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First Move with Julia Chatterley

Israeli Supreme Court to Debate "Reasonableness" Law in September; Author's Letter to AI Giants; Kobold Uses AI to find Key Metals; Microsoft's Nadella Optimistic over AI Growth; LANG: AI is a Tremendous Threat to Writing Industry; Wrexham Making the Most of American Preseason Tour. Aired 9-10a ET

Aired July 26, 2023 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:00:00]

(COMMERCIAL BREAK)

JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move". Great to have you with us for midweek at the multiplex edition of the show

today Oppenheimer and Barbie boosting global box office receipts this summer on Wall Street in the meantime investors in the pink too with their

own Oscar contenders including Top Gun.

The DOW getting top billing is the summertime raging bull rages on calls it cruise control perhaps with 12 days of gains now in a row, the blessed blue

chip performance since 2017. Now with record highs as we've discussed in sight.

Plus gladiator; inflation warrior Jay Powell and his team at the Fed set to hand down their interest rate decision today. Powell remains on the pricing

Prowl, hike today all but certain. But what then is a soft landing in sight or is that still "Mission Impossible".

And Star Wars the guardians of the tech galaxy battling it out for AI supremacy, a second quarter earnings season reaches orbit, strong gains

premarket for Alphabet, but a slight pullback for Microsoft, will bring you all the action with Tech Analyst Dan Ives.

And as we await the curtain rays on Wall Street, it's looking like a lower open for the major averages. The decider of course today, as I've already

mentioned, will be what the Fed says about the future. But also lots of potential positives for the U.S. economy too, a tentative contract deal has

been hammered out between UPS and its unionized workers. The agreement will hopefully avert a strike that would have pressured U.S. supply chains.

In the meantime, U.S. consumer confidence currently sitting at a two year high plus, we're seeing more banking sector consolidation in the United

States too embattled regional bank PAC West, being bought by another smaller player Bank of California, more tie ups and consolidation to come

in my estimation.

Lots to get to, as always, but let's begin with our feature attraction, the monetary matrix, Christine Romans stars in this movie, and no one's taking

any pills on this show, at least until the end of it. The question is, I guess for Jay Powell and for the read, because clearly investors believe

that the rate hike will happen is what the bar for raising rates again?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes, and what's this September scenario? There's a lot of data between now and the next meeting.

So there will be a lot of new information to digest.

You know, and will the Fed Chief continue to gun it until you get down to 2 percent in CPI? Or is there a comfort level somewhere between where CPI

sits right here, and 2 percent and also looking at core rates. I know the reporters who are in that room with Jay Powell today will be asking him

about how firm he is on that 2 percent inflation target. And how long he thinks it'll take them to get there.

And depending on what he says today, stock investors are either going to be shown to be you know, the victors or the -- or they overdid it, you know,

because the stock market looks like it's completely pricing in a soft landing here.

And no big surprises from the U.S. economy and from Jay Powell and an end in sight to the Fed rate hike cycle. So a rate hike expected today, maybe

another one in the cards, but no one knows for sure.

CHATTERLEY: Yes. And it's going to come down, I think, to your point of how much emphasis he places on cooling inflation versus the resilience and the

strength in the economy, because that's where you're going to get the hints, really, if they are concerned about the ongoing resilience and for

much of that.

It's tied to the jobs market, and in particular, wage pressures, which have been a battle for them. It's a good thing for workers, of course, but it's

been an inflationary challenge now for the Fed for many months.

ROMANS: Yes. And right now, for the first time in this sort of inflation cycle, really this current inflation cycle, you've got wages that are

rising more briskly than inflation, so for consumers on Main Street that means for the first time in a long time, their bigger paychecks are not

being eaten up by the extra bills that they're paying.

But that's good for Main Street. That's a problem for the Fed. And that's one of those messaging challenges I think the Fed Chief is going to have

you know, where he has to explain why you want wages not to be too hot? And why you want the job market not to be too hot, even though that's what

regular people would like.

CHATTERLEY: Yes, and it's not a big problem for corporate, as you said, the stock market show it's a problem for smaller businesses, which aren't

captured in those big indices. Christian Romans we shall see. Thank you for that.

OK to Israel now, we're in the last few hours the Supreme Court has ruled it will not issue an injunction to temporarily block the so called

"Reasonableness Law". This strips the high court's ability to rule government decisions as "Unreasonable". It was passed by the Knesset on

Monday and is now in force.

The Supreme Court says it will debate the controversial law in September. Hadas Gold joins us now from Jerusalem. So for those that have been

protesting these reforms and this law change it's a glimmer of hope perhaps that at least, their questions, their concerns will be heard. They just

have to wait until September.

