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Quest Means Business
Xi Hails New Era in U.S.-China Ties, Warns Trump on Taiwan; Xi: Taiwan may be Very Dangerous Situation if Mishandled; Ecuadorian President Cracks Down on Crime Amid Rise in Violence. Labour MP Josh Simmons Resigns to Make Way for Andy Burnham; Cerebras' Valuation Explodes Amid A.I. Data Center Boom; Khan Academy to Offer New Higher Education Product. Aired 4p- 5p ET
Aired May 14, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:26]
PAULA NEWTON, CNN INTERNATIONAL HOST: Hard to believe, but even with all this global turmoil and in fact, the Strait of Hormuz still closed, the Dow
back above 50,000. Those are the markets and these are the main events.
President Trump and a cohort of top U.S. CEOs making their big deals during their trip to China.
The President of Ecuador will tell us why he wants U.S. forces to help fight cartels in his country.
And Wall Street has a new $100 billion company, chip maker, Cerebras doubles its valuation after its NASDAQ debut. The CEO joins us.
Live from New York, it is Thursday, May 14th. I am Paula Newton, in for Richard Quest and this is QUEST MEANS BUSINESS.
And a very good evening to you. Tonight, the leaders of the U.S. and China toasted the crucial relationship between their countries during a State
Dinner in Beijing. Xi Jinping told Donald Trump their countries should be partners rather than rivals.
He said the world is changing and turbulent and that it depends on both sides rising to their responsibilities. The two leaders discussed trade and
other global matters on their first day of talks. The Chinese Foreign Ministry says, Xi warned Trump against mishandling the issue of Taiwan, and
it says the two leaders exchanged views about the Middle East.
Trump told Fox News that Xi pledged not to provide arms to Tehran. Listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: President Xi would like to see a deal made. He would -- he would like to see a deal made
and he did offer, he said, if I can be of any help at all, I would like to be of help.
He would like to see the Hormuz Strait open.
(END VIDEO CLIP)
NEWTON: Now, at a separate meeting, Chinese Premier Li Keqiang urged U.S. business leaders to help the two countries maintain healthy ties. More than
a dozen executives made the trip. That includes Elon Musk, NVIDIA's Jensen Huang, and Apple's Tim Cook.
Now, according to Chinese state media, Xi told them that prospects are opening for them in China. There has already been some deal making, Trump
told Fox News that China has agreed to buy U.S. planes.
(BEGIN VIDEO CLIP)
TRUMP: We had a very good meeting, but we want things from them. One thing he agreed to today is going to order 200 jets. That's a big thing. Boeing.
SEAN HANNITY, FOX NEWS CHANNEL HOST, "HANNITY": Boeing.
TRUMP: Two hundred big ones. That's a lot of jobs. That's a lot. Boeing wanted 150, he got 200.
(END VIDEO CLIP)
NEWTON: Now one business leader has stood out from the bunch on this trip. Clips of Elon Musk, let's say he is showing a little bit of personality.
They have gone viral.
Clare Duffy is in New York.
We can always count on him being the center of attention. It is some spectacles, some theater. But I am wondering, besides those airplanes that
the President just announced, what more concrete deals can we expect, if any, really?
CLARE DUFFY, CNN BUSINESS WRITER: Well, Paula, I think it is a really good question. Trump went into this meeting saying that expanding market access
for U.S. businesses in China was a top priority. And if you look at some of these business leaders who came along with him, I mean, Elon Musk, for
example, Tesla has been waiting for regulatory approval in China to roll out its full self-driving technology, which, of course, could make those
cars more attractive to Chinese consumers, perhaps that is something that was discussed.
NVIDIA has been pushing China to allow it to restart sales of some of its A.I. chips, following the sort of U.S.-China trade tussle, and the U.S.
once again giving it the greenlight to sell its chips in China. That is another thing that I expect. There may have been some talk of.
And the other really important piece here that, again, I expect that they were discussing is rare earth minerals. The U.S. has been hoping that China
would allow more exports of rare earth minerals that are very important for things like chips and data centers, very important for the U.S. maintaining
its position in the A.I. race.
And so those are some of the key pieces that I imagine were discussed here. Now, whether we will see concrete deals out of this, I don't know, but I
think Trump was hoping to bring home some wins for U.S. businesses, given that there were some very other tricky issues he was negotiating, things
like Iran and Taiwan, bringing home concrete wins for U.S. businesses would allow him to say to the American public, this is what we got out of the
Summit.
[16:05:00]
NEWTON: Yes, which is important, especially as you say, Iran, the Strait of Hormuz is still closed. No resolution to that yet.
I want to go back to this issue of A.I. and this concept of cooperating on guardrails between China and the United States.
You know, Treasury Secretary, Scott Bessent acknowledged that it is China and U.S. that will be dictating and leading this rate going forward. Is
this issue of guardrails on A.I. -- is that a realistic goal?
DUFFY: Well, it is interesting because on one hand, it has never been more important for, as you say, these two leaders in this industry to work
together on this issue, to prevent some really extreme risks that we could see from this technology, but at the same time, they still feel very far
apart.
