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Quest Means Business

Fed Cuts Rates Amid Differing Views About Next Move; Wood: Innovation and Interest Rates Not Inversely Correlated; Jamaicans Assess Damage After Direct Hit by Hurricane; Fed Cuts Rates Amid "Differing Views" About Next Move; Alphabet, Meta. Microsoft Announce Latest Earnings; Accor CEO on French Politics and A.I.; Top CEOs Speak in Riyadh. Aired 4-5p ET

Aired October 29, 2025 - 16:00   ET

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

[16:00:17]

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street. What a busy day! It's Moody's ringing the bell

celebrating an anniversary, but what a busy day we have had over the last 12 hours, eight hours trading. Hit the gavel, sir, bring trading to close.

A bifurcated -- a truly bifurcated session. One and a two and a one, two, three, four. Trade -- that's enough, sir. Thank you. Thank you. Youve done

the business.

Trading is over. Those are the markets and the main events that you and I are going to chew over, over the next hour, the Fed cuts interest rates,

but says another rate cut is far from guaranteed this year.

Market optimism from Cathie Wood, the chief executive of ARK Invest. Cathie says this isn't a repeat of the dot-com bubble and Sebastien Bazin, the

ACCOR CEO, explains why he doesn't want A.I. Interacting with his guests and he has got good reason.

Good evening, tonight, we are live in Riyadh in Saudi Arabia. Wednesday, October the 29th. I am Richard Quest and you better believe it, in Riyadh,

I mean business.

Good evening. The Federal Reserve Chairman Jerome Powell has sent a shiver through the markets, noting that the Central Bank has strongly differing

views about where interest rates are headed. And all this, interestingly, at a time when the Fed actually lowered the benchmark rate this month by a

quarter percentage point. That was widely expected.

However, as you can see, where the Fed funds target range now 3.75 to four percent, but of course, the decision itself was by no means unanimous. One

policymaker called for a half a point cut that was Stephen Miron. As we might have expected, another called for no cut at all, believing that

inflation was more of a worry.

Chair Powell says on the dual mandate, there are risks to both sides, inflation and job markets. But on balance, job market went out this month.

However, it is next move is not yet clear.

(BEGIN VIDEO CLIP)

JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: We will continue to determine the appropriate stance of monetary policy based on the incoming data, the

evolving outlook and the balance of risks. We continue to face two-sided risks.

In the Committee's discussions at this meeting, there were strongly differing views about how to proceed in December, a further reduction in

the policy rate at the December meeting is not a foregone conclusion, far from it.

Policy is not on a preset course.

(END VIDEO CLIP)

QUEST: Now, the interesting thing about that it was not just that there was a disagreement, there was a strong disagreement. And so U.S. markets fell

sharply and that's when the Dow turned negative. It had been rising strongly in early trading. It was over 48,000.

So now you have rate cuts adding fuel to the rally led by tech stocks. If you look at the tech, NVIDIA, the market cap surpassed $5 trillion during

the trading session thanks to the red hot demand for its highly advanced A.I. chips. We've got earnings after the bell from major companies --

Microsoft, Alphabet, Meta, all reporting over the course of the next hour. When we get those numbers, then well bring them to you.

But if you take the economics and the market signals, who better to put it together for us than Cathie Wood, the CEO of ARK Invest?

Cathie is one of the most famous traders on Wall Street, made a fortune with big bets on companies having strong growth potential. She has her eyes

on five -- this is how she describes it, and you'll see it here -- five innovation platforms -- robotics, energy storage, A.I., blockchain

technology and multiomic sequencing. And under that, 15 sectors that go with it.

And she says technology is going to be transformative. But is she worried? No, not a bit. Not worried about a bubble.

(BEGIN VIDEOTAPE)

CATHIE WOOD, CEO, ARK INVEST: I was around in that tech telecom bubble and what we saw back then were investors and speculators throwing money at

anything, and you might say that the same is happening today.

[16:05:10]

But if you take out and you just said this, actually, if you take out the movers and shakers, the rest of the market is trying to figure out, okay,

who is going to win? There are some obvious winners now, many of -- well, in the private markets, of course, NVIDIA, the chip players, TSM; in the

private world, the large language models, OpenAI, Anthropic, xAI, Gemini's Google, so that's in the public markets, those are very obvious.

What we are seeing today, though, we did not see back then, is, founders leaving their companies and lured by Mark Zuckerberg to become part of an

A.I. machine over there. That didn't happen back then.

In essence, these companies that those founders are leaving, they're not going to be the winners. They're not. And you know that because their

founders have left.

QUEST: But there still will be a very nasty taste if this market cracks. There are -- I guess what I am saying is technology meets market forces.