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HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Yes, they didn't get the temporary injunction that some of them were hoping that would immediately freeze this

bill. But instead, the petitions will be heard in September after the court comes back out of its recess.

In fact, the Supreme Court President and several of the senior justices were actually in Germany on an official trip and cut that trip short, in

order to rush back to Israel to hear these petitions. We know seven petitions in total, will be heard in September, all of them will be heard

in September, about this bill.

Now, this is setting things up for a major legal battle, because what this bill did was it amended a basic law of Israel. Now Israel doesn't have a

written constitution. It has a set of basic laws with the idea having been back in the past that those basic laws would form the basis of a

constitution in the future.

And the Supreme Court has never has discussed basic laws, but it's never before ruled or nullified a basic law or a change to a basic law in the

past, and also, this would be the Supreme Court ruling on its own power on its own abilities. What it can do, to strike down or to halt government

decisions?

Now, so what this means is right now until you know this, the legal battles are fought is that this law is now enforced. And there is a question about

what the government might do with this. And there are some critics who are worried that one of the first actions might actually be to fire the

Attorney General.

The Attorney General in Israel has a bit of a different position than let's said in the United States. The Attorney General here is more of an

independent legal body than it is in the United States. And the current attorney general has been a fierce critic of some of these government

actions.

She's criticized parts of this judicial overhaul; she's clashed with the government. And Julia, she's also overseeing Prime Minister Benjamin

Netanyahu's corruption trial. Now he has denied those charges, has denied that this overhaul has anything to do with his corruption trial. But the

critics now worry that because this bill, this is now a law on the table.

That it'll be much easier for the government to fire her whereas before the Supreme Court would have had an easier time to say, well, that was an

unreasonable decision. They still have other avenues to block her firing. But there is now a fear this would open the door for action such as getting

rid of the Attorney General, Julia.

CHATTERLEY: Yes, we want to watch this very closely over the next couple of months, Hadas Gold thank you. Now firefighters across Europe and Africa

have to tackle wildfires as extreme heat bakes the planet. Fires have killed dozens of people in Algeria, Greece and Portugal.

Meanwhile, in Italy, while wildfires are blazing in the south, severe storms and giant hail, have cause chaos and loss of life in the north. Nada

Bashir joins us now from Rome. Nada, the extremes of weather that we're seeing across the country and this hail, in particular sort of mind

blowing.

NADA BASHIR, CNN REPORTER: Absolutely. We've heard from the Italian Civil Protection Minister who has described this as one of the most difficult

periods that Italy has faced in years. This is an emergency situation. We're seeing hail and intense storms in the North causing at least one

death so far.

And in the southern regions of Italy, we are seeing those intense wildfires at least 10 wildfires currently ongoing. The Italian emergency services

working to tackle the blaze across different regions including -- Calabria and in Sicily. And in fact, yesterday we saw those flames in Palermo in

Sicily getting dangerously close to Palermo Airport at one point bringing the airport to a standstill and forcing the authorities to evacuate local

residents.

And of course, this has been a deadly extreme heat incident. At least four people reportedly killed according to the Italian authorities. And this is

a huge concern. Italy's Civil Protection Agency says that more needs to be done to prepare Italy for what is said to be a future of repeated heat

waves of this level and of course, wildfires as well.

And that is really a reflection of what we are seeing across the Mediterranean region. You mentioned Greece there that devastation still

ongoing, particularly in the islands of area called Corfu and -- where we are seeing those blazes continue emergency services and response teams from

across the globe actually are working to tarp -- to try and tackle those wildfires.

Thousands of people again, evacuated many of course, fearing for their homes and many for their livelihoods as well. But this is spreading across

the Mediterranean. We've seen fires in Algeria and Tunisia in Turkey, now in parts of Portugal and Southern Spain.

And the warning that we are hearing from experts is that this is going to become the new normal unless urgent action is taken unless the globe stops

burning through fossil fuels and stops rapidly and that is the message we've been hearing from the World Weather Attribution Initiative.

[09:10:00]

Now that damning report which was released yesterday and of course we've heard from European Union officials as well. So they are working urgently

to try and prepare member states or what is it to be a future of continued extreme heat incidences, EU experts saying that they believe that this will

become more intense and more frequent with each passing year.

CHATTERLEY: Yes, can contingency plans and preparations need to be in place because that's what we have to expect now. Nada Bashir, thank you for

joining us there from Rome. Ukraine says it's making advances in the east but encountering fierce resistance near Bakhmut.

