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The road to Kaimi’s ruin started in December, with an Instagram message about a Japanese monkey from a handsome stranger who called himself Mike. Over the coming months Mike and Kaimi would develop a friendship that quickly evolved into a romance.

Kaimi had no idea he had become ensnared in a romance scam known as “pig butchering,” from the Chinese phrase sha zhu pan — the name coming from the idea that scammers must “fatten up” victims first with flattery and fake bonding before stealing their money.

Experts told CNBC it’s easy to dismiss victims of these scams as ignorant or foolish, but doing so discounts how manipulative the scammers are.

Matt Friedman is the CEO of the Mekong Club, a Hong Kong-based organization that works with corporations to fight modern slavery. “Ten scams come by, and they’re very clearly a scam,” Friedman told CNBC. “But the 11th one, I even may even fall for it.”

The scam often starts with a simple text message – “Hi!” Many people disregard the messages that scammers send.

But if they respond, the scammers move quickly to establish a rapport. The mystery texter might say they’re a wealthy executive. They’ll share images of their lavish lifestyle. Eventually, they’ll try to make a meaningful romantic bond with the victim. It can take anywhere from a few weeks to a few months.

At the third stage, the scammers offer to “teach” the victim how to trade cryptocurrencies or foreign currencies. The scammer networks operate fake trading platforms that look “exactly the way they should look,” Friedman told CNBC. Victims are “taught” how to trade by their scammer, and the fake exchanges are engineered to show nonexistent profits of 15% to 20%.

When victims try to withdraw money or have run out of fresh funds, the fake exchanges shut down the accounts and demand payment. Panicked and encouraged by their so-called friend, the victims wire what little money they have left. The exchange and their “friend” block the victim shortly after.

It can take weeks before victims understand they’ve been scammed, and even longer to admit what has happened to them.

Experts told CNBC that the scammers on the phone aren’t the real beneficiaries of the scam, although they do sometimes get a cut of the proceeds. Most often, they’ve been trafficked to Cambodia, Laos, or Myanmar to work for organized scamming networks, according to extensive reporting from ProPublica and Vice.

Law enforcement and prosecutors acknowledge pig-butchering is a problem but tell victims they’re largely unable to help. Reported U.S. losses from investment scams totaled $3.31 billion last year, according to the FBI, but experts say that many victims are too embarrassed to report their losses.

The U.S. manages to recover relatively little. The Justice Department’s only public action seized just $112 million. Federal prosecutors in New York and Virginia have also been pursuing domain names and individuals linked to the scams.

Dennis, a small business owner in Maryland, told CNBC his scammer Sarah reached out to him on Facebook around the same time that Mike first reached out to Kaimi.

CNBC has altered their names to protect their identities, as both Dennis and Kaimi shared personally identifiable information and identity documents with their scammers, and as Kaimi has not disclosed his sexual orientation to everybody in his life.

Kaimi lost more than $120,000 to his scammer. Dennis lost around $500,000.

‘My love for you will last forever’

Mike first messaged Kaimi in late December, cracking a joke about a Japanese monkey that Kaimi had posted.

“When I was looking at who had messaged, I was like, ‘I don’t know if this person is real,'” Kaimi told CNBC. After a few days, Kaimi sent back a perfunctory message. Mike promptly responded and engaged enthusiastically with Kaimi, before suggesting they move to a messaging app called Line.

CNBC reviewed thousands of messages between Kaimi and Mike running through Apr. 2023.

They bonded over their shared love of travel, and Mike eventually invited Kaimi to visit him Seoul. They’d go shopping, Mike said.

Kaimi told Mike that his schedule as a teacher didn’t let him just jet around the world, and he’d have to save money for an international trip. When pressed, Kaimi told Mike about his financial difficulties, stemming from past credit-card debt.

Mike suggested teaching Kaimi how to trade in foreign currencies so he could travel to Seoul and pay off his debt.

Mike alternated between talking about making Kaimi rich and sending him what Kaimi described as “flowery” messages.

“My love for you will last forever,” Mike told him.

Kaimi acquiesced in January, and created an account on the forex platform Mike claimed he used, called DPEX.

DPEX wasn’t a real exchange, but a front controlled by the same scamming group that Mike belonged to.

Over the following weeks, Kaimi wired thousands of dollars from his bank to Crypto.com, a centralized exchange. He used it to buy ether and send it to DPEX’s wallets.

