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First Move with Julia Chatterley
The Fed Says it Will Keep Rates Lower for Longer, but Wants Congress to Help; President Trump Expresses Doubts on the TikTok-Oracle Deal; Snowstorm After a Red Hot Debut for Snowflake. Aired 9-10a ET
Aired September 17, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:19]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I am Julia Chatterley. This is FIRST MOVE and here is your need to know.
Patient Powell. The Fed says it will keep rates lower for longer, but wants Congress to help, too.
Conceptual concerns. President Trump expresses doubts on the TikTok-Oracle deal.
And a snowstorm after a red hot debut for Snowflake. We'll talk to the CEO.
It's Thursday. Let's make a move.
A warm welcome to FIRST MOVE and a stone cold winner of a show for you today, why? Well, the CEO of Snowflake as I mentioned there, will join us.
The company whipping up an investor storm at least, in their public debut yesterday. The reception anything, but chilly.
Snowflake ended the session up more than 100 percent -- look at that -- from where it priced at $120.00 a share. What does that actually mean in
terms of how investors are valuing this company?
Well, take Microsoft, if you gave its future business operations the same kind of value as investors gave Snowflake yesterday, then Microsoft will
have an effective market cap of some $17 trillion. It would be bigger than China's economy. That's the kind of comparison. It's a little bit apples
for oranges, but it gives you a sense and we'll thank Baron's because they did the financial work for me on that.
Meanwhile on Wall Street, gains made earlier this week melting away after the Federal Reserve meeting -- and that continues premarket. Chairman Jay
Powell is as patient as ever saying rates will be on hold for a further three years plus, but it seems investors were hungry for more detail on
exactly what might trigger a future rate rise, even if it is some time in the distance especially given the Fed's more relatively upbeat outlook on
the recovery.
It sees the economy contracting by 3.7 percent this year. It's a smaller drop than was feared back in June. The bottom line is, though, the stock
market matters way less than all the struggling families out there.
Powell also reiterating his demand for more financial aid from Congress. This, as an additional 860,000 Americans signed up for first-time benefits
last week. Almost 30 million people still receiving some kind of financial assistance at the last check.
Wall Street weakness meanwhile spreading overseas, too. Europe is lower. Asia markets pulled back, too. The Bank of Japan meeting overnight offering
little in the way of fresh support. But a big shift potentially afoot in the U.K. Talk, advice given to the Bank of England perhaps about the
implications of cutting rates below zero on hard Brexit fears. That triggering, as you can see, a drop in the pound.
Lots to discuss. Let's get more on our drivers.
Christine Romans joins us for more. Christine, lots of technical issues and elements, I think, discussed in this Fed meeting at the presser, but the
bottom line, and I've said it twice and I'll say it a third time, the Fed wants more action from Congress.
ROMANS: Absolutely. I mean, and look, the virus is in control here, so Congress is going to need to pass more support. That's what Fed Chairman
Jay Powell clearly saying -- and he has said it before -- and there's a little bit of nervousness on the street because it doesn't look like
there's much action from Congress at the moment and there's a big fear that you really won't have anything happen until after an election.
The President weighing in on this yesterday, saying that he wants a bigger number, but it seems the President is at odds with his own Republican
Party, not necessarily the Democrats, who by the way, for the record, months ago passed $3.5 trillion of Main Street aid, including aid to states
that would pay for teachers and firefighters and some of the really glaring holes in budgets the states are going through.
And I think that Powell was really pointed when he said we can't forget the people, the 11 million people who are out of work. Listen to what he said.
(BEGIN VIDEO CLIP)
JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: There are still roughly 11 million people still out of work due to the pandemic and a good part of
those people were working in industries that are likely to struggle. Those people may need additional support as they try to find their way through
what will be a difficult time for them.
(END VIDEO CLIP)
ROMANS: I mean, those are people who work -- who are already out of work or they are people who were recently laid off in bars and restaurants and
airlines and small business.
You can see the numbers every week of the kind of layoffs we're continuing to have. This is an economy that isn't shut down anymore, right? I mean,
the economy -- this is an economy grappling with a virus that has not been contained. This is the way it looks right now.
[09:05:12]
CHATTERLEY: Yes. And this is the critical point, and we will continue to bring it back to the real economy and real people. I will, though, ask
about the market reaction here because I can imagine some people going, hang on a second, the growth forecasts are better, the unemployment rate
that they're anticipating is not as bad as we were expecting. They're going to keep rates on hold for what feels like forever. Why the disappointment?
What more do investors want here?
ROMANS: I mean, I think -- don't you think investors are addicted to big stimulus and the big, big stimulus from the Fed has already happened and is
still happening.
