did you make your wish? barbara evanson: --more than her life itself. [smooch] i love you. [upbeat music] >> welcome to. >> street signs. >> we are live from davos. >> in london. >> i'm karen. >> chu with. >> steve sedgwick, and these are your headlines. elon musk takes the shine off stargate saying the ai groups involved don't have the money, while microsoft boss satya nadella touts his own ai cloud. >> all i know. is i'm good for my 80 billion. i am going to spend $80 billion building out azure. customers can count on microsoft. >> sap ceo.

>> christian klein. >> calls for a. >> european plan, telling cnbc the continent needs to respond to fresh ai investment stateside. >> my hope is. >> that with. >> what everything. >> what now happened. >> in the. >> united states. >> that is certainly a wake up call. and this wake up call now. >> still, we. >> need to see proof. but i hope now also europe comes closer together and we really form a union. >> the german finance minister, jorg cookies, backs changes to berlin's strict fiscal discipline. rules in a bid to attract private investment. >> there has to be some targeted reforms to the debt brake because we have so much need for infrastructure spend on railways, on roads, on bridges, on. >> education, on 5g. >> infrastructure, etc. so a lot of public infrastructure has to be provided. >> and the nato secretary general, mark rutte. >> calls on the new us. >> administration to maintain support for ukraine, urging all

allies to do their part. it is impossible to. >> keep nato safe. the whole. >> nato territory safe. >> yes. for now, yes, we. >> can do that, but not in. >> 4 or 5 years. if we don't ramp up. defense spending. and we have this whole process in place in nato to exactly establish. >> what all the allies. >> have to do, and it will be much more than 2%. >> and i'm. >> sylvia mauro. >> here in london. >> european stocks hold around record highs, but a mixed earnings picture. caps further. gains in early trade, with asml and puma dragging on the wider market. >> let's note this. >> year tesla. >> ceo and x owner elon musk has. criticized the stargate ai project launched by president. trump alongside the ceos of openai, oracle and softbank. in a post on x, musk said, quote,

they don't actually have the money, going on to claim that softbank had secured less than $10 billion in funding. openai sam altman responded, saying musk's claims were wrong and calling on the trump ally to put america first in. his new role. andrew ross sorkin caught up with microsoft ceo satya nadella here in davos and asked him about the spat. >> microsoft is investing $80 billion in capital each year, and this year we're investing, and i'm not particularly in the details of what they're investing. look, all i know is i'm good for my 80 billion. i'm going to spend $80 billion building out azure. customers can count on microsoft, with openai models being there everywhere in the world, serving openai models and other models. that's, i think, what i know. >> sap ceo. >> christian klein. >> told us this. >> morning that rather than focusing solely on ai, europe needs to concentrate on integrating it into existing industries. >> when you look at our industries, we have

manufacturing, we have auto, we have chemical, and we need to apply ai to make our industries more competitive. i would say it's not. it would be the wrong thing. now to only focus. oh, we need a company who's producing all these chips, all this hardware. we need to be stronger in the industries we are. and there we need more boldness, more willingness, more courage. honestly, it's about the politicians building the framework about, you know, more europe, but it's also about us on the economy to drive the transformation and use this technology to transform. >> well. >> they've been. >> on tenterhooks. >> haven't they, all week. i'm talking. >> about. >> the great and the good at. >> davos. >> wondering what president. >> trump is going to do next. >> and he's set to. deliver a hotly. anticipated virtual. >> speech to. delegates in davos later today. that's coming up at 4 p.m. london time. >> well cnbc has been. >> speaking to some of the biggest names in economics and finance. >> here in davos about their. projections for. >> inflation and. >> interest rates. >> why don't we. >> take a peek? >> tariff will probably not really help inflation to come

down. >> and therefore. >> you know i don't see rates coming down. >> as fast. as people believe. so. >> and when you. >> look at the current. environment, the market. seems to believe that we. >> we do. >> not see. >> ourselves behind the curve. and if our baseline holds, i think. >> the, the. >> the anticipation that we have will put us on target. and, you know, our target is 2% medium term sustainable. we want it to be sustainable. and i think that we are we are well positioned for that at the moment because of the strength of the us economy. the expectation. >> is that interest rates will stay. >> higher for longer. that has meant. higher interest rates at the long end of the yield curve for many, many countries. and also it's meant a stronger dollar. and that has obviously has implications. and countries need to build resilience to it. >> oh well. >> we're saving the best till nearly. >> the last. >> carlos torres. >> vila is the chair of bbva and joins us now. carlos lovely to

see you. how are you. >> great to see you again. >> it's finally snowing. and if we happen to be skiing this weekend, that would be perfect. >> but we're not. >> but you are. look, in terms of what i'm hearing, what karen's hearing about banking is clearly everyone knows we need cmu. we need banking union. but i don't know if they all know that we need banking mergers to make stronger champions. we keep hearing about europe wants champions. it wants international champions for the eu. but when it actually comes to it, a lot of policymakers we're speaking to, they're dead against it. and you're coming up against this as well, whether it's in spain with sabadell and whether we're seeing it with the italians trying to buy german banks as well. what is wrong with the politicians where they don't get we need bigger, stronger banks and we need more union. >> i think they're. >> coming. >> to understand. >> and are they? >> yeah. >> i think so. >> it's clear from the. >> diagnosis of all the reports that draghi, the letter reports that we. >> have an investment gap. >> the agenda. >> is very clear. >> in terms of what we need to invest in the digital transition, the energy transition and modernizing.

