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Early Start with Rahel Solomon
Trump Administration Halts Medicaid Payments To Minnesota Over Fraud Claims; Anthropic Drops Core Safety Pledge Amid Pentagon Fight; Lawmakers Grill Trump's Pick For Surgeon General. Aired 5:30-6a ET
Aired February 26, 2026 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[05:30:00]
(BEGIN VIDEO CLIP)
J.D. VANCE, (R) VICE PRESIDENT OF THE UNITED STATES: Far too many people have gotten rich by taking what is the best of the American spirit and getting rich off of it instead of providing services to kids who need it.
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RAHEL SOLOMON, CNN ANCHOR: In the State of the Union address Tuesday President Trump vowed to take a hard line on fraud claiming without giving specifics that it's a major issue in many states.
India Prime Minister Narendra Modi is wrapping up a two-day visit in Israel. Modi and his Israel counterpart Benjamin Netanyahu attended a ceremony at Israel's holocaust memorial in Jerusalem. They describe themselves as friends. Modi was the first Indian prime minister to visit Israel in 2017. During the visit Modi and Netanyahu were expected to discuss artificial intelligence and defense.
The trip comes as the U.S. builds up naval forces near Iran and it has raised fears of wider conflict in the region where millions of Indian nationals live and work.
The Duke and Duchess of Sussex are also in the region for a humanitarian trip with the World Health Organization. Harry and Meghan met in Jordan with medical evacuees from Gaza on Wednesday. The couple also joined a W.H.O. roundtable meeting and visited a refugee camp for displaced Syrians. Also on the agenda a visit to the regional headquarters of World Central Kitchen, which makes meals for people in the territory.
Still ahead for us, one of the top AI companies is ditching its flagship core safety principles and the timing -- well, it comes right as the company faces growing pressure from the Pentagon. That story and more business news after this break.
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[05:36:12]
SOLOMON: Welcome back to EARLY START. The time now is 5:35 and this is your business breakout.
Let's start with where U.S. futures stand ahead of the opening bell on Wall Street and at this point all the major averages look set for a lower open.
A few things that investors are watching today, you have weekly jobless claims that come out in a few hours. That's the number of Americans filing for unemployment benefits. And then tomorrow, on Friday, you have the wholesale inflation report, PPI or the Producer Price Index. So a few of the things perhaps driving market reaction this week.
All right, let's take a look at some of the other business headlines today.
German Chancellor Friedrich Merz toured the Forbidden City in Beijing on the second day of his trip to China. The chancellor has called for partnership and dialogue with China. The European leader is looking to reset trade relations which have been strained by a huge trade deficit.
Tech giant NVIDIA beat expectations again in its quarterly results. The chipmaker reported $68.13 billion in revenue, nearly $2 billion higher than expected. The company at the backbone of the AI industry also reporting record quarterly and full-year revenues.
And apparently self-driving cars will be hitting the streets in American cities this year because Waymo announced that it is expanding access to its car service to Orlando, Florida and three cities in Texas -- Houston, Dallas, and San Antonio. The company says that its services will be limited to specific areas of each metro.
AI firm Anthropic is rolling back its core safety principles in response to competition, and the change comes as Anthropic is in the middle of a dispute with the Pentagon over red lines in its AI.
CNN's Clare Duffy reports.
(BEGIN VIDEOTAPE)
CLARE DUFFY, CNN TECH REPORTER: Right. A source familiar with the matter is now telling CNN that this move by Anthropic to change its core safety principles is unrelated to its ongoing discussions with the Defense Department but, of course, the timing here is really interesting.
It was Tuesday that Anthropic CEO Dario Amodei met with Defense Secretary Pete Hegseth. Pete Hegseth has given the company a 5:00 p.m. Friday deadline to acquiesce to the Defense Department's demands which are essentially that Anthropic shouldn't put limits on how the Defense Department can use its technology.
Anthropic, meanwhile, does not want the department to be using its AI models for automated weaponry or for mass surveillance of U.S. citizens. And we have no indication that Anthropic plans to back down on that red line. But the company did, this morning, scale back its core safety principles. About three years ago the company committed to pausing development of its AI models if it worried that there was a risk that it couldn't control or control the safety of those models. The company now doing away with that commitment.
And it explained this by saying that it had hoped that policy would encourage other AI modelmakers to take a similar approach. It wanted to create a race to the top rather than a race to the bottom for this development of this technology. But that is not what has played out here and Anthropic said it believes it's actually safer for it to continue moving forward with development in light of the fact that other modelmakers are surging forward with their development.
Now I do think that this fight with the Defense Department puts in really stark relief what the stakes are here. You know, you've got a company saying we're not going to pause development of our technology even if we have safety concerns. Meanwhile, Defense Secretary Pete Hegseth has threatened to use the Defense Production Act to require Anthropic to hand over its technology and essentially let the defense department use it however it wants.
And so you see how we could end up in a really potentially dangerous place if the companies are moving forward with this development of their technology and then a government, the U.S. or otherwise, forces them to hand over that technology and let go of control over how it's used.
