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Quest Means Business

Frigid Temps Raise Turnout Fears In First Vote Of '24 Race; Dangerous Wind Chills Hit Iowa On Caucus Day; Trump, Haley, DeSantis Make Final Pitches To Iowa Voters; Inflation Comes Into Focus At The World Economic Forum; US: Houthi Missile Struck Cargo Ship Monday; Iowa Republicans Voting In First-In-The-Nation Caucuses; WEF Warns Of Threat Posed By A.I.-Driven Misinformation; Nikki Haley Seems To Trim Donald Trump's Lead In Recent Iowa Poll. Aired 3-4p ET

Aired January 15, 2024 - 15:00   ET



RICHARD QUEST, CNN INTERNATIONAL HOST: No trading on Wall Street. It's Martin Luther King Day. It's a public holiday, so let's get straight to the

main events of the day.

The Iowa caucuses, they are just hours away, the first votes in the 2024 presidential election.

AI, we are in Davos where everything is about artificial intelligence. We asked the CEOs, is the world ready for AI? Live from WEF in Davos on

Monday, January the 15th. I'm Richard Quest with AI Alex, and together, we mean business.

Good evening and a very warm welcome. It's January. It's freezing and we're up a mountain. So on QUEST MEANS BUSINESS, it can only mean one thing, it

is time for Davos. And we even have -- hallelujah -- we even have snow.

We've done our annual pilgrimage high into these results. We're going to ask the leaders gathering here what worries them the most. There's a range

of issues -- AI election disruption, stalling economic growth. It's all to be discussed over the course of this hour.

And the timing could not be more appropriate. In the US stage of Iowa, voters are preparing to cast the first official formal votes, if you will,

of the 2024 election season, and they're doing it in a very unusual surroundings, the Iowa caucuses. Jim Sciutto is in Washington and knows all

about and will tell us what it means.

JIM SCIUTTO, CNN HOST: Well, Richard, I said the one thing that Iowa and Davos have in common is really, really cold weather, zero-degree temps

expect to go even well below that as we get closer. The first votes for the Republican presidential nomination will be cast in just hours.

Party members in Iowa will head to their local precinct and caucus for their preferred candidates. It's an interesting process. We'll talk about

it in a bit.

Former President Donald Trump is trying to secure what he hopes will be a blowout victory. His main rivals are former South Carolina Governor Nikki

Haley and Florida Governor Ron DeSantis.

Haley is seeing some momentum ahead of next week's primary in New Hampshire. DeSantis is really just trying to keep his campaign alive. He's

put a lot of resources into Iowa.

Caucus-goers will be forced to brave, as I said, life threatening cold. An arctic blast over the Midwest has sent temperatures across Iowa below zero

degrees Fahrenheit, we should note. By tonight, temperatures will range from negative two to negative 13 degrees -- even colder with the wind. The

negative 30s, again in Fahrenheit.

There are questions about how this might affect turnout, whether any specific candidate could benefit or be hurt by it. Trump is telling his

supporters to show up, literally, no matter what.


DONALD TRUMP, FORMER US PRESIDENT: If you're sick as a dog, you say (inaudible) going to make it. Even if you vote and then pass away, it's

worth it, remember?


SCIUTTO: Even if you vote and pass away said the former president. Jessica Dean is in Des Moines, Iowa.

And, Jessica, the campaigns are worried about this. We know, to some degree, the weather they've been making an extra effort now in their

pitches, but also resources like rides for voters to make sure they get to those caucuses tonight. What's the expectation? Do they expect a major


JESSICA DEAN, CNN CONGRESSIONAL CORRESPONDENT: Well, that's what the big X factor is in all of this, Jim, is that nobody knows for sure what the

impact will be. As one adviser to the DeSantis campaign said to me earlier today, is it geographical? Is it that its people in more rural parts of the

state where the roads may be (inaudible) is good? Does it impact age in terms of older voters maybe or less inclined to get out in this weather?

They just don't know, and they don't know the exact number of people in general that will be turning out. And all of that will play a role in what

we see tonight.

And, look, the Iowa caucuses are always about a ground game and organization because, just to remind everyone, what makes them different,

in part, is that it's not like a primary day where you go and drop in to vote whenever you want, check your ballot, and move on. You have to go to a

specific caucus site based on where you live. You have to meet there at a certain time and then proceed with what essentially is a community meeting.


So it does require some organization. That's where Ron DeSantis and his campaign really feel like they have a good organization in place, never

back down. That's the SuperPAC that's affiliated with him has poured millions and millions of dollars and many, many hours into the states, over

for 900,000 doors knocked, I'm told, over the last several months. So they feel like they have a lot of touchpoints. They also are offering rides to

get people to these caucus sites safely.

