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First Move with Julia Chatterley
U.S. Regulators Meeting Right Now to Decide on Pfizer's Jab; Mark Zuckerberg Plays Down Legal Challenges and the Breakup Threat; Airbnb, the Latest Tech Stock to Hit the Public Market. Aired 9-10a ET
Aired December 10, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:41]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Vaccine verdict. U.S. regulators meeting right now to decide on Pfizer's jab.
Facebook fight back. Mark Zuckerberg plays down legal challenges and the breakup threat.
And flotation frenzy. Airbnb, the latest tech stock to hit the public market.
It's Thursday. Let's make a move.
Welcome to FIRST MOVE once again. We truly have a jam-packed show for you today. We've got major news on U.S. science as you heard there and European
stimulus, too.
Let's begin by calling it V-Day in the U.S.A. with the U.S. poised to greenlight the Pfizer-BioNTech jab; and time to act the European Central
Bank boosting its bond buying program by an expected $600 billion.
Central Bank monetary support easier to agree it seems than government fiscal support. We've still got lawmakers here in the United States
battling to agree on terms and there's no sugarcoating these numbers.
This is the backdrop. A much higher than expected 853,000 Americans filing for first time jobless claims in the past week alone. That's the highest
level since mid-September.
In total, 19 million Americans claiming some form of jobless benefit according to the latest data now. Government officials have raised concerns
that these numbers may be inflated due to the sheer scale and challenge of counting them. My view that 19 million figure one year ago was one and a
half million workers getting benefits. That trend tells a story here and some 12 million Americans will lose pandemic tied benefits in two weeks'
time without government action. Time to act.
U.S. futures lower at this moment. I think impacted by those numbers, Europe also turning lower despite the E.C.B.'s action. Last ditch Brexit
talks have been extended until Sunday, too.
And what about Asia? Well, that's mostly lower as well. China today announcing retaliatory sanctions against U.S. officials for Washington's
tough stance on Hong Kong crackdowns.
Wow. There's a lot going on.
Let's get straight to the drivers and bring you up to speed. A momentous day in the fight against COVID-19 here in the United States. Regulators are
meeting at this moment to determine the fate of the Pfizer-BioNTech vaccine.
The greenlight for Emergency Use Authorization could come after America suffered its deadliest day of the pandemic yet. Senior medical
correspondent, Elizabeth Cohen is with us now.
Elizabeth, always great to have you on the show. Just explain to our viewers exactly what the committee is going to be looking at today.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Julia, so the way the process works in the United States is that the U.S. regulatory agency, the
Food and Drug Administration, reviews all the Pfizer data: how many people did you give this vaccine to? How did they do? Did they get COVID-19? Do
they not get COVID-19? And did they have any bad side effects?
So, the F.D.A. reviews that, but then there's a second step. The F.D.A. goes to outside advisers. These are not people who are paid by the F.D.A.
They're not employed by the F.D.A., they are outside advisers. They're mostly University, medical doctors and academicians, and they then review
the data and they help the F.D.A. decide should this vaccine get the greenlight or not.
So, let's take a look at the data that this committee will be looking at. What they're going to be seeing is that in the Pfizer data, that it was 95
percent effective when they did a clinical trial of more than 40,000 people.
There were frequent side effects. Those included fatigue, achiness, fever, but it lasted only about a day. They did not find severe side effects.
Now having said this, those 40 something thousand people that they tested it in, there were some people they didn't test it in and now that this
vaccine might be going out on the market really quite soon, you have to wonder who maybe shouldn't be getting this vaccine.
So, let's talk about the people in whom it was not tested. And it is a -- there is a list here, so children under 16 years old that was not tested
thoroughly in them, nor in pregnant women, mothers who are breastfeeding, people who are immunocompromised, and people who in the past have had
severe reactions to vaccines.
[09:05:14]
COHEN: So those folks might not be in line to get the vaccine. That's something that is going to have to be dealt with and thought through that
people are going to have to talk to their doctors about and that certainly regulators will have more to say on that topic -- Julia.
CHATTERLEY: Yes, quite fascinating. The final points on that board there in light of what we saw in the U.K. with the two individuals who seem to have
an allergic reaction, and of course, the U.K. adjusted their guidance on who gets it initially, at least.
Elizabeth, this is the key point. When do we think people will start getting vaccinated in the United States assuming sign off happens here?
COHEN: It could be a matter of just days or a few weeks until people start getting the Pfizer vaccine, if it gets authorization, which we expect that
it will. And let's look at who the first groups are because this isn't like other vaccines where you just show up and get it, certain groups are going
to be given priority.
So we already know that the first two groups to get priority are going to be healthcare workers, and people who are in nursing homes -- nursing home
residents, and then the next group after that would be essential workers, police officers, firefighters, et cetera.
