>> abvie, a great yield and wonderful pipeline. >> dow is down about 72. it was down more than 300 earlier. s&p 500, trying to do the same. and watching the nasdaq, of course. and apple, especially been a long time. nasdaq 100 is positive, nvidia is in the green. see how it finishes. i'll see you at 3:00 on "closing bell." "the exchange" is now. thank you very much, scott. welcome to "the exchange." i'm kelly evans, and here's what's ahead. the fed's loretta mister says it's important to not wait too long to cut rates, but the b bifurcation she's seen in the economy means higher for longer. our market guest is singing with the value trade. he's bringing three names well positioned to pay dividends literally and figuratively. from rate buydowns to rates,

heavy insenators to soak evidence demand. our analyst joins with us the story and the trades. but let's start with today's markets with bob. what are you seeing? kelly, we are off of the lows of the day, but not by much. the dow is again lagging. this is really a very persistent trend that we have seen in the last tweak. the major indexes, maybe six points off of the lows for the dow jones industrial average for the s&p 500, i mean, and we've been moving up much more notably on the dow. we've been down several hundred points, but you see the dow is lagging. lagging the nasdaq, lagging the s&p 500. this is because the dow doesn't have as much technology in it as the s&p and the nasdaq. that's really what's been moving. let's show you the sectors here. what's shocking this week is the rather poor breadth, after a tremendous march and april and largely may, breadth has been

crummy in the last couple of weeks. it's 4-1 declining advanced stocks here at the new york stock exchange today. declining bond yields, they're good for the market generally, but not for everything. so it puts pressure on commodity stocks, pressure on energy stocks. even consumer staple stocks don't have as much pricing power. although they've done a little better today. and bank stocks have had a tough time for a number of weeks here. tech today, big cap tech doing okay. most of the major names are up. apple down about 1%. meta and amazon down a little bit. overall, this is still a tech-driven market. a lot of talk about stocks, broadcom, nvidia, all involved in that. consumer staples are finally bouncing. they have just had a lousy year, a lousy month frankly. but they're doing a little better today. this goes to the growth and fising pressures. when you have deflation, much more difficult to raise prices. there's been pushback on higher prices, even in the restaurant business where value meals are making a comeback.

also not doing -- having a tough time today, the worst performers carnival, norwegian, there was some comments -- analyst comments today based on cruise prices in early june, there was modestly softer pricing. and these stocks have had some run-ups. they've been up and down, but you can see the effect that's having on them today. just on industrials, which were really big darlings for months on end, particularly towards the end of last year, dover, eaton, rand all big, even quausi ai plays have been weak. and there are some modest growth concerns around these. a lot squirrely here. there is the ai paradigm that's powering the stock market, but below that, you have issues of what the implications are for deflation, as well as the implications for somewhat slower growth. back to you.

>> absolutely. bob, thank you. we appreciate it. outgoing cleveland fed president loretta mester is wrapping up a 40-year career at the fed, but not before sitting down with our steve liesman to share some interesting thoughts about the fed's path forward. steve is here with the highlights. >> i'm glad bob did the bad news, but it was a good week if you were an inflation dove and a u.s. bond holder and you're long. import prices provided the third better than inflation report this week in a row, and the outgoing fed president sitting down with us and welcomed the progress. >> we've been working hard to get inflation down. we've been restrictive on our monetary policy. we have seen good progress over the last couple of years on inflation. we're not there yet. but you have to look at the whole group of data and be happy that we're starting to see inflation move back down again after stalling a bit in the first part of the year.

>> her comments came after import prices surprised to the downside. she suggested rate cuts could come before the fed hits that 2% inflation target. it has been a very volatile seven days in the bond market. look at this chart here. two-year yield note, it surges. a week ago on the strong jobs number, falls sharply wednesday. that's in the middle of your screen there. on the good cpi number. comes back on the hawkish fed in the afternoon. then yields plunge again with a negative wholesale inflation report. we're down 21 basis points in case you're keeping the score, for the week at least. markets still think july is too soon for the fed to cut, but they become confident in sent after the inflation data this week, raising the cut probability to 71%. and then you can see the probability of a two cuts this year, now trading at 76%. mester retires at the end of

this month. 39 years overall at the fed. she said the good inflation data, good way to go out, but she still said she would see a few more months of better data if she were to cut. she'll be gone. the question is whether or not her replacement takes office july 1, if she has the same opinion. >> bond expert, if i'm not mistaken. >> internal financial plumbing expert. >> even better. >> i don't know if she can fix the leak under my kitchen sink, but i think she can fix a leak in the financial system. >> we'll take that at this point. >> the question is, i mean, if -- she helped guide goldman through the worst of times in '08 and '09. >> we'll see what that expertise brings to bear. the next guest says the bifurcation of the economy will keep inflation and rates higher and a soft landing is off the table. let's bring in nancy.