But the question remains, will that organization make a difference? The former president has much more of an organized campaign here on the ground

in Iowa than he did back in 2016. They feel like they're in a good position. And then you have Governor Nikki Haley, who's had, as you

mentioned, this momentum heading into this part of this primary, right, when people are starting to vote.

What has been interesting, though, in that Des Moines register, NBC News poll, which showed her in second, Jim, was an enthusiasm gap, though,

between her supporters and the supporters of the former president who were sky high, and even Ron DeSantis who were higher than Nikki Haley. So we're

going to see how this all plays out, again, with that big X factor being the weather.

SCIUTTO: Yes. And as you say, it's an unusual process there. You got to show up. You got to spend some time there in the caucuses as you make your

preferences known.

Jessica Dean in Des Moines, Iowa. Thanks so much. Of course, we don't have the votes yet. That's not going to be for a number of hours.

We do have polls and a closely watched poll out of Iowa shows Donald Trump polling well ahead of his competition. According to "The Des Moines

Register" newspaper there, 48% of likely caucus-goers say he is their first choice.

Haley polled second at 20%. That is more than last month. Ron DeSantis, close behind her, but back in third candidate -- third percent -- third

place. No other candidate polling above 10%.

Like I said, though, we're going to have votes tonight, and that's what we're going to be looking for. I want to bring in Republican strategist,

Doug Heye, and CNN Political Commentator Paul Begala, who was a chief strategist for the 1992 Clinton-Gore campaign.

Good to have you both on. I'm going to go to the Republican operative, Doug Heye first.

Doug, for folks watching at home, particularly those overseas, how much does Iowa matter? Because if you look back at the recent history, there are

a lot of folks who win the Iowa caucus, but don't go on to get the nomination .


SCIUTTO: . the Republican nomination. Ted Cruz won in 2016, beating Donald Trump. Of course, Donald Trump was the nominee. Is this key in this

election process?

You know, Iowa is a very different process as you laid out. Also, what happens with Iowa is different than what we typically see. Iowa is not

necessarily about who wins it, and I think it's pretty clear that Donald Trump is going to win it and win it handily.

But if the margins look exactly like you're polling that you showed earlier turn out to be, then what we'll see is this is a two-person race. Iowa is

about who emerges from Iowa. You can win Iowa and not become the nominee. That's certainly happens more often than not. But who emerges and goes on

to New Hampshire and other states is what Iowa is really about. It winnows that process down.

If the polling holds firm -- and again, it may not -- it means that there are two tickets out of Iowa, one for Donald Trump, one for Nikki Haley. If

Ron DeSantis comes in third place, his campaign is, if not just effectively over -- completely over -- Vivek is a word that we just stopped using. So I

think that's where were going to be looking at tonight is Donald Trump's going to win handily. Does he get over 50%? Who comes in second?

That tells us essentially if we think about Groundhog Day, will this campaign live for another six weeks or not?

SCIUTTO: Yes, it's a fair question. Doug Heye, thanks so much for joining us.

Paul Begala with us as well. And, Paul, when you speak to the political pundits, and we shouldn't always listen to what they say, but they do have

a lot of experience yourself included. They say Nikki Haley's path, though narrow, would look something like this coming in a decent strong second in

Iowa, a real strong finish in New Hampshire, possibly even winning. Then she goes back to her home state of South Carolina, makes the showing there.

Just reality check that scenario for us. Is that a very, very long shot? Is it plausible or is Donald Trump almost certainly the Republican nominee?

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: He's certainly the betting favorite. I would bet Trump over the field. He's in such a dominant

position in Iowa, which Doug's right, Iowa rarely actually picks the president. That's what the New Hampshire people always say. They say Iowa

picks corn, New Hampshire picks presidents.

And it -- but Doug's right. If she gets a second place, even if it's not that strong because the polling now has Trump up 28 points, no Republican

has ever won Iowa by more than 12 in a contested non-incumbent year. Twelve is the record. Trump is poised to blow that out of the water in Iowa.

But Haley is much closer in New Hampshire. It's a different electorate in New Hampshire. They're much more moderate; Iowa much more conservative,

much more dominated by evangelicals. New Hampshire has a lot more independents. Haley is well-positioned there.


There is a huge red flag, oh, in this wonderful poll for Trump, great poll for Trump. There's a red flag in there. If I worked for Trump, that would

keep me up at night.

The Iowa poll -- Ann Selzer does, it's a great poll -- 43% of Haley's voters in the Iowa caucus say they would vote for Biden against Trump. But

when you're losing half of 20%, I mean, that's 10% of Iowans if I will -- you know, I will -- it's a terrible problem for Trump is, I think, the

stuff that makes him almost unbeatable in the primary may make him almost unelectable .


