WHEN: Today, Thursday, January 18, 2024
WHERE: CNBC’s “Squawk Box” – Live from the World Economic Forum in Davos, Switzerland
Following are excerpts from the unofficial transcripts of CNBC interviews which aired on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Thursday, January 18 for Davos 2024 in Davos, Switzerland.
Interviews included: S&P Global Vice Chair Dan Yergin, Semafor Co-Founder and Editor-in-Chief Ben Smith, Sanofi CEO Paul Hudson, Palantir Co-Founder and CEO Alex Karp, Atlantic Council, President and CEO Fred Kempe, Anti-Defamation League CEO & National Director Jonathan Greenblatt, Deloitte Global CEO Joe Ucuzoglu, HP CEO Enrique Lores, Morgan Stanley CEO Ted Pick, Liberty Global CEO Michael Fries, Will.i.am, Workday Co-CEO Carl Eschenbach and Former U.S. Speaker of the House & Solamere Capital Founder Paul Ryan.
Links to video of the interviews are included below.
All references must be sourced to CNBC.
Interview with S&P Global Vice Chair Dan Yergin
Video:
YERGIN ON THE RED SEA CONFLICT
DAN YERGIN: I think it is a disruption. Supply going to the Red Sea had doubled because of the sanctions on Russian oil. So you had Russia oil going to Asia and Middle East oil going to Europe. Now the numbers are way down. And some people have announced that they’re not shipping oil through the Red Sea, but actually a lot more are not shipping oil through the Red Sea.
YERGIN ON THE RED SEA CONFLICT IMPLICATIONS
YERGIN: So far, what is really striking is it hasn’t had much impact on the price. That’s the most striking thing. And I think there really two reasons for it. One is because of the buildup of supply from the United States, and it’s really a geopolitical rebalancing, and the other the oil market is oversupplied right now. So it’s just the market you would expect there’d be a geopolitical premium in the price. So far we haven’t seen it.
YERGIN ON ELECTRIC VEHICLES
YERGIN: Well, I mean in Europe, it’s 26% of new cars. China’s 36%, U.S., it’s about 10%. I think something very interesting I’ve been hearing about in the last few weeks is the politicization of EVs. It’s a red state, blue state. It’s a Democrat, Republican.
ANDREW ROSS SORKIN: Is that U.S. specific—
YERGIN: I think it’s U.S., but I think the other issue that’s there is, is the amount of minerals that will be needed. Another thing that’s been on the agenda here, which is a kind of awakening up is that energy transition is going to a lot of minerals and electric car has two and a half times more copper than a conventional car.
Interview with Semafor Co-Founder and Editor-in-Chief Ben Smith
Video:
SMITH ON STORY OF DAVOS 2024
BEN SMITH: I mean to me I think the big story is actually an attempt to sort of walk away from a kind of progressive political posture the year—
JOE KERNEN: Here?
SMITH: Forum that a lot of companies had. Yeah, I think you hear a lot less about sustainability. You hear a lot less about DEI, things like that.
ANDREW ROSS SORKIN: Yeah, it’s all gone under.
SMITH: I think the it’s actually part of the reason they’re so happy to talk about AI is it’s kind of politically neutral. They’re concerned about, they’re concerned about the backlash.
SMITH ON DAVOS CONSENSUS
SMITH: It is a famous thing that you should sort of sell the Davos consensus. I mean the most to me iconic one was to be here in January 2020 and no talk of COVID. In 2016, they put out a 96-page risk report that doesn’t include Trump or Brexit. I mean this year it is an absolute item of faith that Donald Trump will be elected President of the United States which I think is great news for Joe Biden.
Interview with Sanofi CEO Paul Hudson
Video:
HUDSON ON AI AND DRUG DEVELOPMENT
HUDSON: Well, it’s incredible, for me, it’s the great disruption. It is such an opportunity, an earthquake in discovery. We could have ahead of us a golden generation of science born out of AI. You know, for us we’ve been on this journey for three, four years. And it’s the whole company. It’s not just a bunch of pilots. In R&D, particularly research, we’re doing a structural biology with AI. We’re looking at undruggable targets and making them druggable.
BECKY QUICK: What does that mean, undruggable?
HUDSON: Wells there’s things that we’ve not been able to design molecules that can actually drip on a receptor to transform a patient’s life. And now we can model that very differently. And we can approach it very differently.
