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First Move with Julia Chatterley
Investors Selling Stocks on Growing Inflation Fears; Russian Hackers Justify their Actions as Pipeline Stays Shut; IBM's CEO Tells Why AI and Quantum Computing are Key to Future Growth. Aired 9-10a ET
Aired May 11, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:46]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Tech tumble. Investors selling stocks on growing inflation fears.
Cash not chaos. The Russian hackers justify their actions as the pipeline stays shut.
And big blue's big bet. IBM's CEO tells us why AI and quantum computing are key to future growth.
It's Tuesday. Let's make a move.
ANNOUNCER: This is CNN Breaking News.
CHATTERLEY: We begin today with breaking news from Israel and the sound of sirens in the Israeli city of Ashkelon near Gaza following a deadly night
of air strikes and rocket exchanges between Israel and Palestinian militants.
CNN's Hadas Gold is there for us. Hadas, bring us up to speed with what you've seen in the last few hours, please.
HADAS GOLD, CNN CORRESPONDENT: Julia, I'm in Ashkelon, which is in the south of Israel, not too far from the Gaza-Israel border, and all day long,
there have been air raid sirens, a barrage of rockets, at least 300, Israeli military says have been fired from Gaza into Israel, and actually,
one of them this morning hit this building just behind me. Our cameraman will pan out so you can see the impact site, quite serious there.
There were some injuries in this building, including one that was seriously injured. We're also being told by Emergency Services that in the last few
hours, two people have died here in Ashkelon as a result of rocket attacks.
The Israeli military says they have responded with air strikes and we have been hearing planes overhead as well as some explosions, but we are not
sure if they are from air strikes or if they are from more rockets.
But the IDF says that they have struck more than 150 targets in Gaza. They say, they have killed 15 militants as of today. The Palestinian Health
Ministry says that at least 24 people have been killed by Israeli strikes, including nine children.
Now, the Israeli military says that they take all reports of civilian casualties very seriously. They say, they are investigating the incident.
They say that they also understand though that a third of rockets fired have fallen short within Gaza, but Palestinian Health Ministry is saying
civilians have been killed in Gaza.
At least 16 Israelis beyond those casualties I mentioned have been injured in Israel and this is all coming after several days of incredibly high
tension in Jerusalem.
Gaza militants say that these rocket attacks are in direct response to what has been happening in Jerusalem. We have seen more than 500 Palestinians
injured in clashes with the police at the al-Aqsa Compound, as well as clashes in the Sheikh Jarrah neighborhood where Palestinian families face
possible evictions.
Tensions here and the activity we are seeing, the military activity, the barrage of rockets, the Israeli military response. These are at levels that
we have not seen here in Israel and with Gaza and with the Palestinians for several years.
Tensions are incredibly high and the activity is not just here because we are also seeing protests and violence in other cities in Israel. So really,
a very fluid, a very dangerous situation here in Israel right now.
CHATTERLEY: Hadas, any efforts to try and de-escalate?
GOLD: It doesn't seem like there is any sort of de-escalation any time soon. The Israeli military saying that this is a very serious provocation
by Hamas and that they will -- they plan to respond in kind and they are continuing air strikes.
We have been hearing, like I said, planes flying overhead. We continue to hear and receive these red alert air sirens throughout Southern Israel here
in Ashkelon as well and actually, yesterday, there were sirens and rockets fired towards Jerusalem, which has not happened in a very long time.
That for Israel was a very clear escalation. It was a very clear message as well from the militants in Gaza.
And right now, it doesn't appear as though this is going to be calming down any time soon.
CHATTERLEY: Yes, we're just showing images now of you having to move away from your live shot earlier as well. Stay safe.
GOLD: Here we go. We've got sirens again. We're going in. We're going in. Julia, we're going inside. We have more air raid sirens right now. Stay
with me. Stay with me.
Stay with me. We're going into the bomb shelter in the building behind me. This is what has been happening all day long. Going into the bomb shelter.
[09:05:07]
CHATTERLEY: Okay, we are having some difficulty keeping reception and contact with Hadas there, but as she mentioned there, she is headed once
again back into the bomb shelter in the building where she is reporting from and actually we were showing you just images as that happened there,
of a siren that earlier today that she was forced once again to go back inside.
I think we're just trying to re-establish contact with her now. We're showing you some images of the shelter in the building as I mentioned, but
we seem to have lost connection again.
We'll try to re-establish a connection with her. But for now, Hadas forced to go into the shelter there in the building behind where she was
reporting. A very fluid situation there as you can see.
We will keep you abreast of any further developments.
All right, for now let's bring it back to the FIRST MOVE for markets.
Actually, we seem to have re-established contact, so I am going to try and get back to Hadas. Hadas, can you hear me?
