my proxy fight so many more questions the company announcing a $5 billion cost program, 5,000 job cuts associated with that as well something we have seen, perhaps, too often for some these days, morgan >> it was an extraordinary morning, extraordinary interview, david and shares of disney are helping the dow to move higher as well as the s&p the nasdaq is trading higher as well that's it for us on "squawk on the street." "techcheck" starts now good thursday morning. i'm deirdre bosa with carl quintanilla and jon fortt. disney, 5,000 employees laid off. nelson peltz declaring victory and an end to the proxy fight right on our air this morning. sonos shares higher after a big beat on revenue and earnings the ceo with us exclusively this hour. affirm gets a bump and we look ahead to paypal tonight

>> that's right. disney, though, is where we're going to start the stock is up, let's see, 2.75% after results unveiling a restructuring plan that includes $5.5 billion in cost cutting part of that, 7,000 layoffs. the company beating on revenue and eps, saying it would focus on getting its streaming business to profitability by the end of next year and no longer provide guidance on subscribers. a big question from wall street as the company plans for its stake in hulu, here's what ceo bob iger told our david faber. >> hulu, by the way, is a very successful platform and a good consumer proposition but everything's on the table right now. i'm not going -- >> you mean -- >> i'm not going to speculate whether we're a buyer or seller of it, but i have obviously suggested that i'm concerned about undifferentiated general entertainment, particularly in the competitive landscape we're operating in and we're going to look at it

very objectively >> if there is -- if there is an opportunity, for example, to potentially sell your interest to comcast, if brian roberts were interested, that's a conversation you would have? >> i said we're open -- we will be open-minded. >> i just want to make sure because i think the assumption has been you will buy what you don't already own of hulu. >> i think i'm suggesting that isn't necessarily the case >> well, those numbers and plans come as the company has been embattled with investor nelson peltz. that activist investor, well, iger's plans were enough for him to call into the show and declare the battle is over >> this was a great win for all the shareholders management at disney now plans to do everything that we wanted them to do we wish the very best of probation, his management team,

the board. we will be watching, we will be rooting, and the proxy fight is over >> wow julia boorstin, senior media and tech reporter, what's next now just the execution >> yeah, look, i think having to deal with a proxy battle with someone like nelson peltz, i think that's a distraction i think it was an unnecessary distraction for bob iger when he already had so much work to do in order to get this company back on track, restructure the company. i think getting this off iger's plate is a huge relief and allows him to focus on execution. he laid out his plan, restructured the company he made it clear they want to focus on profitability, particularly in the key streaming division and to figure out how to monetize their content in the most effective way. that comes down to this idea of putting those content decisions

and content distribution decisions in the hands of the creatives. so, jon, it will be interesting to see what happens next now he has a sort of clear runway to do so without the distraction of the proxy battle. >> i have to say, it was very compelling television this morning to see that happen play out in real-time. julia, what did you make about bob iger's answers about hulu. he said they may look at selling it to our parent company comcast. he's in a tricky position. if he takes it on, that's adding to disney's debt load. if he doesn't, he could lose an important platform anything you read into his comments >> it is, indeed, a tricky situation, deirdre, in part, because so many subscribers to disney plus also subscribe to the other streaming services, hulu or espn plus. there's this question of if you did get rid of hulu, how would you manage those subscribers who are also intertwined i think he's thinking very strategically here

he's going to be very cautious and not jumping to make any plans. i think based on his comments, he doesn't yet know what he's going to do. he's in the process of figuring it out he's trying to figure out especially where this role of general entertainment fits in this disney streaming platform because, of course, the differentiated content is marvel, is lucas film, it's all those disney brands that are so iconic and nobody else has so, i think this question of hulu, which has been very successful, but it less differentiated, how does that fit into the conversation. so, he's open minded, he said. i would believe him that he has not determined his plan there just yet. >> is he locked into anything here i think the assumed valuation of hulu, just like so many other things, was a lot higher a couple years back. and i feel like i remember there being some floor on how much, at least folks at comcast thought they would get for their stake in it. how does that work out under