Interview with Palantir Co-Founder and CEO Alex Karp
Video:
KARP ON SILENCE ABOUT ISRAEL
ALEX KARP: Everyone senses that they spoke out on things they actually don’t believe in and they set a precedent. The precedent that they set was, I’m going to speak out about moral causes. Okay, now you have a crucial moral cause. You can be against what I’m saying, you can be against standing with Israel, you can’t say you don’t have an opinion. You don’t have an opinion on this. You have fallen on your head. There are people in corporate America who say, look, I never have an opinion, my opinion is the shareholders. I actually am sympathetic with them but if you’ve spent the last 5 years lecturing us about all sorts of things that no one believe you believe in private, you can’t just wake up the next day and say I can’t speak about this thing I believe or say I have no opinion. It is crazy ridiculous and it undermines the fabric of democracy because no one believes it.
KARP ON ISRAEL TALK AT DAVOS
KARP: Davos has an important function. I live on a different planet. On the planet I live in, climate is important. Fighting bigotry of all kinds is important, the most important issue of our time is war and peace and the absolute most important metaphor for that is what do you think about what happened in Israel and by the way, antisemitism as a kind of prejudice has always been the canary in coal mine for your society isn’t working, your university isn’t working, you’re not providing real growth to your population and because you’re not explaining why it doesn’t work, you just go blame the Jews. And so, like any enterprise, that is about making the world a better place that doesn’t deal with these issues is basically saying I’m not engaging in the problem.
KARP ON HIGHER EDUCATION
KARP: Across democracy in the West, we have a very large focus on what we pay, not what comes out. In Tech, we have absolute myopic focus on what goes out not what goes in. Our institutions have to move from what did we spend to what did we get.
KARP ON UKRAINE
KARP: We show up weak there, we will be taken advantage of, not just by Russia, but by Iran, and by China. So, even if you do not agree with what Biden is doing, what I happen to think we should do, you cannot afford the precedent of the West losing.
KARP ON HAMAS
KARP: At the moment, Iran feels the cost is too high this will change and there is no other way to change it. And so, I don’t know what that point, when that happens, but what America and Israel have to figure out a way to do is signal strength, while reducing human casualties. It is very, very hard to do.
Interview with Atlantic Council, President and CEO Fred Kempe
Video:
FRED KEMPE ON CURRENT GLOBAL CONFLICTS
FRED KEMPE: What people fear about this new era is U.S. is the, is the wildcard. Will the U.S. come through for Ukraine this year? How is the U.S. going to manage the Middle East? So the what I’m hearing from U.S. leaders is they want Ukraine to hold in the north in the east, but breakthrough in the south and threaten Russia enough in Crimea that Putin comes to the table. That would be a good outcome. In the Middle East, they want Israel to move on from Hamas at some point. Restart its integration talks with Abraham Accord states of the Middle East, the moderate Muslim states, normalize with Saudi Arabia. There’s a lot of effort to now regionalize out of this. So what is crisis for, if you don’t use crisis to come out, fixing things and what’s the point?
KEMPE ON A POTENTIAL TRUMP PRESIDENCY
KEMPE: So Trump and Ukraine is a real danger, no doubt about it. Trump and NATO, you know, he wants to strike deals. He’s transactional. There’s almost less alarm here. People are calling the Trump put, you know, they’re they’re hedging Trump and in the Middle East and the Gulf they would like him back. In Europe is probably the place that’s most nervous because they’ve said the most bad things about Trump and Trump doesn’t forget that sort of stuff. And so, Europe is the place that is the most concerned about, but, but people are saying it’s a coin flip at this point here—
KEMPE ON THE CONCERN OF A TRUMP PRESIDENCY
KEMPE: Here’s what I think is a serious concern about Trump. If you think about, it’s a new world order, post 1945, you need a Marshall Plan. You need a NATO, you need European Union, you need to work together in common cause. That’s not Trump’s first instinct. And that’s the real concern here. At the end of World War II, we had 50% of GDP. Our adversaries were in rubble. The Global South didn’t play much of a role. Now, it’s much more complicated. So the President has to come in. This is what I’m hearing here with a more sophisticated control and a way to galvanize international institutions.
Interview with Anti-Defamation League CEO & National Director Jonathan Greenblatt
Video:
GREENBLATT ON ANTISEMITISM
JONATHAN GREENBLATT: Hatred of Jews is a universal problem, and it demands a universal response. Now, look, there are bad actors who are trying to say what Israel is doing in the Middle East is the cause of antisemitism but that’s baloney. We have seen an explosion of anti Jewish hate, and it didn’t start after the Israelis went into Gaza. It started on October 7th. We have seen staggering acts of harassment and daily violence. By the way, not just in America, but in England, in France, in Germany, all over Europe.
GREENBLATT ON MIDDLE EAST AND DAVOS AGENDA
GREENBLATT: The truth is we have a terrible crisis right now in the Middle East, we need hostages to come home yesterday. Today is the 104th day they have been held in captivity in tunnels. Billions of dollars went into the tunnels. They have a network overseas of NGOs in Europe and America who promote this lie that Israel is committing genocide. It is disgusting and we have Jewish people getting attacked in broad daylight. This needs to change. I want to put more of this on the agenda and hopefully today is a start.