There was no new surprise, no new shiny tool in this toolbox this time. It was a reminder that Congress needs to work -- the outlook is uncertain. I
mean, the Fed Chief was very clear that the virus makes the outlook here in the middle term uncertain.
So yes, the economy crashed. It didn't crash as bad as the Fed had thought in the beginning, but it still crashed and the outlook is still uncertain.
I think, also, there were a couple of dissenters, right, and I think that that has sparked a little bit of concern about well, wait a minute, could
the Fed -- you know, could there be a hawkish camp being developed in the Fed. We'll see.
CHATTERLEY: Yes. And all of this, of course, dependent on a vaccine or not. The market just wants perfect clarity and no one can provide it right
now. Thank you, Christine Romans there.
All right, President Trump casting doubt on a proposed deal between TikTok and Oracle. Under the partnership, China's ByteDance would keep a majority-
owned stake in TikTok.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: We're looking into that from the standpoint of ByteDance. We don't like that. I mean, just
conceptually, I can tell you, I don't like that. That has not been told to me yet. That has been reported, but it hasn't been told to me.
It could be very accurate reporting for a change. So if that's the case, I'm not going to be happy with that.
(END VIDEO CLIP)
CHATTERLEY: Selina Wang is in Hong Kong. Selina, I mean, he said conceptually, but then he hadn't seen the details of the deal. So we will
set that fact aside. He also said, and this is the important thing and we keep coming back to this -- you know, it comes down to national security.
Selina, what do we know, one, about this deal, and whether or not ultimately Americans' data will be safe? Because that's going to be the
convincing factor, surely.
SELINA WANG, CNN CORRESPONDENT: Well, Julia, you have Oracle and TikTok here twisting themselves over knots to thread this needle to both please
D.C. as well as Beijing.
In terms of the deal, a source close to the matter told me that TikTok would be creating this global business headquartered in the U.S., in which
Oracle would have a minority stake in it. ByteDance would retain majority ownership.
Oracle would be processing the U.S. data, as well as having more oversight over the technology. It would also likely agree to some limitations to put
some sort of firewall between ByteDance and TikTok to satisfy some of those national security concerns.
Now, sources have told me that Oracle and ByteDance are of course confident that this does solve the national security concerns, but you already have
many lawmakers saying that they take real issue with this deal, that it doesn't do enough to protect American data.
It is, of course, a far cry from Trump's initial statements that he wanted a complete outright sale of this app. You have Senator Josh Hawley saying
that this app should be rebuilt from the ground up and that if there are any constraints perhaps, the only way to protect American data is to ban
the app altogether.
CHATTERLEY: It's quite fascinating, isn't it? I mean, of all the complications, and as you've said, this is a very fine needle to try and
thread. I think, eyebrows everywhere, unanimously were raised, when the President talked about the U.S. administration getting its cut, getting
some money as a result of this deal being done and the President also addressed the complications of that yesterday as well.
WANG: Well, Julia, there are a lot of things happening in terms of this particular deal that are completely unprecedented. In terms of what could
happen next, though, there are really three options.
President Trump could ultimately kill the deal, he could say yes and go ahead with it despite some of the concerns, or the government could tell
ByteDance and Oracle to go back to the drawing board and come back with something better.
If that were the case, experts tell me that this could potentially continue to drag out potentially even dragging out beyond this November presidential
election, and when it comes to those national security concerns, a lot of the experts say that these fears are largely theoretical, at this point,
although there are legitimate concerns about Chinese ownership of such an influential social media app in the country, but this entire saga and drama
over ByteDance and TikTok's ownership they say really overshadows the more important question, which is that the U.S. needs stronger standards and
legislation to guard against data collection across apps from every country, including the United States.
[09:10:03]
CHATTERLEY: Yes, you raise a great point, and I will add to that whether it's President Trump or President Biden, I don't think either of them is
getting a cut of this deal, whether it goes ahead or not. Selina Wang, thank you so much for the analysis there.
All right, staying with the President, the President also casting doubt on the congressional testimony of one of his top health officials.
He says the Director of the Centers for Disease Control was confused when he gave lawmakers his opinion about the possible timeline for a vaccine
rollout and on wearing masks.
John Harwood joins us now. John, words fail me. The problem is we've seen this all along. We've got the President contradicting his own health
officials and it just adds to the broader uncertainty, and of course the timing on this contravenes elections in two months' time and that feels
like it's the big problem.
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Julia, it was an extraordinary scene yesterday at a time when the United States continues to
struggle with roughly 40,000 new cases a day, a thousand deaths every day. We just got news this morning that 860,000 Americans filed for unemployment
claims, 26th consecutive week of higher than ever before the pandemic, showing the financial cost of the pandemic.