GOLD: Hi, Julia. Yes, we can hear you. We had to -- as you saw, for the air raid sirens, that's been happening all day long, we had to run into the
bomb shelter here in this building that was actually hit earlier today.
We are in this bomb shelter with other residents of this building as well as other media who have been here reporting on these strikes. But when
those air raid sirens go off, you have seconds to get into a bomb shelter, it depends on how close you are to Gaza.
But the Israeli military has been advising residents of these areas to stay very close to their bomb shelters because it seems as though with every
hour, we get multiple air raid sirens that send people scurrying into the buildings.
We also, after those air raid sirens started, we heard explosions. Now, we don't know if those are from the iron dome into -- or from rockets landing,
but actually, just before that air raid siren, we did hear airplanes overhead and we did hear some explosions, which may indicate that there may
have been some sort of air strikes and this latest air raid sirens and potentially the rockets being launched could potentially be in response
again.
This is all just from what we are hearing and seeing here on the ground, but this is what it has been like all day long here. It is just constant
air raid sirens, constant running into the bomb shelters, hearing those explosions.
And as we noted, Israel is responding with air strikes in Gaza. They say that they have killed at least 15 militants. The Palestinian Ministry of
Health in Gaza says that more than 24 people have been killed including nine children and the Israeli military says that this will continue, that
they do -- they will continue their operations and then also, we have been hearing from the Emergency Services here in Ashkelon that two people were
killed by rockets that landed here earlier today.
So as you can see, a very tense, a very fluid situation here.
CHATTERLEY: Hadas, just explain because we lost you briefly there when you were heading down to the shelter. Just where are you? What is the room?
What are the people in there saying to you about how they're feeling at this moment?
GOLD: Well, for the people who live in this area, this is -- I don't want to say a regular occurrence, but this is a part of life.
And what's been really interesting to see is in between the air raid sirens when there's moments of calm, people will go out and take their dogs out
and get some fresh air as well.
But this is just a very tense situation for the people here and this is how they live.
CHATTERLEY: Yes, this is how they live. Hadas, thank you. Stay safe, please. Thank you for coming back to us there.
All right, as I mentioned, let's bring it back to FIRST MOVE for markets. And the move is lower once again.
I can give you a sense of the global picture with European and Asian investors taking a cue from Monday's weak U.S. session. Yes, there you can
see, it is a sea of red there. Just the Shanghai Composite managing to eke out some gains there, despite the broader pressure across the Asia region
as well.
Let's just have a quick look at what else we're seeing. For U.S. futures, particularly the NASDAQ looking like they will pull back further after
losing some 2.5 percent on Monday. Just for perspective, the best performing FAANG plus member, Google parent, Alphabet only -- only -- lost
2.5 percent. Tesla, the worst down over six percent.
You've got to keep your mind there, the NASDAQ still down just five percent from record highs, so we can still call this consolidation. The question
is, what is happening? I think it's tied to Friday's disappointing payrolls report.
If you remember the first take seemed to be, look, a weaker jobs recovery means the Fed has more time before rate rises are required. The second take
though is that firms and if firms are struggling to hire, then perhaps, they'll have to raise wages. Hurrah, you could say because that is a good
thing, but it is also inflationary and it doesn't tend to be temporary.
So, when you combine this with the recent run up in commodity and house prices, the shortages in things like chips for the tech sector, it's not
hard to see why people are getting nervous, and it is global and it is across asset story, too.
Just to give you a sense, bond market based measures of longer term inflation forecasts, so-called break-evens rose to multi-year highs in
several countries on Monday.
Let's talk this through and get to the drivers.
[09:10:10]
CHATTERLEY: Christine Romans joins me now. Christine, it was an interesting report. You and I didn't get a chance to talk about it, but you
do get the sense that people are looking at this now and whether it's a good thing or a bad thing and I know we agree, it is a good thing if wages
go up.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Yes.
CHATTERLEY: That is a more sticky form of inflation than perhaps commodity prices rises and other measures.
ROMANS: Absolutely. And wages going up is good for the American worker, right? And maybe what is needed to lure people off the sidelines and back
into the labor market. But it is a much more complicated picture than that. You talked about those supply chain snafus. That has been remarkable to
watch just across the globe, the different ways that COVID and the change in consumer behavior and quite frankly the COVID shutdowns really decimated
global supply lines.
So we are watching that play out, and you're seeing commodity prices go up. You're seeing product shortages. You're seeing just in time inventory
really kind of get its big revenge, right, when so many of these supply lines have been distorted.
That's going to mean higher prices and shortages and we are seeing that.