this new less certain scenario >> well, i think that you have to realize that valuations have come down for a lot of reasons, including concerns about the advertising market so, hulu is more valuable if the advertising market is more robust because it does have that advertising component to it. i think that's an interesting piece here of course, you have also the subscriber growth. i actually don't think iger is really locked into anything right now. i don't think he's locked into anything when it comes to espn i don't think he's locked into anything when it comes to hulu he has the optionality tom rogers has said he thinks the ideal scenario is have comcast and disney continue to co-own hulu. lod logistically i think that's unlikely because of the constraints about that but there is a floor for what comcast would have to pay if they were buying out the rest of it this would be a negotiation. i think we're past this point. this would be a sort of fresh

negotiation over the value of that remaining stake in hulu i don't think he's locked into anything i think he's trying to figure out where general entertainment fits into this broader ecosystem. the stronger question is selling content. in the past couple of years, disney has been focused on creating content to put on its own platforms and there's this question of when it would make sense to sell general content to other platforms. >> it's a great way to get into our next guest, julia. thank you. dive a bit deeper into disney, bring in former amazon studios head of strategy, matthew ball, along with doug, who has a market performance on disney appreciate the help. to julia's point, doug t wasn't that long ago people were tossing around ideas about the asset mix really changing. we didn't get it but has iger built in enough optionality for that still >> well, obviously, they could still do anything. they were pretty clear last night and not looking to get rid

of espn, the asset most often talked about when people talk about divesting assets they said they looked at it during the chapek regime and decided it wasn't a good idea. now, even if they wanted to sell something, the question would be, could they find someone to buy it desire for these assets right now is not super high. a lot of the potential buyers are also balance street const constrained. so, you know, just because they want to do something doesn't mean they could do it. >> indeed. matthew, i'm reading a bunch of wall street desk notes one from bernstein, the streaming wars are over and netflix has won. strongest balance sheets, content budgets being slashed. iger wants higher quality subs and he says that will cost them more in acquisition space. how much space is there between netflix and everybody else >> when you look at netflix versus disney, we're seeing

roughly 30% or 40% more subscribers. the top number of subscribers held by the walt disney, seems comparable the gap on a revenue basis and now on a cash basis just for streaming is quite considerable. that raises the question if that's disney in number two, how far is the rest of the pack? i think that's why netflix is feeling good today. >> good morning. it's deirdre activist investors are on the hunt in this market environment. peltz has declared victory, but i wonder if it's possible that disney has opened itself up to other activists who maybe think espn should be spun off or have strong opinions on the dividend and hulu all have you to do is look at salesforce, under pressure by five activist investors, is this the end of the story or do you think someone else could swoop in >> i think if nelson peltz hadn't gotten involved in the first place, what disney announced yesterday would have been almost exactly the same maybe they wouldn't have

announced the dividend reinstatement, i don't know. they were already in process of looking at cutting costs even before bob iger came back. they said $1 billion of the $5.5 billion was already in the plans they laid out on chapek's last call he can declare victory, but i don't know that disney did anything different just because he was involved. >> matthew, what do you think -- were you convinced by his comments on finding a successor? are you optimistic he'll be able to do so in two years? >> i think that's going to be quite the challenge. certainly at this point, it's clear that as he said earlier today to cnbc, everything's on the table. that includes dividends, cost savings, simultaneously putting more control in the hands of creative, while not looking to divest espn, making it a separately distinguished entity makes it very clear exactly what that business looks like and what it might get in the market as the market turns around lastly, identifying that general

entertainment content is less of a priority going forward, while announcing many new sequels. the reason i say this is because he's making very clear to anyone who might try to take an activist stake what the entire landscape of the company looks like and how it might evolve going forward. that seems likely to buy him some time, even as he reconfigures his own succession. >> finally, i know the chapek era is backward looking, but when you think about his move on pricing in the parks, his willingness to get aggressive on subtargets, has that been constructive for the whole industry, do you think >> well, certainly if you look at warner/paramount, they're trying to raise prices on their dtc product. everyone is sitting down saying the race to gross subs is over now we have to think about profitability. what's our ability to raise price? what's our pricing power disney, obviously the parks

which had another blowout quarter yesterday, they have enormous amount of pricing power. i think they probably have pretty good pricing power at disney plus, too for their content they have, their branded content, consumer price elasticity is probably pretty high. that's one thing they have in their back pocket that maybe some of their peers don't have >> interesting so much to distill given all the unknowns in the industry regarding disney and everybody else doug, matthew, appreciate it, on an important day for us. thank you. >> thank you. and still lots to come this hour on "techcheck." sonos shares are surging after record quarter ceo patrick spence joins us. plus, forced entry at salesforce, another activist investor taking a stake in that company. affirm is plunging after robinhood ticks higher "techcheck" is just getting started.