While all of that is happening, a President who is losing in the polls, who is looking to give the American people some reason to embrace his handling
of this, was contradicting Robert Redfield, the head of the C.D.C.
He did it on mask wearing, which is the single simplest most effective thing Americans themselves can do right now to protect themselves and
others and he also did it on the crucial question of when we're going to get a vaccine. Take a listen.
(BEGIN VIDEO CLIP)
DR. ROBERT REDFIELD, DIRECTOR, CENTERS FOR DISEASE CONTROL AND PREVENTION: I think there will be a vaccine that will initially be available sometime
between November and December, but very limited supply and will have to be prioritized.
If you're asking me, when is it going to be generally available to the American public so we can begin to take advantage of the vaccine to get
back to our regular life? I think we're probably looking at late second quarter, third quarter 2021.
TRUMP: I think he made a mistake when he said that. It's just incorrect information and I called him and he didn't tell me that, and I think he got
the message, he may be confused. Maybe it was stated incorrectly. No, we're ready to go immediately as the vaccine is announced.
(END VIDEO CLIP)
HARWOOD: Of course Robert Redfield did not misunderstand the question, did not get it incorrectly. He was reflecting the consensus of public health
officials that while we may get a vaccine approved within a matter of weeks, even, because trials are well along, and there may be some doses
available for healthcare workers and other particularly vulnerable people, it will not be until months into 2021 when the vast majority of Americans
are able to have access to a vaccine.
That's what Robert Redfield was communicating. That's not good enough for President Trump as he is trying to catch Joe Biden in the polls, and that's
why we had that disagreement yesterday.
CHATTERLEY: It's very difficult for someone like the C.D.C. Director to continue when his credibility is continuing to be questioned.
John, do we end up splitting hairs on this, do you think? If they get approval, if we get regulatory approval for a vaccine before the election,
the President can at least say, look, it's out there, it is being used and it's available, even if it's not as we've discussed, for broader use?
HARWOOD: Yes, and that would be a good thing if it happens.
CHATTERLEY: It would.
HARWOOD: There's no doubt about that. Everyone wants to see a safe and effective vaccine approved and it would be a good thing. It would be a step
forward if healthcare workers could get vaccinated or if vulnerable people could get vaccinated. Nobody disagrees with that.
The question is, what do you promise the American people and are you suggesting that you are pushing this process forward faster than the
science permits it to go in order to achieve a political result? And that's the question that President Trump puts on the table over and over and over
again.
CHATTERLEY: Yes, we need the truth if we want people to trust. John Harwood, thank you so much for that.
All right, these are the stories making headlines around the world. Tropical Depression Sally is saturating parts of the Southeastern United
States right now.
The storm, which had been a Category 2 Hurricane, has left more than half a million people without power and caused catastrophic flooding in parts of
Alabama and the Florida Panhandle.
Aides to Russian opposition leader Alexei Navalny say he was poisoned in a hotel room in Siberia last month, not at the airport as initially thought.
They say traces of Novichok have been found on a water bottle that was taken from his room shortly after he became critically ill.
All right, still to come here on FIRST MOVE, Snowflake snowballs. Shares in the software company more than doubled on its first day of trade. We get
the take from the CEO.
And food in flight. I speak to the company pioneering the delivery of meals by drone, iFood's CEO joins FIRST MOVE. Still coming up, stay with us.
(COMMERCIAL BREAK)
[09:18:23]
CHATTERLEY: Welcome back to FIRST MOVE. A bit of an early fall chill on Wall Street. The market is set to drop for a second straight session with a
tech selloff set to resume.
As you can by the NASDAQ futures there, investor disappointment also over the Fed's latest policy statement and the presser seems to be at play here
as well. A bit of a thaw perhaps under way for IPO Snowflake, too.
The software firm shares set to pull back after yesterday's more than a hundred percent pop. Oh please, it is down six percent and that's still an
ice sculpture in my world. Losses are pretty minor though given the firm's sky high valuations which we will discuss.
In the meantime, the U.S. is reporting that 860,000 more people signed up for the first-time jobless claims last week. A fresh sign that more fiscal
help is needed from Congress. It looks like President Trump also wants a big bill now, too. The question is, will he get it?
Mohamed El-Erian joins us now. He is Chief Economic Adviser at Allianz. Mohamed, fantastic to have you on the show as always. I care a lot less
quite frankly about the market disappointment than I do about the issues that Fed Chair Jay Powell underscored.