In those same comments, I believe Scott Bessent also said the only reason that they were having these conversations is because the U.S. is ahead in
A.I., so what happens if China gets ahead? Is there then -- you know, are we a race to the top? Or race to the bottom? I think that is the real
question here.
They did talk about, according to Scott Bessent best practices, for making sure that nonstate actors don't get access to advanced A.I., that is a good
first step. But I think the real bigger concern is what happens when these state actors that are your rivals are racing against you to advance this
technology, to use it, for example, in military actions.
I think those are the bigger questions that make me sort of hesitant to think that we will see any real progress on this issue just yet. You know,
we could see some real extreme issues start to happen and the countries revisit this. I think that's a real possibility, but I think there is
probably a long way to go here in terms of real cooperation on this issue.
NEWTON: Yes, in so many ways, it actually mirrors the nuclear arms race, something that is still ongoing, and yet it is that serious. So we wonder
if a framework could start to develop.
Clare Duffy for us, really appreciate it.
Now, the Chinese Foreign Ministry says President Xi warned Mr. Trump on the issue of Taiwan. China's leader said there could be conflict if the U.S.
and China mishandle disagreements.
Mr. Xi made it clear that Taiwan is the top priority in U.S.-China relations. He warned that differences over the self-governing island could
lead to a very dangerous situation.
Will Ripley is in Taiwan for us and we are gearing up here, Will, for day two of this summit, not much substantively in terms of the summit, except
for what we just talked about and I am wondering what you're thinking if you believe that the Chinese have now put this issue to bed, they've made
their comment, or if there is something more to happen on the issue.
WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Oh, I think there are closed-door discussions happening today and all of the officials that we've
been speaking with here in Taipei ahead of this Summit are just holding their breath, hoping that those discussions do not result in any change in
the already precarious status quo that has kept the peace across the Taiwan Strait, Paula.
In the days and weeks leading up to this, we heard from the Taiwan Foreign Minister, who said he hopes the summit brings no surprises. The Deputy
Foreign Minister went a little bit further in an interview a couple of weeks ago, saying he is afraid Taiwan could be on the menu.
Obviously, you heard President Trump talking about his conversations with Xi regarding Iran and weapons sales to Iran. You know, China has been
suspected, perhaps, of providing mixed use equipment, possibly some of those man-pads, those shoulder-fired weapons, you know, much to the chagrin
of the United States. If Xi Jinping were to assure, hey, I am not going to provide weapons to Iran. But by the way, can you delay that $14 weapons
deal that's still pending because Taiwan's Parliament has approved it, but they haven't approved it in Washington.
President Trump hasn't authorized it, and if that were to be further delayed, if Xi Jinping were to ask for that and President Trump were to
give that as a concession, not only would it be a huge blow for the leadership here, but it would also be sending a message not just to Taiwan,
but other U.S. allies, that security could be up for negotiation, for the right price, particularly when it comes to a superpower like China.
So I think the -- you know, the messaging here obviously is they believe that China is the biggest threat to regional stability. They value their
partnership with the United States. But privately, people are watching very closely, wondering if President Trump is going to stick to the script if
the assurances from people like Secretary of State Marco Rubio that U.S. policy on Taiwan has not changed, if those are going to stick or if there
is going to be some unwelcome surprise. And I think they are just trying to brace themselves for any and all possibilities here -- Paula.
NEWTON: Yes, and well, given you are in Taiwan and how many years you've covered this, okay, we look at the public statements, but I am wondering
what Taiwan is looking for in the coming weeks or months that tells them that perhaps behind closed doors, something may have been said or done and
I am thinking about whether it is delays in arms sales, whatever it may be.
RIPLEY: Yes, well, I think that's going to be the big indicator is when does President Trump authorize this additional $14 billion in arms sales?
They already have authorized $11 billion. But Taiwan's Parliament just approved a total of $25 billion in weapons purchases from the U.S. and
these are weapons that Taiwan in some cases, these deliveries are already delayed by years.
[16:10:10]
But Taiwan says they need these defensive weapons to protect their democratic system from the increasing threat of Chinese military activity
near Taiwan around this island, China has staged large scale military drills on a pretty regular basis ever since Nancy Pelosi visited this
island a few years back, and they are documenting aerial incursions by the PLA jets and fighter jets and ships in the Taiwan Strait on a daily basis,
some of them crossing into this island's self-declared air defense identification zone.
I think the first indicator is going to be the arms sales package. Does that $14 billion get approved? Obviously, the American Institute in Taiwan
which is the de facto U.S. embassy here, they are going to be briefing Taiwanese officials as soon as they get readouts from what is happening in
Beijing. Right now, everything is going through Washington, so it is hard to get any information, even out of U.S. officials here in Taipei. They are
punting everything to D.C. right now.
