"squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are have a special edition for you. we are live from the world economic forum in davos, switzerland. i'm becky quick along with joe kernen and andrew ross sorkin. >> welcome back to davos >> not a green jscreen >> it is beautiful >> why outside this is why. it's worth it. we have heaters. we'll make it. >> and hot tea. >> you have thermals on. >> we have this guy. he doesn't care. he doesn't wear a coat brian moynihan

let's see what is happening with the markets as we are opening up after the holiday weekend in the united states let's look at u.s. equities. under pressure dow futures almost down by 200 points decline of 190 nasdaq futures off 128 s&p futures down 30. treasury yields with the ten-year yield at 4% if you check things out right now, we are at 4%. the two-year yield above 2.4%. you have the houthi rebels saying they will attack u.s. and british based ships as well involved with israel or headed to israel. wti this morning is trading up .50%. above $73 a barrel natural gas is down by 8.5%. andrew. it is freezing there

voters in iowa braves ice and snow giving former president donald trump a landslide victory. getting 51% of the vote and ron desantis coming in second place. former south carolina governor nikki haley grabbing third place. vivek ramaswamy has dropped out of the race as he came in fourth place. what is happening here is one conversation, but related to what may happen in the united states. >> not a new conversation. >> it is not >> not just u.s. ceos, but countriesyies around the world waiting to see how it shakes up in november. >> there are policy changes that you would see that would impact people here in europe. they are harkening back. christine lagarde saying this is

not conjecture we saw it in the four years from prior presidency nato and trade >> president zelenskyy is here >> him, too. >> you would see i don't know i don't know what you think a president biden versus president biden would be like and what the impact would be on ukraine. >> it is not necessarily the place for the republican caucus where the eventual nominee was the winner i think we need to throw that playbook away. probably i don't know anything can happen. >> there are people suspecting this will be wrapped up by the time you get to south carolina. >> i think maybe santorum. >> you are not putting much stock in this? >> not as much in the past >> you are putting stock in it >> yes i think trump is likely the

nominee. new hampshire. we will see whether haley can change things based on the inn evi inevitability of it. and in the meantime, the makers are reaching a stopgap deal chuck schumer and mike johnson agree the cap for the 2024 fiscal year is $1.6 rillion. that number is $70 billion more than far right conservative leaders wanted lawmakers have until midnight saturday to get that package approved. in it corporate news, boeing adding more inspections after the midair blowout in the alaska airlines 737 max 9 earlier this month. this came after the faa extended the grounding of the planes in indefinitely for safety checks the wall street journal reporting the long awaited

delivery of 737 max jets to china could face delays. china southern airlines was re ready to receive boeing planes this month look at boeing shares this morning. the pressure we have seen the last couple weeks continuing this morning is down another 2.5% to $212 a share. apple saying it will remove the blood oxygen sensor from th smart watches. halting sales from the models after the import ban went into effect after the october ruling by the trade agency finding apple hviolated the masimo operations tool. it will remove the blood oxygen

sensors. unclear how much that will impact the watch sales it is one component of why people buy those watches apple offering a discount of the watch in china right in time for the week long lunar new year holiday on february 10th the traditional time of gift giving in china. >> who wants to know their oxygen level i would think it is mostly for people of a certain demo they don't buy apple watches in the first place? >> you have people who have been buying the watches for the health products. >> i have never -- >> my mom bought one. >> i would not notice removing that feature from my watch >> she didn't buy it for that reason. >> this is supposed to compete with garmin. >> what do you need your blood

oxygen it seems maybe if you have a certain medical issue. >> tim cook has been looking at the health aspects of the watch as the future. it is a setback. >> can they correct it if they don't have the patent? >> do you wear one >> wear one occasionally >> the best thing about it when you have it on is you can get an email and feel it? what is the best thing about it when you have it on? >> the best thing? >> you can't come up with one? >> if you are in a meeting and you don't want to get out your phone and look like you are not paying attention, you can glance down it looks like you are looking at the time >> what time is it >> that's true, too.

when we come back, we will kickoff our davos coverage with the ceo of bank of america brian moynihan we have the founder of the world's largest head fund ray dalio. "squawk box" will be right back.

kickoff the world economic forum in davos, we want to get a preview of what to expect here in davos joining us is brian moynihan he is the chairman and ceo of bank of america. good to see you. >> great to kickoff in davos and the beautiful setting. it is nice and warm out today. >> it's not bad. we we have the sun. brian, you are the first guest here i hope you can lay the ground work for the meetings this week. one issue that has come up is the lack of trust in institutions and governments and ngos the survey showed 22% of people have faith in the institutions and ngos what does the brain trust do about that >> it is a message to act in unity.

we will have over the course of the trust question with a.i. being a big theme here president zelenskyy came in and talked to the group of us and how the private sector can support the ukraine economy. it is growing over last year >> 5% sdp >> i think it is 5.5%. those themes are there what people want from institutions is certainty and execution and getting stuff done and not the usual food fight it is great to learn from people and go back and try to do something good >> let's dig deeper on what you heard from president zelenskyy this is a critical time for what is happening in ukraine. what has been amazing is their economy is growing in the midst of the ongoing war >> it is a classic definition of walking and chewing gum. fighting to the death and the first time they came in 2022, we were stunned but how resolute

they were in fighting the war. they opened the black sea to get the grain out. our teammate went there on friday with secretary pritzker his message was they have to straighten out the country and the reforms have to go through because you cannot put the money in otherwise it is fascinating to hear him talk about that. he is flipping from military to defense to anti-corruption to grain and military and defense it is fascinating. >> in terms of the global economy, one of the issues you talked about recently with earnings on friday and one of the things you said is less demand for commercial loans. what do you see happening? >> more of the u.s. commentary at the end of the day, the

consumer has been relatively strong they held in there they continue to grow their spe spending m businesses are facing a decline in the economy and soft landing prediction from a 4% to 5% dprgrowth rate. the thought process is shortened. we need to get through the change in the rate structure in the u.s. and around the world. we need to get through more certainty in a stabilization and we can work out from there you are in the twist from the very tightening of policy and knocking down car loans and the housing industry as intended and come out the other side. businesses react to that the usage from 30% to 36%. it is against the economy that you expect to be back up to normal. >> we still see some of your

competitors refurbishing the bank rescue fund can we put that behind us? that was a one-off a couple of banks got caught with their pants down with duration we thought maybe that everybody had a duration risk problem. now rates are starting to come down they haven't yet we dodged that. >> those companies are unusual they are different if you put a ten-point scale ten would be us and wells. if you went to them, they are a two or a three that business model suffered it has been contained. yes, the group of us at $2.1 billion in the fourth quarter to reimburse the fund it is a government dparguarante, but the banks pay for the costs of liquidating those companies the rest of the industry is

strong they have the capital. that is why we are not thrilled with the capital rules the liquidity test and stress test >> no iceberg under the maturity >> commercial real estate. a lot of people back home may have seen it the "60 minutes" piece on this sunday about commercial real estate there were prognosticators saying all of these things will roll and when the businesses need to get out of the leases, they will do so. this will take the whole market down the whole commercial real estate market down. >> the commercial real estate loan product for lack of a better term, is more out of the comm industry those of us that are larger don't have as high exposure. we have $100 billion going into the crisis we have $60 billion now.

>> are you changing your own footprint? the real estate the bank of america has. a lot of people are looking around and saying two or three years from now, will people keep them or shrink >> we shed 30 million square feet of real estate in the last 30 years >> why >> the space consolidation and efficiency a long-term trend in hoteling and office space the pandemic hits and we learn about three days a week and all that which makes up five work days people in the office four days, that is 25% savings if real estate costs it takes you time. >> you need the same space >> that is the hoteling. we work in all of the different things that trend line was already going. we got 25% of the space positioned that way. the pandemic hits and everything changes. that is the long-term trend.

commercial real estate at the end of the day, revaluations are going through as you speak you will see that come through with the reserves and charge offs it takes a long time this is a slow burn of change as opposed to joe talking about 5% rate rise in 12 months that's a quick change. >> if it is not a problem for you and other big banks, is it a problem for smaller banks which focus on commercial real estate and what does it mean for the fdic and assessments down the road >> if you around in the late '80s, the commercial real estate and real estate issues around the country were slow liquidation. the system knows how to handle that bank failure. 4,000 banks failed in the last 30 or 40 years smaller banks will be fine they know their clients. you know, yes, it will be disruptive it is different from the

financial crisis with the whole industry won't kaplooey overnight. the leverage is not quite the same. >> you believe in the markets forecasting of how many rate cuts we get? the reason i ask is there is always a worry about a crowding out of 34 trillion it started happening and the supply was too much and options were not going well. suddenly, everything is fine six or seven cuts. no more worries? clear sailing? >> i wish the day happened where you stop talking about the fed >> they won't let that happen. >> u.s. economy rides by 80 ceos the fed has to get normalize we have four rate cuts, not six or seven in the market for 2024.

that leaves you to 4% fed funds rate forward handle on a ten-year rate cut. >> he's been around. >> nobody has seen a normal rate curve. it will take a while to adjust we have to get the rate structure in a way with more flexibility up and down and not glued to the floor you will see that play out that would be better for the u.s. and ultimately better for all of the countries around the world if the u.s. can get situated that is what the fed is trying to engineer. they have to be careful they don't overshoot. >> you mentioned requirements for the banks. it has been a move that you and a lot of other big bankers have been stepping up and saying this is going to hurt compe competitiveness. it looks like they may be changing the requirements or considering it >> from the public dialogue, they are working on it when we say competitiveness,

some people say you want to make more money we made $100 billion after the pandemic we will make more money. my colleagues will do it, too. if you have a business in europe and in the united states even g engaged in autos and the supply chain, you will have a higher cost the capital the company in france or germany is the competitiveness issue does it make us more competitive? the american banks will figure out a way around it. it makes the lesser sized businesses less competitive. we are in a trade negotiation. the playing field is not level now. it will get more unlevel we are saying be careful we are well capitalized. we made it through a banking crisis last march and life went on we have been stress testing.

you are throwing it all out on a different theory is that wise with the kmamerican economy? >> do you have a preference who wins the election? >> i told becky, we have been around since 1974. somebody will win. we will figure out how to operate. we will try to figure out how to be successful. >> good answer >> brian, thank you very much for joining us and kicking off our coverage >> thank you. >> you are not cold? >> no. >> thank you coming up, elon musk -- elon musk wants more control of tesla before moving on with other plans. in the next hour, quarterly results from goldman sachs and morgan stanley we gets the reaction from the world economic forum in davos. we'll be right back. this thing, it's making me get an ice bath again.

