lot over even the past 48 hours. of course it had dropped below $100,000. now up now at about 102,000. at one point it was close to $103,000 this morning. make sure you join us tomorrow. a lot going on. the headlines won't stop. squawk on the street begins right now. they got a whole bunch of big, important interviews. >> good tuesday morning. welcome to squawk. >> on. >> the street. i'm carl quintanilla. >> with jim. >> cramer. >> david faber at post nine of the new york stock exchange. the bulls are trying to assemble a day after that deep sea gut. >> check and the. >> nasdaq's worst day in six weeks. >> but it is. >> tentative so far as the market also wrestles with some fresh tariff warnings from the president. and now treasury secretary. robert begins with the eye stock route. >> nvidia and other. >> chip names look to. >> rebound after that deep. >> sea fueled sell off. >> plus. >> gm and boeing are among the. >> companies that have. >> reported earnings. >> this morning. >> we're going to be joined.

>> exclusively by. >> the ceo of boeing. >> that will be. >> in. just a few minutes. >> the company. >> is laying out. >> its recovery plan, of course. following its largest. >> annual loss. >> since 2020. and a new partnership to. address one of the key concerns. at least it was until yesterday surrounding the ai boom. and that's the rising demand for power and the drain, of course, on the electric grid, we're going to have the ceos of chevron and ge. they're both going to join us exclusively. >> in. >> this hour. >> let's get right. >> to the markets. >> a day after the. >> nasdaq did drop by. >> 3%. >> fueled by. >> china's ai startup. >> deep tech. >> nvidia shares. >> rebounding a bit this morning. >> after wiping out. >> almost 600. >> billion. >> in. market cap yesterday. of course. >> that. >> is the biggest one day market cap loss in us history. although the rotation. >> jim was. >> to some areas of tech too. >> yes, indeed. >> and remember the. >> second worst was also nvidia during. >> the watch. >> party period. the stock is up. >> what i would say is there. >> will be. >> heat seeking. >> missiles coming. >> after that. >> stock up.

>> and if you really. >> want to buy it, wait. >> till they send. >> it down 2. >> or 3 bucks. >> because that's been the usual practice here. >> i look. >> it's no doubt. >> about it that people just say. >> there, there. >> the blast zone. >> i like. >> sam bliss. i go to symbolist a lot from jp morgan. >> and he's saying, listen, before you. >> just write this off, remember that there are real winners. there's winners and losers. and he. he's saying that. amazon is a winner. they benefit i mean. >> they can amazon apple meta and. >> some less interesting google winners. >> but nvidia. >> you point. >> out is at. >> david one of. >> the shoot. >> first ask questions. >> later the. >> p based. >> on forward earnings expectations declined toward the very low end of the range. and i. >> was. >> watching last night a great. video after ces with you know it's one of the it's on youtube huge. >> and i just thought. >> you know. >> what we're now thinking. we went from thinking. >> it's great to. >> thinking there's really. >> no use to it. but i keep coming. >> back to. >> the next generation is about robots and it's about

self-driving. it's not about chatgpt where it might hallucinate or not. >> right. >> come on, let's get serious here. >> right. >> well, i don't think that anybody is. still, i don't really think there's a great deal of questioning as to the long term, the long term impact of ai, jim. right, right. what we had yesterday, of course, was a question as to whether or not there are going to be ways to do it more cheaply. that is going to require less compute and therefore less power, perhaps. right. and even though it was a broad sell off in some ways it was very distinctive in terms of it was nvidia. it was it was it was broadcom. it was anybody really in the data center and or providing power to the data center. but the fact is microsoft did not sell off that much. alphabet did not sell off that much. amazon i mean the potential winners right now. alphabet i don't know. you know, maybe not much. you know, i mean they search could hurt distillation. that's that's happening. in other words that how they deep think deep seek

distilled from openai. and what that means in terms of the commoditization overall of all of these models. right. i do wonder, for example, if openai was trading as a public company, which it may at some point, what would have happened to it. >> yesterday. >> i know. >> and how much did this. outfit did semantically. steal from openai? they may have. >> i have benioff on tonight to talk specifically about how that is the denouement. >> but, you know, world where maybe even microsoft gets to provide inference, right? because that's the key here is the reasoning part of this to its customers. and that costs less. well, maybe that's a better world for microsoft. maybe that's a better world for amazon. maybe, you know, for meta as well. but i think less clear for some of those who are really at the forefront of providing the actual models. obviously, we're talking alphabet, openai. well, anthropic is supported by amazon, certainly, but amazon web services is now benioff and.

>> benioff is going to come on. >> to talk about. >> the fight. >> between microsoft and. >> i, dave. david. >> microsoft and i. >> and open openai and. yeah and i have them on just because it's really gotten very serious. >> so he's coming on tonight. >> yeah. >> because i just think it's got it's a major story for us. >> it is. but he's just going to sit there and say we benefit isn't he. that's what i'm not going to let him sit there and i'm not going to let him get away with it. they can fight it all out. it's all about software. >> no, i said, you're not going to do that. you know, there's no give without a get. >> you want to go and you want to say. >> listen, it's the greatest thing in the world. well, let me just ask you the incentive, the bombs he is throwing car on on . i mean, he's throwing nuclear. war here. i mean, we're going to have to we're going to have to ask rtx when we. >> mean an. >> iron dome for benioff. >> we did get a chance yesterday to get some feedback from the president, from nvidia and from sam altman, who did say, jim, it's invigorating to have new competitors called this impressive what they put together. >> well. i like that. it is impressive because it's much lower cost. but i question

whether what they stole, i question how good it is. i question the hallucination factor. i question that when i went on it, it was stupid as wood. i mean, look, there are some real problems here, but i. >> know there may. >> be, but the calculations are good. no i'm not, you know, look, if. >> but it shows, first of all, that the software engineers in china are the equal of many of the ones here in the united states that they thought they. >> were blockheads. >> that's important. there is a thought that they they trail us in terms of their ability when it comes to software development. >> we are so far ahead of. >> them and. >> we're doing robots and cars. where's their robots? in cars? >> oh really? the last i think they lead the world in evs and in and in. have you been in a chinese ev flooding the market with. they're going to have all sorts of stuff. they're everywhere in cars. yes. okay. and you don't think they're going to be able to make robots? >> i'm saying that elon. >> they're elon. >> what that jenson elon musk partnership. yeah i understood that. >> i'm just saying you're questioning the chinese ability to make autonomous automobiles and robots. >> forget about it.

>> they can flood the world. >> the supercomputer solution i think is a brilliant solution by musk. >> there were also comparisons yesterday to remember the old days of betamax versus vhs. betamax was a superior technology. people decided, you know what? for the cost, vhs is good enough. >> well. >> look, there's no doubt about the cost is great for this, but if you're going to go for it and you're going to do what jensen was talking about, which is anything physical, anything physical with black, you know, with blackwell that it's going to be better than what we do. i'm just saying that jensen is on a plane on his own, and that if you have low commodity, jensen's got the $3,000 chip that can handle that. was i shocked by this? no. it was nice that they came up with such a low price. >> but the point is the demand is i mean, i don't want to put words in your mouth, but are you. >> saying i said. >> i'm not. >> saying buy anything. >> you're not saying that. but at the same time you are talking about the market that they're going to ultimately have for a physical ai in the form of robots, it's going to be big,

right? >> it's just it's a little sophisticated. >> obviously, nobody has changed their plans as of yet for building data centers or anything else. we'll see. although you could argue it's just going to bring more efficiency and it's going to bring more advances more quickly. and so maybe it's the out years when we reach agi carl, that then will after we reach artificial general intelligence, which may be closer than we had thought right then the future cash flows may have to be discounted because they may not be there quite. >> as much. go listen to him. the future is now. >> aside from all of that, it's a big day for large industrials. we'll get to gm and rtx, but boeing as well. company reporting its biggest annual loss since 2020. and our phil lebeau is here this morning with the ceo. hey phil. >> hey carl. >> kelly, thank you for joining us this morning. look, we know what 2024 was. and you knew that going into this job as you look at 2025 i can tell that you see some some reasons for optimism here. >> yeah, i really do. >> despite the challenging fourth quarter, we are making. >> some some significant

progress. >> you know, we had. a great capital raise. >> so the balance sheet. >> is solid. for the. >> next year. >> and we're starting to see really. >> good progress as we ramp production. >> back up on the 737. >> and the max production rate is critically. important to the. >> recovery of the. >> program of the company. >> are you seeing what you need to see so far to say, yeah, i like where we're headed in terms of getting ultimately to 38 per month at some point this year. yeah, we're actually. >> a. >> little ahead of where i expected, you know. >> coming out of the. >> strike. >> we slowed down. intentionally rebalanced. >> the production line. >> and i think that's. >> paying big dividends for us right now. we'll probably deliver. >> in the. >> upper 30s. on production. >> on 737. >> maxes in january. now we had. >> a lot of airplanes in inventory. >> so we're. >> flushing through that, that inventory. but so far so good. and what i look at is, is less. >> about the. deliveries and more about. >> the key performance. >> indicators that the faa. >> is using. >> to determine whether we're able to. >> move beyond. >> 38 a month.