Other elderly people, not those living in nursing homes, and those with underlying medical conditions, and then later will be everyone else. In
other words, everyone else if you don't fall into one of these categories, you will get vaccinated later. It might not be until the spring.
So it will take several months to do this, Julia. This is not going to be a quick rollout. It will take months.
CHATTERLEY: No, and in the interim, keep wearing masks, keep social distancing and we just await the moment.
COHEN: That's right.
CHATTERLEY: Elizabeth Cohen, thank you so much as always.
All right, the CEO of Facebook is promising to fight back against a major antitrust lawsuit filed by dozens of U.S. states and the Federal
government. It claims Facebook has abused its dominance in the digital marketplace and should be broken up.
Brian Fung joins us now. It highlights, Brian, I have to say the growing bipartisan movement in Congress to tackle these Big Tech players, but it
seems Mark Zuckerberg, not too worried at this stage.
BRIAN FUNG, CNN TECHNOLOGY REPORTER: That's right, Julia. This is shaping up to be a major historic court fight. Forty-eight Attorneys General and
the U.S. Federal Trade Commission alleging that Facebook has violated the U.S. competition laws by engaging in a pattern of anti-competitive and
illegal behavior.
In two separate lawsuits filed yesterday in Federal court, the government officials say that Facebook violated competition laws by targeting
companies that it believed would be a competitive threat in the future, and buying up those companies before they had the opportunity to turn into more
serious rivals.
And the lawsuits focus more specifically on WhatsApp and Instagram, two social media platforms that have become critical to Facebook's success in
recent years, and now the officials are saying that a court should force Facebook to sell off these properties and take any other further steps
necessary to restore competition.
Now, what is Facebook saying here? In an internal memo to employees, Mark Zuckerberg, as you said, vowed to fight these lawsuits and said that
Facebook, you know, competes very strongly and fairly.
And he also said to employees that today's news is, quote, "One step in a process which could take years to play out in its entirety. In the
meantime, you shouldn't be communicating about these cases or related issues, except with our legal team."
Now, Facebook's other argument here is that regulators looked at this deal at the time -- or these deals at the time -- and didn't find any problems
with them, so there shouldn't be any reason for regulators to be questioning them now, and of course, experts are telling CNN that just
because regulators may have blessed a deal in the past doesn't necessarily insulate Facebook from future scrutiny, especially if there's new evidence
coming out that indicates potential illegal behavior -- Julia.
CHATTERLEY: Yes. And we've got a better sense of the information and what was going on behind the scenes at the time as well.
I picked out the same line, one step in the process, which could take years to play out in its entirety. Can we just pull up the share price a second,
really quickly -- just to look at the lack of reaction from investors yesterday on the announcement of this news, so we know exactly what they
think and the ringing in my ears, Professor Scott Galloway, his comments about the sum of parts here being greater value than the whole even if they
are broken up.
We shall see. Brian Fung, great to have you with us. Thank you for that update there.
All right food deliveries, DoorDash, soaring 85 percent above its IPO price in its first day of trading Wednesday, but investors not yet sated. Today
brings yet another highly anticipated Wall Street debut, Airbnb starts trading on the NASDAQ in just under half an hour's time.
Paul La Monica joins us now and he will be eagerly watching this. Are we expecting the same kind of price jump, Paul, in Airbnb as we saw for
DoorDash?
[09:10:17]
PAUL LA MONICA, CNN BUSINESS REPORTER: It's certainly possible, Julia, I think it's going to be very interesting to see how much the price, you
know, does go up on the first day. I mean, DoorDash obviously did well, and this is a company that is thriving during the pandemic but has a lot of
competition and has to worry about going forward now, most notably from Uber, which is buying Postmates.
But I think, Airbnb, it's interesting because it's sort of the flip side. Right now, times are tough. Revenue is down more than 30 percent in the
first nine months of this year, obviously, because of the pandemic, people are traveling less and don't need, you know, temporary lodging.
Hotels are obviously suffering as well, but I think the hope with Airbnb is that going forward, when things return to normal, if and when people start
traveling again because there's a vaccine, Airbnb will continue to be that disruptive force that is hurting the big hotel chains.
And you know, you just look at the hotel stocks this year, Hilton, Marriott and Wyndham, they're all down and you know, not thriving even though Airbnb
is probably going to pop today.
CHATTERLEY: It's such a great point, Paul. I mean, they went into mass cost cutting exercises, of course, Airbnb, but we saw a surge of rentals in
rural areas as people tried to get out of the cities, which in some way questioned the numbers and to a small degree, to a certain degree, not
fully, clearly, but your point about the valuation and how much of a pop that we saw in DoorDash and the comparison with Uber and their food
delivery is incredible.
I was just looking at some of the numbers, investors are valuing this company on a revenue basis, about twice as high as Uber. So that's DoorDash
to Uber comparison.