His transfers started small – the first was worth just $140. DPEX claimed it converted his ether transfers into Tether, a U.S. dollar stablecoin.

Mike and Kaimi’s first trade together was a bet against the Japanese yen falling in value. When Kaimi saw he’d made $20 on a $100 trade, he was sold.

Mike offered to help Kaimi structure a plan to use profits from DPEX pay off his $300,000 in student loans, mortgage, and credit cards. In February, Mike even “sent” $30,000 from his own DPEX account to Kaimi’s to help him move closer to his debt-free goal.

“I want to repay you as soon as possible, shrink down most of the debt, then plan a trip to Korea to see you,” Kaimi told Mike. Mike pressed Kaimi to add more to his account and join him in bigger bets. He grilled Kaimi about how else he could raise money, from friends or through loans.

In all, Kaimi sent DPEX more than $100,000 worth of ether. His paper profits grew handsomely: in one week in March, Kaimi’s balance went from $100,000 to $310,000.

“I thought I was someone who knew when they were being scammed, was able to discern things,” Kaimi told CNBC.

But when Kaimi told Mike he was planning to withdraw his funds, the penny dropped. DPEX froze Kaimi’s account, claiming that Mike’s generous $30,000 “gift” was a suspicious transaction.

Mike claimed his account was frozen too. “OMG,” Mike said. “we are the same.”

DPEX asked that Kaimi pay back that gift to unlock his full account balance. Kaimi had planned to do so anyway, but sent DPEX nearly $30,000 to settle the “debt.”

The scammers settled into a predictable pattern, pumping Kaimi for more and more fees and taxes. Kaimi paid $64,000 in apparent penalties, urged on by Mike. When the scamming operation asked him for another $65,000, Kaimi realized that there was no chance he was getting his money back.

When Mike pressed him to pay DPEX’s “fees,” Kaimi snapped. “I’ve filed a report to the FBI and the SEC,” he told Mike.

‘I thought of ending everything’

This is one of the images that Dennis’s scammer, “Sarah,” sent him. The face has been blurred to disguise the identity of the woman pictured, whose image may have been used without her knowledge.

Dennis didn’t have any reason to be suspicious when his first scammer, Sarah, messaged him on Facebook.

“I just said hi and bye,” Dennis told CNBC. “But she keeps approaching me,” he said. “We became friends.”

Sarah claimed she was a wealthy executive at a Chinese electric-vehicle manufacturer. She showed him photos of her “uncle” with Alibaba’s Jack Ma. She sent him photos and videos from luxurious stores and apartments.

But it was her show of affection and care more than her material wealth that drew Dennis close.

“They talk to you and manipulate you,” Dennis told CNBC. He was in the midst of separating from his wife. They shared a child together, and in his messages with Sarah, he shared his feelings of inadequacy as a father.

Sarah offered Dennis comfort. They talked for hours every day, and it was weeks before she first offered to teach him how to trade crypto.

Another picture “Sarah” sent Dennis.

Sarah said her powerful uncle ran a trading syndicate large enough to influence crypto prices and guarantee a profit. Experts say that scammers will often cite a well-connected relative as part of their fictitious success.

Sarah pointed him to an “exchange” called Bigone-Eth, and could only be accessed through a iOS app called Trust Wallet. Dennis sent thousands of dollars from Coinbase to Trust Wallet, and gave the fake exchange permission to control the crypto in his Trust Wallet.

Sarah guided him through trades that predictably returned 20% From late December through January, Dennis bought nearly $160,000 worth of bitcoin for his “Bigone-Eth” account, and invested $100,000 worth of his cousin’s Bitcoin with Bigone-Eth as well.

It wasn’t enough for Sarah, who told Dennis he needed to invest at least $500,000. Otherwise, she suggested, Dennis’ son would “suffer” because of Dennis’ laziness.

But like Kaimi, Dennis felt he’d made enough. The hammer fell when he went to withdraw his winnings: Bigone-Eth froze him out and demanded $180,000 to release his $1.2 million balance.

The demand made Dennis suspect that the broker was trying to scam him out of his money. It was only in March, months after he began talking with Sarah, he began to investigate romance scams and fake crypto brokerages.

Along the way, he conducted an internet search and found a company called Financial Fund Recovery, or FFR, which said it specialized in crypto asset recovery.