>> and those. >> indicators are looking good. and we're going to stay. focused on. >> making sure we're. >> disciplined as we. >> build these airplanes. >> and ramp back up. >> all of this is happening as we have a new president in office. two questions here. one, have you talked with president trump and two, elon musk, and doge is one of his big plans and drink driving greater efficiency. i know you've talked with elon musk. you've had him down to your facility where you're building the new air force one. what's your perspective in terms of what president trump will do during his administration? >> well, first of all, i mean, he's keenly. >> focused on american. >> jobs, and he. >> knows that the aviation industry. >> is. >> is critically important. >> to. >> american jobs. >> and we build these airplanes in the us and we export them. >> throughout the throughout. >> the world. so i think the administration is going to. be very. >> supportive of not just boeing. >> but. >> the overall aerospace industry. and yeah, we've. >> been engaged with. with elon. >> on looking particularly at. >> the. >> vc 25. >> program. >> at looking at that program

and seeing are there areas. >> that we. >> can make changes. >> to. >> that program, eliminate cost. eliminate schedule. >> the. >> president wants the airplane sooner. and so we're working with elon and their team to figure out what can we do to pull up the schedule of. >> that aircraft. >> have the interactions so far been what you would call constructive? >> oh. >> yeah, absolutely. >> i mean, they sincerely are looking at at things. >> that are in the. >> contract or in the process that are slowing us down, that aren't. >> providing value. >> and we're engaging with the with the doge team to if we can't find that right mix of requirements that need to come out and get out of our way so that we can be more efficient and deliver a better product. >> kelly, jim's got a question for you, jim. go ahead. >> thank you, phil kelly, thank you for coming on. i'm wondering why this the second half is when things get better. i would expect that the second quarter is. and the reason i mention that is because i don't want people to buy the stock. knowing the second quarter is awful. i mean, how do we know that that things are going to get better

in the third quarter? if the second quarter is not good? well. >> jim, we haven't we haven't forecast a bad second quarter. what we've said is that. >> the. >> first half will be a usage of cash. and then we'll we'll turn to a cash positive in the second half of the year. but it's all determinant on the 737 max production rates. and i'm not going to put a date on when we need to get to 838 and get approval for the faa to go beyond. it's more important that we do this right. we have a stable production system. we get through that. and i expect by the second half of the year we'll have that approval and we'll be moving to a higher production rate. so that's really what's driving the first half. second half profile. >> you've got the labor agreement i know you're hands on now. it looks like you've got a lot of good people. how many can you do max. how many. not the max but how many can you make per month. because i'm trying to figure out how to model what the second half could be. >> well, we're planning to be at

about 38 a month for the balance of this year ramping up to. and we'll go in five step increments every six months after that. so that gives you a feel for how to how to model the rate increases on seven eight, seven. we're at five a month rate moving to seven a month rate. and we'll do that when our performance indicators say the production system is stable. and hopefully that's in the next quarter or so. >> kelly, when you look at your defense and space portfolio, look it's been a mess. you continue to lose money with some of these programs, especially the fixed price programs, contracts that have just not been they've not been good contracts. have you talked with the incoming or the new defense secretary, i guess, and do you expect that to change in terms of how these contracts are bid out? because clearly it has not worked over the last several years? >> well, so first of all, i haven't spoke to the new secdef, but i certainly hope to as he

just, you know, was just confirmed. i don't think that we're going to change our approach to these programs. as you know, we've learned a lot about these fixed price development programs, and we're just not going to enter into the wrong contracts. fixed price has its place, but it isn't in high risk development areas. i think cost plus is more appropriate. i don't think that's going to significantly change. but, you know, we'll work with the administration as they look at what they want to do for contracting going forward. >> you have some divisions that you are currently considering or have said, look, we will take some bids on some of our divisions or businesses, subsidiaries. how many of those do you expect those transactions to take place this year? >> well, a few, you know, we've got a couple in advanced stages that we're looking at. you know, i'm through my portfolio review. don't think of this as major structural redesign of the of the corporation. but i do think there's places that we can

streamline. and so we'll be actioning those here in the next six months to a year. >> when might we expect you to name a new president, ceo of space and defense? is that a first half hire, or do you think it may take a little longer? >> you know, i don't have a fixed time on that bill. you know, it depends on the availability of the right person to lead that. and i've got an interim ceo who's doing a great job right now. so i'm not in a hurry to make a bad decision. we'll take that one when the time is right. >> and i'm sure we'll be talking with you some more. kelly, thank you very much for joining us today. kelly ortberg, the ceo of boeing. guys, we will send it back to you. >> our thanks to you, phil. phil lebeau with kelly ortberg thoughts, jim. >> yeah, i think that if you're going to get a strong second half, i don't know if you can wait. i mean, my thinking was, look, if it's going to be a really tough second quarter, maybe you wait till say the last month. but i was very encouraged, particularly because the possibility you can make

they can start making a lot of planes. the backlog is huge. and i know everyone talks about how there's only two of these companies. it hasn't helped people. but now it could be close enough and they got the cash. >> the old duopoly defense. not our only big interview this hour, by the way. we'll get the ceos of chevron and ge vranova announcing this new partnership to power some us data centers. that's coming up. within the hour, we'll get to jetblue and royal caribbean gm kimberly, we do have a price target cut on nvidia this morning and another downgrade of amd as we look at futures. stay with us. >> individually. each of us is great. >> but from. >> here you. >> can see. >> we're one big team. >> at atlassian. we believe real progress takes all of us working together on new sources of energy, cars that drive to the future, even pizza deliveries. together we can go beyond where we've ever. been collaborating

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(woman 2) ...on our la-z-boy furniture. (vo) la-z-boy. long live the lazy. used. >> we've reduced our china exposure from 50 to 25%, and we've been working to reduce it even further. it cannot be about removing all the rules. it's about all of us operating together. >> the partnership with openai to us is a critical partnership. we love it. it's working. >> if you use. >> the us. >> estimates of how much power we're going to need, we're talking trillions of dolla do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some

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is the symbol for. >> what a pleasure it is to just have a purely good quarter david 11% organic sales growth 15%. commercial aftermarket 10% commercial operating and then 10% defense. they're making money in defense, cybersecurity. and what i think just to throw in a little i know you love it when you hear what people are talking about. president trump and companies. president trump wants a domestic iron dome. and israel smaller than the united states. >> just a tiny bit. >> yeah. just kind of throw that in there. >> size of. >> rhode island. i mean, i think it reminds me of like, do you have to have an intercontinental ballistic missile system like we had in the 70s? that was the talk against the soviets, margin expansion everywhere. and david, it is true that they do a huge amount of business in the middle east monster and that when the when israel has to replenish, you should be thinking of raytheon, when the european continent wants to protect itself against russia, you have to be thinking that that's their orders to. and obviously they're

working with doge. everybody's working with doge. right, right. >> all right. i mean, we're talking about 9% overall, a sales growth 11% organically is what. >> yeah. and then original equipment is fantastic. >> so double digit. >> double digit organic growth. what do you pay for this thing by the way when you think about it versus. >> a palantir for example. >> well palantir you pay david alex, he told you that infinity is too cheap. i you know, look i don't get i've been saying alex karp is going i don't call it palantir. i call it karp. i think that karp goes to 100. why? why do i say that? because the people who own the stock are taking it to 100. i mean, it reminds me of some stocks we saw in the 80s where people, like, be banging on the table saying, dig, dig, dig. karp. karp. karp. karp. karp. i mean, it's just it's a juggernaut. so you. >> can't compare. >> the two. no, you can't. >> even though they ultimately have a similar client. >> they sure do. and they're rocking the world. yeah, but rtx is very good at what it does. i'm glad you brought up palantir, because palantir is

gamestop with a brain. gamestop with the brain. with the brain. >> what is that? i don't. >> know what i'm saying, that the people who like gamestop are up on palantir. they're going to take it up. i see, and, you know, get out of the way. there's probably some short stories that get run over. they do have really good stuff. oh yeah, cybersecurity and a cheap, you know, the way they want to procure. they understand procurement better than anyone in the world. very smart. they've been call it. car. car. car. >> car. >> car. philadelphia. haverford. you went to haverford, then you study in germany, and he's got the palantir to stanford. and you know what i mean? in other words, stay away. like nixon said, we got. >> to go. >> opening bell just a few. >> minutes away. don't go anywhere.