BEGALA: . in the general election.

SCIUTTO: It's an interesting point, no question. As we look at this race as well in Iowa, in the last hour discussing with others, one made the point

that everything is national. Now, that we used to talk about the very specific circumstances of an Iowa or New Hampshire and what was necessary

to win an Iowa, right, go into all 99 counties, shaking hands in diners.

But in this age of highly factionalized national politics as it relates to both the Democratic and Republican Party, is that still true? I mean, is

Iowa unique or do we really just see folks battling this out in the national media and see it play out -- you know, they are less unique race-


BEGALA: I think it still matters regionally for the different rules that I talked about. Iowa, it's just the demography of these states.

The last time the Republicans had a contested primary, 2016, Mr. Trump narrowly lost Iowa. It lost.


BEGALA: Of course, he said it was rigged. It wasn't. Ted Cruz beat him fair and square. Narrowly -- though very narrowly -- Trump came back seven,

eight days later to New Hampshire and won by 20. He crushed Ted Cruz there. So New Hampshire kind of likes to correct for Iowa.

Here's the interesting thing. I do think Trump looks like he's heading for crushing victory in Iowa. Will New Hampshire then, where he won the last

time by 20, will they flip again and defeat him there?

I do say -- I want to say that one thing about the weather. I worked in Iowa. You're right, I worked for President Gephardt, who went to all 99

counties. And we won Iowa .


BEGALA: . years ago and it didn't do us good.

But it's dangerous. It really is cold. And I know Mr. Trump was joking, but people ought not risk their health, safety, lives for this. And nobody

believes in democracy more than I do. And I want everybody to participate, but it is dangerous and frightening whether it's that bad. And I really

don't think Mr. Trump should have been joking about that.

SCIUTTO: To your point, you raised here's another candidate who win in Iowa, did not go on to get the nomination. Mike Huckabee is in that

category as well, although there are ones who really made their mark. Barack Obama, of course, won, Iowa by very little bit, but then people

started to look and say, hey, wait a second, maybe Hillary Clinton is not automatic.

Just raising that point, historical precedent, we'll see if it's telling it all in this race.

BEGALA: It's true.

SCIUTTO: Thanks so much, Paul Begala. Good to have you on

Of course, we have our Richard Quest back in Davos. So, Richard, we don't have actual votes yet. We will have those tonight. You and I both like to

wait for the results before we pronounce anything, but a lot of the signals now do point to a strong finish for the former president.

QUEST: It's a -- the caucus, I love the caucus. The whole idea, them all getting together in a room and then moving round from one group to the


By the way, Jim have you got snow there? Is there snow in Washington?

SCIUTTO: We actually have snow in Washington for the first time in like 700 days. It's no Davos here, but I will say it's nice to see some of the snow.

QUEST: And ill bet that the city is not coping with it anywhere (inaudible) .

SCIUTTO: Oh, it's going to shut down.

QUEST: . (inaudible). We'll be back, you know. Jim Sciutto in Washington.

SCIUTTO: Thanks.

QUEST: We will be back with you very shortly.

What are the key issues that Donald Trump has been focusing on is how to join the voters with inflation. It's a huge topic of conversation here at

Davos. And one of which the vice chair of BlackRock says, when it comes to inflation, got to be careful. As the vice chair says, it could be sticking



PHILIPP HILDEBRAND, VICE CHAIR OF BLACKROCK: I think what's going to happen as inflation isn't going to disappear as much as people think right now.

So, you know, we have falling inflation that's mostly goods inflation. Wages/service inflation is still high.

I think what were going to find is essential banks will not be able to kind of completely take the eyes of the ball. And so those are the two pieces

that .

QUEST: You just sort of said the world is flat in a sense of are they going to push inflation all the way down to target?

HILDEBRAND: I think they're going to find that that's going to be a little harder than the market thinks right now. So we're not going to see as much

of a kind of interest rate cuts coming through as many now hope as the sort of panacea to all problems.


We had decades. Whenever there was a problem, central banks could cut rates. I think that's going to be much more difficult in this new world.

QUEST: It comes really back to this idea of the inflation cutting credential, the integrity which, to some extent, was lost, letting

inflation get so out of the bag. Pushing it below down to 2%, is that important?

HILDEBRAND: Yes, yes, because if you lose that anchor, especially -- remember, we're in a world where debt levels are very high .

QUEST: (Inaudible) 3% .

HILDEBRAND: . ah, where, you know, it's a slippery slope.

QUEST: . two, three.

