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Quest Means Business

Kevin Warsh Confirmed by Senate to be Next Fed Chair; Trump Arrives in Beijing, Set to Meet Xi in a Few Hours; Fervo Energy Shares Pop 35 Percent in Market Debut. King Charles Outlines Government's Agenda to Parliament; Princess of Wales on Two-Day Visit to Italy; Swarmer Shares Plunged on Weak First Quarter Results. Aired 4p-5p ET

Aired April 13, 2026 - 16:00   ET

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

[16:00:18]

PAULA NEWTON, CNN INTERNATIONAL HOST: The Dow, you see it there basically treading water today. A bit of a loss. The S&P and the NASDAQ though eke

out gains and that is despite the fact that inflation continues to come in hot.

Those are the markets, and these are the main events.

Kevin Warsh will be the next chair of the Federal Reserve with the U.S. inflation climbing, he might find the confirmation battle was the easy

part.

A delegation of top U.S. CEOs joins President Trump in China, and a blockbuster listing for geothermal energy company, Fervo, its CEO joins us

live.

And live from New York. It is Wednesday, May 13th. I am Paula Newton, in for Richard Quest, and this is QUEST MEANS BUSINESS.

And good evening.

Tonight the U.S. Senate has confirmed Kevin Warsh as the next chair of the Federal Reserve. Trump's nominee was approved by a largely party line vote

with the support of just one Democrat.

He is set to be sworn in next week in time for the Fed's next interest rate meeting already scheduled, as scheduled in June. Warsh takes over from

Jerome Powell at a precarious time. Wholesale inflation jumped six percent in April on an annual basis, I am going to repeat that again, six percent.

We learned just yesterday that consumer prices rose 3.8 percent last month. The two numbers weakened the case for an immediate rate cut.

Stephen Moore is a former economic adviser to President Trump, and he joins us now. Really good to see you and have you on the program on what is a

historic day as far as the Fed is concerned.

STEPHEN MOORE, FORMER TRUMP ECONOMIC ADVISER: Yes, it is.

NEWTON: It definitely is. So why do you believe Kevin Warsh will make a good Fed Chair? And do you believe he can withstand the pressure you and I

both know is coming from the president to lower interest rates?

MOORE: Well, great to be with you. Thanks so much for having me. I've known Kevin Warsh for years. He is an outstanding -- he will be an outstanding

Fed Chairman. He is probably one of the most knowledgeable people in the country on monetary policy.

He has served at the Federal Reserve Board, I have to say shame, shame, shame on 46 Democrats who voted against him when he is so well-qualified,

maybe the most well-qualified new Fed Chairman since Alan Greenspan back 20-some years ago. So, really very solid pick.

You know, I do think he will be independent. What he believes in is making the dollar as good as gold, making sure that we keep inflation low, and as

you just said, that's going to be a challenge with these higher energy prices, and of course, to ensure that the United States dollar remains the

world's reserve currency. Those are three of his top priorities.

NEWTON: And President Trump had that exact same confidence in Chair Jerome Powell when he ushered him in as well and nominated him.

So how about it? How does he really navigate this?

MOORE: Well, first of all, you're right. I mean, every time I would see the President, the first thing he would say is that he said, I made a bad pick

on Jerome Powell. I said, yes, sir, you did.

You know, Powell, his tenure was certainly not very successful with inflation going through the roof up to nine percent under Joe Biden. It was

the worst performance since Jimmy Carter was President.

So I think we will see price stability. He wants to have a price rule where interest rates are really set by what is happening with, for example,

commodity prices. And so we have -- in other words, we are going to have more of a kind of rule-based monetary policy rather than the Fed just

making up the rules as they go along.

NEWTON: I am not sure that is what Chair Powell would say he was doing. But, you know, let's go at this.

The data on inflation this week was really like throwing an incendiary device at the economy.

MOORE: Yes.

NEWTON: And this is what Kevin Warsh will inherit. I mean, even his colleagues at Stanford University's hoover institution, you are well aware,

a lot of them, your colleagues as well, they're fearful about what he is about to take on.

John Cochrane there, a colleague of his at Hoover, said, I am not sure if you've heard this line, he told POLITICO, Kevin Warsh is like the dog who

caught the car. So what now?

MOORE: Right. I mean, you're exactly right. This is going to be a very tough period. I couldn't agree with you more. I mean, we have inflation

that has been unleashed. Hopefully it will be temporary. I think most people would agree that this inflation will come down as soon as we see

hopefully very soon, the Strait of Hormuz open and the oil flowing again.