WOOD: Yes.

QUEST: Again.

WOOD: Yes.

QUEST: And there is a new generation of people that don't remember dot-com boom and bust in the 90s. They don't necessarily remember 2008 and they do

think that it is going to keep rising or they haven't experienced the force of a market correction.

WOOD: Well, I think that the most seasoned, shall I say seasoned investors, from 25 years ago, meaning 25 years ago, they were in their 20s and 30s.

They are toward the ends of their careers now. They are teaching.

QUEST: Right.

WOOD: They are teaching the younger people in those firms, maybe not as much in retail, which may be your point here. Its retail that is real.

QUEST: Because retail is more important now, because retail is more accessible.

WOOD: Absolutely. And that's one of the reasons I founded ARK. Right?

QUEST: Exactly.

WOOS: Was to be very transparent, to bring these young people along on the journey. What I think is different this time, and it is very dangerous to

say that, I really understand that, having been an investor for many years. In the late 90s, the technologies were not ready, costs were way too high

and I am going to give you a few examples.

We did not get the cloud until 2006. We did not get the first real breakthrough in A.I. until deep learning in 2012. The second one, even more

important, that has created generative A.I., that's transformer architecture, that took place in 2017. So we weren't ready for prime time

back then. The seeds had been planted, investors were throwing money at seeds and a lot of those never blossomed. Right? Some did, some did.

QUEST: I feel slightly embarrassed asking the next question, but need to ask it anyway.

WOOD: Oh, do.

QUEST: Do you see a downturn? A market, a major serious market correction? When you look at valuations at the moment, do you see one near term?

WOOD: So there is a difference between a correction and a bear market. Absolutely, we can see corrections and I can see a reason for correction

next year. If we are right, and these five innovation platforms are moving us into a productivity driven boom in economic activity, if we are right,

what will also happen next year? Interest rates will stop going down at some point because a boom means activity is very, very strong. That may

shake some investors up.

They got a taste of this -- more than a taste. It was punch in the mouth in 2022, interest rates went up and innovation based strategies crashed. Any

long duration asset, including long term bonds, went through a horrible time. So some people may, in that transition from falling interest rates to

rising interest rates next year, they may get worried.

But, I've been through many cycles. I can tell you that innovation and interest rates are not inversely correlated. They were in 2022, and that's

because of the shock. But interest rates in 2017 and 2018 went up, they went up at a measured pace and innovation based strategies absolutely

soared.

QUEST: Do you worry about the long term --

[16:10:10]

This is a -- this is how long you know, what's the weather like today type of question, but do you worry about the long term fiscal health when you've

got growing deficits in the largest economy for the foreseeable future?

WOOD: So I started my career during Reagan's early years, and this was the story back then. This is deja vu for me and I remember as a very

impressionable young person in the business, this fight and the right answer was get the economy growing faster, much faster than it has been

growing with productivity as the engine.

I think that we are in the same story, but it will be turbocharged because, the seeds that were planted by the Reagan revolution, they've been

germinating for 25 to 30 years. Now, they're beginning to flourish. So I think the real GDP growth rates are going to be astonishing.

If we are right, if we are right, real GDP growth, which globally, which has averaged three percent for the last 125 years, is going to accelerate

to more than twice that during the next five years. And yet there is so much fear out there. This is the opposite of the tech and telecom bubble.

That's why this is sustainable.

This is the proverbial wall of worry. Those are the strongest bull markets. They climb a wall of worry and they broaden out over time and that is what

is happening now.

(END VIDEOTAPE)

QUEST: That is fascinating. Cathie Wood there with the prognosis that the bull market still has much mileage to run and taking from it the

information that she is seeing.

Now, the Federal Reserve is in some respects flying blind. Because of the government shutdown, key economic data has not been available. September's

Job Report, due three weeks ago, postponed. This month's jobs data will probably be delayed as well. The October inflation report is in jeopardy.

And so you're not getting retail sales, producer prices, housing starts to name a few. These may all have been hit by the shutdown and are not

necessarily reflected.

Matt Egan is in Washington and was there.

Matt, we've got a load of stuff to get through.

If we take to start with this idea of the data that they had at their disposal, they can make a pretty good extrapolation from what they see in

private sector, private surveys, where they were beforehand, the data they've got. So how serious is not having this level of data?

MATT EGAN, CNN REPORTER: Well, Richard, Fed Chair Powell, he signaled today that yes, that could be an issue going forward and he was asked about this

very issue during the press conference about what happens if the government shutdown continues and they have to make a decision in December without the

full battery of official gold standard economic data that they've come to rely on. And he said, yes, that could make us move more cautiously.

