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Fareed Zakaria GPS

Interview with Jake Sullivan. Interview With Carnegie Russia Eurasia Center Director Alexander Gabuev; Interview With Former Baltimore Health Commissioner Dr. Leana Wen; Interview With Author Derek Thompson. Aired 10-11a ET

Aired August 17, 2025 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[10:00:46]

FAREED ZAKARIA, CNN ANCHOR: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world, I'm Fareed Zakaria coming to you live from New York.

(BEGIN VIDEOTAPE)

ZAKARIA: Today on the program, Vladimir Putin and Donald Trump meet again, this time in Alaska, supposedly to pursue peace. No deals were made, but the rehabilitation of the Russian president has certainly begun.

I'll talk about all of this with the former National Security adviser, Jake Sullivan, and then Alexander Gabuev, a top Russia analyst.

Also, the White House just canceled half a billion dollars of research funding for the MRNA technology that brought us the COVID vaccine and shows promise in combating cancer.

Why would they do that? What does it mean for your health? I'll ask an expert.

Finally, hundreds of billions of dollars are currently being spent in America on A.I. Is this massive outlay of money propping up the entire American economy? And is it a bubble?

Derek Thompson will help us understand.

(END VIDEOTAPE)

ZAKARIA: But first, here's "My Take."

America is often criticized for being short term in its orientation, quick to change course. In fact, Washington often shows a steely consistency in its foreign policy. Consider the strategic outreach to India that began during the Clinton administration and was expanded on in a bipartisan manner over 25 years, until now.

Donald Trump's sudden, inexplicable hostility toward India reverses policies pursued under five administrations, including his own previous one. If it holds, this reversal may be the biggest strategic mistake of the Trump presidency so far.

After the Cold War, the U.S. began a sustained outreach toward India. President Clinton's visit in 2000 was hugely successful and opened up the possibility of a new, warm relationship between the two countries. The pivotal shift took place under George W. Bush. His administration realized that a rising China was transforming the international system, and the single most important counterweight to China could be India, then the world's second most populous country, which was also beginning to reform economically and integrate with the world.

A close relationship between Washington and New Delhi would be the key to preventing Chinese domination of Asia and securing America's interests in the region. The giant obstacle in the way of better U.S.- India ties was India's nuclear weapons program. Washington had penalized India for this to preserve the global nonproliferation regime. The Bush administration decided that India should be treated like a great power, like France or Britain or China.

It offered a historic deal that ended the isolation India had faced because of its nukes. That deal, expertly navigated on the Indian side by Prime Minister Manmohan Singh, marked a watershed in the relations between the two countries. After that, things got closer. The Obama administration saw India as key to its pivot to Asia and supported New Delhi's bid to become a permanent member of the U.N. Security Council. He greatly increased trade between the two economies.

The first Trump administration took an important leap forward politically. It elevated the Quad, a defense oriented group of the U.S., Australia, Japan and India, and gave it more substance. Trump also embraced and promoted his personal relationship with Prime Minister Modi. President Biden built on the Trump legacy, forging greater cooperation in defense and economics.

India began planning to cooperate with the U.S. in the manufacture of everything from fighter jets to computer chips. In the second quarter of this year, India exported more smartphones to the U.S. market than China.

India is a prickly country. It was colonized and dominated by the West, ruled by Britain for two centuries. After its independence. It was supported unequivocally by the Soviet Union, while America gave money and arms to its adversarial neighbor, Pakistan. Being a large, diverse, messy democracy, it has domestic interests that it cannot ignore.

[10:05:05]

Despite all this, Washington, through painstaking, patient diplomacy, was able to nudge New Delhi closer and closer so that the two countries' interests and actions were aligned.

Enter Trump 2.0. With little warning, Donald Trump has undone decades of painstaking effort by American diplomats. He has placed India in the highest category of tariff countries, along with Syria and Myanmar, while placing Pakistan at just 19 percent and offering joint efforts to look for oil in that country. There is little accessible oil there. He met with Pakistan's army chief in private, a Trump family backed firm has had ties to Pakistan's National Crypto Council, all fueling suspicions of backroom deals.