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>> in a world. >> of uncertainty and disruption. how will your investments stay resilient? >> we've been. >> navigating change for 125 years, always looking forward, anticipating risks and trusted to manage over $1 trillion in assets worldwide. solving for the needs of investors today and tomorrow. that's the power of nuveen. >> the opening bell is brought to you by nuveen, a leader in income alternatives and responsible investing. >> the federal reserve, gearing up for its first meeting of the year, expected to hold rates steady this week. jim likely to get asked about some of the president's comments about tariffs yesterday. >> yeah, i think that jerome powell knows how to punt better than anyone i've ever seen. i mean, he's i just think he's just not going to take the bait.

i think he's going to say, listen, we got to see what happens because it's such a fluid situation. by the way, i think people at home should recognize that. it's not like we know everything. things are so fluid that, for instance, the don't mention i just talked about rtx. well, rtx has this terrific drone killer system, which they've shot down a huge number of things. well, maybe the president wants the drone killer and a lot of off the cuff comments, and you can't react to all of them. so i think that jay powell would be best to say, you know what? we have to wait and see. >> back to your comment earlier in the week that not every utterance by the president is a trading opportunity. >> everyone wants to trade off it. i just think you have to say, wait a second, take a breath, take a pause. it's too hard. >> nick timiraos in the journal today looks at whether or not tariff threats feed inflationary inflation expectations. his argument is that it didn't. and trump 1.0. but the public didn't have experience with real inflation back then. >> well. >> look, i think that the public is much savvier. knows that when

there is inflation. stay away. i mean, i follow the liquor industry, of course, because my wife's got mezcal and i spend a lot of time looking at diageo and brown-forman. those guys have to cut price. >> they haven't. >> i mean, you have to cut price. kimberly-clark. do they have to. >> cut price? >> if you don't. >> cut price, procter will take advantage. >> of it. >> we finally. have people who are trying. to cut prices. >> very good. >> let's get a look at the open here in the cnbc real time exchange of the big board it infrastructure services provider kyndryl. and at the nasdaq it's packaged meat producer smithfield foods, celebrating its ipo today. speaking of prices, jim rcl with the best five week booking stretch of its history. >> look, i think a lot of people really misjudge that industry. well, equipment being the best, by the way i look, the carnival is no slouch. and norwegian cruise i happen to like viking by the way. not the viking therapeutic. i like the viking. david. >> the cruise lines. >> yeah, but you know what

people learn. carl and i spent a lot of time analyzing the industry. is. it is just such a bargain in an era of inflation. it's just considered to be the best way to have a vacation. i'm going on one. you know, i just think that they're terrific and everyone thinks recognizes that even people that a lot of people who are snobs, okay, the snobs don't recognize that these things are great trips. and that's why, david, it's the wall street snobs who that's why that stock is up so much. because they didn't believe. they don't go on a cruise. they think they think, you know, steerage. they like watch they watch titanic. they don't like royal caribbean. >> it's been a great place to be. i when you go to miami and you watch those giant i don't they're not even they almost don't look real. they're so enormous. >> sci fi sci. >> fi and water. it's incredible. >> i think it is incredible. and people just misjudge the earnings power. and the earnings power is amazing. these ships up you know their engineering

degrees. >> it's incredible. >> yeah. >> it's cold. you got to shovel in cold. >> it's cold. it's weird to watch rcl and that part of the industry do well. and then look at jetblue today narrower than expected loss. but it's getting taken apart. down 16. >> no i mean. yeah you can't look these things know how to run a they know how to run an airplane. >> i don't know man. the airline industry is really it's split now. there's ual. >> there's. >> haves and delta. >> there haves. >> and then there seems to be everybody else. is that a fair statement or. no. am i being a little unfair? no. alaska air. >> also because alaska has been always well run. alaska? hawaiian. >> they bought hawaiian. and then they've added an enormous amount of market cap. >> and that guy. >> is well, we all know the performance of that stock. delta. american has stumbled badly. >> it's trying. >> only lately though. had a great run. >> it did what? american. yes. american. we had them on. they're making a good run. but look, i think that united i thought, had a great quarter. the stock went down, reported a great quarter. but you know american look, it's not up for

the year. >> and then i mean jetblue obviously tried to buy spirit. we know what happened to spirit. in other words another great move by our antitrust folks. you know, let them go bankrupt instead. >> well, that's kind of what happened after safeway, albertsons that's been there. like, let's not let this stuff happen. and they didn't like they don't like supermarket and they don't like airline mergers. well. >> they are no longer. >> they're no longer no. >> lina khan and jonathan canter are no longer. >> re-appoint. lina. >> no, no he didn't. >> oh, man. i'm in a time machine, by the way. i think he got rid of her faster than he did have nuclear. i have pro net gas. >> although there's some doubts this morning about juniper hpe. jim, i'm sure you saw juniper down. >> i know, and you know jes that deal i thought was done. i mean, come on. by the way hpe is front and center with this issue about data centers. and everybody thinks that they're a big loser. i happen to think they're a big winner. i think that mr. murray is terrific. but yeah, i don't

understand what's the matter with that. >> to you? >> well, the reports are that doj is leaning against. i think they also say hpe is scheduled to meet with doj today. >> david, this is not anti-competitive. >> you know what, jim? i don't know on that one. i just haven't dug in enough to understand what the competitive. >> well i. >> was shocked framework may be or the issues may be shocked. but generally speaking, as our viewers well know, at this point, there is an expectation for a far lighter touch from a trump led antitrust administration. and we'll see. >> this was a gimmick. >> you know, it's funny. we didn't we haven't seen a lot of big deals as yet. it's very early. >> you're talking about beacon roofing. no. come on. julian francis on last night. >> i know you did. i know. >> and. >> and what? they put a poison pill this morning. >> well, see, when i go to you, i think you'll say. i think there's a good chance it goes through when you say. and what? what that does is minimize the interview just a tad. just a tad?

>> no, i'm just saying, i think it's. listen, i keep pointing to it as a perfect example of a good old fashioned hostile right qxo full tender offer. they put the poison pill in. these guys have no antitrust. they have full financing, not subject to due diligence. they signed a standstill at. so they can't talk to them. they wanted them to sign a. standstill without. >> talking to let them in. >> well, no they didn't. >> no they did. >> without signing a standstill. well no. >> no no. but they. no. yeah. said let them in. >> yeah. only if they signed a standstill which they. >> wouldn't do. there was two meetings. one was good, one was bad. >> anyway, we'll see what happens with good old beacon. >> but why shouldn't they move on? why shouldn't they ask for more money? of course, they got a much higher. both from home depot. >> they should. >> i don't. >> know, brad jacobs going to give it to him, but they should. >> but why did they? >> and now they're going to move to replace the board. so this is. >> even though why did they get punished? i don't know about unforgiving. i know unforgiving. >> interesting story in that regard because we haven't seen a good old fashioned hostile that way. >> the fact they're doing a great job. and just because the

multiples are low, they're going to get had. sometimes you just get hit. is that what you're talking about? >> let's move on to gm because it is down almost 9%. guys, mary barra was a guest on squawk box earlier. the losses in china, restructuring in china, the charges associated with that incredibly profitable year for gm, by the way. and they're forecasting as you see right there on cnbc.com. another strong year this year that said stock getting hit after what was very strong performance last year. >> were you shocked by the charges i wasn't shocked by the charges. >> no. i mean they kind of forced out of the charges. >> who's selling that? hey, hey look, nvidia, i told you the clowns who were buying it up for, you know, send in the clowns. you know what i mean? >> yes. sondheim. >> yeah. >> yeah. i like beautiful songs. good. a little night music. what was that from? carl? send in the clowns. >> is it. is it. >> or. follies? follies. follies. follies? yeah. >> don't bother. >> they're here. yeah, yeah. >> what? he knows that. >> there's not a big not a big rebound. vertiv is not up.

>> no, of course not. the sellers didn't get finished. >> yesterday is up. >> when you see stocks that are down 30, 40, 50 points, that means there's guys furiously selling and they rarely get done selling on the first day. so we. >> have is barely up. >> we have to let this up. we you know we the eagles i don't play for the eagles. we have to let the sellers get get finished. you don't ever come in and pay up after a day like yesterday. you think the sellers went away like hey you know what? i'm i'm completely finished. >> but he's still working through this, carl. trying to understand it. it's very difficult to fully understand what the implications of seek are going to be over any period of time. >> the b of a. short analytics desk today. not done yet. there you go. give it more time. essentially, given the level of net grosses, need one more day before reengaging on launch. >> i should go to work for them. you know, that's exactly right. that's completely right. i was at the trading desk that did that. >> this is the short analytics and their delta one team. >> it's a delta.

>> one team. >> the delta. >> one team. >> i thought it was the rangers. it's delta one. yes. oh my god. well delta. oh geez. you know. wow. by the way delta. >> by the way morgan stanley cuts nvidia to 152. >> yeah they. are really helpful. >> they think they'll guide in line and that there's still. >> that's right. because they really have problems with blackwell. they have problems making blackwell. i think that's absolutely right. but i would say the people who are selling, they don't know the omniverse, they don't know the truth. but let them sell. get the hell out of nvidia. all right. i don't want that. i'm saying because i'll quote me, you know, say, hey, cramer says get out of it. no, i'm telling these people i want out. you know what? we ought to just change the topic entirely. let's do it. let's bring in chevron and ge. let's move on to data center baby. yeah exactly. it's not really changing the topic for no given. chevron and renova. david you love it. they are announcing a new partnership to address the rising data center and hyperscaler energy demand needs. joining us now to discuss

chevron uyghur chairman and ceo mike wirth. and we've got ge renova ceo scott strasser. these guys these guys are not new to our show. no they're not. they're not new to our show. no. and i'm going to start with mike. with mike because mike i know that you are a shrewd follower of the news flow after what happened yesterday. was there any remorse about putting this together, given the fact that the whole aspect of why these stocks are down is because the chinese have figured out a way to make these things at a fraction of the energy? what are you saying? >> well. jim and david, it's great to see you this morning. >> look, i think the. news that people are reacting to underscores how. >> competitive. >> global and urgent the race for ai. >> leadership is. >> and, you know, that's going to. require energy as as we look. >> to build. >> out the models in this country. >> not only to answer questions. >> but ultimately to reindustrialize our economy and to bring manufacturing back. into this country at a greater scale. these technologies are