HILDEBRAND: Once you start, why not four? So I think you have to have that anchor particularly. Remember, we are coming out of these crises with huge

debt levels. So I mean, the way the government spending has increased, if you look at the US in the last year, tremendous increase in fiscal

spending. So we need an anchor. That anchor has to be price stability.

QUEST: The Iowa caucuses, today, Christina Lagarde said that Donald Trump reelected would pose a threat to Europe because of difference of standards

and values. Do you agree?

HILDEBRAND: Yes, but I would say it may also be the wakeup call that Europe needs. And I think Christine would probably agree with that. But, you know,

in a sense, it's perhaps the choke that the kind of wakes up Europe to say we have to find a way to become more sovereign, in a sense, and less

dependent whether it's on China or indeed on the United States.

So I think this is -- it can be both. It is a threat that is a -- something that worries people to great extent, but it can also be perhaps a wake-up



QUEST: You'll hear more from Philipp Hildebrand in just a moment or three.

When it comes to winter sports, we always like to find an analogy, something that can help us understand what's going on in the global

economy. While the crowd here at Davos is facing a slippery landscape, and so what better than curling -- something I've never understood. Now, I'm

just not very good at it.


QUEST: In the Red Sea, and event that everybody had feared, a Houthi missile hit a US-owned cargo ship in the Red Sea earlier today. The vessel

was struck roughly 100 miles or so off the coast of Yemen. The vessel sustained minor damage. There was a fire in the hole, and it was able to

continue on its way.


It follows, of course, the US and the UK launching airstrikes on Houthi targets last week. Houthi officials promised to retaliate, saying any

American or British ship would be a legitimate target.

Our Pentagon correspondent, Oren Liebermann, he's with me now. To an extent, I mean, the fact that they were able to hit the ship and that it

was at this moment after the US/UK attacks, but retaliation as such.

OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: Part of the retaliation probably -- and this, of course, is what the US is waiting to see. The

Pentagon and the White House have made clear that, yes, they're expecting the Houthis to retaliate in a bigger, broader, larger way as they have very

publicly promised. The question is, what does that look like?

This attack on a US-owned and operated ship appears to be the first time the Houthis have successfully hit a US-owned and operated ship since they

started launching attacks in mid-November, but they have more capability. The US/UK strikes didn't try to destroy the Houthis' military. It tried to

limit their ability to target international shipping lanes as they have in this sort of massive barrages, like we saw earlier last week.

Did they do that? Well, we're going to wait to see here. The US feels their strikes were affected. But clearly as were seeing now, the Houthis still

have the ability to launch. This wasn't the only launch we have seen since the US led strikes. So we'll need to see how this plays out, but it's

difficult to see a scenario in which this comes down in the near future. Richard, we're probably going to see more attacks potentially from both

sides here.

QUEST: We can leave it to others to postulate whether the US/UK has degraded the Houthis' abilities. From a business and economic standpoint,

this has reinforced the danger for shipping and, therefore, the increased likelihood for the foreseeable future that ships will have to take the

longer route.

The US, UK .

LIEBERMANN: Absolutely.

QUEST: . and all the others simply cannot defend the commercial shipping fleet.

LIEBERMANN: Not entirely, and that's the issue here. This started with what they call the defensive operation, Operation Prosperity Guardian, to

safeguard the ships in the Red Sea. And then when the attack on the ship didn't stop, it went to the offensive strikes by the US and the UK backed

by some other countries here.

The goal is to get the Red Sea and the Gulf of Aden back to situation where ships and shipping companies are comfortable using them again. But given

the levels of activity we've seen here over the course of the past 72, 96 hours, that's not happening anytime soon. And that means some of the

world's largest shipping companies are still going to go the very long way around Africa.

That has effects on inflation. That has effects on prices until shipping can get back to normal. And that, too, not happening here.

So, Richard, you're very right, this has real-world effects that consumers all over the world are going to feel sooner rather than later.

QUEST: Oren Liebermann, at the Pentagon. Grateful. Thank you, sir.

This year's Davos, the theme that UEFA has chosen is rebuilding trust. Of course, it comes in the midst of the highest global tensions we've seen in


It doesn't matter where you look. Everybody says it here. And so, back to the vice chair of BlackRock and what he thinks the top issue at Davos.


HILDEBRAND: Oh, I think it's geopolitics. It's, you know, the kind of -- it's the fracturing of the global economy into competing blocs into -- we

have wars right not far from here. So I think the one thing we could change, we can change demographics. Those are some of the things week

there's not much we can do about it, but we can change -- at least we could change some of the geopolitical hotspots.

QUEST: Rishi Sunak said last week that this was the most unstable time he could remember in decades. Would you agree?

