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Quest Means Business
Former Heads Of Fed, Treasury Condemn Criminal Probe Into Powell; U.S. Human Rights Group: 500-plus Protesters Have Been Killed In Iran; Trump Calls For 10 Percent Cap On Credit Card Interest Rates; Klarna CEO: Credit Card Rate Cap Would Boost Competition; Paramount Escalates Hostile Bid For Warner Bros. Discovery; Apple Picks Google's Gemini For Its A.I. Features. Aired 4-5p ET
Aired January 12, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:16]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Remarkable comeback for the markets. Closing bell ringing on Wall Street. We have the
S&P 500 at a record high. In fact, all three indices are up which, considering the environment we are talking about, riskified. One and a two
and a one, two. Oh, we only got two there today. I feel we've been short changed on a busy day. Those are the markets. We will put them into some
sort of perspective for you and the stories that we are talking about.
The former Fed Chairs are rallying along with Treasury Secretaries behind Jay Powell as he defends himself from the Department of Justice
investigation.
In Iran, it is the morgues and they're filling up with the brutal government crackdown on protesters.
And bank shares are falling on President Trump's call for a cap on credit card interest rates. The CEO of buy now, pay later, the giant, Klarna will
join us live on QUEST MEANS BUSINESS because we are live tonight in New York, Monday, January the 12th. I am Richard Quest and I mean business.
Good evening.
We begin tonight with the former Fed Chairs, Treasury Secretaries and leading official economists coming to the defense of Jerome Powell. It
follows the Justice Department opening its criminal investigation about the Central Bank's renovation and testimony that Powell gave to Congress.
In a joint statement, the group said the move is an unprecedented attack on Central Bank independence. It has no place in the U.S. where the rule of
law is the foundation of economic success. And what a list -- Janet Yellen, Alan Greenspan, Glenn Hubbard -- we've got all political stripes are there.
The Chairman of the Fed, Jay Powell has hired the powerhouse law firm, Williams & Connolly that will represent him issuing his own extraordinary
statement on Sunday saying the accusations are baseless and that he would not be intimidated.
(BEGIN VIDEO CLIP)
JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In
every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment.
Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do with integrity
and a commitment to serving the American people.
(END VIDEO CLIP)
QUEST: President Trump's top economic advisor, Kevin Hassett, says he thinks that Chair Powell should welcome the investigation. Mr. Hassett is
widely considered to be amongst the top contenders to be the next Fed Chair, and he says he thinks there are legitimate questions about the cost
of the Federal Reserve's Washington headquarters' renovation.
(BEGIN VIDEO CLIP)
KEVIN HASSETT, DIRECTOR OF THE COUNCIL OF ECONOMIC ADVISERS: I guess the question is if you think the building cost $20 billion or $10 billion, do
you think at some point that it is appropriate for the federal government to investigate? And it seems like the Justice Department has decided that
they want to see what's going on over there with this building that's, you know, massively more expensive than any building in the history of
Washington.
And if I were Fed Chair, I would want them to do that. I think that it is really important to understand where the taxpayer money goes and to
understand why it goes this way or that.
(END VIDEO CLIP)
QUEST: Kevin Hassett.
Phil Mattingly is with me. We have much to chew over as we go through this. Let's start with, I suppose not just only the unprecedented nature of this,
but this letter that has been signed by them all, by the former secretaries, by former Fed chairs. It is not going to make a jot of
difference to the Justice Department, but it does set a tone for how things are now moving.
PHIL MATTINGLY, CNN CHIEF U.S. DOMESTIC CORRESPONDENT: The ferocity and the velocity of the pushback across parties from not just former Fed chairs of
both parties or nominated by presidents of both parties and Treasury Secretaries nominated by presidents of both parties, but also Republicans
publicly on Capitol hill underscores the stakes, and I think the seriousness of this moment and the kind of evolution of what has been a
longstanding and long simmering, mostly one-sided war from President Trump against Fed Chair Jay Powell.
Powell made it both sides last night in his decision to push back and push back fiercely in that two-minute straight to camera video, and I think that
was intended to elicit this support that we have seen over the course of the last 15 to 16 hours, Richard.
[16:05:06]
I think, it is incredibly important, I think probably is a good explanation as to why markets calmed down a little bit over the course of the day,
recognizing that Justice Department may do this, and it is certainly unprecedented, but there is a significant, significant amount of support
behind Powell here.
QUEST: Okay. So, the other point of view, though is and I was looking at the tweets from the Congresswoman who started the whole thing, or at least
as she did with her complaint.
She has a valid point. You know, criminal activity is criminal activity. If there is a legitimate thing to investigate, it needs to be investigated, as
Hassett said, without fear or favor.
MATTINGLY: So what is being investigated here is statements made by Fed Chair Jay Powell in congressional testimony. I think this is important
contextually, when you listen to what Kevin Hassett was saying.
The Justice Department is not investigating the cost overruns. The Justice Department is not investigating a $10 billion or $20 billion project. They
are investigating the Fed Chair's statements related to a $2.5 billion project, and whether those statements were actually lying against his oath
when he was testifying in front of the Senate Banking Committee. That is absolutely something worth looking into if it is something that's happened.