And frankly, no matter how much work happens on the lower level, Paula, as anyone who deals with the Trump administration knows, at the end of the
day, it is what happens in the room with President Trump that's going to be the deciding factor. He is known to be mercurial. He is known to make
decisions on the fly to ad lib, to go off script, not necessarily read the full brief, and an issue as sensitive diplomatically is this one, that has
a lot of, you know, the U.S. is bound by law, by the Taiwan Relations Act of 1979 to provide Taiwan with defensive weapons, but how many weapons?
What kind of weapons?
The first Trump administration was actually the administration to sell the biggest in terms of billions and in terms of the size of the weapons, Trump
was the one that was willing to do that. They are hoping that that will continue, obviously, the ruling party here is hoping they will continue to
be able to purchase weapons like that.
NEWTON: Yes, and a reminder that given the importance of Taiwan in terms of technology, there is a huge interest in the United States and also keeping
this detente, if you will, 100 percent, we will talk about that later.
Will Ripley, good to have you there. Appreciate it.
Now, as I touched on a short time ago, the war with Iran and the Strait of Hormuz came up between Presidents Trump and Xi, with Mr. Trump saying China
was offering to help with a potential deal. CNN's Matthew Chance is in Tehran right now, and we'd like to note, CNN only operates in Iran with
government permission, but maintains full editorial control of our reporting.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN CHIEF GLOBAL AFFAIRS CORRESPONDENT: Well, as you can see, it is a bustling capital of the Islamic Republic, but Iranians today
are watching President Trump in China, one of their most implacable enemies, meeting a powerful friend. And with the Iran War so high on the
agenda in Beijing, state media is almost gloating at the spectacle.
One headline I saw earlier saying that Trump's visit to China is in the shadow of failure and stalemate. But the truth is, both the United States
and Iran are now looking to China, it seems, as a way out of their deadlock, the ongoing Closure of the Strait of Hormuz, the inability to
agree a compromise on Iran's nuclear activities.
Washington, of course, wants Beijing to pressure Tehran to accept its terms. But here officials are calling on China, the Islamic Republic's most
important trading partner, to mediate a favorable end to a damaging war.
Matthew Chance, CNN in Tehran.
(END VIDEOTAPE)
NEWTON: Coming up, Ecuador is fighting an increase in violence. The country's president is in the United States trying to deepen security
cooperation. You see him there. We will speak to President Daniel Noboa next.
(COMMERCIAL BREAK)
[16:16:12]
NEWTON: Ecuador is working to deepen its ties with the United States as it fights increasing gang violence in the country.
President Daniel Noboa met with U.S. Vice President J.D. Vance, Wednesday. The two discussed their commitment to fighting narcotrafficking.
Ecuador has launched a sharp crackdown on drug crime, and in March, the U.S. military began operations in the country as well.
Now, the measures have helped reduce violence in some areas. Still, human rights groups have expressed concerns.
Ecuadorian President Daniel Noboa joins us now from Washington. It is really good to have you on the program, Mr. President. You are in D.C. You
met with Vice President J.D. Vance. What were your priorities in speaking with him and what kinds of commitments have you now agreed on?
DANIEL NOBOA, ECUADORIAN PRESIDENT: I am very happy to be here. Thank you for having me.
First, we talked about the reality of the region and these groups are not common gangs. These are narcoterrorist groups that attack our region, that
attack our citizens, affect the country's development, affect our ports, and a lot of it comes from our borders, especially our northern border with
Colombia.
NEWTON: There is no doubt about the strain. Did you make the comment that you have made outside of the Vice President's Office, that nearly half of
the cocaine that transits through your country is destined for the United States? What more commitments did you get from them? And would you welcome
more U.S. involvement?
NOBOA: We would welcome U.S. involvement, respecting our laws and also respecting our military. Our military can lead the operations and have the
support of American troops. That's the way that we've been working so far, and we've been successful at doing so.
Right now, we have cornered these narcoterrorist groups into two areas in particular, which are the province of Guayas and the province of El Oro, so
we have further operations going on there in the next few days.
NEWTON: In the next few days, so you have more operations on the go being planned this hour?
NOBOA: Yes, but mainly our local operations in urban areas like Guayaquil and Machala, these areas have the highest number of homicides in the
country, but at the same time, we can see that there is a reduction in homicides in the most violent area, which was the metropolitan area of
Guayaquil. And in total, we have 16 percent less homicides and 25 percent reduction in common crimes.
NEWTON: And how much has the United States military or otherwise contributed to you helping with this?
NOBOA: Well, it has been mainly Intelligence briefings and satellite imagery and more assistance, I would say, than on the ground operations.
This assistance has helped our military and our police to do their job. We are a sovereign nation, and we respect our laws and we respect
international law.
NEWTON: You know, your country, and I don't have to remind you, has gone from one of the safest in Latin America to one of the most violent. You
have been in power now for two-and-a-half years. You have three years left on your mandate. You must make more progress on security. I am sure that
that is your number one priority right now.
But what proposals have you put forward? And can you give us a timeline? Like when do you expect things to get better? How long will this take?
NOBOA: Well, things will definitely improve in a couple of years. This is a long war, and because we respect human rights and our local laws, this has
to be done with caution. At the same time, we need to push for economic development. We need to push for an increase in sales and increase in
savings and increase in exports that we've gone a long way since the beginning of this presidency.