>> our infrastructure. >> and they quantified in the hundreds of billions of euros of additional investment. and that investment needs to get financed. through the capital markets, which is the minor part. today, only 25% of the financing in europe, 75% comes from banks. >> so the. >> banking side is hugely relevant. we need to push forward the capital market union so that the savings that europe has, which are large, do. not get. >> channeled to other places. >> mostly to the. >> us, but. >> stay in europe to invest in. >> european projects. >> but while that comes. >> the banking union is essential. >> and as. >> letta says in his. >> report. >> there's one whole. chapter called. >> scale matters. if you look at the size. >> of banks in the world, among the. top 25 largest banks by market cap, there are zero eu banks. and there you have not only american. >> banks, you have chinese. >> banks, canadian. >> banks, australian banks. >> singaporean banks. >> indian banks. >> this is. >> the. >> european mindset. the

politicians in and the regulators in switzerland completely miss the credit suisse debacle. and then when they call in a white knight ubs sergio ermotti, he turns it around. he puts together a really big power play. >> admittedly. >> it's. >> very, very big. >> compared to the swiss economy, but. >> suddenly they. >> start worrying about it being too big, rather than saying, great, we've got a champion here as well. for me, that isn't just a swiss mindset, that's a european politician mindset. so when you tell me they're beginning to understand my question, that. >> i think they're beginning. >> to understand. from all the talk in davos has been around. >> competitiveness has. >> been around the big. >> role that the. >> financial sector plays. for europe. >> to be competitive. there's no. >> innovation without the money for. >> it in europe. >> exactly. you need to you need the investment. >> in innovation. >> but you. >> need to invest to. >> invest also in infrastructure. we have huge infrastructure needs. >> you need. >> to invest in the companies and. >> the smes. >> we just. >> need. to get our. >> financial system to be more efficient in channeling the savings to productive investment, which is the big role that banks play. but really, believe me, steve, i

think they're coming to understand. >> and i think. m&a is. >> back on. >> the table. >> in europe. i was telling you a few years ago, it's boring. >> because it takes. >> a long, long time. you might remember. yes i do. well, the point is that it might be boring, but it's essential that we gain scale. yeah. to compete in the world. europe needs larger banks like it needs larger companies in telecom. it needs larger companies in the tech industry and in other industries as well. >> where do you think we're going to see further consolidation in european banks? >> the first step is always domestic consolidation deals, like the one that we're doing in spain with. >> the union. >> with sabadell, because. there we have the. >> beauty of. >> diluting fixed costs in a larger cost base. we have significant cost synergies. and then the complementarity as well of having an sme business with a universal retail business and large corporates as well, which is where. >> we excel. >> and then increasingly we will be seeing more cross-border. but for that, i believe it's a bit of a chicken and egg. we need to

advance into the banking union as well, because today cross-border deals have less synergies, precisely because there are restrictions in how a pan-european bank can manage capital and liquidity primarily. so as long as there's ring fencing, for example, of capital and liquidity in member states, it just makes less of a sense, less sense to do a cross-border deal. >> i want to get into the. risks of doing business and being a bank internationally these days, because your model and the model of some of the other banks in europe to have a footprint in some of the emerging markets was a model that really benefited a lot of the banks until the pandemic hit, and then it just looked like more risk attached to a bank here in 2025. as we talk about beefing up potentially mexico and having a better corridor there, we've got politics at play thanks to donald trump, and we don't know how he's going to treat mexico. so are there risks of having a bigger footprint in 2025? >> i think the bbva story demonstrates that our diversified footprint and the presence we have with leading franchises in emerging markets

has proven to be a huge positive. we are among our peers, the 15 banks with whom we compare, the one that has the best combination of growth and return on equity. we have the highest growth double digit growth in credits last year and return on equity around 20%, also increasing the tangible book value of our shareholders nearly around 18% over the last three years. so and looking forward, yes, there is always uncertainty, but mexico is a clear winner of what's going on because of the structural advantages of mexico size, youth demographics and then the presence to the us and nearby the us with competitiveness. it has its labor costs are a fraction of the us. and that structural factor, no matter what happens with trade, immigration, drugs, etc, which are all topics that need to be resolved, mexico will be a winner. >> let me pivot to monetary policy, because i had a terrific sit down yesterday with madame lagarde, and we were talking

about the direction for interest rates. and we know that each country across the eurozone is very different in terms of its growth story, its inflation story. but there is a view by some of the governing council members that they want to get back down to a neutral setting very quickly by summer, that we may see back to back 25 basis point rate reductions. would that be welcome, or are there still concerns in your mind about services inflation? >> i think that's the central scenario. and of course she knows much better than i do. but everyone is expecting for drops in interest rate to bring it down to 2% towards the end of the year. but i would say that there is a lot of inflationary forces still out there, primarily in the us, where the animal spirits are high and a lot of the measures from the new administration might have inflationary effects, others not because there are others that increase supply, which might have a counter effect, but overall there is certain risk and concern. and here in davos was part of the discussions that we might see inflation coming back a bit in the us and that

might trickle to europe, especially depending on what the trump administration does and how europe responds regarding the trade agreements or the trade arrangements. >> a quick. >> word on the consumer in europe as well. the spanish economy has been going great. 3% handled 20, 24, probably high twos in 2025, you think two and a half, 2.7. >> 2.3, 2.3. >> okay, so growing outgrowing europe as well. is that down to something that the spanish are doing particularly well or is it down to, well, the next gen funds that have gone into renewables is down to the fdi coming in because of that as well? or is there something very specific about spain that actually northern europe can replicate? >> it's both. it's both. clearly, the next generation eu funds have helped because they have been a big supporter over the last couple of years, and that will continue a bit into 2025 and 2026. so that's that's big support. but then what we have is very strong demographics because of immigration. so we're