It is also something Powell, Richard, has repeatedly addressed since these accusations were initially made several months ago. The idea of the type of
marble that was used, VIP dining rooms, elevators, the explanations that Powell and the Fed have given are actually in black and white at length on
the Fed website, and have been sent to members of Congress as well.
And again, I think that the key distinction here is when you see Republican members who don't necessarily, if ever, speak out against President Trump,
immediately saying, yes, this is not legitimate. This is pretext for something that is not what is actually being looked into according to these
subpoenas.
Then it underscores that there is pretty wide agreement here about the basis.
QUEST: On this, you can see on the screen it says that Donald Trump denies knowledge of the investigation, and is there a possibility here that the
DOJ is doing a bit of freelancing here? That actually, you know, they are giving the boss what they think the boss wants or wants them to do, but
actually, Donald Trump has never actually sat there and said, I want you to do this.
MATTINGLY: Two things I think to keep in mind here. One, based on reporting of what I actually know, which is the Treasury Secretary who has been the
person behind-the-scenes, who has repeatedly, over and over again told the President, don't go down this path of trying to fire the Fed Chair. I know
you want to do it, I know you've said you want to do it. You don't want this legal fight. You don't want the market reaction to that legal fight.
And Powell has made clear he wants -- he would fight if it were to happen.
So Bessent was not aware. The Treasury Department was not aware.
What you can also kind of keep in mind here, and I think this is what you're getting at, and it is a really, really important point is the
President is very cautious about what he explicitly says to do. The President implies a lot of things that his aides, advisers, particularly
those outside of the inner circle senior team that are really driving things sometimes do to try and curry favor or to try and make sure that he
knows that they care about what he is concerned about.
That very much seems to be the case here based on my reporting. We are going to keep reporting it out going forward, but my understanding is the
people that have been involved at the highest levels with the President on economic decisions were either not aware or were not in support of what is
happened over the course of the last 24 hours.
QUEST: Briefly, because I've got Mohamed El-Erian coming up and I want to hear his views. But briefly, how do they get out of this?
MATTINGLY: That is a great question that I've actually been asking a lot of people about. You look at the senators, you look at the Republican senators
who have said any nominee you put up will go nowhere. And you say, well that's our off ramp. We can't do anything with this.
The other thing to keep in mind, just really, really quickly here.
QUEST: Yes.
MATTINGLY: Whether or not this could actually, end in an indictment if you take this to a grand jury, this is a tough case to bring on congressional
testimony and on a grand jury in Washington, D.C. Perhaps these are just subpoenas, not something that actually ends up in an indictment.
QUEST: Phil, I am grateful for you. Thank you.
And the markets, it ignited the events of the day. The so-called Sell America Trade. The Dow was down 300. And then, I mean, look at this. We up
86. Other areas show signs of concern.
Gold, two-and-a-quarter percent. We are now at four-and-a-half thousand. My goodness. Where does it all go? Bond yields rose. Remember this is because
it is all the perception of lending to the U.S. could become more risky, and therefore you end up with a weaker dollar.
Mohamed El-Erian is the chief economic adviser at Allianz, also the chair of Gramercy Funds.
How many ways can we look at what's happening? Let's take this point by point.
First of all, on the actual, if you will, action. Do you see accepting the legitimacy of any investigation? Do you see this as being an attack on the
independence of the Fed?
MOHAMED EL-ERIAN, ECONOMIST AND ADVISOR, ALLIANZ: I see it as an inevitable step of a feud that's been going on for seven years, Richard.
[16:10:10]
And the longer this feud continued, the more likely we are going to have a major escalation. And last night, we got a major escalation from both
sides, from the DOJ and also from Chair Powell's unprecedented response. And the key issue, you raised it, it is what is the off ramp here? And that
is what is really hard to find. We hope that there is a way of combining preserving the independence of the Central Bank, which is critical with
greater accountability -- accountability is weak right now and major reforms to the way the Fed operates so that we don't get repeated mistakes.
But how we get there? I don't see it as yet.
QUEST: Okay, but if we just take this, there are -- you know, this isn't in isolation, of course. You have the Lisa Cook incident. You've got the
President saying, I will only appoint somebody who agrees with me and is going to lower interest rates.
You have an environment where if, say, Powell falls or even after -- I mean, when he goes, it is difficult to see that the -- that the
independence is intact, if you will, to put it in a cruder term, the virginity remains intact of the Fed's independence.
EL-ERIAN: So Powell is going. His term as chair, not as Fed Governor, as chair finishes in May and he will be gone and we will have a new Fed Chair
if Congress approves the nominee.
Look, the reason why the markets are calm and really, if you look at the end of the day, the reaction has been very muted is because people know
that interest rate decisions are a function of the whole committee of the voting members of the committee. And while the Chair is first among equal,
he cannot easily sway the committee.