DoorDash trading it over 16 times revenue, and if you project the latest quarter out over a year, Uber trading at just under eight times sales.
Really? I worry about that idea.
LA MONICA: Yes. I mean, yes, it's an extremely frothy valuation and DoorDash obviously is not nearly as diversified a company as Uber is.
Uber, obviously, you know, trying to find the right mix of assets for that company. They've been busy selling a lot of things lately. But I do have to
wonder why there has been this much enthusiasm about DoorDash when the valuation is so exorbitant.
They are pricing it as if there was no competition. You can understand it a little bit more with Airbnb because there isn't as much pure play
competition in it or market.
But that being said, it's obviously getting a little frothy and bubbly here.
CHATTERLEY: Yes. I concur. Paul La Monica, thank you so much for that. We will watch this space.
All right let me bring you up to speed to some of the other stories making headlines around the world. Two countries seen as relative successes in the
fight against the coronavirus are experiencing a surge in cases. Germany and Japan have reported their highest number of new infections since the
pandemic began. Officials in both countries have called for reduced contacts.
Meanwhile, Saudi Arabia has joined the U.K. and Bahrain as the first countries to authorize use of the Pfizer-BioNTech vaccine.
The E.U. and the U.K. also are set to hold the next round of Brexit talks on Sunday after a crucial meeting in Brussels ended with no deal. The sides
remain far apart on key issues, but of course the clock is ticking.
The U.K. has just three weeks to secure a trade deal with the E.U. before the Brexit transition period ends.
All right, still to come on first move, we go up in the Cloud with Amazon Web Services. We've got the CEO and we'll be talking about powering 2020's
move online. Stay with us, that's next.
(COMMERCIAL BREAK)
[09:16:49]
CHATTERLEY: Welcome back to FIRST MOVE. Vaccines set to give a much needed room to global economies next year. Until that happens though, urgent help
still needed now.
The E.C.B. deciding its time to act once again announcing an increase in its bond buying of some $600 billion. These new lockdowns weigh on European
growth. The E.C.B. also extending the stimulus program through March of 2022.
No such luck here in the United States where negotiations continue, and fresh evidence appears that economic restrictions are further weighing on
the U.S. recovery.
A far greater than expected 853,000 Americans filing for first time jobless claims in the last week. Joining us now, Mohamed El-Erian, the Chief
Economic Advisor at Allianz. Mohamed, always fantastic to have you on the show.
Let's talk about Europe first because the European Central Bank weighing up rising short term risks, whether it's rising COVID cases and the health
challenges, potentially the Brexit deal or no Brexit deal coming at the end of this year, and offsetting that against the hopes of vaccines kicking in
and recovery in the future. The right move today?
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISOR, ALLIANZ: It is the expected move, but I call it the typical active inertia. What do I mean by that? Active:
you have to do something. The economy is slowing. Brexit uncertainty. The currency is too strong. The market is expected to do something.
But inertia, you doing more of the same and the more of the same, unfortunately. And that's not the E.C.B.'s fault, but unfortunately, does
not have a massive impact on the economy.
CHATTERLEY: Isn't that the definition of insanity? Doing the same thing over and over again and hoping for a different outcome. When I look at
their bond market, the number of bonds trading with negative yields, it just -- not only do I ask how on Earth they get out of this, but why do
they think this is going to make a difference? And I guess you're saying it won't.
EL-ERIAN: Yes, I don't think they had a choice. They had to do something because they don't want to become part of the problem. At best, they want
to be seen as trying to be part of the solution. But they are not the solution.
I think that this is a very conscious decision. Interestingly, Julia, it is what they did not do. They did not cut interest rates more then realized
that negative interest rates have limited impact, and they didn't extend the buying program to other assets.
So as interesting as what they did is what they did not do.
CHATTERLEY: Should they have done that, Mohamed? Is now the time?
EL-ERIAN: Absolutely not. Absolutely not. Okay. Monetary policy is not like pushing on a string. And that would be fine if there weren't unintended
consequences or collateral damage.
What Europe needs is what the U.S. needs, which is a pivot to smarter fiscal policy and a lot more pro-growth structural reforms, not more
monetary policy.
CHATTERLEY: Yes, and Eurozone nations can't even agree on how the money that they have agreed can be spent, so that's stuck in the works, too. I
mean, we haven't even got to deal.
Let's move to the United States now, but you've already -- and I've watched you tweeting saying it's actually too little too late, even if they managed
to agree the bipartisan deal on $900 billion.
[09:20:03]
EL-ERIAN: Yes, the damage is there. You cited the number of initial claims. Just to put it into context because there's going to be a lot of debate as
to: was last week's number distorted? This is the highest amount of initial joblessness for 11 weeks.