And once the oil price comes down, I think -- because that most of that increase that you were talking about, which is very worrisome, I agree, is

a result of the higher energy prices, which means that food prices are higher, manufacturing costs are higher, et cetera.

[16:05:04]

But you're right, this is going to be a very difficult few months for him to navigate that, especially because he has President Trump, who wants to -

- who wants him to cut interest rates, but right now, I don't really see any case for cutting rates, given the fact that we have inflation that came

in at a 3.8 percent read.

NEWTON: Yes, and that might be the understatement of this quarter so far, Stephen Moore because that's not -- you know, at this point. Go ahead.

MOORE: I was just going to say, I mean, nobody can really predict what is going to happen with the oil price. It is so volatile right now and things

change, I mean, I have never seen anything like this with the herky-jerky daily. You know, one day the oil price goes down to $80.00, then it goes up

to $90.00 and then it went it went up to $110.00 and it changes every almost every and so, it is very difficult.

NEWTON: But that's because of the President and his strategy on this war. I mean, the Strait of Hormuz at this hour remains closed. What levers do you

believe the President has to open it, if he even does want to open the Strait of Hormuz? I mean, you heard him speak to Americans yesterday

saying, I am not really thinking about Americans' financial situations. He is just thinking about whether or not Iran will have a nuclear weapon. That

was cold comfort for anyone looking for any help on affordability right now.

MOORE: It certainly makes the world a lot safer place and that, you know, the fact that they can't blow up cities and so on is and Trump has said,

and this is for people to decide themselves, you know, do you think the short term -- the long-term gain of having -- taking away the nuclear

weapons of these crazy people in Iran is worth, you know, paying more for gasoline now, I mean, people will make up their own minds about that.

But, you know, look, he is in China right now. The President meeting with President Xi in Beijing and one of the things on the agenda is to try to

get China. You know, China is more reliant on Middle East oil than the United States is.

So, you know, he is going to need some international cooperation. But I will say this, the one thing that is really important is that trump has a

an energy policy that is basically drill, baby drill, produces much energy here at home as we can, thank God, or we would probably be paying about

$8.00 a barrel -- a gallon of gas if we had a kind of Joe Biden net zero policy of trying to shut down American oil and gas.

We are now the single biggest producer of oil and gas in the world and that has inoculated us somewhat from these high costs in the Middle East.

NEWTON: well, some argue that if, you know, we did what China did and in fact, had a lot more renewable energy that might insulate us as well the

way China has insulated itself, at least for a matter of months.

Stephen Moore, we have to leave it there but please come back as we continue to watch Kevin Warsh in his new role. Appreciate it.

MOORE: Thank you for having me. Take care.

NEWTON: Now, U.S. President Trump, as we were just mentioning, is set to meet China's leader, Xi Jinping in just a few hours from now. He was

welcome to Beijing by Chinese dignitaries as well as a military band and hundreds of children, enthusiastic children. You see them there.

Trump arrived with a slew of administration officials as well. He is also bringing along more than a dozen business leaders, including Elon Musk,

Apple's Tim Cook and some of the top names in banking and finance.

Kristen Holmes is in Beijing for us.

Good to have you there on the ground. That was quite a welcome. We have a day of work ahead, though, here. In terms of the economy, President Trump

came to do business with China, and that might come as a bit of a surprise to Americans who heard him on the campaign trail and afterwards say that

basically they were in economic competition with China and China continues to take advantage of the United States.

KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, that's absolutely right. But President Trump wants to come out of this with some

wins and when it comes to wins, the one thing that they believe, they, being the administration that they can get out of this is some business

deals.

You saw the fact that he is traveling with this delegation of some of the highest ranking CEOs in the United States. He actually traveled on the

plane with two of them in the tech industry, Elon Musk and Jensen Huang. These are people who he is hoping can secure deals for investments in the

United States, private sector deals that are going to get money eventually into the United States.

There is also going to be conversations and hopefully some outcome in terms of deals with China, purchasing goods from the U.S. One of the things that

the administration is focused on is agriculture, in particular, those soybeans. The other thing that we are expecting is certainly conversation

and possibly some deals around commercial jets and jetliners.