The fact that the unemployment rate belies those that simply can't find work at this moment, and the challenges for millions of Americans.
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: You're absolutely right. He painted a pretty uncertain and unsettling picture and used it in
two ways. He used it to justify what was a very uber dovish response. It wasn't well communicated, but it was a very uber dovish response.
And secondly, he used it to push very hard for fiscal action, including local and state government aid.
So he went quite far for a Central Bank Fed Chair. Normally, they don't like going deep into something that comes on the auspices of Congress.
[09:20:20]
CHATTERLEY: Yes, he has had to walk that line for a while. Now, the irony is, the Fed was so good in stabilizing the system that they have given
cover and allowed Congress to take their time and play politics here.
EL-ERIAN: Only if you measure it by the stock market, and I know a lot of people do so. The Fed has been exceptionally successful in boosting asset
prices well beyond what fundamentals would validate.
When it comes to the real economy, however, the Fed has been pushing on a string. In fact, during a rather difficult press conference for him, he was
put on the spot by being asked why is the Main Street Lending Program not working as well as it should?
And there is a sense that the Fed is much less effective when it comes to the real economy, but the politicians take comfort from the stock market.
They shouldn't, but they do.
CHATTERLEY: Yes, they shouldn't, but they do. Do you have sympathy for investors though that wanted more clarity over the conditions upon which
rates may rise in the future, particularly when -- whether it's politically or in terms of the science, we're putting so much weight on the appearance
of a vaccine?
EL-ERIAN: Sympathy, no. Understanding, yes. Let me explain the difference. The market has become like a spoiled child. Every time it gets something
from the Fed, even if it's more than what the Fed -- they were expecting, they immediately ask, okay, give me more, give me more.
So that has been the market behavior. The market has been conditioned to expect from the Fed and push the Fed, and what I worry about, Julia, and
you know that, is that you get this self-reinforcing interdependency that ultimately is not very healthy for the system.
CHATTERLEY: What happens, Mohamed? What happens next?
EL-ERIAN: So my great hope is that we get significant policy action outside the Fed, and I'm talking not just about fiscal policy. I'm talking
about a basic understanding that we need to do two things, boost productivity and boost household economic security. That they get these
actions to allow fundamentals to validate asset prices. That is my hope.
My worry is that it's going to be the other way around. It is that we are not going to get it and at some point, even the Fed, and that's a big
statement, but even the Fed will not be able to maintain what has been a historic disconnect between elevated asset prices and a sluggish economy.
CHATTERLEY: Who is more likely to provide that? We're deep diving now into the realms of what happens after November and I know that's complicated,
but President Biden and his administration, versus a second term for President Trump and his administration? Because that is something that
investors need to be thinking about. We are just two months out from that decision being made, we think.
EL-ERIAN: Yes, we are, and I think it has more to do with Congress than just the administration. If you get a split Congress, you're going to have
issues. If you get, however, one party, whichever it is, capturing Congress, you will get more policy action.
It will be different, it will emphasize different things, but you will get more policy action.
CHATTERLEY: Do investors need to be positioning for that today? Are they positioning for that today in what you're seeing?
EL-ERIAN: They are not. And you talk about Snowflake. Investors are in complete liquidity conditioning. They have brushed aside one issue after
the other.
I've been following very closely, how does the market react to two things? One is the changing prospects, according to the poll of the two candidates,
and, two, is the amount of uncertainty about the run-up to the election and post-election. We have unusual uncertainty.
And the answer to both these questions is -- the market doesn't react. Basically the market is in a liquidity paradigm and it takes a major shock
to get it out of it.
CHATTERLEY: We've talked about that major shock in the past. You mentioned the "S" word, so I'm going to go there. Snowflake. Even if we take the
business itself out of it, if we look at what we saw yesterday, whether it was valuations, whether it was the dramatic spike-up, is that a sign in
your mind of excess liquidity of irrational exuberance or perhaps a flawed process of IPO, particularly given the market conditions at this moment?
EL-ERIAN: So while the IPO process is not perfect, it is about excessive risk taking and I can give you a whole list of issues where we see it. We
see it in IPOs and let's talk again in three or four weeks' time and see where Snowflake is trading then.
We've seen many of these that are the thing to have and everybody piles in and you yourself self-reinforcing, and then it reverses itself. But look at
the amount of SPACs, which are special purpose vehicles that are raising money without telling you where they're going to invest the money and
people are giving them money.
[09:25:27]
EL-ERIAN: Look at bond issuance. Look at IPOs. I mean, these signs of excessive risk taking, Julia are all over and that's what liquidity
paradigms do. That's what they do, they create and encourage excessive risk taking.
