behind the dividend yield on the call 4.8% and the man can the etf? >> on semiconductor, strong move higher and much more room to go to the upside. >> we are green across the board and the dow is up about 120. the s&p getting closer to 4200 and the nasdaq which started negative is now in the green, as well "exchange" is now. ♪ ♪ thank you very much, scott hi, everybody. i'm kelly evans. here's what's ahead. first republic becoming the first bank to fail since march, but will it be the last? charlie munger concerning it is full of bad property loans and the fallout from the turmoil is just beginning, so with the fed raising rates be the wrong move at the wrong time and we'll debate the fallout and reits have been hard hit amid hard hits and worsening fundamentals and they run the gamut from shopping space to fundamentals and where to find value in

earnings exchange and the fintech lender out of weaker banks and sofi just beat on revenue and guidance and shares made a turn mid-morning and are now down 9%. will they sell the news or is there more to it anthony noto just ahead. do we call these session highs >> they're just about there, kelly. i'm going to tell you right now, for the s&p 500 which is the broader measure. we're talking 17 points on the upside that was the high of the session so far, tilting toward here. we were down about three points or so at the lows of the session. so if you look at it on balance it is generally positive up one-third of 1% and it is a similar percentage move. 34,218 and 4200 for the s&p 500 level and the nasdaq composite index up .25% and 12,253 the last trade there

one of the bright spots in that technology trade today has been on semiconductor this is a computer chip company that does a lot of work with automotive and applications and electronic vehicles and that sort of thing. up 7.5% toward the best levels of the day right now because it comes out with earnings and revenues that both beat expectation and the outlook is rosier than some analyst his thought and by the way, the reason why is because for the first time in history, automotive chips made 80% on revenue and one last thing to point out, kelly mentioned how important the banks are. i'm not going to show you first republic because truth be told the shares have been traded since the pre-market and they're tradingon a technical basis right now. there's no real value left to them, obviously, they've been seized by the fdic and everyone else j.p. morgan chase is up 2.75%. and pfc, a spattering of some of

the regional banks which are not as closely tied to the likelihood of what will happen with first republic and pac west bancorp and the spdr regional bank ticker is down 2% so watch this sentiment, whether or not it shifts a little bit even though as jamie dimon points out the worst may be over for some of these guys back over to you >> thank you very much, dom. we appreciate it let's drill down now on the failure of first republic, and there are several big, unanswered questions for the rescue deal and the bank right, what is the five-year loan from the fdic where is the fdic getting the money from can this tie up capital from future bank rescues and why are companies -- let's bring in mark cal abria. he joins us here along with jim coffey at jenny montgomery and of course, cnbc's very own

leslie picker and steve liesman who are both on set with me now. guys, let me turn to you with some broad brush chit-chat about this situation, steve, i'll turn to you first as the day goes on, does this leave a better or worst taste in your mouth, do you think >> to the extent there isn't a systemic trade going on, i'm going to leave the story to leslie she does the story if it creates a meltdown i kind of get involved, right so she can control the situation and i'm not really joking here because it isn't really funny. >> no, sure. >> and i think that really is the question that we have to ask ourselves as we head towards a fed meeting this week where the fed's going to hike by a quarter-point cut. there's this idea that the fed can do monetary policy with this hand and supervision with the other hand when you read the report on friday it wasn't clear to me they can do both >> however >> they didn't seem to have a right hand certainly not at the leadership level.

we haven't talked a lot about that, but here's thething. you read the report and they get told about the problems at the banks and it is unclear what happened at the leadership level after the relationships come through. here ate thing we've had three bank failures and we've had to create a special fund to liquefy the banks to allow them to finance their maturities is that success from the fed's point of view or are we warning that maybe the fed should have put monetary policy more in concert with supervisory policy. >> let me turn to you, mark, before we drill down big picture talking, are you surprised that the shrug to this bank collapse? it's interesting, that in march, these bank failures come up and it's not really related to monetary policy? they have to keep tightening and now we have another huge one and it's not related to monetary tightening i don't know, does any of it make sense to you? >> it does i understand the shrug and i