This video appears to show Kyiv's forces taking over Russian positions south of the besieged city, CNN just to be clear unable to independently

confirm the details on this. Meanwhile, the U.S. Secretary of State says American Trevor Reed decision to fight in Ukraine should not impact efforts

to free two Americans detained in Russia, Paul Whelan and Evan Gershkovich.

(BEGIN VIDEO CLIP)

ANTONY BLINKEN, U.S. SECRETARY OF STATES: Even with countries where we have profound differences, and almost by definition, countries that are

arbitrarily detaining or unlawfully detaining Americans are usually countries with pre-profound differences. We've managed to find ways to

bring Americans home.

(END VIDEO CLIP)

CHATTERLEY: Nic Robertson joins us now. Nic, and for those that may not have been following this story, Trevor Reed, of course, someone who was

detained in Russia was released, and then was injured fighting in Ukraine.

So all sorts of questions being asked about and concern about his health what he was doing there, but also, as we mentioned, for the families of

individuals that remain detained in Russia, whether this will affect their ability to be released at some point, too?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, and some U.S. officials are expressing concern that it might have an impact there. Of

course, the official line is that the staff from the State Department that they hope it doesn't, that they can continue in these difficult

circumstances.

Trevor Reed was released April last year and a prisoner exchange where there a Russian pilot who has been sentenced to 20 years in jail. I think

he had served about 11 of those years for smuggling drugs. So that was a pretty big deal, that prisoner exchange.

And this is typical of how the United States manages to get detainees out of Russia through exchanges. So the clear implication is, if a Russian

thing that they're freeing people likes Trevor Reed, a Former U.S. Marine who spoke Russian, and that they're going to turn up on the battlefield

later fighting Russian forces.

That's not a good sign that he's being treated at a U.S. military facility in Germany, Landstuhl. The extent of his injuries isn't clear this time.

That would seem to be his treatment, there was seem to be slightly out of the extraordinary as well, because most of those U.S. vets or other

national veterans or their militaries who go and fight in Ukraine, which isn't uncommon.

Generally get treated in Ukraine or -- and then repatriated back home. So this seems slightly different track and also that may send a signal to the

Russians as well, that's not going to help with the negotiations.

But the State Department has been very, very clear here, look this was an individual acting on his own, that had done this by choice. And the State

Department said, again, very clearly that they don't recommend any U.S. citizens go to Ukraine because of the volatility of the situation. And

explicitly, not the front line, so this is obviously, you know, making a dip -- a difficult diplomatic situation for prisoner exchanges much

tougher.

CHATTERLEY: Yes. And certainly more information required not only about his health, but to your point exactly what he was doing there. Nic Robertson,

thank you. Now a dramatic scene here in New York City just a short time ago after a crane caught fire and collapsed in midtown Manhattan.

Extraordinary images, it happened on a construction site on 10th Avenue and 41st street that's according to the fire department. The crane's arm became

detached and crashed down into the streets striking a building as you saw there as it fell. Two people were hurt one firefighter and one civilian

both are said to be in a stable condition in hospital. And of course, a real close calls for all the people who were in the street there and ran.

All right, coming up on "First Move", hidden treasure, a mining startup with a mission to pinpoint key metals to help towards a clean energy future

plus authors letter to AI giants what writers want from big tech? That's coming up. Stay with us.

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[09:15:00]

CHATTERLEY: Welcome back to "First Move". 350 million that's the number of electric vehicles the world needs on the road by 2030 to help reach net

zero CO2 emissions by the middle of the century that at least is according to the International Energy Agency.

And just to give you some context, there were 16.5 million EVs on the road at the end of 2021. So clearly, there's a long way to go. Now achieving

that goal is going to require a dramatic rise in the output of a few key materials. And we're talking about rare earth metals and minerals used in

batteries and other forms of renewable energy like solar and wind farms.

Well, that's where KoBold Metals come in. The mining startup sees it's already utilizing the power of AI, Geosciences and data aggregation, to

pinpoint deposits of -- copper, lithium, cobalt and nickel in more than 60 projects across three continents.

And they say they can do it in a more efficient and sustainable way than traditional mining operations. And I'm pleased to say joining us now Kurt

House. He's the CEO and Co-Founder of KoBold Metals. Kurt, fantastic to have you on the show! I've given it a go here, but just frame the problem

in your mind. How big is it? And how much do we need from the earth?