People also know that the bond market will have a say if it believes that we are setting policies now according to political issues and not economic
issues, and the memories of the 70s are still there. So it doesn't surprise me that the initial market alarm, which wasn't a really loud alarm, was
reversed by the end of the day.
QUEST: But this phrase that those of us who have been around a year or two, you know, the bond vigilantes, we used to use that phrase when we were
talking about LBOs and all of that and bringing companies to book if they were taking on too much debt, the bond vigilantes.
How does the bond vigilantes play out in something as large and liquid as the U.S. government debt markets?
EL-ERIAN: Oh, very easily. If the bond market believes that the Fed will be irresponsible and that will result in higher inflation, the bond market
will want to be compensated more and you will see yields go up.
You know, we saw -- I don't want to make the comparison too closely, but the U.K. felt the pressure from the bond vigilantes when Liz Truss tried to
implement these unfunded tax cuts and she had to change course.
So the bond market can play a role, but the bond market isn't alarmed right now for good reason, which is that the way the Fed functions means that a
new Chair will need time to impose their authority and will not simply be able to change the whole way the Fed functions.
QUEST: Right. There is a point, though, that the bond market isn't worried until the bond market is, in a sense and that turns on a dime with the
first -- it is very difficult to spot that moment, but once it has happened, it is brutal.
EL-ERIAN: Correct, and you don't want to get close to it. I completely agree with you. You don't want to get close to it and that is the threat.
And people understand that. The Treasury Secretary understands that, certainly, the five people that are finalists for this position understand
that. So that is clearly understood.
It is interesting, however, that the S&P ended up at a record high after this and a lot of people are puzzled. I am not puzzled. I think that there
are checks and balances in the system.
Do I want to see this mess go on? Absolutely not. It is not good for the standing of the U.S. in the global economy.
QUEST: On that note, let's finish on that last point about, because really, again, for people like yourself, this is not so much a -- I mean, we can
parse it out with this decision and that statement and this action. And as you say, any given day of trading.
[16:15:08]
But at the end of the day, it comes down to, you know, the smell test, the feel test. How it all looks and feels, because that's what markets trade on
over medium to longer periods. And there, how do you feel about all of this?
EL-ERIAN: So I am worried because the rest of the world has overweighed the U.S. They use the U.S. as a reserve currency. They trust their savings and
their wealth to U.S. financial markets because the U.S. is perceived not as pristine, but as the cleanest dirty shirt. There is nowhere else that is
better than the U.S.
If the U.S. starts eroding its standing in the global economy, then the rest of the world will look to reduce its overweight and what has been
happening to the price of gold is an indication that at the margin, people are reducing their exposure to the U.S. dollar.
QUEST: Gosh, thank you, sir. I am so grateful to have you on the program tonight. Excellent as always in difficult times. I am grateful. Thank you.
Now, the U.S. President says Iran has called to negotiate as the regime's crackdown reportedly kills more than 500 people, in a moment.
(COMMERCIAL BREAK)
QUEST: More than 500 protesters are believed to have been killed in Iran, according to a U.S.-based Human Rights group. Nationwide anti-government
demonstrations have now entered their third week. CNN's Jomana Karadsheh reports on the brutal crackdown by the Tehran regime and some of the images
in this report are disturbing.
(BEGIN VIDEOTAPE)
JOMANA KARADSHEH, CNN INTERNATIONAL CORRESPONDENT (voice over): From behind the walls of the Iranian regime's censorship, a chilling video has emerged.
Every moment of what may be a hidden camera reveals a terrifying picture of what has been unfolding on the ground.
(UNIDENTIFIED MALE speaking in foreign language.)
KARADSHEH (voice over): "They butchered him," this mourner wails. The camera drifts past grief, not lingering long enough for us to be able to
tell the stories of loss and pain of so many who gathered at the Kahrizak Forensic Medical Center outside Tehran, searching among rows and rows of
body bags that line the courtyard for loved ones missing.
At the same facility, lines of lifeless bodies are stored in a warehouse turned morgue. Inside the center, distraught family members stand anxiously
in front of a screen that flashes photos of the dead.
[16:20:10]
They page the family of a man named "Mohammed," who he and others were, how they were killed is hard for us to verify.
(UNIDENTIFIED MALE speaking in foreign language.)
KARADSHEH (voice over): State media had its own pictures and narrative from the Kahrizak Forensic Institute, reporting the majority of the bodies are
those of "ordinary citizens." They blame their deaths, like the protests on foreign-backed terrorists carrying out what they say are indiscriminate
killings. These pictures the regime decided to air, perhaps, a warning to those who dare take to the streets.
It is almost impossible for us to get real time updates from Iran, the regime shut down communications across the country on Thursday, just as
nationwide protests against the clerical establishment drew larger crowds to the streets of every province.
It is a tactic out of its playbook on crushing dissent, a cover it has used in the past to unleash bloody force.
The little testimony and images that have been trickling out, only a small window into what a ruthless regime doesn't want the world to see. Video
like this that purportedly captures the feared state security forces out on the streets is slowly surfacing, sent out by those who are risking their
lives to get it out.