We know that the CEO of Boeing is expected to be there at one point. I mean, one of the things to keep in mind with this trip as a whole, Scott

Bessent, the Secretary of Treasury, he has really been the one behind-the- scenes who has been preparing for this trip, meeting with his counterparts, having conversations with his counterparts, really prepping the groundwork

for this trip, which shows you the direction that President Trump wants it to go in.

Now, of course, there are a number of questions as to what can actually be achieved, particularly given the fact that this Iran War is serving as kind

of a blanket over the entire trip and there are going to need to be extensive conversations between President Trump and President Xi about Iran

and what is going to happen moving forward.

[16:10:09]

So when they get to the business deals and who has the leverage in those deals, that is going to be one of these outstanding questions. There are a

number of analysts who say that President Trump is in a severely weaker position now than he was back in October, when he met with Xi, and that is

likely to be something the President and the administration were aware of.

Remember, they actually pushed this trip six weeks down the road, hoping that the Iran War would be over by then. But obviously, we are still very

much embroiled in this war. We have President Trump now frustrated considering combat missions going back into Iran for strikes and military

operations. So it is nowhere near over, and it is certainly going to loom large over this meeting.

NEWTON: Yes, and as you have reminded us, the Defense Secretary, Pete Hegseth, on this trip with him, which is an extraordinary thing in and of

itself.

Kristen Holmes, we look forward to your reporting in the coming hours. Appreciate it.

Now, the leaders of the world's two largest economies, as we were saying, are meeting as the war in Iran unleashes one of the largest energy shocks

in history.

CNN's Matthew Chance has just entered Iran and we would like to note, CNN operates there only with the permission of the Iranian government, as

required under local regulations, but maintains full editorial control over what it reports. Listen.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CHIEF GLOBAL AFFAIRS CORRESPONDENT: Well, we are on a long drive towards the Iranian capital, but we've had to stop because we

have come to a bridge that was struck by a U.S. or an Israeli airstrike during the recent bombing campaign.

You can see a whole section of it has fallen into the river and if you look around over here, all the cars and trucks have had to go around on this

detour. When you consider all the other roads and bridges that have been hit, it has added hours to the journey time.

Well, before we arrived in Iran, some Iranians told us, don't go in. It is too dangerous. The war could resume at any time, especially amid growing

tensions over the closure of the Strait of Hormuz and the failure of the U.S. and Iran to reach a compromise over nuclear activities.

But with President Trump on that state visit to China, both the U.S. and Iran seem to be looking to Beijing as a possible way out of their deadlock.

Well, China is Iran's major trading partner. China buys most of Iranian oil, has a shared interest with Washington in getting the energy supplies

unblocked.

Meanwhile, here in Iran, we are glimpsing how the country is being shaped by the conflict and the pressure it is under from crowds of Iranians at the

border we have just been to hauling cooking oil across from Turkey, where it is much cheaper, an acute cost of living crisis, remember, sparked

nationwide protests late last year that ended in horrific violence.

To the words of one Iranian father who told me that what he called Trump's war had silenced people and made the Iranian government stronger. In his

words, at least for now.

Matthew Chance, CNN, on the long road to Tehran.

(END VIDEOTAPE)

NEWTON: Now, a Chinese oil tanker did successfully cross the Strait of Hormuz today as President Trump's Beijing visit kicks off Multiple vessels

from China, in fact, have passed since the war began. Virtually all European tanker ships, on the other hand, remain very much stuck.

Germany's Hapag-Lloyd is one of the European shippers, with boats stuck in the strait. CNN's Anna Cooban spoke to its chief executive after the

company released its earnings.

Anna joins us now live.

I can only imagine, he is really at the sharp end here with this whole closure going on much longer than anyone expected.

ANNA COOBAN, CNN BUSINESS AND ECONOMICS REPORTER: Yes, well, Rolf Habben Jansen, the CEO was telling me earlier that per week, the extra cost that

this company is incurring is up to $60 million and that's because of more expensive fuel, but also all of the additional costs tied to fuel.

So all the trucks, the railroads they are now using across these so-called land corridors, that's really racking up these expenses and he is expecting

to be hiking freight rates over the next few months.

We will hand over to him to explain more about how this crisis is impacting his business.

(BEGIN VIDEO CLIP)

ROLF HABBEN JANSEN, CEO, HAPAG-LLOYD: Well, if you look at our results at face value, I think they are a bit unsatisfactory. We had hoped for a bit

better results, but if you look a bit deeper, then it is understandable why it happened.