KURT HOUSE, CEO AND CO-FOUNDER OF KOBOLD METALS: Yes, perfect. And as we heard on your broadcast earlier, the world is getting hotter; it's getting

hotter, faster. We've already had record temperatures, many record temperatures this year. In fact, three of the hottest days on humid record

occurred in the year 2023 globally. This is the sort of challenge of our time.

And solving climate change requires many, many different things to happen. One thing that we definitely know has to happen is we have to electrify

virtually the entire economy, including and maybe most importantly, the transportation sector to just doing that one sector of the economy, all the

cars, trucks and vans on the planet.

By mid-century that's close to 2 billion electric vehicles right by 2050 that need to be on the planet. And there's as you just said, there's less

than 20 million right now. So all of those cars, vans and trucks require more of these special metals than your traditional gasoline or diesel

powered car.

In effect -- in fact if you add it all up all of those 2 billion electric vehicles that we need to put on the roads within the next less than 30

years it ends up being more than $10 trillion worth of newly discovered lithium, copper, cobalt and nickel.

I stuff where we don't actually yet know where the mines are going to be. We haven't discovered them yet. So this requires kind of a record pace of

exploration, discovery and development. In order to solve a necessary but insufficient part of the climate change challenge.

CHATTERLEY: We also need recycling of what we pull out of the ground as well, we often talk about this on this show, and the dangers of where the

supply chain currently is, in many cases, it's unstable or complicated supply chain partners, China, Congo, Chile. So finding and diversifying the

sources of these metals and minerals is, key to.

Explain the technology, where does the artificial intelligence come in? And why do you think you can identify the sources of these metals and elements

better than anyone else?

HOUSE: Yes, it's a fantastic question. So fundamentally, exploration is a search problem, right? What we're trying to do is understand and predict

the composition of the Earth's crust, with more statistical rigor than anyone has ever done before. So the first question in any kind of AI

challenge should be sort of what is the data that you're using, right?

Where does that come from? Well, the data here is that humans have actually been collecting information about the physics and the chemistry of the

Earth's crust for I mean, centuries, millennia, in some sense, but at least over the last 100 years, they've been collecting that information, with

great fidelity and more sophistication.

The types of data that humans have collected are magnetic anomaly data. So the Earth's magnetic field actually changes from place to place as you move

around, and it changes because the magnetic properties in the in the Earth's crust, and the rocks in the near surface, the Earth's crust change.

Similarly, the Earth's gravitational field changes from place to place, we have modern satellite imagery can take very high spatial resolution, as

well as high band resolution, which means many, many, many different wavelengths of information. We can probe the earth with electromagnetic

tools that tell us something about how conductive the rocks are.

And then, of course, there's a huge amount of geologic, descriptive information, you know, think of think of old prospectors with a pen and a

paper writing down what they see in the field describing the rocks and their orientations. And all of that is the data and it comes in myriad

formats, a minute, much of it, not even digital world.

But humans have that information that humans have collected. So what we're endeavoring to do is to identify all of that legacy information, and then

actually transform it into a way that's consistent, right? That's, universally organized. So, that our humans and our computers and algorithms

can systematically search in it and look for key connections between those very different data types.

CHATTERLEY: And that makes sense to me. And you are having some success, I believe you've located nickel sulfide in Quebec, and part of the success

there allows you to raise money to search for copper in Zambia, I believe, too. And that brought in some pretty well-known names in terms of investors

as well.

But I think there'll be a lot of people watching this and saying, even if you can be more accurate and use data science to target where you're

mining, it's still mining, there are still environmental concerns about that. Explain to me why this is more sustainable than traditional forms of

mining for these metals.

I guess you just pull it out of the ground once in this case, and then you're done versus burning the fuel the other side, but explain to me why

this is more sustainable.

HOUSE: Yes, so the first key question we have to ask is do we get off fossil fuels or not? Right, and if we don't get off fossil fuels, then we

fry the planet. And we continue to mine and extract information for our extract material from the earth forever. So that I think is sort of not an

option.

So the option is, do we mined a lot more in the next 30 to 50 years, in order to have enough material to reach the risk the circular economy that

you referenced earlier, though, sort of fully recycling, you know, recycling economy, but then the second question that you just asked is OK,

sure.

[09:25:00]

So we can get to that fully circular economy, but to get there we have to mine a lot more material and that mining has real impacts it absolutely

does is completely true but not every mine is the same, I can give you a simple example. So imagine a deposit that is 1 percent copper say.

That means that it for every one kilogram of copper that you extract from the ground, you need to extract 100 kilograms of rock, right? Now imagine a

deposit that's 5 percent copper. Well, now you have to mine only 20 kilograms of rock for every kilogram of copper.