adding 600,000 people per year year after year. it's not an issue in spain. they all find jobs. and a lot of that immigration comes from south america. same religion, same culture, easy to integrate. and that has been a boon for the economy because we're bringing in talent and we can grow because it's more people. so the labor market has been very strong. and maybe that's a lesson for europe in these periods when there's a lot of anti-immigration talk for spain, this has been a very, very positive development. also in spain, we have an advantage in the energy side because of the sunshine. it's very reliable in spain, so there's a lot of investment coming in to take advantage of that. and i think there will be a trend going forward. so spain is well set to continue to grow well beyond the eurozone, precisely because of the labor dynamics as well as the energy. and then the final point i would make is on the export side. so tourism has been really strong. that's another positive of our economy. and

exports primarily in the services sector has been very strong. where we're lagging is in investments. so to gross capital accumulation which is essential for productivity. so really our productivity needs to improve so that we can not only grow the economy but also grow the gdp per capita. >> brilliant. >> it's so nice of a positive story. it really is, because there's a lot of doom and gloom in europe. so great to see spain firing on all cylinders colors. >> lovely to see you. but if i may say yes you may in davos. and i was telling karen earlier the pessimism that some people talk about in europe, i see it with a different light. i think there is now a clear consensus around the need to get europe to be more competitive. that's great. and to simplify, i you know. >> i hear you, but let's move from. >> talking about it to doing it. >> but that's exactly what we're talking about. action. now we need action. and people like commissioner dombrovskis has a clear mandate to simplify. and i come out of davos with a clear conviction that he's going to deliver. >> brilliant, lovely.

>> and of course, mrs. rivera as well. she's got a. >> oh, yes, of course. >> a key brief. so that would be fascinating how. >> we change her mandate is very clear. and she's always. >> talking huge mandate. >> i know that, carlos. >> nice to see you. carlos torres, who's the chair of bbva. thank you sir. very nice to see you. thank you. the us president donald trump, has threatened russia and other participating countries with further tariffs. if there's no deal to end the war in ukraine. it comes a day after the president promised more sanctions against moscow if it failed to negotiate. well, i just caught up with the nato secretary general, mark rutte, and began by asking him whether he's concerned about the direction of the war in ukraine. >> this is moving. >> not in the right direction. >> it should move eastwards and it's moving westwards. very slowly. >> the russians are really paying a high price. >> we know that tens of. >> thousands, potentially hundreds of thousands of russians have died. >> many more. have been seriously wounded. >> so russia. >> is paying a high price. >> the economy is doing worse, but. >> still the. >> front line. >> is moving in the wrong direction. >> we have to change that.

>> we have. >> to. >> change the. >> trajectory of. >> this whole war. >> how does that happen, given the support that ukraine has already, it seems unlikely to increase given the fact that we've had changes in washington, d.c. >> what i. >> think is. that washington, d.c, if. >> they. >> would decide to keep the support going. >> and maybe. >> do even more so that you can get put into the negotiating table. >> that we. >> in europe will. >> have to pay more, which. >> is only logical because trump. >> is right. >> ukraine is closer to europe. >> but trump. >> is also right. this is also a geopolitical conflict, so i'm sure the us wants it to end with a good and strong deal. >> but but. >> trump. >> is trying to force putin to the table while putin is still making advances on that eastern front as well. it's unlikely he's going to rush to the negotiating table, isn't it? >> well. >> i was. >> very, very. >> happy with. >> the. wise decision. >> of trump to put more sanctions on russia. we know that the. russian economy is. doing terribly bad, and these sanctions will help. >> and i. >> hope the europeans will also step up now with their sanctions. we are doing. >> a. >> lot here on the european side. >> i think. >> europe could do even more and

work in conjunction with the. >> americans to choke. >> off the russian economy. and we know that. >> he's already. >> spending one third of his budget on defense, and now he is having these huge economic problems. >> well. >> the us president has called on nato allies, of course, to spend as much as 5% of gdp on defense. i think that's a bargaining position, to be fair. but i asked secretary general rutter for his take. >> clearly we all. >> in europe, those not on 2%. and luckily, thanks to. trump in his first term. >> we have stepped. >> up defense spending. we are now spending 640 billion more than when he came. >> into. >> office in 2016 2017. >> but we all. >> have to get to the 2%. not not. >> so still. >> 8 or 9 are not, but many more than when he came in first time. so that is one. it has to be done in the next couple of months. but the problem is even bigger. i came in this job now three and a half months ago. i looked at all the facts and i came to the conclusion it is impossible to keep nato safe. the whole nato territory safe.

yes. for now, yes, we can do that, but not in 4 or 5 years. if we don't ramp up defense spending. and we have this whole process in place in nato to exactly establish what all the allies have to do, and it will be much more than 2%. but secondly, also to ramp up the defense industrial base, we are simply not producing enough. >> and you can catch all the latest news out of davos on our cnbc live blog. well stay tuned. we're going to be joined by enquest ceo amjad pfizer icu for an exclusive interview that's an exclusive interview that's coming your way next. hey, can you speak french? who, me? i know a few words. if you're struggling to speak a new language, you should try babbel, a learning platform designed by over 200 language experts. it's like having your own personal language coach. babbel offers live classes with expert teachers for real world conversation practice.