going to be fundamental to everything. >> in our economy. >> so the growth and demand. >> for power can burden a grid that's already stressed. it could. >> add cost to consumers. so behind the meter solutions powered by abundant american energy. >> and natural gas. >> is an essential part. i think. >> of that. >> equation going forward. we talked to the customers. the hyperscalers are still just that. they're hyperscalers. they need to go fast and they need scale. and i think these solutions are intended. >> to provide that. >> well, okay. so scott, i look at point blank announced today the formation of a partnership to build a new company to develop scalable, reliable power solutions for us based data centers. and i keep coming back to if you're in the business of trying to service the data centers, i think you have to ask yourself, if i build it, will they still come? why will the data center still come after what we heard yesterday? well. >> i mean, jim. >> thanks for having me here today. i mean, i'm thrilled to be in greenville, south carolina, where we make all of

those gas turbines. and when we look at our demand profile through the rest of the decade, i mean. there's demand three times the available supply that we're going to be able to build out. so we're going to need some efficiency in the system to make this whole thing work. there's a lot of innovation that will happen with the hyperscalers. we're really counting on that. but when you look at the electric power system right now, reserve margins are coming down throughout the us. prices are up and we're going to need partnerships like this behind the meter to alleviate some of the pressure in that system. and that's why we're so thrilled to be part of this partnership with mike and with cj. >> because we. >> need more partners. that are capable of industrializing at scale what's going to be needed in this country, and also to decarbonize that over time. and mike and the team clearly are capable of doing that. and we're thrilled to be part of the partnership. >> yeah. and obviously, i mean, we are again, just to emphasize four gigawatts, you're talking about powering 3 to 3.5 million us homes. it's an enormous

undertaking. to a certain extent. you guys expect to get get it started by 2027. mike, what gives you the confidence you can get this thing going and get it and get it, you know, together. and let's call it two years and have the have the natural gas available, i guess, to power so many of the, so much of the facility. >> well, i don't think the natural gas supply will be the problem. this country has decades and decades of natural. gas just waiting to be produced. what gives us. confidence that we could move with speed are a couple of things. number one, we've been working on this for quite some time. we are early in the queue. >> for delivery on seven of the largest gas generating turbines. that gas generating turbines that ge manufacturers with first delivery next year in 2026, moving into 2027, we've been advancing site selection work already. we're beginning engineering studies. we've been talking to customers for months

and months. and so this is work that has been underway, and we intend to move with with speed in order to meet the demand that that scott referred to. >> no, i mean, obviously, you guys produce an awful lot of natural gas now in the permian. is it going to be are these things going to be near that area? does that matter? well. >> we're looking at a number of different sites. we're looking at. >> some. >> sites in in the south. we're looking at some in the midwest and some in the interior west of the country. we've got a set of criteria that include things like gas supply, a regulatory and permitting environment that allows us to build things with the kind of pace that is demanded here. we've got an eye towards future decarbonization of these plants, and so access to things like storage space for coal or other resources like geothermal or wind are all part of the selection criteria. so we've got a number of sites that we're looking for. and importantly, we're working with customers to determine which sites are most attractive to them. >> right, scott, it's the first

opportunity we've had to speak to you, obviously, since your stock got crushed yesterday. now, to put it in perspective, it's still up 12% over the last three months because you've had an enormous run up on so much of the enthusiasm around your product and what it means for the growing need for power in this country. that said, i'm curious as to your reaction to yesterday, to that loss of, you know, at this point, almost a quarter of your market value. well, you take a step back. >> and. >> we're certainly appreciative of the market's response. over the ten months we've had as a public company that shows its confidence in our future to grow and grow profitably. yesterday's a tough day, but relative to the market's reaction. and, david, when i think about when i was with you in december on set, we're just as confident, if not more and just as optimistic, if not more, with our growth projections from here, the profitability that we can drive and this growing market, we've got an incredible opportunity to serve it. and i'm thrilled again to be in greenville, south carolina today where we're going

to serve a lot of this market for us growth and look forward to our steps ahead from here. >> scott, i'm wondering whether we shouldn't be thinking that this whole rush to nuclear, the opening of a three mile island, the idea that we can build these small modular. you are the nuclear guy. i mean, when you see all these projections, don't you kind of sit back and say, are they kidding me? when you decommission a plant, you can't just recommission it. i mean, i just think that there's a lot of fanciful stuff going around about nuclear. you know. >> listen, we're going to add another 3 to 5gw of new nuclear in the, in the us with the existing installed base before the end of the decade, will uprate the 65 plants we have with our technology in the us. i was in japan a few weeks ago. we've turned on in japan a few of our nuclear plants, two of the 20. there's another 18 to turn back on, and we're having more advanced discussions with customers today on putting small

modular reactors inside existing power plants, existing nuclear power plants today. so that's going to play an important role here, jim. i mean, it's going to be in all of the above. we're going to need a lot of different leadership. that's why we're excited about this partnership with mike, because this is a different archetype for us to grow into this serving market. we're also excited about the opportunity with nuclear. there's no question about it. >> mike. you know, i did note how many times the trump administration and president trump were were mentioned and praised in the press release announcing this deal and your own quote as well, in terms of the enormous energy resources and unrivaled workforce, you know, the new american golden age that you cite as president trump's vision. what about the other part of the trump administration's hopes in terms of drill, baby drill, and 3 million additional barrels? your capex plan that i most recently recalled didn't seem to increase for 2025. so i know you're praising the trump administration for their overall

approach here, but i'm curious as to how you see your role playing out when it comes to the drill baby drill side and the additional barrels they want to add for daily production? >> well, look, we're very. supportive of the president's agenda to unleash american energy. this is a new day in terms of the attitude towards our industry in this country. and we're growing production. we'll release our earnings later this week and talk about production in the year past, but also production going forward. and we're finding efficiencies in our business. this is nothing new and we can deliver more production growth in a more capital efficient manner today than at any time in our history. jim was offshore last year to see how we're unlocking resources out in the deep water. our work in the permian basin continues to find ways to be even more efficient. we're delivering production growth rig production growth today with many fewer rigs than we would

have imagined just a few years ago. so i wouldn't automatically correlate our capital spending plan and the discipline that we've demonstrated for years in how we allocate and execute our capital program with the ability to grow energy production. >> yeah. >> i was on that, that platform. it's really incredible. you know what, mike? i think everyone's pretty much afraid, i think, to speak to the truth about china and the chinese. what do you think about the possibility that they're completely lying, that the idea that this deep sea was subsidized dramatically by the prc, that the whole thing is really an effort to make it so that we ourselves have lost confidence and maybe stop our spending, including with what you're doing. and why do we always believe that the chinese tell the truth? >> well, look, i you know, we do our analysis on the fundamentals and i'll leave the, you know, the interpretation of some of these things to others. but as

scott mentioned earlier, the demand drivers for power in this country are something we've not seen in generations and their data centers, but they're also the electrification of other parts of the economy. and we've got a grid that hasn't been modernized in decades. and so the investment case for the partnership that we announced today is strong, it's compelling. and i think it stands independent of a number of these other dynamics. there's a range of forecasts for how aggressive it can be. but even if you take the lower end of that range, they're still going to be a need for a lot more power in this country. >> but mike, if i'm the chinese, i put out something that made it so that you don't do what you're doing, that you stopped your build out, that you look foolish, that we asked you tough questions because we think you don't know what you're doing. that's what the chinese want. >> well, again, i'll let you speculate or interpret those signals. we look at the fundamentals, we talk to customers. we look at the basics of supply and demand and

technology. our intent is to offer cost competitive solutions for customers. and as i said, we've been in dialog with all of the hyperscalers and see strong, strong signals that there's robust demand for this partnership, but also for much more. >> thank you. thank you for telling the truth. it's really refreshing. mike and scott, great to have you on the show. >> go birds. >> thanks, guys. >> oh, geez. yeah. wow. yeah. >> i'm going. >> that that sold. >> you as. >> we go to break. lost a little ground from the open. nvidia is lower. in fact, it took out its intraday low from yesterday at one 1670. watch bonds today as we get ready for the fed decision tomorrow we'll get conference board in a few moments. durables were a little bit lower than expected. down two two looking for 6/10. be right back.