So, this is a material number, this is a consequential number and it is one that we have to take seriously. The U.S. economy is weakening and if
Congress doesn't get its act together, the amount of scarring, long-term damage is going to be significantly more.
CHATTERLEY: How much more cash? I mean, there are all sorts of questions of policy changes that are required. But if we just talk in terms of the cash,
if they manage to get $900 billion done here, when they come back to the negotiating table in January, how much more do you think needs to be
agreed?
EL-ERIAN: You know, Julia, it is less about more money and more about mindset. Relief is really important, and now, we know that there's an end
to relief. We know that the vaccine is coming, you know, we cross our fingers that it will be a smooth implementation.
But at least this is -- we see the light at the end of the tunnel, but we have to deal with the consequences of the last 11 to 10 months and the
consequences of hits to productivity, hits to growth and hits to household economic security.
That's what fiscal policy should be thinking about, which is how to counter these long-term problems before they get embedded in the structure of the
economy and they become much harder to solve.
CHATTERLEY: What about recovery, Mohamed? I do hear optimism from the business community that as we get vaccines in to the system, I mean, we've
had suggestions that we could have a hundred million people in the United States vaccinated by the end of the first quarter into April and perhaps a
significant recovery in the second half of the year. Are we being too optimistic?
EL-ERIAN: So, the optimism is based on incredible progress in coming up with this vaccine, and we should celebrate that. I would be excessively
optimistic, I think, yes, we have to be hopeful, but not excessively optimistic.
One is, there's lots of question marks about the vaccines. Ask a doctor, they'll tell you we don't know how long the immunity lasts. We don't know
what the side effects are.
Then there's a question about adoption, especially in the United States, there is a strong anti-vaccine movement. I'm not one of them, I will be out
there to get the vaccine. But there's a movement out there and that means that herd immunity is not going to be instantaneous.
And thirdly, we have longer term damage, Julia. So it's not as if we bounce back immediately. We have to deal with short term problems that are
becoming long term problems,
CHATTERLEY: Scarring, as you pointed out earlier. What does this mean for investors, Mohamed, because there has been a sort of ongoing party, I
think, for investors, stock markets are trading at record highs, people are piling into emerging markets, they're piling into high yield credits, for
example, and looking at this and saying, look, they are cheap because the recovery is coming.
Is there a lot of risk in those kind of trades at this moment, based on everything we've just discussed?
EL-ERIAN: So, I call it the great disconnect. Markets have been completely disconnected from economic reality. But there's a good reason for that,
which is the amount of liquidity that has been pumped in.
So, if you're an investor, and you are buying at this point, understand what you're betting on. You're basically surfing a liquidity wave, and it's
a huge wave. It's an enjoyable wave. It's a very rewarding wave. But be careful.
Don't confuse that with a fundamentally based investment. This is a liquidity-based investment.
So, I tell people, you've got to be much more tactical, much more short term in your thinking than you would be otherwise, and enjoy the wave, but
just make sure you get off before it breaks.
CHATTERLEY: I mean, that's not a natural position for -- particularly for medium to long term investors to be in, you're sort of saying that actually
you have to be far more tactical and maneuverable in the short term. What are their -- how do they respond to that?
EL-ERIAN: So, some of them, say yes, but I have no choice. Look, if I was fundamentally based, I would have missed a really big rally and that's
correct.
CHATTERLEY: It's true. Yes.
EL-ERIAN: Okay. Some of them justified by the destination saying that, well, the vaccines are coming, so this may be a liquidity wave, but it's
going to turn into a fundamentally driven rally.
So, you know, the big hope is that liquidity gives away to fundamentals, but that goes back to where we started, Julia, which is who does that
handoff? That handoff isn't automatic. It needs a lot of help from both the public and the private sector.
[09:25:07]
CHATTERLEY: Yes, that point there reminds me why I'm in this job and not still in finance. I leave it to the experts. Thank you very much.
EL-ERIAN: Julia, I help people. I tell people, I am so happy I'm not managing other people's money. Because this is a really tough situation to
be in. You want to surf the wave, but it goes counter to everything you've learned.
CHATTERLEY: Yes, yes, you and me both, sir. Thank you. We'll continue to have these discussions and watch everyone else.
Mohamed El-Erian, the Chief Economic Advisor at Allianz. Great to have you with us, sir, as always.
All right, coming up. The company behind Netflix, Airbnb and Zoom. I speak to the CEO of Amazon Web Services. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. This year, the pandemic moved much of our world online or to be more precise, it moved even more of it over to
the Cloud.
Cloud computing is the IT infrastructure that allows the rapid and flexible moving storage and analyzing of data and services online. One of the
biggest providers is Amazon Web Services and among the household names that run on top of AWS are names like Netflix, Zoom, and Moderna. And joining us
now is Andy Jassy. He is CEO of Amazon Web Services. Andy, fantastic to have you on the show.