The analogy he used was, if you're driving in the fog, you tend to slow down, and that was noteworthy to me because it really flies in the face of

the confidence on Wall Street, that another interest rate cut in December is a slam dunk.

Before this meeting, the market was pricing in a hundred percent chance of a cut in December, and that has come down a bit to around 90 percent. So

Powell is sending some signal here to investors that no, an interest rate cut is not a foregone conclusion.

QUEST: Okay. Now if we look at the voting on it, you had the majority obviously, wanting to further cut; one wanted more, one wanted to stay

where they are. If we now look at the Dow on the day, we can bifurcate the Dow to pretty much when we got the result. So the market certainly doesn't

like -- I mean, they like today's cut. They don't like the forecast.

EGAN: You're right. I think really the moment that Powell made the comment about an interest rate cut in December not being a foregone conclusion, we

saw an instant market reaction with stocks dipping and bond yields going up, not an overly massive reaction. But yes, some investors taking some

chips off the table.

But I also don't think that anyone should be shocked here that Jerome Powell is leaving himself some wiggle room. I mean, why wouldn't he leave

open the door to changing the course in December, when December is a long time away, especially in this news cycle and when there are just so many

unknowns here, whether it is the trade front, whether it is the price hikes, the mass layoffs from Amazon and others, and of course, the

government shutdown itself.

[16:15:09]

So Powell is saying, you know, this is not a slam dunk for a December cut, but of course he is saying that.

QUEST: So I just wonder, the Fed has been in such a difficult position. The pressure we've still of course got the brown issues with the Fed. The Fed

is in so much pressure. Is there a -- what is the feeling from what you can gauge being in the building amongst the officials, do they feel under

pressure?

EGAN: Well, you know, how could they not feel under pressure when the leader of the free world is attacking the leader of the Federal Reserve?

You know, by name, again and again, although some of that pressure has actually seemed to dial back a bit as the Fed has begun those interest rate

cuts that the President has been seeking.

But look, right now they are hoping and they are expecting that the tariff driven price hikes will be temporary. Of course, Richard, you and I know

that people are frustrated not because necessarily of how much prices are going up, but because of the level of prices and that's something that

Powell acknowledged, right, that after years of high inflation, prices are way too high.

But their focus right now, Richard, is on protecting the job market. They want to make sure that this no hire no fire job market does not morph into

something more dangerous.

QUEST: Matt Egan who is in Washington, Matt, I am grateful. Thank you.

Few hours from now, President Trump will speak, or at least it his plan to speak to the Chinese leader, Xi Jinping. It is their highly anticipated

meeting. It is taking place in South Korea on the sidelines of APEC.

The first face-to-face encounter of the two Presidents, Mr. Trump's second term. They are expected to agree this framework for managing economic ties.

Mr. Trump said he expects to make, in his words, a big step on the issue of fentanyl and fentanyl abuse and exports.

Meanwhile, South Korean officials say they have reached a trade deal with the United States and The White House is calling South Korea will invest

billions in U.S. shipbuilding, aerospace technology as part of the agreement.

Ivan Watson is watching events for us in Hong Kong.

It has been a lot -- I mean, this trip has had an enormous amount to it. To some extent, the meeting with Xi is the high point.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It sure is, and President Trump said that himself while acknowledging that he would not get

a face-to-face meeting with North Koreas leader, Kim Jong-un and he tried to kind of spin it and say, well, but the focus of this trip is to see Xi

Jinping, the leader of the world's second largest economy, and the trade war that's been underway, everybody's going to be watching to see whether

there can be some resolution of that.

Certainly, negotiators from Beijing and Washington have been meeting almost down to the wire last weekend in Kuala Lumpur, where they both emerged from

talks. The American and Chinese delegations sending positive and optimistic signals, and we perhaps got the most details from the U.S. Treasury

Secretary Scott Bessent there, where he predicted that the 100 percent tariffs that Trump had recently announced against China that should have

gone into effect on November 1st, should go into effect, that they were effectively off the table.

And he suggested also that in response, China would postpone its export controls over rare earths and limiting the export of its rare earth

monopoly. But it will all come down to what happens when these two leaders meet face-to-face, and if fit is any signal, it is only today that the

Chinese government confirmed that Xi Jinping would, in fact, meet face-to- face with President Trump.

We haven't had confirmation until today.

QUEST: Ivan, when that meeting happens, you'll be covering and I am grateful. Thank you.

QUEST MEANS BUSINESS tonight from Riyadh. As Hurricane Melissa makes its way towards the Bahamas, the residents of Cuba and Jamaica are assessing

the damage that's been left in its wake.