So that's a five times reduction in the total amount of mining activity for the same amount of copper at the end of the day. Right, so one of the

things that we're trying to do is find the very, very best deposits, which will both be the least expensive to mine, and will have and have in a happy

state of affairs will have by far the least impact.

And then beyond that, it's a matter of caring, deeply about your footprint in the region, that reminding, and what that overall impact means for all

of the stakeholders, which is every man, woman, and child on the planet that cares about stopping global warming, as well as the people right near

the mine, who deal with any local impacts of the operation?

CHATTERLEY: OK, so how long is it going to take? Because to your point, I think is a great line to use with investors that there is no choice. If you

want to get away from fossil fuels, there is no choice. How long before you can successfully see some of these metals coming out of the ground in

scale? Because scaling up is what's going to be crucial to this.

HOUSE: Yes.

CHATTERLEY: And I asked the question I know it's a tough one, sort of breakeven on the costs of this too, because I do feel like investors care a

little bit about that more perhaps today than they did in the past.

HOUSE: They care.

CHATTERLEY: Yes.

HOUSE: They care a lot about that as they should. So we were already pulling in a certain sense. We're taking materials out of the ground right

now. But it's only in a scientific manner, right? So you said when do you scale up, right? Right now we're pulling materials out of the ground, in a

way to characterize what's under the ground and understand the full economics building a mine there.

Or project in Zambia that you referenced is probably is kind of our most forward project. And that we are moving, full throttle to develop that

project as fast and as responsible as possible. So we currently have almost 250 people employed on that one project site. Most of them are actually

Zambians, which is something we're quite proud of.

And there's 24/7 operations, it's possible that could be an operating mine with possibly within this decade, certainly within the next 10 years. But

it's going to requires many, many years and huge amount of investment. But there's so much material there that the sort of overall investment returns

will be very good.

CHATTERLEY: Yes, that's fine. It's beyond 2030. Yes, I mean, we've got to get moving on this.

HOUSE: Yes.

CHATTERLEY: Which is why I think some of your big investors Bill Gates, Jeff Bezos, you've attracted some pretty powerful people, expedient people

when they get moving as well. So it's going to be interesting to track your progress.

HOUSE: Yes --

CHATTERLEY: Yes, Kurt, great to have you. Kurt House, the CEO and co- Founder of KoBold Metals, great to chat.

HOUSE: Thank you.

CHATTERLEY: All right, coming up, tech check Alphabets of Microsoft took AI the cloud and more in their latest results. And extra special look at the X

Factor everyone is talking about too, a question you can guess yes you can. That's coming up.

(COMMERCIAL BREAK)

[09:30:00]

CHATTERLEY: Welcome back to "First Move", U.S. stocks are up and running on this wildly busy Wednesday a Fed day another blockbuster earnings day two

in early action. The major averages are still lower as you can see as we await the big Fed rate decision in 4.5 hours' time.

We've got a Jerome Powell pause at the last Fed get together but this time around stormy weather a quarter percentage point rate hike is expected the

question is what comes next. In pre-market earnings today Boeing and coke lending some support to the blue chips after they managed to beat on

earnings forecasts, coke raising its full year outlook too.

And on the NASDAQ, it's a tale of two techie shares of Microsoft are lower, strong sales growth and positive talk about artificial intelligence but

some weaker forward guidance. Alphabet shares are rallying as cloud revenues please the street they're up almost 6 percent. The earnings

threads do not stop here, Meta earnings after the bell today.

Much to discuss as always, Dan Ives joins us now. He's the Managing Director of Equity Research at Wedbush securities. Dan, good to have you

with us, I do have to say I feel a bit sorry for Microsoft, because they beat expectations across the board but expectations was so wild that there

was always going to be a little bit of disappointment, perhaps what do you make of it?

DAN IVES, MANAGING DIRECTOR OF EQUITY RESEARCH AT WEDBUSH SECURITIES: Yes, and enjoy this is a knee jerk reaction.

CHATTERLEY: Yes.

IVES: I think this is a stock ultimately over the next 48 hours that will be green. I mean, this is the flex the muscles moment for Nadella and

Redman on AI. This is a get out the popcorn moment. AI is just starting what I believe in 1995 internet movement.

CHATTERLEY: Wow! OK, so we'll go backwards. But first, give me your price target on this one because we were just showing the chart and just also to

point out to our viewers. They are up 46 percent already this year, just to give us a sense of perhaps buy on the rumor and sell a little on the fact

what's your price target now for these guys?