HILDEBRAND: Probably. Certainly, it is a time that is fundamentally different than the last 30, 40 years. And that, of course, creates


QUEST: In what -- because of what?

HILDEBRAND: I think the biggest reason is that we were able -- through to the integration of China and all the cooperation technology trade to keep

expanding the productive capacity of the global economy, that left enormous room for growth without inflation. Now we have constraints on the

production capacity of the global economy because of geopolitics, because of aging, because the fiscal limits. And that means everything is going to

be more difficult.

So the way I explain it in the most simple way that things are just going to be more difficult and, you know, that's why I think the things that we

could improve, like the geopolitical problems would make a huge difference if we can make progress there. But I would agree with the prime minister

that this is a very challenging time.

I had a chance to speak to Henry Kissinger just a few months before he passed away, and he also made the observation that this was the most

unstable period that he remembers.


QUEST: Choose your color.

HILDEBRAND: I've got to go with blue.

QUEST: Now, on the scale of AI, at the moment, where -- how prepared are we? Are we dangerously unprepared or have we nailed it? Well, put your

cross on the board.

HILDEBRAND: I would definitely put us in the area of dangerously unprepared, certainly, as a society.

QUEST: Which one? Is it because we can't get global cooperation, the ethical question or the inequality?

HILDEBRAND: Well, the -- I think in the global cooperation there are actually some opportunities.

QUEST: Right.

HILDEBRAND: This is a bit like climate. It's a huge challenge, and so there may be opportunities. The part I'm most worried about, frankly, is this.


QUEST: So Philipp Hildebrand putting himself on the board, and there you see ready -- how are we ready for AI? And over the next few days, of

course, we will be getting -- filling all this up dangerously unprepared to nail it. And then they can either take one that we've already established

with or they can -- or any one of our guests can go and do choose one of their own. You'll see how it'll be fascinating to see how this develops

over the course of the week.

Now, as I thought (inaudible) face AI and global conflicts and the political shifts more, their target in achieving a soft landing is

increasingly narrow. Here in Davos, they must avoid slipping. It could lead to difficult knock-on effects for their countries. If you think about how

difficult it is just to navigate this place, you get an idea of the sort of challenges.

So if you take snow, and you take ice, and you try and take the global economy, well, put them all together and you see that Davos Curling Club.


QUEST (voice over): It is a scene of alpine beauty, the landscapes of winter at Davos, the peaks, the vistas, the snow. The World Economic

Forum's theme this year, "Rebuilding Trust," where it aims to hit the target. That's also the philosophy of their Davos Curling Club.

UNIDENTIFIED MALE: So when does skip sets here, you make it through like that.

QUEST (voice over): So that's why it's called curling because you curl, curl.


QUEST (on camera): Think of these stones as being economy. There is governments, prime ministers, presidents, finance ministers. They set their

course and send it on its way.

QUEST (voice over): So many factors threatened to sweep the economy (inaudible). For starters, interest rates. Central bankers have hiked them

to the point where economies have slowed down to kill inflation. And now they're trying to hit that target 2% without knocking themselves on.

Global growth is expected to slow this year. I know it's not going to spiral down.


QUEST (on camera): I did nothing, I did nothing because I wasn't able to swift enough out of the way until the economy came to a stop.

QUEST (voice over): It is also the year of elections, political candidates charting their collision course to victory, hoping to knock rivals off the



QUEST (voice over): AI is a curling stone, heavy and once set three may be difficult to control. And even if we all do the right things, well,

accidents can still happen.

QUEST (on camera): It's unbelievable. The world of curling can teach us much about today's global economy. Having raised interest rates and then

still trying to keep things going without coming to a complete stop.

And then when all is said and done in a competitive environment, you want to knock your competitors to one side, but you don't want to completely

ruin the game.


QUEST: I don't think I have a career ahead of me as a curler in any shape or form and Lumbago won't take it.

The race for the White House, it officially kicks off today. It is in Iowa and the unique American tradition of the caucus. I'll explain just how it

works after the break. It's quaint. It's delightful. Is it fit for purpose?



SCIUTTO: We're turning now to Iowa where residents are preparing to cast the first votes in this year's presidential race here. The Iowa caucuses

are the earliest look at how actual voters see the field. And the polling suggests that this could be a two candidate race by this time next week,

front runner Donald Trump and emerging contender Nikki Haley.

CNN's Dana Bash spoke to Haley, the former South Carolina governor earlier, asked her about drawing more focus away from the former President Trump



DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Donald Trump, among other things, says that you're not tough enough to be president. How do you

interpret that?

HALEY: I find it comical, because when I was at the U.N., he always used to tell people, don't mess with her. She's tough.