Bankrupt and ‘scammed out of my mind’

In late March, Dennis spoke with a person claiming to be an FFR employee, John Seth, who told Dennis that Sarah and the exchange were part of the same scam. Seth also promised he could recover Dennis’ assets, something Dennis now believes was a lie.

Just a few days after Dennis spoke with Seth, he got an unsolicited call from someone identifying himself as Benjamin Grey. He claimed he worked at Bigone-Eth, and told Dennis that he could recover his money for $100,000. Dennis never provided Bigone or Sarah with his phone number, and now suspects Grey was working with Seth to scam him out of more money.

But Dennis, more alone than ever, trusted Seth. Seth urged Dennis to pay the fee but keep it secret from Sarah and the Bigone-Eth scammers. He borrowed $100,000 from his parents and sent it to Grey through Coinbase.

Dennis didn’t notice that Grey’s wallet address was different from the original scammers, nor that Grey’s email address had a slight misspelling of Bigone-Eth’s name. Dennis thought he was on the verge of getting his money back, of repaying his parents and his cousin and moving on from his life.

Dennis was out another $242,000 by the time Seth told him to stop talking with Grey.

Seth suggested suing Grey and Bigone for the lost money. He sent Dennis an invoice detailing how FFR would put a “lien” on Dennis’ Bigone account — which, in fact, was a fictitious account at a fictitious exchange. Dennis would simply have to wire $42,000 to an Abu Dhabi bank account to get started.

This time, Dennis realized he was being “scammed out of his mind,” and blocked both Seth and Grey.

CNBC spoke with Seth, who strongly denied that FFR was running a scam. He implied that Dennis was lying to CNBC, and said that FFR did not have an employee named Benjamin Grey.

CNBC has reviewed financial documents, emails, blockchain transactions, and recordings of calls between Dennis, Grey, and Seth. Despite his claims to the contrary, the recordings show Seth encouraging Dennis to send money to Grey. Both Seth and Grey contacted Dennis using VoIP numbers from the same issuer. Both numbers were disconnected after CNBC reached out to them.

Other attempts to reach FFR were not successful. In a text conversation with the number Dennis offered for Grey, the person on the other end denied knowing anything about the interaction with Dennis. A customer service representative at FFR’s Abu Dhabi-based bank confirmed that company had an account there but declined to provide further information.

FFR used an address of a coworking space in the state of Georgia to register as a limited liability company in Georgia. Over the phone, a receptionist at that coworking space told CNBC that FFR was not a tenant there, and that the mailbox used on the registration form did not exist at that space.

But the receptionist said that a visitor had been looking for FFR’s office just a few weeks prior, and had told the receptionist that FFR had made off with a scam victim’s money.

‘Powerless’

In the U.S., law enforcement are still grappling with how to seize and restore victims’ funds. In California, Santa Clara county prosecutor Erin West is pushing regulators and law enforcement to better understand how these scams work.

West has had some success at a local level in seizing a few million dollars for a handful of victims. But she says without federal intervention and private sector support, putting a meaningful dent in scamming operations will be difficult, if not impossible.

“I wish I could save them all,” she told CNBC. Both Dennis and Kaimi reached out to West, who did what she could to connect them with the right people.

But Dennis and Kaimi’s losses form just a small fraction of the billions of dollars lost to scammers from thousands of victims. In 2022, the Department of Homeland Security estimated scam-related losses at over $3.3 billion. Kaimi has considered filing for bankruptcy. His local Hawaiian bank has closed his checking and savings accounts, according to a letter from the bank shared with CNBC. Kaimi said a bank employee told him his Crypto.com wire transfers were the reason for the closure but didn’t offer any more information to him.

He’s filed multiple complaints, with the FBI, Secret Service, and regulatory agencies, but hasn’t heard back from any of them.

Dennis said he’s been in regular contact with the FBI about the scam. CNBC traced Dennis’ bitcoin to a wallet that’s received more than 59,000 bitcoin, worth about $1.6 billion, since 2019. The trail ends after that wallet, which regularly transfers its contents to the crypto exchange Binance.

Crypto exchanges like Binance, Crypto.com and Coinbase are convenient waypoints for scammers because they have a trusted reputation and massive trading volume. All three exchanges have warned of the dangers of crypto scammers, but for some, that isn’t enough.

When he reached out to Crypto.com, the exchange told Kaimi they couldn’t help him get his money back.

“I’m not asking you to take responsibility of getting my money back,” he said. But he pointed out that his scammers had used the same wallet for months.