Trump has suddenly turned on India, insulting its economy, calling it dead. In fact, India has had the fastest growing large economy in the world for several years now and is the world's fourth largest economy and will likely overtake Germany by 2028 to become number three after the U.S. and China. It is the world's second largest importer of arms and has the second largest number of smartphone users.

India has a long history of seeking to be nonaligned. Under Modi it embraced a variation called multi-alignment, allowing it to freelance and maintain good ties with all sides. Persistent American diplomacy and the rise of China had been chipping away at that stance, and India had slowly but surely been embracing closer ties with America.

No more. Even if Trump reverses course once again, the damage is done. Indians believe that America has shown its true colors, its unreliability, its willingness to be brutal to those it calls its friends. They will understandably feel that they need to hedge their bets, stay close to Russia, and even make amends with China. The country is united in its shock and anger at Trump's insulting behavior.

When I'm in India, I often urge the country to forge closer ties with America, telling Indians that they should shed their ambivalence, that their destiny lies in a great partnership between the world's oldest and its largest democracy. Today, I would be hard pressed to urge Indians to follow that advice.

Go to CNN.com/Fareed for a link to my "Washington Post" column this week, and let's get started.

On Friday in Alaska, the United States government quite literally rolled out the red carpet for Vladimir Putin. The Russian leader's plane was escorted by American jets. Once on the ground, Putin was met with applause and a warm handshake from President Trump.

Trump had suggested a 75 percent chance of success at the summit. But as the speeches from the leaders afterward laid bare, there was no agreed solution for ending the war in Ukraine. Notably absent from the summit was Ukrainian President Volodymyr Zelenskyy, who will instead meet Trump at the White House tomorrow alongside European leaders.

To break it all down, I'm joined by President Biden's National Security advisor, Jake Sullivan.

Welcome, Jake. It seems to me that, you know, if you had to choose a kind of win loss, Putin won and Trump lost in the sense that Putin achieved the goals he was trying to achieve, he keeps the military campaign up. No sanctions. All the talk of new sanctions against him have been -- have been tossed away. And there's no -- there's no deal he has to worry about.

And as far as I can -- one can tell at this point, Trump didn't get very much. There are some talk Witkoff now makes of some concessions they made.

What's your sense?

JAKE SULLIVAN, FORMER U.S. NATIONAL SECURITY ADVISER: Well, Fareed, as you know, frequently with these high-stakes summits, it's hard to tell who won and who lost. But on this one, there is a really pretty simple metric, as you just laid out. What did each leader go into the summit to try to accomplish, and did they accomplish it?

Well, President Trump went in to accomplish an immediate ceasefire, and in the absence of a ceasefire, the imposition of what he called severe consequences. President Putin went into the summit trying to avoid both a ceasefire and severe consequences. And since there is no ceasefire and there are no consequences on the back end of the summit, it's pretty clear that Putin walks away the winner.

But of course, it's early innings. There's still a lot of game left to be played. So President Trump still has the capacity going into his meeting with President Zelenskyy and European leaders tomorrow, and ultimately carrying forward this diplomacy to get some points on the board.

[10:10:07]

Unfortunately, I think what happened in Alaska, you have to say very much advantaged Putin.

ZAKARIA: So let's -- let me play devil's advocate and give you what I assume is Donald Trump's perspective. Look, the Russians are four times bigger in population, 10 times bigger economically. The Ukrainians don't have a very good cards, as he keeps saying. What he's going to try to do is get Putin to agree to security guarantees for Ukraine. That is a big thing. And Witkoff says that Putin has sort of agreed to those.

He's going to ask for some border adjustment. Again, Witkoff says they've agreed to those. In return for that, Ukraine has to give up every -- you know, has to agree to let the Russians keep about 20 percent of Ukraine, et cetera.

What's wrong with that deal? You know why wouldn't it work?

SULLIVAN: Well, first, as I said, it's early innings, so there's more to play. But, Fareed, let's just be clear about what Donald Trump said as the objective for this summit himself. It was to produce an end to the fighting, a halt to the fighting, so that these negotiations could continue. And he said he was going to impose massive sanctions on Russia if he didn't get that. He came out of the summit actually having completely flipped his position and aligned with President Putin, saying, no, no, no, no ceasefire will work towards an end of the war on an open-ended timeline.