In this one location, an estimated 250 bodies with hundreds more confirmed killed elsewhere, according to activists. The world now braces for what may
come when Iran finally emerges from the dark.
Jomana Karadsheh, CNN, London.
(END VIDEOTAPE)
QUEST: President Trump says that Iran's leadership has called to negotiate following his threats of military action. The U.S. President had warned
Iran he would intervene and according to Mr. Trump, the U.S. is now assessing if Iran has crossed his red line.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: We are looking at it very seriously. The military is looking at it and we are looking at
some very strong options.
I think they are tired of being beat up by the United States. Iran wants to negotiate this. We may meet with them. I mean, a meeting is being set up,
but we may have to act because of what is happening before the meeting.
(END VIDEO CLIP)
QUEST: Kevin is with me. Kevin Liptak at The White House.
What does he mean? I mean, I've read a lot of articles in the last 48 to 72 hours about the various options. From your understanding, what's the
favorite?
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: I mean, the favored, at least according to Karoline Leavitt, who we were just talking to in the
driveway, is this diplomatic window that they see opening. The President does think that there is some chance that these talks could potentially
yield something and we understand that the Iranian Foreign Minister reached out over the weekend to Steve Witkoff, the President's kind of Swiss Army
knife foreign envoy, to talk about potentially getting these talks back on track.
And you'll remember, Richard, these are the two men that were negotiating some kind of nuclear agreement before President Trump went in and ordered
those strikes on the nuclear facilities back in June.
And so there does seem to be a belief inside The White House at this moment that the Iranians are serious about talking, and when you listen to what
Karoline Leavitt was saying, she says that their message seems to be more conciliatory in private in these messages than what they've been saying in
public.
And so they do seem to think that diplomacy could be a real option on the table at the moment.
QUEST: Right. But what's the end game? I mean, you know, everybody wants to know how far the U.S. is prepared to continue to tolerate the current
regime in Tehran? Or is there some, I won't say secret plan, but some sort of vision of change?
LIPTAK: Well, I think the end game is clear to one person, and that's President Trump, and even when you talk to officials, they acknowledge only
one person is going to decide how all of this proceeds, and it is Trump himself.
I do think that question of what they're trying to get out of the Iranians is a good one. Remember when they were talking about the nuclear program
early last year, the big sticking point was that Iran was never going to agree to a complete denuclearization. And even though President Trump
insists that their nuclear program has been wiped out, at the same time, the Israelis are warning him that they are rebuilding and that their
ballistic missile program is rebuilding.
And so whether that remains President Trump's red line is something that no one has really said explicitly so far. There are a host of options that the
President could lean on that fall well, short of firing a missile into Iran. Things like a cyberattack on some of the regime's services or trying
to bolster the internet in that country, that's something that the President has talked to Elon Musk about, about trying to get some more of
these Starlink apparatus into the country to try and skirt the regime's crackdown on information.
[16:25:18]
Why they haven't done that so far? I don't think has necessarily been explained. Remember, that was kind of the move that the Biden
administration took back in 2022 to try and get around some of these internet blackouts. Why they haven't done that so far? Unclear, but
certainly a host of options that the President could choose from as he sort of makes this decision.
QUEST: I am grateful to you, sir. Thank you. Kevin Liptak at The White House. Thank you.
The U.S. banking industry, particularly credit cards slamming Donald Trump's call for a credit card rate cap of 10 percent. Klarna CEO likes the
idea. He will tell me why after the break.
(COMMERCIAL BREAK)
QUEST: President Trump is calling for credit card interest rates to be capped at 10 percent. Shares of the top credit card companies have fallen,
as you can see quite sharply in some cases, Capital One, which is vast; JPMorgan, also American Express and the like.
Mr. Trump opposed the idea on Friday night on Truth Social as a push for affordability. He is accusing the companies of ripping off the American
public and said the cap should last one year. The banking industry has responded: "A 10 percent interest rate cut would reduce credit availability
and would be devastating for millions of Americans and small business owners."
Sebastian Siemiatkowski is the CEO of Klarna, buy now, pay later has its own range of cards. He says it would make the credit market more
competitive.
He is with me now and joins me to discuss this now.
Good to see you, Sir Sebastian, for joining us from Stockholm.
You've -- you're in favor of this because you basically say a lot of the old arguments about pushing credit people into loan sharks' hands is not
true.
[16:30:08]
SEBASTIAN SIEMIATKOWSKI, CEO, KLARNA: Well, I think we can just look to Europe to see what has been going on, both interchanges regulated in the
European market, so I mean, the credit card transaction in the U.S. generates about 2.5 percent in merchant fees, and then an additional 2.5
percent in revenue from revolving customers, which is $5.00. That's humongous compared to Europe, but also interest rates are capped for these
kind of lending products in a lot of European countries, and it has not led to the effects just like Trump says, it doesn't lead to those effects. And,
it will not necessarily do that.
I mean, if you have a product whose whole idea is to get people to borrow as much as possible at highest possible interest rate, that will mean a lot
of people overextend themselves. You will have higher losses and the need to charge even higher fees to make it work.