We are going to get important inflation data this week. But I think what markets are telling us as it spread around the world, this sort of renewed
realization of inflation risks that you're going to see some real effect in prices quite frankly from all of this disruption in the world. Does it
last? That's the big question.
But at least after record highs for the S&P and the Dow, investors are saying, maybe we need to put those concerns back in the forefront again
just so we don't hide from them at this point.
CHATTERLEY: Yes. Take some profits off the table while you can, quite frankly, because I think that's probably what we're talking about here,
let's be clear, just five percent of record highs. As always, we agree. Christine Romans, some day we won't. Thank you.
ROMANS: Nice to see you. I am not sure.
CHATTERLEY: No, neither am I, actually. I am just saying it. Thank you.
All right, more details emerging into who is behind the cyberattack on a major U.S. oil pipeline. Colonial Pipeline hopes to have services mostly
restored by the end of the week, meanwhile, the F.B.I. has identified the hackers as a criminal gang known as Darkside. Matt Egan joins us with more.
Matt, great to have you with us. What more do we know about trying to re- establish supplies. I mean, we have to explain and understand how crucial this is for supplying fuel to the East Coast of the United States.
MATT EGAN, CNN BUSINESS SENIOR WRITER: Yes, Julia. That is right. This is day five of one of America's most important pipelines being effectively
paralyzed by hackers. As you mentioned, this is such an important piece of infrastructure. It supplies nearly half the diesel and gasoline to the East
Coast.
So, here is the latest. Colonial Pipeline, they say they hope to be mostly operational by the end of the week. They also say that Line 4, which runs
between North Carolina and Maryland, that is operating under manual control for a limited period of time. The corporate website for this company is
also down, we've learned this morning. The company says that is unrelated to the ransomware, but of course, it is not really a good look.
Listen, everyone wants to know what's happening with gasoline prices. Now, the national price at the pump hit nearly $2.99 today. That is the highest
level in almost six years according to AAA.
But gasoline futures on Wall Street, they are not really freaking out. RBOB is kind of unchanged since the close on Friday and of course, Friday night
is when we learned in New York at least that this ransomware had shut down the Colonial Pipeline.
Demand is certainly rising because drivers are aware of this, and I guess they're getting a little worried. Gas Buddy which tracks real time demand
and prices, they say that U.S. demand for gasoline was up 20 percent on Monday relative to the Monday before in just five states -- Georgia,
Florida, North Carolina, South Carolina and Virginia. Gasoline demand is up 40 percent, all five states are served by the Colonial Pipeline.
North Carolina Governor Roy Cooper, he issued a state of emergency last night and that move allows them to sort of temporarily suspend some fuel
regulations in an effort to make sure there is enough supply.
So, Julia, I mean, here's my take. I think that, you know, people are going to pay more for gasoline. I mean, if they are paying a little over $3.00 a
gallon, I don't think that means that they are not going to take a road trip if they've been stuck inside for the last six months.
But the real concern of course is supply. I mean, no one wants to see gas lines just as the economy is opening up.
CHATTERLEY: You know, it is quite fascinating, isn't it, as well? I mean, when you're talking about paying a little bit more for gas, what about
paying these guys to move away and release what they've taken control of here? It's quite fascinating to see, these attackers say, our goal is to
make money and not create problems to society, well, socially conscious hack attack hasn't happened. What do we know about Darkside?
EGAN: Yes, so let me tell you a little bit about Darkside. It has got its origins in Eastern Europe. It exercises what they call double extortion. It
is a form of ransomware attack where they will encrypt the victim's data and they will also steal some of it and threaten to release it to cause
reputational harm unless the victim pays.
[09:15:20]
EGAN: RBC Capital put out a note on this group as well, and they say that Darkside is sort of rebels and their Robin Hood mentality where they claim
to kind of giveaway some of their proceeds to charity, but, Julia, I talked to Neil Chatterjee yesterday. He is the Commissioner of the Federal Energy
Regulatory Commission, and he said, listen, this attack on the Colonial Pipeline is a real wake-up call.
He called on CEOs, energy CEOs, pipeline CEOs to step up their security and do it right away. And he also said that the U.S. government must be
absolutely firm and clear in telling nation states like Russia that harboring ransomware teams is not going to be accepted and the United
States will defend its national interests.
Julia, I think that the foreign policy and national security repercussions of the attack are just starting to be felt.
CHATTERLEY: Yes. We're going to speak to the IBM CEO later on the show and he says, cybersecurity is an issue of the decade and we need to be more
focused on it. Matt Egan, I couldn't agree more. Thank you. Matt Egan there.
EGAN: Thank you.
CHATTERLEY: All right, still to come here on FIRST MOVE, vaccine velocity. Bhutan's Prime Minister on how the tiny kingdom out vaccinated most of the
world.
