Return to Transcripts main page
Quest Means Business
President Trump Speaking to Reporters; Broadcom Earnings Send Chip Stocks Sharply Lower; Pentagon Denies Iran Claim U.S. Missile Hit Kuwait Airport; Senate Kicks Off Marathon Vote to Fund Immigration Enforcement; Accor CEO Eyes Expansion in Final Years of Tenure; Quantinuum Rings Nasdaq Closing Bell to Mark IPO; Mexico City Prepares for World Cup Crowds. Aired 4-5p ET
Aired June 04, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:21]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Welcome to QUEST MEANS BUSINESS.
President Trump is speaking in the Oval Office. We will join him tonight.
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: I think he'd like to do it. I'd like to. I think he wants to do it very much. Got a lot
of energy. But he will be very good.
Again, it is not a permanent position. We are looking at -- we are interviewing people right now, but it is somebody just to take it over for
a little while.
REPORTER: Does he have the necessary, in your view, Mr. President, the necessary National Security experience to take on that position?
TRUMP: Well, I do, and I think he does, actually, because he is smart, because a lot of National Security. Look, I wasn't greatly experienced in
National Security and I think I've done a really great job with it, a lot of people would say that. I've ended eight wars and soon to be a ninth. I
hope that works out to, you know, frankly, but probably -- and there is another one also. It could be ten.
No president, I don't think a President has ended one war having to do with outside of this country. So, you know, we've done a good job.
I would say that Bill is a guy that will be able to figure it out very quickly.
Again, it is short term, but he may be very effective for a short period of time.
REPORTER: Mr. President, so will there be a proportional shared increase of electricity production as a percentage of our nation's electricity output?
And my follow up is I took that historic trip with Secretary Wright of the small modular nuclear reactor on the West Coast early this year.
Are we making more progress? Because I know how critical gas and coal is for the secure grid?
TRUMP: Well, the answer is we are. But Chris, you want to answer that?
CHRIS WRIGHT, U.S. SECRETARY OF ENERGY: Yes. I mean, our electricity grid essentially runs on gas, coal and nuclear. Those are the three key sources.
They're the backbone of the American electricity grid. We are in favor of seeing all three of them grow. You will see all three of them grow during
this administration.
And in fact, later today, before the sun goes down, you will see a big announcement in the nuclear space related to the trip you came on.
REPORTER: Thank you.
TRUMP: Okay. Thank you.
REPORTER: Mr. President, President Putin said today that he was willing to make compromises that you requested to end the war with Ukraine if Ukraine
was willing to make similar compromises.
TRUMP: Yes.
REPORTER: What were the compromises that you had --
TRUMP: Well, I'd rather not say because Peter asked me that. I think it was meant as a little wise guy question, but I am not sure. But I am very
responsible when that happens, it is going to happen. They are going to both make compromises. I suggested those compromises.
And, you know, we've had a lot to do with it. We'd love to see. They are two very good people. They're two very, I mean, incredible countries,
beautiful countries. They've got us -- last month they had 25,000 people killed, soldiers, mostly soldiers, some people, but mostly soldiers and it
has been averaging probably almost 25,000 people every month of soldiers killed.
And, I've been very strong on the fact that they've got to get that over with. So, but they -- they do. I want them each to make certain
compromises. I think they're going to do that.
Yes, Daniel.
REPORTER: Mr. President, thank you. Your actions have saved and supported more than 100 coal plants in your second term. When you hear something like
that and you try to create an environment where they're not just surviving, they are thriving, what does that do to the reliability of our energy?
QUEST: So there we have President Trump answering a variety of questions on all sorts of issues. I do know that we are going to hear more about coal
and nuclear later in the day, but that's the President at the moment.
So far, nothing outstanding on Ukraine or on the war in Iran. So, we continue with our business agenda.
Two competing forces are pulling U.S. markets in different directions tonight. The triple stack will show you the story. We've got a record on
the Dow and the S&P as falling oil prices lift sentiment on the broader market. They like what they see in the general U.S. economy. Leading the
way, health care, financial stocks. Now you look at that. You see quite clearly.
But then you've got the NASDAQ, which is lagging behind on a rising market to fall is significant and it is a pause on the A.I. rally thanks largely
to Broadcom, which has just suffered one of the single day market losses in history as revenue projections fell short of sky high expectations.
Lisa is with me. Lisa Eadicicco is with me.
The problem here is that Broadcom didn't do anything wrong. It just didn't do exactly what was expected to be right.
LISA EADICICCO, CNN BUSINESS TECH EDITOR: Well Richard, I think really what this speaks to is the really high expectations for companies like Broadcom
that are in the chip and memory space that are absolutely critical to the A.I. data center buildout that we've been seeing.
