Return to Transcripts main page
Quest Means Business
Seven Families of Tumbler Ridge Victims Sue OpenAI; Amazon, Alphabet, Meta and Microsoft Report Earnings; Saudi Arabia Pulls Funding from LIV Golf; Jerome Powell's Eventful Eight Years as Fed Chair. Powell Says He will Remain on Fed's Board of Governors; Senate Committee Advances Warsh's Nomination as Federal Reserve Board Chair; Croatia and Bosnia- Herzegovina Sign Gas Pipeline Deal. Aired 4:00p-5p ET
Aired April 29, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:32]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": There's the closing bell, and a one and a two and a one, two, three, four. The gavel is
gaveled. Trading is over and as you can see, the market has pretty much been where it has been throughout the course of the session. It has been a
busy sort of day.
Those are the headlines and now to the main stories that we are following for you.
Jerome Powell stays on at the U.S. Federal Reserve.
An OpenAI lawsuit that we will be following and giving you the details of what has been happening.
And a day of tech earnings, the Big Four. We will have the details who has done what and why it matters.
It is all on tonight's QUEST MEANS BUSINESS. I am Richard Quest in New York, and this is QUEST MEANS BUSINESS for Wednesday, April the 29th.
Good evening.
We begin tonight. It is not quite the end of the Jerome Powell era at the Fed. Jerome Powell just wrapped up his last news conference as the bank's
chairman and he told reporters he is not going to step down from its Board of Governors just yet.
He is entitled to stay on for the rest of his term. The Chair said President Trump's attempts to undermine the Fed's independence led him to
postpone his retirement.
(BEGIN VIDEO CLIP)
JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: My concern is really about the series of legal attacks on the Fed, which threaten our ability to
conduct monetary policy without considering political factors, and I want to note here, this has nothing whatever to do with verbal criticism by
elected officials.
I've never suggested that such verbal criticism is a problem, and neither has anyone else here. But these legal actions by the administration are
unprecedented in our 113-year history, and there are ongoing threats of additional such actions.
I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to
conduct monetary policy without taking into consideration political factors.
(END VIDEO CLIP)
QUEST: So Mr. Powell's term ends as chair on May the 15th. By then, highly likely that Kevin Warsh will replace him and may even be in position by
then. For now, the Fed held interest rates steady as expected, with the Committee highlighting the uncertainty caused by the war in the Middle
East.
Matt Egan is at the Fed.
Weve got several aspects to do it. Let's do -- well, you start where you think is the most interesting, either the policy decision today or his
decision to stay on.
MATT EGAN, CNN SENIOR REPORTER: Well, Richard, the policy decision was relatively ho-hum, right. No change in rates. That's exactly what we
expected.
But the decision by Jerome Powell to stick around here, I mean that is a historic decision. He could have said that he was leaving, riding off into
the sunset after eight consequential years at the Fed, but he is not doing that. Instead, he is signaling that, yes, he will become the first Fed
Chair since 1948 to remain at the Fed in a lesser role on the Board of Governors.
Now, this is all about, of course, Fed independence. The fact that Powell says he is staying, it shows that he views the actions of the Trump
administration as a clear and present danger to Fed independence, which is clearly something that Powell cares about deeply.
Now, during the press conference, I asked Powell why? Why does this matter? Why should the public care about something that kind of sounds wonky Fed
independence? And what would happen if the Supreme Court rules against Lisa Cook and allows the President to fire her from the Fed? Take a listen to
his response.
(BEGIN VIDEO CLIP)
POWELL: Elected politicians are always running for election, and they'll always want low rates, and that will lead to inflation over time.
This isn't bipartisan. This is nonpartisan.
We'd have no credibility. Markets would lose faith in us and our ability to control inflation and having any respect would be, you know, it would be
gone.
(END VIDEO CLIP)
EGAN: Now, this shows how massive the stakes are in the minds of Powell and many economists and Fed watchers and former Fed officials that I talked to,
they believe that Fed independence is absolutely crucial. And that, Richard, is why Powell isn't going anywhere.
[16:05:01]
QUEST: Okay. But I don't understand it, Matt, how does him staying on as Governor after his term ends? I heard the sort that you've just played the
sound. I heard the earlier bit where he talked about it being battered left, right and center.
But how does him staying on as governor assist that matter?
EGAN: Well, it gives Powell a chance to see how the Fed under Kevin Warsh will be run, right? It gives him the ability to make sure that decisions
continue to be made based on the economic data, not the political calendar.
It also sends a very loud statement about how Powell won't be bullied. It could be a way to also signal to some other colleagues that may be thinking
about leaving, that maybe they should stick around as well and it does have the effect of denying President Trump the ability to appoint another
official to the board of governors.