[16:20:10]
We are in double-digit growth in sales. Our economy is growing by four percent, our inflation is below two percent at the moment, and we just
broke record on foreign direct investment in 2025.
Aside from that, we are reducing the number of homicides and common crimes to the level that we were in 2024, which has been the best year in the last
three years.
NEWTON: We will talk a little bit more about the economy in a moment. I do want to go back to this issue, though, and the fact that some human rights
groups do have questions about the way you're conducting this.
Sean Parnell, a Pentagon official, posted this video of what your government and the U.S. say is the destruction of a drug trafficking
compound. Now, the U.S. says it was a direct request from you for targeted action to dismantle narcoterrorist networks.
Now, we are watching this video that the Pentagon released, but human rights groups, they believe that Ecuador -- in Ecuador, they believe that
this was actually a working farm. I mean, what was this operation specifically? And will you continue to push for more of these joint
operations?
I know you just told us that you are being as careful as possible and that you are trying to obviously abide by human rights legislation in your own
country. But given that this incident alarmed so many groups in Ecuador, what happened here? And do you have proof that this was a drug trafficking
area?
NOBOA: Yes, it is a drug trafficking area, and its close -- very close by from large coca fields. At the same time, narcoterrorist or ex-guerrilla
fighters don't post a sign the size of a sign in Times Square saying, we are the narcos and we are here. They hide in farms. Some of them actually
hide and transport their drugs in fishing boats.
But what we received was Intelligence from our partners and with that, we acted.
NEWTON: So you don't believe what the human rights groups are telling you or what some have looked for on the ground, that this was a farm, that the
farmer had no connection to drug gangs?
NOBOA: No, it was a resting spot and at the same time a place of operation from guerrilla -- ex-guerrillas that operate close to the border in
Sucumbios, right in front of Putumayo, where, let's say, 60 percent of the coca production of Colombia is right there. It is right in front of it, so
a few kilometers away.
NEWTON: Yes, and to be clear, you pointed out before that the production -- your country is a transit point, not necessarily a point of production.
I do want to --
NOBOA: It is not a point of production.
NEWTON: I do want to get back to this issue of your economy. The IMF, in fact, agrees with you that your government has made some gains. Growth, as
you point out, is strong and inflation is quite low. Reforms are underway.
But I am curious to ask you, how do you plan concretely to build on that momentum?
NOBOA: Well, the only indicator that really matters at the end of the day, and that we use is the Poverty Index. It is at 21.4 percent, it is the
lowest point in the history of the country. That means a lot of things. That means that there is local consumption. That means that there is
increased sales, increased savings, that services are reaching more Ecuadorians, and that the average quality of life is increasing.
So by reducing poverty, we can say that we are in a more just country and a country that lives with more dignity and freedom.
NEWTON: And concrete plans that you might have to going forward?
NOBOA: Yes, we need to increase our youth employment. We have a very young nation, 40 percent of the population is between the ages of 14 and 35. So
we are working on technical schools, on trade schools, and to educate, to employ, not just plain education, but actually to have a plan to employ
hundreds of thousands of Ecuadorians that are graduating from high school and that they end up in the workforce. So we need a plan for them.
NEWTON: And that is definitely --
NOBOA: If we don't have work for them, they are going to end up in the hands of the narco-groups.
NEWTON: I was going to say, that is definitely part of the security plan as well.
I do want to go to the issue of tourism. It should be a robust growth sector for your country. I don't have to remind you, I've been to Ecuador.
It is a beautiful country, and yet, you can't blame people right now, given the violence that they heard of not wanting to visit. What can you do and
how long will it take, do you believe to really rejuvenate this sector?
NOBOA: Well, tourism is growing at double digits and most violence is being sectorized. Quito, for example, has a lower homicide rate than 80 percent
of the capitals in Latin America. Cuenca has the highest quality of life in all of Latin America.
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This is the third city in Ecuador. Galapagos has zero homicides per year, and a lot of people visit the Galapagos like we saw pictures of Jeff Bezos
and Mark Zuckerberg and Leonardo DiCaprio in April.
So Ecuador's tourism is growing. It is mainly adventure tourism. So people would -- people like to go to the Amazon. People like to go and hike up
volcanoes or go to Galapagos and to protect these areas is our priority, not only on the environmental side, but also because we want to protect our
tourists.
NEWTON: Right. President Noboa, I really thank you for your time today. Appreciate it.
NOBOA: Thank you. Have a good day.
NEWTON: Now, Cuba says its ready to listen to $100 million aid offer from the United States. Its Energy Minister says the island nation has now run
out of diesel and fuel oil. The lack of electricity sparked protests overnight in Havana.
The country has been in a severe energy crisis since the U.S. imposed an effective oil blockade in January. Blackouts are lasting more than 22 hours
a day, and some Cubans say they don't even have enough power to charge their cell phones.
Patrick Oppmann is in Havana and has been dealing with this and you always remind us, Patrick, about what the poorest in Cuba are going through at
this hour.