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let's find out from the ceo, patrick spence, who joins us now. patrick, welcome so, inventory is back in line. bumpy comps, though, for the rest of this year. i'm curious, given that you set a floor and you're continuing to grow, how is your product changed compared to pre-pandemic home theater versus portable, for example, how has speakers per household changed and what does that set the stage for what's ahead >> thanks for having me on, jon. we actually gained over 5 million new homes across the period where everybody was forced to stay home. up to 14 million homes it's been a real catalyst in terms of people coming into the sonos ecosystem. we've gone to almost three products per home we average now. we as well have products that -- homes that have more than one

product, have a lot more than that we think there's a huge opportunity in our install base to take those that have one and move them up to three, four and possibly six and get to there. but we have seen hom gained sha we play. our portfolio is so strong in that space on the wireless speaker side we as well maintained our gain share. we did that because we were back in inventory, finall supply chain issues behind us and we were able to run a really focused promotion, which we haven't been able to do in three years. we're getting back into normal, if you will, and so that's why we were able to deliver a strong quarter. >> what does the motion look like, especially am this economy. is there consistency on -- what's the gateway speaker, the lower cost portable or do people start with the home theater and add on from there? do you see that shifting as consumers, perhaps, have a little less money to spend

>> so, you know, we -- what you said makes a lot of sense. what we saw in the quarter was a huge number of people starting with our sets. we group speakers together, the home theater bundle or two speakers and we saw a record number of our customers actually beginning with a set of speakers we've actually leaned into that and been able to get people starting with multiple, which leads to longer lifetime value really powers our flywheel and so, no, it isn't a price issue as much as i think a value proposition and making sure we have a strong value proposition. we make it easy for consumers to understand that you're better -- you have a better experience overall if you have multiple products so, we found a way to do that. and it's really helped in terms of our business and i think the customer experience at the end of the day. >> patrick, good morning it's deirdre do you have data on how much sonos customers are using the integrated smart speaker assistants like google and alexa? >> we do

we launched voice control last year that's our own voice assistant that's very focused on audio we kind of on this wanted to something that's really focused on what we do well, audio. that one is our highest net promoter score as well we're seeing great engagement. it's about halfway through where we are with alexa on our products we have alexa, google assistant, voice control. they all play together. >> let me ask you, though, if the big tech companies are working on maybe the next iteration of technology like krvrgsal ai, which we've spent so much time talking about, how do you compete with them there if that's the future that's going to increase the market of audio, if you can interact with assistants in that way can you interact with your assistant in that way? >> absolutely. we have 70 people working, you know, on sonos voice control you would find at other companies tens of thousands potentially. this is a space where ai, i don't think it's about having a volume of people i think it's about having the

right people working on it, being very focused we'll stay focused on solving a lot of the audio use cases the thing we know that voice assistants have been used for -- when they were launched they were used for music, timers and weather. what are they largely used for today? music, timers and weather. we're going to focus on making the best experience possible on audio. and i think we'll be able to predict what people want to do with music and everything else around their house and i think it's going to get better and better over time. >> patrick, do you see any kind of hardware shakeout happening often when the economy turns south, tech companies, other companies that were sort of hardware tourists but never really figured out the premium profit margin part they start pulling out and dropping back. is that happening this time and does that open up possibilities for you and maybe having to spend less on marketing or not having to fight as much per share? >> the tourist -- that's a good way to put it, jon in the holiday quarter, i was

pretty surprised at the lack of real innovation and competitive intensity in the marketplace we're just not seeing a lot of interesting things out there we're working to raise the bar in our in-home theater, in speakers, and we're also expanding into four new categories one of which you'll see this year and so, you know, i think as others seem to be pulling back, that's what we can see, the tourist, as you put it, we're seeing a ton of opportunity and we know how to do this i'm very confident about the way we're positioned right now and what i'm seeing in the marketplace. >> looking forward to that new category, patrick. we talked about this before. >> of course, jon. i'll be back >> patrick, thank you. coming up after the break, third point is the fifth known activist with a stake in marc ben benioff's salesforce. shares of affirm down after results last night the guidance, the cost utting, the head count reduction we'll trade that stock when "techcheck" is back in a minute.