There are better credit products that don't lead to that.
QUEST: Right. To be -- to be fair, your cards and your buy now system doesn't charge interest if you do it within the period. But once you -- if
you miss payments and if you don't, I mean, you are up there as well in the dozens, in terms of the interest rate level, 25-30 percent?
SIEMIATKOWSKI: Well, not entirely. I mean, first and foremost, like our late fees and late fees and late structures are similar. I mean, on credit
card, the interest rate we are talking about here is just if you pay on time and revolve. Right?
(CROSSTALK)
QUEST: Right.
SIEMIATKOWSKI: If you actually late, you might incur even higher fees.
So, but we do have some late fees. We have tried in the U.K. to run with no late fees whatsoever, but realized there was actually a negative
correlation with people paying even less. So, it was actually good to have some consequence for not paying on time.
But generally speaking, I would say, you know, a credit card encourages to put all your spending on credit and then revolve. Our product is put some
transactions on credit.
(CROSSTALK)
QUEST: Right.
SIEMIATKOWSKI: Fixed installments. zero percent interest. And that just leads to lower losses, as we proven, compared to credit card.
QUEST: This is a naive question. I have never really understood, besides greed, why credit cards do charge such usurious levels of interest rates.
And I say that because I borrow from a bank, it's three to five percent, maybe seven percent, nine percent if you are have a poor credit rating.
Borrower go to the revolving credit 25, 30, 30 percent. I don't understand it, other than how much can we make.
SIEMIATKOWSKI: And look, I've been working with this for 20 years, and it took me some time to figure this out. And I don't necessarily think like
maybe in the 90s, people were different than they were just sitting and optimizing profit. I don't think these banks are thinking that way anyway,
but it's very hard, because they make so much money out of these products.
And to some degree, the whole products, ideas to lend people as much money as possible, make them borrow as much as possible, build these balances. I
mean, on average now, $5,300 is a typical balance in the U.S. People pay $160 billion in credit card interest in the U.S. up from 100 just a few
years behind. So, what happens is, and then, the profit you make from that --
(CROSSTALK)
QUEST: OK.
SIEMIATKOWSKI: You are giving in cash back in different. So, you end up in this system where we are, you know, people are, you are charging these to
sustain your customer acquisition costs and your bonuses to your customers.
And then, it just becomes this loop that nobody in the banking industry can get out of.
QUEST: Yes, yes. This idea, by the way, that's interesting, the idea of the rewards now, whether it be through miles, or whether it be through whatever
other rewards program it is, your view on that is that it is essentially unfair that you are giving those who have got most more on the -- and the -
- and the people are paying for it, are those at the bottom.
SIEMIATKOWSKI: Well, it's not just my view. I mean, the Federal Reserve in the U.S. published a report about this. This is the most effective income
redistribution program in the world. It transfers $15 billion from low income, low FICO score households to high income, high FICO score
households, and it generates, you know, it -- and the reason for that is people who, even who don't use cars in the U.S., pay higher fees for goods
because merchants have to charge higher to sustain the card rates of 2.5 percent
(CROSSTALK)
QUEST: Right.
SIEMIATKOWSKI: And then, wealthy people get that through their cash back programs and rewards. So, it's an extremely effective wealth redistribution
program. And I don't think that was the original intent, but it doesn't necessarily serve society well.
QUEST: Sebastian, I'm grateful you've stayed up late-ish tonight in Stockholm. Thank you very much for joining us. Always good to see you, sir.
Thank you.
SIEMIATKOWSKI: Thanks.
QUEST: Now, to Paramount and the bid to take over Warner Brothers Discovery, the parent company of CNN. Paramount is now threatening a proxy
fight to elect a board that's friendly towards its offer and remove the directors who prefer to go with Netflix.
Paramount also filed a lawsuit. It wants WBD to disclose how it valued the office, in other words, all the private papers so they can see it.
Brian Stelter is with me.
[16:35:00]
Now, here is where it gets tricky, Brian, because they have already put a tender offer in. Why are they more confident of a proxy, rather than just
letting the tender?
BRIAN STELTER, CNN CHIEF MEDIA ANALYST: Well, I think, Paramount would say they are checking all the boxes. Plan A, plan B, plan C, et cetera.
And I'm not sure where we are at this point, because plan A was to make that unsolicited bid last summer. That's what David Ellison did just as
soon as he took control of Paramount. So, you know, he is on a months-long ordeal. And you can kind of sense that in the tone of his shareholder
letter, his frustration with the inability of the Paramount side to convince WBD to take his $3 per share offer.
But actually, in the last hour, we've heard back from WBD, and they are basically dismissing Ellison's P.R. campaign. Here is the statement from
the company, saying, "Despite six weeks and just as many press releases from Paramount, it has yet to raise the price or address the numerous and
obvious deficiencies of its offer. Instead, Paramount is seeking to distract with a meritless lawsuit and a tax on a board that's delivered an
unprecedented amount of shareholder value."