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for all those making it big out there... ...shouldn't your mobile service be able to keep up with you? get wifi speeds up to a gig at home and on the go. introducing powerboost, only from xfinity mobile. now that's big. xfinity internet customers, cut your mobile bill in half vs. t-mobile, verizon, and at&t for your first year. plus, ask how to get the new samsung galaxy s25+ on us. 696 6005 12. >> that's 806 9665 12. >> squawk box live from davos morgan stanley's ted pick workday's carl eschenbach. liberty global's mike breese, honeywell's vimal kapoor, blackrock's larry fink stay ahead of the market, squawk box today, 6 a.m. eastern. cnbc. >> rio tinto ceo jakob stausholm has told us about the logistical

challenges his firm has encountered in mineral extraction in greenland, raising questions for us president trump's possible plans for the region. >> what is. >> interesting is we have looked at at greenland, for we have been exploring it for 15 years. we have never been able to come up with a profitable project. there's clearly a lot of minerals up there, but the logistic cost in a place where you don't have roads, everything has to be airborne is enormous. >> so yeah. >> yeah, we'll see. europe. the london metal exchange, matthew chamberlain told us that buyers are pushing for supply chain diversity when it comes to critical minerals. >> it's been one of the. >> big talking points over the past few days is the critical minerals agenda. and i think we're seeing a lot of countries saying that they want a. >> more diverse. >> source of supply. i don't think that's a an action against any particular country. it's just about supply chain diversity. so we're very fortunate at the lme that if you

look at our brand lists, we have brands from all. >> around the world. >> for all of our metals. it's something that we really prioritize. we aggressively add new brands and new warehouse locations, new copper brands from the drc. new warehouse locations in jeddah and now hong kong. and i think to a certain extent, that then provides us that resilience, that when people are looking for that diversity of supply, we're not ourselves dependent on any one region or geography. i'm pleased to say joining us around the set is amjad pfizer icu, ceo of inquest. amjad, great to have you with us. >> thank you for. >> inviting me. i want to start off with the policy issues that we're seeing the united states drill, baby, drill. that was the message first up from trump versus in the uk where you're operating and you're facing windfall taxes still that were initially meant to be a one off but just stayed and stayed. how different is the regulatory regime for you when energy is meant to be a huge part of the manufacturing process and security in the future?

>> it's a. >> it's a massive difference. >> i mean, obviously, trump is pushing. >> hard to maximize. >> value in the us already, even under. >> biden has become. >> the largest. >> oil producer and now the largest. lng exporter. >> and. >> the largest gas producer. >> so. >> almost 40 million barrels. >> a day equivalent on both. >> and that's. >> from a. >> start. >> in oil of about 5. >> million barrels a day. >> in, in 2000. >> so, so really. >> that's almost. gone up. four times in liquids from 13 of. >> of oil and about 7 million of. >> other liquids. >> the uk is exactly the opposite. >> it's gone. >> from about. >> 4.5 million barrels a day. >> equivalent in 2000. >> and now last year is about a million barrels a. >> day, down. >> almost 30% year on year. >> so polar. >> opposites and. >> it's terrible. >> i mean. >> again. >> it's a national emergency. >> for. >> for the us and. >> 1 or 2 the. >> immigration and. >> and energy. >> whereas the uk is. effectively slowing down investment and bringing the, the whole industry. >> to a standstill. >> the almost six. >> companies have already.

>> since the. >> budget. >> have left. >> or decided to leave, and cnr apache. >> obviously taqa stopped their. their production. so we are seeing. >> also equinor and shell. >> combined in a company. >> effectively cutting the cord, so. >> seeing a lot. >> of decline. >> how short sighted is the uk policy then when we're talking about ai needing huge amounts of energy in future? and we were talking before off camera actually about whether the us has energy security. why do we need a national emergency? is it because of the ai demands that are coming, and does the uk need to change its mindset to be fit for purpose on the energy side for ai? >> so in the. >> us, the amount of production. >> is still very. very high and. >> the exports is. >> is. even all. >> the oil is. >> exported and. >> both gas and lng is exported. >> lng now. >> the largest. >> exports from the us. is of lng. cargoes in the world. >> and that business is built up over. >> only the last, last nine years. >> so quite big. >> the issue in. >> the. >> us is infrastructure. they've got lots of problems. >> with infrastructure. there's a lot of gas, but the. >> infrastructure itself for electricity is not there. and i

think that's the big challenge. and that's where the if you look at the cost of gas in the us. >> it's. >> about $4 an m, but the cost of electricity. >> is. >> about $0.08. >> whereas the cost of gas but long term cost. >> of gas in europe is about 14. >> the cost. >> of electricity. >> in the future in europe is about the same. so it's that bottleneck in the. middle that's creating the problem. >> can i just go back. >> to the previous point? and if this government isn't careful in the united kingdom, they're going to lose the resources companies from london listings. your in-q-tel is your record on the london market as well. are you seriously thinking about delisting from london, perhaps going somewhere else, perhaps going to the united states where a energy companies are treated at a premium as well? be you don't have the same criticisms labeled at the resource industry that we get on this side of the atlantic. >> i mean, the uk market. >> already is. >> a is a challenge market in terms. >> of. >> the london stock exchange shrinking. >> and you're absolutely spot on, steve. even more of a challenge. >> for.

