what's not to like? >> what is your final trade, josh? >> zoom. very cheap stock, apparently. they impressed a lot of people at the goldman sachs conference this week. >> stef? >> halliburton, very cheap at nine times. >> good stuff. thanks, everybody. see you on "closing bell." "the exchange" is now. though apple is down. thank you, scott. welcome to "the exchange." i'm kelly evans. it is a big day for apple, whose shares are down again, as china could reportedly widen their iphone ban to state-owned enterprises. plus, this all comes as chinese rival huawei launches its new high end phone. and with apple shares having their worst two-day drop in nearly three years now, our technicians of apple have been overhyped for nearly a year. he'll tell us how low shares have to go to find support here.

a raft of warnings for the restaurant and other consumer stocks, as gas prices are at a seasonal high we haven't seen in more than a decade. before that, let's get the latest on these markets. kind of a mixed bag, dom chu. >> it is. and it's much more value oriented in the green and tech oriented in the red, much like your outfit today. so let's talk about what is driving the action. if the dow industrials are up 0.2 of 1% at 63 points, 34,508, the opposite end of the spectrum is the nasdaq composite, down over a per september, which is off session lows right now. 152-point decline. 13,721 for the composite index. and the s&p 500, somewhere in the middle. down 15 points, 1/3 of 1%. at the highs of the session, we were down ten points and roughly 35 at the low. that gives you an idea of the trading range today. with regard to that technology trade, kelly mentioned something about negativity around the

possibility that china could crack down on apple iphone usage, and it's the possibility it might extend to foreign technology in general. that sentiment dragging the semiconductors lower, among the worst performing chip stocks in the s&p 500 today. qualcomm, lam research on the equipment side of things, all down roughly 3.5% to 7% so far. and the big etf, off 2.5% itself. so watch those semiconductor trades. some people consider it a possible leading indicator. and the stock of the day, which is apple. the most important stock in the market here in the united states, off about 3.5%, following 3.5% declines yesterday, all on this sentiment of what china does. china is a very big market for apple. this is the year, it had a pretty much straight line higher

through 2/3 of the year so far. and even with the drops today, we are still down roughly 4% of the record highs that we saw. so yes, big two-day drop, and it's significant. but still 4% away from record highs, that causes this bull/bear debate about whether apple has gone too far too fast and just how big a pullback could be. >> many aspects of that discuss today, dom. thank you very much. is the china iphone ban, at least for government officials, a sign that a broader crackdown on u.s. corporations might be coming? officials say the two nations respect decoupling, but china has banned micron from vital infrastructure projects and banned tesla cars from high level government meetings. eunice has the latest. >> reporter: it's unclear how expansive this director is or will be. the government hasn't commented nor has apple. but what we heard is that there are more and more reports of the state agencies or state

companies informing employees they can't bring their iphones for use at work. instead, they need to perhaps change their iphones to another product within a month, that the focus of this directive is for national security reasons, and also that they're focused on those who are working in investment trade, as well as international affairs. now, the question hasn't been so much about the impact for iphone sales just because of those who work in the government or government agencies, but whether or not this is really sending a signal from the government that apple is not politically correct in china any more. so that's something that we are watching very closely. we've talked to some apple iphone distributors, and they said that as of right now, apple's bigger problem is the new huawei phone. because the huawei phone just

released is called the mate 60 pro, and it was released when u.s. commerce secretary was in town. the specs are very unclear. the company has been a bit circumspect about them. but what's interesting is that it's running as if it's a 5g phone. the state media has been kind of touting this as a poke in the eye to the u.s., and even cctv has been posting memes that have been turned into phone cases that you can buy, kelly, but are actually showing romando as a huawei ambassador, as they say. >> wow. let's take this a little further. how significant is the huawei phone launch, eunice? how much excitement is there among the chinese customer base? >> reporter: well, it's difficult to say. in terms of the excitement from an official level, state media

has been playing it up. there have been stories how there are 800,000 sales. we don't really know the number for sure in terms of the phones. there's been a lot of excitement there. but it's unclear as to whether or not the public really likes this phone or not. i mentioned that some of those memes that have been created online, they're have been people co-opting the means, because huawei has said, we are far ahead in their technology, and there are a lot of folks who say, you know, they're posting it, but as a sarcastic way to say that there's no way that huawei has been able to make this new phone without the use of foreign technology. that is definitely the sentiment that we heard a lot within the tech community here. >> quick last question. what strikes me about the move that china is making against apple in particular, they say all foreign phones, but let's just say it's apple. if china produces so many of