(COMMERCIAL BREAK)

[16:22:11]

QUEST: So now to Hurricane Melissa, but we are in -- what a magnificent -- look at that. Gorgeous!

This by the way is the conference center. It is an interesting question about why it was built and the rumors were whether it was built for

somebody's wedding. It is hard to know, it is hard to get to the actual truth about it, or whether it was just the Ritz Carlton Hotel, which is

what you can see sort of over my shoulder over there. That's the place where they all got locked up.

But anyway, beautiful night and it is nice and coolish.'

Let's talk about Hurricane Melissa, if we may. More than a thousand residents of the Bahamas have been evacuated ahead of the approaching

hurricane. In Jamaica, we now believe it has caused -- at least four bodies have been recovered after the hurricane hit the island earlier.

As people are returning to what's left of their homes, here is how one described what he saw as the hurricane struck.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It was terrible. The wind, it was violent. It was terrible for all of us. I have a son here, and believe me, he was actually

crying. So we were all full up and we were weeping.

(END VIDEO CLIP)

QUEST: Now Jamaica really took the brunt. In Cuba, there was devastation across the island after landfall. But to some extent it wasn't as bad. The

winds had abated somewhat and around 140,000 people, though, are still cut off by rising flood levels.

For the latest, Patrick Oppmann joins me now.

I mean, look, I don't want to minimize and I don't want to get it wrong, but it could have been a great deal worse. I was listening to you earlier.

It was you earlier who was talking about it, saying, bearing in mind what we saw in Jamaica could have been a great deal worse.

PATRICK OPPMANN, CNN HAVANA BUREAU CHIEF: Absolutely. We expected it to be a great deal worse. You know, when we were looking at a couple of days ago

at a Category 4 or 5, it is a very different storm than a three coming directly over Santiago de Cuba, the second largest city on this island,

500,000 people here. That would have been catastrophic. There would have been many, many people dead, I am sure.

So to have a Category 3, still a very powerful storm, but it cut a little bit to the west of this city. It spared us the worst. Now it is raining

right now, Richard. And that does add some insult to injury. If you've lost your roof, if you're one of the many people that has a damage to your home

and the water is getting in as well, it complicates some of that search and rescue efforts in the mountain regions where so much rain came pouring down

in some of the coastal regions that are still cut off.

So, it is not that we know exactly what took place here and Cuba got off easy. It got off easier than Jamaica, because of course, Jamaica was hit

with the worst case scenario. People, though, are feeling that they did not get a storm that could have been as catastrophic as the one that seemed

like it was on its way here.

We should point out, though, Richard, that there is no power at all in most of Cuba right now, certainly not in the eastern part of the island.

[16:25:09]

We've gone for more than 24 hours without power, no sign of when power and Cuba's fragile electric grid will be restored here. The longer you go

without power, as you know, that means food waste, tempers flare and the government, if they've proven anything over the last several months, is

that they do not have any tolerance for protests. So they need to get the power back on here as quickly as possible, but no clear sign of when that's

going to happen.

QUEST: The issue, I mean, on the wider you cover this region and you have done for some years, but how do they plan, particularly in a country? I

mean, Jamaica got hit and throttled. But to give Jamaica its fair credit, it was well prepared. It has strong institutional management for

resilience. Cuba does to a certain extent, but they're going to get more of these and more frequently in the years ahead.

OPPMANN: And what we are seeing, Richard, and I agree with you. Jamaica did an absolutely amazing job. I was following it from here, really kind of the

gold standard of dealing with the hurricane, having your leadership out front. And here, you know, not so much. You know, they talk about how Fidel

Castro would go out and cover every hurricane, you know, and be there on the scene. We didn't see the top leadership here, you know.

But certainly they were in touch. Certainly, there is a civil defense organization here that is the backbone of the revolution, the government.

But it is much weaker than it used to be in years past. You would see pre- deployment of water, of food always before hurricane, you would see these trucks that go out to repair the electric lines as soon as the hurricane

let up. It was really an amazing system of organization that has just been degraded over the years, because the resources here are so much fewer.

QUEST: Patrick Oppmann in Cuba. I am grateful to you, sir. Thank you.

QUEST MEANS BUSINESS tonight comes from FII, the Future Investment Initiative. We will return to our business agenda, our nightly

conversation, you and I and joining us, we will have the former IMF chief economist, Ken Rogoff. He will be with us to discuss the Fed's rate cut and

where Chair Powell goes from here. QUEST MEANS BUSINESS in a moment.

(COMMERCIAL BREAK)

[16:30:36]

QUEST: Hello, I'm Richard Quest in Riyadh, Saudi Arabia.