thought the way this transaction was handled was much cleaner and much smoother and the way i think about it is the good, the bad and the ugly and it was a clean transaction and little to customers and this is a deep hole especially given that there's only a billion in the deposit insurance fund i would like to see what kind of deal j.p. morgan got and it looks like a good deal and the ugly to me is we'll have four or five more regional banks before this is overtake a hit there's more to come and that's concerning i don't see those banks being a systemic risk. i think that can be handled and there will be another hit to the positive insurance fund before this is all over with. >> leslie? >> just to speak to the whole monetary policy aspect in all of this jamie dimon was asked on the call today about his views on whether we do see a credit crunch from this, whether we do see additional bank failures and the like and he's pointed to the regional bank earnings that we

saw last week and he said those suggest there were modest deposit utflows, but he blames those largely on qt as opposed to a bonified bank run which i -- >> which definitely started before march 9th. >> interesting exactly. and he says he's been harping on the qt thing for quite a while. >> should he be listened to? if the most influential, most significant banker in the country is saying the quantitative tightening is a problem here, should he be heard? >> yes definitely, and the question is i still have this question that i started with i don't know that the fed can go about its merry business of solving the inflation problem by doing what it's doing and have happening to the banks what's happening because it may be this that this is a sustaining issue and you can be sure that there will be further tighten of credit standard and i have to ask leslie, do we know what the loan was

>> he was asked this on the analyst call they declined to give specifics for the rate just saying that it was market value >> for the record, i sent a note to the fdic like 3:00 in the morning and where is the money coming from and have not responded, folks you've not respond, fdic hello? >> tim, let me turn to you >> i have no idea. i have no idea it's the fund that the banks stay into to cover insurance just in case some of these scenarios occur from i'm not sure where the money is coming from. >> how would you categorize what's happening across the country broadly speaking now >> they're reacting to one higher rates as banks are typically slow to do in a tightening cycle and they don't raise rates until the tail end of the cycle and that's happening right now at the same time, the federal reserve is shrinking the money supply and that's causing a move in the

profits. this is unique because we had a run on the bank, the silicon valley bank and we had the spillover effects on first republic and what should normally take months for deposits to move is happening in a matter of weeks and that's creating anxiety that we're seeing in the regional bank space. >> do you, tim, have the same concern that mark does about the potential for bank failures, because from the bank experts i talk to there's such a wide range of opinion and the more specialist people are, the less concerned they are and the people looking at the landscape and the banking experts and the banks are a buy here >> well, let's step back for a minute and it was a traditional run on the bank ask it nd it had in unique and modern ways and the same thing at first republic what these two companies have in common is that they both grew

very quickly during a low interest rate environment near zero, right? i would love to tell you that they were the only two doing it. excluding signature and the conversation and their problems were kind of their own, but there were other banks that grew quickly in this interest rate environment, but the vast majority of the regional and small banks of this country were not trying to pick up pennies in front of the steam roll. >> mark do you want to talk about that and saying why you're more on the concern side rather than potential failures? >> i would say there is a fair amount of agreements and for those that say banks are a good buy. some are a good buy and some are not. there's a small segment that i would agree there are real problems with, and broadly the sector will make it through which is why i don't think this is systemic, but there's definitely six to 12 that are real problems that half of them are not going to make it through this cycle it is even important to remember

by the time lehman failed back in 2008 we had already lost 2 million jobs. >> uh-huh. >> we've seen no real job loss yet and so a lot of this will depend on do we go into recession? do we go into job loss we have market to market loss and we think it will show up in commercial real estate so while i think the overall sector is going to make it through and i don't think this is a systemic issue, it's really a handful you've got to keep an eye on >> by the way, steve, we now know that the fed itself was told this that there was an 11-page demonstration given to the board that they posted for the public where it literally lays out piece by piece and calls out 31 banks that had negative tangible equity at the end of the third quarter and we all now know that the bank most at risk was silicon valley bank and presumably, they made it to

powel and i don't know if brainerd was there, and if you were told this was probably coming why was there no plan >> what did you do what did you do as a result? did you call your supervisors up and tell them to sharpen their pencils when it comes to interest rate management according to that report, they would have a horizontal review in the first quarter i, by the way, asked a senior fed official about this question about whether or not the report looked at fed leadership and it did not, apparently, and i asked why no action was taken. i was told it was an information presentation and not an action presentation. >> mid-february. >> when i told my wife that she said to me, well, when i tell you the garbage is full, is that an information presentation or an action presentation i do want to get to one important question, which is this, where is the money going to the extent that we have or do not have an uninsured deposit problem in the banks i think it's going into things like money markets and to me,

