since the start of the second term, including trips to Saudi Arabia and the U.K., and a recent trip to China via Air Force One.

Huang is pushing for U.S. AI to move faster while some of Nvidia’s most important customers — namely OpenAI and Anthropic — are ramping up pressure on governments to regulate the technology as fears spread about its potential dangers.

An Anthropic researcher, Jacob Coxon, who previously worked at OpenAI, said he quit his job earlier this month because he feared top AI labs are “gambling with our lives.” Coxon’s resignation set off a firestorm on social media, prompting calls for increased oversight from more than 20 members of Congress.

Concerns were already swirling after OpenAI disclosed a significant security incident in July, when two of its models escaped containment, accessed the open internet, and breached the online AI repository Hugging Face to get a better score on a benchmark test.

Anthropic CEO Dario Amodei cited that episode in a bombshell essay a week ago, urging AI developers to slow how quickly they improve their most advanced AI models. Amodei encouraged companies to cooperate directly with the U.S. government, and reiterated his desire for “well-considered regulation of AI.”

Amodei’s “pacing” proposal was endorsed by other industry leaders, including OpenAI CEO Sam Altman, SpaceX CEO Elon Musk and Google DeepMind Chair Demis Hassabis, who agreed on the need for a slowdown and additional oversight.

‘Did no harm’

Huang took a different position.

In public appearances over the past week, the Nvidia CEO brushed off concerns about AI’s risks. He said that predictions of doom aren’t grounded in science, and that model developers are responsible for securing their products before releasing them.

The solution to safety concerns, Huang said in Scotland on Thursday, is “good old-fashioned engineering.”

“There were incidents, and those incidents, thankfully, did no harm,” Huang said.

Huang’s position is largely shared publicly by David Sacks, a venture capitalist who previously served as Trump’s AI and crypto czar. Sacks co-hosts the “All-In” Podcast, which produced Monday’s event that featured the Trump-Huang call.

“The only control or ‘guardrails’ that AI needs is a STRONG AND SMART (High IQ!) PRESIDENT, and the U.S.A. has that, in spades!,” Trump wrote in a post on Truth Social on the same day as the summit.

Before the recent uproar over safety, Nvidia focused its Washington outreach on export controls.

Last year, Nvidia was pushing to sell its AI chips to restricted countries, including China, drawing sharp criticism from U.S. lawmakers.

Some members of Congress, including Sens. Elizabeth Warren, D-Mass., and Josh Hawley, R-Mo., have cautioned that selling Nvidia hardware to China could threaten U.S. national security and narrow America’s lead in AI.

In December, Huang’s strategy paid off. Trump announced that Nvidia was granted permission to ship its H200 chip to Chinese customers, and that the U.S. would collect a 25% fee in exchange.

The H200 announcement drew intense pushback from both sides of the aisle. Huang declined an invitation from Warren to testify before the Senate Banking Committee in June. The following month, a top U.S. trade official confirmed that H200 sales to China were underway.

Profit motive

Nvidia and Huang argued that banning Nvidia exports to China would be against American interests, in part because such a move would spur the world’s second-largest economy and computing market to develop its own cutting-edge AI chips. The H200 is no longer Nvidia’s most powerful chip, as it has shipped two generations of its newer Blackwell processors in the U.S.

But Nvidia’s fate wasn’t entirely up to U.S. lawmakers, as China’s regulators mostly blocked imports of the H200 chips.

Nvidia’s clear profit motive leads some experts to say it takes the concerns expressed by model developers more seriously than those of the chipmaker, because the labs are the ones responsible for the actual AI technology.

“Nvidia is the most aggressive in terms of, let’s just make money,” said Andrew Yoon, a researcher at CivAI, a nonprofit warning about the dangers of AI. “At every turn, they are really trying to just make sure whatever happens is good for Nvidia’s bottom line.”

Nvidia’s ambitions in China will loom large during the state dinner on Thursday, when Trump, Huang and Xi will all be in the same room. The White House is also planning a meeting with major AI executives to coincide with the event, according to CNN. Other industry executives, including Altman, are expected to attend.

But Huang’s presence carries extra weight. During a House hearing on Monday, Treasury Secretary Scott Bessent was asked if Trump understands the threat AI presents.

“I would just say the president is completely aligned with Jensen Huang, the CEO of Nvidia,” Bessent said.

WATCH: Nvidia CEO Jensen Huang says safety is an engineering problem