A lot more QUEST MEANS BUSINESS tonight when Chair Powell hints that the Fed's rate cutting campaign may be over for this year. Ken Rogoff will be

with me to chew that over and what comes next. And the chief executive of Accor Hotels Sebastien Bazin, he's going to tell me why he wants to keep

A.I. out of the guest experience.

There's more to that than meets the eye, but we'll only get to it after the headlines because this is CNN. And on this network, the news always comes

first.

Responders are racing to the hard hit western Jamaica, where Hurricane Melissa has the strongest storm to ever hit the country. More than 70

percent of the island is now without electricity. And the prime minister has declared all of Jamaica a disaster area.

And now to Cuba, where it's also suffered significant damage. Officials say the storm has killed more than 20 people in Haiti.

French officials now tell us two suspects arrested for the Louvre heist have admitted their involvement in the robbery. According to the Paris

prosecutor's office, the two remained in custody. The jewels that they are accused of stealing from the Louvre have not been recovered. Two further

suspects are still at large.

President Trump is going to meet the Chinese leader, Xi Jinping, over the coming hours. The meeting follows the on again, off again trade war between

the world's two largest economies that have wreaked havoc on the global economy. Mr. Trump is currently in South Korea, the final stop on his Asia

tour.

The Federal Reserve has now cut interest rates to the lowest level in three years. The benchmark was lowered by 25 basis points as expected. The lower

limit now, 3.75 to four. Chair Powell says the Fed is divided on its path forward with both the market -- labor market and the inflation being a

concern.

U.S. markets fell as the chair began speaking. The Dow was off more than 70 points. The S&P was also down and in the red. Tech stocks clawed their way

higher, but they have been considerably higher earlier in the session.

The Harvard economics professor Ken Rogoff is with me, formerly an economist for the IMF and the Federal Reserve's Board of Governors.

Are you perhaps -- I mean, the -- there's no surprise on today's decision. But the strongly disagreeing views, to quote Chair Powell, does suggest

that there will not be enough to vote next month or in November for a rate cut.

KEN ROGOFF, PROFESSOR OF ECONOMICS, HARVARD UNIVERSITY: I think if they were voting now, they would vote against. I mean, look, the evidence is

inflation is still high. They don't know what's going on with the economy because the shutdown is preventing the numbers from being published. But

everything they look at seems to be that it's going kind of strong.

Yes. Employment is not growing the way it was. But a lot of that has to do with the immigration shutdown. There are no people. And so, you know, even

this cut, you could debate, I think they need some evidence to push them in the other direction. I think right now they're doing nothing. Yes, the

market is disappointed for them. Each rate cut is like crack. They just love it. But that's not necessarily good for the rest of us if it's pushing

up inflation.

QUEST: The Fed still says unemployment is the prevailing concern in the dual mandate. If we -- when do you think that would shift to inflation?

Because if you listen to what they say, what chair and others have said, they are firmly of the view that the tariff is going to be a one hit wonder

and is not going to become sticky.

ROGOFF: Well, I think what you could say about inflation is that it isn't about to blow up, whereas employment, we don't even know what it is. And so

if you're sort of saying, you know, could employment turn out and the economy turned out to be much worse than we think, that is possible because

we don't know.

[16:35:05]

Inflation is not so bad. And if you want to be risk averse, you push interest rates down. But it's possible the economy is doing better than we

think. And they'll decide the other way. I mean, I would not rule out interest rates turning around and going up at some point next year if the

economy doesn't slow down.

QUEST: So here at FII, here at the at the conference in Riyadh, there is, perhaps not surprisingly, optimism that this is different. We heard Cathie

Wood saying on this program earlier, this is different to dot-com boom and bust because this to some extent, although A.I. is not at fruition by any

stage, it is the second leg of the internet which we had seen already.

ROGOFF: No, it's absolutely remarkable the A.I. boom and Trump has leaned into it. But, you know, there are a lot of questions. First of all, all the

electricity you need, the data centers. And look at all the jobs being lost. I mean, that's where there's unemployment. It's coming from A.I. and

I don't know that just boosting demand is going to pick those people up. I think there could be as much unrest over A.I., more than we've seen over

globalization if it moves at this pace.

QUEST: Ken Rogoff in Cambridge, Massachusetts, I'm grateful to you. Ken, thank you.

Over the last few minutes, we've had results from Meta, Alphabet and Microsoft. They've all reported earnings. Shares in Google's parent company

soared after hours. Alphabet, it topped $100 billion in quarterly revenue for the -- $100 billion in revenue for the first time. Meta and Microsoft

stock fell despite -- look at that, that's a sizable fall for both of those.