money markets especially government money other mas are an economic dead end when it comes to lending so i think part of the fallout here is -- >> the government doesn't get its four or five failures and you can see i'm pointing at the screen i'm pointing to mark, but anyway, the point is if he doesn't get them it's because the money went out and that's good, but where did it go? did it go to a place where it can give the economy a multiplier effect or not >> i'll ask you and then we have to go. >> these are places that are less productive in terms of investment either money market funds or directly into treasurys, and i expect another trillion in deposits to leave the system in the next 12 months >> yeah. yeah >> what's the fallout of that? i mean, leslie, you will have more -- >> more sundays. >> potentially more sundays

a trillion doesn't mean that is problematic, right >> tim >> i think it will flow out for a period of time, but eventually it will come back because banks will focus more on interest spread and that's what they charge on loans and deposits and if it comes from the single relationship that's more positive from the bank. >> once you're in motion, you stay in motion and when you are not in motion, you are not in motion once i'm moving my money, right? isn't that an issue? the banks will not be the place where i put my money and go to sleep after that >> in addressing that, i also want to know what you think will happen to the banking system because the crazy thing about all of this is the high pce report on friday we're talking about the fed maybe not being done this week, right? i heard steve earlier. maybe they're not done again and what will the impact on the banking system be? >> well, to your question,

kelly. more of the same in the near-term. there will be this intermediation and higher deposit costs and more depositors, if you're a productive member of society, whether you're a business owner or developer, eventually you'll come back into the market although they're going up and you will realize that you can still make a profit in doing what you're doing. >> we'll leave it on that hopeful note, what do you think? tim coffey, mark calabria, steve liesman and leslie picker. the two-day meeting will kick off tomorrow tyler matheson and i will be down there don't miss it this wednesday may 3rd starting at 1:00 p.m. eastern. now let's turn to sofi whose shares are reversing course down 9% after the company mentioned student growth and warned that student loan business may not return to pre-pandemic levels

and it was benefiting off of weaker banks as we were discussing and the shares are off 25% while the regional bank is down 29%. that said, sofi is still down 71% from their all-time high from february '21. joining me now is anthony noto thank you very much for your time today i know you have a lot of balls in the air we appreciate it >> thank you for having me. >> i want to point out, too, that you were buying the shares the week after the svb collapse. just talk to me about that a little bit >> i'm focused on the long term for the company, and we are building the company that will be the winner in the digital financial world and we built a durable company that's a one-stop shop across the financial needs and that's allowed us to gain huge market share. we grew over 40% in revenue to an eighth consecutive quarter of record revenue of $630 million and the third consecutive quarter of ebitda. it is operating on all cylinders

because of our diversification and our unique approach and so i'm focused on the long term, and when i see opportunities of uncertainty and investor concern i want to express my confidence by putting my money where my mouth is >> do you think there's confusion in the marketplace about the commentary about the weakness that you're dealing with >> no, what i would say is we're in an uncertain economic environment. we've seen disruption in the banking industry that's obvious given all of the news that you've been covering today as well as what happened over the last month and that's been layered on top of the fact that we've had record high inflation for the first time in several decades in addition to the fact that there's uncertainty in the economy and global risk in the eastern europe there's a lot of uncertainty in the marketplace so in many cases, stocks take two or three steps ford forward and one step back and our performance is over

$2 billion in revenue and the top of, and diversification we've had across so many businesses >> you can drive eight consecutive quarters of record revenue is you have businesses that can perform in different environments and you can allocate resources to make it happen and that's what we can control. >> what have the last six weeks been like? as soon as svb and others collapsed, the immediate thing is direct exposure and then you think maybe opportunistically, here's how we can manage deposits if you're an uninsured depositor ask are concerned. you saw deposit inflows and just talk to us about being on the front lines. this customer realization that money is fungible and move it around and it's easier than ever what's it like businesswise the last couple of weeks >> first and foremost, i want to emphasize for our viewers that we've added more than $100 million for the last three

quarters and we are well on our way of doing that again in the first quarter of the year. the disruption that happened in the marketplace gave us the opportunity to build trust with the members and to build trust with members and the first thing we do is made sure there was no direct impact on our business or our members' financial situation given that disruption. from there, we then said how can we be more helpful how can we increase the value proposition and we made the decision within days to launch a new level of fdic insurance. through a partnership with a third party. we are a national bank we are also able to leverage our funding and our loan business to give an attractive interest rate we raised the interest rate to 2.8% in the savings account and we have a 1.4 interest on the checking account sofi is a safe and reliable bank that you can put your money with, but not only that, we'll give you an unmatched