West says that while private partners in the banking and crypto industry often are conduits for these kinds of scamming operations, they are also ideally positioned to cut off the supply of fresh money to pig butchering networks.

“We are essentially fleecing our entire middle class of their generational wealth, and handing it to bad actors overseas, and nobody’s stopping this,” West told CNBC.

Shortly before publication, Cloudflare shut down Bigone-Eth’s domain name and flagged it as a suspected phishing site. Neither Cloudflare nor the FBI responded to a request for comment.

Within hours, Dennis’ scammer sent him the new domain name and begged him to respond to her. Dennis ignored her.

“Disappointing men with no sense of responsibility,” she wrote the next day.

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From Llamas to Avocados: Meta’s shifting AI strategy is causing internal confusion

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December 9, 2025

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From Llamas to Avocados: Meta's shifting AI strategy is causing internal confusion

Meta CEO Mark Zuckerberg makes a keynote speech at the Meta Connect annual event at the company’s headquarters in Menlo Park, Calif., on Sept. 25, 2024.

Manuel Orbegozo | Reuters

Meta CEO Mark Zuckerberg was so optimistic last year about his company’s Llama family of artificial intelligence models that he predicted they would become the “most advanced in the industry” and “bring the benefits of AI to everyone.”

But after including a whole section on Llama in his opening remarks during Meta’s earnings call in January of this year, he mentioned the brand name only once on the latest call in October. The company’s obsession with its open-source large language model has given way to a very different approach to AI, one focused around a multibillion-dollar hiring spree to bring in top industry talent that could help Meta take on the likes of OpenAI, Google and Anthropic.

As 2025 comes to a close, Meta’s strategy remains scattershot, according to insiders and industry experts, feeding the perception that the company has fallen further behind its top AI rivals, whose models are rapidly gaining adoption in the consumer and enterprise markets.

Meta is pursuing a new Llama successor and frontier AI model, codenamed Avocado, CNBC has learned. People with knowledge of the matter said many within the company were expecting the model to be released before the end of this year, but that the plan now is for that to happen in the first quarter of 2026. The model is wrestling with various training-related performance testing intended to ensure the system is well received when it eventually debuts, said the people, who asked not to be named because they weren’t authorized to speak on the matter.

“Our model training efforts are going according to plan and have had no meaningful timing changes,” a Meta spokesperson said in a statement.

With its stock underperforming the broader tech sector this year and badly trailing Google parent Alphabet, Wall Street is looking for a sense of direction and a path to a return on investment after Meta spent $14.3 billion in June to hire Scale AI founder Alexandr Wang and a handful of his top engineers and researchers. Four months after that announcement, which included Meta purchasing a big stake in Scale, the social media company raised its 2025 guidance for capital expenditures to between $70 billion and $72 billion from a prior range of $66 billion to $72 billion.

“In many ways, Meta has been the opposite of Alphabet, where it entered the year as an AI winner and now faces more questions around investment levels and ROI,” analysts at KeyBanc Capital Markets wrote in a November note to clients. The firm recommends buying both stocks.

Meta's latest hiring will help company's new wearables product line, says Big Tech's Alex Kantrowitz

At the heart of Meta’s challenge is the sustained dominance of its core business: digital advertising.

Even with annual sales in excess of $160 billion, Meta’s ad targeting business, driven by massive improvements in AI and the popularity of Instagram, is growing revenue north of 20% a year. Investors have lauded the company for using AI to bolster the strength of its cash cow and to make the organization more efficient and less bloated.

But Zuckerberg has much grander ambitions, and the new guard he’s brought in to push the future vision of AI has no background in online ads. The 41-year-old founder, with a net worth of more than $230 billion, has suggested that if Meta doesn’t take big swings, it risks becoming an afterthought in a world that’s poised to be defined by AI.

Until recently, Meta’s unique position in AI was the open-source nature of its Llama models. Unlike other AI models, Meta’s technology was made freely available so third-party researchers and others could access the tools and ultimately improve them.

“Today, several tech companies are developing leading closed models,” Zuckerberg wrote in a blog post in July 2024. “But open source is quickly closing the gap.”

He’s since started changing his tune. Zuckerberg hinted over the summer that Meta was considering shaking up its approach to open source after the April release of Llama 4, which failed to captivate developers. Zuckerberg said in July that, “We’ll need to be rigorous about mitigating these risks and careful about what we choose to open source.”