If Powell leaves, then President Trump will be able to have a majority of appointees at the Fed. Now, it is debatable the consequences of that
majority, but clearly that is another outcome of this decision -- Richard.
QUEST: I am grateful. Matt Egan, who is in Washington. Thank you.
Now, we've been talking about how indeed -- you might want to know. Let me tell you, who was the last Chair who stayed on afterwards.
You've got to go back to 1948, when Marriner Eccles stayed on as Governor after his term ended, and he stayed until 1951 and again in that occasion,
it was a battle over Fed independence with the Treasury interference, which ultimately resulted in the two sides coming to a deal.
Kevin Warsh has cleared the major hurdle in the confirmation process. The Senate Banking Committee voted along party lines to advance his nomination
as Fed Chair. That set the stage for a full Senate vote. He is expected to prevail. I would be very surprised if he didn't make it. There have been
some bumps in the road.
Republican, Thom Tillis previously said he would block Walsh's nomination until the Justice Department dropped its investigation into Powell and now,
that has happened.
Loretta Meister is the former President of the Cleveland Fed. Let's do this bit by bit, if we may.
Are you -- I am guessing that you're not surprised that he is staying on as governor, bearing in mind the wider position, but the same question to you
as I asked Matt Egan, how does him staying on as governor help the situation?
LORETTA MEISTER, FORMER PRESIDENT OF THE CLEVELAND FEDERAL RESERVE: Well, I think he made a point of saying that he really wanted to see the
transition. And, you know, he is worried about the independence of the institution. He does see it at risk. And I think, you know, in weighing the
pros and cons of staying, I think one of the cons was, oh, it will be looking at like there are two Chairs and he made it clear he has no
intention of that.
You know, the court case was dropped by DOJ, but dropped with a caveat that they could resume it at any time if justified. They shifted it over to the
Fed I.G., which ironically, Chair Powell had already asked the I.G. to investigate. So that investigation is already going on.
So I can imagine if that comes back and as I expect it will finds no grounds for a criminal proceeding, the DOJ can then say, okay, it is done
and that will be another step towards giving reassurance that there won't be another criminal case.
So again, I think there are some more steps along the way here and that's why I don't -- I don't really perceive that he has any intention of staying
the full two years that he could stay. I think it is just for a time to make sure that these proceedings get really resolved in a transparent and
fully resolved way.
QUEST: So now let's look at this decision today. The actual decision to remain and to hold rates, that was not a surprise, but we are now getting a
disagreement and quite a strong disagreement on the wording used in the direction and the guidance to be used with a preference now to move away
from this idea. I mean, there was a strong -- there was a forceful minority for wanting wording that moves away from the idea that the next move will
be a cut.
MEISTER: Agreed, and it sounds like even amongst the non-voters, there was a group that would have preferred that they go to that more even balance
between cuts and increases as being a possible next move. So I think that just reflects what's going on in the economy.
We've seen a lot of data that suggests that the real side of the economy, growth and employment is actually holding up remarkably well given the
pressures on the economy from the war in the Middle East.
[16:10:10]
And we have an inflation problem, we know that. We've seen that in the data, right? We experience it in life. You go to the gas station and you
have to higher prices. We are seeing it in airfare.
So the real focus of the Committee is rightfully on the inflation part of the mandate at this point, and I think there was a growing constituency
that said, well, our language in the statement has been used in the past to signal that the next move is likely to be a cut, and we don't feel that
that necessarily is where we are today.
So I think there is a growing group that really wants to move that. I think the other thing that it shows is that I think Kevin Warsh is correct, in
that they need to really improve communication, because the average person reading that statement wouldn't have got that that necessarily is a bias
towards a next rate cut.
You know, I think the average person reading would say, oh, it looks evenly balanced. So again, you know, they're using code words to signal rather
than speaking what they really see and I think that's a problem.
QUEST: Look, the nature of the job is going to be uncertain in the sense that you can't be definitive about what you're going to do. You've got to
be data dependent.
The moment you're data dependent, everybody is reading the data to read what they want into it. I am not suggesting we go back to Alan Greenspan's
Greenspan speak where or Fed speak where we had no idea, in a sense, the obscure was considered to be the majesty of the process. But there has to
be a balance or maybe there isn't. Maybe we are destined and doomed for this.
MEISTER: No, we are not doomed. We are not destined or doomed.
Look, the committee could do a better job, in my view, of explaining how they are reading the data. Tell us what they think the data is telling us,
as you know, the committee view and tell us what that means for where the stance of policy is likely to be going.
And then tell us, look, if things work out differently and suppose that the inflation that we are seeing from the oil price starts getting more
embedded in other parts of the economy, then we are going to be reacting to that.
I don't think that's insurmountable and I think they could do a good job of bringing that in.