Given the fact that they've now run out of diesel and other energy sources, what will the consequences be, do you believe in the coming days and weeks?
PATRICK OPPMANN, CNN HAVANA BUREAU CHIEF: Well, for the people in the bottom, they will be very, very dire. You know, I am amazed the power is on
at all right now in our office. It could go off at any point. You don't know when it is going to come back on.
You know, of course, for people like us who have generators and solar panels and batteries, you make do as best you can. For people who don't
have those luxuries and we are talking about the vast majority of the population here, you are sitting in your home, you're not going to work.
You're not able to really cook. You're not able to go anywhere because there is so little transport. The price of everything just continues to
rise and it is very miserable in the summer months, particularly now that there is an increase in mosquitoes, now, the trash is not being picked up.
And so what people will tell you again and again is this is just not living. This is not life. And they blame many times the U.S. of course, but
as well their own government for not investing in the infrastructure here over decades.
And so you have these ancient power plants that run on diesel. Diesel, the government cannot get any more because of course, there is oil embargo, but
it simply just can't afford it now that Venezuela is no longer as close an ally or an ally at all of the Cuban government, there are really very few
governments that are willing to give away the kind of vast amounts of oil that this government needs to survive, this country needs to run, and of
course, the U.S. is blocking those shipments.
So it is a dire situation, and by all accounts, it is going to get worse and worse. And perhaps the only lifeline there is, is the one the United
States' government is offering, but with a lot of caveats.
NEWTON: A lot of caveats and we will see if that deal comes through in the coming days or weeks.
Patrick Oppmann for us in Havana live. Appreciate it.
Coming up, new threats to Keir Starmer's leadership. A senior member of his Cabinet has resigned and another contender to replace the Prime Minister is
moving closer to challenging him.
(COMMERCIAL BREAK)
[16:31:34]
NEWTON: Hello, I am Paula Newton, and there's more QUEST MEANS BUSINESS in a moment when chip maker Cerebras has just pulled off the largest IPO of
the year, and I'm joined by its CEO in a moment. And Keir Starmer could be facing a leadership challenge any day now. I spoke with Labour MP who says
the prime minister should step down. Before that, though, the headlines this hour.
The American and Chinese delegations will meet in the next few hours for round two of talks in Beijing. U.S. President Donald Trump told FOX News
Chinese Leader Xi Jinping offered to help end the Iran war while agreeing that the Strait of Hormuz should be open. He also says China vowed not to
give Tehran any military equipment.
Ukrainian officials say at least a dozen people have been killed since Wednesday in a massive wave of Russian air strikes. President Volodymyr
Zelenskyy says Russia fired more than 1500 drones and 50 missiles over a two-day period. That would make it the largest prolonged aerial assault
since the start of the war.
Cuba says it has completely run out of oil and diesel fuel under U.S. blockade. Scattered protests have broken out in Havana amid a series of
island-wide blackouts. Cuban energy minister says a Russian donation of oil in late March has been exhausted.
Prime Minister Keir Starmer is facing growing threats to his leadership. Labour lawmaker Josh Simons announced he would resign his seat in
parliament. The move is intended to give Greater Manchester Mayor Andy Burnham a chance to secure the position to challenge Mr. Starmer. Meantime,
Health Secretary Wes Streeting has resigned as well. He wrote in a letter that it was clear Keir Starmer will not lead the Labour Party into the next
general election.
Clare Sebastian has more now.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, the latest in a great number of curveballs in another dizzying day in British politics, really more
evidence, I think, that the landscape has fundamentally shifted over the past week since those catastrophic local election results for Labour. First
of all, of course, we got Wes Streeting's expected, it had been reported, but still bombshell announcement around 1:00 U.K. time that he was
resigning as health secretary.
A really senior figure in the Cabinet, a huge blow to the prime minister. And not only did he leave, but he left with a stinging rebuke in his
resignation letter of the prime minister. I'll read you a portion of that. He said, "Where we need vision, we have a vacuum. Where we need direction,
we have drift." And he goes on to say, "It is now clear that you will not lead the Labour Party into the next general election."
Now, as you say, no official announcement that he's challenging Starmer. He may not have enough support in parliament as of yet. He needs 20 percent of
Labour MPs. That's about 81. But still, this could pave the way. The prime minister came out and responded with a letter to Wes Streeting. This struck
a much more conciliatory tone, the prime minister saying, "It is incumbent on all of us to rise to what I see as a battle for the soul of our nation.
As part of that, we must deliver," he said, "on all of the promises we made to the country, including our promise to turn the page on the chaos that
was roundly rejected by the British people at the last general election," a reference to, of course, the fact that the previous conservative government
had gone through three prime ministers in their last two years in government.
And that is what the Labour Party ran on ending. And I think a hint to Wes Streeting there. But still a conciliatory one that all of this is not
helping matters.
[16:35:05]
And then, as you say, Andy Burnham steps up. One Labour MP has said that he's going to stand aside and Andy Burnham can run in a by-election. He is
seen as a very, very popular Labour politician, a powerful potential challenger to Starmer. There's still a lot of procedure here to get to get
through. He needs permission from the Labour Party's governing body. Its so-called National Executive Committee to run.