And rebooting IBM, the computing giant CEO and the company's pivot to AI and the Cloud. That's next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE and to a country where an extraordinary vaccine drive has to be seen to be believed.
Bhutan, a Himalayan nation between India and China has vaccinated 93 percent of adults in around two weeks. Bhutan is also providing support to
neighboring India as the country is struggling with a catastrophic surge of COVID cases, and I am pleased to say joining us now, the Prime Minister of
Bhutan, Lotay Tshering.
Fantastic to have you on the show, Prime Minister. Thank you for joining us.
We have much to discuss in terms of your own actions in your own country, but I saw that you spoke to Prime Minister Modi of India today and you've
been providing support to the nation, too.
Can you just explain what you've been doing for India to support at this moment?
[09:20:21]
LOTAY TSHERING, BHUTANESE PRIME MINISTER: Thank you. Thank you, Julia and hello to all your viewers. In fact, before I start answering your question,
I will take this opportunity to convey warm messages from His Majesty, the King and Her Majesty, the Queen from the land of gross national happiness.
I'm surprised how you found Bhutan, because normally we are not found. Normally, we are not heard. But I am very happy that you reached out to us.
You're right, Julia, I took this opportunity to call Prime Minister Modi, our good neighbor, to express our solidarity with him and we could only
send our warm wishes and sincere prayers for him, being a small country, small economy, resource constrained, we are not able to offer that much of
economic assistance, but as you all know, good neighbor, India is suffering a lot from the pandemic and they are running out of almost all of the
healthcare facilities.
So, the only thing we could offer is some liquid oxygen that we could tank and ship it to India. So that is what we could do, but more than anything,
as I said, Julia, I'm so happy that I could talk to Prime Minister Modi and send prayers for all Indian friends.
CHATTERLEY: We understand. It's clearly a border nation for yourselves. Can I just ask what measures and protections you're taking in order to
protect your own citizens?
TSHERING: Of course, now I don't know how much time I have on this, but we started our preparation since February last year actually, a month after
the disease broke out in China, and then we took all measures in place and then, as we were anticipating, we got the first case on the 5th of March
last year and ever since we got the case, we had a very good control, I would say.
Immediately we stopped tourists coming to Bhutan. We blocked all our international borders both by land and by air and then, we had all the
civilians and testing primary contact testing in place.
And until now, we managed to keep our community safe, and in fact, all this thing started from our leadership, His Majesty, the King, who as we talk is
in the south where we share three borders with India. His Majesty, for the last, almost 15 months had spent almost 80 percent of the time out of the
Palace guarding our country physically as well as mentally, morally supporting all of the frontline workers.
So, of course, being small is our strength, but then all of us being unconditionally united under His Majesty's leadership actually had given us
very good protection.
CHATTERLEY: And a 21-day quarantine as well, for those entering your country also helped. Talk to me about the vaccine drive, because I think
for most people listening, the idea that you managed to vaccinate 93 percent of your adult population in the space of under two weeks is an
astonishing feat.
How did you achieve that? What perhaps can other nations learn from how you did this?
TSHERING: Yes. I mean, of course to us, we thought it was just a simple plan that we strategize for ourselves, but now I'm hearing that news from
around the world, we are actually happy that many heard us, actually, again, started from His Majesty's in-depth knowledge about the infection
and our King's knowledge about herd immunity.
In fact, we all designed in a way -- the rest of the country has designed to vaccinate our population initially and caregivers, the frontline
workers, the health staffs would have come first, but with the knowledge of herd immunity, His Majesty was very sure that we could vaccinate almost all
700,000 population that we have in the country.
So, we design and rolled it out on a national campaign mode where about a month before we vaccinated, we online enrolled all eligible population and
then we designed, of course, on a good day that we roll it out and in the span of I, would say not exactly one week, but I think nine days, we
managed to vaccination almost 90 percent of the eligible population.
And then over another two or three days more, we could cover now almost 95 percent of eligible population. That is almost 65 percent of people living
in Bhutan. Of course, we vaccinated all living in Bhutan.
So our first dose went very well, and of course, I shouldn't forget to thank India for their generous support of giving us vaccine for free.
[09:25:02]
CHATTERLEY: Covishield, of course is the vaccine, the AstraZeneca vaccine that the Serum Institute of India has manufactured. Obviously, they are
having supply issues and they are focusing on their own domestic priorities as well.
Can I ask you, Prime Minister, what you're hearing about the provision of the doses for the second dose for your citizens? Is that going to come
timely? Do you have any sense of when that might arrive?
TSHERING: Yes, that is the question that we all are asking ourselves. Of course, time interval between the first and second dose is about eight to
12 weeks.