Now, on the question of, does Russia have all the leverage and Ukraine lack all the leverage? I think this is belied by a simple fact, which is that for three and a half years, Russia has tried to take the whole Donbas militarily. They have not succeeded in doing so. And now Russia is trying to achieve diplomatically what they couldn't achieve militarily. And my concern is that President Trump seems to have intimated to President Putin that he would support actually having Ukraine not just cede the territory it's already lost to Russia, which is problematic enough, but actually give up territory that Ukraine currently sits on.

And the second point I would make is, I think part of the reason that Putin came to this summit in the first place is he was worried about further economic pressure from Washington. He was worried because of the fragile state of his economy. President Trump has basically signaled to Putin that for the time being, he's not going to impose additional pressure. This puts Putin in a position where he's got time and space to continue this brutal war of aggression against Ukraine. That is the challenge.

But on the question of security guarantees, let's see, if it turns out that Russia does agree to substantial security guarantees provided by the U.S. and Europe to Ukraine, that would be a good thing. Steve Witkoff seems to have suggested something along those lines today. Let's see if that comes to pass.

ZAKARIA: Jake, I wonder if you have a thought on this. I've often looked at Trump's views on Russia, and they seem stuck in the 1980s. He talks about Russia as this mammoth superpower. You know, he thinks of the summit between him and Putin as sort of like those Cold War summits between Nixon and Brezhnev. He -- you know, he talks about Russia being unbelievably strong.

He even talked about it spanning 11 time zones, which it doesn't. The Soviet Union spanned 11 time zones. So it does feel like there is this massive overestimation of Russian power at the heart of Trump's view of Russia.

SULLIVAN: I agree with that, both in the macro sense that when he looks at Putin, he sees this very powerful leader of a very powerful country as opposed to a leader of a country whose population is declining, whose economy is declining, whose future prospects in technology and everything else that's going to determine success in the 21st century declining. So he's still, as you said, sees Russia from the past.

And also, specifically in the war in Ukraine, he sees Russia, as you put it, and as he has said, as holding all the cards, when in fact Ukraine has stood up bravely and resisted Russia's efforts to take over the country, pushed them back from Kyiv, recovered more than half the territory that Russia initially occupied. And as the central bank governor of Russia recently publicly stated, the Russian war machine is being fueled by an economy that is starting to sputter.

And so now is the moment for the United States, alongside Europe, to put Ukraine in the best possible position to get a true and just peace out of this. Now is the time to increase the pressure on Russia, increase support to Ukraine, and I fear that what's come out of Alaska is the reverse of that. But let's see what happens this coming week, because President Zelenskyy will get the chance to make the case.

ZAKARIA: Stay with us. Stay with me, Jake.

Next on GPS, I will ask Jake Sullivan what it would take to end the war in Gaza, and who is to blame for that tragedy continuing.

[10:15:06]

(COMMERCIAL BREAK)

ZAKARIA: In Israel today massive crowds of Israelis took to the streets and launched a nationwide strike as they urged an end to the war in Gaza and for a deal to free the remaining hostages.

It is one of the country's largest coordinated protests since the war began nearly two years ago. Organizers say hundreds of thousands of people are taking part. All of this comes as Israel's government intensifies its assault on Gaza, and Palestinians there face a deepening hunger crisis.

[10:20:01]

To discuss, I'm back with Jake Sullivan, who served as President Biden's National Security advisor.

Jake, you wrote a piece in an Israeli newspaper, an op-ed in which you said there are no further military gains to be gotten from this war. Israel should stop, negotiate a deal that ends the war and brings the hostages back. People have been saying this for months, and the argument is that Bibi Netanyahu doesn't want to do this because that would mean the end of his government, because accepting that there is something called Hamas that you have to negotiate with and sign a deal with, would outrage the extreme right-wing members of his government, and they would pull their support and he would fall.

If that's the case, you know, there was nothing in your argument that would address that reality.