good to see you. >> nice to see you. thank you. >> where do you think we should start? what's been the most significant development in your mind in markets over the past week in the economy? >> well, certainly we did have a good month, a good track of inflation readings this week, that just steve just mentioned, the question is why are we seeing the low in inflation? one month doesn't make a trend, we need to see several more months. we would highlight that you are squeezing significantly the low-end consumer and starting to squeeze the middle income consumer. if you look at the university of michigan consumer sentiment survey that came out this morning for june -- >> it's bad. >> very bad. it's the three pieces that were bad. both the low-end and middle income confidence dropped confidence and we are in recession territory. that comes back and helps explain why you're seeing weakness in retail sales. there's a huge debate that

higher interest rates are helping consumer spending, but retail sales have been flat all year. you are seeing strength in services, maybe that is that upper income consumer doing that. but on balance, you are starting to see the economy deteriorate, and the question is why? >> nancy, before we dive into that, just a moment on the consumer sentiment. mark zanldy said it's a flawed survey from the university of michigan. do you think there's just something flukey, whether it's politics or something else going on -- >> before nancy answers, there's been a change in the methodology at michigan that raises questions about the last three months. they've gone increasingly to a web-based source whether than a cell phone source. a reason to be a little careful, but it's not a reason to discard a signal it may be sending. >> they said in their release

this morning that, indeed, they tested both the web-based and their normal way, and they have the same conclusions. >> okay. i didn't know that. >> good for them that they did that. >> exactly. the university of michigan is heavily focused on prices, on inflation. the conference board is much more so on boards. we're not in a recession right now, but what the university of michigan survey is telling us, price levels are very elevated. that's squeezing that lower and middle income consumer. indeed, inflation expectations remain somewhat elevated. and if you ask consumers, the reason your personal finances are getting hit, it's high-priced levels, as high as it was in the late '70s and early '80s. >> your colleague, jake, was on earlier this week, and he points out we are talking about levels. but even if you talk about price

increases, it's running at a 6% year on year average versus zero for discretionary. if you think this is pointing towards an economic downturn, i'll give you another devil's argument for it. dean mackie was on yesterday saying consumer balance sheets are in good shape and he doesn't think we'll see a very near term downturn as a result of that. >> the economy has been bifurcated. we have a bifurcated economy. at the end of the day, you keep inflation and interest rates higher for longer. those areas of strength, what's going on in ai, keep capital spending stronger, keeps the economy moving ahead. in 199, and 2006, 2007, we had economic bifurcation. so these periods of high rate and inflation squeezed that lower end consumer. now we argue that middle income consumer and both ended poorly. our base case is we will have a

recession. it's been bifurcated up to now, but we will have a recession, but not until the fourth quarter. the board is telling you right now we're not in a recession. once you go into recession, both conference board goes down, and right now we're not. but there are growing signs we're deteriorating signs. there are plenty of signs that the consumer is getting squeezed, which is why retail sales are flat. >> i'm not going to make the following points because it's the weekend and i want to go out on a good note. but i would point out, nancy, and i'm sure you have an answer. but, a, we are approaching, i believe, come june or july a full year of wages running stronger than inflation. >> nice. >> so real wages have been rising. there's also a wit of data that shows those on the low end of the income spectrum have done better in this go round in terms of the cycle on wages than those at the higher end of the

spectrum. of course, if that were always -- if that were the final determinative factor, we would never have a recession. so, i'm just say thing is some -- what do you want to say, runway it would appear. people are down beat, and we did a lot of work on this, kelly. even though they're down beat like it's a recession and that's where their sentiment is, their spending has been relatively upbeat. now, we will get the retail sales next week, and our cnbc monitor admittedly, it is new, showed a good bounceback in april. we'll see if that's the case, and i'll be the first to say we need to be careful about this because it's a new indicator, but it is using actual spending data. >> nancy? >> i would look at real retail sales. they've been flat all year. auto sales have been flat, sub-16 million units for over a year. if you look at company news, our