what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. [♪♪] your skin is ever-changing, take care of it with gold bond's healing formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond. (clock ringing) go. and go and go and go. (tense music) but what if you. (tense music) stop! you work hard. it's time for a bank that'll work hard for you.

everbank performance savings is built to put your money to work with some of the highest rates in the country. going, that's what got you where you want to be. we're the partners for your next move. everbank. advantage, you. the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

you can't buy great conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence.

ceo elon musk wants more con control of the ev maker. musk wants 25% voting control. he currently owns 13% of tesla which is 411 million shares. who's counting that is the last financial filing in the third quarter of 2023 musk wrote i'm uncomfortable of tesla being a leader in a.i. without having 25% voting control. enough to be influencinfluencin

not enough to be overturned. i would prefer to build outside of tesla he stood out with remarks suggests that tesla is an already important a.i. company >> if it is an a.i. company, customers said you are going down this road now you are going to take and people are trying to take the fee from this and that it is getting complicated quickly. >> everyone we will talk to from qualcomm to palo alto. if i read this, i know everything when i read about palo alto or qualcomm, it takes me a while. i don't know it's very, very arcane and it is difficult. one thing they're all saying, it is all about a.i. and we have no

idea how to do a.i they are all saying the same thing. it is the most important thing julie will be on telling all of the clients it is all about a.i., but they are scared >> pat gelsinger is coming on and saying a.i. is the future of the trip industry. >> the ceos need to do something. >> they need to know something when we come back, we will talk to another ceo. we will talk a.i., too peter orszag with the he can pec expectation from the fed and everything he is hearing on the ground in davos, switzerland and we have an exclusive interview with secretary of state antony blinken at 10:00 a.m. a cinrit ck >> announcer: executive edge is sponsored by at&t business next level moments need the next level network. ncredible.

let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us. (♪♪) the first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com hi, i'm kim, and i lost 67 pounds on golo. with a partner that always puts you first.

when i was diagnosed with breast cancer, food became my comfort. i didn't think i looked pretty anymore, so i let myself go. i've seen the golo commercials for a while. what stuck out to me most was there was no celebrity endorser. the testimonials were from real people. what cancer took from me, golo gave back. (uplifting music)

joining us now in the interview to talk about the markets and fed in davos,

switzerland, peter orszag great great to see you >> thank you >> we see this as a signal what are you hearing and seeing? we are trying to get a test here of what things are going >> a fair amount of constructive optimism on the u.s. economy and concern with germany and uk and massive concern about the politics. >> the politics of what is happening in the u.s. and how it effect the world or vis-a-vis the crises and wars in ukraine and israel and such? >> all of the above. disproportionately what will happen in the u.s. >> let's go to that. what do you think will happen in the u.s. we have talked about iowa in the last half hour

it seems donald trump is going to be the nominee. what happens >> it was likely trump would be the republican nominee before iowa it is more likely now. i think it will be a close election every election in the u.s. will be close because how polar eized the country is it will be age against abortion with african american turnout and the cases surrounding trump as auxiliary players the tip may be the economy the economy is seen as worse than it is that can change over the next course >> can i ask about your perception of the economy? i think people get a lot of blame when things are bad. when gas prices go up, people say it's that guy's fault. i don't know whether people get credit if you see gas prices go down. >> i think what is happening here is three things there is a lag

it takes a while before perceptions of the economy catch up to the actual economy that needs to play through the second is there's clearly a deep partisan split on the issue. republicans think the economy is worse than democrats do. as the country polarizes, that gets worse the third thing is there is new evidence out, given gdp and the stock market, the new sentiment is more disproportionate >> i would say the gas prices, when they come down, but still up 40 or 50% from where they were when biden took office and put fossil fuels out of office is a problem that trickled across the board it wasn't all biden's fault, granted, but when it slows to 3% from 9%, the 9% for two years is still in there people are spending since biden

came in 35% more for groceries they feel that real wages did not start growing until the beginning of 2023. for two years, you were under water. you are below where you were when he took office in terms of actual wages people have enough to be able to say i'm not feeling great and it is not the media telling me. the media would like to give biden the benefit of the doubt you can't. people feel this i get tired of people saying it's too bad you don't understand the economy you are not bad off sdpl. >> i agree you want to talk about frustration in the united states two-thirds of the american population have seen flat or declining life expecexpectancy two-thirds

it is up to the middle class, too. this is a desperation. people frustrated with their outlook in life. >> coming across an open border. >> we can debate the most recent macro indicators i'm not denying many people are still in lots of pain. the most recent macro indicators are really good relative to what you thought at the beginning of the pandemic we have come through this much better than one would have thought. secondly, there is a disconnect between the macro indicators and how people are talking about the economy. >> peter, let's ask about how the businesses are feeling that is how consumers are feeling. you talk to ceos all the time. you are looking at the potential for the fed to start cutting rates. >> we'll talk about that >> you are not a believer? >> first, i think people misdiagnosed inflation it was pandemic coming and going. that said, i do not think the

fed will start cutting rates any time soon or at least until late of this year is likely to play out look at what jay powell is saying and they will be concerned about cutting too aggressively during an election. they will claim they are not, but they will. then they will really do not want to go back to kwquantitatie easing you have the opportunity to cut rates. >> and the balance sheets. >> finally, why cut rates? what is the impetus for cutting rates when, a, you want to stamp out inflation and secondly, the economy he iis not in recession. >> what does that mean for the businesses getting back into m& a? >> m& a are a negative high and stable is not so bad. i think what is happening is the m& a market is turning is exactly that people have seen the pivot from the fed and that created along

with some losses in court for the canti-trust with the effort on m& a. the labor market remains pretty good the consumer, although there are signs of fragility in default rates, the consumer held up well >> i go back to the can cons piratorial view , the closer you get to the election, it is harder to the degree there is something going on in your head of how you do this in the context of the election if you think you have to go late, you think you have to go early or not at all. >> i think that is the more likely scenario is 2025. he will hold these rates higher for longer there is no immediate impetus to

cut. he keeps saying that. >> can you do a role that tells you it is too tight if core is at a certain level if you did it mathematically >> or chicago says you are looser than ever >> i'll be blunt here. the inflation problem despite prices are higher as you noted, the inflation problem is soft. if you take out housing, you are at target. that doesn't mean you are too tight. >> you don't stay too tight if you don't have to be. >> peter, thank you. we appreciate you. >> thank you. coming up, the ceo of accenture will join us next and talk about how firms are adjusting companies to new technology almost 1 million people at accenture at this point. 750,000. is that true >> yeah.

>> unbelievable. all about integrating artificial intelligence it will be 400,000 after that. reminder, follow "squawk pod" on uryo favorite podcast app and listen any time. we'll be right back. monologue] another destination wedding?! we just got back from her sister's in napa. who gets married in napa? my daughter. who gets married someplace more expensive? my other daughter! cancun! jamaica! why can't they use my backyard?! with empower, we get all of our financial questions answered. so we don't have to worry. can we get out of here? i thought you'd never ask. join 18 million americans and take control of your financial future with the real-time dashboard and real-live conversations. empower what's next. switch to shopify and sell smarter at every stage of

your business. take full control of your brand with your own custom store. scale faster with tools that let you manage every sale from every channel. and sell more with the best converting checkout on the planet. a lot more. take your business to the next stage when you switch to shopify.

corporate leaders take

technology led by artificial intelligence is the number one disruptor for businesses according to the survey conducted by accenture joining us now is julie sweet. i was talking about you earlier. reading off of the surveys that your company conducts, this is the most important thing and everybody is scared to death if they heare able to maximize the potential. it is not a given. you need accenture to help you along the way, i would think, is what your salespitch would be. >> joe, you are right. we have 150 leaders who signed up this year at davos to do workshops. not show up and listen to a panel, but actually roll up their sleeves and do workshops we did that because the single biggest difference of who will win and who will lose is not the technology, but it is the leadership

in order to not be afraid, you have to know more about this technology than you ever had to know about technology because you didn't have responsible pc or responsible cloud in three decades, i have never stood in front of the client and say this technology will change everything about your business positively if you do it right. >> think about being a ceo i remember the day we started talking about chatgpt. we flipped a switch and the ceos the day before never said a.i. or it was something off in the future suddenly it is here and now and you better be up to speed or you will lose. >> you are absolutely right. in 2022, we put out the big pronunciation. to succeed in the next decade, you need a.i chatgpt it comes along and they finally understand it. there is a pivot right now, if someone comes on and says i have 400 things i'm

doing, i said you should be doing hree we're at risk of everybody spending time piloting and experimenting and getting involved. >> what are you doing? using a.i. today which fundamentally changed the company? >> me, not my company? >> personally or accenture. >> we are redesigning how we do software development that is stable stakes. today, i have a.i. that allows me to ask my financials information and get questions back i did not have that a year ago >> internal chatbot? >> yes it is getting better it is not always accurate. >> sam altman talks about them being an incompetent helper. >> before chatgpt, yi was using

a.i. i had legions of finance people come back a day later. i solved that with traditional a.i. it is transformative, but you have to actually change. if the biggest problem was not the technology when we did that, but my leaders were not using it they called the person to bring the slide to do it >> julie, you do a huge amount of recruiting on college campuses have you changed any of your recruiting policies based on the anti-semitic backlash with the elite college campuses >> we have not -- we are not looking at whether people have said something we do background checks. we have not made specific changes to say we will not go look at it that is not how we have played we are more focused in the first case do we have people who share our values and people who learn and how we think about technology?

for example, the number one question we ask all recruits is what have you learned in the last six months other than in school >> are the ivy leagues the left place to ecruit? >> we do broader recruiting. remember recruiting strategists and supply chain and people who do coding. we are very different than most companies. the ivy leagues are good for some things, but not all things. >> you have companies that find themselves and the ceo is like we have to get up to speed on a.i. let's talk to accenture. who got you towup to spooeed? are you ready to tell these companies? how did it happen? when did you start >> great question. personally, i am constantly doing learning we have been working and put out a book "human plus machine" five years ago that talked about a.i. we have been working in gen a.i.