So, no movement from WBD, and that's to be expected, because this is another example of checking the box. Right? They have sued in Delaware, as
expected, and now, they are threatening a proxy fight as well. Richard.
QUEST: OK. So, now, let's say that this all progresses, every single thing I have read, including your own articles on this subject, makes it clear,
all Paramount has to do, I say all is up the offer.
If they came in at $33, $34, yes, it would cost them 10 billion, 12 billion more, but it would be very difficult for the WBD board, with its fiduciary
responsibility to turn that down.
STELTER: And that is what, you know, reading between the lines of the statement, WBD is even indicating, right, saying, we have told you what to
do. We have told you the number, essentially, as you know, reading between the lines. They have said, we have told you the number, meet the number.
So, you can view this as an ongoing auction process.
That said, WBD has also said the paramount, basically attempting a leveraged buyout, and has expressed a lot of skepticism about the financing
and the Middle East sovereign wealth funds. So, there are all of those other factors as well that will weigh on this. And so far, Richard, I've
seen shareholders, big shareholders, be split about this.
Some favoring Netflix, others favoring Paramount. A real divide as this goes forward.
STELTER: But what's fascinating last night at the Globes, our company did extremely well. Cleaned up left, right, and center, and it will be, you
know, Warner Brothers is having a very good year, both in terms of critical acclaim and profitability.
That makes this asset even more expensive and more valuable.
STELTER: No, a hundred percent. The takeaway from the Golden Globes is that Warner Brothers had the best night. David Ellison was in the room, sitting
there, maybe stewing, I don't know. He couldn't have been thrilled, but the anti-CBS jokes that were made from the stage, this is make or break for
Ellison.
Paramount is a pretty small fish. It's desperate to get big. It believes it needs WBD going forward. So, all of that would air in the direction of
eventually seen a bit above $30 per share.
QUEST: That you, you and I, both wish we were making the sort of money that the lawyers must be making, whoever -- and the bankers advising on this.
Can you imagine what the fees is --
(CROSSTALK)
STELTER: No comment, Richard. No, I'm just going to play it straight, sir.
QUEST: And what the fees must look like? The fees indeed.
You and I can share it. Thank you very much. Good to see you, sir. Thank you.
Now, Apple says it will upgrade Siri later this year in collaboration with Google, and it's an A.I. model -- and it's A.I. model, Gemini.
The deal is for a huge win for Google's parent company, Alphabet and its effort to capture A.I. market share. Alphabet reached a valuation today of
more than 4 trillion. The only other companies have done that are Nvidia, Microsoft, and Apple.
This is interesting. Clare Duffy, it's watching the ruminations of who is being where. But this is one -- this one is significant.
CLARE DUFFY, CNN TECH REPORTER: Yes, this is significant, both for Apple and Google. I'll start with Apple. You will remember back in 2024, Apple
made this big splash when it announced it was upgrading Siri, making it A.I. powered. It had to delay those plans last year because its own A.I.
technology was just not at a place where it could create a really differentiated, meaningfully useful new product for consumers.
And now, this deal with Google indicates that Apple still hasn't been able to get its own A.I. technology, where it wants to be. It has decided that
going with a third-party model is a better plan at this point. But this is totally important for Apple, because it's going to allow it to release this
upgraded version of Siri. It's expected to come this spring, and its strategy is really contingent on rolling out new A.I. features that will
get users to upgrade to new iPhones.
So, huge for Apple. And of course, as you said, Richard, this is really a significant win for Google as well.
[16:40:00]
Especially, just weeks after, OpenAI internally announced a code red.
(CROSSTALK)
QUEST: Right.
DUFFY: Because Google's newest version of Gemini was so impressive among users. And so, I think, this is another win for Google in terms of getting
its technology in front of more users.
(CROSSTALK)
QUEST: So --
DUFFY: I'll just say this. You know, it was Google's partnership with Apple making it the default browser on the iPhone that allowed Google to become
dominant in that market. It will be interesting to see if we see repeat here with A.I.
QUEST: Yes. But now, we have got this interesting situation where, how far can Apple allow or use Gemini? Does Apple, at some stage need to have its
own A.I.?
DUFFY: I think it's a really interesting question. I mean, I think, certainly Apple would like to have its own foundational model. That is
something the company has been working towards. This deal with Google. They are going to create a custom version of Gemini for Apple. So, they will be
getting something a little bit special here.
But it may be that Apple decides that it's not worth the investment and the challenge of creating its own A.I. model. It's worked with third parties on
technology like browsers before. So, it may be that Apple decides that just going with third parties is the way to go here going forward.
But it is interesting, especially, because Google is a competitor in the smartphone space too, and you know, Google Gemini is incorporated into
Android phones. So, it's going to be interesting to watch, whether this is a temporary play for Apple to get this upgraded version of Siri out there.
(CROSSTALK)
QUEST: Right.
DUFFY: Or if this is more of a long-term strategy,
QUEST: These companies are really good at being friends and allies with their competitors when it suits them.