Avocado, when it’s eventually made available, could be a proprietary model, according to people familiar with the matter. That means outside developers wouldn’t be able to freely download its so-called weights and related software components. 

Some at Meta were upset that the R1 model released by Chinese AI lab DeepSeek earlier this year incorporated pieces of Llama’s architecture, the people said, further underscoring the risks of open source and hammering home the idea that the company should overhaul its strategy.

The company’s high-priced AI hires and leaders of the recently launched Meta Superintelligence Labs, or MSL, have also questioned the open-source AI strategy and favored creating a more powerful proprietary AI model, CNBC reported in July. A Meta spokesperson said at the time that the company’s “position on open source AI is unchanged.”

The Llama 4 flub was a significant catalyst in Zuckerberg’s pivot, the people said, and also led to a major internal shake-up. Chris Cox, Meta’s chief product officer and a 20-year company veteran who was hired as its 13th software engineer, no longer oversees the AI division, formally known as the GenAI unit, after the botched release, the people said.

Zuckerberg went on a spending spree to retool Meta’s AI leadership.

He landed on Wang, then Scale AI’s 28-year-old CEO, who was named Meta’s new chief AI officer and, in August, became the head of an elite unit called TBD Lab. Avocado is being developed inside TBD, people familiar with the matter said.

Alexandr Wang, CEO of ScaleAI speaks on CNBC’s Squawk Box outside the World Economic Forum in Davos, Switzerland on Jan. 23, 2025.

Gerry Miller | CNBC

OpenAI CEO Sam Altman said in June that Meta was trying to lure talent from his company with gigantic pay packages, including sky-high $100 million signing bonuses, which Meta said at the time was a misrepresentation.

Along with Wang came other tech bigwigs, including former GitHub CEO Nat Friedman, who heads the product and applied research arm of MSL, and Shengjia Zhao, who was a ChatGPT co-creator. They’ve brought with them modern methods that have become the standard for frontier AI development in Silicon Valley, and have upended the traditional software development process inside Meta, the people said.

Meta’s AI culture shift

Wang is now under pressure to deliver a top-tier AI model that helps the company regain momentum against rivals like OpenAI, Anthropic and Google, the people said. 

That pressure has only increased as competitors stepped up their game. Google’s Gemini 3, unveiled last month, has drawn solid reviews from users and analysts. OpenAI recently announced new updates to its GPT-5 AI model, while Anthropic debuted its Claude Opus 4.5 model in November shortly after releasing two other major models.

Analysts previously told CNBC that there’s no clear leading AI model, because some perform better on certain tasks like conversations or coding. But the one constant is that all of the major model creators have to spend a lot of money on AI to maintain any competitive edge, they said.

A hefty dose of that spending lines the pockets of Nvidia, the leading developer of AI graphics processing units. Nvidia CEO Jensen Huang laid out the state of play during his company’s earnings call in November, after the chipmaker reported 62% year-over-year revenue growth. He highlighted a number of model developers as big customers, including Elon Musk’s xAI.

“We run OpenAI. We run Anthropic. We run xAI because of our deep partnership with Elon and xAI,” Huang said. “We run Gemini. We run Thinking Machines. Let’s see, what else do we run? We run them all.”

At no point did Huang reference Llama, although elsewhere on the call he said Meta’s Gem, “a foundation model for ad recommendations trained on large-scale GPU clusters,” drove an improvement in ad conversions at Meta in the second quarter.

Wang isn’t the only Meta exec feeling the heat.

Friedman has also been tasked with producing a breakout AI product, the people said. He was responsible for Meta’s September launch of Vibes, a feed of AI-generated short videos, which is widely viewed as inferior to OpenAI’s Sora 2, they said. Former employees and creators told CNBC that the product was rushed to market and lacked key features, like the ability to generate realistic lip-synched audio.

Although Vibes has attracted more interest to the company’s stand-alone Meta AI app, it trails the Sora app as measured by downloads, according to data provided to CNBC by Appfigures.

Pressure is being felt across Meta’s AI organizations, where 70-hour workweeks have become the norm, the people said, while teams have also been hit with layoffs and restructurings throughout the year.

In October, Meta cut 600 jobs in MSL to reduce layers and operate more quickly. Those layoffs impacted employees in areas like the Fundamental Artificial Intelligence Research unit, or FAIR, and played a key role in chief AI scientist Yann LeCun’s decision to leave the company to launch a startup, according to people with knowledge of the matter.