I think we were hit quite significantly by bad weather, especially in the beginning of the quarter. That cost us a lot of volume and cost us quite a

lot of additional cost. That hurts us more than others because we have a very big exposure to the European ports and also to the transatlantic.

On top of that, we saw, of course, since the beginning of March, the war in the Middle East. That definitely caused quite a bit of extra cost.

In the month of March, we would normally recover that, but of course, before that gets invoiced to our customers, that takes a little longer. So

that is, I think why all in all, not a great set of results. But we know what the root causes are, why we are not happy and I also expect it to be

better in Q2.

[16:15:07 ]

COOBAN: We are now around two-and-a-half months into this war. How have you changed your operations to respond to all of that?

JANSEN: I think this crisis is a little different than some of the other ones that we've had because it is a fairly isolated crisis geographically,

because it is the Persian Gulf and everything outside of the Persian Gulf runs more or less as normal.

So we've tried to isolate the problem, if you want, and to make sure that whatever we do to keep the rest of the network running as normal and I

think we've done a good job on that.

What is a bit special, though, about this crisis is that, the cost that go up mainly because of the lack of fuel availability or because of what

happens to the oil price affects everyone around the globe. So whilst it is a fairly isolated geographical conflict, which operationally is actually

not that difficult to manage, the effect of it is global because the fuel price went up so much.

COOBAN: And can you tell me about what you're foreseeing, perhaps longer term? This crisis has really exposed the vulnerability of certain shipping

routes. Let's say the Strait of Hormuz gets reopened tomorrow, will your operations -- how long will it take for them to get back to normal? And

will it ever be the way it was before?

JANSEN: I think we've seen also in COVID and in other crises that as soon as some of these bottlenecks disappear, things go back to normal quite

quickly and people always talk about now it is going to be different forever. But normally that's not the case because goods will try to follow

the routes that are the most cost efficient.

So I expect that when the Strait opens up again, the services that we used to have in the past are going to be back. Before those will be fully normal

again, it will likely take three months or so.

COOBAN: And can you tell me about the ships that you have currently in the Gulf? How are the people on board those ships? How many have actually been

able to get out? Tell me about that situation.

JANSEN: Yes, initially, when it happened, we had six ships stuck in the Gulf. At the moment, we still have four.

COOBAN: So that's at least a little bit less. The ships do have enough supplies. We can also supply them. We can also bring them fresh water. We

can bring them fuel.

We have also been able to exchange some of the crews. So the situation is not great. But it is at least fairly stable for now and hopefully things

will open up soon. But as you and I both know, that is very uncertain at the moment.

(END VIDEOTAPE)

COOBAN: So you've heard it from him, Paula. He thinks that once this conflict ends, it is going to be a relatively quick unwinding of all of the

backlog of vessels. However, the key here, Paula, is that we don't yet know when this is going to end.

NEWTON: Absolutely not, and as you said, that is quite a question and even with everyone with their eyes on China right now and the visit by President

Trump, there is still no guarantee that the Strait will be open in the next few days or even weeks.

Anna Cooban, grateful to you for doing that interview. Appreciate it.

Now, Fervo Energy has made its market debut. Its chief executive is at the NASDAQ to mark the occasion. He will join us live, next.

(COMMERCIAL BREAK)

[16:20:52]

NEWTON: Fervo Energy ringing the opening bell today at the NASDAQ. The renewable energy company was there to celebrate its IPO.

Its shares popped more than 35 percent on the very first day of trading. They were offered at $27.00 a share. The company says it raised nearly $1.9

billion through the IPO.

Fervo specializes in geothermal energy production. It is going public at a time, a booming demand for electricity, driven in part by new A.I. data

centers.

Fervo Energy CEO, Tim Latimer joins us now.

Congratulations on the IPO. You certainly have a right to be excited. That was quite a successful one. Can we start first, though, with your

technology proposition? What is it? How does it work and why do you believe it will transform energy production in sectors that need this kind of

energy at this time?

TIM LATIMER, CEO, FERVO ENERGY: Thank you and thanks for having me, and it certainly has been an exciting day. And, you know, just to start to lay the

foundation of what geothermal is, you know, it is a way to generate electricity that's 24/7 and carbon free. It has been around for a hundred

years. And it involves drilling wells into the Earth where the rocks are hot and then producing steam from that to generate electricity at the

surface. So it is a really unique way of making energy.