DUFFY: Absolutely. Yes, Apple has proven that maybe more than anybody else. It just wants reasons for iPhones to get into user's hands, and it thinks
that this upgraded version of Siri is going to be a really good way to do that.
QUEST: I'm grateful to you, Clare. Thank you very much, indeed. Thank you.
I want to show you the markets, because the Dow and the S&P tonight have both closed at fresh records. Only 86 odd points and less for the NASDAQ.
But I think what's interesting is the fact that they managed to do it, bearing in mind, we were down so heavily at the beginning,
Walmart is at the top of the Dow 30. It's up three percent. Apple gained a third of a percent on the back of that news, of course, that we are talking
about. And the financial stocks near the bottom. Not surprising, Annex, Visa, JPMorgan, you know the reason. Even travelers, you know the reasons
why because, of course, they have been hit by this credit card, potential credit card cap that the president intends to introduce.
And that's our program for tonight, our report on our financial world. And QUEST MEANS BUSINESS. I'm Richard Quest.
Whatever you're up to in the hours ahead, I hope it's profitable. We'll "CONNECTING AFRICA" next.
(COMMERCIAL BREAK)
[16:45:54]
ELENI GIOKOS, CNN ANCHOR: Welcome to CONNECTING AFRICA. I'm Eleni Giokos.
Technology is transforming how we live, work and communicate with one another. And emerging tech, like Artificial Intelligence, has become more
integrated in our everyday lives.
The United Nations Conference on Trade and Development estimates the global A.I. market was worth $189 billion in 2023. And says, it could be worth
$4.8 trillion by 2033.
Within Africa, there are endless opportunities for A.I. integration, from scaling up agriculture production to democratizing access to financial
services and expanding health care resources.
Our correspondent, Victoria Rubadiri, takes a look at how one company and its app, Aura is using technology to improve emergency responses and save
lives across the continent.
(BEGIN VIDEOTAPE)
VICTORIA RUBADIRI, CNN INTERNATIONAL CORRESPONDENT (voice over): In an emergency, every second counts, but some African nations face a dire issue.
They lack public run EMS, or Emergency Medical Services. According to the World Bank, in 2021, only 21 countries in Sub-Saharan Africa had a national
system for EMS.
Kenya is in the midst of rolling out its first National Response Program. Until now, private companies like Pulse Emergency Medical Response have had
to operate on their own to provide life saving measures.
The company says even getting to patients' homes can be a challenge.
MARGARET GITAU, OWNER AND CHIEF EXECUTIVE OFFICER, PULSE EMERGENCY MEDICAL RESPONSE: In some parts of the country, we have network blackouts, so there
is latency there, and at times, we have got electricity problems such that when someone wants -- when someone wants to be assisted, you get to their
destination and you find that they don't have power on their telephones. So, it becomes a bit of a challenge even to locate them.
RUBADIRI (voice over): To improve efficiency, first responders often rely on tech companies like Aura to connect them with those in need.
VICTOR ODERA, KENYAN COUNTRY MANAGER, AURA: We give users access to these emergency services, to the exact GPS location anywhere, anytime, by
connecting them to a network of vetted private emergency response providers.
RUBADIRI (voice over): Aura was launched in 2017 in South Africa.
CHRISTINE KARIUKI, HEAD OF BUSINESS DEVELOPMENT, AURA: All the user actually has to do is to open the app and press the panic button. As soon
as this happens, this alert is sent into our platform, and our algorithm starts geolocating the closest responder.
So, in real time, the responder also gets information around the nature of the emergency, as well as the exact GPS location of this emergency.
UNIDENTIFIED MALE: I'm picking you up at Peponi road at Nairobi, Kenya.
RUBADIRI (voice over): Aura has expanded to seven countries across the continent.
Here in Kenya, Aura partners with dozens of private response companies covering more than 40 cities and towns. Offering assistance from roadside
to medical emergencies.
ODERA: So, you find that in cases where service would essentially get you in about 60 minutes, we are now able to reduce that to some five-minute
response time.
RUBADIRI: So, you started in Kenya in 2021. How different would you say you are from other competitors in the space?
ODERA: So, able to cater to people who do not want to download an application, we have this one called modernity. So, now we also looking at
panic buttons. Right? Like physical panic buttons. We also now looking at wearables, you know, your smart watches, right? So, very different and very
varied channels through which you're able to get our product and our solution to the hands of many people.
(END VIDEOTAPE)
GIOKOS: Warren Myers is the co-founder and CEO of Aura, and he joins me now. Warren, great to have you on the show. Welcome to "CONNECTING AFRICA",
and we have just seen Aura in action on the ground. Give me a sense in terms of what problems you were trying to solve when you founded the
company, and importantly, the impact that it's having.
[16:50:07]
WARREN MEYERS, CO-FOUNDER AND CHIEF EXECUTIVE OFFICER, AURA: Great. Thanks for having me. It's awesome to be here.