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welcome back to "techcheck." according to reports, yet another activist has taken a stake in salesforce. dan loeb's thirdpoint is the fifth known activist to take a position in crm. other activists are starboard, valueact capital it is expected they are prepared to nominate a slate of directors to the board it opens on february 12th. salesforce announced the appointment of three new independent directors of their own, including valueact ceo. they have been doing with that executive exodus earlier this year they announced they were cutting 10% of its

workforce in an offered to rein in cost. the question is whether as a collective the activists want more cost discipline or enter into new categories. we have benioff tweeting about ai. >> my bet is on cost discipline with these activists probably the chance pretty low that benioff can pull a bob iger here and stiff arm and end up in the end zone crm and these areas of revenue acceleration are the first areas we're seeing ai applied in monetizable ways, which has positive implications for salesforce but also going to arm their insurgent competition. the pressure not just going to come from activists. >> and it's spread out, as we've said there's five activists versus one. what iger was able to do was able to get nelson peltz off his back before showing anything concrete in terms of the

execution. there's a confidence he will be able to do that. can benioff do that as well? he's already nominated three additional directors that perhaps elliott is not on board with it's going to play out i think it will play out a longer period of time than peltz versus disney. it is amazing to see this environment. i keep going back to this, how many companies are right for activists action, private takeovers, go privates it's an interesting dynamic playing out right now. >> yep continues to right here on cnbc, minute by minute. still to come this hour, affirm and robinhood headed in opposite directions after reporting results. plus, paypal earnings coming tonight. we've got the trade on all three names after this

welcome back to "techcheck." we are two hours into trading. let's get a check on the markets. stocks moving higher as consumer discretionary and tech lead. as you can see, the dow industrials up about 82 points nasdaq comp up about a quarter of 1%. google is waiting for another day. here are some other movers at this hour. mattel shares sinking on guidance below street estimate casinos are getting a boost. tapestry getting a boost on the back of strong results with coach, the main driver of profitability. the retailer raising full year

2023 guidance. and right now we are getting a news alert on gm and global foundries. let's get to our phil lebeau phil >> deirdre, general motors and global foundries entering an agreement, a supplier deal, if you will global foundries will be providing wafers for gm chips. these wafers have specific information made specifically for general motors, semiconductors going into gm vehicles they will be manufactured at the global foundries facility in upstate new york they're making a big commitment to expand their presence in upstate new york well, this is part of that the significance of this for general motors, once that facility is up and running, this secures or further secures gm's chip supply. we won't see these wafers coming probably until mid-decade. this is part of what mary barra has talked about they want to make sure they have the supply chain locked in as they expand their ev production and all of their production over the next several years

>> yeah, certainly supply chain security, a big growing trend at the automakers phil, thanks very much phil lebeau. we will be speaking with the ceo of global foundries, tom caulfield right here on "techcheck." let's trade fintech. starting with affirm, the buy now, pay later sinking after this comedy of errors. reporting a miss on top and bottom lines for fiscal q2, missed on guidance for fiscal q3, and now laying off a fifty of its workforce, about 485 employees. ceo did put the blame on his shoulders, telling shareholders, quote, the root cause of where we are today is i acted too slowly as these macro economic changes unfolded the stock lost 80% of its value over 12 months is there a road back to growth let's bring in wealth advisers founder, todd gordon we've been talking about

delinquency risk this entire time how much has the stock priced in the environment we now find ourselves in >> carl, i think they've priced in quite a bit you know, these delinquency rates are moving higher. they are concerning. the affirm platform will come in and say there's no apr on this, but there was a report out that 70% will wind up paying late fees with the macro headwinds increasing interest rates, less discretionary income, those fees people are paying are going to continue to mount, defaults will come in. i'm skeptical on the product right now. >> yeah. i mean, it also sort of belies the pattern we've been getting lately, which is you get a bounce on layoff news. do you think there are other dynamics weighing on it? not just the guidance, for example, which is obvious, but the reliance on exclusivity, whether that's a peloton or amazon contract? >> exactly, yeah i listened to the conference call, carl they had mentioned peloton