We are into the fifth week after the first vaccination. India and government of India, Prime Minister Modi of course, has agreed and still
are very happy to help us. But also fully agree and understand the situation that they are in.
So as we bank on to the support from India, we are reaching out to all the leaders in the world to support us with vaccines, actually, preferably of
course AstraZeneca, but then, any make would do because, being a doctor myself, knowing immunology, how our bodies react to the vaccination
process, I think any vaccination that has proven track record, any vaccination that is approved for emergency use would be good for us.
So knowing the situation that the government of India is in, we are reaching out to all good, friendly leaders in the world to help us with at
least half a million doses so that we could cover 95 percent of the population with the second doses so that we will actually have a good herd
immunity and then we also would like to open up our borders and be absolutely sure that people of Bhutan are protected immunologically.
Right now, the protection is maximally through non-pharmacological interventions. People are following COVID norms very strictly. We have
absolutely no to any foreigners who are coming to Bhutan, and as you rightly say, we have a very strict state sponsored 21 days quarantine even
though I know the practice being two weeks, but we have gone one week beyond that.
We also have some restrictions of Bhutanese traveling within the country. We have categorized the country in to high risk and low risk group. Anybody
who wants to come travel between the two places from high to low risk area will have to undergo a mandatory state sponsored quarantine for a week and
within the country, we have lots of medical checkpoints where traffic along busy roads or highways are picked up and our target is to on-site COVID
test, at least 10 percent of the travelers.
All frontline workers, health staff, Armed Forces, business people, eateries, all are checked once every two weeks, so that in the event of a
community transmission or a local transmission, we would like to pick it up on the first hour out, say, we wouldn't wait for 24 hours.
And then our contact tracing has now become very efficient that all small outbreaks, we almost get 80 percent of our positive cases from the traced
primary contacts and not very many from the community.
So far, so good, but we know we don't see the enemy. The infection is becoming more and more infectious. The wave is becoming hotter and hotter.
We are really, really cornered with the wave that is sweeping this part of the world.
CHATTERLEY: Sir, you've certainly handled it, and I know you mentioned you're a doctor and I know you practice it weekends and have been commended
for it. You are one busy man. So, I'm going to let you get back to it.
And you made a point that you're not often heard. I promise you Bhutan is heard on FIRST MOVE. Come back and speak to us soon, please, Prime
Minister. It was great to have you on the show.
The Prime Minister of Bhutan there. Thank you.
Okay, the market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:32:05]
CHATTERLEY: Welcome back to FIRST MOVE. Trading has started on Wall Street and it looks like another difficult session for U.S. investors, especially
those with money in technology stocks. All the main indices are down with inflation fears simmering once again.
We've also got the latest CPI data from the United States on Wednesday, so that's something to watch for, too. But as you can see, the S&P 500 off
more than one percent, the NASDAQ down almost two percent already in the session.
Tesla also falling heavily. The company experiencing sales softness in one of its key markets. China also tensions between Beijing and the United
States. Chip shortages and of course, some recent PR issues, perhaps not helping matters either.
And if you thought you could escape the stock market pain by buying into things like cryptocurrencies, well, challenging, Bitcoin is still
struggling to return to record levels over at $60,000.00. Ether also pulled back from all-time highs hit on Monday.
Computer giant, IBM unveiling new artificial intelligence and Cloud tools ahead of its annual Think Event. The company says the products will help
accelerate the digital transformation accelerated by the pandemic.
Last week, IBM also announced it had created the world's smallest microchip. Joining us now is Arvind Krishna, Chairman and CEO of IBM.
Arvind, fantastic to have you on the show.
I do want to talk about Think Big and some of the topic of conversations there, but I think there's nothing bigger than thinking about those in a
crisis and I know IBM has been supporting India, providing the tools, oxygen. Can you just talk us through what IBM has been doing, please, to
support the nation?
ARVIND KRISHNA, CHAIRMAN AND CEO, IBM: Hafa Adai, Julia, and a pleasure to be here with you.
When you think about India, and it's been obvious now over the last four weeks that the crisis has been increasing, we decided to step forward with
our resource, with our voice. We also helped convene a similar set of people and I'll begin with that first.
So we helped convene the Global Task Force for Pandemic Response. So under the auspices of both the Business Roundtable and the American Chamber of
Commerce, we got together with 40 of our peers, and we wanted to do a combined coordinated action.
How do we use our collective voice with the government here in the United States? How do we use a coordination with the government of India, but also
provide money, provide resources provide goods? And what are those goods?
Right now, there's a shortage of ventilators, of oxygen concentrators and then also share best practices about what we're going to do for all our
employees.
And so convening all of this is what we are doing because this is going to take a long and protracted effort.