Anna Cooban is with me.

As much as Alphabet probably doesn't justify its rise, my guess is that the other two don't justify by the numbers. But what do the numbers show?

ANNA COOBAN, CNN BUSINESS AND ECONOMICS CORRESPONDENT: Well, it's interesting, Richard, that you're seeing these falls because actually these

companies were reporting pretty healthy earnings. They also beat analysts' expectations. But what is particularly interesting is Alphabet, the parent

company of Google, reported its first ever $100 billion quarter. And these are all companies, you know, A.I. is on everyone's lips at the moment that

are benefiting either directly or indirectly from this A.I. hype, this A.I. boom.

And I think what's interesting is when you look under the hood at, you know, beyond the headline numbers at something called CapEx, which is just

a business jargony way of talking about the amount of money that these companies are preparing to throw at building stuff, that the data centers

that will be fueling these A.I. products and systems. That is what's particularly interesting.

We've seen Meta raise its outlook for how much it's going to be spending on its capital. And we've seen that Microsoft has said before that simply

there is not enough supply of these data centers to meet this demand when it comes to A.I.

QUEST: So I always have a huge difficulty with these companies and their results, and I come away from it wondering, you know, like a curate's egg,

good in parts. If you had to give an assessment on the overall, what would it be?

COOBAN: Well, I think just taking a step back and looking at where the industry as a total, it's pretty hard not to get slightly worried about

what we've all been talking about on this A.I. bubble. I know you've just done your interview with Cathie Wood, you know, the prominent investor, who

is talking around how the technology is fundamentally further ahead than where the internet was 25 years ago. So we can't make these parallels to

the dot-com boom.

QUEST: Yes.

COOBAN: But, I mean, I'll just show you some numbers, Richard. You've got Microsoft's market cap around $4 trillion. You've got Nvidia hit $5

trillion market cap today, which is absolutely extraordinary. Apple again $4 trillion. And it's hard not to look at that and think that given as well

that many of these investments in companies are quite circular, and what I mean by that is you've got Nvidia, the big chip maker, they are funneling

investments into A.I. companies. Those A.I. companies are then promising and are buying Nvidia chips.

So you've got a virtuous circle going on. But if one of the dominoes was to fall, if there were to post very disappointing results, if the technology

was not seen to be as promising as investors had hoped, would that virtuous circle turn into a vicious circle? And that is what many people are worried

about when they think about this A.I. bubble.

QUEST: I'm grateful. Anna Cooban, joining me tonight. Thank you. In London.

Coming up, I'll be speaking to the chief executive of Accor Hotels, one of the vast companies. He tells me France needs a courageous leader to get it

through political turmoil and that he never wants his customers interacting with A.I. Do not panic. That's not quite what it seems. You'll hear him

after the break.

(COMMERCIAL BREAK)

[16:43:08]

QUEST: Welcome back. QUEST MEANS BUSINESS live tonight from FII in Riyadh.

The chief executive of the hotel giant Accor tells me he doesn't want his guests interacting with artificial intelligence. Instead, Sebastien Bazin

says he wants to use A.I. to enhance the human experience between his employees and his guests.

We also discussed the political turmoil in France and the issue of the budget. He told me France will be fine as long as it takes action.

(BEGIN VIDEOTAPE)

SEBASTIEN BAZIN, CEO, ACCOR: France is a subsidized economy. 57 percent of French GDP is actually bureaucracy government related. So if the world goes

south, minus 4 percent, we're going to go down 1 percent. If the world is going great plus four, we're going to be plus two. So between the minus one

plus two, France is fine. We just need to take actions on reducing the debt. We need investment. We need trust. We need less taxes. We need less

regulation. We need to act. We need to move. We are --

QUEST: I guess what I'm saying is there is a feeling of despair that none of these things are happening. And there is now political paralysis.

BAZIN: That is true. But that feeling of despair was not existing seven years ago when Macron got elected. It was exactly the opposite. It was all

positive. So we're going to go back to this. We just need somebody who has the courage to make hard decisions. We need the Gerhard Schroeder of 20

years ago in Germany. We need that guy to come. He won't be reelected, but he would have made the right decision for the country.

QUEST: If you look at Europe now, the leadership, my words, not yours, there does seem to be a vacuum of leadership.

BAZIN: In the world, my dear. Not in Europe.

QUEST: But I would say arguably the United States does have a strong leader at the moment.

BAZIN: Yes.

QUEST: Whatever one's view or not as you can see from Asia.

BAZIN: Sure. Truly.

QUEST: Where are you putting your money in terms of, you're getting it out of the U.S.