apple's products, it would seem this would be the last place they want to go to shoot themselves in the foot. just curious of your reaction to that. >> reporter: yeah, well, you know, you're absolutely right. the logic that we would previously always believe and put out there is that at the end of the day, the chinese are very practical, and that they don't want to see a lot of job losses, and that probably is still the case, or at least there hasn't been any signs that this will get so wide that people are crushing their iphones or anything like that. but what is different about the administration, the xi jinping administration, is that we have now seen several examples of where the president has put national security over the economy in a lot of the decision making. so that's where kind of people are sort of wondering where this is all going. >> right. a different leader might have stepped back from this one, but not him. and not this time and not in other case, as well. eunice, thank you so much.

is apple finally breaking? that's what wolf research is asking in its latest analysis. my next guest my argue that apple has been broken for a year, general rating negative output for the tech sector. joining me now is carter worth. it's been such a good stock this year, carter. >> such a strange thing. performance is performance, but relative performance is also not only important, it's in many ways, if you are benchmarked to an index, it's the only thing that matters. what we know, ironically, is that apple's relative performance to its peers, to the tech sector, peaked almost a year ago. in fact, it was the last week in september of 2022, apple since then, you can see it on this chart, has been underperforming the entire s&p 500 sector.

so since september 27th, semis are up almost 50%. the tech up almost 40%. since september of last year, ibm is beating apple. apple has been a bad pick, despite being up, because it's all about what one could have done, opportunity lost. >> wow. >> and now this news related drop in gap today, i just think you don't want to be there. i'm a seller. >> maybe what this is a reminder of, just starting on january 1 is not the whole story. it may be true more than ever, given what's happened with stocks selling off right into the end of the year and rebounding right at the start of this year. so what would you say about apple now for levels of support? down 7% in two days but only a few percentage points from the all-time highs. >> that's right. and so if you look at the absolute chart, the very strong advance from its october lows, the question is, is this enough of a correction?

the stock was fairly steep and uncorrected, again, all the while underperforming. but at this point, is this setback, this drop decline, selloff, you choose the word, is this enough to correct a very steep descent? i would say no. >> and if it's not -- so in other words, if apple shares fall enough, then that correction will, you know, be -- you can tell me, but we're kind of in the middle, where it's not quite -- it's not sharp enough yet. >> it has not expunged enough of the sort of -- >> expunged is the word i'm looking for. thank you. so we showed up and showed the tech spider. it appeals like the story is fundamentally driven, but is there something more going on for the tech sector, for apple, what do you think? >> there are a lot of people that would consider apple no longer a growth stock, and does

it deserve the multiples? that is the big decision that has to be made. we also know that it's a buyback machine. apple has bought back some -- the amount of stock it's bought back is in size, greater than the market cap of basically 400 plus stocks in the s&p. so what does that have to do with anything? the truth is, maybe it's rich, maybe it's no longer a growth stock. but here and now, what is the premise for buying a stock that has the following two circumstances -- day-to-day, heavy selling, news related, and two, a stock that is underperforming its peers, underperforming ibm for a year? not great. >> is it ibm, is it oracle, is it energy, old tech, where do you see more signs of strength and vigor in this market? >> well, oracle is quite good and i would expect a good result. that's what the charts indicate. energy, we're sticking with it.

we're in the camp that rates have peaked, and we want to be long energy, and health care. >> and i know health care has moved today. stay tune, we might be talking more about this, with unh leading the dow. carter, thanks for your time. speaking of apple, dan niles says it's his longest single stock short, pand student loan repayments and no major ai play will force investors to re-examine their positions. meantime, shares of disney, a seven handle i hear. wow, just at $80 as the carriage dispute with charter continues. and disney just released a statement about that fight. let's go over to julia boarston. >> escalating war of words

around this standoff in charter and disney's negotiation. here is the latest. disney saying with the u.s. open, college football and the start of the nfl season, it's unfortunate that charter decided to abandon their consumers, saying we will not lose sight of what is most important, investing in the highest quality stories, news and sports or the audience and saying, the question for charter is clear. do you care about your subscribers and what they're telling you they want or not? disney stands ready to resolve the dispute and to do what is in the best interest of charter's customers. this comes in response to the ceo of charter, chris winfrey, saying that it's going to be disney that decides if its content is part of their bundle and they can offer a bundle without sports. kelly? >> julia, thank you. as the saga continues to twist and turn with monday night football approaching. coming up, is oil's pain retail gain -- no, is oil's gain retail's pain?