CHATTERLEY: Is the Fed negligent as all this happens, Mohamed, because I feel like they're caught between the devil and the deep.
EL-ERIAN: They are. They are in a lose-lose-lose situation. They lose if they do more because they contribute to future financial stability. They
lose if they do less because they disrupt the market that can then contaminate the economy. And they lose if they do nothing at all because
investors aren't happy.
So I sympathize where they are. I wish they hadn't gotten into this situation, but they are. The key issue is a handoff. We need this policy
handoff that we talked about earlier. And unless we get it, then we are sitting on an increasingly volatile financial situation.
CHATTERLEY: Yes, I agree. Very eloquent argument for the handoff. We hope we get it.
Mohamed El-Erian, the Chief Economic Adviser at Allianz and congratulations, once again, on your new role, your backdrop has changed.
It's very beautiful. It's different, but very beautiful. See you soon.
EL-ERIAN: Yes, I'm in day six of my 14-day mandated quarantine.
CHATTERLEY: Yes, I was going to ask you that. Yes. Stay safe. Great to have you with us. Thank you.
Over in the U.K. there now of course. The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:30:02]
CHATTERLEY: Welcome back to FIRST MOVE. Some big thumbs up there from Wall Street as they open for business this Thursday. But I have to say, stock
market is under pressure with the biggest losses coming from tech.
The NASDAQ actually dropped more than one percent in yesterday's session, too. Stocks falling amid disappointment in the Fed's policy statement
yesterday.
As we've discussed already, I think the markets wanted more clarity on what will trigger a rate rise and what will ultimately keep them low. A world of
perfect information. Sadly, we don't have it.
But the economic challenges remain crystal clear in today's jobless numbers, 860,000 more claims filed in just the last week alone. And Yelp
now says 60 percent of U.S. businesses shut during lockdowns will never open again. A total of almost 98,000 firms.
The economic uncertainty playing out in bond markets today, too. As you can see, yields currently under a bit of pressure, so that flight to safety
going on there as well.
Now, we knew it would be a big one, but not like this. Snowflake went public on Wednesday and it turned out to easily be the biggest software IPO
ever.
Shares more than doubled, closing at around $250.00. That gives the company a valuation of $70 billion. That's bigger than Walgreens or Hershey just to
give you a sense.
So why is Snowflake such a big deal? Well, it's all about the Cloud. The company helps other businesses manage large amounts of data stored in Cloud
services and analyze the data, too.
We're joined by the Chairman and CEO of Snowflake, Frank Slootman. Frank, fantastic to have you with us. The best word I could use at this moment I
think is wowsers. I'm sure for you, the team, investors, your workers, this is an indescribable moment, but try. What's the last 24 hours been like?
FRANK SLOOTMAN, CHAIRMAN AND CEO, SNOWFLAKE: It's been an absolute zoo, as you can imagine. Very excited, obviously.
We're thrilled to get such a strong reception and the investors that we've been talking to for over a year leading up to today, they just have very
high conviction about the company and want to be big holders over a long period of time.
So it's a good start, but, you know, there's a lot of people that have observed that it was a pretty wild day yesterday.
CHATTERLEY: Yes, this is not your first rodeo. This is the third time you've taken a company private. We just heart Mohamed El-Erian say that
what saw yesterday with your share price spike was a sign of irrational exuberance, would you agree with that, or would you see perhaps flaws in
the IPO process that retail investors were literally left scrambling here to buy your stock?
SLOOTMAN: Well, you know, exuberance is definitely, you know, correct. We always say, look, you know, a stock is worth what somebody wants to pay for
it, no more, no less. So it's rational in that regard.
Markets get over their skis in the short-term, but in the long-term they normalize and get it right. There is such a thing as a price demand curve,
meaning that some people will just pay way more than others, and when a market starts up like this, then the stock price is going to start
traversing up the demand curve to the highest bidder.
But the idea that we could have sold our entire offering at the price of the last sale, obviously, that's unknowable and extremely unlikely.
CHATTERLEY: Yes, and I agree with you on that. So you're sort of arguing that at some point gravity perhaps will apply. Let's assume it doesn't and
just try and justify the kind of valuation that we're talking about here.
I mean, your revenue growth was 175 percent in the fiscal year to January. Even if we just take a fraction of that, what's your sort of forecast for
the next four or five years in terms of revenue growth?
Can you keep and sustain this growing at 40 percent to 50 percent revenue growth, for example?
SLOOTMAN: Well, we're not going to get ahead of ourselves. We have guided in our SEC disclosures and in our meetings with investors what we're
willing to say at this point. But, you know, obviously -- and we're trying to manage expectations as well so that people don't get ahead of where we
are because no purpose will be served by that.