[16:05:06]
And I think the expectations are so high because a lot of companies, these hyperscalers, keep spending massive amounts of money on data center
buildouts and the expectation is that Broadcom and other companies in that same space are going to see massive paydays from that.
And as you mentioned, Broadcom didn't do anything wrong. There are a lot of really surprising and positive numbers in here. They said revenue for the
second quarter grew 48 percent compared to last year. They expect to see a lot of growth in their semiconductor revenue for this year, but they didn't
change their guidance outlook for semiconductor revenue for 2027.
And I think that's the key here, and that's what a lot of people on Wall Street have a lot of questions about, because that's when I think we are
expected to see more of these data center plans being put into place.
And I think beyond just that guidance, I think I am sure Wall Street also wants to hear more about new partnerships and other ways that that Broadcom
can benefit from this growth.
QUEST: Okay, so share price is a factor of future earnings stream and if the future earnings stream is not there, then the share price falls and
there is an argument that that's what we have seen today, except the future earnings stream of companies like Broadcom was never that certain to
justify those prices in the first place, and that's the conundrum here.
EADICICCO: Yes, I think when you talk about A.I. in general, there is just so much uncertainty around it because it has been growing so fast, and at
the same time, a lot of the companies that are the biggest names in the space that provide services to consumers like OpenAI and Anthropic, those
companies are also still kind of figuring out how to generate profit for themselves, right?
So I do think that there are a lot of questions just around the business models surrounding A.I. in the future, and I think part of why you see a
lot of attention focused on these chip stocks, in particular, companies like Broadcom and NVIDIA, is because these data center buildouts kind of
offer a tangible business model, something that we know that these companies are investing in.
We know that these plans have been made to build out these data centers. So I think that's part of why they are so closely watched.
QUEST: I am grateful for you. Thank you. We continue.
Concerns about those tech stock valuations, it all happens when we have an IPO pipeline that's really quite extraordinary. Elon Musk is preparing for
what can now officially be called the largest IPO in history, SpaceX.
Last night, we gave you the price. Well, it is $135.00 a share, 555 million shares are going to be sold, and that puts the value of the company at $1.7
trillion. A report from Morningstar questions that number. Its analysts say Elon Musk's company is probably worth closer to $800 billion, which is
still quite a lot, but not the largest in that sense.
SpaceX is one of just a few highly anticipated. You've got OpenAI, you've got Anthropic, you've got SpaceX.
Kristina Hooper is the chief market strategist at Man Group. Good to see you.
Let's deal first of all with the valuations and bearing in mind what Lisa was just saying. The valuations are much -- they have divorced from reality
of future earnings streams because that is so uncertain. So, is this an accident waiting to happen?
KRISTINA HOOPER, CHIEF GLOBAL MARKET STRATEGIST, MAN GROUP: Richard, I think you hit the nail on the head, it absolutely is. Think of this as a
form of faith based investing. You have many, just assuming that the earnings forecast today are what we will actually see when there are a
variety of potential obstacles that could actually slow A.I. CapEx.
And so I do think that markets are overly optimistic. Investors are overly optimistic. It doesn't mean that A.I. isn't going to be transformational.
This doesn't mean that this isn't another industrial revolution, but we are at a place where valuations are so high. Stocks are in many cases, priced
to perfection when it comes to anything related to A.I., and I do believe we could easily be disappointed.
QUEST: Right. But the point about stock prices is that they correct over time whether it be in the short or the meantime, you know, if you're
pricing to perfection over time, the market will price to reality rather than just mere expectation.
And what I don't understand is why rational, hard-nosed analysts and investors are giving so much leeway. That's really what's the trouble here.
It is not that a few companies are a bit frothy, it is analysts are sort of going along with -- they've drank the Kool-Aid.
[16:10:07]
HOOPER: Well, I would argue that analysts are basing this on what they've seen thus far, which has been a dramatic ramp up in spending. But I do
think we are going to get to a point where that spending slows, and it could come from a variety of different places.
We could, for example, see hyperscalers have difficulty getting financing or not having the interest or the will to spend as much as they have spent.
We could see, for example, supply chain disruptions that slow A.I. CapEx.
So a variety of drivers could push spending lower in this space.
QUEST: But you see, you're focusing in that, you're focusing on CapEx spending, being the driver and unless there is a consummate CapEx spending
into profitability, all you've got is basically a negative side of the balance sheet. You're spending, but you haven't got the revenues.
At what point do you need to see that CapEx producing larger profits?
HOOPER: We are getting much closer to where were going to need to see it, but we won't know exactly what that point is until we see a market
reaction. That's the reality.
Valuations are rarely predictive in the shorter term, but they can be sometimes and we have to be aware of that. And you mentioned seeing a price
adjustment over time. But Richard, it could happen rather quickly. And in fact, the ECB and its financial stability review warned of a potential
sharp adjustment because prices are so high. And I do think we have to factor in that potential.