proposition to spend anywhere you want, how you want from your mobile device. >> so much more to ask, i'll sneak in two final questions the first one about student loans in particular. i think those payments are set to resume in the coming month or soon do you expect that to be a fill up to the business >> we achieved eight record quarters in a row without the student loan business being robust we're in one-fourth what we're at in the fourth quarter 2009 right before the pandemic. if the student loan moratorium ends, there will be a pickup in student line financing, but we're not counting on it we have a diverse business and the thing that dates our growth is how much we invest and where we invest. if the business comes back we'll reallocate services to it, and meet our members' needs, and if not we will reallocate in other places and improve the performance. >> how much of a headwind is to operate a financial institution like yours in a high-rate

environment where the macro slowdown can take a couple of more quarters to materialize how do you remove that headwind or do you just have to -- have to deal with it? >> the reality is you have to have an ability to reallocate it to the businesses that benefit the most we are seeing a significant demand in debt refinancing and we're offering the people to do unsecured personal loans and to smooth those payments out with a lower amount over a longer time period in addition to that, we are try to be nimble to help people on that side of the equation, as well the reality is we have a very strong balance sheet we have significant growth in deposits of $10 billion and that gives us optionality to help members when they need >> i know 10 years ago you were at twitter and it's still tempting to ask you about it we're out of time. anthony, thank you for joining us >> thank you for having me.

president biden weighing in on first republic at an event for national small business week, ironic he's reassuring that the banking system is healthy. take a listen. >> i am pleased to say that the regulators have taken action to facilitate the sale of first republic bank. i'm sure that all depositors are protected and that taxpayers are not on the hook. these actions are going to make sure that the banking system is safe and sound, and that includes protecting small businesses across the country who need to make payroll for workers and their small businesses >> going -- taking pains, we should say, that taxpayers will not be on the hook that's again, the president weighing in this morning my next guest has been carefully watching the market's response to the bank failures and says these difficulties are putting the fed at a crossroads of choosing sticky inflation or bigger economic problems and history shows they may end up choosing inflation, with shopping mall stocks and banks,

too. bill smeed is chief capital officer at smeed capital management what a day to have you here. >> thanks for having me. >> you have historical knowledge better than anybody, do you think this is an opportunity to play in the bank stocks and do you think this is a problematic event, inflation still remains a top concern. >> free money created a lot of ignorance and a lot of ignorant investments, and so you're going to go through this rolling set of bear markets to punish the sins of the prior episode. this particular episode is closely associated with the insanity in start-ups and highly leveraged private equity investments and things that were fed by free money, but what's interesting, in our opinion, people are worried about the banks. i'm more worried about the people who have suckeled on the start-up world

the vendors to the start-up company. >> sure. >> no one is talking about cloud service is slowing down. well, yeah, every time you close up the funding on these start-ups they're not going to be cloud hosting they're not going to be doing digital ads. they're not going to have things brought to them by amazon and they're not going to buy apple devices as fast as they were when people are funding them. >> let me ask you as a value investor knowing that this is somewhat cyclical and why not buy those businesses and look at apple and say here's an opportunity and they're at a down point in the cycle, but i want to own it for the next 10 or 15 years. >> fantastic question. i made fun of ebay in '99. someone will go online and buy a once-used caliber driver and they would buy $300 shares of ebay and i made fun of that and in '08 we ended up buying a whole bunch of ebay at $1100 a share and owned 100% of paypal

and owned 30% of skype and owned all of stubhub and five or six advertising firms and made a ton of money on it, but that was nine years later, kelly. that's what everyone's forgetting here. there will be bargains, but munger called this financial euphoria episode that peaked in 2021, the biggest of his career in totality and there were several different financial -- so why aren't you more bearish everyone who shares that view is the obvious shoe yet to fall has happened the economy will crash and the inflation should be the last of anybody's concerns so i wonder why you're not more bearish about where the market's going >> great question again because these are rich people's problems venture capital is for rich people private equity is for rich people all investing is for rich people that even if they lose the money it's not going to change their