economic data are obviously company data, if you look at cigna and rh, and i have a bunch of companies saying ouch, they're seeing weaker unit sales and seeing cigna said they would see declining prices. and so right now, the economy is bifurcated. there are areas of strength, particularly on the ai side. but we do see things deteriorating end of the year. >> would you say a sonnet or more of a shakespearean -- >> it was economic poetry to me. i read nancy all the time. they have a great shop over there at piper sandler. one of their guys just went of to the new york fed. so they're people to take seriously. >> nancy, thank you so much. steve liesman, have a great weekend. despite the fed's mantra of higher for longer, investors are betting on cuts. inflows of nearly $2 billion this year and value funds saw

outflows of 2 $2.6 billion. the s&p value index falling, while the growth index is up about 2% since wednesday. my next guest is still sticking with value and says the fed has to start easing now. let's bring in my next guest. great to have you back. welcome. how are you? >> thanks, kelly. great to see you again. thanks for having me back. >> i wanted to wave the red meat at the bull here by quoting the declines in value. michael was pointing out earlier this week that value factors have done poorly, but if you define value as quality, that quality is outperforming more than ever. any way, the podium is yours. >> i think we're in a market that's dominated by momentum, and we're seeing the stocks that are going up continue to go up. whereas the stocks that are not going up are not doing anything. and right now, the market is really being dominated by a

small handful of stocks, especially nvidia. it's very hard to find a market index that does not include nvidia, but has done better than the qqq for example. so this is a difficult market for value investors. but you mentioned interest rates being good for growth stocks. a decline in interest rates would also be good for dividend paying stocks, because it makes those future dividends greater and also makes them more competitive against bonds. >> so is nvidia a value stock? >> i don't think so. it was a value stock at one point. in fact, in 2022, i was a buyer of nvidia, because it was undervalued. i not only bought nvidia, but i also bought google and amazon. those stocks i held onto, because they are no longer -- i mean, they're still good value in my opinion. nvidia, however, appears to me

to be very overvalued, especially on a price-to-sales basis. you know, the other reason i sold nvidia is because i have a lot of exposure to etfs, including qqq and fpy. nvidia is now 25% of the smh. even though i sold the stock, i still have a lot of exposure. >> i was going to ask why do you have exposure to the qqqs? >> because i don't put all my money in one stock. i want to have exposure to all sectors and all industries, so i own qqq, i own spy, i own the dia and shm. and i also own a bunch of other etfs and individual stocks in other areas. so i'm a financial adviser. i have to manage money responsibly. i can't give my clients too much

exposure to one stock. >> so that's what brings us to some of those individual names you mentioned, ibm, verizon, pfizer, you know, get us excited. >> yeah, these are stocks that are out of fever. i like to buy things that are cheap. if nobody wants them, i get interested. all three of these stocks, by the way, pay generous dividends, and all three have been increasing the dividend every single year for a long period of time. so eventually i think they'll come back in favor. these are not the kind of stocks that are going to double in value every time we blink. but they'll do well over the long-term. >> a quirky last question for you. michael hartman was talking about what he's calling the cash bubble. we were just talking about this divide between how consumers feel about the economy and their ability to spend, generally speaking. is there -- the journal had an article that americans are making a lot of money off of their cash.

i'm just curious, people say oh, there's $7 trillion of cash on the sidelines. is that cash happy to be on the sidelines and compounding in value? your thoughts on that? >> i'm one of those people. i do have money in treasury bills, short-term treasury bills. if you have a situation where you can get well over 5% on bills that are one year or older, take advantage of that. now, of course, not everyone is making money on this, because there are a lot of americans that don't have cash available. those that do are sitting back and generating quite a bit of income from those treasury bills. >> i just think it's a significant part of what's going on here. always a pleasure. thank you for your time today. have a great weekend. >> thank you, kelly. coming up, ev makers are in the midst of a pricing battle, and it could reshape the auto industry sooner than you think. we'll tell you which names are discounting the most and what it means for the bottom lines in the long run. and it's been six months since