I've held the view that we are going to solve the pandemic in India and other places is a marathon not a sprint.
CHATTERLEY: Yes, I couldn't agree more. But the biggest proportion I believe of IBM's offshore employees are in India. What specifically are you
doing to protect and support them at this moment? What are you hearing from them?
[09:35:04]
KRISHNA: So, Julia, they're most worried of course about the pandemic sweeping through them, their families and their extended families. What are
we doing for them?
One, we did dramatically enhanced insurance so that none of them feel that they cannot take care of themselves and their loved ones. So we have done
that. Two, we are attempting to, but this is going to depend upon vaccine supply. Can we give vaccination centers from our office buildings so that
they can come get access to it? Provide a great deal of telehealth locally, so that people don't have to go to hospitals because those are overwhelmed.
But can they get medical advice from other places?
We have funded taking oxygen concentrators into the country and I've been so amazed and pleased, our people, those who have access to local resources
have stepped up to help each other in the series.
Somebody needs oxygen cylinders, somebody else knows how to get them and gets them to them, and these are local pockets that have sprung up amongst
our employees that help not just them, but also some of their other friends and colleagues from other places.
Doing all of this, while maintaining great business continuity has been just incredible to watch. I'm so pleased with our leaders and our employees
there.
CHATTERLEY: Yes, I'm sure you're incredibly proud of the support that they're providing to each other and their communities, too. Thank you for
sharing that with us.
Okay, let's talk Think Big because I know that's the big announcement. Today, you're focusing on quantum computing, on AI.
I was looking at AI investment last year and it seemed to plateau. Talk to me about what clients are saying to you and what you think is going to be
crucial in terms of AI investment going forward, and how pivotal, it could be, as we transition, we hope, out of the pandemic and normalize in some
form, the workplace?
KRISHNA: So, Julia, I think when we look at the last 15 months, everybody shifted to how do I take care of my workforce going remote? How do I do all
the collaboration tools necessary to go do there? How do I make sure I have resilience in my software infrastructure?
That occupied them for the last 15 months, and so consequently, I think the AI investment didn't decrease that kind of pause, kind of stayed stable.
All surveys show about 31 percent of companies are adopting AI well, and that kind of paused.
Going forward, which is 31, accelerating to 47, but I think everybody is going to adopt AI. Why? How do you do better customer service for your end
customers? How do you really make your employees more productive? How do you automate operations all inside the enterprise? All of these are going
to be use cases for AI to unlock that 16 trillion in global productivity we all want by the end of the decade.
The same way that electricity happened at the turn of the last century and everybody went through electrification, I think AI is going to infuse every
business and every enterprise in this century.
CHATTERLEY: If we look at the development and the adoption of Cloud computing, I know, this is a key focus for IBM, among others over the last
two to three years, for example. What has the past year done in terms of speed of adoption, and the recognition to your point that actually, the
workplace perhaps is going to be more hybrid? We need to be able to take whatever capabilities and data analytic tools that a company wants, and do
them wherever they're operating. All of these things, how is that going to play into the kind of speed of growth that we see over the next three to
five years in your mind? And what does that mean for IBM?
KRISHNA: Let's take a great example from the world of data that you started talking about, Julia. So people may have data on one public Cloud,
they can have data on another public Cloud, they'll have some inside their own enterprise. How do you begin to knit this data together to still get
the insights that you need to power a customer insight or a power a better operation, or take cost arguments out of the enterprise?
And so all of the technologies that go across these is where we begin to see the enterprise wanting to go, and when you go across that environment,
I'll call that hybrid Cloud as the catch all phrase for those environments.
But then leveraging perhaps AI inside the data technologies, technologies, like auto SQL, that allow you to gather all this data and still extract
insights from it. What is the kind of growth we expect there? We see the enterprise world in this hybrid Cloud and AI world growing at double
digits, and that is where we begin to see the effort beginning to go.
There will always be areas and pockets which will decrease spending, but they will be offset by these pockets of increased spending. And that is
where we are putting our effort to go capture more and more of this increased market share in the areas where our clients want to spend money.
By the way, they don't just need technology, many of them also need expert help to make their journey from where they are to where they need to go.
[09:40:03]
KRISHNA: And so we invest in both those, both in terms of the capabilities and in terms of giving them this expert help in these areas to get going on
their journey.
CHATTERLEY: Yes, they know what they want to go, it is just how to get there.
One of the other issues, I think and you said, this is going to be the issue of the decade and it's incredibly topical, in light of what we've
seen, both with the SolarWinds hack, and of course, with the Colonial Pipeline in the past few days, cybersecurity.
Arvind, you suggested, and I read that you had mentioned this as sort of NASA style, government investment is required in order to be able to tackle
this appropriately between the public sector and the private sector. Are those kinds of discussions being had, and how do we ensure that they are if
they aren't?