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>> last few weeks have seen a series of downgrades for amd. today it's been righteous over at melius coast to hold down to 129. pryor 160 says we should have done this ten months ago, jim, when the stock was up 40%. >> i love ben, he's absolutely right. he's done some really good stuff. he's been writing and a good video he did yesterday. but and by the way, it's possible amd is a winner just because like you, if you don't need so much power boom. yeah. so i think but he's he's late but i understand. >> yeah he does say it's not a deep seek related downgrade. dow's down 53. stay with us. >> welcome to reinvented with accenture today i'm here with margherita della valle ceo of vodafone. you were employee 25 in vodafone italy. today you're the ceo of vodafone. what is your strategy and vision for the future? >> we are changing our culture to really focus on our

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>> so you can mind your business. >> no, no. >> that's not what i meant. >> you all. >> should. >> be laughing harder. >> experience the power of cnbc pro. never miss a moment with exclusive access to market moving interviews and stock picks. become a smarter investor picks. become a smarter investor with the power of i'm not happy with the way that pg&e handled the wildfires. yeah. yeah. i totally, totally understand.

we're adding a ton of sensors. as soon as something comes in contact with the power line, it'll turn off so that there's not a risk that it's gonna fall to the ground and start a fire. okay. and i want you to be able to feel the improvements. we've been able to reduce wildfire risk from our equipment by over 90%. that's something i want to believe. [skateboard sounds] dream office a. >> reality. >> i don't. >> have to. okay, matt. tonight. by the way, nvidia is going to try to bounce it, you know that. but matt, tonight we've got the man who i think has gotten the most outspoken. and his stock is up huge on this marc benioff. he is the ceo of salesforce. and he's going to talk about how it's time. it's software as a service is time. hardware is a commodity. how do you like that. what a show. >> really good one jim. we'll see you tonight. mad money. 6 see you tonight. mad money. 6 p.m. eastern time with some [sfx: wind, rain and rolling thunder] with the vision to see what's possible and the grit to make it happen,

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>> good tuesday morning. welcome to another hour of squawk on the street. i'm carl quintanilla with leslie picker and david faber, live at post nine of the new york stock exchange. sara eisen has the morning off. bulls definitely looking for a turnaround tuesday. not compelling at the moment. dow still down about 30 points. s&p roughly flat up than less than a point. and we are going to get some data in a few moments. tenure holding on to 455. >> we are 30 minutes into the trading session. here are some movers. we are watching. >> a volatile. >> session for nvidia after the biggest one day market cap loss for a public company ever, shedding nearly $600 billion in value yesterday. currently, those shares rebounding slightly, up about 1.5%. royal caribbean a top gainer on the s&p after fresh. >> numbers and. >> strong guidance. execs added that bookings have accelerated since the last earnings. >> call and. >> that stock. >> up nearly 8%. their ceo here to break down the numbers next hour on money. movers and watch

shares of gm. that one reporting a top and bottom line beat guidance above the range. shares have been a big outperformer. over the last year, but currently trading down about 9%. >> getting some consumer confidence data out a few moments ago rick santelli's got it. morning, rick. >> good morning carl. >> indeed. >> these are january conference numbers from the conference board on the headline number, expecting very close to 106. a bit of a miss here, 104.1. and in the rear view mirror, though, there is a big positive revision, 104.7 jumps up to 109.5 109.5 last month would end up being the best since july of 23. so the revision is big. it really is solid. now, if we look at present situation 134 .31 34.3 is the weakest since sep of 24. obviously it's sequentially lower. 130 4.3 following one

40.2 what lies ahead are expectations 83.9 believe it or not, this is actually the best since nov of last year. so not that big of a comp 83.9 doesn't sound so strong, but it is following 81.1. if you really want to look at a solid number, we're competent to know. but nov is all really all the way up at 93.7. and finally, if we look towards the richmond fed, we have manufacturing and service sector on the manufacturing side, -0.4, -0.4. that's actually better than we were expecting. we're expecting a number in minus double digits minus ten -11. and if we consider this is now the 15th consecutive negative number in a row. but it's still the best since may of last year at minus four. and finally on the service side, positive seven is our read. positive seven would comp of course to last month's 14. it ends up being the weakest

positive number going back to october when it was negative at minus four. we see that interest rates haven't moved much on that data. 455 is up one on a ten. 420 is unchanged on a27 year 44 billion of them. we will be auctioned off at 1:00 eastern. carl back to you. >> see it. one if not before rick santelli. it was a tale of two markets yesterday. as you know tech coming off its worst day since 2020. hundreds of billions of market cap erased. while sectors with no direct air exposure like real estate and staples did end the day higher. staples even recording its best day since 2022. our senior markets commentator mike santoli watched it all happen. has some thoughts. 24 hours later, pretty stark rotation as opposed to liquidation, to the point where you see it's. >> almost mechanical. >> and forced. okay, nothing happened yesterday to get campbell's soup up 2.5%, except that nvidia was down a lot and people. >> did not. >> want to completely exit the market. and so it found its way into the more neglected corners.

it's a healthy response. i mean, the idea that you've been able. >> to kind. >> of make it happen in the market, stay near. >> all time. >> highs when. >> by the way, semiconductors on. >> a relative basis peaked in june of last year, they've. >> not. >> been leadership for seven months. so yesterday was a little more of a give up trade in that area, but one that's just exacerbated the ongoing pattern. i think there's an issue if the market has to rely on this. i mean, rotation is great. it keeps volatility suppressed. it enables the market to let some areas cool off and perk up in other parts of laggard sectors. the issue is you don't. >> have. >> that kind of open ended valuation ceiling in non tech that you have in tech. and so it's. >> kind of. >> how much are you going to pay for bank of america. ultimately banks have been great. they've been outperforming. they've probably been the cleanest read on. you know kind of a soft landing plus policy help. >> that. >> we have. but i think that's where the market is. also yields were down yesterday. when bonds are bid breadth is good. that's been the rule today. you have a little bit of a firming in

yields. and i do think. >> maybe a little. >> more focus. on the tariff story and. >> the or. >> just the open ended ness of. what are. >> we going to get. >> when it comes to the next economic policy move. >> so we're held in check near record highs. >> how much of these levered etfs do you think exacerbated the moves yesterday, whether it was levered semi etf or levered short semi etf or levered nvidia etf. i mean did that create more pronounced moves you think. >> i think. >> well i. >> mostly see it as a coincident indicator, a manifestation of what's. >> going on in the. >> very short term. it can be an exacerbated because, you know. you kind of know. >> what. >> the fund. >> has to do to rebalance. at the end of the day, i don't think it's really tail. wagging the dog. i think yesterday was nvidia is a stock with $2 trillion. >> in on. >> paper profits from a year ago. a lot of. >> people. took them. >> real investors took them. if you listen to the hedge fund kind of monitors on the on the sales and trading desks, they said it was long only selling,

you know, that it was basically, you know, we may be overplayed this hand. we have a little bit of doubt in terms of multi year earnings outlook. so i do think the leveraged etfs to me are more of a sentiment tale. and so when it gets fevered like that when you see the options stampedes that are running on the long side which. >> had been happening. >> going into this, that tells you that retail is a bit overexcited. and i think that that's going to be hard to wring out of this market. i don't think it's like it's a it's a fatal flaw of the bull market, but it's something that that's been very stubborn. wall street journal story yesterday about not just the levered etfs, but just in general about the market tone being like, how could i ever step away from my long position. >> in robinhood. >> like as if there was just like no limit to how much this stock can go up after what it's already done in a. >> frankly. >> a business that interactive brokers has every bit of, you know. >> we're going to be very focused on conference calls coming up in the next few days from obviously the likes of microsoft and others in terms of their capex plans. i don't think anybody anticipates there's going to be any real change in

in the conversation or in the way that they communicate. so with nvidia shares rebounding ever so slightly and any number of the other names at least sort of steadying but not really rebounding sharply, is it going to be months or, you know, what is the period of time in which investors are going to be able to fully understand and digest this news, mike, and really make decisions about what these companies are worth? >> so nvidia reports february 26th. so you have a month before you actually hear it directly in terms of guidance, order books, all the rest of it. i think that it's going to die hard. i mean, this idea that this is productive and necessary investment, i feel like the market is going to be able to maybe still lean on the benefit of the doubt there and not penalize these companies for the spending, because, by the way. what would they otherwise be doing with the money. sitting on it, buying back some stock that's a that's always out there as a possibility. i think they want to see the dial turn down or the scrutiny heightened in terms of what you're getting directly back from the return. >> which will be a shoe as this year goes forward.

>> yeah. as opposed to it just being like, well, brute force, we have to build as much as possible, because what if we don't and somebody else does? i think that's not a comfortable situation, but it's not like they're using leverage. it's not like, you know, there's this financial risk in terms of what they're getting for it. >> i also. >> think people have in mind that meta just. >> threw so much money. >> down the drain on the metaverse. they throttled back, they bought back some stock, they cut costs and the stock got it all back and much more. so i feel like there's optionality in these companies that don't exist, you know. >> because they're all so incredibly profitable. >> exactly, exactly. the core business is so productive that, you know, you can make some mistakes. >> fascinating mike. mike santoli thank you very much. for more on nvidia and how the chips are trading right now. seema mody is tracking that action for us. seema. >> nearly $600. >> billion. >> in market cap yesterday. it's up about. >> 1% at this hour. the stock is now trading. about 43%. below

the average price target on wall street. a number of analysts weighing in this morning on the direction of nvidia going forward, morgan stanley actually cutting their price target from 166 to $152, citing possible further export controls. while mizuho is. jordan klein calls nvidia's move, quote, overreaction. two things will act as catalysts for the semi trade going forward. one is how microsoft and meta justify their ai budgets to shareholders in light of d6 lower cost model, and any update from washington and president trump's plans to tariff or add restrictions on chip sales. we spoke to atlantic council's mark christopher, who highlights a few options that they have, including expanding the entity list of chinese firms banned in the us and denying chinese companies access to us cloud providers like amazon, which developers there use to rent nvidia gpus. evercore isi adds that nvidia and amd have been hoping that trump would soften the biden administration's new licensing requirements that require to sell to over 100 countries

countries that does go into effect in april. but they add that this whole deep sea revelation might add a new complication to those efforts. so the focus very much not just on ai budgets, but again, what washington can do here. >> sima, do we have any expectation that jensen huang is going to i mean, there was a period of time where you could see him every single day on a podcast or something. is he going to be quiet between now and earnings, do we think, or is he going to show up somewhere and talk about it? >> that's a great point, david. i would leave it to him to see whether he takes this as an opportunity, given the big drop in its stock price to address shareholders and the public about nvidia's growth trajectory, the supply dynamic around blackwell. we certainly have seen him use that media strategy in the past, following earnings and any type of disappointment. >> seema. thank you. seema mody on nvidia. all right. we've got some news on x. of course. that's the platform owned by elon musk, a private company.