GREENBLATT ON 2024 ELECTION
GREENBLATT: Biden’s popularity is higher than Trump’s in Israel today because he’s been so good on this. Look, at the end of the day, what I’ve got to hope is that some degree of common sense prevails. What I’m hearing from CEOs here is that they’re all doing the scenario planning now about Trump winning.
Interview with Deloitte Global CEO Joe Ucuzoglu
Video:
UCUZOGLU ON THE IMPACT OF ARTIFICIAL INTELLIGENCE
JOE UCUZOGLU: So you can’t walk six yards along the promenade without a bunch of flashy graphics around generative AI. The issue isn’t just how significantly positive the use cases are. This is going to be transformative to every aspect of the enterprise. And when we look at the types of use cases we’re working on with clients, anything ranging from transforming the drug discovery process, creating molecules all the way to something you might think of as being more mundane, like call centers where the productivity benefits are substantial. This is going to have a big impact. The issue is the timeframe. And I’m a little worried that we may be at least the height of the hype cycle, and sort of predictions around how quickly this all plays out. These are big complex enterprises.
UCUZOGLU ON DECARBONIZING THE ECONOMY
UCUZOGLU: Let’s talk about how to do it pragmatically. So is it going to happen overnight? No. We’re going to need a lot of fossil fuels for a lot of years. And that may be inconvenient to some. You’ve had people protesting as we walk up here, but the science is pretty clear. And we’ve made a lot of headway. I mean, one of the reasons why some of the worst-case draconian scenarios people talked about without any efforts to mitigate this, we would have been headed to a four degree rise by the end of the century. Now people are debating is it one and a half is a two is a two and a half? How much is mitigation versus adaptation? But if you take a pragmatic approach to this, I think there’s a lot more common ground than people want to acknowledge.
Interview with HP CEO Enrique Lores
Video:
LORES ON HP MARKET
ENRIQUE LORES: Market size for PCs was published yesterday so this is public data we can talk about. We saw a decline of 2% which is showing the recovery that we started to expect a few months ago because we have been declining minus 10, minus 20, and now minus 2 shows that market is getting better. HP grew shares we’re happy with our performance in the market and clearly helps with the optimism we have for 2024.
LORES ON EMPLOYEE SENTIMENTS
LORES: I think the pandemic showed the different way of work, create a different type of need, so now all of our employees, and now they really want to see a change to make sure that they can combine the personal needs, their professional needs, that they can get the technology that they will need to help them be successful and this is showing that all of us as companies, we need to make significant changes in how do we connect, manage, develop, grow our employees to make them successful.
LORES ON AI
LORES: We are really excited about opportunities AI brings. As you were saying at the beginning, we are introducing in our PCs next year, the capability to run language, large language models locally, which will from a cost, speed and security perspective, a much better solution for consumers, and for professionals and that’s probably biggest change in PC industry in the last 20 years.
Interview with Morgan Stanley CEO Ted Pick
Video:
TED PICK ON 2024 OUTLOOK
TED PICK: The right answer is who knows? And it’s always the right answer. The, I guess the market says 140 basis points of cuts the bounce you guys heard this morning and kind of a little less than or a little more than 50/50 on March and the dot plot is kind of 75 basis points. I think this feels a little like the late teens when we were coming off the zero barrier in reverse, kind of ready to lift and then every time they talked about it because it sort of tried out there, it’d be sort of a hawkish reaction, they would sort of stand pat. Now we’re doing the opposite. Talk about talking about the path lower, there will be a loosening, asset prices go through the roof. So like okay, let’s see if that overheats us again, but I do think we are probably past peak inflation. What’s interesting, though, Becky is like, it is not inconceivable that we have to go faster, i.e. 50 basis points, if you sort of price that as kind of five or 10%.
PICK ON INVESTMENT BANKING BEHAIVOR IN AN ELECTION YEAR
PICK: Well, as you guys know, this is a prism where you got to censor whether it’s corporate activity, and there’s a ton of activity buzz, because people wanted to do stuff at the end of financial repression then we had the pandemic and then there’s gonna be the elections so stuffs gonna happen. People want to scale up, the world got smaller, you’re going to want to purify there’s a backlog of sponsor activity that has to get sold and taken public companies that want to merge with the right partners and need to get regulatory authority. They don’t know what comes next. So actually, I think the pace of activity and kind of advisory tickets that you know very well I think that’s going to quicken I think it’s going to quicken on mid to large cap across industries and cross border. It’s not gonna be bang, but I think once people start getting going, we’re gonna see a bunch of it.