IVES: Yes, we raise price target to 400. And I think we look at a year they join apple in the $3 trillion club in our opinion because when we look at

AI, this is an AI gold rush. It's something we haven't seen in 30 years since the internet and they say that top of the mountain is in VDI and

Microsoft.

[09:35:00]

You will get those calls Microsoft Alphabet as a bowl today you're drinking your coffee for you even better feeling about that both thesis and tech.

CHATTERLEY: Yes, I mean, there's the cloud component that we can talk about here. And then there's the Artificial Intelligence component and their

investments in that too. And you can perhaps give us some context, because in the run up to these earnings, they gave us a sense of what they were

going to charge, clients for the use of some of these AI driven tools, the pilot, the co-pilot.

We've had Brad Smith on the show talking about this. I think that's priced at $30 a month. Do you have a sense? And can you predict what proportion of

their client base is going to be adopting, paying for these AI driven tools over the next few years?

IVES: Yes. Enjoy, that's an excellent question. I think it's really good to the core right now, the bull bear sort of the Beta Microsoft, but we

believe conservatively, you get 50 percent penetration.

CHATTERLEY: Wow!

IVES: It could be much higher than that cloud revenues incrementally that can be an incremental 100 billion of cloud revenues over the next three to

four years, which is why this is all table stakes right now, just starting new, I really have used the drumroll to a transformational time, not just

across tack, but especially that trophy case is when Nadella and Redman on AI.

CHATTERLEY: Yes, it's a fascinating moment, as you call it, the AI rush. We are going to see we surely are going to see a ramp up of IT spending in

this sphere. I feel like it's sort of the cybersecurity that never really got going from sort of two, three years ago, this feels very different in

that regard.

It's also an opportunity for every single tech company of any kind out there to keep throwing the AI word in there in order to boost the share

price. For an investor, how do you distinguish between what's real and what's sort of fake at this stage?

IVES: Yes, you have to separate winners from losers. And I think it's not just talking its actual use cases. You look right now and Microsoft's doing

MongoDB, Snowflake, and Salesforce.com. This is just the start. The Oracle is another example. I think it's really software and chips that are going

to benefit here.

And Julia, right now everyone's looking for, from my conversations, who the second, third, fourth, fifth derivatives, and we believe this is

potentially a trillion dollars of incremental spend over the next decade. It's really software chips that are going to lead it.

CHATTERLEY: In video, we can throw that one in there as well. Can I be really annoying and naughty and ask you about prints? I mean symbol, I mean

X I mean, X formerly Twitter, and I'm not asking about Twitter. I'm asking because I know you cover Tesla and there's always that sort of ongoing

nervousness.

I think that if advertising money is lost at twitter then Tesla is used by Elon Musk as the funding tools to support the other business. What do you

make of what we're seeing there? Are you trying to sort of set it aside and focus on the fundamentals that Tesla which based on the last earnings look

pretty great?

IVES: Yes, me right now its touches world everyone else is paying rent when it comes to this green tidal wave. We're seeing electric vehicles. I think

the Twitter situation or X -- me Twitter to me in the birdie. I think that's something where if there is ultimately more capital needed to come

from outside capital not Musk sells in stock.

I didn't, that's why right now that's it contain res, but as we all know, Muskers the beat of a different drum. And I think it's a potentially a

risky move, getting rid of the birdie, but it's all going toward the Super App. And that's the ultimate vision. It's hard to bet against Musk.

CHATTERLEY: Yes, but Dan, it will always be a bird to me, Ives.

IVES: Always a birdie.

CHATTERLEY: We're always going to tweet. We're not going to X. Yes,

IVES: We're always tweeting not X'ing.

CHATTERLEY: We no X.

IVES: No, it's always tweeting to me --

CHATTERLEY: Yes, we're not, no pills, no X rated -- on the show, Dan, great to have you with us.

IVES: Thank you.

CHATTERLEY: Appreciate your insight, thank you, Managing Director of Equity Research at Wedbush Securities. Coming up after the break, artificial

piracy, one of the world's oldest writers organizations is targeting companies behind the newest AI technologies. Authors say they need fair

compensation for the use of their work to train these AI models. Where AI Matt on the show today and that's next.

(COMMERCIAL BREAK)

[09:40:00]

CHATTERLEY: Welcome back to "First Move", is generative AI models gained a deeper foothold into everyday life. Concerns about data piracy,

originality, and a lack of transparency continue to grow. My next guest says her big concern is that large language models are being trained on

copyrighted material taken without permission or without due credit.

And now thousands of authors including famous names like James Patterson, Jennifer Egan, Margaret Atwood, and Ron Chernow are speaking up. They've

signed a letter to the tech giants best known for AI developments like Microsoft Meta and open AI calling for consent, credit and fair

compensation.