SULLIVAN: Well, first of all, it is definitely time for this war to end. It is a god-awful, heartbreaking human tragedy every single day seeing those images that touch all of us everywhere around the world. And you don't have to take it from me. You can just listen to so many Israelis.

There are not further material military objectives to achieve. There is so much suffering -- continuing military. Of course, it comes down to the prime minister making the decision for it to stop. And now it's the people of Israel who are taking to (INAUDIBLE).

ZAKARIA: Is this happening? Yes, it is.

SULLIVAN: -- is what I believe should happen. And if Prime Minister Netanyahu won't do so because of his politics, that is very much on him. And increasingly you are hearing voices from the Israeli security establishment saying there's not a credible reason to continue this war. And that is why I believe it was important for those of us who have a voice in Israel to speak out and to make our case as powerfully as we possibly could. ZAKARIA: But you don't -- you didn't address the reality that people

say Netanyahu wants this war to continue. These are the same Israelis you're talking about because he wants his government to survive.

SULLIVAN: At the end of the day, this is going to be up to the Israeli people. And that's who I was speaking to in the op-ed, to the people of Israel, directly, publicly making a case I had previously made privately. And the Israeli people are now making their voices heard.

Will it be enough to get the prime minister to change course? I don't know. What I do know is what the right answer is, which is end the war, bring the hostages home, end this suffering, end this starvation, end the unnecessary death. And let's move forward with a long term solution here that includes a two-state solution and a Palestinian state. That is what should happen. The reality of Prime Minister Netanyahu continuing this war at this point does not make sense. And I think it's important for us to be unequivocal in stating that.

ZAKARIA: The people who want to continue the war say, look, at the end of the day, that would mean Hamas will still be standing and Hamas will, in a sense, have won. And we can't allow that to happen. Is it possible to completely destroy every Hamas fighter, every fighter who claims to be affiliated with Hamas?

SULLIVAN: What Israel has already accomplished is it's destroyed Hamas's military formations. Late last October, it took out Hamas's top leader, the author of the October 7th massacre. And now it is not in a position to kill every last living member of Hamas. That is not possible. But there is actually a good example of how Israel can proceed. The ceasefire that the Biden administration negotiated with Hezbollah.

Israel didn't kill any Hezbollah fighter, and Israel had to worry about Hezbollah possibly rearming, and therefore has had to take steps to ensure that doesn't happen. It can apply that same model with Hamas. It can make sure that Hamas can never conduct another October 7th, and it has even more capacity to stop Hamas from rearming than it does to stop Hezbollah from rearming.

And yet, that deal with Hezbollah was profoundly in Israel's interest. And an end of the war in Gaza would be profoundly in Israel's interest as well. There is a template here for how to do this without trying to do the impossible, which is to kill every last person who calls themselves Hamas.

ZAKARIA: Jake Sullivan, always good to have you on. Thank you.

Next on GPS, back to the Russia summit. Was Putin the big winner? I'll ask a seasoned Russia observer when we come back what his calculation was and what he's made of it.

(COMMERCIAL BREAK)

[10:29:19]

ZAKARIA: The big winner of Friday's summit, at least in terms of optics, seems to be President Vladimir Putin. He gained the legitimacy of a red carpet reception by the American president and didn't have to do any kind of ceasefire for the war he started in Ukraine.

To help us better understand the possibilities of peace and what is going on, joining me now is Alexander Gabuev. He's the director of the Carnegie Russia Eurasia Center based in Berlin.

Alexander, let me ask you something about Vladimir Putin's strategy here because he seems to have directed his strategy at President Trump personally. Now, lots of leaders do this now. They figure it out, which is that, you know, you flatter Trump enormously personally. You bring him gifts. Hopefully they're gold in some way. You talk about what a great man he is.

So, what Putin did was he gave Trump a series of -- you know, showered him with praise and said -- confirmed something Trump had been saying all along, which is if Trump had been president, this war would never have happened. A rather bizarre claim to make, because that's -- that says Vladimir Putin, who has this deep-seated, long-standing grievance about Ukraine, which he keeps talking about is structural and with deep roots and historical, wouldn't have invaded because, you know, he had a better relationship with the guy in the White House.