CHATTERLEY: Give it to me. What kind of growth are we talking about here?
SLOOTMAN: No, I can't give you numbers beyond what we've already put out there. You know, in our first earnings announcements, I will tell you, we
will provide guidance to the markets and we have a very measured process. We're fairly sober about these things. We're not a pump and dump company.
This is a marathon. We're going to settle in and we're going to bring investors along. It's all fun and games when people get this excited about
being part of the Snowflake journey and we're excited as well.
But we're here for the long haul. Today, we're getting up and we are just going back to work, one foot in front of the other and that's our culture.
So we're going to provide a really, really tight guidance to our markets so that we don't get too much separation between what the company is thinking
and where markets might be.
[09:35:46]
CHATTERLEY: Do you think that that separation exists today?
SLOOTMAN: Well, I mean, if you are at a hundred times revenue, a case could be made. Yes, so.
CHATTERLEY: Yes, a hundred percent. Let's talk about just even scaling to grow into a bigger valuation. As you said, this is a long-term prospect and
clearly your early investors are saying that precise thing.
What's going to be the biggest challenge? Because Cloud -- selling Cloud products is about as hot as it gets out there. Hiring people in order to do
that selling, in order to scale this business, surely is going to be one of the biggest challenges.
What's your sort of competitive edge even hiring to be able to scale this business?
SLOOTMAN: There's a couple different aspects to it. Operationally, you're right, I mean, we're providing resources, you know, very, very fast. We're
hiring very, very fast. You need to do these things in a very judicious manner, otherwise organizations will implode on themselves.
We've lived through other companies, very, very high growth trajectory, so we feel like we have a good grasp on how to do that, and the most important
thing is we have a very crisp vision of what we want to do in the future. This whole notion of a data Cloud, a type of Cloud that has never existed
in the history of computing.
This is what investors get so excited about and it is sort of part of the exuberance that we observe, because they're seeing the potential and they
can't wait for that to come to fruition.
But we're just excited to get out of bed every day and work on that and make that happen. We're here to build companies. That's really what's
exciting to us.
CHATTERLEY: Explain that differentiating factor, because I think there will be confusion for people out there going, you know, hang on a second,
you're sort of a customer of some of the biggest Cloud players out there, the IBMs, the Microsoft's. You're also a competitor of them and will
clearly be growing into that position.
You're also partnering with some of them as well, obviously, Salesforce bought in to this story as well. What does that mean in practice?
Opportunity? Potential challenge going forward if the regulators turn around and go, what's going on here?
SLOOTMAN: No, you know, it's definitely a more complex world than the one we live in. I mean, you are correct, I mean, when we work with these very
large platform players, depending on what day it is, they can be a competitor, they can be a partner and we're obviously large customers of
them as well and growing in bounds.
So it requires a lot of discipline, certainly from the top down, we get really good messages. People understand that they need vibrant ecosystems
on these platforms. They need innovation. They need choice. They need vast to breed because otherwise they can't compete against their competitors,
right?
So there's a little bit of schizophrenia going on and depending on what the moment says, you know, you may come down on one side or the other.
You know, we're good friends one day and the next day, there's hostility breaking at this place or another.
CHATTERLEY: Yes, I understand. So one of the big stories, and I think this played into the credibility and the excitement that we saw, is Warren
Buffett known -- Berkshire Hathaway, at least, known for staying away from exactly what you are at this early stage, just going public tech companies.
What did he see in your mind, and I guess it goes back to the point that we've been discussing throughout this. What ultimately is Snowflake's
competitive edge now and in the future?
SLOOTMAN: Yes. So one thing that's really important to know about Snowflake that this is a product that was built with a clean sheet of paper
by some of the world's greatest database technologists. Now, why does that matter?
In computing, what happens over and over again, each iteration of platforms where people carry legacy technology forward; this time around, with the
transition to Cloud, that just simply does not work. We cannot deliver on the promised Cloud in terms of its enormous scale, enormous computational
power with legacy architecture.
Snowflake didn't do that. We just started over. We are running on a public Cloud only. We brought no legacy forward.
What we ended up with is just an incredibly potent platform and it's just blown the doors off of everything that people have seen before. That's why
there's been such incredible uptick.
Not to forget that this marketplace that we're in has a screaming need for very, very high scale and very, very high performance. There's been pent-up
demand literally for decades in this marketplace and we're unleashing that, and that's really what you're seeing.
[09:40:29]
CHATTERLEY: Yes, and we're just at the beginning of the early stages of adoption, I think, of Cloud technology, the use of it and the analyzing the
data that's out there.