QUEST: Central Banks, I am glad you mentioned the ECB, Central Banks on both sides of the Atlantic are doing quite a lot of work, not just stress
testing, but also understanding because Mag Seven is such a huge part of the market. A.I. is so dominant in terms of investing strategy.
If it turns turtle, as they say, then Central Banks could find their national economies in very, very tricky waters.
HOOPER: Oh, absolutely!
Central Banks aren't just worried about growth and inflation, they worry about stability. That includes market stability. And so of course, they
have to be concerned with this.
QUEST: I just keep looking at these companies that are going to IPO and the three biggies, Anthropic, OpenAI and SpaceX, the market will find the money
for them, to be sure and there is also, I was reading a very interesting investment strategy where people are investing into the companies that they
know have invested into those three big companies.
So, if you can't get directly to it, you're going to go via those companies that are already well and truly up to their eyeballs in it.
HOOPER: Yes, this feels very much like much of what we saw during the tech bubble, the late 1990s, the early 2000s. There is a reason for positive
sentiment, but there may not be as compelling a rationale for this level of exuberance. And of course, it has with it significant risks.
QUEST: Kristina, when you get the memo that tells you what day that the market is going to turn, do pass it on, please.
HOOPER: You're my first call, Richard!
QUEST: My first call, yes, yes. Take it to the bank. Good to see you. Thank you very much.
Now, fresh strikes are testing the tenuous ceasefire between Israel and Lebanon. The negotiations between the U.S. and Iran, the conflicting
messages from Washington and Tehran in a moment.
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:16:32]
QUEST: Tonight, a new ceasefire agreement between Lebanon and Israel is being put to the test. Israeli forces and Hezbollah have traded fresh
strikes, and it happens only hours after the deal was struck. The militant group called the agreement a farce.
Kuwait has released this footage. There you go. Allow you to appreciate what must have taken place there. That was an Iranian strike on their main
airport.
Look at it. Imagine the horror of that being on the inside. Absolute horror.
Tehran claims the damage was caused by a U.S. missile interceptor. The U.S. military says that is totally false. CNN's Melissa Bell takes up the story.
(BEGIN VIDEOTAPE)
MELISSA BELL, CNN SENIOR INTERNATIONAL CORRESPONDENT: There is this ongoing dispute about how this latest flare up in the Gulf began, with Iran
insisting that their attacks on Bahrain and Kuwait were a response to the U.S. strike on an oil tanker in the Strait of Hormuz and further American
strikes on an island there in the Strait of Hormuz as well.
So, there were -- there is this added complication of this renewed violence that, of course, in Kuwait killed one person, injured 60 around Kuwait
Airport.
But this latest flare up of that violence, of course, further then complicates the efforts to secure that ceasefire between Israel and
Lebanon. Of course, Tehran has again insisted, beyond accusing Kuwait and Bahrain of being complicit in the American war and justifying them for its
attacks on the Gulf States.
It is also now saying that it will not be resuming any talks, indirect talks that have been happening with Washington until there has been a
proper ceasefire along the Lebanese-Israeli border and the end of the war there.
And we've been having these mixed messages between the Americans and the Iranians about the state of the negotiations. President Trump insisting
that talks are underway and that a deal might be found by the weekend. Tehran in the shape of its Foreign Minister, explaining that no progress
had been made in those talks, as far as the Iranians are concerned and that they've now been suspended as a result of the latest violence in and around
the Strait of Hormuz, also adding that the Iranians will now only return to the negotiating table if there is a full ceasefire in Lebanon.
The trouble is that the ceasefire that was agreed on Wednesday after the negotiations between Lebanese and Israeli officials at the State Department
in Washington was almost immediately challenged by an exchange of fire between Israel and Lebanon, further challenged, as we know, the fact that
Hezbollah is not a party to this deal and has insisted that it will not be involved in it or indeed prevented from acting as a result of it.
There is a further complication, of course, in the fact that Israel insists that it will keep -- stay in its positions about nine miles across the
Lebanese border, including Beaufort Castle, that Crusader-era castle that it is now occupying nine miles to the north of that border, insisting there
will be no return of the Lebanese populations there.
That is another major sticking point, and Human Rights Watch, again, very much this afternoon, criticizing the fact that Israel maintains that
position.
(END VIDEOTAPE)
QUEST: Melissa Bell reporting.
Investors are hoping that the ceasefire between Israel and Lebanon is a step towards the reopening of the Strait, and oil prices eased slightly,
though they are clearly elevated compared to -- just look at the way in which $88.30 on the 29th, $93.12. So we are way above.
The volatility has forced people and businesses to adapt.
[16:20:10]
If you look at the data from China, it shows sharp falls in oil demand, and yet the economy of the country remains relatively robust.