they talked about this gross volume bookings, which had pretty significant growth, but without peloton, they had come off. so, they can't rely on that. they do have a partnership with amazon and shopify there is hope for it again, i'm concerned about the macro headwinds. u.s. credit card debt we just learned last week went up to $930 billion, new all-time high. so, you know, i'm concerned. i'm not going to write the stock off. it's a new idea from a technical point of view. it failed on the breakout, the 200-day was at about 20.5. there's a downtrend line if we can get it through '21, maybe the story will come back but i'm cautious right now. >> let's look at robinhood the stock is trading down this morning after initial post earnings pop the company missed on top and bottom lines investors did give the company the benefit of the doubt after an earnings hit in part due to

$57 million tradingness and management willing to tighten the belt the co-founders canceling half a billion worth of their own compensation engagement remains low losing nearly 1 million active users last month are fintech products, is that becoming commoditized? where should robinhood be valued, like a tech company or a brokerage? >> more like a brokerage i certainly hope people aren't yolo'ing affirm payments to trade in robinhood that's public disclosure you know, listen, i run a retail -- as well as money management, i run retail trading advisory membership business look, i have to say nobody who takes their trading or investing on the retail side is in robinhood. i think there's a general distrust from large traders and investors. they have a pr problem the ceo, i think he's the

new-age mark zuckerberg after the 2016 election. you have this and sbf, bankman-fried is tied up in part of the business. they have a pr issue jpmorgan came out with a report that said even in up and down markets, there's significant wealth destruction happening with their customers i just don't think they're properly trained their monthly active users dropped to about 17 million -- sorry. there were 17 million in '21, now down to about 11 million they're not keeping the retention. we are rotating back into growth, those acronyms yolo and fomo are coming back in. maybe they'll get resurgence and crypto - >> that's on the positive side >> and crypto -- that's on the -- it's a good - >> okay. we were just talking about affirm, soy don't know let's look ahead also to paypal. that company is expected to

report results in line with guidance the street is worried about a spending slowdown. mizuho lowered it saying paypal's deceleration with key merchants could be because of a broader e-commerce slump given that, we're hearing so much about a slowdown in consumer activity in december and, you know, consumer credit, you were just mentioning, what do you expect from paypal? >> jon, i'm more rosy, less dire on paypal. i'm interested in this one i've owned it. i don't own it now looking at $1.20 eps this time last year it was $1.11. i think they face the same macro headwinds, high inflation, lower discretionary spending they do face some razor margins, razor-thin margins i do like the way the company is positioned i would be interested in buying a pullback to 76 for my growth

portfolio if we can get a little selloff after the earnings report i'm encouraged by pal pal. i like the way the company's positioned. >> todd, thank you we'll keep our eye on lyft, reporting after the bell that follows uber, which called its recent earnings its strongest quarter ever got really good response from the street. after the break, is wall street's frozen ipo market starting to thaw we'll look at some of the newest public listings in a minute.

let's check in on the ipo market solar tech company next tracker raising $638 million by selling roughly 15% more shares than expected in its debut. so, is the ipo window open a crack? cnbc has a piece on it hugh, what can go public now everything >> no, no, not everything, jope. n jon. nice to be with you. for most of last year, the ipo window, as they call it, was completely shut. certainly in the fourth quarter of last year there was really -- it was crickets in the ipo markets. so, what we have here is a thawing of some but not all the sectors. in favor now, you mentioned next tracker. there's another listsing that will price tonight called inlight, tel aviv based

renewables company green energy, renewables, there's some momentum there because of the inflation reductions act they have their own cycle they're working on that isn't affected by macro concerns hitting tech, for instance. >> investors seemed to like profitability. what does that mean for big names in tech that folks are hoping to see? stripe, which seems to not be going public but to let employees cash out. and instacart, which probably doesn't fit the profile of what people are really excited about these days. >> no. but you have to look at, okay, so is the company -- do they need to go public? in the case of instacart, i believe they do. my understanding is they can go as early as midyear. so, if we -- if markets remain buoyant and the discount they need to take to list, because there is still a discount you need to entice people to, you know, to buy your new stock, if the discount isn't that large at midpoint of this year, they're going to go ahead, is my