Frank, have you slept at all in the last 24 hours, you and your team? Or has it just been like nonstop?
SLOOTMAN: It's been like a ten-day process, so yesterday was just the culmination.
CHATTERLEY: I was about to say yes, it is a week, never mind one day. Try and get some sleep and congratulations, again, to you and the team.
SLOOTMAN: Thank you.
CHATTERLEY: Thank you. Frank Slootman there, Chairman and CEO of Snowflake.
All right, up next, robots that shop and drones that deliver. This may be the future of food delivery as envisioned by Brazil's iFood. We've got the
CEO, next.
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CHATTERLEY: Food has taken flight. Are we looking at the future of take- away meal delivery? Well, Brazilian food delivery service iFood is now pioneering delivery by drone, and as demand takes off, it is also testing
robots that can get your grocery shopping.
The pandemic clearly has turbocharged iFood's growth. Food orders are up 33 percent since March and the number of restaurants on the service soared by
26 percent, too.
Joining us now is Fabricio Bloisi. He is the CEO of iFood. Sir, fantastic to have you on the show. Wow. You've seen some increased demand as a result
of COVID. Just talk us through how you've handled that.
FABRICIO BLOISI, CEO, IFOOD: Hello, Julia. Pleasure to be here with you today. You know, believe me, our thought was not really growth over the
last six months. Our thoughts, it was maybe the most challenging of our lives these months.
We are focusing on making people safe, healthy, and keep the delivery partners healthy, contactless delivery. We really were focusing making the
ecosystem healthy and keep the restaurants alive.
Because I believe people feel safe with our services and the demand is really growing.
[09:45:29]
CHATTERLEY: Yes, I mean, I know you're covering more than, what -- 212,000 restaurants as a result of this. To your point about safety, is that why
you're pioneering drones or is it more about time saving? Just talk us through the permission that you've got in Sao Paulo to start testing using
drones.
BLOISI: Sure. We really believe this service is just the start. We believe the food delivery is going to grow a hundred times from now.
Many years ago, we used to do our own food at home. We don't think people are going to do their food at home anymore. We believe people will eat all
the time outside home, so we have to invest a lot in artificial intelligence so people really can -- we can understand when people want to
eat, how to deliver it easier and faster, and drones is a necessary solution to be more efficient on that.
We just got the permission to operate in some test areas in Sao Paulo and I'm sure this is going to be very important for us in the future.
CHATTERLEY: And you use the drone to take it from the restaurant to a final delivery person that then gets it to the door, so it's just cutting
out a piece of the journey, that's correct?
BLOISI: Exactly. The interesting thing about our market is that everyone gets hungry at the same time, so we have two million people that at 7:00
p.m., they say I want to eat now.
So we have to use AI to really solve it and we have to use drones to really reduce the production time and the production costs, so we can save the
costs for the delivery time by around 15 minutes with drones.
Today, we are doing that. We have delivery partners, so the drone takes it from our kitchen to our condominium and then some person gets it there and
delivers it to your home for safety reasons.
CHATTERLEY: Yes, it makes perfect sense, and the idea that everyone wants to eat all at once is a potent one. The big challenge here, I guess is
collecting data initially. The regulatory burden.
Is this something that you think you can use more broadly, whether it's in Brazil or outside as the company looks to scale up?
BLOISI: The company is already growing a lot. We are doing 14 million deliveries per month. So, serving 30 million people per month. I think the
whole world is very concerned now about data privacy. We follow everything to be a pioneer on that, so we have to keep the privacy of our customers.
But using data, using artificial intelligence is the way to deliver cheaper, faster, healthier foods to our customers so we have to use data,
but considering the data privacy, that is something that everyone has to invest more.
CHATTERLEY: Yes, I couldn't agree more with you. Talk to me about the robots as well. How much work have you done on that with the groceries?
BLOISI: We are doing drones for condominiums, but also robots to make the delivery, to take the food out of the shopping center or inside
condominiums, too. Again, we are doing that, and together with delivery partners.
But I have to tell you, Julia, we are really just starting. Over the next five years, as technology over the last 100 years, they completely changed
the way we do all of our work, drones and robots will change how we operate to deliver. So we're really excited that we are ready to start operating in
these cities right now.
CHATTERLEY: Yes, and you know, I have two choices now. I can talk to you about your business and the financials or I can talk to you about what
you're trying to do to keep Brazil's food ecosystem alive, because you've done some great things.
You've extended health benefits to some of your delivery partners. You've created solidarity funds for those at highest risk. I know you've been
reversing some of the delivery costs, so giving it back to the restaurants as well.