Its E.V.s and other energy efficient measures that people are turning to. Environmentalists hope to see trends like that continue.
Jesper Brodin is one of them. He is well, you see, he was chosen to chair the board of Prince William's The Earthshot Prize. You see them there. He
was, of course, the former CEO of IKEA, and Jasper joins me from Helsingborg in Sweden -- I always found -- Jasper, good to see you, sir. I
am grateful.
JESPER BRODIN, CHAIRMAN OF THE BOARD, "THE EARTHSHOT PRIZE": Good to be with you.
QUEST: The issue is how much -- it is the old argument of mitigation versus adaptation and it is a sterile argument because you have to do both. I am
aware of that. But I am wondering where you think the priority is at the moment.
BRODIN: Well, as you said, it is both, definitely. Unfortunately, we need to prepare ourselves with adaptation. But at the core of the issue, we have
a leaking ship and we need to make sure we plug the hole and we pump the water.
So mitigation needs to be at the center of all the things we do.
QUEST: What's your favorite in terms of mitigation? What do you want to see people doing particularly well?
BRODIN: Well, I do believe the favorite pathway as I've been, I think looking for, and I think together with other corporate leaders finding of
the last decade is actually when we are capable to mitigate, and at the same time, not only do it at zero impact for business, but actually get
benefits out of business.
So to a lot of favorites depending on, of course, which sort of business you're in. But if you look at the renewable energy sector, which brings you
cheaper energy, but also brings you independence when it comes to energy, it seems to be one of the smartest things to do.
QUEST: I just heard here in the U.S. today, the U.S. is going to announce new developments on nuclear. It is going to announce new developments on
coal. The Energy Secretary was saying that the grid runs on three things -- nuclear, gas and coal. How retrograde do you see the move to open up or
develop or continue to promote coal as a form of energy?
BRODIN: Well, you know, as a representative and the chair of The Earthshot Prize and other organizations who work in the space of trying to combat
climate change, we need to stop adding carbon to the atmosphere. And obviously, we need to find a way to do that, both in the time perspective
that we are running because we are running against the clock speed here, which doesn't look too good.
That means obviously, as much as we can accelerate renewables, it is also about finding the best cost benefits. And today, the renewable energy
sector is actually out beating, outpacing all over the world from China to the U.S. all other sectors when it comes to investments. So, that is what
we do. That's what we also look to celebrate and people who actually make those changes come through in big companies, in small, yes.
QUEST: So The Earthshot Prize, why did you get involved? I mean, besides the fact, obviously the Prince of Wales, you know, asked you and if asked
one serves, so to speak, but Prince Williams made this very much one of his key strategies and important parts of his public life.
What was it about Earthshot and its one million dollar prize that you liked?
BRODIN: Well, I think there is a couple of things with the prize. I always admired it since it was started five years ago in 2020. It combines urgency
and optimism, both these ingredients and it drives the focus towards actions. It does celebrate the people through the award winning ceremonies.
But it also helps organizations both to scale up and also to fund the interests that we want to see more of out in the world. It is a well-meant
intention to actually not support these initiatives, but actually bring hope to the world by telling the stories.
QUEST: Now, I am not sure you can see that we are sending you the picture back, but I have on my table here a chair, a chair that you and I helped
build just before you left your last job. Have a listen to what happened when we tried to build this, when we successfully built it.
(BEGIN VIDEO CLIP)
BRODIN: We are going to start with these legs actually.
QUEST: Take the legs.
BRODIN: Yes. We take the legs.
QUEST: And we want the bit with the two holes at the bottom.
BRODIN: Right. So which way are they going to go?
QUEST: Ot goes. Yes, that bit. The prongs point away from the point, the rounded bit. Okay, good. Here we are. Your reputation is on the line here.
BRODIN: Yes, I know. This is the risk we are taking, both you and I, I think, particular, me.
(END VIDEO CLIP)
[16:25:10]
QUEST: Now, you'll be pleased to know, you can't see it, but the chair is still standing, which is good.
BRODIN: Oh, that's good news.
QUEST: And we do sit on it. It is good news, but it is the message that I am showing at the back where you wrote "The future is bright." You still
believe the future is bright bearing in mind the awfulness that we face and the difficulty -- we don't seem to be making much climate control progress.
But you say it is still bright.
BRODIN: Well, I would argue differently, actually based on facts as well. But I think optimism, the way I see it, like to see this is a choice and
I've made mine in this space.
Ten years ago, Richard, we had aspiration and hope that we would be able to combat climate change and nature loss. Today, we know in the corporate
sector that is not only possible, but it actually seems to be a really good business idea.
If not in all, in a majority of the businesses out there.
QUEST: I am grateful to you. We will keep checking in with you. Thank you, sir, for joining us. Thank you.