amazon rolled out ads on prime video disrupting the market. we'll look at what it means for netflix and the rest of the media landscape. "the exchange" is back after this. (♪♪) at enterprise mobility, we never stop looking for new mobility solutions. because sometimes the best road forward, is the one you didn't expect. (♪♪) [ inner monologue ] i needed some help. good thing i knew someone... ♪ ♪ or... some-thing. [ a.i. copilot ] glad you called, j. [ a.i. copilot ] it's time for an upgrade. awesome. ♪ ♪ [ inner monologue ] i knew what i had to do. because they never stop. no time to waste. this isn't sci-fi. this is precision ai. ♪ ♪

welcome back to "the exchange." chinese automakers are surpassing u.s. manufacturers for the first time last year, according to a new report, chinese brands sold 13.4 million

new cars, while american grands sold nearly 12 million globally. mading the series is byd, outperforming ford, stellantis and tesla. the slowdown has sparked inventives, from price cuts to leasing offers. my next guest says companies could be playing for those leases down the line. dan, how significant are these discounts? >> hi, kelly. thank you so much for having me. yes, what we're noticing is that automakers are trying to push discounts, because the ev demand is soft. you saw early on a lot of outright price cuts, a lot of this spurred by tesla. but i think one of the observations is that -- has been that the elasticity of demand is probably not what some were hoping for. and so they're resorting to other ways to discount and leases are a key way. you get the full $7500 tax credit in addition to that,

there are more subtle ways to embed discounts. so we are seeing some increased discounts, but it's occurring in what we call subtle ways. >> so tesla has a $299 a month lease for a refreshed model three. what are some of the other competitors offering, the american ones? >> yeah, you know, i think the ones that have stuck out to us, we're seeing gm, you know, some of the deals that we were seeing, for instance, a blazer ev, somewhere in the $200 range, call it, you know, $250 for a blazer ev. lyric, i believe, was $400. you're see thing with ford, as well. rivian is pushing this, as well. but those are obviously more expensive. those are going to be something with at least $600 to $700 per month. but the point is, sit is a way o push the volume and fully

capitalizing on that $7500 tax credit. >> so as you write, we're concerned about the profitability of these aggressive lease oftenings and believe they're delaying ev losses. what is the implication for stocks like gm or tesla? >> well, you know, the implication for tesla is obviously it's a sign of, you know, soft demand and the fundamentals are a clear challenge for them right now. what you are seeing is that some of these discounts actually are, in a way, protecting the residuals for the time being, although they pay for it later on. companies like gm or ford, even if they are increasing discounts on the evs, they are still at their fore vehicle manufacturers. even if the ev demand is weak, there is a strong ice profit stream to support the numbers.

so at least there's the offset from that. >> you're talking about the legacy automakers discounting or offering incentives that amount to over 25% of list price, whereas tesla is only 3% for most of the models. it's the legacy players having a much harder time moving these vehicles, in other words? >> i think that's the challenge here, right? it does tell you that tesla is still the dominant player in the u.s. market. they hold roughly 50% of the u.s. ev market share. i think that the legacy players, you know, or gm, others are catching up. but it is still a gap. i think that speaks to the discount gap that we're seeing. the other thing i'll just point out, it tells you the channels on the coast firm. tesla is able to offer these more affordable offerings. they have a superior cost structure on evs. because legacy automakers are

more channelled from a cost stand point, they have to price higher, so it limiting what pricing they can offer. that's why they're perhaps at some what of a competitive disadvantage for the time being. >> i imagine on top of this if we had chinese evs to worry about, which still seems like a ways down the road. dap, thank you very much for your time. >> thank you for having me. speaking of evs, now that elon musk's pay controversy is probably in the rear-view mirror, jeff killburg has a bullish way to trade tesla, calling it a high beta stock that offers an electrifying opportunity. go to cnbc.com for more. coming up, a $4 billion next generation nuclear power plant being built by a company founded by bill gates. there you see him at the ground breaking in wyoming this week. later on, we'll speak with the company ceo about what makes this plant unique. as we head to break, check out shares of penn entertainment,