gas prices are higher for this time of the year and it could lead to discretionary spending. and one of the world's largest lithium reserves is in the middle of the nevada desert with the potential to triple american supplies. but there is a land battle brewing, and the future of battery production in the u.s. hangs in the balance. that story is ahead. and here is a look at the markets. the dow is leading the way with 52-point gain. the s&p is down 0.4, and the nasdaq and russell down 1.1% today as bond yields are down a hair. back after this.

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welcome back to "the exchange." energy is the top performing sector so far in the second half of this year, up more than 11%. the gains are driven by supply concerns after opec plus started cutting out output. with the national average hitting $3.80 a gallon according to aaa, the highest level for this time of the year in more than a decade. while energy's gains chip away at consumer spending and cause pain for retail. joining me now is the chief oil

analyst at opec. welcome to both of you. denton, i'll start with you. yesterday we spoke with an analyst who wasn't sure if oil could run much higher. i guess it doesn't matter, because these levels alone are causing more pain than we are used to. >> absolutely. yeah, we are at the highest levels of the year, trailing off a little bit today. but all things considered with the supply cuts, u.s. inventory has drawn in each of the past four weeks. so we could still see some more upside for crude oil. gasoline, though, we're fortunate in this time of year in that vacations are over, no one is clamoring for gasoline, so demand should trail lower, as well. >> crude is around $86 a barrel right now. do you think we go much higher? we know the risk, inventories are low, prices could spike, but

what could it take to drive us upwards of $100 a barrel? >> i think you need some sort of event that's probably unforseen right now. whether that's one of the other opec nations running into a real issue with production. maybe it's libya, iraq, maybe it's nigeria, which have had their struggling here and there. but i'm talking about hurricanes, god forbid another war. you know, i see a couple dollars more above side, but probably not that much more. >> let's say i'm joe biden and i want to get gas prices down, what else can i do? can i turn to u.s. producers, which are almost back to where we are prepandemic in terms of output. what other measures are there? >> one thing that's been happening, and the biden epa has been pretty liberal is rbt, basically switching from summer grade gasoline to winter grade gasoline earlier.

then you have arizona, they pull gasoline from california and the east. and a couple of refineries in el paso have had issues. so they have an epa waiver, too. so these waivers help the supply situation with gasoline. so i would expect that considering if there's any more obviously storms that impact supply, you'll see more of these waivers. but that's one of the tools in the tool belt. >> the other way to ask it, have we put in the highs for the year? i'll put on the hat of energy investors and focus on the consumer. but energy investors are starting to say, this is one part of the market up for the second half of the year. if i could ask you from that point of view, would you be encouraged the games could continue or cautious? >> cautious, especially on retail gasoline. we're entering a time of year where demand is down a little bit, but also we'll be manufacturing a lot of fall and winter grade gasoline.

there's a couple of aspects to that. the formulation for gasoline has these different components, and one is a lot cheaper because you can use more of it in the winter time than summertime. that should keep prices low. and ethanol is really cheap. much of the gasoline in the united states is 10% ethanol. ethanol in some markets is more than a dollar lower. so the cheap ethanol could keep prices from getting too far out of control. >> denton, thank you so much. appreciate it today. you've heard about the forecast for oil and gasoline. what does this mean for retailers? let's ask ike. how much pain is it causing do you think? >> hey, kelly. so, look, i don't think it helps. it's been a nice tailwind year over year. we've had the low-end consumer under some pressure. it's been an area where there's a little bit of hope, and now you are seeing that tailwind turn into a headwind. the way we look at the consumer right now, we're running out of