cnbc's susan joins us has got details hugh. >> hey david. yeah. so x is striking a deal with visa to be the first partner for what is what it is calling the x money account. since buying twitter in 2022, elon musk has talked about turning the social media site into a quote everything app where users could send payments and store cash by using the payment rails of visa, the world's biggest credit card network. x users can move funds between traditional bank accounts and the x money account. they can store funds there and also make instant peer to peer payments with other x users, like with zelle or venmo. i'm told the x money service is expected to launch in the first quarter, and deals with more financial partners are likely, said one of the perks, said one person with knowledge of the matter. one of the first use cases for x money is so that creators on the site can accept payments and store funds without using external banks. i'm told minutes ago, x corp ceo linda yaccarino said in a post that it is, quote, the first of many big announcements about x money this year. david. >> hugh, i have a question about regulation with regard to social

media. is it different for a partnership like this than it would be safer, more traditional interchanges with financial partners? >> yeah, leslie, it's a fascinating question because, you know, x money, twitter has been accumulating money transmitter licenses in more than 30 states over the past year. so they're going to be what's more like stripe or other fintech intermediaries, where they're going to be able to provide banking like services without really going to the work of being a regulated bank. and so i would think that there is some element of the banking universe. i think community banks think smaller banks, which are going to potentially protest this incursion by technology. >> interesting. hugh, thank you. thank you for bringing us that news. you got it. soon as we head to a break, let's give you a roadmap for the rest of the hour. the fed is kicking off its two day meeting, of course. exclusive results of our cnbc fed survey will be forthcoming. >> plus. >> could open eye become the work of ai? why? one top tech expert says yes. >> and the treasury secretary,

scott bessent, making the case for gradual tariffs that rise month over month. but the president planning more sweeping tariffs. we'll talk about what may happen, perhaps as early as this weekend when squawk on the street continues. >> in a world of uncertainty and disruption, how will your investments stay resilient? >> we've been. >> navigating change for 125 years. always looking forward, anticipating risks, and trusted to manage over $1 trillion in assets worldwide. solving for the needs of investors today and tomorrow. that's the power of

nuveen. >> what are. tariffs fit in? they are an economic tool. they're an. economic weapon. the question. >> is how they. >> get used. >> we've reduced our china exposure from 50 to 25%. and we've been working to reduce it even further. it cannot be about removing all the rules. it's about all of us operating together. >> the partnership with openai to us is a critical partnership. we love it. it's working. >> if you use the us estimates of how much power we're going to craig here pays too much for business wireless. so he sublet half his real estate office... to a pet shop. there's a smarter way to save. comcast business mobile. you could save up to an incredible 70% on your wireless bill.

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>> we had a great capital. >> raise, so the balance sheet. >> is solid for the. >> next year. >> and we're starting to see really good progress. >> as we ramp production back. >> up on the 737 and the max production. >> rate is. >> is critically important to the recovery. >> of the program. >> of. >> the company. >> that was boeing ceo. that was last hour. he's optimistic about the year to come. shares as you see up nicely this morning despite the company's sixth consecutive annual loss six consecutive. it was the biggest yearly loss, in fact, since 2020. for what it's worth, if you care, 55% of analysts call the stock a buy. but that's pretty low. actually. i would assume the percentage of buys are far higher on most stocks. i'm just saying that based on 35 years of experience. but i may be completely wrong, but that's my guess. >> meantime, the president making a number of headlines overnight about tariffs. let's get to megan costello with more on that. morning, megan.

>> hey good morning karl. >> a lot. >> of tariff talk right now just in the last 24 hours. some updates. we first heard speaker mike johnson downplay the. >> threat of tariffs. >> saying that he does not believe we will see across. >> the. >> board tariffs on entire. >> countries or industries. >> then we saw a. >> report that scott bessent is pushing for. >> tariffs to. >> start low and. >> increase gradually month by month. >> also, they're dampening the potential. >> impact. >> although trump did later deny that report. >> but then we saw the president himself. >> threaten a significant escalation on tariffs. take a listen. >> in the. >> very near future we're going to be placing tariffs on foreign production of computer chips, semiconductors and pharmaceuticals to. >> return production. >> of these essential goods to the united states of america. >> so, guys. >> if it's hard to keep up with the plans, it's because they're still being. >> worked out. trump is. >> increasingly leaning on tariffs as. >> a. >> threat here. >> but when it comes to actual. >> implementation, we are. >> just not there. >> quite yet. >> trump has. >> floated february 1st this

saturday as a deadline for tariffs on canada, mexico and china. but he's also mandated a trade policy review due by april 1st. >> and i'm told. >> that staff is working to keep trump from announcing any tariffs until as close to that april date as possible. that would give them time to get their economic team fully in place and nailed down their path forward. there's also expectation that the canada and mexico talk is a push to reopen trade negotiations with those countries. so all of this right now mostly being taken more as a threat than as a plan of action for now. but the caveat, of course, is that all of that could change at any moment, guys. >> meantime, megan, the candidate for prime minister in canada this morning, is suggesting maybe she gets a summit of allies. everybody but the us politicos got a piece up looking at the experience of colombia over the weekend, saying that south america might be looking to bolster ties with china. i just wonder how much of this has the potential to backfire. >> a lot of it could. carl, what i think has been really interesting in watching the

global response in the last week and also in the past few months since trump was elected, is that countries seem much more willing this time around to stand up to the president, much more so than they did in the first term. part of that canadian election, in the fallout in trudeau's cabinet, i've been told, was about this disconnect over how to respond to trump. and that candidate you mentioned, chrystia freeland, doesn't want to back down. her view is that if you capitulate to trump now and give him one thing, then he's just going to come back asking for more. so that's just one example. colombia was ready to stand up this weekend, of course, until they weren't anymore. but we're seeing a lot more standing up to trump in china and other places than we were seeing four years ago. >> and to your point, earlier, i mean, howard lutnick hasn't been confirmed yet either. right. and he's supposed to have an important role, i think, when it comes to tariffs. also, megan, i'd just love to get your take. did the president say something about tariffs on chips from taiwan as well, which you might imagine would have a significant impact on the likes of tsmc? >> a very significant impact. so yes. first, howard lutnick and

jamison greer, the pick for ustr. neither of them confirmed yet neither of them have even had their hearings yet. so at least a couple of weeks, i would expect before we see either of them in place, a big part of that trade team. as for the chips, yes, he's saying that he wants to put tariffs on all chips coming into the us because he wants us to produce them here. and he specifically mentioned taiwan, of course, the dominant player globally in producing semiconductors. and he says they shouldn't have that sort of market dominance. but putting tariffs on all of those chips the us right now guys i know that, you know, produces about 0% of the advanced chips that are used in ai. so a major hit to our ai companies, if suddenly they're paying 10% more, 25% more on all of those chips that they need. so i think a lot more discussion to come, especially on that semiconductor front. >> megan, a lot of headlines flying around this week. we'll talk later. megan cassella in dc. meantime watch defense names today lockheed and rtx going in opposite directions after reporting results. record backlogs at both names. rtx backlog ballooning to more than

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inbox. sign up now for free at cnbc.com. slash top ten. >> welcome back to squawk on the street. the fed kicks off a two day meeting on interest rates today some mixed reviews on the president's key economic policies according to our latest fed survey at cnbc. our steve liesman got the numbers. morning, steve. >> hey good morning carl. yeah mixed is a good word. higher inflation but also more growth. that's the assessment of respondents to the cnbc fed survey. when asked about the effects of president trump's expected suite of policies. extremely inflationary, 5%, 59% say somewhat inflationary, 23% say not inflationary or deflationary at all, and 14% see them as deflationary. we'll get to that in just a second. what about on growth? they're also viewed, however, positively for growth 14% say very positive, 46% say somewhat positive, 9% no effect. and a third believe they could be potentially negative for growth. now let's look at the individual policies. and

this is where it gets really interesting because take tax policy a respondents are divided on the inflationary effects of tax policy about a third each way. deregulation though seen as disinflationary. you can see there going to the right there. but then look at immigration and terror policy both seen as negative pushing inflation higher. now let's take a look at it from a growth standpoint. well tax policy they love this one. good for growth. same with deregulation. very positive for growth but not the immigration and not the tariff story. both seen as negative for growth. mark zandi from moody's analytics writes while the us economy is on strong fundamental ground, much higher tariffs and significant immigration deportations will diminish it and taken too far, could undermine it. then there's drew matus of metlife investment management. he writes in regulatory relief is a core feature of the incoming administration's plans and will be a key driver of increasing