I always say, when we started the business, 2017 even back then in South Africa, people could get a taxi or a pizza quicker than they could get help
when they are dying having an emergency. And that obviously didn't make sense. So, what we did was build a platform marketplace where we onboard
and vet all types of emergency responders, private, and public, and we provide technical access to mass market audiences, so that we can
effectively democratize access to emergency response services when people having medical or criminal situations.
GIOKOS: How are you able to leverage new technologies and integrate A.I. to create more efficiencies?
MEYERS: The moment as a tool for us, is not a product. We use it to help us build and optimize internally. And the reason why I feel like our business
is very well positioned over the next, say, five to 10 years, with this A.I. boom, is that we are not just a software company.
Where we are moving to now, is that panics are going to be far more human and biological. Means your voice, you're either going to prompt an A.I.
agent that you are in trouble, or whatever you wear on your ring or your wrist is going to know that you are having a trauma event, and that's going
to come through to us, and we are going to get you help.
GIOKOS: So, Warren, I want to talk about your footprints across Africa. You are in seven countries at the moment, in the next five years, what is your
vision?
MEYERS: So, at the moment, we haven't -- we haven't set up our product in - - let's call it North Saharan. So, Morocco and Egypt massively growing markets, specifically Egypt, as well as in Franco and the French speaking
countries. That's something that we haven't done yet. So, that's like the new frontier of enabling our service across those regions, and then just
generally doubling down on partnerships that enable not just specific country distribution, but Africa distribution.
GIOKOS: And still to come, I speak with one group aiming to transform Africa's A.I. agenda with hopes of creating a unified digital market.
(COMMERCIAL BREAK)
GIOKOS: Welcome back.
Technology is vital to help companies, industries, and communities at large, scale up and improve efficiency. Smart Africa is at the forefront of
shaping the continent's digital and A.I. agenda.
With an alliance of more than 40 African countries, the group aims to create a unified digital market.
Lacina Kone is the director general and CEO of Smart Africa, and he joins me now.
Lacina, welcome to CONNECTING AFRICA. Great to have you on the show.
I want to start off about whether Africa is ready for A.I. and digital transformation on balance. Is the African continent prepared?
LACINA KONE, DIRECTOR GENERAL AND CEO, SMART AFRICA: Thank you very much, Eleni for inviting me. First of all, Africa is not approaching Artificial
Intelligence as a late adopter. No.
We are shaping it deliberately. Based on our development priority, our value and our strategic asset, we have moved from fragmented national
initiative to coordinated continental actions.
In April 2025, 49 African countries came together to endorse the African Declaration on Artificial Intelligence in Kigali. That was just a turning
point. It sends a clear signal that Africa wants to govern A.I., not simply consume it.
But readiness for A.I. today is no longer defined by data and algorithm. It is increasingly defined by energy, its affordability, reliability, and
sustainability.
[16:55:03]
And this is where Africa holds a decisive and often underestimated advantage across large part of Africa, as you know, benefit from more than
3,000 hours of sustainable sunshine every year, even under a very conservative scenario, developing just one percent of Africa's suitable
land for utility scale, solar could actually generate between 1,000 and 1,500 gigawatt of installed capacity. That is four to six times Africa's
current total power capacity, entirely renewable.
So, at a time where -- when global A.I. expansion is constrained, not only by computing power, but by energy shortage and carbon considerations, this
positions Africa as a future home for green data centers and next generation of A.I. infrastructures.
GIOKOS: So, Lacina, let me ask you again, is the African continent ready for A.I.? Because you're talking about possibilities and probabilities, but
you have got to solve a very big problem.
KONE: Yes, we are ready. In fact, A.I., it's an equalizer for us. For us, in Africa, it's an evolution. Because we have been talking about
infrastructure, connectivity transformation, digital public infrastructure. Here comes the A.I., where the use cases will drive all of this individual
development happening.
GIOKOS: Let's talk about how much needs to be invested on the African continent to bring this vision into fruition.
KONE: Our estimate based on the work done already on the Africa A..I Council, we are going to divide Africa into clusters. Not every single
country must have a data center, AI data center.
We come out with number which goes between nine to 12. Ai data centers. The total rough estimate is close to about somewhere around `30 to say, 5
billion U.S. dollars.
GIOKOS: There is a lot of collaboration that's happening with the private sector. Give me a handle on what's going on, what's exciting you.
KONE: Today, on the continent, we have about 2,400 startup entrepreneur and SMEs already developing A.I. in agriculture, in education, in healthcare,
in the climate, related services and applications. They're using all what's available today, which is -- which are the frontier model.
And 2025, the estimate market size of the A.I. in Africa is about 5 billion, which is the project score, about 16 to 17 billion by 2030 about
four years from now.
But in total, by 2030, we are looking back, according to certain statistics, at 2.9 trillion U.S. dollars addition to the GDP. So, the
opportunity is there. The demand is actually there. But how we get there. That's the big question.
GIOKOS: That's it for this month's CONNECTING AFRICA. If you want to know more about the subjects we cover on this program, you can check out our web
site.
Until next month from me, Eleni Giokos, let's keep on connecting.
(COMMERCIAL BREAK)
END