[05:40:00]
Now we should say that Anthropic is certainly not moving away from safety. The company framed this as a progression of its safety policies. It talked about how it's going to continue to have testing, and benchmarking, and transparency measures in place.
But certainly I think we'll look back on this moment and this conflict with the DOD as something that is very consequential in the development of this technology and we'll be watching closely as the company figures out how to respond ahead of that 5:00 p.m. Friday deadline.
Back to you.
(END VIDEOTAPE)
SOLOMON: Still ahead, Trump's nominee for surgeon general, who does not hold an active medical license, faces tough questions from lawmakers. We'll have the details straight ahead.
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[05:45:03]
SOLOMON: Welcome back. I'm Rahel Solomon. And here are some of the stories we are watching for you today. A new round of indirect nuclear talks between U.S. and Iranian
delegations is underway in Geneva at this hour. The Trump administration imposed new sanctions on more than 30 individuals, entities, and shadow fleet vessels ahead of the talks. It says that they enable Tehran's illicit petroleum sales, ballistic missiles, and weapons production.
Talks between U.S. and Ukrainian diplomats are scheduled to resume today in Geneva. Ukraine's president says that he spoke by phone with President Trump, Jared Kushner, and special envoy Steve Witkoff about the talks. The next trilateral negotiations involving Russia are set for early March.
And Cuba says that its troops shot and killed four people on a speedboat in Cuban waters who were trying to "infiltrate the island nation." The Cuban Interior Ministry says that the boat was registered in Florida and was carrying Cubans who live in the U.S. Secretary of State Marco Rubio says that no U.S. government personnel were involved but does say that the U.S. will do its own investigation.
OK, taking a live look now at Capitol Hill. That's where President Trump's nominee for surgeon general faced some tough questions Wednesday at her confirmation hearing. Both Democrats and Republicans grilled Dr. Casey Means over her positions on vaccines, pesticides, and other health issues. They also questioned Dr. Means about her qualifications and her medical license, which is not currently active.
CNN's Meg Tirrell has more.
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MEG TIRRELL CNN MEDICAL CORRESPONDENT: Dr. Casey Means is not a traditional pick for a surgeon general nominee and there were a lot of questions about her background and her credentials heading into this confirmation hearing. While she does have a medical degree from Stanford, she didn't finish her surgical residency. She stopped after four years saying that she'd become disillusioned with the more traditional medical practice.
Then she went into private practice in Oregon, she says, before co- founding a health company called Levels which advocates for using wearables, like continuous glucose monitors, to try to improve your metabolic health. She then co-wrote a best-selling book about metabolism with her brother, Calley Means, who is now an adviser to health Sec. Robert F. Kennedy Jr.
Currently, her medical license in Oregon is inactive and there were a lot of questions about that, as well as perceived conflicts of interest from her prior life writing a newsletter and as a guest on a lot of different podcasts.
But where there was really probably the most grilling was around her stance on vaccines. And Dr. Means said this really wasn't a part of her message. But we are in a time when we are seeing historic cases of measles. And we heard a lot of questions from folks like Sen. Bill Cassidy, a
Republican doctor who chairs the Health Committee. He asked her about specific vaccinations and whether she would recommend vaccinations to parents, as well as what she thought about any connection between vaccines and autism. Here's what she said about that.
SEN. BILL CASSIDY (R-LA): Do you believe that vaccines, whether individually or collectively, contribute to autism?
DR. CASEY MEANS, SURGEON GENERAL NOMINEE: Senator Cassidy, you're a physician, I'm a physician. The reality is that we have an autism crisis that's increasing, and this is devastating to many families. And we do not know as a medical community what causes autism. We should not leave any stones unturned.
TIRRELL: Now Cassidy himself has made the point that the preponderance of evidence shows no link between vaccines and autism, and he worries that continuing to study an issue takes resources away from areas where it could be better applied to actually really understanding autism and to providing better services for people with autism.
Now there were other areas of a lot more agreement, including on ultra processed foods. This is something Dr. Means has focused on quite a bit, and she said she would use the office of the surgeon general really to promote this issue. She called ultra processed foods "frankenfoods made in factories."
Other issues like pesticides had a lot more attention. Republicans concerned about issues for farmers. People in the Make America Healthy Again movement want to see more action on pesticides.
So there will be tensions going forward but the key question, of course, is how Sen. Cassidy is going to vote here and will this nomination proceed.
(END VIDEOTAPE)
SOLOMON: Our thanks to Meg Tirrell there.
Well, she's a five-time Olympic medalist who has taken on the toughest opponents on ice. Now she's facing off with President Trump. Hilary Knight, the captain of the gold medal-winning U.S. women's hockey team slammed the president after he said he would probably be impeached if he didn't invite the women's team to the White House.
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HILARY KNIGHT, CAPTAIN, U.S. WOMEN'S HOCKEY TEAM: I thought it was sort of a distasteful joke and unfortunately that is overshadowing a lot of the success and -- you know, the success of just women at the Olympics caring for Team USA and having amazing gold medal feats.
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[05:50:09] SOLOMON: President Trump made the comment after FBI Director Kash Patel put him on speakerphone in the locker room with the U.S. men's hockey team celebrating their historic win.