>> oil and. >> gas companies. >> the issue. we're looking at is pivoting towards asia. so we've made great progress. >> over the last. >> year in asia. we've signed an agreement to sell gas. >> into malaysia using one of our. >> resources. >> the two and a half tcf. >> we've just purchased harbors. >> energies. >> vietnam assets. >> we've we. >> have a joint venture. >> now for exploration. >> and in indonesia. >> we're also. looking at with some majors there. so we are expanding in. in in the region. we've taken a development opportunity also. >> in malaysia. >> so pivoting to asia. investing more in asia. >> our purchase. >> was $84 million, which is a big a big number for us. but quite a big cash flow during the year. >> so why be listed in london? >> well. >> we still have a big business. >> in london, and. >> we still have these investments that we've made. even though the tax rates are now very high, we. >> we still. >> have tax credits for the investments we made in the past, which is a very valuable asset. i think until that tax credit is, is finished, we still have.

>> that tax. >> credit finished. >> well, depending on what we do in terms. >> of acquisitions. >> because we're not going through investment anymore. we're looking at going through acquisitions there. so on our own it would take 5 to 7 years depending on oil price, but without, you know, without acquisitions. >> but with. >> acquisitions we're. >> hoping to accelerate that because npv value of that asset can be accelerated. >> can i ask you about the geopolitics because there are moving pieces here. the ceasefire we've been watching around gaza, ukraine, russia. if we see further progress in some of these conflicts, what does that mean to the geopolitical premium that we've been seeing in oil? >> well. >> i think that we're. >> still not seeing. >> much of. a premium. you know, we've seen some movements up and down. but the reality is there's a significant overhang still in the market. it's increased over the last year. it's about 5 million barrels a day, mostly. in in saudi. so it's 3 million in saudi, a million in uae and about a million between kuwait and iraq. so we're not seeing. >> much of a premium that's

still there. >> now, the challenge this year in terms of supply and demand of the market is china versus versus opec. and what opec is going to do. >> i don't. >> expect much to come out of the us in terms of additional production. even with the drill baby drill. i mean, it's economics and the price of oil is, you know, low mid 70s in terms of wti. >> well we're on top of the range. sorry. i'm just going to come in here because we're we're roughly at $80. seems to be the top for brant pretty much give or take $1.70 dollars. certainly the floor at the moment as well. i actually think without the war in ukraine and plus drill, baby drill, i actually and plus i think the opec tensions are building up. you know, those of us who look to this industry can see they don't like holding back production when the prices as it is as well. we could quite easily have a dare i say it, a 5 or 6 handle on brant potentially. if all of this comes together. >> i think. >> the if. opec the. >> they've had tremendous discipline and they've been actually the central bank of the

market driven by saudi arabia. >> but then. >> opec is. >> the only swing producer out there anymore. that's the point. >> you're talking about the us. >> yeah. >> well the us. >> so far. >> the us. >> has has. >> not stored much and continues to produce. and what i don't actually see it as much of an increase going forward in the us because we are also getting to. this infrastructure bottleneck in most places for, for the production of gas and oil. >> just quickly, can i squeeze in a question around energy prices in europe because madame lagarde, the ecb, yesterday they were watching energy prices. is the central bank going to be spooked by energy prices in europe in 2025? >> i mean, europe has has done a tremendous job at averting the crisis because germany was able to build lng terminals at pace and then supply from the us has come at pace. there's a huge number of plants being built in the in the in the us, those have been frozen. now i think it will be open again. so i imagine the lng supply to europe will will be in place. it's a question of price. but but also the us gas

is plentiful, so i don't think the price is going to move very much. for europe it's about $14 an m so i don't see much of a crisis. obviously we had 100. we had 15 bcm blocked off from russia, but that's relatively small in terms of number of cargoes that can be brought into europe. >> i think half the governing council have just breathed a sigh of relief. then. you know, we've got to leave it there. lovely to see you. thank you very. >> much indeed for your time. >> andrea zazou, who is the ceo of inquest. and you can catch all the latest news out of davos on our cnbc live blog coming up on cnbc. we're going to be joined by the eq, ceo christian sinding, who is going to join us very first on cnbc conversation. >> when a cyber thief transfers the title of your home out of your name, it's a race against. time to stop the theft of your hard earned equity. many people don't know this has happened until long after it's done.

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>> welcome to street signs live from davos in london i'm karen cho with steve sedgwick and these are your headlines. elon musk takes the shine off stargate saying the ai groups involved don't have the money, while microsoft boss satya nadella starts his own ai cloud. >> all i know. >> is i'm good for my 80 billion. i'm going to spend $80 billion building out azure. customers can count on microsoft. >> sap ceo christian klein calls for a european plan, telling cnbc the continent needs to respond to fresh ai investment stateside. >> my hope is that what what everything what now happened in the united. >> states. >> that is. certainly a wake up call. and this wake up call now. >> still. >> we need to see proof, but i hope now the also europe comes closer together and we really form a union. >> the german finance minister. your cookies backs changes to berlin's strict fiscal

discipline rules in a bid. >> to. >> attract private investment. >> there has to be some targeted. reforms to the debt brake. >> because. >> we have so much need for infrastructure spend on railways, on roads. >> on bridges, on. >> education, on 5g, six g infrastructure, etc. so. >> a lot of public infrastructure has to be provided. and nato secretary general mark rutte calls on the new us administration to maintain support for ukraine, urging. all allies to do their part. >> it is impossible to keep nato safe. the whole nato territory safe. yes. for now, yes, we can do that, but. >> not in 4 or. >> 5 years. if we don't ramp up defense spending. and we have this whole process in place in nato to. exactly establish what all the allies have to do, and it will be much more than 2%.