Interview with Liberty Global CEO Michael Fries
Video:
FRIES ON AI
MICHAEL FRIES: For us, in our industry because we’re grinding every day to drive revenue it’s going to be a game change. Anything that touches the consumer will be more joyful, better, more efficient, anything that involves our networks will be more energy efficient. We’re going to find outages more quickly. Our people are going to be more productive. All the knowledge work we do internally I think it’s real and for us, we’ve got use cases identified. We don’t have to be first in AI, just fast. I think we’re on that track and the risk are real, no question about it, but unlike prior innovation cycles, I’ve never seen such awareness. Regulators are on it and companies will self-regulate. We have principals around being beneficial, responsible, ethical. Everybody’s thinking ahead about these risks. That’s never happened before the internet came around, nobody was thinking about risks. Not saying they’re not earl. Just saying first time I’ve seen there’s a lot of work going in ahead of time to manage and anticipate those risks.
FRIES ON TELECOMM BUSINESS
FRIES: I’ll tell you this. We’re at an interesting inflection point in my business because transport business, broadband business, connectivity business, is it a commodity? It’s critical it’s infrastructure, but is it a commodity? How do you differentiate. But what we’re doing is we spend the last fiver years changing the portfolio now so we have FMC in only 5 markets and we sold the cable stuff at 12 times. We spent $14 billion buying back 60% of our shares ridiculously low values and we’re in a position now, told investors in February we are going to come with a strategic update, show them how we’ll bridge the massive value gap in our stock, through a series of transactions, structures and strategies that will deliver value to shareholders so we think it’s a great moment for us. It’s a great inflection point. In the industry itself, we can cut costs with AI, we can be more efficient. Fundamentally, we need new revenue. Whether that’s selling new services like health or selling telehealth services in Holland and gaming in Belgium. If we can find ways to get customers more stuff at the supermarket approach, it can work. Second thing that’s interesting about our business is the goal in our business is the networks. And what you’re seeing in Europe is infrastructure valued 15 times EBITDA so we wouldn’t be surprised to look at networks and ServeCos separately and finding way to break up the business in a way so these networks, whether they’re fiber or 5G, have value different from the ServeCos.
Interview with Will.i.am
Interview with Workday Co-CEO Carl Eschenbach
ESCHENBACH ON WORKDAY LAWSUIT
CARL ESCHENBACH: We’re aware of this lawsuit. I can’t comment on it obviously but I think we respectfully disagree. We’ve been doing a, for more than a decade, we’ve built AI deep into our platform and we’ve been approaching it in a very responsible way. In fact, you know, at this conference here this week, we’ll hear a lot about AI and responsible AI and over the last decade and more over the last 5 years, we’ve been working with regulators around the world in the EU, U.S. and even the state level making sure AI is implemented in a responsible way.
ESCHENBACH ON AI APPROACH
ESCHENBACH: I think, you know, the output of your AI is only as good as the data you’re putting into it and the data model. When you think about Workday, our data is highly curated. It’s 65 million users on a common platform and that’s where we’re training our model AI off of so it’s very secure, protected, it’s highly curated and so it’s very different than doing AI where you’re training off the internet. So I think we’re different how we think about it.
Interview with Former U.S. Speaker of the House & Solamere Capital Founder Paul Ryan
Video:
RYAN ON THE NOVEMBER ELECTION
PAUL RYAN: A lot is gonna happen between now and November. Nothing’s linear in politics these days. There’s a zigzag. So who knows is the point. Biden is so weak that even Donald Trump polls ahead of him, but look at Nikki Haley’s polling. I mean, she beats him by like 12 points in head-to-head polls. So I would prefer a candidate who I think would be a good president, and who I know is going to win and by the way, give us more seats in Congress. That’s Nikki Haley. So obviously I my preferences are bubbling to the Republican Party right now. But let’s just wait and see what happens in New Hampshire and see if there’s an inevitability narrative, which has credence coming out of Iowa, if it if it sticks past New Hampshire, and if Nikki Haley wins New Hampshire, then I think we’ve got a race on our hands. So I want to wait and see what happens there.
PAUL RYAN ON GOVERNMENT FUNDING
RYAN: I did four or five of these deals so the appropriation process is broken. And the problem is it takes both parties to fix the appropriation’s process and you do not have that. You do not have a bipartisan consensus, and how to rewrite the 1974 Budget Act to make appropriations work. So we’re stuck with this system we have today. Mike Johnson inherited this problem. And Mike Johnson is in a in a tough position. He’s gonna have like a one vote margin when Bill Johnson goes to Youngstown State. So Steve’s got stem cell transplants, Kevin’s gone. He’s down to a one vote margin. They’re gonna get the government funded, they’re gonna get this stuff done. It’s gonna be ugly, it’s gonna be late. It’s gonna get done, though.