And even though it has been around for a long time, it has been limited to very niche locations. Think Iceland or New Zealand, places that are famous

for their volcanic activity and even though it has what everybody needs right now, 24/7 carbon free electricity, it has failed to really grow as a

sector for the last few decades because it is so limited to that unique geology.

And what Fervo has done is pioneered new methods of deep drilling. So, we drill our wells down, miles down into the Earth, and then turn horizontally

and drill miles horizontally as well, which allows us access way more hot rock and we do it at a much lower cost than what has been done in

traditional geothermal, in part because we are building on major drilling advancements that we've adapted from the oil and gas industry.

And so what that means is we can develop geothermal in places that people used to think weren't possible. And so we are growing this sector

exponentially now and doing so at a time when there is a huge demand for new electricity, driven in part by the growth of A.I.

NEWTON: I do want to talk to you a little bit here about proof of concept. I know that it is there, but do you believe it could still be cost

effective in the long run? I mean, the drilling, as you just explained, is still quite intensive, even though this is certainly innovative technology

and you've already had to buy up a lot of land to do this as well.

LATIMER: Yes. Great questions. And yes, we absolutely believe this is a cost effective technology, as do our customers who are on the other side of

those contracts and are very excited to be buying electricity from us.

You know, to give you some stats, when we drilled our first horizontal well four years ago, we were just very excited to get it done. No one had ever

drilled a horizontal well in these conditions before, in the hard rock, high temperature conditions that you find in geothermal reservoir. So we

were just excited to get it done.

But it was just the very beginning of our cost curve. We are drilling so much faster now. In the last three years, we've developed new innovations.

That means we are drilling our wells at reduced the drilling times by 75 percent, and the cost of drilling by 75 percent since we started drilling

our first wells just a few years ago.

So, you know, right now, it is a fascinating time because almost every other energy resource is getting more expensive because there are all of

these inflationary pressures and supply chain challenges. We are going in the opposite direction because the pace of our drilling improvements is so

fast that the costs keep coming down.

NEWTON: And I hear you on that. But in terms of when you're at scale, so let's say in the next year or two, what other modes of energy are you

competing with here? Like where are you cost competitive given what we just witnessed there in terms of CapEx is pretty high.

LATIMER: Yes, we are cost competitive with everything out there right now. I mean, it is a unique time in the power sector where we are being asked,

our sector is being asked to grow for the first time in almost a generation, and so we are going to need all of these resources and

geothermal stacks up against any of them.

You know, right now, as I mentioned, we've got great customers across Southern California -- Edison, Google -- so we are tapping into both

utilities and hyper scalers, and they are finding a price that they really like and it is because not only do we have certainty around this, but we

also have speed, which is very important today.

And we produce a unique product that's 24/7 reliable and doesn't have fuel costs. So those are all things that are very differentiated compared to

really anything else you're going to find in the energy sector.

[16:25:11]

And as a result, its very cost effective and we have no trouble finding customers who are very eager for this power.

NEWTON: So, Tim, to make a fine point of this, though, you've been at this for a while, clean tech investment has been a trend for a while, but how

can this sector entice more venture capital? Because there is plenty of competition right now for investment in energy of all kinds, period,

whether it is clean, dirty or otherwise. And do you have support from the Trump administration?

LATIMER: It is a great question. And, you know, getting the clean tech sector off and driving new innovation has been a passion of mine for a long

time. We've been happy to be supported by some fantastic groups who are leaders in this space, whether its organizations like activate that promote

this kind of clean energy technology from the very first beginning of innovation and new trials to folks like breakthrough energy ventures and

what they are seeing now is Fervo is one of the examples as more and more of these companies realize exits and get to the point where they have IPOs

and public offerings and there is more liquidity in the system. These winds are going to cycle back in a virtuous cycle that brings more capital into

the sector.

And I think we are all very excited about that and I am just very proud that our team at Fervo is one of the pioneers that is showing this is an

asset class that can that can really make a great return for venture.

NEWTON: Okay, Tim Latimer, we will leave it there and continue to check in with the sector. Appreciate it.

LATIMER: Thank you.

NEWTON: Now, for some time now, a shadowy network of Chinese oil refineries has been working to pump billions of dollars into the Iranian economy,

despite massive sanctions imposed by the U.S. government.

That system is now coming into the spotlight as President Trump visits Beijing.

Simone McCarthy traveled to Hebei Province in Central China to find out more.