>> breaking news. it's really snowing here in davos. but but i mean, i can say at least one of our guests to come and at least a couple of them have been on this morning saying we're staying the weekend, we're going to ski. and they're just rubbing their hands with glee because it takes that layer of ice off the top of under your blades. you just got that little bit of powder and they're going to love it, aren't they? it's been getting a little bit icy out there, hasn't it? because the sun's been out. it starts to melt and that freezes over at night time. slush on the lower slopes. this is heavy isn't it? this is great. should be staying for the weekend. well, why don't you? i may do, i'll cover monday. really? if you want. this is a negotiation. no transactions, not negotiation. do it. speaking of a transactional negotiator here, let's talk about president trump. he's repeated calls for tariffs against a european union, countries saying the measures are needed for fairness. we've been speaking to business leaders here in davos about the impact of trade curbs. if we suddenly see that. >> the. >> tariffs will bring the. >> world to a better. >> place, i think that's. >> at least a. >> new theory to many of us. i think for. all of us,

immediately. >> you either. >> have taxes or tariffs on the goods we are buying ourselves. >> that creates inflation. >> i don't think the world needs excessive inflation. >> tariffs. normally they increase inflation by definition. so it doesn't really help. so i think the idea would be what can we do, what kind of deals to make in order to really reduce the tariffs to, to the, to the minimum level. because free trade, low tariffs i think is really a driver for growth. >> i would. >> say tariffs are not helping global trade. and when you look about the dependencies between europe and the us. >> or the. >> united states and china, i don't believe that this is good. >> i'm going to step away from our skiing conversation. christian is with us, the ceo of ec. there's big business happening. m&a is back in a big way. that's what we keep on hearing. well how active do you want to be and what seems to be a consolidating market now this

year? >> well it's great to be here. >> it's great that. >> it's snowing like. >> talking about skiing. >> of course. but more importantly, yes, we believe the market is continuing to improve. we had a record year in 2024. we did over $20 billion of investments. we did more than $10 billion of exits. and that's kind of building up to 2025, where i think a lot of the market participants are now ready to transact, whether it's private equity or family offices or strategic buyers. and of course, if you look at the global capital markets, the ipo market is wide open. the credit markets are strong. so we're we're fairly positive looking into the next year. >> help us think about targets because we keep on talking about the us growth story that is so resilient and the growth that we're seeing there, even on a global basis, coming at the expense of other countries that are simply not growing as fast. does that mean the targets, the m&a targets are going to be stateside? people want the growth. they want to pivot towards the trade policies and trump policies versus europe. or is it the opposite? everything's cheaper in europe. and look,

there's a for sale sign up on everything. >> yeah i think it's rather the latter especially for private equity. because what we do is, you know, we look at sectors and themes and then we break that down into industries and then we look for particular companies. so we're finding companies in for example, animal health or, or veterinary services, those kinds of sectors or in renewables, the transition to a digital society, data centers and all these things. and around that space, the companies in europe that are actually very attractive are a bit cheaper than they are in the us. so i think there will be activity actually all in both regions. asia is also very active. actually, india is our most active market globally. if you look compared to where our funds are investing. so i look at a, you know, a pretty broadly across the world, but that's different than taking a macro view of the us or a macro view of europe. that's a whole different discussion. luckily we're investing in the micro. >> and that's it's only good if you can eventually turn it around and sell it. and i actually managed to get into

your report, which is extraordinary since i've been doing about, you know, dozens of interviews today. but i was i got down to the bit that i'm really interested in. you guys are talking about the deals you want to make. i'm talking about the deals you want to get out of as well. it's this is phenomenal. the exit rate as well. 72% increase on 2023. lots of x i think. is it a record year for exits from you as well or something like that. >> number but not in volume. >> okay. so talk to me about the exit of the market because that's really the lifeblood of pe. you know you want to take on these deals but you want to get out of them as well. >> that's right. you know, ultimately what what our job is to do is to create value in the companies we own and then monetize those companies so we can deliver returns to our investors, which are pension funds and institutions from all over the world. so what we've learned over the past cycle is that we need to prepare our companies earlier for exit, because there's been so much volatility. >> over the holding period. >> very interesting. >> so if you look at the shorter holding period. >> no, not the holding period. but we own companies for 3 to 5 years typically. and in the past we would probably prepare for

exit 6 to 12 months ahead. now we're preparing 12 to 18 maybe 24 months ahead. >> can you do that? >> you can because there's a lot of there's a lot of mental preparation. there's a lot of strategy, preparation. they're all, you know, all kinds of accounting elements, etc. getting the management team ready to be a public company, for example, if it's going to go public. and the reason i say it that way is that the market's been so volatile over the last five years with, for example, the ipo market opening and closing, the m&a market being on and off the credit market, even being a bit on and off. so we need to transact when the markets are attractive. so what we try to do is kind of hit the axis of when the companies are performing well and when the market's performing well. and that's what we're seeing coming together now. >> very interesting. we're talking about the ipo route out as well. exit events including competitive sales ipo, the ipo market are very, very interesting because there's been a lot of talk about democratization, about european equity markets looking pretty flat as well. if the ipo market is alive and well, that's a really healthy sign. it is it. >> it is. >> but it's not that