The press conference statements actually are quite good about that, and I think they could do that better as a committee.
QUEST: I am grateful for you joining us. Something tells me you and I will be talking a lot over the course of the year as we try and work out exactly
what a President or a Chair Warsh actually means, particularly if he is going to do half of what he says he is going to do.
Good to see you, Loretta. Thank you very much for joining us. Much appreciated.
Thank you.
MEISTER: Take care, Richard.
QUEST: Thank you.
Now global energy shocks are pushing Europe to diversify their supply chains. Croatia signed a deal. It is The Three Seas Summit, and by seas I
mean seas that you swim in, not Cs as in the letter. Anyway, the Croatian Prime Minister, Andrej Plenkovic, will be after the break. QUEST MEANS
BUSINESS.
(COMMERCIAL BREAK)
[16:15:47]
QUEST: Then the King and the Queen are spending the third day of the U.K.'s State Visit to the United States and they were in New York. Their Majesties
laid a bouquet of white flowers at the 9/11 Memorial and then they met some of the families of the victims.
They also were talking to and hearing the stories of first responders and local officials.
Then the King and Queen went their separate ways. One went to visit an urban farm in Harlem, where King Charles enthusiastically fed some of the
chickens. The farm is part of an organization that encourages young people to lead healthy lives, and their next stop is a reception for the King's
Trust, the charity established by Charles to help disadvantaged youth.
The significance of the visit, and in the context of the special relationship.
Bonnie Greer is with me, former Deputy Chair of the British Museum and a political cultural commentator.
Good to see you, Bonnie. It is always good to have you.
BONNIE GREER, FORMER DEPUTY CHAIR OF THE BRITISH MUSEUM AND POLITICAL CULTURAL COMMENTATOR: Hello, Richard. Good to see you.
QUEST: You know, in a way, it is good to have you in London tonight because you can get the perspective from being on the other side of the Atlantic,
of how it is being -- here, it is going down gangbusters. I mean, people seem to be incredibly impressed with Charles' dignity, his graciousness,
all the things that I suppose that is what he is employed for.
GREER: Well, exactly. I mean, I have lived here a long, long time as long as -- almost longer than in my native land, the United States and what is
fascinating to watch, Richard, is that we are in a new age. We are in the Carolean Age now. Before we were in the Elizabethan age, the age of his
mom.
Now, we have a Baby Boomer King with all of the concerns that we boomers have with the environment, war -- all of this and Charles has brought this
to the table.
On top of it, the guy is a man of the theater, so he knows how to command a room. He is a historian, so he knows the history of the -- of his -- of
course, of his country and of the United States.
But what was very interesting to me, and I loved it, he was he was schooling the Congress on the relationship between the United Kingdom and
between the United States. He said, "my Prime Minister." He didn't say "the Prime Minister" and what he wanted to impress on the Congress is that the
leader of the party that wins the election is his advisor.
QUEST: And also, I noticed that both in his speeches and talking, he has mentioned Australia several times. Indeed, I believe the bell from HMS, I
believe its HMAS, Trump. I believe it was that he gave the President last night and I believe again has an Australian connection.
So he is constantly reminding everybody of the multitude of roles that he plays.
GREER: And Richard, he brought up the fact that, hey, I am a veteran of the Royal Navy. My father was in the Royal Navy. My great uncle, Lord
Mountbatten was in the Royal Navy. My grandfather was in the Royal Navy, you know. So don't talk about the Royal Navy -- but he did it so
charmingly. People were sitting there stunned, they couldn't believe it. And he worked the room and it was brilliant.
QUEST: What do you think is the legacy of this trip? Because there are really two, as I see it. The first is, does he manage to paper over cracks
between that and Starmer? I suggest that will last probably as long as your tea remains hot and --
GREER: I haven't got any tea, so it won't happen, right?
QUEST: Well, then, the ice and the drink remains cold. But you know what I am saying. So I guess that the ability to paper over the Starmer stuff is -
- but in solidifying his role as the monarch, that I think is one of the significant parts. What do you think?
GREER: Totally, and he wants the United States to understand that he is continuity. He is the continuity of this country. He serves at the pleasure
of the people, and he was very -- he said that quite subtly, but he is continuity. He can go all the way back.
[16:20:08]
When he made the joke, and it wasn't, about the fact in the War of 1812, the British Army actually took down the capital, this was to remind people
that this was once my domain, my family's domain, we are still standing, and we know a lot. We maybe know a lot more than you.
So it was -- and also that Britain is not some little island off of the English Channel, it is a system of countries, part of a system of countries
and I am the head of it.
And he said it in a way that, you know, really, a guy who was, you know, the goon show person when he was a little boy. This was fantastic.
Fantastic!