for years. we have been working in a.i. for a decade definitely came on faster than anticipated. i have taken my top leaders through hours of live training and six hours of computer training we will train 250,000 people in gen a.i. this year since 2019, i trained every person at accenture at 600,000, on a.i in 2019, i became the ceo. i said every person in the mail room or hr or strategist, you need to know six things. now it is 11 they take assessments. one of the things i'm passionate about is a.i. can be great and we have to bring our people along. my dad caught me something simple a job matters in life. lots of problems are solved by that we focus a lot on the skills that are needed. when i'm using a.i. in finance, i have to explain to the finance people a.i when you think about the davos

and why does a.i. matter and the skills part, so every workshop we do we talk about skills and talent we have to do something fundamentally different in companies and in schools >> daunting. i may call you to help me. >> julie, thank you. >> joe, i would do it personally when we come back, a lot more rolling here. fash "squawk box" will be right back after this

it starts with a grill. but it becomes so much more. an extension of your home. not just a weekend retreat, but an everyday getaway right in your backyard. newage makes it possible with beautiful all-weather cabinetry, grills and appliances that transform your backyard into a complete outdoor kitchen. visit newageproducts.com to book a free design consultation and create the outdoor living space you've always wanted.

and create the outdoor living space - if i told you something extends your life span, improves your sleep, makes you more empathetic, and reduces stress and cognitive decline, you would think it was a miracle drug. but i'm talking about reading. reading every day does all those things and more, which is why i started my book club, read with jenna. so start a reading streak, even if it's just a few minutes every day, on the way to work, your lunch break, before you go to bed. every little bit helps. the more you know.

welcome back to "squawk box" live at the world economic forum in davos a leader in culture, fashion and philanthropy, diane von

furstenberg. you come with a different approach than a lot of the business people who are here, and i feel like you infuse this whole agenda often times when you come with a sense of purpose. this year -- you have different words you like to use every year, and this year you said the word is manifestation -- >> no, no, first you have to have the intention >> and then manifestation. >> because you have to focus on the intention in depth so you have manifest. >> are you bringing this message here to davos? >> no, first of all, they asked me to come here and i am very flattered that i spoke here, and i do love the theme, restore trust.

i think it's such a major --i don't know who came up with it, but we need it so badly, because -- and the two words that are important, restore means that you don't have it anymore, otherwise you wouldn't restore it trust is about truth i think it's a very good topic >> as somebody that understands the customer, that ultimately is the public, and what do you think -- there's a reason to restore trust because the public doesn't trust almost anything anymore, and how does that count in business and in life? >> yeah, it's very confusing you talk about money all day long you talk about currency all day long, right? maybe we should invent the currency of kindness the currency of truth. the currency of trust. >> social media, you spend a lot of time on social media -- >> you spend a lot of time

reading me on social media, because anytime i do anything on it -- i don't know >> the customer is on social media right now, and do you think -- >> first of all, i hate the word customer because it feels like a rip-off already, you know, and it's the women, the women that buy your clothes >> the women -- >> i don't like the customer >> but do you think social media is undermining the trust that's what i was going to say when you used to ties historically, it was in a different way and now you do it on a different platform. >> i don't know. i think you can only control yourself, right? i think over the years i have gained trust from women. i have never lied. i've never lied in my life, so i can't be blackmailed i went through ups and downs and this and that, but i always share it >> i think you are right in that you can only control yourself and see what happens

when you get to a place like this and they start talking about restoring trust, i have a hard time figuring out what some of the solutions are what do you think the solutions are? >> oh, my god. the solution is look at the mountain look at the mountain look how beautiful it is, and look what we are doing with it, you know i mean, it's a little humility for, you know, the aggressiveness and the weapon and the medication and all of those things that, you know, that inspire fear. >> we have to run, but i have one last question. you have been trying to empower women for a long time, and there seems to be a backlash against dei programs across the country, and some of it is related to race, gender, and all sorts of things, and quotas and the like, and i am curious as to what you think about that, dei being

equi equity and inclusion -- >> sounds like drinking. dui. >> there are a lot of efforts to put pledges and quoters in place and do you think that's a good or bad idea? >> everybody talks about data, right? >> yeah. >> but what about impulse? what about what happens with the heart? you can't predict that what about coincidences. it's great to have data and to go for justice, but i think we need a little oil in the spinach. >> i like the message. >> you don't say that in english or spanish, but in french you do >> "squawk box" is coming right back after this.

rylee! from rylee's realty! hi! this listing sounds incredible. let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us. (♪♪)

good morning world leaders and business titans gathering in the hills of the swiss aps in the world economic forum we are here this hour. and within the hour, ray dalio will join us also, we're getting market reaction to earnings from goldman sachs and morgan stanley coming up shortly. the second hour of "squawk box" begins right now

♪ ♪ good morning welcome back to "squawk box" here on cnbc live from the world economic forum in davos, switzerland. you can problem figure that out. i am joe kernen along with becky quick and andrew ross sorkin here are the futures this morning, which, you know, not really a big welcome for us over here on swiss soil this morning, but not too bad. down 125 points. it has been -- it has been a little bit of a consolidation period, and it was not really a santa claus rally, and it started in late november and the averages surprised everybody by the end of the year, a little

back and forth so far, but i don't know if anybody can figure out what 2024 is going to bring given the events we will witness in november, which started yesterday. >> yep >> the 10-year is right at 4%, and oil is always important. seems to be around trading range between 70, 75 bitcoin, kind of interesting, it ran up to 49,000 on the eft, and it has been very stable right here around 43,000 i guess people are buying. blackrock bit something like 15,000 -- >> yeah, it was a big number >> i guess there's a dip i wouldn't overstate it. it's a trillion-dollar market cap, and if you add up whatever a eft has to begin with, it's

not anywhere near -- what do you think the total is you have to buy more than 20 billion? buy more than 30 billion >> i don't know. it will take a little bit. you have to get the irss -- >> it's so stable, you could buy a pizza with it. >> our next guest, world leaders convenen to imagine a path forward in today's political climate, and ray dalio, it's great to see you on day one here we talk about crisis, and there are a lot of crisis and folks involved in crisis that are here, if you will. the president of israel will get here on wednesday, and president zelenskyy, who you saw this morning, is here, and antony blinken is here, and china is here there are cross currents taking

place, and i have been reading you on linkedin now, and you have been writing about how to think about the economy. >> i think, as you know, i think there are five major forces that repeated through history, and those are the debt phupb economic force, and the external geopolitical force, and that's the struggle for the control of the world order, and the climate issue. throughout history, the climate has killed more than anything, and lord knows it's a bigger force now, and there's technology >> right >> we have all of these forces coming together in 2024. if we look at them individually and you put them together, they each affect each other, and the election of the president will affect the markets and then the

markets will affect the amount of money we are spending on wars, and that will have an affect and they are all coming together 2024 will be a pivotal year, because when we meet next year at this time we will be able to look back on the internal conflict force and the geopolitical force -- >> historically when there's lots of uncertainty, it's the best time to buy, right? >> well, it depends. i think it's more complicated than that. i think the markets, mostly for the magnificent seven, you know, you can't look at the markets as a whole, you have to look at the pieces then you have to look at different countries. so the pricing, as we had the move down to 4% bond yields, and then we had movement in equities, in particular in those companies, and they are no longer as cheap as they were before, right? i think we start with a bond

yield. start with an inflation rate and then add in a real rate. i think the inflation rate is in the vicinity, likely will be in the vicinity of 3, 3.5%, and then a real yield, and a 4% bond yield, that's no longer a really attractive rate. if you go beyond the bond yield, and you say the bond yield will affect everything, and we have to rollover debts at higher interest rates and so on, and if you look at that particular thing, by any measure, it's not cheap. >> the market is not cheap okay >> so the pricing, here, is different than the environment you can't just look at the environment. then you look at what is priced into a market. >> right >> if we are looking at the

politics, the geopolitics, i don't think those are priced in because it's difficult to apply to a market, and that's not priced in, and neither is the geopolitical maybe if you go to china, the prices are in because -- >> the political ramifications on the market. if president biden wins a second term, good or bad for the market if former president trump wins a second term, good or bad for the market >> i think they are both threatening for the markets. >> both are threatening? >> so they have no alternative >> which is the better of the bad alternatives, if that's the case >> let me say why. >> okay. >> our big worry -- our biggest worry is whether we are going to accept -- whether both sides will accept the circumstances, not just the election, whether

they will accept the decisions even today we deal with the question of does the supreme court rule is there an acceptance of those decisions, and we are come into an environment where politics is made as a political weapon so that we are now having fights, so even if you take the extreme left and the extreme right are at risk. if we take biden, he will not be president likely, and most people think he may not be the strong president throughout his term then we are dealing with another part of the democratic party and then the same -- >> you mean kamala harris? >> and a more -- there's a great conflict between the left and the right. >> you are putting her in the more progressive camp? >> it would be more progressive.

i think you would see a more progressive democratic party okay so now you have a more progressive democratic party and you have a more aggressive -- excuse me, more conservative and natio nationalistic party, and the question is how we get through this in a way where we have sensible governance or do we have irreconcilable differences over everything. it's not just money. taxes will enter into it the taxes that will come out of this, and protectionism, nationalism, support for other countries, all of that will be different, and also it has to do with even how you raise your children in terms of these types of balances. >> boil that down to an investor's point of view if you don't like the payment you are getting for u.s.

payments, what do you do >> do you know what your neutral position is? i find that the markets right now are not either super attractive or super unattractive, generally speaking aside from the politics, so you will come into the environment where there will be greater risks taking that factor and the world factor >> right >> so what is your neutral position i have neutral portfolio, okay, and it's a diversified portfolio that i don't take the time to get into you go closer to your neutral portfolio, and it doesn't emphasize -- people think you go closer to crash, and that's not right, but what is balance how do you balance that portfolio? you go to neutral. you should know what your neutral portfolio is >> let me ask you a different question, given how much time you have spent in china, and do

you anticipate something happening with taiwan, given the election that just happened in taiwan, and given that party has just talked about trying to ultimately be independent of some sort, what do you think happens? >> i think that there can be a demonstration of concerns that will be more cosmetic than there will be reality wise there are important changes taking place i was there last march, and they were not on talking terms and there was a big risk of crossing red lines, and particularly when we have a conflict here, that has changed. there's communication now that is quality communication about how to deal with such things, so that there's a likelihood there

will be a delegation that will go over there. the red line is are we in favor of the independence of taiwan. i think you are going to have to have careful world are by the united states that makes it clear that they are not in favor -- loud and clear. the wording changes. >> we have the greatest system of government since the beginning of time, the constitution and the bill of rights, and there are a lot of safeguards built in, and as churchill said, when it comes down we try everything else, we do the right thing, and the strength of the country and people prevail, and can we say that here in davos not everybody else can >> i think absolutely can you say it, and you have to also say don't take that for granted.