BAZIN: Yes.

QUEST: And you're putting it into places like Saudi, like here.

[16:45:02]

BAZIN: The U.S., actually Blackstone, Brookfield. Those guys don't put much money here. It's actually money coming from PIF, from Abu Dhabi, from

Qatar, from Bahrain. So -- but we are actually taking the money from those places and we spend a lot in India, a lot in Southeast Asia, a lot in

Philippines, Indonesia. This is where the growth is. This is what you have a lack of supply, a lack of infrastructure and a very booming demand. So,

yes, most of it is Asia.

QUEST: What is the trend in -- what do people want now from a hotel?

BAZIN: Experience. They want uniqueness. They want to be surprised. They want culture. They want fine, they've never been eaten before. They want to

go to the museum even though they know that museum exists. They want to be curated. But it's actually much tougher because you're moving away from the

product to go to the experience, which includes design, which includes service, which includes the way you act and interface with you.

QUEST: Let me understand. When you look at what the traveler wants.

BAZIN: Yes.

QUEST: And the tourist wants, the ability to deliver, now A.I. is a massive component of it now. But --

BAZIN: A.I., yes.

QUEST: There's a contradiction, a paradox almost. You know, A.I. is at scale and allows you to do more, and now you've got to deliver that more.

BAZIN: A.I. is going to tell me everything about you before you come to my property. A.I. is going to be saying everything about you when you leave my

property. So I'm going to know you pretty well when you pop in. During your stay I don't want any A.I. machinery. I want you to sit down with my guy

who's going to know you very well. And I want that interface, human interaction to play, because you're going to remember the smile.

You're going to remember the people you've met, and you're going to remember those who've been opening your eyes to things you've never done

before. A.I. is an instrument. It's a tool. During your stay, A.I. will be minimal.

QUEST: But how easy is it for you to convert the A.I. pre-arrival information into, and even the A.I. ongoing information, into delivery of

something that's surprising, exciting, et cetera?

BAZIN: It is not easy today.

QUEST: That's the problem.

BAZIN: No, it's not easy today because we don't have the database. We don't have basically the algorithm. We don't have the scientists. It's going to

take probably 12 to 36 months.

QUEST: Really?

BAZIN: It's going to go very quickly. As soon as that data is reliable, accessible, then you can actually trust it. Don't you worry, we're going to

be able to extract it and you're going to be smiling. I was telling you earlier, ChatGPT knows everything about you. I just want ChatGPT to tell me

more which means I need to -- I need to partner with them.

QUEST: You need -- now there's two steps to this.

BAZIN: I know.

QUEST: You need ChatGPT to tell it to you, and you need to be able to act upon it because if you act upon it in a sort of commercialized way, I'm

going to feel like I'm the product.

BAZIN: Well, you are already, my dear. You've been a product for a long time, so -- and you're not my product when you come to my hotel, you're

just a person. You have a smile. You have a name, you have an identity. You have a culture. So, no, I think those two are going to be intertwined. I

don't want A.I. to replace your stay. I want A.I. to enhance your stay. That's extremely different.

(END VIDEOTAPE)

QUEST: You just got to admire Sebastien Bazin. The honesty, the frankness. I am the product, he says. And who can disagree?

We are live in Riyadh at the FII in Saudi Arabia. This is FII Nine. So we've seen a few changes, you and I, over the years. I've been speaking to

the global business leaders. Well, when we come back, the man who put it all together, FII's executive chairman joins me and talk about it more.

(COMMERCIAL BREAK)

[16:51:07]

QUEST: Welcome back. We are in Riyadh. FII is in full swing. Anyone who's anyone in the world of business is here. So to put this in perspective, in

fact, we spoke to so many big names. We'll be talking to them, you're seeing them over the rest of the week. We had the chief executive of the

London Stock Exchange, Ark Invest who you heard today, Standard Bank later in the week, Franklin Templeton, and Bombardier. Not to mention I moderated

three panel discussions back to back.

Richard Attias is the chairman of FII's Institute Executive Committee.

I was busy today.

RICHARD ATTIAS, CHAIRMAN, FII INSTITUTE EXECUTIVE COMMITTEE: I think you were --

QUEST: As were you, sir. As were you.

ATTIAS: I thank you for always being with us. Yes, we're quite busy days, but very interesting with I think great outcomes. The first outcome, which

is quite sad for someone who spent 25 years of his life in Europe, everyone is in a consensus that Europe is not doing well at all, at all, at all. And

this is coming even from the Europeans. So this is something extremely concerning because they don't see at all Europe coming back unless strong

leadership is back.