As we've adjusted our behavior and changed our consumption pattern, so businesses have had to respond and scale up, too. Just explain what this
past nine months has been like for AWS including I'm assuming not much sleep.
ANDY JASSY, CEO, AMAZON WEB SERVICES: Thanks for having me, Julia. I appreciate it.
It's been a crazy last nine months for everybody in the world and us included and you know, what we've seen in the last nine months is that
every company in the world has tried to save money including Amazon, by the way and we spent in AWS a good amount of our time trying to help our
customers find ways to save money.
One of the best parts about running in the Cloud is you have this benefit of elasticity, which means if it turns out you need more capacity --
infrastructure capacity -- than you thought you need, you just seamlessly scale up, which a lot of companies had to do when they were suddenly forced
to work remotely from home.
[09:30:14]
JASSY: But it also means that if it turns out, you've hit a peak, and you don't need that peak capacity anymore, and I don't know if any of us
thought that the pandemic would end up being a peak, but that is what happened, then you're able to give back that capacity and stop paying for
it.
So we helped a lot of companies who were in the Cloud save money during the pandemic.
All that said, I will say that what happens in a lot of these discontinuity is like a pandemic, as companies take a step back and they think about what
they may want to change strategically, and a lot of companies decided in this pandemic, that they didn't want to run their own infrastructure on
premises anymore, and they're going to move to the Cloud.
In all these conversations that we've been having with large companies, which, you know, had progressed over the years, but there was a lot of
dipping of toes in the water and have moved from conversations to real big transformation plans.
And I think when all is said and done, you look back on the history of the Cloud, it will turn out that this pandemic accelerated adoption by a few
years.
CHATTERLEY: Yes, I mean, we'll talk about this more. It's not just individual companies making these choices. We're seeing whole industries
now: entertainment, the healthcare sector, and finance.
I want to make this real for people first, though, and I think one of the names that's become synonymous with the pandemic in the hopes for a
recovery is Moderna that's developing this this vaccine.
I know you guys have been working with them now for what -- four years or so. You helped them develop the Zika vaccine as well. I mean, they created
a vaccine in a mind-blowingly short amount of time. How did AWS play into this?
JASSY: Well, you know, you're right, Julia that virtually every vertical business segment is being reinvented as we speak in significant part
because of the Cloud because it allows you to be so much more cost effective, but it also has so much functionality.
It means you can invent in a much more rapid rate, and so when you look at a company like Moderna, they built a digital manufacturing suite on top of
AWS, where they use services for us like storage, and compute and data warehousing and machine learning, and they've built their COVID-19 vaccine
candidate on AWS in 42 days versus the typical 20 months it takes. It's a total game changer.
You can look at it in other industries, too. If you look at what Volkswagen is doing in the auto space, they basically have completely reinvented their
manufacturing and logistics process where they've made all of their 123 factories and 1,500 supply chain ecosystem partners, all of those nodes are
able to now communicate with one another in real time and they've built machine learning models that they've pushed to the edges of those nodes to
be able to predict what's happening and take action.
It just totally changes the supply chain when you're thinking about an area that's complicated, like the auto space. Or you can look at media and
entertainment. I mean, if you look at what when FOX sold to Disney, but retained their broadcasting arm, they used the occasion to completely
reinvent how they did broadcasting.
And so, they're doing very low latency, uncompressed video now through AWS. And instead of rolling out those $30 million trucks to stadiums and arenas
and trying to do the compute in those trucks, they're able to do it through AWS, which totally changes how you do broadcasting.
So virtually every vertical business segment is being reinvented as we speak.
CHATTERLEY: Yes. And I saw the Verizon CBS announcement as well in the last 24 hours. So congratulations on that as well.
Talk to me about Carrier, because we had the Carrier CEO on the show as well, and he was talking about, again, cold storage and the challenges of
making sure that we don't see deterioration or degradation in the quality of the vaccines that we're going to be pumping out.
And again, he was saying, AWS, we track the data at every stage in real time to understand that there are no breaks in this chain.
JASSY: Yes, I know you had Dave Gitlin on the show a few weeks ago, and I think what carrier has done on top of AWS is really remarkable. And again,
another pretty big reinvention in an industry.
And I think that if you think about what they're doing, they're basically - - they built this product called Lynx, which gives you end to end visibility on refrigeration, temperature and storage and transportation and
it changes with regard to spoilage and waste, what's going to happen with food.
But as importantly, if you look at the time that we're in right now, and you think about the vaccines being developed, and how they're going to get
to individuals, Carrier is going to play a big role in transporting those vaccines at the right temperature, so we can all use them. So it's very
impressive what they've done innovation-wise.
CHATTERLEY: Yes, and it's going to hopefully make a huge difference to the recovery, too.