And look, I was tough as a governor. You know, I took on -- you know, whether it was like passing the toughest illegal immigration law in the

country, whether it was taking on my own legislature when I made them start to record their votes on the record, whether it was at the U.N. with

Russia, China, and Iran. Everybody that's ever worked for me or worked with me, no one ever questions my toughness.

He's saying this because now he knows he's in trouble. Now he knows this is becoming a two-person race. So, I know that he knows the truth. It doesn't

bother me at all.


SCIUTTO: What we should note that Iowa votes differently than most states in this country, Republicans are holding what are called caucuses today at

more than 1600 different sites around the state. Party members will gather in person and cast secret ballots after representatives of each campaign

make a pitch for their candidates,


"CNN NEWS CENTRAL" anchor John Berman. He's here with me to explain and there's no showing up for a few minutes and just pulling a lever, you got

to go there. I mean, once you're in the room, you got to literally vote with your feet.

JOHN BERMAN, CNN HOST: It's a commitment. It's especially a commitment when the temperatures are like -15 to -20 degrees.

To be clear, no votes have been cast in the Iowa caucuses yet, even though it is caucus day. At 7:00 p.m. central time tonight, Republican caucus

goers will show up to one of their precincts. As you said, there are well over a thousand, some of them will be in the same buildings. But they show

up by seven central, which is 8:00 Eastern time.

Once they get there, inside that room, a representative from each campaign gives a speech that could either be a campaign official, it could be a

campaign family member if you're one of the huge caucus sites, or it could be someone from the local community, and they can actually have a bigger

influence than anyone, Jim because there's someone you know, if you hear from a neighbor, to vote for Nikki Haley, or Donald Trump or Ron DeSantis,

maybe you'll listen to them.

After they give that speech, then, the balloting, you write down your choice, usually just on a paper ballot that you stuff in a box. I mean,

this doesn't have to be high tech at the caucus site, because there are so many of them, and a lot of them are quite small.

So, you write down the name, it goes in a box, then the votes are counted.

Once they're counted each caucus site, then they are reported to the Central State headquarters. A lot of the time, we have CNN reporters each

of those locations, we get a sense from some of the biggest caucus sites who might be ahead in each place.

The votes are tabulated. Then we get an idea of who's ahead on caucus night, it gives us our first sort of straw poll of the situation.

This is all ultimately about selecting delegates, though, Jim, and this is the first step, the very first step in selecting delegates for the

Republican National Convention much later this year.

What happens tonight is delegates are picked from each precinct site, then they go to a county convention, then they go to the state convention. And

then those delegates are sent to the national convention. But this is the first step in apportioning those delegates.

And I should note one other thing because some people say, well, what about the caucuses where there's a threshold where people move around the room if

you don't get a certain point? That was only in the Democratic caucuses. That was never a Republican thing. That was a democratic thing. Republicans

don't do that. It's a little bit easier to follow the process among Republicans, Jim.

SCIUTTO: And we should note for the overall nomination race here, the Republican Party changed the rules in recent years. So, there's a winner

take all situation, you don't kind of divvy it up between first, second, third, based on how many actual votes you get.

BERMAN: A lot of the states over the course of the year, Jim, they've made it so whoever wins the state gets the lion's share of the delegates so that

they don't have a delegate battle heading into the Convention, which again, is something we've seen on the Democratic side, more than on the Republican

side of late.

SCIUTTO: We'll be following. Thanks so much, John Berman in New York.

NERMAN: Thank you.

SCIUTTO: The risk factors of artificial intelligence, A.I. they are front of mind at this year's World Economic Forum in Davos. Richard Quest

conversation with founder of Klaus Schwab. That's next.



QUEST: The IMF is now warning that artificial intelligence A.I. could affect nearly 40 percent of jobs worldwide. And in doing so, worse and

overall inequality in the labor market.

I sat down with Klaus Schwab, the founder of WEF, arguably the reason why we're all there. He warns that A.I. driven misinformation is another huge



KLAUS SCHWAB, FOUNDER, WEF: If you take two years out look, fake news is sick, biggest risk, which we face at the moment, because it can have

enormous consequences for elections, it can change the context inside which we are living in the wrong way.

QUEST: If you accept that the genie is out of the bottle, and we can't put A.I. back in, or we can't re -- how do we manage it?

SCHWAB: We can maybe not put it in again. But we can capture it somewhere, it has come out of the bottle. And now we have to make sure that it goes

into the right direction.

And so that means we have to develop guardrails for artificial intelligence.

QUEST: Why are you confident that we will?

SCHWAB: I'm not so confident that we have at least to undertake the necessary steps and so the key step is bringing governments and business

together. And because only through cooperation of those two main pillars of society, integrating also civil society, you can create the kind of


QUEST: Are you worried about the US election in November?