LeCun declined to comment.

Yann LeCun, Meta’s former chief AI scientist, says people move on.

Getty Images

Zuckerberg’s high-stakes decision to turn to outsiders like Wang and Friedman to lead the company’s AI efforts represented a major change for a company that’s historically promoted long-tenured workers to top posts, the people said.

In Wang and Friedman, Zuckerberg has handed the controls to experts in infrastructure and related systems, rather than consumer apps. The new leaders also brought a different management style and one that’s unfamiliar inside Meta.

In particular, insiders told CNBC that Wang and Friedman are more cloistered in their communications, a contrast to a historically open approach of sharing work and chatting on the company’s Workplace internal social network

Members of Wang’s TBD Lab, who work near Zuckerberg’s office, don’t use Workplace, people familiar said, adding that they’re not even on the network and that the group operates like a separate startup.

However, Zuckerberg isn’t giving the new AI leadership team complete autonomy. Aparna Ramani, engineering vice president, who has been with Meta for nearly a decade, has been put in charge of overseeing the distribution of computing resources for MSL, the people said.

And in October, Vishal Shah was moved from leading the company’s metaverse initiatives within Reality Labs, where he’d been for four years, to a new role as vice president of AI Products, working with Friedman. Shah is considered a loyal lieutenant who has helped act as a bridge between the company’s traditional social apps like Instagram and newer projects like Reality Labs, the people said.

Meta confirmed last week that it plans to cut resources to its virtual reality and related metaverse initiatives, shifting its attention to its popular AI-infused glasses developed with EssilorLuxottica.

‘Demo, don’t memo’

One of the biggest points of tension between the old and the new is in the realm of software development, people familiar with the matter said.

In creating products, Meta has traditionally sought input from numerous groups responsible for areas like front-end user interface, design, algorithmic feeds and privacy, the people said. The multistep process was intended to ensure some level of uniformity among the company’s apps that attract billions of users each day.

But the many internal tools built over the years to help coders create software and features weren’t developed to accommodate foundation models. Meta’s new AI leaders, notably Friedman, view them as bottlenecks slowing down what should be a rapid-fire development process, the people said.

Friedman has called for MSL to use newer tools that have been calibrated to incorporate multiple AI models and various kinds of coding automation software often called AI agents, the people said.

“They have this mantra now saying ‘Demo, don’t memo,'” Lovable CEO Anton Osika said in October at the Masters of Scale Summit in San Francisco, about Meta’s new development process.

Osika said Meta employees have been using Lovable’s tools to more quickly build internal apps, specifically referencing the company’s finance teams, which have turned to Lovable to create software for tracking head count and planning.

An illustration photo shows the event of Meta launching the Vibes platform, Suqian City, Jiangsu Province, China on September 26, 2025.

Cfoto | Future Publishing | Getty Images

While Meta continues retooling its app development methods and pushes toward releasing Avocado, the company has been experimenting with other AI models on its products. Vibes, for instance, relied on AI models from Black Forest Labs and Midjourney, a startup that counts Friedman as an advisor.

Meta is also altering its approach to infrastructure, and is increasingly turning to third-party cloud computing services like CoreWeave and Oracle for developing and testing AI features as it builds out its own massive data centers, the people said.

The social media giant announced in October that it signed a joint venture agreement with Blue Owl Capital as part of a $27 billion deal to help fund and develop the gargantuan Hyperion data center in Richland Parish, Louisiana. The company said at the time that the partnership provides the “the speed and flexibility” Meta needs to build the data center and support its “long-term AI ambitions.”

Despite the company’s challenges in 2025, Zuckerberg’s message to employees and investors is that he’s more committed than ever to winning. At the top of the company’s earnings call in October, Zuckerberg said MSL is “off to a strong start.”

“I think that we’ve already built the lab with the highest talent density in the industry,” Zuckerberg said. “We’re heads down developing our next generation of models and products and I’m looking forward to sharing more on that front over the coming months.”

WATCH: Data center demand driving infrastructure credit

Data centers demand driving infrastructure credit: Clifford Capital

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Paramount’s hostile Warner Bros. bid, Meta’s AI course correction, McDonald’s value crackdown and more in Morning Squawk

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December 9, 2025

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Paramount's hostile Warner Bros. bid, Meta's AI course correction, McDonald's value crackdown and more in Morning Squawk

David Ellison, chairman and chief executive officer of Paramount Skydance Corp., center, outside the New York Stock Exchange (NYSE) in New York, US, on Monday, Dec. 8, 2025.