understanding. now, you have stripe, as you alluded to they said -- they told their employees they have in the next year sort of a consideration of weighing an ipo. my understanding is, you know, they've got options to stay private. in many ways, private is better for stripe they'll probably continue to do that >> all right well, thanks for keeping an eye on it for us many things shifting in this market, hugh son carl >> jon, as we go to break, take a look at draftkings up almost 50% so far this year we'll sit down with ceo jason robbins tomorrow on "techcheck," ahead of the super bowl this weekend. we're back after this. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term

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what a morning it's been with the disney print last night. conversations with iger and peltz today and now some words from disney. david faber is still with us in burbank. >> carl, just to sort of put a pin in it, so to speak, as you pointed out, extraordinary back and forth this morning our long sitdown interview with bob iger and then nelson peltz saying, i'm done, proxy fight is over disney says the following, we respect and value the input of all our shareholders and we appreciate the decision by trian fund announced by nelson peltz this morning they go on to say, this is a moment of great opportunity for the walt disney company as we

recommit to our historic 100-year legacy of unrivalled creativity and future of sustained growth and profitability. we're pleased that our board and management can remain focused without the distraction of a proxy contest and we have tremendous faith in bob iger's leadership and the transformative vision for disney's future he set forth yesterday. so, that is, as i've said many times, a significant distraction for management, that being a proxy fight. and so this is a moment, carl, certainly they are happy about, given everything else on their to-do list it's at least one thing they can cross off. >> i'll add, david, trian has formalized what peltz told us in a statement, we congratulate disney and iger. we're pleased with the role trian was able to play we will be rooting for the company's success. quite a morning. dee? >> so, they're allowing that they had a role. i suppose the hard part starts now, which is execution for iger meantime, guys, china raising a red flag about overhyped stocks,

especially in ai surprise, surprise warning traders in an op-ed in the security times earlier this week that some companies are simply riding on concept without conducting actual businesses some smaller ai companies in china have seen 100% to 200% gains. the biggest beijing, science technology, trying to slow the hype, saying its chatgpt style products do not yet generate revenue. saying, investors are piling into smaller firms al it is all we've been talking about stateside when it comes to the battle of our own tech titans besides this week's announcements, ai profits have ballooned throughout the season. mentioned 200 times this quarter but not just by the mega caps, but large cap names like qualcomm and service now

sticking with ai, let's turn to alphabet our next guest is out with a new note after yesterday's sloppy chatbot rollout, with an eye on traffic between google and bing. noah rates alphabet a buy of $135 brian, break down this threat. is it really as big as the market initially is making it out to be? google is down another 5% yesterday. it's delta between it and the other mega caps this year has widened. it's a massive overperformer is that overdone do you think microsoft could actually secure the distribution to make bing a real competitor >> thanks for having me. i would argue it is overdone, but this market and this tape doesn't like uncertainty and i think one of the important points of what we've been doing is there is a lot of incremental uncertainty about the higher cost of all these ai tools and

new language models, which are going to come to search over the course of the next two to three years. i don't worry about alphabet and google's capability to sort of maintain a very strong position at the top of the consumer funnel on search, but i think the uncertainty the market is wrestling with now is how do fo margin profile of alphabet and google just because, well, the consumer tools are getting better the consumer tools, because of all of this ai, for now are going to get more expensive to sort of run through alphabet's data centers >> cost is obviously a big sticking point, and i wonder if you think -- some say google,a way, will have to cannibalize its own search business in order to really compete on this genai front. do you think sundar pichai is willing to do that cutting costs and a full hiring freeze let alone layoffs >> i do. this is a company that has been

innovation and user driven from the beginning and i think they have been investing and talking about investing in ai since above 2015 it's not new we think they have the technologies and in some ways i feel confident that we're going to look back a year from now and say that it was chatgpt and this focus on ai that has forced them to push out the tools faster to consumers, improve the products more, and just sort of secure their position at the top of the funnel so i do think they will cannibalize themselves i think you will see improved search products and a lot of ai-driven tools across alphabet. and it could very well be these last few months around chatgbt and what's happening with microsoft and bing that forces google to move faster to get them into consumers' phones. >> is there a cost for google, even maybe in its cloud business