Then, of course, they need to organize the by-election. That could take several weeks. And then, of course, he has to win it. But still, I think at
this point, this day has taken us several steps closer to a potential leadership race. It's not going to happen imminently, but it certainly does
complicate the job of the prime minister, who continues to fight to prove to the British people that he has what it takes to stay on.
(END VIDEOTAPE)
NEWTON: Our thanks to Clare Sebastian there. Clive Betts is a Labour MP and he joins us now.
This is a fine mess, isn't it? To use a term. You know, the bind that you and your party are in with British voters. What do you expect to change
under a new leader?
CLIVE BETTS, BRITISH LABOUR MP: Well, first of all, I think it's very clear from the voters that talk to me in our recent local elections and we went
around door-to-door and spoke to a lot of people in the area I represent. And they were saying, no, we don't -- we've got problems. We don't think
the Labour government has delivered all we want, but particularly we don't like the prime minister. We don't like Keir Starmer, and we're not going to
vote for you while he's the leader of your party.
And that was said over and over again. In that situation I think you have a real challenge because even if you bring new policies in, even if you start
a new narrative with the voters, they've stopped listening. If they stop listening, there's nothing you're going to do to persuade them to change
their mind. So I think we do have to have a change of leader to change the public's view of the Labour Party and the Labour government.
NEWTON: OK. Given that, who are you backing and why? Who is going to do what Keir Starmer was incapable of doing?
BETTS: You know, you're one of a number of interviewers who've tried to lead me down that path in the last few days. All I've said all along is, I
think we've got to try and find a sensible way forward. Look, the reality is, and Wes Streeting said it in his message there, Keir Starmer is not
going to lead the Labour Party into the next election. I think that's one of the certainties in all this.
It's merely a question of when he goes and whether there is absolute chaos or there's an orderly election to replace him. At this stage, there's still
a lot of chaos around. I just hope eventually, and it's the Cabinet to take responsibility to say, right, we need to sort this out. We can't have this
drag on for months, and indeed, probably the next two or three years. We need now to find a way of having an election and allowing all the people
who are likely to be strong candidates to take part in that election. That's the only way we're going to get out of this and get to a better
place in the next few months.
NEWTON: But given the polarization and the division that we saw come through in those local elections, isn't there a risk that your party has
just set up a turnstile at Downing Street? And you will, like the conservatives, cycle through even more prime ministers.
BETTS: We could do that. I don't think we're quite as good at getting rid of our leaders now, prime ministers, the conservatives are. They've got a
track record.
NEWTON: I'm not sure that's something to aspire to. Just letting you know about that.
BETTS: Right. So I think the likelihood is we will have one change. It's important we get that change right, that we get a change, obviously, which
our party supports, and that all our party members feel they've had a say in it. And then it's important that we pick someone who the British people
is likely to have an opinion of that is favorable. Of course, that depends on how they perform in office.
But one of the things a leader has to do, the prime minister has to do, is to be able to communicate with voters and let them feel at least that that
person is on their side, understands their problems and their concerns at the time of, you know, real pressure on living standards of war in the
Ukraine, of war in the Middle East. It's really important that an individual can speak to people on their wavelength and communicate well to
them.
I'm afraid Keir Starmer hasn't been able to do that. One of the criticisms, he really hasn't been able to communicate in a way that people feel.
NEWTON: Right.
BETTS: He's got empathy with them and connects with them.
NEWTON: But look, it seems your entire party has already moved on from Keir Starmer. So the task at hand here, the chancellor saying that, look, U.K.
cannot afford this right now economically. You know that, you've been door- to-door, and you look at all the statistics. You guys have to wrap this up pretty quickly, right? And get on with governing and the policy. There are
quite a few challenges on the economy.
BETTS: I think you're right. But if you could then come and talk to all my colleagues and say, this is what you need to do, maybe we can get a message
across, because in the end, the Cabinet has to take responsibility for this. And one of the things I'm really disappointed of, we had disastrous
local elections last week, the worst since the war, and yet the Cabinet apparently didn't even discuss what was wrong and what we should do to put
it right.
[16:40:11]
That, I think, is a failure of leadership from the Cabinet. I'm really disappointed in that because they're the organization. They're the top body
in the government. Collectively, they ought to be putting their minds to work at this. And apparently what the prime minister has just said, back me
or sack me. Well, they nodded their heads and got on with it. I'm sorry. You can't just do that with the disastrous results we've had.
And people do want some (INAUDIBLE). People are struggling in their daily lives. Cost of living pressures and very poor public services that we
inherited from the conservative government. They need putting right. But they need clear leadership. The vision that Wes Streeting talked about, not
a vacuum, unfortunately.
NEWTON: Mr. Betts, from Sheffield, England, I thank you as we continue to watch from the sidelines. Appreciate it.
BETTS: Thank you very much for having me this evening. Thank you.