Andy, we have had competitors of yours on the show talking about the hybrid Cloud. This idea that some businesses will keep some of their data on
private Clouds. They'll push other parts of their data out to the public Cloud and they'll manage the data between the two of them.
Where do you stand on this? Because when I was listening to your keynote address and comments that you made at the Reinvent Conference, you were
talking about taking the Cloud to the edge, and that edge being wherever a business then needs to use or analyze that data, whether it's an oil rig,
or it's a battlefield, for example, just distinguish between hybrid Clouds, perhaps some of your competitors and what taking it to the edge means and
differentiates AWS?
[09:35:28]
JASSY: Yes, it's a good question, Julia, and you know, what I would tell you is that we've had a strong opinion for many years and continue to have
it that over the fullness of time, and I don't know if that will be 10 years from now or 20 years from now, the vast majority of computing will
move to the Cloud, and relatively few companies will have their own data centers, and those that do will have much smaller footprints, but that will
take a long time.
And even when it happens, there will be certain workloads or applications that are more appropriate in different locations, and so I think, if you
look at the history of this term of hybrid infrastructure, people have always used it to mean Cloud alongside on premises data centers.
But, you know, what we're seeing is that it is really too narrow a definition. What hybrid really has become is Cloud alongside various edge
nodes of which on premises data centers is one of them.
But it also includes if you if you want to have infrastructure in a restaurant or a hospital, or if you want to actually have infrastructure at
the edge of a battlefield or an oilfield, or agricultural field. If you have certain workloads, where you only need one or two of them in a certain
major metropolitan area where you don't want a data center there, because it's really expensive. But you'll pay a little bit more to have those one
or two workloads work there, because you need really low latency to your end users in a certain metropolitan area.
Or it could be that you want to build sub 10 millisecond latency applications using the new 5G technology for mobile applications, then you
need that infrastructure right at the 5G towers.
And so that is what hybrid is becoming. It is Cloud alongside these various edge nodes, where what customers really want is they really want us to
distribute AWS to all those different edge nodes in the same way they're able to consume them in our public regions.
CHATTERLEY: You know, I was looking at some of the data on this. And it was tough to find a company that doesn't run off your platform. You do have
about 40 percent market share right now in terms of the Cloud. And yet, it's just a fraction of global IT spending for many of these companies
around the world. I think it's less than five percent at this stage. Interesting in terms of growth opportunities, Andy, but it's also a huge
responsibility.
How do you mitigate the risk of an outage? Because that's a huge problem for big companies -- and small.
JASSY: Yes, to me, the number one priority unquestionably, for us in AWS and when you're running a Cloud infrastructure technology platform, like we
are, is security and operational performance and we overstaff those areas, we prioritize those areas, and we spend a lot of time making sure that our
customers are successful.
You actually -- when so many companies and so many governments are relying on your infrastructure, you just don't have a business if you don't have
airtight security and very strong operational performance. And so we spent a lot of resource there.
I think that if you look at our operation, performance and security for the first 14 years that we've had a business, it's been very strong, and it is
one of the big reasons why we've grown as fast as we have.
CHATTERLEY: Yes, such a critical element. Now speaking of governments, the news, obviously, in the last 24 hours, U.S. regulators tackling Facebook,
potential threats of breakup, and I just wondered what the conversations are like internally, between Amazon and obviously AWS, about potential
future regulation, and how that perhaps, filters in maybe it does, maybe it doesn't to a bigger question about potentially spinning AWS off at some
point, you're a big business on your own.
JASSY: Yes, you know, what we talk a lot about internally at Amazon is that when your company starts to get larger, like we have at Amazon, you've had
success in a few different business segments like we have, you're going to have to expect more scrutiny, and people are going to look at what you're
doing.
And so what we spend most of our time focused on is making sure we do right by customers, and then when we are scrutinized and people look at what
we're doing, that we're proud of what we do. And so that's what we spend our time doing.
We're always focused on customers and are trying to do things the right way. You know, people ask us all the time whether we expect AWS to be spun
off, and you know, I don't. And I think that typically when companies choose to spin off units, it's either because they want them off their
financial statements, or they can't fund the new business in the way they want.
And neither of those have been the case for AWS and I think also our customers would prefer us not to be spun off just because I think instead
of having us focused on earnings calls or building a separate financial system or HR systems, they want us focused on making sure that they have a
secure operationally performant and highly capable infrastructure, and that's what they want to spend time doing.
[09:40:12]
CHATTERLEY: Try not to fix something that isn't broken and focus on customers first, quite frankly, and providing a service to them. That's the
message.
JASSY: Yes.
CHATTERLEY: Yes. I hear it. Andy Jassy, great to have you on the show. Looking forward to continuing this conversation because I have hundreds
more questions as you could imagine. We will chat again soon, I hope.
JASSY: I look forward to it.