SCHWAB: Of course, I'm worried exactly for the effects that it may be very much influenced by fake news.

QUEST: Final thought on the list for you, which is the biggest risk we face in the next 2024, the next year to do?

SCHWAB: I think the biggest risk we face is that we lose hope. And that we lose trust, trust into our institutions and particularly trust in our

capability to shape a better future.

We have become too much pessimists. Look, human kind was driven so what's a paradigm, the narrative to take care of next generations, to take care of

the neighbors. And we have lost this capability to a certain extent.

QUEST: How do we get that back?

SCHWAB: Look, the world is also full of opportunities and the world what's happening is not happening. We are the cause of what's happening so we can

construct a world of tomorrow.


QUEST: That is Mr. Schwab, with me is with Edelman, every year this time we talk about the Trust Barometer across government business economics. And we

know from what Klaus was saying that trust is high -- in very short supply.

But let's go through the Edelman Trust Barometer, shows that most people don't trust their leaders to manage innovations like A.I. effectively.

Nearly 60 percent of the people in more than two dozen countries say their government regulators don't have the competence to do it. And innovations

are mismanaged than well managed.

And yet, if you go up to the top of the promenade, A.I. (INAUDIBLE) there's an orgy of A.I. is going to get up there. There is just A.I. everywhere,

every shop, every corner. The future is A.I.


RICHARD EDELMAN, CEO, EDELMAN: Innovation is the great promise for business. The problem is people don't believe it's being well managed.

By two to one across all the countries we've studied, across age groups, cross gender, cross income groups. It's a universal concern, which is we

don't think that regulators are keeping up. We don't think that people are taking sufficient concern about employment impacts.

So, they want to be sure that this is going to be in their favor before the --

QUEST: Right. They're right. You had the IMF report this morning. But up there, everybody's talking about rely on for a busters. We're not, we can

do better. It's a -- it's like -- it's a disconnect.

We are about to make the same mistake that we made with the Internet and with the digitization.

EDELMAN: The opportunity for business is clear. It's the most trusted institution in the world, it needs to do this right. It needs to accept

good government regulation, it needs to be sure about retraining. And it needs to be sure that people understand what we're talking about. We've got

to not repeat the mistake of the pandemic, when we lost trust in science, and basically went back to, you know, trusting people next to us. We've got

to have a system that works for everybody.

QUEST: But they write to have this cynicism about it. Because business, they're not just looking at it to cut cost. It's not as -- it's just

ruthless. But there will be a white collar loss of jobs or impact that we have not seen before.

EDELMAN: This is correct. But we should acknowledge that there's going to necessarily be a change, we should improve our community colleges, we

should be sure that we're putting a campaign together to educate people about this is going to be a measured transition, this is not going to be

done suddenly in a jerk. We're going to come to a place where for example, we can prescribe medicines that we know are going to solve people's


QUEST: If in the past, we know that government has always been way down the list in terms of trust, is there any indication that government -- the

position of governments is improving?

EDELMAN: What we see is there's high trust in government in the developing markets where the economies have performed well, there's low trust in the

developed markets. Government versus business, it's a 50 points Delta on competence.

QUEST: What does that mean?

EDELMAN: It just means that people think business gets things done, the government talks and is stymied. And that's why so much reliance on

business, on diversity and inclusion, sustainability, geopolitics, and now it's going to be on innovation.

QUEST: U.S. elections. Tonight, the Iowa caucus. Christine Lagarde says that Donald Trump is a threat to the values of Europe because of the

difference in values.

And obviously, some of your employees will vote one way and others will vote the other. But how do you see tonight?

EDELMAN: Innovation is on the ballot, Richard, it's an interesting --

QUEST: What do you mean?

EDELMAN: It means that we have 50 elections around the world. The U.S. is one example where people are trying to make an assessment of how much

government I want, what kind of regulation I want, what kind of future I want. Do I want a more national focus? Or do I want a global focus?

QUEST: But if Donald Trump becomes the nominee and then subsequently succeed? And there is a very polarizing effect, how does -- how does the

global economy like manage that? Or have I just been too far to the future?

EDELMAN: Look, brand America has been hurt over the last 10 years. So, you look at Southeast Asia, for example. China's trust is higher than the

United States. That is a major shift in the period of time.

But the U.S. has a lot of strengths. The U.S. is ahead in technology, in terms of oil and gas. We have a fantastic energy portfolio. So we have a

real opportunity.

QUEST: Choose your color, Sir.

EDELMAN: I pick Edelman, blue.

QUEST: Blue, I've heard that as being every corporate blue. Edelman blue, matches your shirt.

EDELMAN: Absolutely.