tailwinds, and the consumer catalyst path from here, it's not great. you have gasoline prices on the rise. you've got credit tightening and delinquencies going up. and the elephant in the room is student loan repayments starting soon. >> and you still have to cover the space, especially now that we digested retail earnings. i'm sure that's done to separate the winners and losers. who are the names you would stick with, even with higher gasoline prices? >> yeah, look, if we are talking about who are the winners, where are we sleeping well at night? i think the two areas we look at is the all-price sector. so absolutely outperforming, comps accelerating, the department store pain is their gain. inventory, raw stores, burlington are two of our favorites. on the other side, you look at a

business that's just bucking the trend within a slower athletic backdrop, lulu lemon. they have overtaken nike globally right now. they are executing across the board. and prices look really very good. if you are willing to go down the risk curve to more recovery names, a name like pbh is very interesting, with signet. >> i hear the precautions you are expressing, and people have caught one this idea of no recession, let's raise the s&p target. so at what point do you go from being a little concerned to a lot more concerned? and maybe that's the labor market, i don't know. >> look, right now for us, it's fairly binary. when you look at our group, very cyclical group, valuations are very close to trough. numbers have been to the bone, especially on earnings revisions this year. but what is the catalyst to get

in here? there is the boogeyman come october, november, and that's student loans. we're talking about $6 billion. a couple of comps, the headwind. the reason i say it's binary, traffic is stable in the u.s. right now. we're east snap and a bunch of other head winds hitting them. so we're going to know a lot come early holiday about the next direction of this group. >> fascinating, the point about valuations and where we are. ike, thank you for your time. >> thanks, kelly. coming up, deal making is back on the rise with one key metric near its highest level since the start of the pandemic. we'll look at the billions being raised in debt and what is driving all the demand. hexcng iba aer this. conversations or moments that matter, but you can invest in them. at t. rowe price our strategic investing approach

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you can pay more but you can't get more. gold bond. champion your skin. welcome back to "the exchange," everybody. i'm tyler mathisen with your cnbc news skrup date. reporters spotted the d.c. grand jury meeting at the courthouse for the first time since it indicted former president donald trump. the jury indicted trump in august on charges related to interference in the 2020 presidential election. special counsel jack smith said the investigation would continue after those charges were announced. microsoft is teaming up with digital pathology provider paige to create the world's largest ai system to identify cancer. the company said the artificial intelligence model is being trained with millions of images to identify common and rare cancers. the goal is to help doctors with large case roads and are short staffed.

women's soccer in spain are going on strike. the players union said the strikes are in response to the conduct of the federation's president, who has been suspended for forcibly kissing a player at the end of the world cup medal ceremony. the union is also seeking better pay for the players. kelly, back to you. >> tyler, thank you very much. i'll see you soon. coming up, the u.s. is sitting on one of the largest lithium reserves in the world. but nasa isn't too keen to share the wefalth. jane? >> reporter: hi, kelly. i'm in the middle of nowhere, but it could be a very profitable somewhere for lithium. but nasa says hold on, this area is unique and important. i'll explain why, and the tension between the two when we meack. coach saban, this goat done took over our office. and he's using it to send out medical bills. good hands! hospital bill for prime?! gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time!

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welcome back to "the exchange." access to lithium will be crucial as electric vehicles and their batteries command a growing sphere of the automarket. but one of the largest lithium reserves in the world is still untapped. jane wells joins us live from nevada with more. hi, jane. >> reporter: hi, kelly.

that is the hope. this place looks like it's worthless, but it's potentially very, very valuable. railroad valley, nevada, could be the site of the largest lithium deposit in north america. a mining company called 3pl operating has bought the leases here, spending over $20 million so far on testing, which indicate there is is 20 to 25 billion recoveriable tons of lithium under the ground here. that would be a massive supply. but the space agency nasa uses this same place to calibrate optical satellites that provide images on crop health and air quality, and says no other place in america is this good. foreign sites in libya and china pose challenges. nasa is so concerned that mining would mess up calibration that it talked to the bureau of land management, which took back about a third of the claims, and an area that may contain the

lithium mother lode. but is 3pl is certain that much lithium is here? >> we have 48 wells into this deposit. that's a $20 million data set. we have 1100 samples that we have tested geochemically. so i'm pretty certain. >> this is not a matter of figuring out whose roles are more important. we're not questioning nasa. but we believe what we are going to do is important and we believe they can co-exist. >> reporter: nasa project scientist tells me -- >> reporter: since the technology has not been proven at scale, they say they don't want to be the guinea pig. meanwhile, they can test outside the nasa zone, and if it can get permitted in that area, they can start getting lithium out of it with other metals, but it's