KRISHNA: Well, so I think, Julia, we have actually written to the government about this, we have raised it as the topic. I think, right now,
there is so much emphasis on getting through COVID and then on physical infrastructure that that occupies it.
So it's not that the voices are not being heard. But right now, I think it's behind those. When we talk about infrastructure, you talk about the
Colonial Pipeline, that's physical infrastructure, but in the cyber side of that physical gets attacked, the physical is useless. So I actually believe
that when we talk about infrastructure, we should make sure that the cyber infrastructure is on equal stage and equal footing with the physical,
that's the only way to take advantage of it.
And you're right, I have said before, we should have a NASA style program. Go spend $100 billion on a public-private partnership to improve cyber
resilience. Otherwise, we're going to be victim to these kinds of attacks again and again.
CHATTERLEY: Are businesses spending enough? Are they talking about this enough? Because we've had one heck of a warning in the last four months,
and to your point, we're distracted by COVID. But actually, the work environment has made us even more vulnerable. COVID has made us more
vulnerable. We should be focusing on this more, not less.
KRISHNA: I think Julia, it's a mixed reaction. So why do -- why are there so many more cyberattacks? It's kind of the old adage, that's kind of where
the money is, meaning that's where the value lies in the value from the cyber infrastructure that a criminal or a thief can take out.
So if you look at it, I will tell you that financial institutions, insurance companies, telecom companies really have stepped up their game.
They really are understanding what to do, but it's kind of each one is doing their own. That's why I believe a collective effort led by government
would lead to a better answer.
That said, we see enough attacks that happen, I'm not going to name all the people who get attacked, but we know that the answer is not universal, even
though some industries have stepped up, not every industry has and we need to do that.
I mean, think about autonomous vehicles, think about drones, think about automated homes, think about remote healthcare, we really need to make sure
that we are well-protected against those the same way as we spend on military and police functions across the developed world.
CHATTERLEY: Yes, as we increase our data capabilities, we increase our vulnerabilities and we have to be thinking about this. Perfect. Think Big.
Arvind, have a great rest of day in the conference. Great to have you on the show.
Arvind Krishna there, the chairman and CEO of IBM. Thank you.
All right, more FIRST MOVE after this.
(COMMERCIAL BREAK)
[09:46:20]
CHATTERLEY: Welcome back to FIRST MOVE. In Colombia, opponents of the government are vowing to continue demonstrating despite talks with the
President.
For many of them, the big grievance is the crushing economic impact of COVID-19 and the way authorities have responded as Polo Sandoval reports.
(BEGIN VIDEOTAPE)
POLO SANDOVAL, CNN CORRESPONDENT (voice over): This is the release of decade's worth of repressed anger and dissent. For nearly two weeks now,
frustrated Colombians have been taking to the streets. Tension started rising April 28th over government tax hikes proposed to ease the strain of
the pandemic on the economy.
Colombian President Ivan Duque withdrew his plan days later, but a wave of anger was already sweeping across the nation, one too late to contain.
GERALDINE LOPEZ, PROTESTER: This tax reform was opportunity to loud our voices and say no more.
SANDOVAL (voice over): But for Geraldine Lopez and her fellow protesters packing into parks and some, blocking roads, the movement has evolved into
something else. Activists want to expose what they say is excessive force from Colombian Police directed at protesters, much of the city of Cali, the
heart of the movement.
LOPEZ: We really need the international community to see what is happening in Colombia.
SANDOVAL (voice over): One thing she wants the world to know about, the police shooting of protester, Marcelo Agredo on April 28th, the first day
of protest. Widely shared video shows a 17-year-old kick an officer on a motorcycle as he runs away, the officer shoots and kills the young man.
A senior member of Colombia's National Police tells CNN, this case is now with the hands of prosecutors.
The U.N. Secretary General calling on authorities to exercise restraint amid reports of human rights violations. At least 27 protesters have been
killed according to the government, but one human rights group reports as many as 47 dead, 39 of them by Security Forces.
JUAN PABLO RANDAZZO, PROTESTER: The way that they decided to take these things is to bring the police forces and the military forces against their
own people. That's why we are all here. We are not prepared to hear the next day that one of our friends, that one of our family, that one of our
brothers is the one who is getting killed.
SANDOVAL (voice over): Government officials maintain that leftist militants and illegal armed groups are behind some of the violence.
Meanwhile, Colombians are sinking deeper into poverty. Government statistics show that the poverty rate increased from 36 percent in 2019 to
42.5 in 2020.
The once bustling colonial tourist town of Barichara, Marlon Perlata was forced to go from business owner to waiting tables to support his family
waving down the few visitors who drive past his mostly empty tables.