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welcome back to "the exchange." let's get a look at markets. dow well off its lows of 341 today, down only 79. the s&p down seven and the nasdaq up two. the ten-year treasury below 4.22. a lot of global developments, but just the low inflation reports this week, including import prices are pushing that lower. let's talk about apple, up 8% since monday, on pace for its fifth positive week in a row. but this trading action today is especially important, as it tries to maintain its place with microsoft as one of the top two holdings in the xlk the tech spdr etf. this shuffle, this rebalance won't happen until next week, but it's based on the market values of today's close. number one, microsoft, number two, nvidia. number three, as of today, at these numbers, would be apple. each fund for the top two would be -- each of the top two would be 22% of the portfolio.

number three stock would be less than 6%, which is nvidia, just behind the top two. uvs says if nvidia tops apple, it would boost the chipmaker's weight to 21% of the xlk, so the fund would have to buy more than 10 billion worth of nvidia shares next week. that's about a fifth of last week's total trading volume for nvidia. so apple's weight could drop to just 4.5%. shoutout to jessie pound for crunching all of these numbers. if your head is spinning but you want the full story, go to cnbc.com. now over to tyler mathisen for the news update. >> my head is spinning. conspiracy theorist alex jones' personal asset also be sold. a judge ordered the liquidation today to pay his $1.5 billion debt for false claims that the sandy hook elementary shooting was a hoax. meta will not launch its ai

models in europe now after irish regulators told it to delay collection of data over concerns it would be used without consent. meta said it would be using information that is publicly available and licensed. while there have been studies that show women go through changes in their brains to prepare them for motherhood, research shows new dads go through similar changes. a study in spain showed brain images in the brains in spain, shows that images of 40 fathers found structural changes in areas that involve emotional processing and problem solving. it could help new dads bond with their children. the brains in spain. >> it's like brain drain over here. tyler, thanks. coming up, one firm is going across the country to find opportunity in the heart of silicon valley. they closed on more than $500 million in loans since january,

and we'll get their take on the property market. and cnbc is celebrating pride month in june. >> i grew up in a time where we were supposed to feel ashamed. we were not supposed to be who we are. we were not supposed to live our lives openly. there's still a tremendous amount of work to do to ensure we have equal rights and equal protections. these things have never been more important. and finding a way to sell write the progress we have made is extraordinarily important. ♪♪ ♪♪ citi's industry leading global payments solutions help their clients move money around the world seamlessly in over 180 countries... and help a partner like the world food programme as they provide more than food to people in need. together, citi and the world food programme

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welcome back to "the exchange." my next guest generally operates in new york, but recently set his sights west. his firm just closed a $23 million first mortgage lone for residential condos in the silicon valley. let's dive in here. ron, great to have you back on the program. >> thank you, kelly. great to be here again. >> this seems to be a lot of

people from new york looking out west for more opportunities, maybe seeing disstressed prices and so forth. is that the story here? >> it's just providing more time for the borrower to finish selling the units into the market. in general, we're seeing a wall of distress coming as maturities at the end of this year on many bank loans on what is considered staple assets that are coming due. and pricing went down as the interest rate stays higher, and there's question issues on balance sheets of traditional lenders, banks, mortgage reits. it's going to be a very tough year as refinances are coming up. >> yeah, which people say well, geez, it's a tough business to be in, but for you that could spell opportunity, right? >> for all private credit managers, it's been a very strong year. private credit funds like ours

and others are filling in the gap. many banks have slowed down or stopped lending. so we're providing capital and time for what we think is great pricing, and valuations for us to come in and provide short-term solutions until the market finds a new way. >> we've heard new ai companies are driving a wave of interest in real estate in san francisco, the broader silicon valley area. are you finding that, as well? >> there is a huge tech growth momentum around ai companies. it's not just the values in silicon valley. we're seeing it in houston, texas. we're seeing it even in florida, a lot of tech companies are moving there. it's a great growth engine for the market. >> so in texas and florida, you're seeing a lot of tech or ai-driven, you know, lease deals and that sort of thing? >> there's definitely movement of tech companies, entrepreneurs

into those areas. it's not the same volume as it is on the west coast, but it's definitely growing. i think it's going to be a growth engine for those markets. >> yeah. let's talk about what's going on with markets this week. the fed decided to hold, but based on the inflation reports and everything else that could be happening, rates might be a little lower in the months to come. what impact is that going to have on commercial real estate, do you think? >> i think right now the market is pricing accordingly. it seems that september, everybody is betting that sent you're going to see the first rate reduction, probably 25 points. that's a healthy sign. it's not going to be a steep decline, so it's not going to help a lot of projects that provided loans, three, four years ago, fixed rate, 3%, 3.5% where cap rates were 4 and now they're probably 6. and the interest is, you know, much higher than that. so it's not going to save projects currently there, but it's definitely going to help