QUEST: I am so glad we had you tonight. Thank you very much indeed for joining us.
GREER: Thank you. Good to see you.
QUEST: Good to see you, Bonnie. Thank you.
[16:20:56]
Croatia hosting this year's Three Seas Summit and business forum. It took place in Dubrovnik, where the meetings focus was strengthening energy
infrastructure within the member countries. It is the Three Seas Initiative, and by that, as you can see, we are talking about the Baltic,
the Black and the Adriatic Sea and the countries are those that lie between them.
They are very interestingly positioned and they have an interesting sort of history and a future. I spoke with Croatian Prime Minister Andrej
Plenkovic, who told me the region is managing with some difficulty, but they are managing the energy supply strains.
(BEGIN VIDEOTAPE)
ANDREJ PLENKOVIC, CROATIAN PRIME MINISTER: Given the fact that we are in the midst of a yet another energy crisis, first one after Russia's
aggression against Ukraine, now, with the war in the Middle East and the Strait of Hormuz, which is not functional, we are seeking for ways how we
can increase our resilience, how we can help each other in order to undertake measures that will ensure the energy security.
Today, to answer your question, Croatia and Bosnia and Herzegovina actually signed the bilateral agreement to extend the gas interconnection for the
parts of Bosnia and Herzegovina where the gasification hasn't been done, and it is really a big achievement with a lot of support of the United
States.
QUEST: I am looking at a map at the moment, a chart showing the nature of the Three Seas Initiative and I can see sort of the Black Sea, the Adriatic
and the Baltic.
Now, of course, so much energy did come from Russia that has now gone away, but it is where the other new sources can come from, whether they come from
the United States. Do they -- obviously, the Gulf is more limited. Where can you actually get new sources of energy? And to tie it all together
within the area?
PLENKOVIC: Well, you're exactly right.
Over the years, we have -- most of the members of the European Union abandoned the Russian fossil fuels. Croatia got rid of Russian oil and
Russian gas. There are only two landlocked countries who are still using and buying Russian oil that are Hungary and Slovakia, more as an exception
rather than a rule.
Croatia has, in my first mandate as a Prime Minister invested into the liquefied natural gas floating terminal at the Island of Krk and now, 67
percent of the liquefied natural gas that is acquired by Croatia, but also for other operators in the region, comes from the United States.
So we have diversified the routes of supply of gas, as well as oil to the countries of Central and Eastern Europe. I think this was a strategic
decision, which has completely altered previously fully dependent energy situation on Russian fossil fuels.
QUEST: We look now at the change in government in Hungary. You had been a critic of the former prime minister. You must be sort of looking forward to
closer relations, or at least less disruptive relations from Hungary.
What is your view on how -- I mean, but let's face it, this new government is still on the right. It is still not exactly -- you know, it has got
certain views. So what is your hope now that there is a major change in government in Hungary for Central and Eastern Europe?
PLENKOVIC: First of all, we respect the very clear victory of Peter Magyar and TISZA at the Parliamentary elections after 16 years of Prime Minister
Orban's tenure as prime minister. In Hungary, like Poland, you basically have a division of political spectrum that the left is completely
uninfluential, barely existent, and you have basically different political parties from center right to right fighting for the support of the
electorate.
[16:25:00]
When it comes to the European role of Hungary, we have high hopes for Mr. Magyar. I think that the fact that Hungary has already lifted its blockade
of a loan that was intended with 90 billion euros for Ukraine, that we decided at the European Council in December, now the decisions have been
done last week. We can extend our support to Ukraine, 60 billion euros for its military and defense and 30 billion euros for the functioning of the
state.
On a more bilateral level between Croatia and Hungary, we have now an opening several months to put on the table all the open questions, try to
address them quickly and forge a sincere partnership and a friendly relations that these two countries, over the centuries of cooperation, have
had in the past.
QUEST: Prime Minister, guess what? You are now the longest serving Prime Minister or head of government in the E.U. I am sure somebody -- I am sure
more than one of your colleagues has pointed this out to you with Viktor Orban gone, you are now the father of the club, as they say.
That gives you a certain responsibility because you've been there so long.
PLENKOVIC: It is certainly an experience and a responsibility that I am willing to, I would say, put on my shoulders and try to use all the
experience and knowledge and also the influence of Croatia, but also a personal touch into the critical debates that we have now, whether it is
security, whether it is defense, competitiveness or the forthcoming negotiations on the seven-year budget, which is the multiannual financial
framework, certainly it is a privilege, but most of all, with the confidence that the Croatian citizens have given me over the three
consecutive electoral victories in the last 10 years.
(END VIDEOTAPE)
QUEST: That is the Prime Minister of Croatia.