QUEST: All right, join me over here. And are we ready for A.I.? Are we as a society, are we dangerously unprepared, or have we nailed it?

And then circle, which of these you like or go on a frolic of your own?

EDELMAN: Well, I think we're underprepared. And I think inequality is the key issue.

QUEST: Inequality?

EDELMAN: Yes, because the perception of A.I., for example, by the person in the low quartile is totally different than the person in the upper

quartile. And the perception that too much of the innovations in the last decade had been benefiting the rich. So we've got to make sure that the

average Joe, make sure that he gets what he needs.

QUEST: Thank you very much for joining us. I appreciate it.

EDELMAN: Thank you.

QUEST: Now, as we continue tonight, countdown to the Iowa caucuses continues. Jim Trudeau and I will discuss the make or break moment for

Republican candidates. It's QUEST MEANS BUSINESS tonight here in Davos.



QUEST: Well, welcome back to QUEST MEANS BUSINESS. We are only hours away from the Republican caucuses in Iowa, which are the -- if you will, the

first formal votes of the campaign, the former President Donald Trump has consistently held the commanding lead in the state. Today's race is more

about who will end up with second place. That's what Florida Governor Ron DeSantis and the former U.N. Ambassador Nikki Haley are aiming for.

Hoping to become the party's best alternative. Jim Sciutto is with me.

The caucus -- the whole thing of caucusing is just delightfully quaint. And I've listened to you several times over the last couple hours, that

basically Iowa whether it's a predictor or not, it's just takes on a disproportionate importance.

SCIUTTO: It does. Listen, it's the first time we're going to have actual votes, right? We see a lot of polls, now we're going to have people

actually choosing their preference for the Republican nominee.

And another fact here is that Donald Trump has a big lead by every measure, external polling, internal polling, that however, Richard Quest, as you

know, from having covered a few elections yourself, is not necessarily definitive, right? If you look at several Republican winners of the Iowa

caucuses in recent years, they go by the name Mike Huckabee, Rick Santorum, Ted Cruz, none of whom went on to be the Republican nominee, there can be

surprises, Iowa followed by New Hampshire tends to be a very different voting base there.

And you have Nikki Haley, who is granted playing for second in Iowa, but has some real momentum going into New Hampshire. So, we have to hold out

the possibility that whatever we see tonight in Iowa is not the end of this race.

QUEST: It's not the end, and it'll go on and on. But, OK, Jim, the reality and I hate to say this, is that Donald Trump will be the nominee, and

you're going to tell me that's not necessarily the case.

SCIUTTO: Listen, the betting markets are certainly there. I speak to Republican and Democratic pundits, both current and former folks who've

worked on both Democratic and Republican campaigns, and they almost unanimously say he is most likely to be the nominee.


But we don't have to look far in political history in this country to see that surprises do happen. I think we have to hold out the possibility for

that. But yes, listen, the smart money is on Trump being the nominee and that the general election really begins or arguably already has begun

between a Trump and Biden, the most likely Democratic nominee.

QUEST: Tomorrow together, we'll be here. And you will take me through the results. And you will help us understand exactly what it means, Jim.

SCIUTTO: And I hope you'll give me a curling lesson at some point because I've never done curling, I've seen you curl but I've never curl.

QUEST: If I'm giving you lessons, then we're both in trouble.

Thank you, Tim Sciutto joining us. There's a bit more of a curling. Now we'll have more of our special coverage of the Republican caucuses. It

starts only minutes from now 4:00 Eastern time. 9:00 p.m. in London, 10:00 here in Davos. We'll take a profitable moment after the break QUEST MEANS



QUEST: Tonight's profitable moment. Davos and the people who come here aim to do good. But then there's a vast panoply of people who come here to ride

the latest train, whatever it might be.

And we saw Bitcoin, we saw crypto, we've seen just about everything. Now, of course, it is -- well, it is A.I. And there's an orgy of A.I. as I like

to put it up on the promenade. Everybody's got an A.I. story. It's this story. It's that story. It's A.I. is the future. It's the A.I. is got where

we're going in the future, the robustness, the reliance, the whole lot.

But the reality is the disconnect between what's going on out there. And what we've been talking about tonight, which is the potential for job

losses, 40 percent of employment will be affected, says the IMF. That's the reality.

And if the people who come here to Davos don't understand why there's a lack of trust, why people are so skeptical, cynical and downright wanted.

It's because those up there don't seem to understand what most people are concerned about. And that's what we'll be talking about this week.


And that's QUEST MEANS BUSINESS for this Monday night. I'm Richard Quest in Davos. Whatever you're up to in the hours ahead, I hope it's profitable.

I'll see you tomorrow.