Michael Nagle | Bloomberg | Getty Images

This is CNBC’s Morning Squawk newsletter. Subscribe here to receive future editions in your inbox.

Here are five key things investors need to know to start the trading day:

1. One battle after another

Paramount Skydance CEO David Ellison isn’t taking his loss to Netflix in the bidding war for Warner Bros. on the chin. Paramount announced yesterday that it’s going directly to WBD shareholders with a $30 per share, all-cash hostile bid, with Ellison telling CNBC that he wants “to finish what we started.”

Here’s what to know:

  • Paramount’s offer is the same one that Warner Bros. Discovery executives passed over in favor of Netflix’s last week. But this time, the decision will rest in the hands of WBD stakeholders.
  • President Donald Trump over the weekend said the Netflix-WBD deal “could be a problem,” citing the streamer’s potential market share should the deal go through. Trump also said he’d “be involved” in the approval process.
  • Paramount’s hostile bid is backed by Jared Kushner — Trump’s son-in-law — according to a regulatory filling.
  • Meanwhile, Comcast President Mike Cavanagh said he believed his company’s proposal was “light” on cash compared to the other two bids.
  • Paramount shares surged 9% in yesterday’s session while shares of Warner Bros. Discovery jumped more than 4%. Netflix shares pulled back by more than 3%.
  • Follow live market updates here.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC upon Comcast’s planned spinoff of Versant.

2. DC’s AI moves

Nvidia H200 chips in an eight-GPU Nvidia HGX system.

Nvidia

Trump announced yesterday that Nvidia will be allowed to ship its H200 artificial intelligence chips to “approved customers” in China and other countries. The caveat: Only if the U.S. gets a 25% cut.

The Department of Commerce is finalizing the details, Trump said in a social media post, adding that “the same approach will apply to AMD, Intel” and other U.S. firms. Shares of Nvidia, AMD and Intel all rose in overnight trading. Trump also said that Chinese President Xi Jinping “responded positively” to the plan.

Meanwhile, House Democrats are creating a commission on AI, hoping to position themselves as leaders on the issue. As CNBC’s Emily Wilkins notes, the move comes as the tech industry ramps up its presence in D.C. and its campaign spending.

3. From Llamas to Avocados

Meta CEO Mark Zuckerberg makes a keynote speech during the Meta Connect annual event, at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.

Manuel Orbegozo | Reuters

Meta has poured billions of dollars into overhauling its AI strategy. But as CNBC’s Jonathan Vanian reports, the shift has led to internal confusion and a haphazard strategy.

CEO Mark Zuckerberg began the year by touting Meta’s Llama family of AI models, which he said would become the “most advanced in the industry.” But CNBC has learned that Meta is now focused on a new AI model codenamed Avocado that could be proprietary instead of open source.

Elsewhere in Big Tech, Apple has seen significant churn among its top brass in recent days, including the departures of its head of AI and its top lawyer. The iPhone maker’s chip leader, Johny Srouji, reassured staff in a memo yesterday that he isn’t planning to leave “anytime soon,” following a report that he was considering departing.

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4. Farm aid

Dan Duffy uses a tractor to plant soybeans on land he farms with his brother on April 28, 2025 near Dwight, Illinois.

Scott Olson | Getty Images

Trump announced a $12 billion aid package for farmers impacted by tariffs yesterday, saying the funds would come from revenues generated by the tariffs.

A White House official told CNBC that up to $11 billion of that sum will go to the Agriculture Department’s new Farmer Bridge Assistance program to distribute one-time payments to row crop farmers. The other $1 billion will be held as the department evaluates the market, the official said.

Trump, meanwhile, suffered a blow in court yesterday. A federal judge overturned his ban on new wind power projects, saying it was “arbitrary and capricious and contrary to law.”

5. McDonald’s New Year’s resolution

A customer waits to order food at a McDonalds fast food restaurant on July 26, 2022 in Miami, Florida.

Joe Raedle | Getty Images

McDonald’s is putting its franchisees under a more intense microscope in 2026. The fast-food titan said it will look at how their prices align with value goals as McDonald’s aims to woo more price-conscious consumers, according to a memo viewed by CNBC.