>> yeah. but we have been through -- >> well, we? who is we? >> the american people >> my generation and my parents' generation, and those that went through the war, that was the greatest generation. my generation got deeply in debt, broke down the infrastructure and had problems of educating the pervasive population, and had a lot of issues and can't work well with each other >> right >> now we got millennials and generation x, they are going to be the ones that save us >> the system is fine, but how are we going to behave with each other? how are we going to behave with each other can we work it out or, as we are going into this situation where committees -- >> well, bigger risk, internal,

the united states, or china? >> internal is the biggest risk. >> i don't think so. i think it's china >> that's okay we can disagree. the most important thing is, is that we are strong and we work together our greatest risk is not china our greatest risk is ourselves, because if we can pervasively as a group of people, if we educate our people well and we are strong, that is what is going to make us great, and that is what the risk is, that's what we are facing we all look around and we all know that. >> thank you, sir. good message when we come back, the ceo of bmy melon, and we are expecting stats from goldman sachs and morgan stanley goldman sachs share up by 25

cents. "squawk box" will be right back. you bring a lot back to civilian life.

leadership skills. technical ability. and a drive to serve in new ways. syracuse university's d'aniello institute for veterans and military families has empowered more than 200,000 veterans to serve their communities and their careers. from professional certifications, to job training, to help navigating programs and services, we give veterans access to support from anywhere in the world.

bny melon shares were up on friday now joining us now, the bny mellon ceo, mr. vince. just in terms of the results, they were solid and the stock reflected that >> good to be here in davos on a sunny day. friday was a good day for us what we were trying to do is tell the story for our focus of 2023 we made three key commitments to the market and our investors and we delivered on all of them and are pleased with that. the focus for 2023 was having a pivot in our company, our

clients and our culture, and we did that >> what are banks supposed to do >> we thought we would get 20% out of the year and we were consistent with our guidance throughout the year and never changed it, and delivered with 20%, so we were pleased with that >> we talked to one of your competitors, bank of america -- >> and a client, too >> we looked into the abyss with the many crisis we had a year ago, and we are out of that, and those were one-offs. >> i think 2023 proved something to us, which we know from history, but it was a good reminder, which is being resilient and being prepared matters. that was a year for that we saw that with all of the issues around asset liability management earlier in the year, and geopolitical risks through the course of the year, so for us and helping our clients

navigate through those environments, that's what it's been about >> are your clients more willing to put money to work at this point or less, just based on what they are seeing >> we have a lot of uncertainties in the world, but clients have to run their businesses what clients are coming to us for at bny mellon, we're the world's largest securities vendor and asset manager, and we have the platforms that we can use that take problems away from our clients and let them focus on their businesses. >> the return to work, we have heard some -- again, other companies say be here or you are gone, and you took a different tact, right? >> well, slightly different tact, and what we prize and what our people prize -- it's part of the culture at the firm, and that's being able to be

flexible, and we have required them to come back to the office but not five days a week, but it's three days plus there's a little give and take with our people, which is valuable last year we made everybody in the company a shareholder of the company with the bk shares program, and that's so we can talk about ownership we launched a premium-free health care offering, and mental health benefits, and we were talking about the december recharge before we came on the air, and it was two weeks free of the bureaucracy of running the company. we are asking for them to help run the company better and we are focussed on our culture as part of enabling them. >> thank you, robin vince, bmy

mellon coming up next adena freeman. "squawk box" will be right back. that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy.

dormant for the last couple of years, and looks like it could recover. the chair and ceo of nasdaq, adena friedman thank you for being here >> good to be here >> let's talk about the ipo market, because there are lots things are loosening and we are going to see a good year >> yeah, there's the potential for that, and the economy needs to show resilience, which it has been that's giving people more confidence and the fed may feel like they can ease off the rate as we go through the year, and it's unclear as to when, and the promise or expectation of that gives investors more confidence. we are seeing interesting companies looking to go out as early as this quarter. >> and peter orszag was on

earlier, and he thinks we may not see a lowering until at the end of 2024. >> well, i think they need to see interest rates come down and stabilize, and it could get harder and harder to continue to bring it down. if they feel like they can show that stability, they may take one or two actions as we go through the year, and maybe more i am not as -- i am not thinking it will happen in the first or second quarter so much >> you have been the ceo of the nasdaq since 2017. >> yes >> over that time you have seen a lot of different atmospheres, and what are you thinking about the atmosphere right now as compared to what you experienced in the past? >> you have to expect the unexpected you know, i think the environment has become extremely unpredictable and we have to get comfortable with unpredictable which is uncomfortable to do as

a ceo, you want to be able to plan your investments and when you don't know what the insraoeurp environment is going to be like, that's hard to do. >> we were talking about dei earlier today, and esg has been talked about, and you announced any company that would go public on the exchange, on nasdaq, was going to have to disclose, there was going to be a transparency around diversity on the board and the like there's a massive pushback on that very idea of dei that is taking place all over the country. by the way, it's relating to other issues, backlashes against investments in the climate as well, and what do you think of that now >> we continue to work with companies managing theose

requirements when it comes to the board disclosure rule, that was investor demand driven over many years of asking can you provide a more standard way to look at diversity, and we introduced that in 2020 and implemented that in 2021 our companies are complying and it's a simple and forward disclosure rule at this point. >> what do you make of the larger change in terms of sentiment in terms of dei programs around the company, and pledges and quote kwrauzas and all of it? >> how do you create a culture that celebrates differences, celebrates diversity and creates

inclusion. i think my personal view is you take a long-term view and you make sure the programs last through any political cycle, and you focus on it over the long-term as opposed to trying to manage it to a political cycle. >> we had julie sweet from accenture, and you need to be an ai company yourself running the nasdaq that's daunting, isn't it? >> we are a pretty scaled technology provider to the industry >> yeah, security and everything else, and you are in the business and you want companies that do that to be on -- yeah. >> it's a nice flywheel effect, right? we believe that innovation is absolutely critical to solving some of the biggest problems that the finance industry faces. we have been leaning into ai for a long time across the markets

and in the anti-crime sweep we have, and making sure we leverage the data. if you bring data together, you can use ai algorithms to route out criminal behaviors, you will be effective >> this is our view here, and -- >> it's a beautiful view, i have to say >> when we are at the nasdaq, we have a floor-to-ceiling window of times square. >> a big difference. >> i think there's beauty in both >> that's the way to look at it, joe. >> the urban -- >> yeah, it's called urban beauty there we go. >> in all beauty, if you look closely, it has flaws. >> this is pretty and a little chilly >> yes, a little chilly. thank you so much. let's go to the ticker from

goldman sachs. >> happy to, joe. goldman sachs had a number of items, and it was an accounting technique there as well as the 529 million tpeud special assessment to cover the shortfall from last year's bank failures added to pretax earnings, as did the sale of its personal financial management business, and taken together, though, these and other items knocked about 83 cents per share off the aps, and that was a bit lighter than consensus mna advisory dipped 29% with

fewer completed deals in the quarter, and goldman said asset and growth was a beat in the quarter, and it reported record management fees. it's smallest division platform solutions was up due to the average growth in credit card balances and then morgan stanley also reported, and they took special charges in the quarter, $35 million, half was for the legal charge and half for the duic wealth management also, little changed from a year ago, becky >> leslie, thank you very much watching that stock right now, you can see it's up by 40 cents.

when we come back, we have intel ceo. we're going to be publishing multiple episodes of "squawk box" reports from davos each day. we'll be right back. every day, more dog people are deciding it's time for a fresh approach to pet food. developed with vets. made from real meat and veggies.

portioned for your dog. and delivered right to your door. it's smarter, healthier pet food. [♪♪] your skin is ever-changing, take care of it with gold bond's healing formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond. for- if i told you somethingrs extends your life span, improves your sleep, makes you more empathetic, and reduces stress and cognitive decline, you would think it was a miracle drug.

but i'm talking about reading. reading every day does all those things and more, which is why i started my book club, read with jenna. so start a reading streak, even if it's just a few minutes every day, on the way to work, your lunch break, before you go to bed. every little bit helps. the more you know.

welcome back to "squawk box. we are live in davos, switzerland. take a look at the futures ahead of the market open s&p 500 off about 20 points, and the nasdaq off about 83 points meantime, the head hralines i b you this morning, apple will drop one medical feature the feature will now go away apple pulled the devices before the ban went into effect next month. bloomberg reported the modified watches have been shipped to stores but won't be approved yet.

the moves here help microsoft. the paid version will let people use co-pilot, word, excel and other apps >> up 63% in the last year we started with apple and microsoft. if there's two horses not of the apocalypse, but those are the most two important stocks by far. >> yeah. >> now the most valuable company on the planet. uber is reportedly shutting down the alcohol delivery service it bought for more than $1 billion three years ago it provided technology to let local liquor stores provide deliveries of alcohol instead of hiring its own workers, the delivery service suffered a data breach in 2020 exposing information on 2.5 million customers, and that led to the order from the fdic restricting

what they could collect. shares on uber, let's take a quick look it's off, about 0.8 of a percent. tomorrow, dara khosrowshari will be our guest >> an impressive showing >> it starting to work >> not starting, but it's working. >> no doubt. when i have it, i got it, and i do it. >> does that mean jumping the shark? >> no, being on the cover of business week. patrick gelsinger will be our guests and then the ceo of palo alto networks, and chevron ceo, me ik

wirth, and the ceo of qualcomm we will be right back. fast, and what should companies be thinking about right now? >> thinking about ai responsibly, and that includes privacy, transparency and accountability if all of this is going to matter as changes come along

>> what should companies prioritize when it comes to ai >> well, ai aligning with their business goals, and taking care of the emerging risks that comes along with it, and monitoring the ai systems to make sure there are no information drifts. there are a lot of challenges, but the biggest one is the data and algorithm bias you could eliminate a complete segment of the population if you don't do it right which could lead to reputational and revenue loss >> thank you for sharing >> thank you for having me

coming up next, the ceo of inintel joining us here in davos. we will talk to antony blinken later this morning, and that's at 10:00 a.m. and we whaill ve highlights of the conversation tomorrow on "squawk box," of course back here in a minute. hi, i'm stacey, and i've lost 60 pounds on golo. (guitar music) i was surprised with the golo plan, i was not hungry.