Tonight, there is a vote-a-rama on Capitol Hill. What does that mean? The Senate is in our number five of its attempt to pass billions of dollars in
funding for Immigration Enforcement and Border Patrol.
The bill's fate is somewhat dubious. In a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I am Richard Quest.
Together, you and I are, we are going to have a lot more QUEST MEANS BUSINESS. The Accor chief executive, Sebastien Bazin announced he is
stepping down in two years. He told me what he wants to get done before he leaves, and shares in Quantinuum started trading after the quantum computer
company went public. The CEO who rang the closing bell on the NASDAQ will be with me in just a moment or two after the news. This is CNN, and of
course, here the news comes first.
Hezbollah is rejecting the latest ceasefire agreement between Israel and Lebanon. The group's leader has called the deal, which was signed in
Washington on Wednesday, a roadmap to exterminate a segment of the Lebanese people.
The Israeli forces and Hezbollah traded fresh strikes shortly after the agreement went into effect.
The former Trump National Security adviser, John Bolton, is expected to plead guilty over his handling of sensitive National Security information.
Sources are telling us that Mr. Bolton, who is now a staunch critic of President Trump, has reached a plea deal. He has agreed to pay more than $2
million fine and could face five years in prison.
Tributes are being paid to the French-Iranian author, artist and film director Marjane Satrapi. She died at the age of 56. She was best known for
her graphic novel "Memoir," which showed Iran's Islamic Revolution from a child's perspective. She co-directed the film version, earning an Oscar
nomination.
[16:31:01]
President Trump's grip on his own party, the Republican Party, is facing a big test on Capitol Hill. It's a marathon voting session on a $70 billion
immigration enforcement bill, which is a key priority of Mr. Trump. The Senate Republicans have rejected an effort by Democrats to kill the
president's so-called Anti-Weaponization Fund. The House voted to limit Donald Trump's Iran war powers in a remarkable rebuke.
Manu Raju is on Capitol Hill.
Rebellion, such as there may be, is very specific, isn't it? It is those who are senators or congressmen of Republicans who are either not standing
again or are have a particular point of view that they can get away with.
MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Or that they are facing their own difficult reelection bids, which is the real challenge now in the
United States Senate, where they are taking up this $70 billion immigration bill. But there are amendments after amendments that are being put forward
to target Trump's $1.8 billion Anti-Weaponization Fund, that is broadly unpopular among the American electorate, including among Republicans and
particularly for Republicans who are facing reelection.
We saw an amendment that almost was adopted to the Senate bill that essentially would have scuttled the bill altogether and also went after
that DOJ weaponization fund. That proposal ultimately failed by one vote after three Republicans in difficult reelection races voted for it. One
Republican who they were -- Republican leaders were lobbying hard to convince not to sink the bill.
That was Senator Bill Cassidy, who, remember, just a couple of weeks ago Trump pushed him out of his own race after endorsing his primary challenge.
So part of people's own self-interest, sometimes it's these retiring senators, sometimes these senators who are out for revenge, like Senator
Bill Cassidy. Both he and Senator Thom Tillis, also a Republican senator who is not running for reelection, are threatening to vote against this
bill on final passage if it does not go after the Justice Department's weaponization fund.
And the math, Richard, is critical because Republicans can only afford to lose three GOP senators on this party line vote, meaning that if there's
another Republican who breaks ranks like the ones who are up for reelection, that could derail the entire immigration agenda, which is why
Republican leaders are so frustrated at President Trump's handling of this DOJ fund, because it has completely undermined their agenda and their
ability to deliver on a key priority of the president's in this election year -- Richard.
QUEST: OK. So, you know, everybody is looking very closely at what point does the -- never mind his coattails, just this his support, whatever goes
out the window. But at the same time, if you've only got to look at the primaries where he supported against incumbent, ones, the critics are apt
to see things and exaggerate what might be happening here.
RAJU: Yes. Look, I mean, there are two different things that are going on. There's one, Trump is showing his support and his strength within the
Republican primary base. That's been the case time and time again, as has happened in Louisiana, has happened in Kentucky. It's happened in Texas. He
did have a setback in Iowa and Iowa gubernatorial race this week. But broadly speaking, he has been very successful there.
But when it comes to Capitol Hill, things are a little bit different. Yes, he gets his way most of the time, but members here are running on their own
self-interest. They are worried about their own races. And when they have to cast a vote that they know will come against them, will hurt them in
their election, that's when Trump is facing problems. On Iran in particular we saw that yesterday, a handful of Republicans breaking ranks with the
president, in large part because a lot of them are simply hearing from voters back home concerned about high gas prices, concerned about the war.
And they want to show that they're breaking from the president on this issue because they believe, in part, that this will help them politically
with their voters who are frustrated with the president.
[16:35:03]
So that is the real challenge the president has with his agenda, because a lot of things that he is pushing is something that may not be popular for
these members who are trying to survive amid this worsening political environment -- Richard.