CHATTERLEY: The CEO of Amazon Web Services there. Sir, thank you, and I look forward to it, too.
All right, coming up after the break, the Executive Chairman of IBM, the CEO of Merck, they are fronting a coalition to create one million jobs for
black Americans over the next decade. Find out how, next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE.
The U.S. economy is still down near 10 million jobs since the pandemic began. Among them are a disproportionate number of African-American
workers. It's further widened a gap that existed long before the pandemic began.
Now, some of the biggest companies of the world is saying we want to hire, train and promote one million jobs for black Americans over the next 10
years.
The coalition is taking action to tackle racial and economic injustice, and the co-chairs of the 110 Federation join us now.
Ken Frazier is the CEO and Chairman of Merck and Ginni Rometty is the Executive Chairman of IBM. Ken, Ginni, a pleasure to have you on the show
this morning.
Ginni, I want to begin with you and I love the statement on this. It says look, this is not about philanthropy. Success has to be earned. We get
that, but you've got to have the opportunities available to get that success. Just explain what this commitment involves.
GINNI ROMETTY, EXECUTIVE CHAIRMAN, IBM: Yes, well, this is a commitment not only from Ken and myself, but there are 37 founding companies and we hope
this will just keep expanding.
And what we are looking to do is hire a million people into what we call family sustaining wages, but think of that as the beginning of a career. So
$40,000.00 to $50,000.00 jobs, wage adjusted in the country, but what we're going to do is open up a new pathway for that to happen.
Meaning, if you look in our country and remove structural barriers, we want to remove structural barriers, 80 percent of our black colleagues do not
have a college degree. So the pathway we are going to open up is adopting a view of skills first, meaning, bring people into our company without four-
year degrees and work with many different providers and help them scale up so that we can have a pipeline, and it will give us access to talent, a
whole swath of talent that really goes untapped.
[09:45:42]
ROMETTY: So it is skills before degrees only. Now, you know, you and I have talked, we've been at this at IBM a number of years. We're a proof point
that this works.
In fact, 15 percent of my hiring is now folks without a four-year degree to start, and as well 43 percent of our job reqs no longer require it.
So it's about changing our hiring practices, then putting in practices to promote people that come in this way, and then as well, working with all of
the providers of talent out there be it Community College, non for profit credentialing groups, and get them to scale.
And Julia, the bottom line is that we've each done great things individually, but collectively, we can do much better to provide economic
opportunity.
CHATTERLEY: Yes, it's such a great point, Ken, come in here because I know you work with the nonprofit Year Up as well and they say the same thing. If
you demand a college degree, you knock out in their mind, 80 percent of African-Americans and 86 percent of Latinos.
It's crazy because it hurts these individuals who have other skills and it undermines the businesses themselves because they miss out on great talent.
KEN FRAZIER, CHAIRMAN AND CEO, MERCK: That's exactly right. So what we're going to do is not only help our companies perform better, and I would
point out that in addition to doing the hiring side, we're also going to have a community of practice of these companies because when you look at
how we develop and promote advanced black talent, with four-year degrees in our companies, there's a lot we can learn.
We also recognize that that's been a challenge. So only three percent of senior managers and executives in corporate America are black. So African-
Americans being about 13 percent of the population, you see, they are vastly underrepresented.
But going back to your point, what we want to make sure is that these people have a real chance to participate in our economy, they become our
customers, they become our workers in the future, they contribute to the growth and the strengthening of our economy coming out of the pandemic,
rather than having to be people that depend on social welfare, or, for example, people who end up in the criminal justice system.
And the last thing I'll say is that the single most important determinant of a child's success in the world is whether that child's mother or father
has a job. So we're actually addressing persistent intergenerational gaps in wealth and opportunity.
CHATTERLEY: It makes perfect sense to me. Ginni, do we also, in terms of the corporate culture need to get out of this suggestion, because we've
long talked about boosting equality and hiring better and more broad swathes of the population.
But somehow it hasn't happened in practice this idea that you're diluting your talent, if you hire people without a college degree that actually in
some way, again, you're going to suffer as a result.
ROMETTY: Well, it's clearly right.
CHATTERLEY: Please.
ROMETTY: No, Ken and I agree, this is a paradigm that needs to be busted. And this idea that would water down your workforce in some way. I mean,
again, we've proven that's just not true.
I was sharing with Ken that the group of folks that we've been hiring now very consistently over a number of years, 75 percent have gone on to get
four-year degrees, and we've had our first PhD out of the group.
And so, this has got absolutely nothing to do with their aptitude. So this is about giving them access, they've got aptitude.
CHATTERLEY: Wow. That just gave me goosebumps. How fantastic. Ken, I know you were going to respond to that, too. Your views on this, too.
FRAZIER: No, I mean, Ginni said it right. This group doesn't lack talent, they lack access. And you know, there are a lot of jobs in this country.