probably going to take four years. this doesn't happen fast. >> this is fascinating. so nasa is worries because this flat expanse behind you is indispensable for calibrating the measurements of hundreds of satellites orbiting overhead. if we disrupt that, then we can cause all these problems with gps and satellites and who knows what else. >> reporter: that's what they are saying. this is just a flat, solid, it's the right color of white for calibration. large, they say there's no place like it in the united states. they say noaa uses this area, too. i asked the defense department if they use it to calibrate their optical satellites. i haven't heard back yet. >> jane, this is fascinating, truly. pitting one massively important industry against the other. thank you so much for bringing us the story. our jane wells reporting. lithium prices are down about 65% so far this year, so maybe that takes the heat off a little bit. but experts say we could face a

global footage as soon as 2025. my next guest is also making big investments in u.s. sources of lithium. joining me is tom jensen. good to see you again, tom. welcome. >> thank you, kelly. pleasure to be here, as always. >> do you mind weighing in on what you think they can mine lithium in that flat expanse without disrupting what nasa thinks it needs? >> well, the supply challenge in the battery industry is linked to the required development of solar and wind energy, if we are going to stay within the climate boundaries. so we need huge amounts of storage capacity in the form of lithium ion batteries. we have deployed roughly two tara powers of it, and we need to deploy 200 to stay within the

same boundaries. the raw materials required for this probably needs to be between 6 million and 7 million tons when it comes to lithium, and other material sources tenfold in installed mining. now, the required battery capacity required when you -- it comes to lithium is only 20% of globally proven reserves. we don't have any specific opinion on the nasa issue in what you just mentioned, but i do think it's fair to say that 20 years ago, nobody really believed that oil and gas reserves and the shale reserves particularly in the u.s. were going to be as large a source as it is today. similarly, homo ssapiens will fd a way, so i don't think there

will be a shortness in supply. >> i suppose that -- and i remember when you spoke in north carolina, correct me if i'm wrong, but that had been like the lithium capital of the world, and maybe could be once again. so to your point about oil and gas, i'm happy to bet on engineering ingenuity. they'll come up with a way without disrupting the surface or they'll go to north carolina and get it there. why can't we get the supplies that we need from expanses other than this nevada one that we need to leave flat and undisturbed? >> well, i do think that we will find new ways to extract and process lithium. an important case in point beyond what we just mentioned is the fact of urban mining or recycling. as we come to the end of this decade and we have millions of batteries deployed, some will come to the end of their life, and then they will be a large source of urban mining, which

will reduce the pressure on new resource. as an example, in the scandinavian region, we see the emergence of a battery belt from finland in the east to norway in the west, where we have raw materials in the form of lithium and other metals through to battery cells and recycling activities. in the u.s., a similar battery belt is developing from michigan to the north to the carolinas, and in georgia where we are, kelly, and where our giga america sites is developing. we are spurred in large ways by the "inflation reduction act," and that is happening across the board from lithium mining, through battery cell as well as recycling facilities. so we're excitequite excited abe opportunity. >> that's why it's a good reminder. it's not just nevada where we have these projects underway.

tom, thank you for your time today. appreciate it. >> thank you, kelly. still ahead, remember back when i used character ai to bring back those dead economists? the ceo has now made it to the time 100 list of the most influential people in this space and he will join us. check out the dow leaders today with intel one of the strongest performers, up 3%, as other parts of the semiconductor that are very exposed struggle. and health care is a real theme, as well. merck, united health, j&j, all helping the dow into the blue today. health insurance costs are climbing at the steepest rate in years. ishae"s ckft a aer th. road warriors. because we know you're picking up the pace, steering life at 10 and 2. you're hitting the road... and we're helping you get there with confidence. so skip the counter without missing a beat.