He then goes on to even endorse the claims about the 2020 election being stolen. He -- you know, he showers Trump with praise personally and it seems to work. I mean, do you think at some level Putin's strategy was not a strategy towards America, but just towards Trump?

ALEXANDER GABUEV, DIRECTOR, CARNEGIE RUSSIA EURASIA CENTER: I agree with you. President Trump is the commander-in-chief and showering him in praise is not unique to Putin. But Putin can give Trump something that no western interlocutor and President Zelenskyy cannot give. It's exactly this narrative that war in Ukraine is Biden's war, and it's not Trump to inherit. It's really that 2020 election has been stolen and so on.

President Volodymyr Zelenskyy cannot and will not use this language neither will any of the European interlocutors. And that's part of the secret sauce of this bromance between President Trump and Vladimir Putin.

ZAKARIA: Now, the one thing he did seem to get -- President Trump did seem to get or insist on was that there had been no broader conversation about U.S.-Russia relations, which he had kept teasing about. You know, we're going to do great deals together unless the Ukraine war is sorted out. I mean, that seems like why the lunch was canceled.

Do you think that was -- you know, was one of Putin's goals to in some way broaden the relationship to something beyond the Ukraine war?

GABUEV: That's the only unaccomplished goal on President Putin's bucket list. He wanted to compartmentalize the relationship with the United States and make war in Ukraine just one part of it. Well, other parts like giant investment opportunities, he promises President Trump's envoy, Steve Witkoff, or arms control or various regional crises around the world. All of that will be on the table and will continue in parallel while Russia and the United States are looking for a solution out of Ukraine.

So, the only good news out of this summit is that President Trump didn't give Putin that path. And he said, we solve Ukraine first, and then we continue with everything else. The problem is that unfortunately, apart from giving Putin a red-carpet welcome and parroting his narrative, so having this very solid personal rapport, it seems he really has shot himself in the foot by canceling his own negotiation strategy, which was ceasefire first and then we go into substantive talks.

To me, it was very clear that President Putin was not ready for a ceasefire. Continuation of the war against Ukraine remains his only point of leverage. He believes that he is winning this war gradually, and then Ukraine is not losing much territory, but it's losing its manpower and that it's a gradual path of implosion. So, time is on his side, and this is why he will not stop the killing unless he knows the end goal, which he believes should be on his terms.

ZAKARIA: So, you know Ukraine very well as well. If Trump presents Zelenskyy with a deal and says, look, I've negotiated this deal with Putin. You know, he's going to get a bunch of the land, maybe not all of it. He's agreed to security guarantees. You have to take it or leave it. Is Zelenskyy in a position to be able to agree to such a deal?

GABUEV: I don't think that the domestic situation in Ukraine or Zelenskyy's approval ratings, which are sliding after his self- inflicted conflict with the anti-corruption bodies really matters here. President Putin, based on what we know by now, suggests to trade Ukrainian territory for Ukrainian territory. He is ready to abandon his claim and his position against three regions in Sumy, Kharkiv and Dnipro, and surrender parts of Donetsk region. Well-fortified cities of Sloviansk and Kramatorsk, and adjustment settlements that have been turned into a network of fortresses since 2015.

[10:35:04]

This is the most prized defense asset that Ukraine has. Beyond that, just the terrain, the river network doesn't allow to build something similar in case Russia invades. So, Ukraine militarily is not well advised to surrender that. And then the society and the army are very unlikely to accept that deal.

So, this is a poison pill. President Putin has first presented his inflated asks and then dialed down.

ZAKARIA: Alexander, thank you so much. We have to leave it at that. We will be back.

(COMMERCIAL BREAK)

[10:40:21]

ZAKARIA: The Trump administration's war on the scientific establishment ratcheted up last week as secretary of Health and Human Services, RFK Jr. announced plans to cut nearly half a billion dollars in federal funding for mRNA vaccine research. MRNA is a cutting-edge vaccine technology that was instrumental in managing the COVID-19 pandemic and has been cited as potentially transformative in the treatment of other infectious diseases and even cancer.

Dr. Leana Wen joins me to discuss the repercussions from this decision and others. She is a "Washington Post" contributing columnist who previously served as health commissioner of Baltimore. Leana, welcome.