QUEST: Right. When we talk about coming to FII, we used to say, you know, why do people come here, why do business leaders, you know, like Willie

Sutton, the famous bank robber. Why did he rob banks? Because that's where the money is. And people used to go. But what I've heard this time is that

this is not so much about coming here to get money out of Saudi. The Saudis are saying, what are you bringing in?

ATTIAS: Correct. Number one, Saudi Arabia is a place where you need to invest. So I see a lot of opportunities for foreign direct investment

coming to Saudi Arabia, because it's not just any more about the gig project. People realize that this peninsula, the Arabic peninsula, is full

of opportunities and you will have great return of investment, including on A.I. and technology. Look what Humane, this great A.I. company, is doing.

Tourism, huge opportunities in tourism, many other sectors.

QUEST: You had today here Kirill Dmitriev, the adviser to President Putin. And you did the interview. When you do something like this at FII, you've

got to ask the hard questions, which you did, but at the same time, how do you balance that off in an environment like this? It's a tricky one,

Richard.

ATTIAS: Yes, but, you know, you need to be very transparent. And we hear a lot about from Ukraine. You cover so much Ukraine, some TV channels are

almost 12 hours per day nonstop talking, which is fantastic. But I wanted also to give a voice to Russia, to understand the other side and to

understand how Russia is doing. And you heard the data are quite impressive when you have 4 percent potentially of growth, when you have a country

which is not stopping at all.

It seems like they don't care about the sanctions. And when I asked you Kirill Dmitriev how optimistic he was, and he's very well-positioned

because he is part of the negotiation team, and he says that he sees a peace happening in the next few months. So we have reason to be optimistic.

QUEST: Would you like to see more debate at FII? And I'm not sure what I mean by that. Even asking the questions. I'm not talking about a human

rights type of debate, although that could happen here as well. I'm talking about a more critical debate on a variety of issues.

ATTIAS: Absolutely. I think it's becoming, thanks to people like you, not to flatter you, a place where you see controversy, you see contradictions,

you see different positions on many strategies, including different perception on where A.I. should go and what we should do on A.I., where we

should invest. Data centers debate. You know, now everyone is almost consensual that the key priority on A.I. is to invest on data centers.

[16:55:05]

QUEST: And I've heard that once. I mean, it's an obsession in the rooms this. But they don't seem to want to discuss the downside. The demand for

energy, the environmentally, you know, that sort of -- they know that's a problem, but they don't want to discuss it.

ATTIAS: No, they don't discuss it because they know that they cannot do something else.

QUEST: Right.

ATTIAS: Whatever will be the price of the energy, they have to do data centers. So now the question is, where do we install these data centers?

And there is now a lot of negotiation and discussion to create even these sovereign embassy data centers in countries where you have affordable

energy. This is why, once again, this part of the world is crucial. But also, you know, I discovered an amazing leader with an amazing potential

country, which is Guyana. Guyana, the guy was really impressive and one of his strategy is also to build that data center.

QUEST: Data center.

ATTIAS: Once again. In Latin America.

QUEST: So will there be FII 10?

ATTIAS: Yes, of course we are -- we cannot miss, but we will have others between the nine and the 10.

QUEST: Right.

ATTIAS: As you know, we'll be in Miami and we'll be also in Europe next year. And we count on you.

QUEST: Good to see you, sir. We'll be here.

ATTIAS: Thank you, Richard. Thank you for being with us.

QUEST: And thank you for having us.

We will have a "Profitable Moment" after the break. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment" from FII in Riyadh.

I enjoy coming to this event. It is different from, say, Davos or WTS or the others. There's a refreshing, naked honesty about why everybody is

here. No, it's not these days just to get the Saudi money. It is to do business to talk to each other in one of the fastest growing areas in the

world.

Tonight, of course, we heard from Cathie Wood and we heard from -- you heard Jay Powell earlier. This issue, this question of, are we in the

middle of dot-com bubble? Another bubble that is destined to blow up in our faces. Cathie Wood says we are not. She gave us good, strong reasons why

this is not dot-com bubble. And even that was borne out by Jay Powell at the Fed. He said today the A.I. boom is different from the dot-com bubble.

Now that does not mean we couldn't have a very nasty correction that would do serious damage to your wealth. But what it does mean is that there is a

different underpinning to what we're seeing in the market. So when Nvidia trades to $5 trillion, perhaps, yes, it might correct. But it doesn't mean

it's going to collapse. At least that's what they're telling me here. What do I know.

And that's QUEST MEANS BUSINESS for this Wednesday night. I'm Richard Quest in Riyadh. Whatever you're up to in the hours ahead, I hope it's

profitable. I'll see you in London tomorrow night.

END