straightforward. so what we're seeing. >> is. >> you know, larger companies that can generate real liquidity for investors, companies that are easily understandable, that have positive megatrends. those are attractive for the public markets. what you saw during when you know, when interest rates were zero, you could take almost any company public, but a lot of those have fallen 80, 90%, etc. and just weren't ready to be public, didn't have the size, the scale, the outlook. so companies like galderma, which we took public here in last year in switzerland, it's up actually 100%. the company's performing very well, but it's also rerated because it's just a perfect fit for the markets. >> i want to ask you about one of the bigger stories this week, stargate's $500 billion to be raised over the next four years. is that money going to be forthcoming? >> i don't have. >> the, you know. >> the inside information. i see the debates going on x, but from my understanding, a lot of capital is being raised whether

they can make it to 500 or not. maybe that's not that important. what i think is important is that, you know, we see the us now really investing in the next generation of digital infrastructure. we're a part of that. we own a huge data center business called edgeconnex, and i think it'd be great if we could do the same in europe, also in parts of asia, that we can get cooperation between government and business together to drive innovation. because society is changing, it is digitizing very quickly. >> just give us a line on that, because we were hearing some encouraging comments before that perhaps europe can get its act together. but what do you want to hear to be willing to put your money behind ai projects in europe? >> well, we already do. we're a big investor in europe. and i across, you know, software, hardware and data centers. but what we'd like, if you take a step back and look at european competitiveness, which is a huge a huge discussion here in davos and over the last months in europe, we do need to deregulate. i think, you know, ursula von der leyen has has also said this. the draghi report is pretty accurate. we

need to we need to be able to move faster to build new data centers, new renewable platforms, whatever it might be. so deregulating, making it easier, making it easier to move people around and talent around, simplifying tax codes and also creating some type of common capital market so we can bring companies from inception all the way through to the to the capital markets. and if you look at europe, actually there are more research papers in europe written every year than in the us. that's. but slowly but surely, you know, there are less patents in europe and there are less startups and less bigger companies. so we're not able to accelerate from the idea to the, you know, to the actual company in the same way that the us. >> that's really interesting. >> that's what we want to work on. >> you've hit on something i was about to ask you almost half answered it coming in at companies at inception. it's the it's the trend that was identified and that kara and i have spoken about with many guests over the last 6 to 12 months, whereas you're turning yourselves into an amalgam of vc, mpe, aren't you? it's not the traditional pe that's

dangerous, isn't it? because you have to adopt them. the vc parameters of losses that your industry loves a double digit return. that's what is it, ten, 15, 20% you want to get from every deal? yep. vc eight of them are going to be stunners. eight of them are going to work. so you've got to take on extra risk, haven't you? >> you do, but. >> the. >> way you do it is you structure it in different funds. so we actually have europe's largest tech fund for venture capital. and we also have europe's largest life sciences fund. and they're investing in new companies. >> there's no overlap. >> it's just. >> no different rules on the vc side. >> yeah. because the competence is so different that we want specialists in life sciences on the one hand and specialists in tech on the other hand. and those funds, we expect, you know, a lot of the companies not to succeed. yeah. >> can i ask you very quickly about the uk because we saw starmer tried to set a stone out around ai strategy, having one which was somewhat welcome. but everyone i've spoken to and i was in a green room the other day talking to all these tech experts, say, look, there's no incentive for startups for entrepreneurs to list in london because as soon as they do, they

hand over control. is that something that starmer needs to look at? the incentive structure for entrepreneurs? yeah. >> i think i think some of the same challenges that, you know, how do you get companies from this cluster around cambridge, for example? lots of innovation there. how do you get companies to grow from that idea base all the way to success? and i think that, you know, the british stock exchange is the london stock exchange is not as active as it should be. i think the pension funds need to activate more. they probably need to simplify some of the regulations and rules around it and really get activity there, because london is still the financial center of europe. >> great to see you. thanks very much indeed for taking us down a very interesting route and enjoy your skiing. >> thanks a lot. i will you too. hope you get there. >> the offer's there. karen christian sinding, who is the ceo of eqt. coming up on cnbc, we're going to be joined by hubert keller, who is the managing partner at lombard odier. i bumped into him yesterday. we got an interesting chat coming up.

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meeting. >> 2025 is promising major political shifts across europe, with germany set to hold snap elections in late february. i do love that snap elections. we have to wait about three months for them. when they were announced anyway, german finance minister your cookies told karen and me that the country's election will be all about the economy and that changes to germany's much discussed schuldenbremse a debt rules. >> there has. >> to be some targeted reforms to the debt brake. >> because. >> we have so much need for infrastructure spend on railways, on roads, on bridges. on education, on 5g infrastructure, etc. so. >> a lot of public infrastructure has to. >> be provided. but the vast majority of investment of our country, in our country. has to come from the private sector. so in that sense, in addition, we also have. >> to set the right. >> incentives.

>> and for more on what we can expect from the, well, the german establishment, their attitude to banking and why cookies branded unicredit's bid for commerzbank. aggressive, opaque and transparent. it's powerful stuff. you can check out cnbc.com. anyway, someone who's going to be far gentler i'm sure is hubert keller, who is managing partner at lombard odier. hubert we had a nice chat yesterday. we bumped into each other and that's the beauty of this place. you bump into so many important people. and you came off a panel i was discussing. whereas actually the noise around withdrawal from climate initiatives from financiers and bankers, it's become quite loud. you know, we're not going to back this agm. we're not going to back this climate initiative as well. and yet, i think we've both come to the same conclusion that a lot of that investment is still going to happen. it's just going to be a lot less noisy as well. so the fear about money withdrawing from climate initiatives, is it overdone? >> i think so.