Explain to all of us, you know, just so we understand, what is it that is so special about the mRNA vaccine? I'm having sort of, you know, flashes -- flashbacks to COVID. And I think we all knew this, but just remind us.

DR. LEANA WEN, CNN MEDICAL ANALYST: Well, how the mRNA vaccine works, Fareed, is that it's essentially a set of instructions that tell the body to make a harmless piece of virus. In that way the immune system learns to respond to it and then the next time when it's exposed to that disease it knows to fight it really quickly.

The reason why the mRNA technology is so transformative is that previously, the traditional vaccine technologies may take months or years to produce a vaccine in large quantity. The mRNA process cuts that time down to a matter of weeks to months, and that time savings could really be a huge difference when it comes to a novel virus as we saw during COVID, or if we have a pandemic in the future that -- where we need to have large scales of vaccines be deployed and manufactured, then we do need technology like mRNA instead of relying on cells and egg based vaccines that will take a lot longer.

ZAKARIA: And what do you make -- I'm sure you saw the piece by Jay Bhattacharya, the new head of the NIH, which said, look, we're still doing some basic research, but there were a lot of potential side effects. So, we did -- you know, we didn't know what the correct dosage was. There were all kinds of unanswered questions about mRNA that we need to first thoroughly investigate before we go. We -- you know, we jump all in on the mRNA. What do you say to that?

WEN: I would say that at this point, the mRNA vaccine, specifically the COVID vaccines from Pfizer and Moderna, are some of the most well studied vaccines in the world. They have been given to hundreds of millions of people worldwide. There are many studies now showing their safety.

We do know that in terms of efficacy that they are not so effective at preventing disease, but they are very effective at reducing the likelihood of severe disease, especially in vulnerable people. We also know that there could be potential to treat cancers. There are now clinical trials ongoing, for example, to treat pancreatic cancer using mRNA technology, which is a very deadly cancer. Why would we not want to have every tool at our disposal and continue the investments that have already been made?

ZAKARIA: The cuts to the NIH and to the NSF, the National Science Foundation, are pretty substantial. I mean, 40, 50 percent of their budget. Does -- is this -- you know, describe for us, you know, working scientists on the ground, what does this mean? This -- you know, I'm assuming it means whole labs shut down and things like that.

WEN: We are already seeing many scientists have had their grants halted, often without explanation. But then they find out that their grants contain -- their research contain keywords like health disparities or gender or health equity or HIV or coronavirus or vaccines, any number of things that this administration seem to not be in favor of.

We're also seeing billions of funding to academic institutions, to universities being put on pause or frozen. The universities then have had to significantly restrict their budgets. They are hiring freezes, offers that are made to post docs, graduate students, faculty have been rescinded in some cases, and many researchers are now really scared.

And so, there are already really significant impacts on American scientists. And also on young scientists, many of whom are now saying, well, they don't know if they want to stay in the sciences because they don't know if there's a future for them here.

ZAKARIA: And what do you sensing? You wrote your column in "The Post" about the way Europe is aggressively trying to recruit American scientists.

[10:45:07]

My own anecdotal evidence is that China has been laying out the red carpet for all the graduate students being kicked out of -- out of America. Are these numbers at this point significant? I mean, should we think that there is actual -- you know, there is a kind erosion of America's scientific supremacy.

WEN: I think the brain drain is real, and it is very true that our infrastructure that we've taken so many years to build is actively being threatened. I spoke recently with the president of Aix-Marseille University in France, who said that back in March he was hearing all these stories of his colleagues whose work was being censored and whose grants were being cut and who were being forced out of their jobs.

And he started this program at his university for welcoming and recruiting American scientists. And they are on track now this year to welcoming about 30 American scientists. They received over 600 applications, I believe, from scientists at Hopkins and Stanford and Columbia and even at NASA. And this idea is gaining traction.

The European Union is investing 600 million euros to recruit American scientists. The French parliament has a bill to establish a new category for scientific refugees from the U.S. And I just have to say, this is really unimaginable even a year ago that this was going to be the case. Aix-Marseille University currently welcomes refugees from countries like Syria, Lebanon, from Ukraine. Who thought that the U.S. would be joining that list?