QUEST: Manu, I'm grateful. Washington at 4:30 in the afternoon, nice and hot. It looks like the temperature is getting up there.
The chief executive of Accor is looking to expand the group's global footprint. The hotel group has already properties in dozens of countries.
Up next, Sebastien Bazin tells me where he wants to go next. He's in the C- Suite in the Sky.
(COMMERCIAL BREAK)
QUEST: Accor has properties in 117 countries and territories. Now what does that mean? It's nearly 6,000 individual properties, hotels across the
globe, whether it's Europe, Australia, Africa. You can see sort of an idea there. Accor's chief exec says he wants to expand even more before his
tenure is up.
Sebastien Bazin told me he's in his last two years in the post and he wants to, in his words, finish the job.
(BEGIN VIDEOTAPE)
SEBASTIEN BAZIN, CEO, ACCOR: Finishing all the growth of this company, getting into India in a big way, understanding A.I. to adopt it today,
finishing the asset light, selling all the real estate that we still have left. But India is probably the core of this is going to be the next
largest hospitality market in the world. And you know this. This is going to take 15 years, 20 years, and prepare South Africa. So we've been
conquesting South America and Europe and Southeast Asia and Australia and Korea and Middle East. And now the next two territories to conquer happen
to be South Africa and India. And --
QUEST: Both very difficult. I mean --
BAZIN: The most complex one by far.
QUEST: Yes. I mean, I'm not saying that Australia and New Zealand and Pacific and all the others are easy. But it's relatively low-hanging fruit
compared to these other markets.
BAZIN: Well, yes. Today, but as you know, Africa will be probably 25 or third of the world population. India is the largest populated market with a
lack of hospitality infrastructure. It's time to go now. It's may be a 10- year bet, but we've made a 25-year bet 25 years ago in Southeast Asia and in Brazil. So it's a long-time bet, but it has to be started now. And we
probably should have started a couple of years ago.
And we're going big with the new infrastructure, new team, new partner, new methodology, and the real resources. No, no.
QUEST: This asset light.
BAZIN: Yes.
QUEST: Which you're messianic about.
[16:40:01]
It's a wheel that turns in some senses because there are those companies that sort of believe that if you own the bricks and mortar, you do have the
assets, you do have the strength for the future on your balance sheet.
BAZIN: Yes, and so you need to be -- you need to be a true partner with the hotel owners. You need to be fully aligned. Otherwise if he doesn't invest,
my brand will be tarnished. So you'd better basically have a common plan. And that's the limit of the exercise. If you don't trust the owner, don't
put your brand next to him because it's going to be damaged. But if you trust the guy, if you're putting the world and the money behind it, it's
absolutely fine.
It's the 25-year management contract journey and it works. The only limitation of this is the ultra-luxury and ultra-luxury asset, Orient
Express and others, one could say you're better off owning the bricks, as well as being the operator, because there's a lot of money behind. And
maybe some point the owner may not want to put more.
QUEST: So in those scenarios, you're not against owning.
BAZIN: As a publicly listed company, I am because you cannot do both. One is a balance sheet investment, and you need to measure the risk and return
on capital, which is difficult to do. And then you are a servicer, which is a hotel operator. You cannot do both under a listed entity. If you want to
be an owner, do that with your own patrimoine, not listed, which I understand why people do this.
But for me as an Accor chairman and CEO, no, you have to make a choice and the choice that we made five years ago after 40 years of hesitating, we are
fully asset light and we're not going to go back in asset heaviness.
QUEST: Unless your successor decides.
BAZIN: Unless my successor wants to actually reshuffle everything, which he could. Of course he could.
QUEST: Do you fear that at some point that your successor, do you think, oh, no, everything I've done, somebody could be coming in?
BAZIN: I have no fear, no frustration. He can do whatever he wants. He or she actually. And I've done what I felt was good for the company 13 years
ago. It's probably needed actually. You need fresh eyes, fresh blood.
(END VIDEOTAPE)
QUEST: If you want to see a CEO behaving like a CEO, take a watch as we go on because before Sebastien Bazin leaves his post, he has a serious issue
to address. The short seller Grizzly Research has published a report in March that alleges negligence at Accor Hotels, claiming that some
properties failed to properly safeguard against human and child sex trafficking.
Accor has denied the allegations, but its chief executive told me the company followed up with an investigation of its own.
(BEGIN VIDEOTAPE)
BAZIN: Yes, we've done an internal audit which I felt was not enough. We've done an external audit both on the same kind of verifications. There is no
systemic sexual trafficking, thank God. We have proper standards in terms of stopping people actually going into a room with an underage. The one
thing that I guess I found out, which I'm not too happy about, we need to do much more.