economic activity. real quick on the inflation expectations. still expecting two cuts, a little less confident. both those numbers are down the 65% expecting two cuts this year and the 61% expecting one cut in 2026. nominal rate the terminal rate keeps ticking higher, suggesting the fed is less restrictive at the current rates. very low numbers here since february 2022, the lowest probability of a us recession in the next year, and 36% now think trump will respect fed independence. that's down from 56% after the president demanded lower interest rates. so all these uncertainties over policies, along with sticky inflation, explains why the fed already delivered 100 basis points of cuts is going to take its time figuring out the next move, but i do think it will move if inflation cooperates. guys, back to you. >> steve, i wonder what you make of the timiraos piece this morning. basically looking at the reaction function of the american public to tariffs and saying it might not be apples to apples to trump 1.0 because of

what we all went through after covid. >> i think i think it was a smart story and i'm adding in other things. tariffs, eggs and gas, those three things that if they combine like they were asked me the other day about eggs, i said the fed is not going to make monetary policy based on egg prices, but if egg prices are going up, if tariff raises prices, if gasoline prices inch higher, if those three things combine to change the perception of the public that inflation is back and coming back and they can expect higher inflation, that's when the fed will care. karl. >> or the scarcity element. i've gone to the grocery store a couple of times and haven't been able to find any eggs like totally wiped out. >> so i've been. >> told some interesting things going on steve. thank you. still to come, the race for ai supremacy is over and the u.s. didn't win, at least according to our next guest. find out why after the break. and don't

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nate likes what he sees... and he places the trade... talk about easier investing. >> to secure your free. >> generator and solar panels now. >> welcome back to squawk on the street. i'm bertha coombs with your cnbc news update. the white house budget office is pausing all grants, loans and other federal financial assistance as of 5 p.m. eastern today. the freeze could have widespread effects across health care, research, education programs and other initiatives. as the trump administration begins an ideological review of government spending. the order does not impact social security or medicare. norfolk southern and east palestine, ohio, reached a settlement over the february 2023 derailment that released toxic chemicals into the small villages, air, soil and creeks. the $22 million settlement

resolves all claims from east palestine. the money is designated for any issues connected to that derailment. and google is changing its maps to fall in line with two name changes ordered by president trump. the tech giant says it will update the names of the gulf of mexico and denali to the gulf of america and mount mckinley, respectively. google says the changes will take effect when the government updates its official listings for the gulf and the mountain. david, i'm wondering what people are going to do during hurricane season when you have hurricanes in the gulf. we'll just say the gulf. >> the gulf, that's it. we'll just go with the gulf. very pretty pictures of denali, mount mckinley. got to get up there sometime. all right, bertha, thank you. well, we got a lot of headlines. of course, as you well know, around the chinese app company, ai company, deep tech. it's sparked historical

losses for companies such as nvidia and the stock market. but there's plenty of ai companies that are private, aren't there? xai. how about openai? yeah, kate rooney is here. she's got that part of the story. kate. >> yeah. david. you're right. well, some of the leaders you mentioned in ai, they're avoiding any sort of public repricing and reckoning. we saw yesterday that gene munster put it really well. i caught up with him yesterday. he said if openai and anthropic were publicly traded, they would have been down probably 30%, maybe 25% yesterday. the bear case here is that deep threat could be existential for investors. it really changes the economics and some of the underwriting. it definitely turns up the pressure on those companies that have raised a combined $50 billion in private markets. one debate i'm now hearing are these companies overcapitalized. so $23 billion alone. you can see there for openai. raising too much money of course can have some long term effects for return on equity for investors. and while there's still unknowns around how cheap this deep sink model

was to build, the efficiency gains are real. so investors i'm talking to argue that enterprises they're not going to use chinese built ai. but american startups, i'm also told, are now looking to this and seeing that it's possible to really undercut on price here, the bull case by some of the optimistic venture investors out here is that the price to build it was always going to come down. it's up to the companies now to supercharge the usage, to offset all of that. it does highlight this is a new frontier of tech. you've got these leaps in innovation, timing and valuing these technology companies can be really bumpy over a ten year horizon. sam altman did chime in on social media last night, calling deep six model impressive promise to quote, obviously deliver much better models and pull up some releases. we did see that start this morning. openai unveiling chatgpt for government. it is the first big product rollout we've seen from this company since it announced enterprise. that enterprise offering that it has it's going to let government agencies feed sensitive nonpublic data into those models. guys, back to you. >> you know, kate, i mean, it's not as though chatgpt isn't

making money. they are from subscriptions and the revenue numbers are fairly significant for this year, i think. but there's a sense that there's going to be a commoditization of these products across the board that it won't matter one to the next to the next. they just sort of how is it going to play out then? what is going to distinguish them and or what are the real revenue opportunities beyond the subscriptions that they're looking for that are going to justify these enormous valuations? >> i think that's that's a big question, david. and the other side of this too, is that the commoditization knock has really been out there way before deep sea, that these were going to start looking the same. it's going to be harder to make money. the pressure now, and it has been for the last few years here for these companies is that they've got to move to sort of the application layer. they have to make this way more useful. and beyond consumers, they've got to make sure enterprises are using it. so the big fortune 500 companies need to be able to integrate this. they're going to pay more. it's much more profitable side of the business. that's really what anthropic has gone after. so those are a couple of the things. they've also got to make sure these

models are significantly better. if you're going to spend $100 million to create one of these models, you better hope that it is mind blowingly better than the last version that cost another $100 million. so the bar is continuously raised being raised here. and if you're a private investor, you've just got to hope that they can keep up the pace of innovation and justify just those eye watering valuations that we've seen so far. >> kate, i'm just curious from a flow standpoint because for a while now, for the last few years, it's been that only these ai native companies have been able to really raise eye popping figures in silicon valley. i'm curious if that spigot just shuts off automatically as a result of this, or do you think they're still capital that can be sloshing around for these types of companies? given everything we've seen in the potential commoditization of this type of technology? >> it's a great question, leslie. i was talking to a secondary markets expert yesterday and venture investor who said that there's still just endless demand for these companies. i was sort of asking, hey, are you seeing any sort of

pullback? they said, no, there is just such an appetite. and another investor was basically telling me the other day, it's two markets, a tale of two markets. you've got ai and you've got everything else. so i think until you really see the effects, people are still kind of trying to sort this out. you're seeing that in public markets as well, until it's an obvious these companies are going to zero. i'm told the demand and the appetite from investors is still there. they are still immune from interest rates, from any sort of factor on the macro side that would affect, you know, a fintech company, a real estate company. ai has still been immune, but we'll see if that starts to change. guys. >> what an amazing twist in the narrative this week kate. thanks. talk soon kate rooney this morning let's continue with the ai arms race discussion. our next guest strongly believes that open ai may become the work of ai. gary marcus, new york university professor and ai expert, joins us this morning. gary welcome back. it's good to see you again. >> yeah. great to be back. >> i don't think you mean we work as a compliment i. >> well. >> i mean, not really. >> no, i don't.

>> i think. >> that open ai. is highly overvalued. i think we just saw their business model sort of. >> blow. >> up yesterday or over the last few days, with deep sea basically giving away for free what they wanted to charge money for. also, i think that deep tech is more open than open ai, and that's going to be attractive to talent. i don't think things are looking great. i think $157 billion valuation is hard to bear out when you're losing $5 billion a year or thereabouts. and i think the final problem is that this software, large language models, just isn't that reliable. we all know by now that it hallucinates, makes stuff up, makes up, makes weird errors and so forth. and that's a problem. so somebody could be openai, could be somebody else will eventually i think, think of something that is much more useful than llms. but i don't think that's going to happen tomorrow. and in the meantime, openai is burning money. and so we may see their valuation plummet in the same way that we saw with wework. >> do you trust everything you've heard from deep seek? and

i just wonder, how can we make any kind of broad conclusion this early? and given the secrecy and doubt that these details are enshrouded in right now. >> i think it's pretty. >> likely that at. >> least roughly what they. >> described is correct. >> i read the main paper on r1. it makes sense. i've heard that someone at berkeley has already replicated it, and if the company just made it all up, then they're going to flame out very quickly because everybody knows how to replicate. they described enough about what it is, and so we'll find out in a matter of weeks if it's not true. but i think it probably is true. i think what they did is plausible. they worked harder on the optimization than other people had before. it's not entirely surprising that would happen. you know, a year ago i made a bunch of predictions, and one was that this stuff would all become a commodity, that there was no moat. and we all knew there were gains of efficiency to be made. i think they did it in super impressive fashion, but i think it's probably legit. >> i'm curious your thoughts on what this means for geopolitics,

because the conventional thinking for the last few years has been that the us has kind of unbridled resources to put forth toward becoming competitive in ai. and if there's anything we've learned this week, it's that this can potentially be done more cheaply, more commoditized, as you say. so what does that mean for the democratization of this technology across the world? and, you know, taking it one step further, what are the geopolitical implications of this? if, you know, basically with a couple hundred thousand dollars or so, you can just replicate this technology. >> so i think that what this really shows is that ai is, once again, anybody's game, but also that nobody is going to win by playing with llms. llms are two large language models. are two well understood? that's the core of generative ai. everybody's kind of playing the same game, and so it's impossible to get a big lead on that. and now even smaller countries or smaller companies are going to be able to play because of these new results. if somebody really wants to get an upper hand here,