drive the economy into a better place. we're seeing a slowdown in transaction volume still, but there is an increase in distressed sales. it's not a wave of distress, but there's definitely more distressed transactions happen bring notes and properties are trading at steep discounts than what they traded four, five years ago. >> across the portfolio, you have new york city office assets, some real estate and mixed use. but in general, have you been interested in projects that would convert say b or c-level office space into residential? this is just an area a lot of people have found hard to do without significant incentives of local governments. >> we have three loans right now, one that we closed that is a conversion of an office to residential, and two that are currently on the term sheet for one office building in manhattan and one office building in philadelphia. both will be converted to residential. so it's definitely an asset type

we're focused on. these b-class properties are finding it tough to find tenants. in general, most of the loans are on residential properties of of 9%. but office -- >> it sounds like you're doing these projects just at the economics at face value without necessarily needing big tax incentives or anything like that. >> correct. these transactions were purchased in the recent time, basically a new reduced basis, a great basis for the sponsor is doing the convery gent and so it makes sense. without significant reduction in price, significant tax incentives are needed to make these projects make sense. >> and then again, you're doing more in the bay area. we'll see what's next. ron, thanks for joining us today. >> thank you. my pleasure. coming up, we're closing in on the two-year anniversary of

ad supported streaming. while netflix up ended the original model, it's amazon that could force big changes. those details and what it means for both competitors and customers, next. here's a look at some of the names hitting new 52-week lows. a lot of energy companies. also, warner brothers discovery and molson coors. back after this. investment professionals know the importance of keeping their clients on track. sometimes they need help cutting through the noise, to ensure fresh investment ideas keep flowing, and to analyze the market from every angle. at allspring, we deliver the unexpected, by relentlessly exploring where others don't.

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welcome back. we are just a few days away from one of the biggest advertising events in the world, where industry leaders mingle with celebrities and influencers in hopes of securing doles. deidre bosa joins us now with a check on the ad dollar dynamics. are you going there, deidre? >> i am not. i wish i could be there, but i will be here in california. >> make it happen. >> you know who will be there, amazon, and a lot of other big brands. but amazon, of course already

has a massive presence in the digital ad world. with the launch of prime video ads about six months ago, it's holding even more sway over the market at large. a journal report this morning putting to how they're driving down ad prices for everyone. it cites advertisers and ad buyers. netflix could decrease pricing by as much as 35% for 1,000 vow -- views. amazon's prime fly wheel makes it uniquely positioned to impact pricing, even though it's a relatively new player. more than a netflix and some of the other streamers, amazon is diversified. it has prime subscription, a high margin cloud computing business. so it can afford to lower ad prices in exchange for more market share, where it's emerged as a giant. it comes as a time when inventory is exploding thanks to the shift towards those ad supported tiers on streaming

plat platforms. it will hurt the smaller players like roku. the growing role of influencers, this is remarkable, shows a rise in ad spending on influencer marketing. advertisers are projected to spend more than $8 billion this year. and nearly $10 billion next year in those categories. so as tv rates come down, we talk a lot about it, potentially connected tv rates, as well, given amazon's aggressive pricing. there could be more opportunity for them. >> i hear all about it, because my former neighbors are influencers. they are quite successful. they started 3 1/2 years ago, and they've just -- it's amazing how well they're doing. the dynamics have shifted. >> are they getting more brand deals? >> oh, yes, yes, yes and yes. constantly. it's astonishing. >> maybe we need to go. >> we're going the send them. and we're all going to go --