It's not because we have standards. It's not because we have a charter that people basically abide by it. So general managers, they know about it.
Concierge, they know about it. But in some cases in which you want to know that I guess people who actually welcome those people know everything about
it. And we are not impeccable. We're close to being impeccable, but we still have a 6 percent slippage. And that 6 percent annoys me, which means
I guess I need to make it even clearer that even when people book, even if they don't show up, say no when they book.
QUEST: So in the case of this particular allegation from this particular source, what would you say? You're saying we've -- we take you seriously
and we are dealing with the issues that's been raised?
BAZIN: We're taking -- we should be taking it as seriously as a cyberattack, which means that I guess there's probably some holes in the
basket, in some of our brands, in some of the territories and some of the franchises where they know the code of conduct. Some of them either tend to
not abide by it or actually probably have forgotten about it. We need to go much deeper, but there's nothing systemic, and we are above board in terms
of values and in terms of conduct. But I was comforted by the external audit, but I want so much more out of it.
(END VIDEOTAPE)
QUEST: Sebastien Bazin.
Now to an IPO. It's Quantinuum, which went public on Nasdaq. The shares ticked up 6 percent higher on their first day of trading. They were offered
at 60 a share. The pure play quantum computing firm says it raised nearly $1.7 billion. It was founded in 2021 by Honeywell and the software firm
Cambridge Quantum. Honeywell still maintains a large shareholding in it.
It builds hardware and software systems for quantum computing. The U.S. government said it will invest $100 million in the company.
Rajeeb Hazra, who rang or he brought trading to an end at the Nasdaq, is with me. He's the chief executive.
Please, sir, let me just start with a really simple question. How do I pronounce the name of the company with that double U at the end?
RAJEEB HAZRA, CEO, QUANTINUUM: It is just as it is, Richard. Quantinuum. And I'm happy to be here. And thanks for having me.
[16:45:03]
QUEST: Right. Quantinuum. Right. The future of quantum, it's here. It's big. It's getting bigger. But it is still not reached the potential yet.
It's still, you know, there's still questions about how big it is going to be. Where do you see yourself fitting into that ecosystem?
HAZRA: So quantum computing is a new form of computing. And you know, while a few years ago or even a short five years ago, people thought about
quantum computing as a science experiment that potentially someday might do something useful. It has clearly crossed that, thanks to efforts of many,
but particularly companies like Quantinuum.
What we've done is built hardware and software that is co-designed in order to provide computational capabilities, as well as the reliability and
accuracy with which you can start to take on workloads and use cases that look at things that classical computing cannot do, cannot do efficiently or
cannot do at all because of the binary zero one nature of it. So think about looking at molecules and the interactions that unleashes a broad set
of use cases all the way from pharma to life sciences to, you know, to other areas where chemistry is a foundational piece.
And it's with that in mind, that acceleration and the exit from the age of kind of scientific discovery to building the hardware and software on a
roadmap, delivering that performance, unlocking these use cases is what we are doing, working very, very closely with market making customers.
QUEST: Right. So in terms of the profitability, I always feel a bit guilty asking about, you know, why aren't you making more money now, because I do
realize that this sort of -- what Quantiuum is doing is at the forefront along with others. And it's one of those things, you know, that pathway to
greater profitability is how far do you think?
HAZRA: That's absolutely right. I mean, we are in kind of the early days of a technology, kind of what I think about as the 100 megahertz PC days,
right? Who could imagine 20, 25 years ago when PCs were built that way, that that would usher in an entire revolution based on Moore's Law as PCs
turned into servers, servers turned into clusters and clusters turned into data centers.
QUEST: Right.
HAZRA: Today running the most. That's how we see this technology mature. The good thing is there's already tremendous commercial interest in using
this technology on various large, significant use cases, and therefore the value creation tams are in about $10 billion in a short span of three
years, rapidly getting to trillions of dollars if you look at estimates by others. What it does and does that by transforming the way you do discovery
using a combination of classical and quantum computing.
QUEST: Do you think that the market fully knows how to value companies like yours? I'm thinking of the absurdly high valuations we've got on many of
the companies. The A.I. companies at the moment. Now you are one stage even further beyond that, and you still obviously have demand for very specific
types of chips. And you have Honeywell still with you. So you're slightly protected in that sense. But do you think the market fully understands
valuations of these companies?
HAZRA: As long as you use the word fully, I don't think so, because it's a nascent technology. And of course, the market is learning to value and the
investors we have, we are proud to have those investors that understand the long term value in the transformational piece that quantum computing does.
And so as we look at what we do, we focus on value, commercial value creation through the hardware and software and services we build in very
close intimacy with customers, market leading customers.
The value propositions are clearly there long term because these are foundational technologies that transform like, you know, the very core of
things like building new molecules, building new drugs, building new fertilizers, designing next generation data systems for financial services.