They want to see a licensing solution that will pay writers on an ongoing basis for works that are used. The Authors Guild also wants content

generated by AI to be labeled as such. And the Guild's President Maya Shanbhag Lang joins us now. Her memoir, "What we carry" is on the editor's

choice list at the New York Times.

It's so great to have you on the show. Thank you so much for your time. And I've got a printout of the letter here and the list of all the authors and

associates that have signed it. And it's pretty huge. This will be recycled, I promise. Just how big a threat to the industry and to authors

is AI in your mind?

MAYA SHANBHAG LANG, PRESIDENT OF THE AUTHORS GUILD: It's a tremendous threat. And you know, one way to kind of conceive of this if people are

wondering why authors are so up in arms, and what the danger is? Imagine if someone snuck into a famous chef's restaurant and gorged themselves, and

then didn't pay for any of the food that they consumed.

But then went and regurgitated the contents of what they'd eaten and opened a restaurant selling that regurgitated content. So I think even if you have

no knowledge of copyright law or tech, you can appreciate that situation is unfair, both on the input side of taking in food and not paying for it. And

on the output side of trying to profit from what you've illegally ingested.

CHATTERLEY: Yes, I mean, to your point that there is two things there's the, as you call it the input side, there's the use of data, books,

phrases, that this can do incredibly quickly to train the models first and foremost.

And if we talk about the copyright, because I know you are a copyright lawyer, without actually paying for the material or paying for the books.

That's the first thing you're saying, look, it's OK if you want to buy these books or buy this material, but the authors themselves need to be

compensated. That's the first part of this.

LANG: Correct. That's the first part and I should clarify, I myself am not a copyright lawyer. I'm just an author.

CHATTERLEY: OK.

[09:45:00]

LANG: -- I represent the Authors Guild and we do have a legal team of our own that has worked through yours on this issue. What we know is that these

book datasets used to train large language models were obtained from piracy websites. So you know, in other words, a human being who's doing research

might go to the library.

To get books, you don't necessarily pay for all of your research material. But when you go to the library, that library has licensing fees that they

pay to publishers, so authors get compensated. So the idea of multibillion dollar tech companies getting PDFs of our books, illegal PDFs of our books.

And using those to train these large language models, it's just egregious, because they certainly do have the budget to compensate us fairly,

especially given that our works are a huge part of why AI is so sophisticated, and able to, you know, pull off impressive feats.

CHATTERLEY: So even if we could get to an arrangement where authors are compensated for the material that's used, the sort of bigger fear that I

have. And it comes down to an interview that I did with Reid Hoffman, who's a big AI investor, LinkedIn Founder, and he'd co-written what he called a

travelogue not to book with ChatGPT 4.

And it was incredibly sophisticated. It was funny. It was sort of mesmerizing it didn't have the human quality that you bring specifically to

the written word so well. But for me, I was astonished at how well it was writing and the outputs that this was creating.

And I wonder how worried you are about that part of this too, about simply being replaced? I mean, we're seeing in protests in Hollywood over the

fears for writers there too, specifically tied to this technology. How do you control that?

LANG: That's a great question. And, you know, I should say, as background, one of the things we've seen at the Authors Guild is a 40 percent decline

in income for writers over the past few years. So it is not an easy field in which to make a living, and the idea of an influx of content from Ai,

which, of course, you know, AI can produce works exponentially faster and cheaper than human beings.

So that influx into the market place will only make it harder and more difficult to earn a living in this field. And yes, one thing we've noticed,

I mean, there are uses of AI that we never could have predicted or imagined, for example, there are companies out there right now that are

tracking pre orders of books, meaning say I have a book coming out this December.

My publisher would have pre ordered links up on Amazon and other you know, websites. And there are companies tracking these pre orders, and then using

AI to come up with books to fill that niche.

CHATTERLEY: Wow!

LANG: In other words, they want to beat me to my book coming out and effectively preempt my sales because they can get there very quickly. And

they've identified in looking at pre orders, they've identified an existing market or demand for a particular book, you can see how this can play out

less for literary and for example, and more suited for technical books or practical books.

And that is alarming. It should alarm anyone. And that's part of why the Guild wants books that have been generated by AI to be labeled. As such,

you know, our food gets labeled, right. So if there's an artificial ingredient in something that you're eating, you know about it and

similarly, if Artificial intelligence has been used to produce a work that should be clear to consumers.