ZAKARIA: Leana, pleasure to talk to you. Thank you so much for joining us.

WEN: Thank you, Fareed.

ZAKARIA: Next on GPS, will artificial intelligence save the U.S. economy or is it a bubble waiting to pop? I'll talk to Derek Thompson who has some very interesting thoughts on all of this.

(COMMERCIAL BREAK)

[10:51:35]

ZAKARIA: If you're still skeptical about A.I. and aren't sure how important it is, my next guest says that without it, American economic growth right now would be meager, and stock market returns would be putrid.

Indeed, 60 percent of stock market growth in the last year has come from A.I. related companies. Derek Thompson writes about politics and culture and economics on an excellent blog on Substack, and is co- author of the bestselling book "Abundance." He joins me now.

Derek, begin by painting a picture of how central all this spending that these big companies like Google and Microsoft and Meta are doing on artificial intelligence. The spending they're doing, how central is that to the American economy today?

DEREK THOMPSON, AUTHOR ON SUBSTACK: I want to set things up this way. We are so used to talking about what A.I. will be in the future, what jobs it will replace in the future, what it will do in the future. I think that kind of framing is hogwash right now. We need to talk about what artificial intelligence is doing to this economy as we speak.

The biggest hyperscalers, that is to say, the big tech companies like Meta and Microsoft are spending hundreds of billions of dollars, maybe up to $400 billion this year on the infrastructure to build artificial intelligence. That's things like computer chips, data centers and electricity.

Last quarter, spending on artificial intelligence added more to GDP than total consumer spending. That statistic is completely crazy. Consumer spending is 70 percent of the economy. There are, what, 300, 320 million Americans?

The growth of all of their spending on everything gyms, mortgages, rent did not exceed what these handful of companies spent on GPUs, computer chips, data centers, electricity to build out artificial intelligence. So, we need to talk about not just what A.I. will be in the future, but how it is defining the economy of 2025.

ZAKARIA: And then, as you say, if you look at the stock market, basically stock market -- the stock market growth is mostly the growth of these seven or maybe 10 or 20 companies. Does all this tell you, Derek, that maybe this is a bubble? Or maybe put it differently, you remember in the -- in the late 1990s, you had all these companies that were laying broadband for the internet WorldCom, Global Crossing, Nortel, and they laid all this fiber optic cable around the world, which was amazing. And it meant that everybody could be connected.

But they went out of business because they had put so much bandwidth out there that the cost collapsed. Is there some similar dynamic at work here where this is a kind of crazy race? Can it be justified? I mean, are these companies going to eventually make this money back.

THOMPSON: And here's a big question, is artificial intelligence a bubble or is it the most important technology of the 21st century? And my answer to that question is yes, A.I. is most likely both a bubble and eventually going to be the most important technology of the 21st century, and that would make it the first technology to essentially shut both of those boxes.

The railroads, the 19th century were an extraordinary bubble. In fact, recessions in the 19th century were often called railroad depressions because it was crashes in railroad credit that were significantly responsible for crashing the economy in the 1800s.

[10:55:04]

Railroads were a bubble, and they ultimately changed the world. Computer spending was to a certain extent a bubble and then it also changed the world. As you said, the broadband buildout of the 1990s and early 2000 was a bubble, and it also changed the world.

So, I think what we're going to see in the next few years is that these hundreds of billions of dollars will not be able to be met with similar revenue for some of these companies, and there's going to be a bit of an adjustment. You can't simply extend A.I. growth by another $100 billion every single year for the foreseeable future.

I mean, at that point, you're talking about spending $4 trillion every single decade on this one technology. That's not sustainable. But, I think, even though we might see a bubble in the next few years, what's going to come out of that bubble is again, akin to the internet. We had a .com crash, but ultimately internet companies have defined the 21st century. I think we'll probably see an A.I. crash sometime in the 2020s, and also the companies that come out of that crash will probably define the 2030s.

ZAKARIA: Derek Thompson, pleasure to have you on. We'll have you on again soon. Thank you. And thanks to all of you for being part of my program this week. I will see you next week.

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