SIMONE MCCARTHY, SENIOR CHINA REPORTER (voice over): As we drove to this oil facility three hours south of Beijing, it was soon clear we weren't

welcome.

UNIDENTIFIED MALE: These guys are just trying to block the camera basically.

MCCARTHY (voice over): A black van pulled up, blocking our view of one of the many refineries dotting China's coast.

MCCARTHY (on camera): Security here is really tight. This is a facility which is sanctioned by the U.S. government for allegedly importing Iranian

oil.

MCCARTHY (voice over): Iran sends most of its oil to China. That trade is in the spotlight ahead of President Trump's arrival in Beijing this week

with the U.S.-Iran ceasefire under strain. The day before Trump departed for China, Washington blacklisted a dozen people and entities it says are

linked to the trade of oil from Iran to China.

Five Chinese oil refineries and multiple port terminals have been sanctioned by the U.S. since last year for allegedly importing Iranian oil.

The company we visited, Hebei Xinhai, was sanctioned last May. It declined CNN's request to be interviewed.

It was hard to tell what kind of oil the plant was processing, but sanctions clearly hadn't shut it down. The U.S. has been increasingly

imposing sanctions on Chinese entities it believes are involved in the trade of oil from Iran.

SCOTT BESSENT, U.S. TREASURY SECRETARY: They are the largest state sponsor of terrorism, and China has been financing them with their energy

purchases.

MCCARTHY (voice over): For its part, China doesn't acknowledge importing Iranian oil. It also rejects U.S. sanctions and has been pushing back.

Earlier this month, Beijing ordered companies not to comply with sanctions on refineries.

MCCARTHY (on camera): Multiple ports south of me here, as well as across the ocean this direction, are believed to have continued to import Iranian

oil throughout the course of the war.

MCCARTHY (voice over): This oil is carried by a network of vessels, including those known as the Shadow Fleet. The oil is loaded in Iran and

shipped out, often to a floating gas station off the coast of Malaysia, where dozens of boats loiter with their tracking devices turned off,

trading sanctioned oil and ferrying it to buyers, like those in China. CNN pinpointed one such transfer, where the Iranian-flagged vessel Herby

transferred oil to a China-bound tanker just last month.

Weeks later, the Herby was intercepted by the U.S. Navy on its way back to Iran. Once those ship-to-ship transfers are complete, ships heading for

China blend in with thousands of other vessels, regularly transiting through these waters.

For the U.S., that's a major problem. But for China, this oil flow is powering its economy and keeping a close partner afloat.

Simone McCarthy, CNN, Hebei Province, China.

(END VIDEOTAPE)

NEWTON: Coming up for us, the British Royal family is out in force today. King Charles laid out the U.K. government's priorities as part of the

King's Speech, and Catherine, the Princess of Wales, is in Italy on her first trip abroad since her cancer diagnosis.

We will discuss what was said next.

(COMMERCIAL BREAK)

[16:30:00]

NEWTON: Jamie Dimon is coming to Keir Starmer's defense. The JPMorgan CEO told Bloomberg he believes the British prime minister is a very smart guy

and dealing with a difficult set of circumstances at the moment. Mr. Starmer is facing pressure to resign from his cabinet and lawmakers. Dimon

was asked if he would reconsider his bank's new mega office in London as a result of the political turmoil.

(BEGIN VIDEO CLIP)

JAMIE DIMON, CEO, JPMORGAN CHASE: Shock, political instability. But if they become hostile to banks again, yes. I mean, I've always objected to the

fact, you know, we didn't damage the U.K. in any way, and we paid probably $10 billion of extra taxes by now. I don't think that's right or fair. If

that happens too much, we will reconsider.

(END VIDEO CLIP)

NEWTON: In parliament, meantime, King Charles began the new session with the traditional King's Speech. The event included plenty of pomp and

circumstance, including the delivery of the crown and the door being shut in the face of the Black Rod official. During the speech, King Charles laid

out the government's priorities he says the country is under threat.

(BEGIN VIDEO CLIP)

KING CHARLES, UNITED KINGDOM: An increasingly dangerous and volatile world threatens the United Kingdom. With the conflict in the Middle East only the

most recent example. Every element of the nation's energy, defense and economic security will be tested.

(END VIDEO CLIP)

NEWTON: Now, where do we find Max Foster? Not at Westminster. He's in Italy, where Catherine, the Princess of Wales, is taking her first foreign

trip since her cancer treatment.