Perlata tells me he's never seen his country in such a dismal state. He feels the pandemic only helped make the rich richer and the poor poorer due
to Colombia's economic inequality.
The husband and father of five gets emotional saying that he feels he may be a rich man when it comes to his health and his family, but financially,
he is at his worst.
The quiet streets of historic towns to the protester packed avenues in the nation's capital, there is hope among Colombians that things will get
better with a persistent pandemic in a violence-torn country, the only question is when.
Polo Sandoval, CNN, Bogota, Colombia.
(END VIDEOTAPE)
CHATTERLEY: You're watching FIRST MOVE, and coming up, paying for a car with canine crypto? Yes, we're talking Tesla. Don't go away.
(COMMERCIAL BREAK)
[09:51:55]
CHATTERLEY: How much is that Doge (doggy) in the window? A question many investors are asking after Elon Musk sent the cryptocurrency on a
rollercoaster ride over the past few days. Musk may have co-hosted U.S. show, "SNL - Saturday Night Live" with Miley Cyrus, but some might say he
was the 'Wrecking Ball" sending Dogecoin's price plunging after his appearance.
But now the pooch is picking up after Musk tweeted to ask if the world wants Tesla to accept Doge as a form of payment?
Paul La Monica is here. Paul, we're in a parallel universe. Our regular viewers, though, will know that you accurately predicted a buy the rumor
sell the fact wrecking ball move heading into "SNL." What do we make of this?
PAUL LA MONICA, CNN BUSINESS REPORTER: If you told me at the start of 2021 that we will be having multiple conversations about this, Julia, I would
have thought you were certified insane, but here we are barking at the moon, so to speak. You know, cue the Ozzy Osbourne.
But I think right now, what clearly is going on is Musk I think needs to do a little bit of damage control. I am surprised that Doge has fallen this
much. I mean, for any people in their right mind expecting him to go on "SNL" and then just wax rhapsodic for 90 minutes about all the virtues of
Dogecoin and push it to ever higher prices. That didn't happen. He made fun of it with his mom, he made fun of it as a fictitious character on the
"Weekend Update" segment.
So now maybe you do have this damage control. He is asking his Twitter followers, would they buy Tesla vehicles in Doge, and unsurprisingly, at
last check about 77 percent said yes, because I think you know most people who are following Musk are probably among the fans and not the troll.
CHATTERLEY: Yes. I mean, he called it a hustle at one point, didn't he? From Husky to hustle?
LA MONICA: Yes.
CHATTERLEY: As far as Tesla is concerned, though, there are some issues, perhaps in terms of demand in China. And you and I have also talked about
this, the risk, given the importance of China in terms of demand for Tesla, that if the tensions between the United States and China bite, particularly
in terms of Tesla's investments in China, that could be problematic for the stock price.
LA MONICA: Yes, I think there are some concerns about demand in China. That's why I think Tesla stock fell yesterday and is down premarket today
along with just the momentum stock selloff we've seen in general, it's not really about Doge.
But I think what is important to note is those Chinese sales for electric vehicles and auto sales in general that came out this morning, yes, sales
for Tesla fell pretty sharply March to April, so did it for rivals like NIO and Li Motors and some of the other companies in that the shares of
publicly traded Chinese electric vehicle stocks are all toppling along with Tesla.
But two things to note, Julia, sales are still up dramatically year-over- year, even if they slipped last month, and Tesla is also using that Chinese production to not just produce cars for the Chinese market, but also
actually exporting to Europe and demand in Europe is still extremely strong.
[09:55:03]
CHATTERLEY: Yes, important points to know. You also have to read the small print as well by the way if you're buying a Tesla with crypto, because if
you bought in crypto and then you get a refund, they reserve the right to pay you back in whatever form, so beware those steep drops. Just a little
warning on that, too.
LA MONICA: Hopefully, they are paying in Bitcoin and not Doge, but we'll see.
CHATTERLEY: For now. Paul La Monica, thank you for that.
All right, so from big tech to big cats, well, they've both got FAANGs, spelled with a double A and there is a leopard on the loose in one of
China's biggest cities. Yes, I mean it. Three of them escaped from a zoo near Hangzhou Safari Park over the mayday holiday.
Two was soon recaptured, this is one waking up after it was sedated, but a third is still missing and the search goes on. The zoo apologized for
taking a week to warn people about this. They say they didn't want to cause a panic. So, keep an eye out if you're in that area.
That's it for the show. If you've missed any of the interviews for today, they will be on my Twitter and Instagram pages. Search for @jchatterleyCNN.
For now, stay safe. "Connect the World" with Becky Anderson is next and I'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