thanks to release, i don't feel the need to go for snacks or go back for seconds. give golo a try. this plan works. what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul, available at walmart and drinkcirkul.com. i'm andrea, founder of a boutique handbag brand - andi - and this is why i switched to shopify. it's the challenges that we don't expect, like a site going down or the checkout wouldn't work. what's nice about shopify is when i'm with my family, when i'm taking time off, knowing that i have a site up and running and our business is moving forward because we have a platform that we can rely on. that is gold to us. start your free trial at shopify today. ♪ ♪

♪ ♪ ♪ ♪

let's check on goldman sachs and morgan stanley both reported earlier. goldman sachs is at 5.48 on the bottom line. both numbers above expectations. they had markdowns related to the green sky, a portfolio, i assume, unless it's green sky, andrew >> green sky >> and david solomon will join us tomorrow. >> we have blue skies here, though >> blue skies ahead, hopefully in 2024. a net revenue of $85 million for morgan stanley there was a mini crisis we had a year ago, and morgan stanley

ceo, ted pick, will join us on thursday intel stock jumping 12% in december after the company announced a new line of ai chips. joining us is patrick gelsinger, the ceo of intel pat, welcome >> thanks for being here what an honor to be on the show with you >> it's wonderful to have you here i want to talk about your stock and things driving its performance. we just talked about what happened in december, and stock was up 20%, and two things were pushing it one was the idea that chip sales will increase as you see an increase in pc sales, hopefully. the second is the idea of the foundries you were building. what will turn the tide? >> people expect this year to start slow and accelerate as you

go through the year, and you are four years after covid, and that's normal, a four-year cycle. there's a new windows coming out, and the big thing is ai pc. if you go back in time, we created wi-fi, and nothing happened for a couple years, and then we launched the platform, and all of a sudden if you were a coffee shop or hotel, you had to have that for your business, and then it changed the form factor in use cases, and we think about that with the ai pc, and i believe there is a budding excitement for what that will do to the pc category starting this year, and continue into the next couple of years. we announced our ai pc flagship product, and the starting gun

has now sounded. we are off >> let's talk about the foundries inside of things, too. you guys are making plans and things are in the works in the factories you are building not only in the u.s. but other places, too, and this is a story that plays out over a long time. you are going to put a plant in israel, and that government there said they would give you subsidies for that, and this is an indication you will go where your capital is treated best >> overall, there are three things to pull apart there the optimism in the stock for intel, we are getting the process technology back, and we said this audacious plan is to get back to leadership, and as it's coming to life, those that were skeptics are saying, wow, they are making it better.

>> where are you in the four-year cycle? >> well, we are a little over halfway, and we delivered two of those. we are going to production with the third of the five in the first of the year, and the other two by the end of the year many said we couldn't do it, and we are proving them wrong. and then the foundry customers, we are starting to have more momentum of those companies saying we only may have designed on some of today's foundries, and we are interested because we want balance, resilient supply chains the third part of that story is the factories are coming along, arizona, new mexico, oregon and ohio, big projects, and here in

europe, we have an assembly test, and the israel expansion we are the only company in the world that has major supply chains for all three areas, the americas, the europeans and asia it's an uncertain world, and we need resilience, and it's the most critical element of the supply chain is semiconductors >> lots of questions about what can be exported or what should be exported to china, and there's a question about throttling chips what is your view on all of this >> the best way to think about this, the u.s. and western companies we maximize exports, if i want to build lots of factories, i need access to the global market. let us sell chips globally

it's where you want technologies to be, and fought the products, but sale the products everywhere you can and give us as much access in the global community, and the biggest market is -- >> but you have ideas of limiting sales, a good position, a bad position, how far back do you think china really is? i mean, i think a lot of people saw those huawei phones last fall and summer and were surprised at how fast the chips inside them actually were. >> part of that's how much technology access they have, particularly in equipment area and that's where the partnership between u.s., europe, and japan, where do we want the technologies, the equipment to go the idea of limiting the highest performance chips, you know, this has been going on for almost 50 years in high-performance computing i think what's been surprising is the inconsistency or the changes in those policies over a short period of time making it impossible for any of

us, right, to adjust our p businesses and products to meet an ever-changing policy environment. set the policies consistent with industrial policy, let us run our business against them. and of course, then, the question, as you say is, where should the lines be drawn? >> president biden is very tactful in talking about the taiwan elections over the weekend. i would imagine you would be very tactful as well, if you were to comment on things like that you have to be very careful on what you say but what would you say and there are some people that think there's only one option at this point for president xi, and it's only a matter of time >> i think president xi has been do declarative. this is part of china. it's a critical role in the supply change. the elections say things are probably status quo, which is good for the world taiwan is a tech hub -- >> it's a independent -- right the new president staunchly --

>> a balanced legislator, balanced legislation that probably keeps a balanced view -- >> so you don't think anything happens in one year, two years, five years >> i believe there's great risk here by any area of the world being a disproportionate portion of the supply chain for something so critical. and that's the essence -- >> how much time do we have? how quickly do we get to a point where we are chip independent, if you will? >> is that in two years? the end of your four-year cycle. what we said when we started this journey was get to 50/50 by the end of the decade. >> meaning 50% of the chips be manufactured in the united states >> in the u.s. and in europe >> is that all chips or just imported chips >> particularly, the leading edge chips, right, as we move forward, and today that's less than 20% so that's a huge shift in the policy and if we get to 50/50, the world will be a pretty happy place in comparison to the fragility of where we are today. >> the chips act was passed in

2022 it has seemed like that money has been doled out in dribs and drabs. what do you think of how quickly or not quickly that money is getting out? >> we're anxious to get it done, in that sense. and the department of commerce, you know, they were somewhat -- they caught the bus, right they had never managed something of this scale. this is new industrial policy muscle for them to build on the one hand, hey, i'm empathetic of what they had to stand up, but hey, i'm building factories today. get the moneyoney dispensed rapy we're working closely with the department of commerce to get this forward the faster we move, the sooner we get to a more balanced supply chain. >> the other piece of this i was going to ask, this is maybe a geopolitical or policy question. do you think if we get to the 50/50 piece in 2030, that makes it easier for the united states to -- if china decides that they want to take over taiwan, do you think the u.s. says, okay, actually, you're no longer -- actually, no longer strategically as important as you used to be therefore, we're actually willing to let this happen

or does it actually strengthen the hand of the united states to say, actually, we really want to protect you, because of the democracy piece of it and the independence piece of it >> you know, the geopolitics -- hey, i'm not a politician. >> but you've spent a lot of time now with these leaders. >> you sounded like one on that answer about china >> thank you, joe. but the thing is, if you have a more balanced supply chain, everybody can make better policy, right? if you have unique, harsh dependencies, then small things must become big things in this regard, i think everybody can sleep a lot easier if, in fact, we have more balanced supply chains, you know, we have fewer choke appoints, fewer ports, fewer islands, fewer places in the world with choke apppoints and that's what we're trying to achieve. and build a much better national >> everybody in the u.s. can sleep better >> this is the creation of major jobs, you know, construction, of factories, rebuilding the heartland of america and having more control over our

national security. this is the right policy for the world. >> i've read about there being a shortage of construction workers in ohio. how big of a problem is that right now, just in terms how fast you want to move? >> it's a challenge. that said, we're managing through it we're navigating through it. when there's worker shortages, people sort of say, give me a few more boxes and i'll start showing up we're having to manage it, but the balance of cost, schedule, and available talent, we're getting through it, and we've been thrilled by the warm reception that we have in ohio >> do we need to expand the visa program or do we need to start teaching more math to our kids sooner or later, it's going to be a bottleneck, and it's going to be hard to get engineers, is it not >> you know, i have three policy objectives before i leave this job, joe one is chips 1 and probably chips 2, getting industrial policy done. number two is long-term r&d, right? build the seed core for the long-term. and the third is immigration policy you know, every high-end degree should come stamped with a green

card to go with it we need this talent -- >> do we not have it here? do we need more stem >> we need more s.t.e.m., we need more technicians, we need more capacity for -- think about how many of our companies are led my immigrants today. you know, that come to the country well educated, the top of their class, and hungry for the opportunities that the west offers them. and i think we should just say, if the world wants to give us their best and their brightest, we should say, yes, please >> pat, thank you so much for joining us pat gelsinger. >> thank you so much >> up and next from the world economic forum in davos, the ceos of palo alto networks, a guy named nikesh raurora a big hour ahead, don't go anywhere here are the futures, ahead of the opening ball -- bell, on wall street. the ball is tonight, i think we'll be right bac k.

hi, i'm kim, and i lost 67 pounds on golo. when i was diagnosed with breast cancer,

food became my comfort. i didn't think i looked pretty anymore, so i let myself go. i've seen the golo commercials for a while. what stuck out to me most was there was no celebrity endorser. the testimonials were from real people. what cancer took from me, golo gave back. (uplifting music) good morning, it is cold in davos at the world economic forum, but we've got a hot lineup of guests in just the next 60 minutes and you don't want to miss any bill ford, palo alto networks ceo, nikesh arora, jim breyer from breyer capital, and the ceos of chevron and qualcomm don't go anywhere, as the final hour of "squawk box" begins right now.