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welcome back to "the exchange." you would think that these high borrowing rates would deter companies from wanting to take on new debt right now, but they're flooding into the debt

market. steve is here with that story. what is going on? >> 31 corporate debt deals have been announced just this week, totalling $54 billion, making it one of the highest volume weeks of the year. the duration of the deals announced this week are less than five years, so on the shorter end of the curve, a sign that corporations are anticipating rates would fall, and demands that been strong, if you look at the deals coming to market in september, on average, three times oversubscribed, according to credit flow research. fund managers tell us, tight credit spends are incentivizing new deals at the lows hit in march of last year, as well as the prospect of more deal activity. phillip morris, volkswagen, are among the companies announcing new deals this week, so across different sectors. it's not really concentrated in one area. >> okay, yes, the feds raised rates to 5%, but this that is narrowing, they might not

have -- this is the most privileged part of the business world, the ones that can tap corporate debt markets. >> that's right. we saw an overwhelming number of travel and hospitality names, there tends to be these pockets of opportunity, when you see equities a bit more stable, credit spreads are tight. and it tends to come ahead of a big event. we're two weeks away from a fed meeting, and a deluge of economic data, including the inflation report on wednesday. so that is what is precipitate thing type of move in the debt market. but it is expected to continue. >> it's a great point. something that is a little more short term because companies want to be opportunistic, but i wonder if they are forced to. do they have a sense of why lock in high rates, is it also that borrowers aren't quite sure if they want to commit to that period of time if the economic cycle changes? >> that's right. rates may be high, but if you

were taking out a three-year or five-year deal, you have the opportunity to refinance at some point or roll over existing debt. so it's just taking advantage of these opportunities that present themselves. we'll see if we continue to see more. >> busier than expected, that's for sure. still ahead, bank of america saying this business software company, i bet you can't guess it, is well positioned to capitalize on ai and making it a top pick. tweet me if you think you know it. as we head to break, look at dutch bros. it was down more than 4%, it's almost erased those now. they issued $300 million of stock to pay down their debt. interesting. and don't miss an exclusive interview with goldman's ceo david solomon on "closing bell" around 4:15 p.m. eastern. "the exchange" will be right back.

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get way more into what your into when you stream on the xfinity 10g network. here's why you should switch fo to duckduckgo on all your devie duckduckgo comes with a built n engine like google, but it's pi and doesn't spy on your searchs and duckduckgo lets you browse like chrome, but it blocks cooi and creepy ads that follow youa from google and other companie. and there's no catch, it's fre. we make money from ads, but they don't follow you aroud join the millions of people taking back their privacy by downloading duckduckgo on all your devices today. welcome back. shares of c 3ai are down 1% today after its larger than expected loss. our john ford spoke with the ceo and other execs about what is next for artificial intelligence. you've got some, what were you

say were the highlights? >> we're getting a nflurry of a announcements. investors have to figure out what companies are going to reap real benefits from artificial intelligence on those that will trade water or lose ground. so i spoke with the ceo of intuit about their move into generative ai. >> we've invested heavily in our own financial large-language models, and we're training our own models on the customer data. the data does not leave our premise. in order to provide you with perspectives that is helpful to you, i have to be able to provide you recommendations about your business, not general recommendations. so that last layer is about our own models that we have invested in and will continue to invest

in and get trained by our data that helps you with the recommendations. we do partner with leaders in the gen ai space. we believe this is a very much developing, and we want to continue to partner with those that can enhance our own large language models. with those who enhance our own large language models. >> i also spoke with the synopsis ceo. his company makes software tools for chip design. >> you look into new markets like automotives, for example. it's a whole new segment due to the sophistication of the hardware or the chips into a car. they are becoming a customer of synopsis. a.i. is another layer of application where there's a different type of chip that you need in order to accelerate for a.i. applications for these various models. >> so often, kelly, when you have a shift like this, investors have to try to figure

out who is gaining wallet share and engagem because of the trend and whose intellectual property is worth more where they get a margin benefit. >> it seems, do you really want to bet against the likes of salesforce and some of the big players. they ultimately try to figure out who has the technology and fold it in. how do any of these smaller players maintain their edge and not just have their product or their feature become come comau cumodatized. >> benioff has been on this discipline kick where he's like okay, our margins are up, are investors going to let him buy something substantial now, and ai stuff has been getting a nice valuation. how much do they have to grow internally? benioff is going to make a strong a.i. case at dream force in a few days that they have what it takes. >> also, it's hard to know in the early days which bets will pay off the most and if it can't spray money around, they have to