So these address large problems or large opportunities in very large and growing markets. And it's going to be a journey.
QUEST: I am grateful for you joining us from New York. Thank you very much.
Now, the World Cup opener is a week away. Host Mexico City is working to make sure millions of visitors get where they want to go.
(COMMERCIAL BREAK)
[16:52:24]
QUEST: The first match of the FIFA World Cup is now a week away. The tournament will begin with Mexico, one of the event's three hosts taking on
South Africa. It'll happen in Mexico City.
Valeria Leon shows us exactly how North America's biggest city is gearing up for the crowds.
(BEGIN VIDEOTAPE)
VALERIA LEON, CNN CORRESPONDENT (voice-over): Traffic jams are a part of daily life in Mexico City. Now, with millions of World Cup fans expected to
arrive, officials are racing to keep one of the world's busiest capitals moving. New bike lanes, improved sidewalks, upgrades to public transport.
Among the biggest projects is a new 34-kilometer bike lane that stretches south toward Estadio Ciudad de Mexico. The venue set to host five of the 13
matches played in the country. But underground we found more than a few snags.
This is the new bike lane in Mexico City, but as you can see here, pedestrians and also public transportation crossing through. Cyclists are
taking risks at this point.
(Voice-over): Ana Gonzalez uses this route frequently. To get through, she often has to dodge busses, cars, and people walking across the bike path.
ANA GONZALEZ, CYCLIST (through translator): Pedestrians still need to adapt, especially when buses drop off passengers who cross without paying
attention. A lot of pedestrians also walk along the bike lane instead of the sidewalk.
LEON (voice-over): Mobility experts say the project is a step forward, but only a first step.
GONZALO PEON, DIRECTOR, INSTITUTE FOR TRANSPORTATION AND DEVELOPMENT POLICY (through translator): The Tlalpan bike lane is really isolated. We no need
to build lanes perpendicular to it.
LEON (voice-over): But the city's mobility plan goes far beyond cycling. Officials say they are also ramping up the city's metro system, which has
been plagued in recent years with interruptions of service.
ADRIAN RUVALCABA, DIRECTOR, MEXICO CITY METRO (through translator): Rain can affect service, so we're increasing the fleet from 28 to 32 trains to
reduce wait times, even during the rainy season.
LEON (voice-over): Public transport will be critical to meeting the spike in demand from the World Cup. According to the research group "Mexico Como
Vamos" the metro already moves around six million passengers every day. But its director warns the system is already overwhelmed.
SOFIA RAMIREZ, DIRECTOR, "MEXICO COMO VAMOS" (through translator): Mexico City sees an enormous number of trips every day. In a city of nine million
people, the demand for transportation is already extremely high.
[16:55:01]
LEON (voice-over): For Mexico City, the World Cup will be more than a global celebration of soccer. It will be a test of whether millions of
people can move effectively through the city and not miss a match.
Valeria Leon, CNN, Mexico City.
(END VIDEOTAPE)
QUEST: It's a mixed day on Wall Street. You had the Dow and the S&P both higher and therefore records. But you've got the record -- setting a record
up 874 points. And yet the Nasdaq slipped back. It was Broadcom that was largely responsible for that. We had a very sharp correction on Broadcom
because it failed to meet the numbers that it had seen or the expectations of the market, which some would arguably say were unrealistically high.
If you look at the Dow, its health care stocks like United and Merck were at the top. Financials were also strong with gains from Goldman Sachs, Amex
and JPMorgan. Honeywell down 2.5 percent. Honeywell, of course, backs Quantiuum firm which we just spoke of. They still have a large holding in
that and will continue to do so. But as you can see, by and large, the green led the day with broad based overall. Verizon interestingly just down
at the end. So you know, that shows the way the market was thinking.
We will take a "Profitable Moment." We'll do it only after the break. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." Some days when we're looking at the running order for this program, I do sometimes wonder how often can we talk
about the fact that you have the Mag 7. You've got the overvaluations of A.I. stocks. You've got the four the IPOs coming up. And when will this
accident, this crash, this realization that profitability isn't coming as fast as everybody thinks, when will that hit the market?
At the moment, the market seems quite happy to continue with these sky high valuations, with occasional cracks every now and again. Like Broadcom today
with sure a sharp fall. Or you see an IPO that doesn't go as well as everybody had thought. The core problem remains. And it doesn't matter how
we slice it up. We all know that A.I. and quantum is going to be the big driver of productivity and growth in the future.
And we all know that's going to cost a considerable amount of money to actually build out that infrastructure. But when and how long in the
future, and what level of profitability, and so that's why when you see the $1.7 trillion for SpaceX, you know there's an element of a wing and a
prayer, but that, I'm afraid, is what this market is all about today. It's just what you believe and when you believe it's going to happen.
And that is 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.
END