In a moment, the families of the victims of Canada's deadliest school shooting in decades are suing OpenAI and its chief executive. The legal
case, in just a moment.
(COMMERCIAL BREAK)
[16:30:11]
QUEST: Hello, I'm Richard Quest. Together we'll have more QUEST MEANS BUSINESS. We're going to break down the earnings from Alphabet, Amazon,
Meta and Microsoft. Sounds like a firm of lawyers, but they are the big four of the big seven. We'll take a look at Jerome Powell's tenure as chair
of the Fed and work out exactly what he meant, and did he actually achieve it.
And we'll only do it after we've had the news headlines because this is CNN and here the news always comes first.
King Charles and Queen Camilla have in New York for the third day of their state visit to the United States. The majesties visited the 9/11 Memorial
in recognition of the 25th anniversary of the terror attacks. The king has also visited an urban farming community. The queen has been doing other
engagements.
The former FBI director James Comey surrendered today to authorities in Virginia. He's been charged with making a threat against the U.S.
president. The case involves a photo of seashells that he posted online that spelled out "86 47." Comey maintains his innocence. He was allowed to
leave court with no conditions of release.
The U.S. Supreme Court has dealt a major blow to minority representation in the U.S. Congress. The conservative dominated court tossed out a
congressional map in the state of Louisiana that had produced an extra district dominated by black voters. The 6-3 decision will now make it much
harder to challenge congressional maps for racial discrimination.
OpenAI is facing multiple lawsuits over ChatGPT's alleged role in the Tumbler Ridge School shooting in Canada, where five students and a teacher
were killed back in February. Seven families of the victims now accuse the company and its chief executive, Sam Altman, of being complicit in the
death of injuries of their children. Their lawsuits, filed separately both in U.S. federal courts, allege that the shooter had extensive conversations
with ChatGPT that discussed scenarios involving gun violence.
Last week, OpenAI CEO Sam Altman apologized for not alerting the authorities to those conversations, though they had been flagged by staff,
and they did originally lead to the shooter's first account being deactivated.
The attorney, Jay Edelson, and his firm helped file these suits and is preparing more on behalf of the victims. He joins me now.
Sir, I'm grateful. I guess the starting point is what should they have done? I've read the summary of the case and one of the core points that,
you know, you point out is that the sheer volume of dangerous material proves in your case, in your view, how dangerous ChatGPT is.
JAY EDELSON, FOUNDER AND CEO, EDELSON LAW FIRM: Yes. But we don't even have to look there. What happened, the one part, you gave a good summary, but
the one thing that you left out was we had 12 people at OpenAI reading the chats and saying, this is such a dangerous person. Something horrible is
going to happen. And they begged leadership to tell the authorities. For some reason, leadership said no, they didn't do that.
If they had made one phone call, we could have avoided the deadliest school shooting in history. It's killed -- it killed six people in that shooting,
the shooter, including five kids and a 12-year-old girl Maya is in the hospital right now. She was shot at point blank range, including in the
head. She's fighting for her life. Sam Altman could have stopped that if he had just picked up the phone.
QUEST: Why do you think they didn't? Because my guess would be that if those people were asked, hey, had you known what was going to happen, you
would have told the authorities and they would have said, of course we would have told the authorities had we thought there was a realistic chance
that this was going to happen. So why do you think they didn't?
EDELSON: Well, 12 people said that. Their safety team said, we need to tell authorities something awful is going to happen. This is -- the shooter was
discussing plans for violent action. The reason that they didn't do that is because Sam Altman and OpenAI are morally corrupt. They know that if they
actually had to tell authorities every time someone was on their platform planning something horrible, that's all they would be doing.
Look what's happening in Florida right now. There are two separate criminal investigations that have started against OpenAI because of their alleged
complicity in a mass shooting at Florida State University and a double murder at a different school in Florida. This is a company that it's unlike
anything I've ever seen.
[16:35:00]
QUEST: So let's talk about what the company said. They put out the following statement. You may be familiar. It says, "The events in Tumbler
Ridge are a tragedy. We have zero tolerance for using our tools to assist in committing violence, and have already strengthened our safeguards,
including improving how ChatGPT responds to signs of distress, connecting people with local support, mental health resources, strengthening how we
assess and escalate potential threats of violence, and improving detection of repeat policy violators."
This is sort of locking the door after the horse has bolted, I guess.
EDELSON: It's really offensive. So, you know, we brought a number of suits against OpenAI. Their chatbots have led to suicides and some third party
murders and planning of other mass casualty events. Every time they come out with a statement like this, oh, yes, we, you know, we take safety
seriously and we'll try to do better in the future. Any responsible company would say, we want to look at who actually made the decision to not call
the police, and then they would fire that person on the spot.