be more judicious and it would be hard to pick the winner. how does china factor into all this? the chip stocks are down today. they meet a lit reality of they're still 30% exposure to china. this may be turning unfriendly to u.s. tech. >> i think the story is actually turned in the past year, more positive for the u.s. when it comes to a.i. because a year plus ago, the story was china has this unrestricted access to data. they don't have to worry about civil liberties, they're going to run in a.i. since then, we have seen the rise of nvidia and investors are gotten a sense of how falliable their i.p. is, and there's been restriction on some of the accelerated chips. and others are questioning oh, maybe the way the u.s. companies both at the chips level and the apps level have insight into the way western business and thought really works is going to be an advantage in and of itself, and china might not be as well

positioned. >> they only just allowed ernie, the baidu ai bot to be used by the public. we appreciate it, jon. >> a few other a.i. names also getting attention on the street include hubspot, which bank of america says is a top a.i. pick. craig johnson of piper sandler says accenture could come out on top. consultants seeing 16% upside to the shares from current levels and apple, which is having a tough week, could be overcome by the likes of amazon, google, and microsoft thanks to their generative a.i. potential. my next guest knows a thing or two about the industry. he's been named one of "time's" most 100 influential people in artificial intelligence. good to see you again. congrats. >> great to see you. thanks. you know, there's got to be 100 people in a.i., is this everybody? how big is this field? what do you think?

>> it is getting bigger. when i got started working on the large language models in 2016 to 2018, very few people were excited. i could see this thing was going to be incredibly useful, and it's so good to see the whole world excited about this like they should be because this is going to provide incredible amounts of value. >> let me pick up on the point jon was making about america's approach to rolling out a.i. versus china's. what do you experience in terms of demand? i don't know if your product is available in china or if you have opinions on the competitive landscape between these two countries. >> when we first launched, traffic started taking off in china for a few days and we got blocked. but they were not a big fan of the xi jinping bot. so yeah, win for america. we have like millions of people who use our site every day for, like, you know, on average of

hours. and a lot of that is entertainment, emotional support, that sort of thing. but like the big thing about this technology is it is so flexible and so useful that the big value is getting it to billions of people and letting them invent billions of use cases, and thank god in america we can do that. >> so talk to me about the chip usage that's kind of behind this and powering it. are you running into any bottlenecks there? >> yeah. everybody needs more chips. the more chips you have, the smarter a thing you can train, and the more people you can serve. we're good at doing that, but we're still serving a model we trained last year for a couple million dollars and could probably repeat now for like half a million or something. and the reason is we raised a lot of money in getting the chips. we're about to ramp up like crazy on gcp, thank god, and we'll be launching much, much smarter things in the near

future as that compute comes online. >> you guys have been very busy. and of your most popular characters are a character assistant for productivity, a psychologist for mental health issues, creative helper for creative writer. what differentiates these offerings from what i might get at some other a.i. product, especially when you start charging $9.99 a month as you have since may for the paid subscription tier? >> at this point, paid is just like faster service in the case of if the site is overloaded which we have been doing pretty well on recently, so it is free to everyone to use at this point. and yeah, what do people get? well, something that is tuned to what they like. and there's a huge long tale. people want lots and lots of things. we put up some examples, something that says psychologist. no one wants to talk about they

want to talk to like cartoon characters and use that as a psychologist and vent about their day. it's crazy. we don't know what other people -- what the users are going to want to do. and the big magic of this technology is getting it out there to users, make it flexibility, make it intelligent and adaptable. >> we had fun with it. when we raise the larger question, like i did with jon, of can start-ups like yours really compete in the long run against big tech companies or do you become a roll-up or something like that? why can't they come out with features similar to yours, and more or less commodityize your offerings? >> we have incredible ru researchers and engineers. we're hiring like crazy. we're growing like crazy. we're going to go toe to toe with those guys. >> i don't know what your timed

as the splashy party, but if they're doing one for everyone in a.i., it should be something in the metaverse, don't you think? >> yep. i'll send my digital clone. i'm too busy coding. >> your personal a.i. assistant. thank you so much for joining us today. congrats again. we really appreciate your time. >> thank you so much. it's a pleasure being here. that does it for the exchange. next on "power lunch," you'll hear about dan niles who is shorting apple as the single largest stock short position. lloitydiscuss. i' jn ler on the other side of this break. [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go.

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welcome to "power lunch." alongside kelly evans, i'm tyler mathisen. coming up, the apple of my ire. china's government reportedly banning agencies from using iphones. what would further bans in c