behavior the average person in america seeing their wages go up a lot >> but can that remain to be the case when you have the most sort of profitable parts of america in deep recession? >> no because they're -- they don't have the multiplier effect. >> yeah. >> you know we're big fans of homebuilders we own the homebuilders. when people are building houses the carpenters, plumbers and electricians and painters and roofers, there is an okay system of the multiplier effect and when apple does their thing their capital does the borrowing and the maids at the most expensive totals in palo alto, they lived with their relatives in sacramento. their is a great rebalancing and not a great recession that we're head spea heading into >> everyone can head into a recession. the economy can contract 6% for

six months and i always joke, gosh, if your spouse loved you 3% less would you divorce them people divorce their stocks because of 3% less affection from the economy the truth of it is there's 180 million people below 40. the future is very bright, therefore the necessities that they'll spend their money on, homebuilders, oil and gas, target. >> totally. >> -- home depot the name of the game is think like you're owning a business rather than owning a stock >> i thought of you even with tripoint this morning and that's one of the areas where we're taking out the 2021 highs and in some case is going to new highs. >> we listened to your interview. it was sarah, by the way it was fabulous. >> i was listening to cnbc while that was going on and those companies are seeing their market share soar. there's been a downturn. the fed tightened credit more than they've ever tightened credit and despite that, they're

highly profitable and they're building market share to get in the way of those 180 million people >> so have you done the work, everyone who has but the a house at uncomfortably high prices and they said am i going to be under water with this thing? in another ten years will they put everyone in the black on the home prices? >> first of all, millennials are still way behind prior groups of the same age so there's a big ramp still, but we're seeing evidence that 24 and 25-year-olds are much more interested in buying a house than the last set of 24 and 25-year-olds. >> the secular bull on the housing market you're not selling here despite the run they're had. >> buffett said from 1964 to 1981 at the allen and company thing in '99 the economy grew 4.3% between

1964 and 1961 and the dow went nowhere and the market exploded because rates came down. we're in that 64-81 era now where economic growth, main street will outperform wall street. >> the market might go nowhere like stan drunkenmiller said >> exactly p-e ratios get compressed and amazon reported that a complete surprise to everybody that for 15 years of growing sales to $120 billion a quarter they're not making money from delivering stuff to your house. fool meness wo, shame on you fool me twice, shame on me that's a 150 multiple with the stocks who will make it out of this thing with a 50 multiple. >> bill smead, we have buffett this morning thank you for making the time. >> bill smead with smead capita management. names like tenable plunging 50% after the company cut its

full-year outlook and the ceo will join us to discuss the results and how the turmoil is impacting them here's a look at the dow, j.p. morgan leading the chips and gainers versus decliners intel is lagging once again. "the exchange" is back after this rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. (vo) verizon small business days are back. april 27th through may 3rd. risks, charges, expenses get a free tech check and special offers. like a free 5g phone. get started today with verizon business. it's your business. it's your verizon.

welcome back to "the exchange," everybody i'm tyler matheson here is your cnbc news update at this hour. air strikes continue to hit the sudan capital khartoum despite a

cease-fire aimed at allowing civilians to leave the country the fighting there between warring generals has intensified over the past several days so far more than 500 deaths have been reported while millions more remain trapped in sudan's sizeable capital city. hunter biden at a courtroom to face child support case ignoring previous court records and withholding evidence in the litigation stemming from his paternity suit this comes as federal prosecutors are considering charging hunter with three tax crimes and a related charge related to a gun purchase. and adidas shareholders are launching a class action lawsuit over the kanye westphalout the lawsuit alleges that adidas officials intended to deceive investors by failing to disclose ongoing issues between the company and the artist adidas cut ties with ye in

october after facing widespread pressure to end its partnership with the pressure in the wake of anti-semitic comments he made. >> tyler, thank you. i'll see you in a couple of minutes. >> coming up, vornado highlighting reits this week are commercial real estate problems priced in now or not? that's ahead on "earnings exchange." the dow is up 68 ♪ ♪ it's raising capital that helps companies change the world. it's making complicated financial concepts seem simple. opportunity is making the dream of home ownership a reality... ♪ ♪ ...writing new rules and redefining the game...