>> i think so. >> first. >> thank you. >> for having me. >> here today. you're welcome. >> i think so the reality is that i think we are shifting quite perhaps. >> abruptly. >> from what i would call the esg. 1.0 to esg 2.0. and i think for us, esg 2.0. >> which has. >> always been the. >> case. >> the whole debate around sustainability as a wealth and asset management firm is about delivering superior investment returns. >> and that. >> is very hard. so to your question, you. >> know. >> are we going to continue to. >> talk about. >> climate initiatives? are we still going to think about how to fund it? the answer is absolutely yes. >> the. >> economy is changing. >> but i spoke to a couple of ceos. i won't name them because i don't want to kind of, you know, set them up against us politicians. but they said just talk to them differently. if you tell a us politician in a southern state or somewhere, oh, i want to give you a green initiative. i want you to have, you know, a net zero policy, and i can help you with that. they're going to turn around and

say no. if you tell that same politician, i'm going to cut your costs, i'm going to cut your energy consumption. i'm going to make it easier for you to get your to fuel your homes, the industry and your state as well. they're going to bite your arm off. it's how you talk to people and how you portray it. that's what 2.0 needs to look like, isn't it? i completely agree with you. i mean. >> at the end of the day, when we. saw the arrival. >> of the. >> internet, we never had a debate whether the internet was. >> a good thing or a bad thing. >> it just happened. and it happened because it was a major technological revolution. the green transition is a much bigger technological revolution. and. >> you know. betting against. >> tech has always been the wrong. >> thing to do. >> over the years. >> it's an. amazing it's a really important point. we started off talking about energy transition and you called it tech and that's it. it's got an image problem as well isn't it. energy transition is about tech. >> it is. >> about tech. i mean, you know,

think. about solar energy. >> it is about basically. >> you know, it's all about tech. >> it's about. >> you know, capturing the. >> energy of the sun. >> and basically transforming it. >> into an energy. >> that we need to power our economy. and the really good news about tech. is it's subject to the moore's law. >> yes. so costs are going down. and they're going down. >> and they're going down. efficiency is going up. and up and everything is really good. and you know, that's one of the reasons why effectively 95 or 90 plus percent. of all new electricity infrastructure last year were solar, wind and battery. because it's cheaper, it's more efficient. >> and but there's an ideology divide that is forming between the united states and europe. and i'll give you one example that trump may be using fair access rules when it comes to what services banks are offering. so we know the very

same banks and insurers and businesses in europe are saying, i'm not necessarily going to provide services to fossil fuel industries. and future trump may push back against that. and if that is the case, doesn't it change the playing field for those who are trying to do the right thing, take a moral stand, but ultimately may find themselves on the wrong side of the trump administration? >> i think. >> the problem. >> with that whole sustainability discussion, it has. been heavily politicized and. >> the not going to change. >> you may be right, but, you know, for those who are allocating capital and we are in the asset management industry, wealth management industry, we are basically deploying capital every day in markets. we're looking for basically what represents better economics. so sustainability, the transition nature, all of these represent incredibly. interesting investment opportunities. >> does i represent a good

investment opportunity because we're talking about billions, perhaps trillions being deployed over the next number of years. over the next decade or so? will those investment returns pay off for investors? >> very difficult to know. are we going. >> to. >> live in a digital enabled world where ai is going to play a really important role? the answer is probably yes. and are is technology and ai going to play an important role in the green transition? absolutely. so all these things are are connected. >> we were talking about stargate earlier, the 500 billion that trump is trying to ensure is behind that project over four years. do you think that funding is going to be easy to attract? i can't. >> really. >> comment on stargate. >> i would say that. >> if you're looking at all the initiatives that are going on around effectively decarbonizing the economy, around reducing and improving the footprint on nature, i think around materials, around circularity, and a lot of these investments

make sense. they make economic sense. and that's basically what that's the reason why capital is being deployed. >> we have to leave it there, hubert, not least because it's the end of the show. it's the end of our lives. and what a lovely last guest we've had of our lives. after what feels like 362 days of davos interviews and panels. thank you so much. indeed. >> thank you so much. >> thank you. pleasure seeing you, sir. thank you. hubert keller who is the managing partner at lombard odier. well, i think i don't know how many panels and interviews we've done between us, but i think we've pulled a shift couple of couple of panels and certainly a ton of interviews. it's been fascinating. it's been fascinating. and negotiations begin. will karen be on squawk box on monday or will she be hitting the slopes all weekend? you'll find out on monday. same time, same place on squawk box. >> used for two weeks now it's. >> a $1,500. >> coat rack. i didn't even. >> learn. smoke on the water. >> broke her pinkie. >> pulled her.

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>> allowed to. >> continue in this country, but there will be a. shift in ownership. >> the main. >> thing is not just cutting costs, but getting rid of all the regulations. >> i will, very. simply put. >> america first. >> the trump impact on business and the economy for the first 100 days and beyond. cnbc. >> it is 5g. i'm here at cnbc global headquarters. >> welcome to worldwide exchange. >> here is your five at five. stocks are. >> pullingack this morning after. >> the s&p 500. >> it hits. >> an all time. >> intraday high. >> it's now just a. tick below its december 6th. record close. >> saudi arabia tells president trump it wants to invest $600. >> billion. >> here in the u.s. elon musk keeps up his feud with sam. >> altman, while. >> openai, it shifts away from microsoft. plus, e! shares are plunging right now as it slashes its. >> full year outlook. >> as its soccer games disappoint. and later, a cnbc exclusive with the us head of santander bank.