>> take us along. >> i love it. deidre, quickly before we go. do you think that as we heard more people talking about how ad dollars are shifting to retail advertising in general, does that at all undermine or threaten the idea that youtube or other streamers might capture dollars moving from linear tv to those platforms? >> i mean, that was the whole idea, right? we thought that the digital model would catch up. but when you have a player like amazon and that's the uniqueness of it, it has so much room to play around with pricing. we have seen it do so in other industries like grocery or other industries that have gone into with its own private label brands that can undercut the competition because it has this high margin, cloud computing business that basically funds a lot of the other businesses, especially the newer ones from amazon. it's an interesting dynamic that isemerging. maybe leading to more time that it's going to take for these digital ad dollars to catch up

or rise. >> right, exactly. back to where they once were. deidre, thank you very much. appreciate it. coming up, from electricity to solar, ai data centers are expected to spark a surge in power demand, and some companies are ready to go nuclear. we'll talk to the ceo of tera power, which just broke ground on its plant this week. "the exchange" will be right back. okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

welcome back to the exchange. generative a.i. is shaping up to be one of the most influential technologies of our time and it comes with a major cost. according to goldman sachs and chatgpt query requires ten times as much electricity as a google search. all of this fueling renewed interest in nuclear energy with bill gates back to tera power breaking ground for their first plant in wyoming this week. joining me now is chris, tera

plant's ceo. chris, congratulations and welcome. >> thanks a lot and thanks for having me, kelly. >> a lot of the energy nerds i eknow are very excited about this project. talk to us about the differences with the nuclear project you're pursuing and how you think it might be able to be rolled out more broadly. >> sure. tera power is an advance nuclear reactor. it's still vision. we're still breaking heat by breaking nuclear atoms. the plants are giant and require huge amounts of concrete i think so we needed to move to a new technology. that's why bill gates created the company. turns out we're slated to be america's next reactor because we're so far through the nrc, the nuclear regulatory commission process, so not only is america's next reactor this plant in wyoming, it's the first advanced reactor in the free world. >> a molten salt mini nuke?

break it down for us. >> sure. today's plants, which are super safe, are cooled with water. the plant, it happens to be sodium in latin and a few other languages. we're going to cool our reactor with a liquid metal called sodium. another big difference is we have energy storage, which allows us to boost the output of the plant when wind and solar come and go throughout the day. we're big believers in the massive expansion of wind and solar, but it will really complement that expansion by being able to boost that when the wind and sun are there. >> it seems to be rolling out nuclear more broadly and the idea of rolling out more nuclear power is very attractive but even this plant's price tag is $4 billion if i'm not mistaken with the d.o.e. contributing up

to 2 billion at that. these are massively, massively expensive. >> the original project you just described includes more than building the plant. that includes the first time design and licensing with the nrc. we're even building some manufacturing facilities with the components with that budget. it is true the first plant will cost more, but by the time you get to the fifth or sixth plant matrium is going to be very competitive with even natural gas and solar plus batteries. our private investors wouldn't be moving forward would there wasn't this strong business case. >> by the way, wee the ceo of aes on talking about how they think renewables are the future and nuclear has been quote-unquote a little overblown. what would you say about that? >> i would say because of nuclear's inferior cost story in the past that's what's led

utilities to have this pessimism. but i think more and more you're seeing people who really understand the grid see that even if we have a massive expansion of wind and solar up to something like 70%, you're going to need 20 to 30% nuclear on a carbon-free grid because wind and solar are an intermittent resource, and as you add each increment of solar we're only at 20% renewables in the u.s. today. each increment of renewables gets more expensive, and so you're trying to lower your overall system costs. according to 30% nuclear is going to be the way to go. and because matrium is going to cost about half of what today's nuclear vision technology costs. it makes a more valuable electricity, in fact, because what i told you about we can boost our power when wind and solar are there. >> that is my favorite line so

far. quickly the election in november, does the outcome of that -- i mean if biden wins, have the inflation reduction act or other things support nuclear roll outs, if trump wins would these projects go nowhere for a period of time, or would you be looking for impact? >> it's true nuclear energy has often been a partisan choice, but over the last ten years democrats have come out in support of nuclear in addition to republicans. it's for different reasons, so often republicans are supporting it for its energy security value, and democrats are now becoming more and more aware that it is a clean and carbon-free source. so for about five or six years we've really enjoyed bipartisan support and i think we'll have support in either administration. >> we'll be following with great interest. we appreciate your time. that does it for "the exchange," everybody. "power lunch" is next.

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welcome to "power lunch," everybody. alongside kelly avenuens. i'm tyler mathisson. stocks are lower across the board. nasdaq going back and forth between green and red, and for the week is dow is down 3.5%. this month, this quarter the dow is negative. >> but the s&p and nasdaq are both h