good morning and welcome back to "squawk box," here on cnbc we are live from the world economic forum here in davos, switzerland. you knew it was coming up. we've been thinking about it for -- how long have we been thinking about it? >> three months. >> i'm joe kernan along with becky quick and andrew ross sorkin something always happens here. either we're too negative and it's a great year, or we're too positive and we get a pandemic do you remember? paul jones was sitting right there and said, i don't know, there's a respiratory virus in china -- >> january of 2020 >> trump came on and said not to worry. but who could have known at that point, we'd been through bird flu and so many different scares but that one came to pass, unfortunately. the u.s. equity futures are

down, but down much less than when we began this morning now about 60 points. nasdaq said down 57. treasuries, not a lot to take home from this 4%, that's all you need to know on the ten-year, right around that goldman sachs and morgan stanley reporting quarter numbers last hour, both rising slightly and david solman will join us tomorrow and ted pick will join us on thursday >> the private equity group general atlantic confidently filing for an ipo. the firm making a big acquisition move with a new acquisition today, just announced. it's buyinginfrastructure fund manager, activist, which has a big presence in sustainable infrastructure joining us right now, william ford, general atlantic's ceo good morning to you. >> great, good morning >> this is apparently part of a tr trend. we were talking to larry fink back on friday what led to this

what's the thought process behind this deal >> we've known activist for many years, and we've concluded for a wile that the next big investment opportunity is going to be energy transition. and they've distinguished themselves by focusing on developing sustainable energy infrastructure like power, like solar and wind in the emerging markets. and that's what attracted us to them >> one of the things we've been talking a lot about in terms of sustainable infrastructure is both the need for it -- maybe it's a chicken and an egg situation, but we've seen these reports last week about evs in the united states. the pickup, the takeup by consumers, not nearly as fast as people think some say that there really isn't a demand for this product, and that it's being pushed on them >> well, i think what's going on behind the scenes is much more significant. last year, the volume of renewable capacity put online grew by 50% to 510 gigawatts, globally so it is a growth market and continues to grow significantly, both in developed markets and

emerging markets i think while the demand for evs might wax and wane, the demand for power is growing zm how much of is that is a function of governments continuing to spend on that investment most of that is government generated. we've talked to a lot of people saying they're watching the november 2024 u.s. elections very closely, for what it's going to mean not only for other markets, but other countries, too. >> i think that's been a tailwind, but if you look at emerging markets, the demand for power grows at 2x gdp. these countries are growing rapidly. they need more power it's either going to be renewables or traditional carbon-based energy. the hope for the world is that it's renewables. i think the demand is there. and what's needed is, you know, $1 trillion of capital flowing in to put this capacity -- >> money will flow downhill to coal, you know that. you've had 20 years of investments in what we're talking about and you haven't moved the needle it's like 83.4 fossil fuels. it used to be 83.5

so you're looking for some sort of inflection point when things change, because it hasn't changed yet. >> i think it's a fair point, but i think this is a disruption i think this transition will pick up momentum over the next -- >> you don't see india and china -- they're building a coal plant every day? >> they are, but the biggest increase in solar capacity in the world was china last year. of that 510 gigawatts -- >> but it's still marginal >> it's still marginal we're not going to be transitioning from carbon-based energy in thefec next five years >> will you continue to see the government -- not saying they're investing in dollars that the private sector -- well, i am saying that. they're going to invest in things that wouldn't happen in a free market system so you'll take advantage of that >> in this case, joe, it's to the subsidy driven >> we know there's demand, but not necessarily demand for expensive solar and wind it's demand for power. >> and that's going to grow. take data centers, for example

data centers today using about $60 billion -- 60 gigawatts of power to fuel them with ai, it will be ten times that number in the next decade where's that going to come from. some will come from traditional carbon-based energy, but a lot of these data centers are being powered by green energy. that's who i want to get behind. >> i want to pivot the situation to your firm you're a big investor in bytedance, owner of tiktok, shein, a retailer that's been taking off have you got a chance to spend any time with the premiere of china who's here >> i know he's here, but i have not spoken to him yet. >> what is your sense of the relationship between the u.s. and china guiven what's just happened in the election in taiwan and how do you feel about being a board member on bytedance these days, given that your company oftentimes is being described as a national security threat >> inlg china had a difficult

post-toefd environment it was a challenging year and problems in the property market, in the municipal finance came to the fore but i think the government is getting a lot more focused on driving economic growth in china and improving things i think we've seen the bottom in terms of economic performance in china and it should improve this year >> what about the whole bytedance piece of it? >> bytedance is a terrific company and continues to perform well it's a global internet company with 2 billion users worldwide it's a company that aspires to go public at some point in time, when the time is right, we'll execute that >> let me ask you two different questions. one is we sa anti-semitism on tiktok this fall you saw that i don't know how as a board member you feel that and in china, tiktok is very limited -- the version of tiktok in china is uniquely limited, in

large part because of what they think it may do to kids and other things, in operation what have that looks like versus the version that is exported, if you will, to the rest of the world >> let me clarify a few things, the content that exists inside of china has always been separated from the content inside of tiktok they've never been merged together the user pbases have always been separate, the content has been separate what we have done in response to your first question is, we have doubled down on content moderation, which is basically trying to screen out negative content, content related to hate, violence of any kind and we've always been deeply committed to that, but we doubled down over the last year. >> the reason i ask, alex carp, he has literally made the argument that he believes that bytedance and that tiktok itself is an export to literally control the minds of kids in the united states, not because of propaganda, but just basically to make us dumber, frankly, and

because we're all addicted to it and spending all of this time on it and he says, look how they do it in the united states and look how they're doing it in china. what does that say, but how is that really happening here the content is user generated. it's moderated to screen out the bad stuff. and it's generally as much educational and education-oriented as it is mindless, as you might say >> if we're making everyone dumber, it's our own fault for the garbage we're putting into it >> i think there's a lot of great content on tiktok -- >> do you limit your kids on it? >> screen time >> i do. my kids are older. >> i find it addictive myself. i literally have a screen time time-out thing, and then i blow through it >> i get stuck on the 100 emails i have to return >> you get cut off, right? >> too much. you filed confidently ly for an ipo. what does that do about abthe

firm >> that's a more interesting question about the ipo market. it's been a tough two years for ipos, but i'm pretty constructive on it now if you look what's gone on, volatility is at a reasonable level. equity market performance has been good, particularly starting in the fourth quarter. interest rate increases appear to be off the table. that was a real headwind to the ipo market i think that's all improving right now. and i wouldn't be surprised if we see the ipo market open up even in q2, and have a much more active 2024. there's a lot of companies that are ready to go public that are high quality, high-growth, there's also a lot of private equity portfolios that -- >> does that require the fed to lower interest rates >> not really. i don't think so i think what you need is, is reasonable levels of volatility, and positive equity market performance. with those two factors and $7 trillion sitting on the sidelines, i think you can have a very active ipo market >> bill ford, thank you for coming in this morning >> thank you so, so much >> thank you when we come back, we've got some more news making

interviews, including a can't-miss conversation with chevron's michael wirth. next, though, we'll talk cybersecurity with the ceo of palo alto networks stay tuned. you are watching "squawk box," right here on cnbc and we are live from the world economic forum in davos, switzerland.

they're waiting for you. hey, do you have a second? they're all expecting more. more efficiency. more benefits. more growth. when you realize you can give your people everything, and more. thank you very much. [applause] ask, "now what?" here's what. you go with prudential to protect, empower and grow. with everything you need to deliver, you guessed it... more. one more thing... who's your rock? learn more at prudential.com

welcome back to a topic that's on every ceo's mind here in davos, cybersecurity and how to protect employees and assets. joining us now is nikesh arora, ceo of cybersecurity giant palo alto it is giant now, palo alto networks, giant in market cap and everything else. congrats four years with the stocks up since you came home four times >> 4 1/2, but who's counting >> who's counting? i mentioned earlier, i love reading about molecular genetics, but i read about cybersecurity combined with ai and i am left in a bit of a daze these are daunting times, the opportunity is like it's never been in the past, i would imagine. >> yeah, i think part of what it

is, if you look around everywhere, everyone wants to bring more and more technology into the enterprise. the more technology you want to deploy, the more you take a look at data, the more ai, the more data you'll take and analyze and in that process, you'll leave a lot of doors open for bad actors to come and access your technology. and if you look last year, billions of dollars are paid in ransom ransomware and we saw very few convictions. if you're in bad business, this is a good bad business to be in, because less people are getting caught >> there are new technologies in what you do, and you've made acquisitions bringing in companies that either augment or somehow synergyize your own offerings. which ones have you done recently i read about them, but i didn't understand exactly what i was reading. >> five years ago, the trend in our industry was, you came up

with something new, something cool, you sold it to a lot of people, you became a hot cybersecurity star, and something else showed up, because the bad actors moved on to something else. so we have never had a cybersecurity company that has persisted or been evergreen. the strategy we took on is that we want to be there with every trend shows up we'll be there early, if you can't build it, we'll buy it >> that sounds like a big pharma company. >> i hope not. the dumifference is, pharma companies, you're solving verie specific problems. >> how do you think about an r&d budget versus an acquisition budget effectively >> we've been pretty consistent. we've been able to spend about $500 million a year in addition to about 12 to 40% of our spend being in r&d that seems to be the right balance. and every year, there's about 2,000 companies that get funded in the cybersecurity space it's an amazing innovation farm. you can go out and look at them.

>> do you fear that over time and the bigger you get and the better this works, that the government says, look, we can't have you buying all of these companies. it's just too much most of the things you bought are small enough that they're not -- they're not hitting washington, but at some point, does washington start to look at this and say -- >> i think the question is, are we creating a better outcome for our customers or not are we helping commerce secure themselves, or end up in the scales where customers will get greased on lot of money we lost. i think from that perspective, if we can take a deployed customer and add another feature to it, that's a much better outcome for customers. we're not destroying competition or making it hard for anybody else, we're just making sure that the needs of the customer, need of the moment are met >> so you started talking about ai is ai going to help you design security products for customers or do you need -- because of the proliferation of ai, do they need now more cybersecurity because of ai?

>> yes and yes look, literally, i just walked out of a meeting with a hundred ceos sitting there, talking about, hoe do we interpret generative ai, and how do we make sure we can use it in our business this is the fastest any technology trend has taken off i can't remember any other time where last year we weren't talking about generative ai in davos and today everyone is talking only about generative ai they all want to figure out a way of leveragie ing ai in thei business the moment you do, you'll be sharing your customer's data everybody's trying to grapple -- >> large language model for those uninitiated. >> sorry, we talk about this so often -- >> i know. and everybody is trying to figure out how to make sure the data gets security you don't have bad llms out there -- large language models -- that are trained on bad data >> but there is this tension between trying to protect your customers' data, and trying to make sure you are making the quickest advances possible with ai

we've watched that play out with open ai and microsoft. how do you balance that? >> that's a great question i think it's much easier for start-ups to go out, because nefing to to lose. but if you take a large pharma company and dump all of the intellectual property into a large language model, what if that's open, suddenly your ip has been -- >> compromised >> compromised >> and given away. >> that's why large companies with lots of data had to be more careful in trying to introduce new technology compared to start-ups who have nothing to lose >> nikesh, you and your coo have both said that market participants need to distinguish between billings and what was the other -- rpos? >> rpos, yes, remaining performance obligations, yes >> so initially the market looked and said, billings are not up to snuff. i think that your cfo said, well, interest rates went up, so people that customers are not using the same purchasing, i

guess, schedule that they would with lower rates, so what you really need to look at are -- so our billings are fine. can you just explain that? >> we're going to get into a technical discussion >> i don't know, it was technical enough >> it's very easy, go and buy this company, you get revenue. in our business, we say, i promise to serve you for the next three years the customer signs a contract. that is a remains performance obligation >> i remember ge with their power -- they had some sort of weird way. >> but it's all -- >> everybody does it like that the only distinction is, you can only bill what you invoice if i don't invoice you right now, it's not bilgling, it's a future obligation. people don't want to pay you up front anymore. >> so growth just as robust had you had forecast >> i think growth is robust. i think cybersecurity will be a theme for a while. i think the more we get

technologically dependent as a society, the more cybersecurity -- >> how much do the big software -- the microsofts of the world represent a competitor to you over time, one of the things they're trying to do is increasingly integrate their own technology and their own security into these operating systems and the like should they be, should they not be by the way, there's a potential case in -- well, there's a case against google, there's a case against microsoft. there may be a case against apple against their integration of various things. if the doj called you and said, should these oss have security in them -- >> operating systems >> thank you should these operatie ing syste have security built into them, you should say what item >> yes, most things should be secured by design. if you're secured by design, your operating system doesn't allow you to mess with it, it's better but by definition, because everything needs to work together, every piece of technology needs to leave doors open for me to talk to it.