they're going to have to invent something fundamentally new, something that i think works differently from llms getting to general ai. artificial general intelligence probably requires like 5 or 6 more breakthroughs, and the company or country that can ramp up those breakthroughs 1st may win, but just playing around with llms is not really going to get us there. in fact, people have struggled to make gpt five ai. if somebody does figure it out, probably other people will be fast followers. this is just not a way to get an enduring lead. it also shows that the chips act that the export controls are not really a way of controlling this. what we really need is to sponsor innovation, sponsoring the right kind of innovation, getting people to look outside the black box to new approaches. that's what's really going to make a difference here. >> well, we're not doing that. i mean, my god, so much money has gone into this area. you seem to you really don't believe that anybody's thinking differently? >> i think very few people are. i think llms have been kind of seduced the field. you know,

i've been in the field for a long time, and we used to have much more of a kind of culture of people competing with different approaches. and right now we have an intellectual monoculture where almost all the money goes into llms. and part of that is because of decisions that venture capitalists have made part of it's from decisions around ceos. but the economics have all gone to the or not all, but nearly all gone to this one path. and that's made it harder for people to do other things. it's very difficult if you have a and maybe this has changed in the last few days, but it's very difficult with a small budget to compete with a large budget. >> yeah. well that's obviously because the compute let me end there. if i can just get your take i mean yesterday the market obviously seemingly at least worried that we're not going to need as much computing power over time. are you in that camp? >> it's a little bit complicated. >> so the. >> result that we have now is that you can train the models more quickly or more efficiently and more cheaply, and that's a big deal. there's still what we call inference, which is basically using the model at

test time. and new models like o3 actually do a lot of that inference that they're quote, thinking for a long time. that's still going to be expensive. so there was this whole notion of scaling. you just add more and more data. and that's what would get us to artificial general intelligence. and as i warned a couple of years ago that scaling stuff wasn't really a physical law. it was just a generalization. it seems to have run out. we hit a point of diminishing returns. so now people are banking on using more test time compute. i don't think that's going to work either. but that's the next hypothesis that people within the box are trying to explore. that hasn't gotten a lot cheaper. and so i don't know if those models are actually practical. if you need 12 minutes of computer time to compute your answer and somebody charges you $1,000, and then the answer isn't right, people may get impatient pretty quickly with that. >> professor, we need to have you back to talk power as well. as the street tries to wrestle with some of their power generation forecasts for, say, 2030, that's a discussion for another time. it's good to see you. thank you gary marcus.

>> always glad to come back. thanks for having me again. >> meantime, the tech selloff yesterday made a big dent in the wealth of some of the world's richest. for that, we're going to turn to a robert frank. morning, robert. >> morning, kyle. >> good to see. >> you. >> with. some big. >> individual losses yesterday. of course. jensen wang losing over $20 billion. >> in. >> just one day. he's now down. $30 billion from his peak. >> back in november. he's still a member of the $100 billion. >> club. >> just at $101 billion. and he's. >> probably gaining. >> some of that back today. >> but he has fallen from 10th to 15th. >> place on the bloomberg list. >> now on a dollar basis, larry ellison actually lost even. >> more. >> dropping around $23 billion yesterday. that's almost three. paramounts that he lost. >> just in one day. >> other billionaires dropping billions included michael dell. >> the google. >> founders larry page and sergey brin, and of course, elon musk. all together, the top ten billionaire losers lost $67 billion in wealth just in that one day. now there were some

winners yesterday the biggest of course bernard arnault adding $5 billion yesterday. he's up over $40 billion from his low back. >> in november. >> and that puts. >> him. >> back on the $200 billion list. mark zuckerberg added $4 billion to his fortune. and warren buffett up $11 billion over the past couple of weeks. again guys we'll see some of these stocks come back today. but on an individual basis, just so much volatility among the billionaires in the past few days. >> yeah they lost more money than we'll ever have. i can say that pretty confidently robert. hard to feel sympathy, but thank you for sharing those numbers with us. appreciate it. smithfield foods going public today. what investors should know after this. we're back in know after this. we're back in two. at morgan stanley, old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

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decline. but one ai expert is going to use ai to find what the next big investing trends are to where to put your money. tune in to our market navigator segment later on today on power lunch to find out where those find out where those opportunities carl: believe me, when it comes to investing, you'll love carl's way. take a left here please. driver: but there's a... carl's way is the best way. client: is it? at schwab, how i choose to invest is up to me. driver: exactly! i can invest and trade on my own... client: yes, and let them manage some investments for me too. let's move on, shall we? no can do. client: i'll get out here. where are you going?? schwab. schwab! schwab. a modern approach to wealth management. 25 in vodafone italy. today. you're the ceo of vodafone. what is your strategy and vision for

the future? >> we are changing our culture to really focus on our customers. we need to acknowledge that change is hard, but if people understand it's for the right reason, then you get the power of the organization with you. >> we've got another test of a thawing ipo market today. smithfield foods, the biggest pork producer in the u.s, pricing below the range overnight ahead of today's first trade listed on the nasdaq under the ticker ticker sfd. the company used to be public until china's wh group, which will still own about 90% of smithfield post ipo, acquired the pork giant for almost $5 billion back in 2013. the ipo price gives smithfield a nearly $8 billion market cap, below initial expectations on muted investor demand. david, you covered that 2013 buyout. it had all the cfius concerns. >> surrounding it. >> it went through. >> i did. yeah you know i'm sure i did. >> because now interestingly if

you look at the risk factors in the s-1 there's still a lot of that geopolitical concern. they have a lot of inflation exposure. if the cost of the materials that they use to feed the pigs goes up, that cuts into their margins. and then they have a joint venture in mexico. they have a decent amount of exposure in terms of exports. so things like, you know, retaliatory tariffs could impact them. that's another thing that's cited in the s-1. and then also you've got another situation following venture global last week where you've got either flat or declining sales. they give a range of what they're expecting in the fourth quarter. so it's not that high growth ipo that we may have been accustomed to a few years ago. it's again kind of a sticky story from a macro standpoint. they also have, you know, some some claims due to related to some antitrust practices that they have settled but say there could be some more. so again,

it's not a clear cut ipo in the sense of high growth. you know story stock that people can kind of. >> get behind. what people have been getting excited and potentially excited about. yeah. that said there is a pace of ipos, at least so far. >> there is. >> not what we might have anticipated. >> and they're. >> getting done. even though they are downsized, they're still relatively large in size, relatively large in market cap. i mean, $8 billion is nothing to shy away from. >> so anytime we've got two different stories in the travel sector, there's jetblue down on its revenue outlook. but royal caribbean is up on its profit profit forecast. we're going to talk to both ceos when money movers kicks off in just ten minutes. dow's up 240. >> in a world of uncertainty and disruption how will your investments stay resilient. we've been navigating change for 125 years always looking forward, anticipating risks and

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>> that was the ceo of chevron, mike worth, with us exclusively in the last hour, talking about chevron's joint venture with ge and engine number one to supply power for us based ai data centers without straining the existing grid, the first aims to deliver up to four gigawatts of power operations expected to begin by 2027. plans to expand capacity in the future as well. we tried to get him to talk about china and this whole episode that's thrown the market into a swirl this week. interestingly, nat gas is now down on the year so far. >> yeah. and you've got i mean, it was down in relation to some of the export news out of the trump administration with regard to that executive order as well. interesting. the three kind of cohorts here. is there anything that you make of these three combining forces? engine number one is a name i hadn't heard in quite a while. yeah. it makes sense that they would. >> yeah. >> the exert themselves. >> in fact there's a carbon capture component to this. they're obviously putting some assets i mean some money into the to the joint venture which

again expects to begin producing power as much as four gigawatts over time, which would power 3 to 3.5 million homes. again, just to sort of give people a sense as to the enormity of the power production we're talking about. it would be behind the meter, though. in other words, it would just be for the data centers. it would not be used in the transmission grid. and the idea, of course, there is that it would not be costing consumers in the area anymore money, ivanova shares, which got shellacked yesterday. of course, in the deep sink news, they're down another 1.7% so far this morning. you see it right there. we got a lot more live market we got a lot more live market coverage for you. straight prudential has been helping protect people for generations. ♪♪ we helped the lost generation find their way. the greatest be great. we watched boomers grow. [laughing] we are x, y and z. and this january, a new generation begins. generation beta so, now what? we help protect their life's work,

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management in a time of disruptive change. financial well-being accessible to all. call of us today for tomorrow. >> a new administration. new fed strategies. could the trump agenda impact inflation and the fed's next move? fed chair powell's crucial remarks and message to investors. power lunch tomorrow, 2:00 eastern. cnbc. >> good tuesday morning. welcome to money movers. i'm carl quintanilla, live at post nine of the new york stock exchange. deirdre bosa is at one market in san francisco today. this hour. how to play the market following yesterday's tech rout. did yesterday sell off provide an entry point or maybe a larger warning about down side risk? we'll talk about it then. >> republican lawmakers. >> and. >> president trump. >> appear divided. >> on the us. >> response to deep. >> sea and what it all means for national security. boxeo erin