You can think about people who are -- people who work as auto mechanics or in manufacturing jobs or certain kinds of IT jobs in cybersecurity. It's a
skill that they need. It's not necessarily a four-year degree.
The credential is not really what drives job performance, it is actually the person's aptitude, their attitude and whether you've given them access
to the skills and we know that historically, the education pipeline to employment has probably failed black Americans to a great extent more than
maybe some other groups and what we're going to do is we're going to try to address that by focusing on the skills.
[09:50:01]
CHATTERLEY: You know, I can't help but think that 85 percent of employment is outside of S&P 500 companies and one million jobs is great, 37 big
companies coming together and saying, hey, we're going to do this. This is all so great, but it's not enough.
Are we going to see more people get on board, smaller companies getting on board? And in order to do that, you've got to have government
participation, too, whether it's education, whether it's looking at what a minimum or a living wage actually is in this country and needs to be, Ken,
and then Ginni, I'll get you to weigh in, too.
FRAZIER: So Ginni just said it early on, she made that point. This is just the start. These 37 companies, think of them as the vanguard of a movement
that we know has to expand beyond those 37 companies.
So we're going to be looking to our suppliers. We're going to be looking to small and medium-sized businesses. You know, nonprofits are large employers
in this country, whether they are universities or health systems. So there's a real opportunity for us to expand, we must expand, we intend to
expand, and we think that what we have to do is provide the proof points that allow other people to join in this coalition.
CHATTERLEY: Ginni, I know you and I have discussed this. So, I'm not going to want you to repeat yourself on this. Talk to me about government
involvement. Do we need to be having a bigger conversation here about again, living wage, minimum wage, all of these things need to be discussed,
changes in education, too?
I mean, you've been doing great things at IBM, but more is required, broader efforts are required.
ROMETTY: Well, that in your last statement there gets to the heart of this coalition. Many of us have done things individually, and they've done some
-- we've all done some great things.
But all of us coming together, I believe we could do more if we come together as a coalition. And to the government point, there are a number of
things. First, I do believe is public-private partnership that is going to fix this in the timeframe that's required.
But think of things like, in America, universal broadband access. Those are policy things that are required now, because for anyone to get a job and
learn, you have to have that. Or in America, we have something called Higher Education. We have funding for grants for education in four-year
colleges.
Well, we could use adjustments to that so that you could apply that same kind of money to people in an apprenticeship or a two-year credential
program. And then offering apprenticeships to small and medium businesses, so they can bring people into earn while they learn.
And so, there are many ways that the government could support and create a much more positive environment, which Ken and I will work on that and the
whole team will. Because really, what 110 is about is getting at all the structural barriers, so we talked a lot about the hiring and the practices.
Ken mentioned about how we've got to really help scale some great efforts out there that they can produce people with some of the skills, and then
there is an underlying government set of supporting policies that could go in place.
CHATTERLEY: Yes. Guys, it's brilliant. It's so pleasing to hear. Thank you so much for your work on this and come back and talk to us soon, please,
because I know you're going to make great progress.
Ken Frazier, CEO of Merck and Ginni Rometty, the Executive Chairman of IBM, guys, great to have you on the show this morning. Thank you.
FRAZIER: Thanks for having us.
CHATTERLEY: All right. A step closer to reaching Mars. We'll explain why the explosion of this experimental rocket was not necessarily a failure.
(COMMERCIAL BREAK)
[09:55:21]
CHATTERLEY: Welcome back to FIRST MOVE with a quick look at what we're seeing for the U.S. majors this morning. Little change so far in the
session as you can see. A fresh spike in U.S. jobless claims offering fresh evidence that more fiscal help is needed for a weakening U.S. economy.
Congress yet to agree on new aid, but those talks continue. New stimulus though on the way in Europe. The E.C.B. boosting its bond buying program,
buying some $600 billion.
Meantime, we are awaiting the opening trade for mega IPO, Airbnb up with NASDAQ call it the rarefied Airbnb. Yes, I couldn't help myself.
The home rental service pricing its shares at a greater than expected $68.00 a share valuing the company at a cool $47 billion.
Meanwhile, shares of Wednesday's IP) success story, DoorDash using a bit of steam here, down some five percent.
And finally, not every day a space rocket blows up, and yet the mission is deemed a success.
(VIDEO CLIP PLAYS)
CHATTERLEY: Wow, it may have gone up in flames on landing, but before that, the experimental rocket built by Elon Musk's SpaceX soared 12 kilometers,
its highest altitude yet.
There was no one on board and Musk said before the launch that the crash was expected. He hopes this type of rocket will one day take people to
Mars. Wow.
All right. That's it for the show. I'm Julia Chatterley. Stay safe. And we'll see you tomorrow.
(COMMERCIAL BREAK)
END