or one piece of technology to talk to the other piece of technology we're not associated with any one particular camp. we provide security that runs on every piece of technology that's out there. to the extent some of these players are integrating, if they're totally reliant on their stack, they present a threat >> will you even touch the we fyi in davos >> no. >> use 5g. it's wonderful >> you think it's that much safer? >> turning mine off right now. >> i don't know what the cnbc -- >> i'm shutting it off right now. >> do you do a vpn over your 5g? >> if i use a computer, yes, we use that as a tunnel to go access data. >> good to know. >> some news you can use >> before you go, very quickly, you just came from the sam altman message, what was the message where 150 ceos were listening? i t >> i think it's been said that about 98% of the ceos are out there are aware of generative ai and would like to see it used in some way, shape, or form in

their enterprise 69% expect to deploy it in 2024. that is the fastest adoption of a technology trend and the moment everyone starts to deploy it, they'll have to make sure that their data is not getting stolen, no prompts are getting injected sothey need more security. >> a new opportunity thank you. >> when you came and i said welcome, and one of the big boys, a non-founder in the billionaire club, that's what i was talking about, which is not -- you're so goode eat goog, so great at palo alto. >> going to throw softbank in the middle nikesh, thank you. appreciate it. coming up, we're going to talk about the state of venture capital in 2024 with park capital's jim breyer later today here at the world economic forum, an exclusive interview with the secretary of state, antony blinken. that is today at 10:00 a.m. eastern time stay tuned we are coming right back from the worlecom fumn vos.d onicor i is happening here. inventory is practically moving itself quickly and securely. classrooms are getting more immersive.

data is powering insights and imagination. cdw partners with you to get the most from your technology. we work with you to plan it, build it at scale and manage it, so you can do amazing things. ♪♪ make amazing happen. cdw [♪♪] [♪♪] [♪♪] [♪♪] your skin is ever-changing, take care of it with gold bond's different formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond.

some deal news, chip design software maker synopsys announcing a deal to buy engineering software company ansys in a cash and stock deal valued at $35 billion. on returns of the deal, ansys shareholders receive $139,000 in share and a third of snap sis

common stock the combined company expects to achieve roughly $400 million of run rate cost synergies by year three. the deal expected to close in the first half of next year. >> here's what they should do. combine the two companies and then it can be snopsynas >> pretty similar. there is some synergy there. >> when we come back this morning, we will go inside the u.s./china chip war and the race to develop next generation ai technology with the ceo of qualcomm but next, we're going to talk markets and the state of venture capital with jim breyer. "squawk box" will be right back. a car is a car... is a spa. an office. hi! hello!

a cinema. so automated. yes, the definition of a car changes... but one thing stays the same. it's a mercedes-benz. i could use a little help. yeah, there's a lot of risk out there. huh ♪♪ hey, is this thing hard to learn?

nah, it's easy. huh. you know, i think i'm going to ride it home. good thing you chose u.s. bank to manage and grow your money. with our 24/7 support at least you're not taking chances with your finances. yeah, i think i'm gonna need a chair. oh, ohhhh.

welcome back to "squawk box," right here on cnbc let's take a look at the futures this morning right now, you're still looking at the dow futures in negative territory, off by almost 100 basis points actually, fair value, about 90 points below that's an improvement over where we started the show this

morning. we were down by about 200 points below fair value that's after we got morgan stanley and goldman sachs, both those banks trade higher after reporting their earnings >> last year at davos, vc investor jim breyer was pounding the table on nvidia, calling it an underappreciated ai story breyer apital's investment reveals bets on ai adoption from everything from protecting and treating cancer to new materials. joining us right now is jim breyer welcome back to davos. >> pleasure. >> so by the way we should start here, will you still pound the table on nvidia? >> i'm pounding the table on nvidia i think the key risks are supply shortage obviously, there's the chinese supply chain it was at one of the discussions in and around some of your conferences, where i spent time with nvidia's senior teams around resilience of the supply chain. i came away very impressed

they have built a software layer around their chip that the companies i invest in just can't get enough of. and so if you want to run really significant ai, and you want to do optimization, you want to be running different probabilities, you need nvidia, and i also pound the table on amd >> on amd. >> speak to this, though when you speak about doing serious work, sam altman is here, he was talking about cha chatgpt, but you're talking about -- you're investing in a number of companies that are using ai for health care, where they're having to do imagining and really sort of heavy-duty stuff. where do you see the real opportunity? we talk about ai every day, but nobody sort of has a tangible form factor for it where do you see the biggest opportunity immediately? >> well, i'm seeing it play out in very positive ways, because for the 12 or so ai spinouts,

out of memorial sloan-kettering, harvard, ucsf, we start with great medical data and a great set of doctors it's my job to recruit these insane machine learning geniuses out of alphabet and amazon and microsoft. and we're seeing phenomenal progress in a number of cases, where something as simple as getting a pathology slide back used to take ten days, we do it in two and i think what we shall see over the next couple of years, these worlds have been completely separate. >> you're talking about the academic world and then the commercial world where you can actually get those patient-to-patients, right >> absolutely. so i think the other piece of it is for a lot of people that invest in biotech, they've been very slow to invest in artificial intelligence, and there are a lot of great investors out there that just

don't do health care life sciences, so part of the breyer capital thesis in 2016 and '17, study "new england journal of medicine," spend time with the doctors, and the newest deal that i'm really excited about with my friends, michael dell, steve cogluka, we have one of the best scientists in the world as our founder, stewart shriver. and he was a cofounder of the brode institute -- >> this is for arena bio -- >> this is arena we spoke to the brode and the unive universities for about a year and we have basically now announced, as a for-profit institute that will build deep ai technology, but it's all medical and computer experts who really think we can make a big

difference instead of ten years for a new drug, it's three >> that's one of the most exciting promises for all of this technology. >> so i had this conversation last night at a cnbc dinner with one of our great pharmaceutical executives, he's not from the u.s., and he said, how important is ai? i smile, but for someone working in these spaces, as well as more broadly, it's ai or die? i can promise you. i've never seen anything like it >> we're in such early days, and i just wonder whether this is 1996 or not. 1996 was a great time insofar as there was a lot of invention there was also a lot of money that went in that never came out. are we in that period? and how do you decipher between the stuff that's going to work and isn't at this point? >> i think it's really hard to figure out if it's 1996 or 1999.

i was fortunate to have steve jobs as a mentor during the personal computing revolution 50 or so companies went under in about 12 or 18 months. we didn't need that many pc companies. same was true in the era of the internet and the web browser great carnage. social networks, again, one of the reasons i loved facebook, i looked at four other social networks, and facebook had figured things out >> i'm trying to think of the different ways that you can use ai in the medical arena. and i think of, in terms of drug discovery, you don't even need to do some clinical trials for whatever the greatest binding compound is. you might be able to show someone a hisology slide, you know exactly, instantaneously whether it's ancer, whether it shows something else or just data collection for drug/drug

interactions in all of these things, you know tyler jacks? you do he came into the center for cancer research and no one knew why you needed a computer genius at m.i.t. to do cancer research. that was -- that had to be 15, 20 years ago and he's nowat coke up there but brode as well, all three all of the above are where you're going to see potential. >> you bet >> so i'm a venture capitalist, despite what students wanted to call me. >> the drug discovery -- >> it's all of it. the drug discovery, it is happening and my mother passed away from ovarian cancer and there are drugs available today that would have let her live longer, healthier, and better. and not go through six bouts of chemotherapy so there's a pipeline of drugs that just needs to be accelerated -- >> and that's what ai

computation can do >> we've got to run and they're going to kill me for asking. who loses in all of this a lot of companies won, but then there are -- there are going to be people who will be upsenende. >> i think there are companies like cisco that are now value oriented they are not on the growth trajectory i like the acquisitions they've made the magnificent seven, quote/unquote, i would add amd to that list for sure. the best ai talent is in the megacap arena. i would say $1 billion or $1 trillion of microsoft market cap is probably due to ai. and so -- we'll see. but there are a lot of companies that don't move fast enough. >> i can't say with that trillion dollars, overvalued or undervalued. and i think he's not going toens the question jim breyer, thank you. >> thank you great to be with you up next, global energy in focus and the threats to the markets from violence in the red

sea. chevron sea michael wirth will join us. "squawk box" will be right back. "what should we do with it?" bacon and eggs 25/7. you're darn right. solar stocks are up 20% with the additional hour in the day. [ clocks ticking ] i'm ruined. with the extra hour i'm thinking companywide power nap. let's put it to a vote. [ all snoring ] this is going to wreak havoc on overtime approvals. anything can change the world of work. from hr to payroll, adp designs forward-thinking solutions to take on the next anything.

powering sustainable growth in a changing world. powering financial solutions that transform industries. powering innovation with access to capital. powering critical decisions with precise data and insights. powering seamless execution in evolving markets. we deliver our entire global bank to power new possibilities for you. barclays corporate and investment bank. powering possible. las vegas grand prix choose t-mobile for business for 5g solutions. because t-mobile is helping power operations and experiences for hundreds of thousands of fans with reliable 5g connectivity. now's the time to accelerate your business.