NEWTON: Cerebras has made quite a splash in its market debut. Shares have rallied 68 percent. Plenty for its CEO to celebrate. He joins me live next.
(COMMERCIAL BREAK)
NEWTON: That's Wall Street's newest $95 billion company, Cerebras. Its executives rang the Opening Bell as you see there today at the Nasdaq to
celebrate the company's IPO. Shares of the A.I. hardware company surged 68 percent in their first day of trading. They were offered at $185 a share.
The IPO raised $5.5 billion, making it the largest so far this year.
Now Cerebras makes chips that it says are faster, more efficient and less expensive than Nvidia's. Cerebras CEO Andrew Feldman joins us now.
Congratulations to you on the IPO. And listen, give me the specs on this. What is it supposed to do? It is you say the largest computer chip ever
built. And why do you believe it could be a game changer for A.I.?
ANDREW FELDMAN, CEO, CEREBRAS: Well, we solved a problem. This is our chip here. It's 58 times larger than the previous largest chip and larger than
the GPU. And we solved a problem that had been open in the computer industry for 75 years. And by building a chip, we're able to store more
information on the chip and process information more quickly and thereby deliver answers in less time, more order 15 times faster than GPUs for
inference problems, and that's what's booming right now.
[16:45:12]
NEWTON: In terms of A.I., what does the stellar success of your IPO tell us about where this technology is headed?
FELDMAN: Well, look, I think A.I. is an extraordinary wave. I think starting sometime in the middle of last year, our models, the A.I. models
got smart enough to be useful. And they'd sort of move from being a novelty in 2023 and 2024 to something really useful. And as they become more useful
and as they're embedded in our daily work, the demand for the compute that underpins that has exploded.
And that's what we're benefiting from. Our revenues have exploded in 2022. We did 25 million in 2023. We did 79 million in 2024. We did 290, and we
just came off a $510 million year. And so all of this is being driven by sort of people wanting to use A.I. And when they use A.I., right, speed is
fundamental and we're the fastest by a lot.
NEWTON: Andrew, this is not your first rodeo. You've been at this for a while. You decided to put this IPO out now. And obviously it's been
successful. What do you see constraining you or even constraining A.I. in general in the future? I mean, you showed me the size of that chip. It's
very large, very impressive. But are there some constraints there?
FELDMAN: Yes, there are constraints. We -- but they're not on the chip side and they're not even on the supply chain side. The major constraint that
the entire industry is facing right now is data centers and the power to fuel those data centers. I think that that constraint relaxes over the next
12 or 18 months for the whole industry, not just for Cerebras, but I think you've seen the aggressive actions by OpenAI to take data center space.
You've seen recently responses from Anthropic to lease space from Elon Musk and his companies. But I think all of us are looking for additional data
center space. It's in these data centers that we house these fast A.I. computers. And it's with these A.I. computers that we meet the demand for
A.I. compute.
NEWTON: Yes, which is a challenge already given all the issues that we discuss with those data centers. Now you manufacture your chip in Taiwan.
Given the complex relationship with China right now, do you foresee being able to make your chip in the United States or elsewhere? And how long
would that take?
FELDMAN: Sure. So we have been partnering with Taiwan Semiconductor Manufacturing for all 10 years of our company's life. And I partnered with
them previously as well. They're an extraordinary company and they do build our parts in Taiwan. We are at what's called the five nanometer node. They
have a fab in the U.S. at the five nanometer node. Unfortunately, right now it's full, so there wasn't room for us. So we're in Taiwan fab.
It wouldn't be difficult at all for us to move to their U.S. fabs. I think for now we're staying with TSMC for the future. But I think the challenge
is in Taiwan between Taiwan and China, something that have to be watched carefully.
NEWTON: OK. Andrew, is it fair to say you are a newly minted billionaire today? And how many times over? Forgive me, I have to ask.
FELDMAN: I -- fair to say that question makes me uncomfortable. I think, look, the most important thing is that we made some money for our team.
There are people who've been working with us for nine, nearly 10 years, and who've been putting in nights and weekends. Not for a little bit, but for
years on end in pursuit of this vision. And those people, those men and women bet big chunks of their career on us. And I couldn't be happier that
we've made big money for them.
NEWTON: And I hear you, sometimes you just don't know where this is going to go. And there is risk involved.
FELDMAN: Indeed.
NEWTON: Andrew Feldman, as uncomfortable as you are, I'm going to declare you a newly minted billionaire, and I hope that isn't misleading. Thanks so
much. Take care.
FELDMAN: Thank you. Be well now.
NEWTON: Coming up, getting a college degree in the U.S. can cost hundreds of thousands of dollars. Khan Academy says it plans to launch a program
that will cost less than 10,000.
(COMMERCIAL BREAK)
[16:52:12]
NEWTON: A.I. is powering the stock market to new record highs. Our next guest wants it to power learning. Khan Academy recently announced it will
launch a new higher education product. It says the Khan TED Institute will complement traditional universities and cost less than $10,000. And yes, by
today's standards, that's a bargain.
Sal Khan is the CEO of Khan Academy, and he joins us now.