I mean, our thinking is that it starts at the top. And it's probably Sam Altman who was involved in making that decision. So they're just covering
for him.
QUEST: The difficulty, I mean, I hear your position on this case, which seems to be at a certain -- a certain level, but the difficulty for these
companies is how do you -- how do you manage when there are so many millions of people now using it? How do you avoid throwing the baby out
with the bathwater, as they say?
I mean, you say the volume of dangerous incidents is so large, but the sheer volume of us -- you, for instance, I say to ChatGPT, I'm writing a
movie that's going to have a particularly gruesome death scene in act four. What do you expect to happen in those sort of scenarios?
EDELSON: Well, nothing would happen in that scenario. So what happens is ChatGPT's own program, red flags, discussions of dangerous conversations,
and then humans review it. That's what happened here. You had a whole team look at it, read it with context. If they read, your chats where you're
working on a novel, they would have done nothing but in this situation they read it, they made their own independent decision that authorities had to
be notified.
It's also important to understand that not all A.I. platforms are the same. OpenAI made a specific decision to degrade its safety protocols to continue
conversations when people were talking about self-harm or third party harm. They did that for their own business interests. And, you know, society is
now dealing with the consequences of that.
QUEST: Jay, we'll talk more as this continues. I'm grateful that you've come in to talk to us today about it.
EDELSON: Thank you.
QUEST: QUEST MEANS BUSINESS tonight, we turn to our business agenda. Quarterly earnings for four of the seven magnificent stocks have been
released. Now, never mind the individual results. We're going to look for a trend. We're going to look to see what actually might be telling us.
It's QUEST MEANS BUSINESS. Very glad you're with us tonight.
(COMMERCIAL BREAK)
[16:40:32]
QUEST: Four of the magnificent seven have announced quarterly results. Alphabet, Amazon, Meta and Microsoft. And these are the shares afterwards.
So Meta is being clobbered down 5.4. Everybody seems to like Alphabet Google. That's up three and a half. And Microsoft and Amazon just tootling
along nicely. Microsoft. They all reported growth in their Cloud and A.I. services. And Meta reported growth in its ad revenues.
The results bolstered confidence in the very high. We've got Lisa Eadicicco and Clare Duffy.
Lisa, you are doing Microsoft and Amazon. Clare, you are doing Meta and Alphabet. Start with you, Lisa. Tell me what we learned, bearing in mind, I
mean, it looks as if Microsoft is OK and Amazon is tootling along.
LISA EADICICCO, CNN BUSINESS TECH EDITOR: As you mentioned, I think the big number that we really want to be looking out here is the growth in the
Cloud services. So Microsoft said that its Azure Cloud computing unit grew 40 percent. That's a building on some of the momentum it was seeing in
previous quarters. Amazon also said that it saw 28 percent growth for AWS, which again comes on the heels of growth that it's seen in previous
quarters.
And I think that's likely. Exactly what Wall Street wants to be hearing because these Cloud services really kind of underscore the role that these
companies are playing in the A.I. shift right now.
QUEST: OK. Clare, Alphabet, you got the two there today. Alphabet, I mean, the market loves it. Meta, the market doesn't.
CLARE DUFFY, CNN TECH CORRESPONDENT: Well, Richard, one of the really interesting things that was hanging over this earnings print for all of
these companies is this is the first earnings reports that we are getting since the Iran war began and oil prices have spiked. And that is impacting
prices, operational prices for these data center companies. That is something that Meta talked about in raising its full year capital
expenditures estimate by about $10 billion.
It said operational prices are higher. Component prices are higher. There's also a shortage of memory chips which is playing in there. And investors
when it comes to Meta are not loving that. There have been big questions about what kind of return Meta is going to get on those data center
investments, given that, unlike all of the other players that are reporting tonight, Meta doesn't rent out Cloud computing space to A.I. tools
companies.
QUEST: You see that --
DUFFY: So I think that's the big question, the reason why we're seeing that decline in the stock price, whereas Google is showing real clear returns.
Its Cloud revenues grew 63 percent, and there is a $460 -- $260 billion backlog of customers who would like space on Google Cloud that can't yet
get it because they just don't have the capacity.
QUEST: OK. So to both of you, what this is showing, and we'll take Lisa first and then Clare, you. What this is showing is that, I mean, the A.I.
component is crucial, but actually it's only crucial as it regards to the ability to use the Cloud. So whilst we may be getting terribly excited
about OpenAI and ChatGPT and all that, what this is about is corporations using the Cloud both for their everyday business and for A.I. advancement.
Lisa first, then Clare.
EADICICCO: Yes, absolutely, Richard. I think that's part of it. But I think what you're seeing with Amazon in particular is that it's really looking to
evolve AWS beyond that and beyond just providing Cloud services and other basic infrastructure needs. It's trying to expand AWS into a platform that
a lot of companies rely on for a bunch of other things as well, like models and agents and chips.