welcome back, everybody. energy, one of the key topics here in davos this year, and

seemingly every year at this point. and joining us right now to talk about this and much more is chevron ceo, mike wirth. mike, welcome. >> thank you >> good to see you i want to think something right into the news of the day something we have not talked about is a situation that's gotten increasingly concerning, and that's the situation in the red sea with the houthi rebel attacks. they have now said that they're going to be targeting not just israeli-bound ships, not just israeli ships, but american and british ships as well, because of the back and forth in the attack in yemen last week. what does this mean for you? how closely are you watching this and what does it mean for the global oil supply? >> well, we watch it very closely. the safety of our people is the most important thing that we work on every single day we have ships that go through the arabian gulf and the red sea regularly. last year, we had two ships attacked by the iranian navy we had one ship who was boarded off helicopters by commandos and the ship was actually hijacked and taken into an iranian port

we had another one that took fire senior several hours, until the u.s. navy interceded so we work very closely with the fifth fleet. we coordinate every vessel movement with, you know, other military authorities that are in the region but it's a very serious situation, and it seems to be getting worse. to this point, we haven't seen much in markets. >> wti, below $73 this morning that comes as a surprise to me does it surprise you >> well, it does, because the risks are very real, and so much of the world's oil flows through that region. were it to be cut off, you could see things change very rapidly thus far, we've been able to maintain our movements through the region, and others have as well this is an evolving situation and we have to watch very carefully. >> let's talk about what's happening here in davos. we have seen energy has been a focus here for years, and it has, but it's generally people looking for renewable solutions

to the climate change issues that are going on here that's been a focus of davos for years. you've been very vocal about the idea that we need to have lower emissions, but it shouldn't come at the expense of affordable and reliable energy supply what is that message here? how does it resonate >> i actually think the discussion has revevolved here a little bit as you well know, for a number of years, the focus was almost exclusively on climate >> right and there are three things that really matter when it comes to energy it's affordability, it's reliability, and the impact on the environment. and you have to take all three of those into consideration. as you talk about energy as a part of our economy. and we've certainly seen in europe when reliable supply is threatened, prices ss respond a the economy feels it i find a more balanced conversation underway, certainly, not less concern about the climate, but i think more recognition that reliable supply and affordable energy matter and that we have an energy

system today that has the mix that it has. and you can't change this overnight. and so it's going to take time, it's going to take technology, capital markets, and investment in order to scale some of these new technologies and we're on that path, but this is not something that can change as rapidly as most people would like to believe that it can. >> do you think that, for example, the climate agreement, it was much more punitive for the united states vis-a-vis india and china, and we're already in much better shape in terms of controlling a mission it's almost as if we were taken -- i worry about less-developed companies having to live by rules established here by the global elite in davos, that you let them eat cake you can't have hydrocarbons? >> basically, you're saying to other people, that you have to lower your standard of living -- >> you can'tcome into this first world like the rest of us.

your economies can't grow. you're not going to have the hydrocarbon necessary for you to grow there's been a backlash. this is coming home to roost when people don't have energy, when things cost too much and your economy goes into a recession. when europe looks like they dodged a bullet with russia and natural gas, it could have been much worse >> this is the tension that's been developing. how do they allow their economy to develop in a way that's competitive and raises the standard of living and that's maybe a very different solution than what you see in the developed world, where you've got already great wealth an economy that is well developed, whether you're talking europe or the u.s., and the ability to afford things is very different >> the coal plants that we know, are they all clean coal? >> i'm not an expert on chinese

coal, but there's still a lot of coal-fired power being developed. >> they need power from the grid that doesn't come from wind and solar. >> and nuclear as part of that as well. >> do you think davos is -- it's different. it's almost davos 2.0, isn't it? >> do you think anyone realizes they're coming here on a gulf stream probably wasn't a good look when they're piled up at the airports >> i was thinking back the u.s. a political question, which is you saw gas prices go up and dpas prices go down. president biden blamed for it going up a question about whether he gets credit for it going down >> they're still 50% above where it started >> the question that i have, is the ceo of a company in this space, how do you think about the politics and how it relates to price for those watching, trying to thinking about what's happening in the country >> the price of gasoline is set

by supply and demand and competition. it's not set by the president of the united states, not set by ceos of oil companies, it's set by markets it's a globally traded commodity. and prices went up because prices went up when the war in ukraine came out, prices came down as people realized that oil supplies weren't threatened. there were sanctions that were imposed on russia, but the russian oil kept coming into the market the sanctions that were imposed on iran have not -- >> but do you criedit or blame particular president for pipelines that are built or not built or ports or that are open or not open. >> but that's a different issue than the price of gasoline today. that's an investment in long-term infrastructure, long-term energy supply and energy security. those are important issues, but they're not really relevant to the price of gasoline in the short-term >> there's more draconian regulatory environment now than there was before president biden, is there not? >> we've certainly seen mixed signals and we've seen more aggressive regulatory agenda out of this. >> let's talk about what it means even on a state level.

california, your home base, you just said, i think it was last week, that you'll be taking an impairment charge of up to $4 billion, because of significant regulatory ongoing challenges that you've been dealing with, with them. and there's a long litany of the back and forth with california, of what they've been doing but you've spent hundreds of millions of dollars less in investments in the state since 2022, and it's because of the policies that are happening there. what's the problem what's the outlook for california >> california was one of the biggest energy-pollution states in the country for many, many years. our company was founded there. we made the first commercial discovery in pico canyon in 1879 we've been there for 145 years we've been part of the economic growth and the success of the state. the regulatory and policy agenda has become increasingly aggressive and hostile the our industry, raise the cost, made it more difficult to do business there, and we are investing less and as we've looked at our future plans and will invest

even less going forward, we are taking an impairment on the value of some of our assets in the state, because we simply won't be able to produce the value of those assets that we had planned to it's gotten too difficult, and the opportunities for investment elsewhere in our portfolio have become more attractive >> what, specifically? a lot of this is gavin newsom as governor what specifically regulations have made you look at it and say, forget it, it's not worth investing? >> i wouldn't put this all on the current administration this has opinionunderway for a couple of decades. and there's a whole series of things that have made it more difficult to develop energy resources in the state of california it's permitting issues, it's setback issues, there are a whole series of constraints, that i think many in the california policy world would say are intended to constrain and ultimately shut off production in the state, as the state tries to pursue less carbon-intensive economy the reality is, california drivers are still using gasoline

and will be for a long, long time to come that supply will come from other places then the state of california >> and if they're using evs, you need the chevron natural gas to power the grid that charges the evs? you're going to get it either way, mike, aren't you? >> well, look, we're an energy company. investing in renewable fuels, biofuels, hydrogen. >> even evs need power, don't they >> the power comes from the grid the grid comes from power plants >> mike, thank you very much for being with us today, michael wirth. >> you're welcome. >> you have to talk me down. >> thank you, sir. coming up on the other side of this, ai and the geopolitical. be sure to follow squawk pod for special episodes all week long features the very best of our davos conversations.

we'll be publishing multiple reports. hit follow or subscribe on your favorite podcast app we're coming back live from davos, switzerland in just a moment

in a world shifting toward ai, our next guest says his company is well positioned to capitalize joining us now is qualcomm ceo cristiano amon good to have you on. >> happy to be here. >> i'm having deja vu with an interview we just did in palo alto you need to work with me qualcomm has been a leading edge chip company for a while, and that right there makes it hard for most of us to grasp exactly what is happening. then you throw in the ai component, and it's a mix that's hard to explain. will it help qualcomm with its competitors and go into the future and be even more successful >> absolutely, joe the company -- i think probably know qualcomm for what we've done in the wireless industry to

every generation of wireless the company is really changing from wireless communication company into a connected processing company in the semiconductor space. where we're really excited, ai is just the new computing and what's happening on the data center you see with chatgpt and everything, we can bring this to every device, to phone, pcs, to cars. the ability to run ai on those devices is a great opportunity. >> so ai is helping you design the chips to do that, or you're selling into the ai marketing itself or both >> so our chips are going to run those large language models, those large visualization

models, they're going to run and they're going to run in your phone, going to run in your pc, going to run in your car just as an example, in a partnership with bmw, one of our customers, we had our qualcomm concept car and we had a large language model running on that chip with all the knowledge base from the car so you have something in your dashboard. you just ask the car, what is this like? the car explains what it is, tells you what the problem is and asks you if you want to schedule an appointment, tell you your availability and schedule an appointment for you. >> will it then drive the car there, take care of it while i'm at work. >> you can do this everywhere you have a computer, even the palm of your hand. >> there was a time we talked about qualcomm so much, we actually would play qualcomm. >> thank you >> now i think we do nvidia. you have had to transition the business or at least the stock has been -- hasn't been the

growth vehicle it was for years and years in the last two or three years. how does it get back to that >> look, this is i think the essence of why we're being so focused on diversifying the companies. if you look at where the stock trades, it trades on the mobile market the mobile market is great it's a very big market, but everybody has a phone so it doesn't grow as much what we realize is some of the technologies that was the essence with the company which is wireless communication, high performance communication and the ability to do ai processing could have different end markets like automotive or industrial. i think that's where we are. we're happy to see that some of those markets in a short period of time, we're now working with every company in the automotive industry it's a kind of testimony to our technology overtime it does become a larger component of our revenue we expect the stock to have a different performance. ai is a great opportunity. as i said before, it's a

tailwind of what we're trying to do. >> in a leading tech company it's about reinvention, it always is. you either reinvent or you turn into novell or something, i don't know, prime computing. >> that's our story. i think we've been reinventing ourselves every generation. >> so the growth rate in your view will get back to some of the days gone by >> if you look at some of the new business for us, whether it's automotive, industrial, i think our entry into the pc space, the things we're doing with meta, for example, with virtual reality, augmented reality, all those markets have double-digit growth rates. that's the opportunity for us as they get scaled. >> so who is your ideal -- you go to colleges, who is your ideal candidate for a qualcomm position can you find them? >> yeah. qualcomm is a unique place

because we build cpus, graphic processor units, neuro processor units, wireless communication. >> all right i can't do any of that >> so anybody that is interested in working in chip company and change the technology landscape, i think we want to hire those. >> can you >> absolutely. >> are you finding enough s.t.e.m.-educated individuals in this country >> we -- that's an issue the entire tech sector -- i think skilled immigration is important. we've been hiring people globally, not only in the united states but all the different geographies as well. >> it's not just me. andrew, you're not going to work for qualcomm, are you? >> he hasn't offered me. >> christianocristiano, thank yu >> let's get a final check almost put this one to bed this first show. we've got two more to go

futures right now, back down 148. we were down 50. we had recovered, now back down 75 or so on the nasdaq s&p off 21 interest rates haven't been the issue today. about 4% now on the ten-year and bitcoin is right at about 43,000 make sure you join us. tomorrow might be a little precipitation? >> i think thursday. >> that's thursday we'll be here. please join us "squawk on the street" is next good tuesday morning welcome to "squawk on the street." i'm carl quint tina with jim faber and david faber. stocks are lower in europe and asia on some china weakness. a risk in the red sea. yields fall on a very low i'm prior sur vie.