Good to see you. I want to know from you just firstly, what constructive role do you see A.I. playing in education? Because some wonder if our
adaptive learning skills might really atrophy with A.I. and not in the same way enhance our capacity to learn, you know, let alone be creative. What
have you seen?
SAL KHAN, CEO, KHAN ACADEMY: Yes, I think of it less as an A.I. or not A.I. issue and more of what are you doing in any scenario. If you, even before
A.I., if you had a parent or a sibling or a friend who did the work for you, that's going to be cognitive offloading. But if you had a parent, a
teacher, a friend who pushed your thinking, who asked you harder questions, that's cognitive unloading, that would build your critical thinking.
And I think A.I. can go either way. So yes, there is -- there are a lot of students who are cheating, who are doing cognitive offloading. I think as a
system, we have to protect against that. And there's fairly straightforward ways to protect against that, but there's also ways to use A.I. to actually
push students more to dig into their thinking.
NEWTON: And since you've been at this for so long, and now you're doing the deep dive in A.I., I want to ask you, you guys launched Khanmigo. It is an
A.I. tutor. You launched it three years ago. I mean, what did you learn from that? Because you know what I'm going to say as a mom of adult
children now, thankfully, that the human interaction, there is no replacement for that. I don't care how sophisticated A.I. gets. Am I wrong?
KHAN: No, you're not wrong. We agree with that 100 percent. And this is true. We've been saying this even before A.I. came on the scene. Obviously,
Khan Academy has been out there. We're reaching hundreds of millions of students, teachers, classrooms around the world. But we have always said,
I've always said, that if I had to pick between amazing teacher and amazing technology for my own kids or anyone's kids, I would pick amazing teacher
every time.
But ideally we don't have to make that trade off. If you can have an amazing teacher paired with amazing technology, we know a lot of teachers
have a classroom of 30, those 30 students are at all different levels. If we can help that teacher personalize that classroom, get insights about
where they are, give the teacher supports on anything from grading papers, developing lesson plans, maybe answering some students' questions that the
student -- that the teacher can't get to in the moment, then that's a good thing for everyone.
Now, there's also scenarios, for example, we've had students in places like Afghanistan use Khan Academy when they didn't have access to a school.
NEWTON: Sure.
KHAN: So it can raise the floor.
[16:55:02]
But in the ideal scenario, you definitely want both. And what we've seen in classrooms, yes, the A.I. can engage. Yes, the A.I. can help, but it's only
leading to real results when the students are getting a lot of practice on things that are at their learning edge.
NEWTON: Right.
KHAN: The teacher is there to support them, to dig in deeper, to form connections with them. We just did a study that had huge gains. It was
actually in India. But the study showed the biggest gains when it was a combination of Khan Academy plus sharing teacher.
NEWTON: Right. Sure. Using all of it. And let's get to that Khan TED Institute now. You're going to launch it sometime within the next two
years. I mean, as an accredited degree program, what kind of a leg-up will it give people? Because I don't have to remind you how quickly A.I. is
developing. You'd be in the middle of this degree and so much would change.
KHAN: That's the idea. You know?
NEWTON: Sure.
KHAN: Traditional higher education, even before generative A.I. came on the scene, one could argue in a lot of places it's been very expensive,
sometimes costing tens or hundreds of thousands of dollars. Not always clear that the skills you learn are translating into the workplace, and
that's even happening more. It's hard to predict exactly what those skills are going to be, but we think by partnering with some of the top
corporations in the world like Google, Microsoft, McKinsey, Bain, Replit, Accenture, and co-designing tasks, projects with these students to create
portfolios and to develop the, what we call durable skills, the human skills, that will always be relevant.
We think we're going to create a signal for hopefully over time, tens or hundreds of thousands of students that won't necessarily be a substitute. I
think many of the folks who are already interested already have bachelor's degrees, but this will be an extra signal that shows that they have the
A.I. skills they need.
NEWTON: I see what you mean. So you might have a degree in something else, and then you would take this on board at a reasonable cost and really try
and dig deep into the A.I. technology.
KHAN: That's right. And it could also be for people who haven't had access before. And this could also be their first degree. But the bottom line is
we just want to create pathways. And this is Khan Academy's mission, free world class education, this one I'll call accessible world class education.
We've said sub $10,000 not just for tuition. We're saying sub $10,000 for the whole program.
I actually hope we're designing it in a way that hopefully can come even well below that, and even offer financial aid. And if you're at a part of
the world where you can't afford even that, this is mission focused nonprofit.
NEWTON: Right.
KHAN: We want to make sure as many people as possible can tap into their potential.
NEWTON: Sal Khan, I imagine -- I really do admire all of your passion. You've been at this for quite a long time, and no matter what it is, you
kind of bring it every time. We will continue to follow those developments. Really appreciate you being with us.
KHAN: Thank you.
NEWTON: This is -- this was QUEST MEANS BUSINESS. I'm Paula Newton. "THE LEAD WITH JAKE TAPPER" is next.
(COMMERCIAL BREAK)
END