It's really kind of trying to become indispensable in the A.I. boom. And I think that's exactly why AWS is so closely watched right now. It's trying
to become really critical to companies like Open AI and beyond. And I think a good example of that as well is this expanded partnership that we saw
earlier this week between OpenAI and AWS.
QUEST: Right. Clare?
DUFFY: Richard, I think, you know, we're no longer asking this question of whether A.I. is going to benefit the core businesses of these companies,
even for Meta, which obviously stock is down today. But its core business, as you mentioned, has benefited, its ad business. Similarly, Google is
seeing benefits to its search business and of course to Cloud. And the same with those other Cloud businesses.
I think the question remains, what is the new business model for these investments in generative A.I.? Will Meta, for example, which released a
new A.I. model called Muse Spark earlier this year after its massive investment in reorganizing its A.I. unit?
[16:45:08]
What kind of business model will it create around those new products that might move it beyond its existing business, benefiting from A.I.?
QUEST: One word answer from both of you. All right. This is the unfair question. As you look at the quarter, start with you first, Clare, then
you, Lisa. As you look at the four, which of the four do you think has done most impressively in the last quarter? Clare?
DUFFY: Google.
QUEST: Lisa?
EADICICCO: Yes, I would agree with Clare on that. I would say Google as well.
QUEST: I do like it when we get an element of agreement and actually the viewer can go away, our dear viewer, with your joint wisdom under their
belt. I'm so grateful to you both. Thank you.
And we continue with the "Wall Street Journal's" reporting that Saudi Arabia is pulling the funding for LIV Golf. Now there's been all sorts of
difficulties of late. LIV Golf was formed in 2021. It made headlines by poaching top players around the world, massive contracts, huge fortunes.
Golfers who joined the league were forced to leave the PGA Tour. Now, five years on and LIV Golf's existence seems to be in serious danger.
Don Riddell is with us as we talk more.
Don, without the Saudi money, and I guess not just the money, but also the oomph behind it to push it forward, is that the end of LIV?
DON RIDDELL, CNN WORLD SPORT: Well, it would seem to be on life support, Richard, facing a very, very uncertain future. We understand from the "Wall
Street Journal" reports that the players are going to be told officially of this position on Thursday. CNN has reached out to LIV. We have yet to
receive a response from them, but it would seem to indicate that certainly, LIV as we know it will cease to exist at the end of this year.
What happens after that depends on whether anybody else wants to come in and invest in the league and support it. But even if that was to happen,
it's hard to imagine that anybody else would be able to put the kind of money into LIV that the Saudis have been. I mean, the purse for these
tournaments has been ridiculous, if not extraordinary. $30 million purses per tournament. That is why some of these players were so tempted to join
LIV.
I mean, it was just an opportunity to print money for them. But it's hard to imagine that the purses would be as big going forward, which would mean
if LIV continued to exist, they wouldn't have the star players that they've been able to enjoy over the last few years. And then the question becomes,
what is going to happen for the players that left the PGA tour to join LIV in the first place?
Two of them have already left LIV behind. I think the likes of Brooks Koepka and Patrick Reed earlier this year could see the writing on the
wall, and that is why they began the process to get themselves back onto the PGA Tour. Other players might be forced to make similar arrangements,
but it remains to be seen whether the PGA Tour is going to want some of these players back. And so it could prove to have been a rather expensive
decision in terms of legacy for the players who left.
QUEST: Right. So I'm just looking on my phone and Dictionary.com. I just popped in a word. The best word to describe it. Schadenfreude, satisfaction
or pleasure felt at someone else's misfortune. Now, I'm sure the PGA would not be engaged in any schadenfreude at the moment, but if those players
want to come back and they're good enough and in that right league, I suppose eat enough humble pie and you're welcome home.
RIDDELL: I mean, it depends. It really depends. Every single player has a unique set of circumstances. The circumstances by which they left the tour
in the first place, and join LIV, some of them decided to try and sue the PGA Tour. So I think anybody that was on the receiving end of that with
regard to those particular players, I don't think would be keen to see them back at all.
What it might cost, I mean Brooks Koepka is believed to be paying something in the region of $90 million to get himself back onto the PGA Tour. Patrick
Reed has gone a different route. He's trying to regain his tour card by doing well on another tour, the DP World Tour. And he's already won twice
this year. So Patrick Reed is on course to return next year. But I mean, schadenfreude is a good word and, you know, a lot of these golfers have
long memories.
And what happened when LIV kind of kicked off a few years ago was to really instigate what was described as a civil war in the world of professional
men's golf. And it was very, very painful and very difficult for a lot of the guys who decided to stay. They might not be rolling out the red carpet
for anybody wanting to return.