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reporting, but today we'll do a special reit edition of earnings exchange after charlie munger told the financial times that, quote, there are a lot of troubled office buildings and shopping centers and quote, there's a lot offing a agony oue and for the reits especially those with office exposure and the reit vorn ado is down, and only 6 and 1% respectively and all three report this week and while the street will be watching impact with tightening credit and a slowing economy let's drill down on specifics after vornado's dividend and one

the names mizuho says is exposed to the bed bath & beyond bankruptcy hundel it's great to see you welcome. >> thanks, kelly thank you for having me. >> i know you don't cover vorned ao, or is it simply a hard thing to hedge >> there's a lot of headlines around and there are a lot of banks with lots of office loans and certainly that will have a mri over time, but for retail, for open-air retail is not office and despite credit, open-air portfolios are full, demand is strong and we're getting a sign of higher rates and the dividends are well covered and we think the sector is a winner

in the work from home world here >> sure. all right. let's pivot and talk more about that because it was interesting to hear munger call out some of the retail names and i've heard more concerns after bed bath's bankruptcy about who could fill some of these leases what would you say about bricks and mortar and their exposures there? >> absolutely. i think stepping back these tenant issues have been known for some time, party city, regal, bed bath, it's not new. they have budgeted in the full-year guidance ranges if are potential outcomes and it's notable that very strong demand. you are getting demand from pjx and others and even more interesting that the rents here and the mark to markets are 20 to 25% higher and 25% and the rents are at higher levels and we think despite some short term disruption and maybe headlines that this is an open-air

opportunity especially those who are more defensive and that matters, too, because within the retail coverage we favor names that have greater exposure and stronger balance sheets and the top pick this year and we think they're well positioned because of their positioning with the retail that was played off. >> despite those bed, bath exposures and as we've been discussing and looking at the earnings and listening for on the call to make sure that their trajectory is still intact. >> leasing the demand is still something front and center it's something that's not new that the landlords have been talking about this in the last year, year and a half and we s start seeing some cracks in the armor and most importantly, it's important to realize that they've been full, and there's

been no nigh supply and the retention and you put that all together, and i think it's a good formula for them to push rent for them to raise dividend, and we expect pi co this week as we did last week >> quickly and finally when we look at the landscape, where are your concerns mostly centered? for instance, when we talked to huntington bank they said in erm its of exposure we are concerned about long term care where they haven't kept up with inflation are there areas like that that aren't being talk period. >> i think starting first is the most obvious the malls are not open-air retail and their concerns have been publicized for some years now and that's something that we're keeping an eye on. there's a lot of supply

multi-family coming in the sunbelt in the back half of the year and a lot of levered, private operators that build assets where cost of capital is different, and i think it'sing if to result in some disruption potential opportunity of investments and that's something to keep an eye because they've had a great growth trajectory and that's now falling because of the supply entering the market in a big way and that's something to keep an eye on. the health care is referring to someone else to speak it to that, but malls, office and watch multi-family in the back half of the sunbelt. malls, office and keep an eye on health >> one tech investor has strong words. sundar pichai, in the last hour we'lte y wl llouhat he had to say and what's got him riled up next

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welcome back, everybody. ai has been one of the biggest hot-button points we'll call it, one of the biggest debates within mega big tech right you in brad gerstner losing its edge in an interview on cnbc's halftime report let's dig into that with deirdre bosa i don't know if you caught it, but a lot of people have said, come on, google will be just fine and it's going to come back around and he said no. microsoft lead counts and it mighting growing. >> he was basically saying they need to become more urgent and that comes amid reports that google is panicking inside and they lost their ai lead by microsoft. at the crux of the conversation as well. yes, ai is a hot-button issue and a wartime versus peacetime ceo that we haven't seen in some time and a ceo that is able to cut costs where possible and also keep that edge in terms of

innovation mark zuckerberg, wartime ceo satya nadella, wartime ceo and sundar pichai is trying to decide if he can get tough on this you mentioned brad gerstner, listen to what he said, it was pretty brutal. >> as ceo of google i have one job, do not let chatgpt secure a leadership position in search and discovery when it comes to ai and that's exactly what's happened 200 million people now treat chatgpt, a verb as synonymous with discovery in the age of ai. >> kelly, i don't know about you, but i've started using generative ai a lot more in my day to day and the first place i go is open ai. not bar. barred gave me the correct answer google has more history in ai and more tools and resources and

they've been working on this for so long and microsoft has captured the consumer here with the big, splashy open, product launch google's going to have a chance on may 10th at their google io developer conference is sundar pichai going to be cautious or come out and make a splash in many think he'll make a splash. >> he doesn't mind google being second, but just come in in wen that far and pichai doing "6 minutes" warning about the ai dangers and turning to what else they might have on the table, i guess, deidre, he wrote the open letter to meta he has people's ear in the valley he has people's ear in tech, and you wonder if the response from google will be as humble as the respond from zuckerberg was.