McDonald’s will update its standards for franchisees — who run about 95% of McDonald’s restaurants — and “holistically assess” their pricing, the memo shows. If franchise owners do not comply with the new standards, they could face penalties such as being barred from opening additional stores or having their agreements with the company terminated.

The Daily Dividend

IBM CEO Arvind Krishna joined CNBC’s “Squawk on the Street” yesterday to discuss the company’s acquisition of data streaming platform Confluent in an $11 billion deal. Confluent shares soared 29% following the announcement.

IBM CEO Arvind Krishna on $11 billion acquisition of Confluent

— CNBC’s Alex Sherman, David Faber, Lillian Rizzo, Sean Conlon, Emily Wilkins, Dan Mangan, Kevin Breuninger, Jonathan Vanian, Kif Leswing, Chris Eudaily, Steve Kovach, Spencer Kimball and Amelia Lucas contributed to this report. Josephine Rozzelle edited this edition.

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Technology

SF mayor’s downtown revival project has reeled in $60 million from Google, OpenAI and others

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December 9, 2025

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SF mayor's downtown revival project has reeled in million from Google, OpenAI and others

San Francisco Mayor Daniel Lurie speaks during a press conference at San Francisco City Hall on Oct. 23, 2025 in San Francisco, California.

Justin Sullivan | Getty Images

San Francisco’s Downtown Development Corporation, launched in April by Mayor Daniel Lurie, said on Tuesday that it’s received over $60 million in early commitments from donors including Google and OpenAI to help revive the city’s center.

“I think people view this as a generational moment,” Shola Olatoye, CEO of the SFDDC, told CNBC in an interview. “San Francisco has captured the world’s, and the country’s, imagination as a global hub of innovation and industry. The folks who want to build businesses, raise their families here, and visit, recognize the important work that is underway and want to see it continue.”

In October, Lurie said the group, a nonprofit public benefit corporation, had raised $50 million for its efforts, up from $40 million at the time of its debut. When campaigning for mayor last year, Lurie touted his ability to fundraise, drawing on his past experience at the anti-poverty nonprofit Tipping Point Community, laying the groundwork for public-private partnerships to help revitalize San Francisco.

In addition to Google and OpenAI, SFDDC has raised money from backers including Visa, Thoma Bravo, Ripple, Salesforce, Amazon, Emerson Collective, Sixth Street and Gap. The funds will help support Lurie’s Heart of the City initiative, which prioritizes street safety and cleanliness, small business support and more.

San Francisco Mayor Daniel Lurie: We are open for business

Olatoye said some of the funding will also be deployed to fill vacant spaces in key retail spots such as along Powell and Stockton streets.

“We’re going to provide direct grants to these businesses to provide business support, marketing support and legal support,” Olatoye said. “And then actual below market capital from some of our lending partners to go in and actually fix up these spaces and get those businesses in there, get people spending money and generating economic activity for the city of San Francisco.”

Money will also be dedicated to a new Embarcadero Park, inspired by New York City’s Bryant Park. Lurie has often cited Michael Bloomberg’s efforts as mayor of New York as inspiration for his work, and the DDC is drawing on models used in New York as well as Detroit.

While a number of metrics show that San Francisco has bounced back dramatically from its pandemic lull, the city has a lot of work to do to prepare for an active 2026. Super Bowl LX is coming to the area in February, along with the Pro Bowl Games. In the summer, people will pack into the Bay Area for some of the FIFA World Cup.

“When downtown thrives, our residents, families and small business owners all benefit,” Lurie said in a statement. “By strengthening public safety, cutting red tape and leaning into our arts and culture, we are bringing people back to our streets.”

The first-term mayor notched a significant political win in October as President Donald Trump reversed his decision to deploy the National Guard in downtown San Francisco, saying Lurie was making “substantial progress” on crime in the city. Trump also said he was swayed by Nvidia CEO Jensen Huang and Salesforce CEO Marc Benioff. 

The city has been boosted over the last year by a surge in investment and activity related to artificial intelligence. CBRE data on venture funding show 2025 is expected to surpass the record reached in 2021, thanks in large part to AI investments in San Francisco and Silicon Valley.

In addition, crime rates are down 30% from 2024, with event bookings and tourism on the rise, and residential and commercial real estate heating up.

“There’s no doubt that there is a lot of attention on us and we are super focused on outcomes and using data to ensure we can hold ourselves accountable,” Olatoye said.

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President Trump's calls for National Guard deployment in SF loom over city’s AI-driven resurgence

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