CHATTERLEY: Yes, I was about to say, I'm not sure where the government is involved. I'm not sure about fighting for appropriate compensation. It

always, like social media, in these cases comes down to the consumer and the consumer making a choice that, OK, this is available.

But if you want to support individuals, and someone real behind this, you have to, you know, put your money where your morals are, perhaps if that's

what the situation is. I'm just about out of time.

LANG: -- right?

CHATTERLEY: Yes. Thank you for sharing it. And we'll come back to this conversation because I think getting action is going to be a battle but

it's a fight clearly, you're willing to have. Great to chat to you, thank you so much.

LANG: Great to chat to you thank you.

CHATTERLEY: We'll talk again, the President of the Authors Guild, there, thank you, coming up on "First Move", from the legendary Lionel Messi to

the amazing U.S. women's team America's football fever, coming up right after this break.

(COMMERCIAL BREAK)

[09:50:00]

CHATTERLEY: OK, this just in the Economic Community of West African States says there's been "attempted coup in Nigeria". CNN has learned the

Presidential complex was sealed off both Reuters and AFP reported Wednesday that the presidential guards are holding President Bazoum inside the

presidential palace in the Capital, which has been blocked off since by military vehicles since Wednesday morning.

But a statement on the presidency social media channels which CNN can't verify, said President Mohamed Bazoum is "doing well". The Chair of the

African Union Commission has condemned the attempt to seize power by force and called on the forces involved to stop immediately.

Any further information on that we will bring it to you. Now to some football fever in America. The excitement is not only for Lionel Messi is a

rival here but also for the women's national team trying to claim an unprecedented third straight World Cup crown, as Andy Scholes reports.

(BEGIN VIDEOTAPE)

ANDY SCHOLES, CNN ANCHOR (voice over): U.S. soccer fans are confident.

UNIDENTIFIED MALE: I am predicting the absolutely three-peat.

SCHOLES (voice over): And ready to celebrate the World Cup's first ever back to back to back champion, but the team is not getting ahead of

themselves as they prepare for a rematch of the 2019 championship game against the Netherlands.

UNIDENTIFIED FEMALE: This is going to be an incredibly difficult matchup, very challenging. We know that we have to be at our best.

SCHOLES (voice over): U.S. Women's quest for history abroad happening at the same time as the greatest player ever. Lionel Messi has taken his

talents to South Beach. After a Hollywood debut where he scored the winning goal in front of the likes of LeBron, Serena and Kim Kardashian, Messi

following that up with two goals in the first 22 minutes Tuesday night wiling the home crowd leading Inter Miami to a four nil win over Atlanta

united, Messi mania completely taking over selling out stadiums across the country.

IGNACIO CUBERO, EVENTELLECT CO-FOUNDER: The prices are way up. They're up about 10 to 12 times what a normal MLS game would be selling for never seen

anything like this to have the best player in the world come over in the prime of their career to play in America. There's never been anything like

that.

SCHOLES (voice over): It is latest soccer boom cleanses many Americans have fallen in love with Wrexham, a British team thousands of miles away who are

now an unlikely box office smash thanks to deadfall actor Ryan Reynolds, and It's Always Sunny in Philadelphia as Rob McElhenney, who purchased the

team in 2020 and invested $3.7 million into the club.

It had a season two of their hit FX show, Welcome to Wrexham. The team is touring the U.S. after earning promotion to a higher league last season.

[09:55:00]

UNIDENTIFIED MALE: People said at the beginning Why Wrexham, why Wrexham and this exactly why Wrexham.

SCHOLES (voice over): And Reynolds and McElhenney are dreaming of even more.

RYAN REYNOLDS, CO-OWNER OF WREXHAM AFC: I love just hearing friends of mine people that are some are in showbiz some are not in showbiz different walks

of life just saying the words the word Wrexham now like it's just didn't normal part of the lexicon I just think it's so cool.

ROB MCELHENNEY, CO-OWNER OF WREXHAM AFC: I get asked more about this than anything in showbiz for sure.

REYNOLDS: Yes.

(END VIDEOTAPE)

CHATTERLEY: And finally on "First Move", candy or condiment or just -- you decide. Skittles has teamed up with the French's food company for a new

flavor concoction, mustard Skittles. Yes. It's all in anticipation of national mustard day on August the 5th. The two companies say the product

has a tangy mustard flavor, surprise, surprise.

But the question is, does it cut the mustard, we shall see my take on this. Don't even try a ketchup Skittles. I'm not feeling the mustard -- . That's

it for the show. "Connect the World" is up next. I'll see you tomorrow.

(COMMERCIAL BREAK)

END