>> he's not the only person speaking like this he's disappointed that sundar pichai hasn't done more. sundar needs to do a little bit more that said, it is still extremely, extremely early and there are some things that senator pichai and alphabet is doing like bringing its deep mind into the fold, restructuring so that they can do more. so there's still time, there's still space and this is going to be a long runway for alphabet to catch up here and it is remarkable that we're saying catch up where it was thought to have had the lead for so long. so we'll see lohow it all shake out and many call it an existential moment and going back to the fact that i'm using generative ai. >> i was going to ask what you were using it for. was it stock queries >> i asked if it was a public company. it was a public company and

barred was correct so you have to be careful. the answer from open ai was extremely convincing i asked it several different ways and that's an easy question >> it's easy, i know. >> that's a softball tell gerstner. he better start buying google shares today as a result of toda result of this cybersecurity stocks had been on a tear in the first quarter with the bug etf climbing it's down 9% so far. check out how far some of the worst performers are down from their highs. cyber ark about a quarter. we'll talk to the ceo of tenable about what it llwi take to turn things around right after this >> announcer: "tech check" is sponsored by comcast business. powering possibilities

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♪ welcome back to "the exchange." tenable reporting better than expected earnings last week. shares are down 20% after they issued weak revenue guidance for the current quarter and the full year the banking crisis is one of the reasons for the outlook. big money deals have been pushed

out, particularly in the financial services and tech sectors which are traditionally their pockets of strength. joining me now is tenable's ceo. it's great to see you again. welcome back. >> thank you great to be back. >> please give us the granularity here on a day when everyone is kind of going, another bank failure, everything is great, the economy is fine, the fed can keep hiking. >> we're certainly operating in a tough macro and nobody is impervious to a challenging macro environment. so we did see customer purchases, we did see deals going to close that are -- especially in the last two weeks of the quarter which was accented by silicon valley bank among the other difficult economic news. >> yeah, so, you know, how long do you think is this just a little bit of a lull everything you're describing makes a lot of sense and sounds

a little bit discomforting if you're a ceo we had finance, tech, and these are two areas which are taking a pause right now. >> yeah, well, the great news, tenable has a diverse customer base we have customers in over 180 companies around the world in just about every major industry. we have exposure to banking and tech but that's only a few of a very diverse customer base. outside of the financial crisis, we're -- there's concerns. concerns about interest rates, there's concerns about recessions, there's all sorts of concerns and i think cfos and companies are just a little bit more cautious in their spend. >> we had bill smeed on earlier this hour and he said it took nine years after the dot com bubble for tech to get an evaluation that he was comfortable with it. and it made sense to him that everything would be weak right now. do you think this kind of winter

could last this long >> i don't know if it's going to last that long we saw deals moving through the sales process and through the funnel faster than ever. leads turning into tech evals, tech wins turning into procurements just a little bit of a slowdown at the end of that process and so we're assuming that these types of buying behaviors are going to continue and that's where we chose to bring down our guidance for the reminder of the year we did deliver record cash flow and we had a massive beat on earnings and raised expectations for operating income this year >> what are some of the positives you think people are missing? is it just that we're going to have to let this period of macro concern pass >> well, i think the macro is one thing that's just going to have to -- have to pass. if you look at the broader opportunity, if you think strategically, our society is digitizing at an incredible rate you're seeing more computers,

systems, complexities and the threats are not slowing down in fact, they're going to be accelerated by all the ai. it's going to intensify the threat environment and so the cyber market and tenable in particular, we have an incredible opportunity in front of us. challenges, it's a crowded space. it's been overfunded by venture capital. there are 10,000 cyber companies out there. a vast majority making less than $10 million in sales and so there's going to be a shake-up there's going to be a consolidation in this market and you'll have to look to industry leaders. you'll have to look to companies at scale with tens of thousands of customers with nearly a billion dollars or more in revenue and see them shift from market-leading products to platform providers. >> i've heard the bulls on the cloud say, hey, ai kind of rescued this whole narrative a lot of companies can't do ai on their own they're going to have to go to the cloud and procure those

services i hope you'll rejoin us again soon really appreciate it today. >> great speaking with you. that does it for "the exchange" today. stick around for "power lunch. the mattel ceo will tell us the big bets that company is making. tyler is getting ready i'll join him on the other side of this break. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror.

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