(BEGIN VIDEO CLIP)
DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: I must tell you we're going to have to bring the women's team -- you do know that.
(LAUGHTER)
I do believe I probably would be impeached, OK?
(END VIDEO CLIP)
SOLOMON: A contention of the men's team attended Trump's State of the Union address in Washington Tuesday night. The women's team declined the invitation respectfully.
And Wednesday night in Newark, the New Jersey Devils and Buffalo Sabres honored Olympic champions Tage Thompson and Jack Hughes, who scored the game-winning overtime goal.
All right. Still ahead for us, the housing market in New York looks very different depending on the buyer's budget. Still ahead, a view of the New York real estate market from Billionaires' Row. We'll be right back.
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[05:55:30]
SOLOMON: Homebuilders in the state of Minnesota are telling CNN that new home construction has stalled because of the Trump administration's immigration crackdown. The construction industry is heavily reliant on immigrant labor. And one employer says that many of his are seeing monthslong delays because so many workers are scared to show up. He says that immigration officers were at one of his sites for weeks waiting to arrest people.
Earlier this month the Trump administration scaled back its immigration operation in Minnesota, but people in the industry say that the crackdown is making homebuilding more expensive because of the shortage of workers.
Meantime, finding an affordable place to live here in America's most populous city -- well, it's never been easy and high mortgage rates are keeping many potential buyers out of the New York real estate market these days. But at the same time, some ultra high-end properties are being sold before they're even listed.
CNN's Paula Newton reports.
(BEGIN VIDEOTAPE)
PAULA NEWTON, CNN CORRESPONDENT (voiceover): It stands like a trophy exquisitely perched.
MICHELLE GRIFFITH, REAL ESTATE AGENT, DOUGLAS ELLIMAN REAL ESTATE: It is a seamless, elevated experience.
NEWTON (voiceover): 53 West 53rd in the heart of Manhattan's Billionaires' Row sweeps you in, if not off your feet, definitely to new heights.
GRIFFITH: There isn't your traditional concierge desk. It almost feels like you are entering part of your living space. The double-height ceiling, the floor-to-ceiling windows, the views are exceptional.
NEWTON (voiceover): And yes, as you already guessed, so is the price. This unit listed for just over $20 million. We're here for the eye candy, of course -- the views, the opulence.
NEWTON: Oh, wow!
GRIFFITH: I know.
NEWTON: It is really a pretty oasis here. You just kind of sink into the views --
GRIFFITH: I know.
NEWTON: -- and to the level (PH).
GRIFFITH: It somehow feels calming, right? Very Zen.
NEWTON: Yes, it really is.
NEWTON (voiceover): And we're getting a look too at the state of New York real estate.
GRIFFITH: Many of these trophy properties are all going into contract prior to ever hitting the market, and we're talking seven-plus on a price per square foot basis.
NEWTON (voiceover): Michelle Griffith is talking up $7,000 a square foot.
NEWTON: You've been at this for 15 years. What has surprised you about where the market is today?
GRIFFITH: The resiliency of the market is what surprises me every time. Taking the pandemic into consideration, a lot of uncertainty, a lot of, you know, cautious buyers. But the way that market turned so quickly post-COVID, I find that to be one of the most surprising things.
NEWTON (voiceover): At this end of the market -- the sky-high end -- demand is actually outstripping supply, but properties starting at about a million dollars -- yes, that's what a modest apartment costs in New York.
GRIFFITH: Rates. That market is really waiting for rates to come down. NEWTON (voiceover): Mortgage rates have stayed stubbornly high for too long.
MAYOR ZOHRAN MAMDANI, NEW YORK CITY: Good afternoon.
NEWTON (voiceover): And then there's New York's new mayor threatening a 9 1/2 percent hike on property taxes to wrestle a runaway city budget.
GRIFFITH: I received a lot of text messages on that, Paula.
A tale of two ends. So the higher end of the market -- they're not necessarily talking about that. But will that affect first-time buyers and other people that are just considering dipping their toes into the market? Absolutely.
NEWTON (voiceover): But not the toes dipping into these waters.
GRIFFITH: This is probably one of our most requested amenities in Manhattan.
NEWTON: This must really drop some jaws when you bring them in here.
GRIFFITH: Absolutely. This is a complete oasis starting, Paula, with the living green wall, which is on either side of your 65-foot lap pool. Floor-to-ceiling windows.
NEWTON (voiceover): In the competition between ultra-luxury buildings, wellness is a key distinguishing feature. The pool, the gym, the whole concept of a curated health-conscious life in the heart of a city. The exodus from New York post-pandemic was real but so is its comeback.
GRIFFITH: The diversification of New York, whether it's finance, tech, fashion, media -- couple that with the culture and the energy of New York City. It's bringing so many buyers back to New York.
[06:00:00]
NEWTON (voiceover): At this price tag maybe not everyone, all at once, but if mortgage rates edge down there are plenty of renters ready to be minted as new New York City homeowners.
Paula Newton, CNN, New York.
(END VIDEOTAPE)
SOLOMON: All right, that'll do it for us here on EARLY START. I'm Rahel Solomon live in New York. "CNN THIS MORNING" starts right now.