is microsoft forcing them to spend to defend their core business, and does that take away investment they could be putting towards something else that microsoft would like them to not spend on? >> that's a good question. i do think that the rapid ascent of ai, and microsoft is helping that, is having them push out these new tools faster than they would have appreciated in the past or thought they would have done in the past does that mean they will pull back on investment around google cloud or other key initiatives no, i don't believe so but remember we've seen big tech in general find ways to operate more efficiently over the course of the last six months and even on the earnings call last week alphabet management talked about how there are three areas they are focused on to be more efficiently -- operate more efficiently on a durable basis

teams more efficient with ai, look at their vendors and suppliers, and they're going to look at the real estate footprint. i think ai costs are going to go up we are also going to see alphabet take steps to operate their current employee base more efficiently in how they invest going forward. >> brian, a lot of the desk commentary today says investors are obviously spooked, highly emotional, they're wondering whether or not the company should have been more aggressive in operating expense cuts. when is the search deal with apple up for renewal are those relevant questions right now? >> they are relevant i'm getting those same questions. should they have been more aggressive yes, they certainly were not as aggressive as some of their tech peers like meta were, but it doesn't mean they're not taking stems. meta -- alphabet has been clear they've taken steps in the three areas they laid out, and you'll start to see the benefits of that into 2024

it just takes time so in hindsight, do i wish they had been more aggressive, yes, but it doesn't mean you're not going to see the benefits of change they are making as we go through the course of the year and into 2024 when candidly the ai penetration of search is likely to be larger. we need the cost saves more in 2024 even more >> it feels like alphabet is on the defensive but maybe that shifts the next weeks and months brian nowak, thank you for being with us. during february we are celebrating black heritage through the stories of some of our teammates, contributors and leaders in business. here is cnbc's senior field producer >> i'm the product of a black mom who was born in the south and raised in the midwest. and an afro latino dad with big dreams and an even bigger determination to fulfill them. i'm the living example of the rich and diverse landscape that

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welcome back job cuts are hitting workers across tech as companies look to rein in spending the cuts taking place at chip makers look a little bit different. our kristina partsinevelos has more on where the chip industry is cutting expenses. kristina well, jon, it feels like every day there's a new tech company announcing layoffs earlier in the show affirm cutting 19%, zoom cutting 15% of its workforce, alphabet 12%, and the list continues but within the semiconductor world the cuts are more high level and not as deep. western digital cut over 200 jobs in the state of california with the role of technologists and principle engineer are most likely to get the ax intel 700 cuts lam research and micron about 4,000 jobs but those two companies are affecting the jobs worldwide. experts say the semiconductor

layoffs are about pushing the business downstream to manufacturing. >> i don't think we're seeing layoffs to the level of meta they are refocusing, recalibrating strategy >> and that's because there's $53 billion in government funding expected to start being dispersed in the coming weeks and months by the way, the stock's etf only up about 13% since the chips act was passed chip firms have promised to spend billions of dollars and just on your screen you're seeing those billions of dollars from at least 12 companies there. they plan to hire thousands of employees to build in the united states but we're still waiting to hear who will get funding to fulfill the big promises, jon. >> they didn't staff up that much during the pandemic, so that could have an effect? >> no doubt. and the most important thing, too, a lot of these companies focused at the higher level design so can they replicate

that at the manufacturing level. hats off to kayla tausche that the biden administration knows these cuts are coming and the optics don't look good but it's short-term pain for long-term gain all the major indices higher but fractionally, the dow up just about 70 points with that let's get to the judge and "the half. thank you very much. welcome to "the halftime report." i'm scott wapner front and center this hour activists in action as peltz declares victory on disney, salesforce and we'll get to all of that. interesting new moves from the investment committee joining me for the hour shannon, josh brown, bill, jim lebenthal, brian here on set. let's check the markets and see what we're doing, up the best levels the dow hanging on to positive territory. discretionary has been the best of the year, casinos are running hot. we have an exclusive interinview with