Just talk me through giving back, Fabricio, because this is incredibly important. We're still in a pandemic and you're trying to help.
BLOISI: Exactly. That's why the focus is healthy, it is giving back to the society. I think the food delivery company has this responsibility and that
was our focus. It was really not growth.
So we took the high risk group people that work for us out of work. They are receiving their money without work. We gave half billion dollars in
cash flow to restaurants so they can keep alive, because many restaurants are closing.
We really have to understand that we have to use technology and artificial intelligence and all of these tech companies to make the society better
during this very tough time, to be a partner of everyone that needs help now.
We have done around 20 things, our promotion was focusing reaching people. We did a lot of communication to teach people how to avoid COVID
transmission. And I think that's our responsibility. I think we have good impact here in Latin America, but that's why we have to keep investing and
using technology to get to this goal.
[09:50:12]
CHATTERLEY: I'm just going to make sure that people watching this understand what you just said there, because you said you injected more
than -- and it's $461 million in cash flow, i.e. advance payments for restaurants to make sure that they could keep going. This is a big deal,
Fabricio.
Can you stay in business very quickly while you're doing all of this? Can you afford it?
BLOISI: Yes, right, we are certain that this business is going to be very big, that food delivery is just starting, so we have to invest now to
really build this infrastructure. That's what we are doing now.
CHATTERLEY: Fabricio, a pleasure to have you on. Come back and talk to me with your progress and what more you're doing to help. Stay safe, sir.
Thank you.
BLOISI: Good to be here.
CHATTERLEY: Thank you, Fabricio Bloisi there, the CEO of iFood.
All right, racing for a COVID-19 vaccine and then rolling it out in droves. A German pharma company taking steps to increase production capacity. We're
live in Berlin with the details.
(COMMERCIAL BREAK)
CHATTERLEY: Developing a coronavirus vaccine is one thing, making sure there's enough of it is a whole other challenge. That's why Germany's
BioNTech is acting to boost capacity for its vaccine candidate, which it is developing with U.S. drug giant, Pfizer.
Fred Pleitgen is in Berlin and has the details. Fred, how are they going about this?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi there, Julia. Well, essentially, they are buying a vaccine plant from another
company. BioNTech announced today that they are going to buy a vaccine plant in the German city of Marburg from Novartis and they say once they've
outfitted that to their specifications and they start producing the coronavirus vaccine, there, of course after obtaining regulatory approval,
now that is going to -- that plant alone is going to be able to boost their output by about 750 million doses per year.
Now, this comes on a day that BioNTech's CEO, Ugur Sahin once again said that he is confident that he believes that the vaccine candidate that they
are currently working on, together with the U.S. company Pfizer, will be ready to seek approval by about the end of October.
They say they are in the final stretch right now, they're actually looking for further participants in places with a lot of coronavirus so they can
get more data, places like Brazil, places like Argentina and then they are at the same time going to seek approval both from the F.D.A. and ultimately
from the European regulatory body, the ENA.
Now, they say, both Pfizer and BioNTech that they are going to be able to produce, they hope, if everything goes according to plan, about 100 million
doses of this BNT-162 this year and about 1.3 billion doses next year. Of course, that new plant they're acquiring now they hope will help them boost
their output a great deal.
One of the things that they also announced today that at least a portion, Julia of that first batch of 100 million doses they hope to have ready by
the end of this year will go to the U.S. and another portion of that also will go to Europe as well -- Julia.
[09:55:14]
CHATTERLEY: I'm sure there will be a press conference here in the United States that perhaps discusses that at some point in the near future, Fred.
The time scale is just being collapsed here. It's phenomenal. Did they give us any sense of -- and this has to be quick, Fred, of how quickly they can
take the 100 million they can create and actually get them out there?
PLEITGEN: Well, obviously a lot of that has to do with logistics and logistics are something that is always very difficult. But they say that
one of the things that's helping them along is that this is obviously a cooperation between a German company and a U.S. company and obviously,
logistics that Pfizer has in the U.S. will help them get this out quicker than if BioNTech were doing this alone or in Europe, BioNTech with its
facilities can get it out fairly quickly as well.
But they do say they believe it will be about the middle of next year before a lot of this vaccine can be with a lot of people in the world --
Julia.
CHATTERLEY: Yes, it makes sense. Fred Pleitgen in Berlin. Thank you very much for that.
Sorry for rushing you. I'm going to rush the goodbye now, too, because I've stolen more time than I should.
That's it for the show. You've been watching FIRST MOVE. Stay safe and I'll see you tomorrow.
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[10:00:00]
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