QUEST: I'm grateful. Thank you for coming up so quickly with this breaking news tonight.
RIDDELL: All right.
QUEST: Thank you, Don. Good to see you.
[16:50:02]
Now, over the last few years, a pandemic, wars in the Middle East, political disruption in the United States, and an economy that seems solid
but never really seemed to go hunt for armor about it. Imagine having to handle it all that, the chairman of the Fed. We'll discuss the highs and
lows of Jerome Powell's term after the break.
(COMMERCIAL BREAK)
QUEST: So earlier this afternoon, Chair Jay Powell held his last press conference as Fed chair.
Elizabeth Buckwald has covered the chair over his time in office as chairman, joins me now to pull the strands together of it.
I want to start with this. This is the chair talking about inflation and the transitory nature, and how that was a theme that was going to bedevil
the first few years.
(BEGIN VIDEO CLIP)
JEROME POWELL, CHAIR, U.S. FEDERAL RESERVE: I think the word transitory has different meanings to different people. To many, it carries a time, a sense
of short lived. We tend to use it to mean that it won't leave a permanent mark in the form of higher inflation. I think it's probably a good time to
retire that word and try to explain more clearly what we mean.
While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to
households and businesses.
(END VIDEO CLIP)
QUEST: So how did he do on inflation, do you think?
ELIZABETH BUCHWALD, CNN ECONOMICS CORRESPONDENT: You know, in the end he's done pretty well on it. But I think that clip that we just watched there is
really important because Powell, by his own admission, has made mistakes that were transitory has come to haunt him. But he has moved from that and
he has learned from it. And he instead had to inflict pain on consumers because the Fed wasn't quick enough at recognizing inflation.
Now he's leaving the chairmanship with inflation kind of moving in the wrong direction here, quite oppositely in the wrong direction. But he's
done pretty well overall, I would say, after that really bad episode.
QUEST: But you see they all missed it. Every central bank had higher inflation as a result of what took place. Why do you think that the Fed was
more behind than everybody else?
BUCHWALD: They were worried. You know, the opposite effect of raising rates too early at a time when supply chains were still not back up and running.
I mean, it's easy to say in hindsight as we sit here now, the Fed should have raised rates much sooner. But at the time it was not obvious.
[16:55:01]
The employment market was still springing back. And you don't want to take the training wheels off before it's too soon.
QUEST: None of us will forget the embarrassing part with the president when they're visiting the building, and they end up having an argument, and it
really crystallizes this issue of independence of the Fed and the ability of a president to browbeat. When that piece of paper came out here, you
have the two of them. Listen to what the question and the whole issue of Fed independence is all about.
(BEGIN VIDEO CLIP)
POWELL: I'm not aware of that.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Yes. It just came out.
POWELL: Yes, I haven't heard that from anybody at the Fed.
Public service sometimes requires standing firm in the face of threats. That case is perhaps the most important legal case in the Fed's 113-year
history. And as I thought about it, I thought it might be hard to explain why I didn't attend.
(END VIDEO CLIP)
QUEST: This is, of course, referring to Lisa Cook. But at the end of the day, Powell is going to go down. His tenure will be about independence of
the Fed.
BUCHWALD: Oh, absolutely. And he is someone who uses his words very carefully. When he says something you could tell he's thought through it.
And it's never just off-the-cuff remarks. And when he finally took the steps to speak out really firmly about what he was doing, he went to Lisa
Cook's trial because he said that if he didn't do that, he would have regrets. He is staying on at the Fed, doing something that is incredibly
rare to serve out a concurrent term as governor. He'll still be voting on interest rates even when he isn't chair to stand and protect independence.
QUEST: All right. Quick question. Will he go down as one of the great Fed chairs, do you think?
BUCHWALD: Absolutely, 100 percent. But I'm a bit biased here. After covering him, I really do feel he will.
QUEST: And I'm grateful for your assessment. Thank you very much indeed, Elizabeth Buchwald, for joining us, who's covered us and helped us
understand whats going on at the Fed.
We'll take a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, the first Fed chair I covered was Paul Volcker in 1987. Since then, we've been through Volcker, Greenspan,
Bernanke, Yellen and Jerome Powell. Of all of them, Jerome Powell probably was the quietest or seemed like the least likely because he didn't come
from a central banking background, a lawyer, et cetera. But in the end, his determination right through to the end will probably what sends him into
the history books, the way he has stood up for Fed independence.
They all claim to do so, but none of them, or most of them have never been tested and put to the test in quite the way that Powell has. And that is
what he will be remembered for. Standing up for the right to say we're independent.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead I hope it's profitable. You and I
tomorrow, please, let's get together.
END