Max, good to see you and have you there. I am wondering now how the monarchy handles this very fraught time in Britain. I don't have to remind

you, it's both political and economic, and the kingdom seems to need some stabilizing at this hour. And some of the PR that the princess is giving

the monarchy there and the country itself, that couldn't hurt either, right?

[16:35:00]

MAX FOSTER, CNN ROYAL CORRESPONDENT: No, I mean, actually, you know, whatever you think of the monarchy, what it can be used for is when the

government is complete disarray and there's chaos in Westminster, then you have this level of stability that rises above it, which, you know, most

people around the world relate to, probably more, so they see the stability of the monarchy. So you see the princess operating here on a foreign trip,

a first one since a cancer diagnosis. So she's, you know, on the way to recovery. And that continues.

And you have the king appearing in parliament. I mean, I do think that was potentially sensitive for the king, what's interesting about these

occasions when, you know, once a year, there are three parts of parliament. You've got the House of Commons, House of Lords and the monarch, which are

the three parts of parliament all coming together. And the king reads a speech written by the government.

But who knew -- you know, he didn't know what sort of speech he would be getting because it was in such disarray. And, you know, it puts him in a

difficult position if he's potentially reading something that's deeply political, just designed to save the prime minister. That wasn't the case

in the end. But I think ultimately the king showed himself as a symbol of constancy under this, you know, underbelly of utter chaos.

NEWTON: And the Princess of Wales, I was riveted by the pictures today. She certainly looked radiant. And she was so warmly greeted.

FOSTER: Yes. So this was an extraordinary scene earlier on. Thousands of people in here. Not often you have a princess coming to town. And they were

very excited to see her, but they were more excited, I have to say, Paula, you may know about this with your Italian roots, but the approach to

education from this city, which emerged after the Second World War, has been adopted across Italy.

So it's early learning. And it's not about telling children what they should know. It's about letting them explore it so they'll take them

outside. They give them objects and they can create crafts around them for this very early, you know, first few years. And the princess's view,

really, having studied many issues in the U.K. is that it all comes down to early learning when the brain is being formed.

So she came here as her first overseas trip, trying to balance her recovery, to show that she cares about this, but also to learn about it

because she effectively wants to create a global movement., I'm told, out of this interest and linking up projects like this. And actually through

her illness, she went through such a traumatic experience. She wants to focus very sharply on this. She's going to have to balance it, though. The

palace, that can be difficult. But I was told she had a great day today, so I think everyone seemed to enjoy it.

NEWTON: Well, it is certainly a worthy cause and it is heartening to see those Italian communities, a lot of them. It is a community effort to get

the kids educated in this way, and they are extraordinary programs.

Max, I'm going to let you off the hook. We don't have a lot of time, so I'm not going to ask you where that blue pantsuit came from. We'll leave it

there for now.

Shares in Swarmer, a company providing Ukraine with drones, fell sharply after it reported its earnings. The stock closed more than 15 percent

lower. Swarmer reported about $20,000 in revenue for the first quarter. But the key here is that the company posted a net loss of about $4 million.

Swarmer says the results are due to a drop in revenue from its largest customer, Ukraine.

Alex Fink is the president and U.S. CEO of Swarmer, and he joins us now from Austin, Texas.

Thanks so much for being with us because what we're really looking for here is a reality check on drone development. Can you help us out? Not just with

the tech developments, but so many changes in the technology and how it's being applied on the battlefield. And I'm sure that is part of the

adversity your company is dealing with.

ALEX FINK, PRESIDENT AND U.S. CEO, SWARMER: Yes. Thank you. It's great to be here. So yes, there are constant changes on the battlefield. Every few

months the tactics change. And sometimes products that are in favor go out of favor a few months later. And we as a software company can adapt.

Hardware companies probably have a harder time. But as a software company, what we did last year is we saw that products that were popular early on in

the war in 2024, 2025 are not growing categories anymore, whereas the market seems to be shifting to smaller attritable drones to smaller fixed-

wings, one-way drones, to interceptors. And so we've pivoted towards that.

That's why you're seeing a transition in our revenues, where in the few previous quarters, the revenues themselves were going down. But the amount

we have under contract and under MOU went up to $16.3 million under contract, $16.8 million under MOU. And just today, we announced a new deal

with $2.86 million guaranteed and an additional $10.4 million option that we expect to realize shortly.

So we think that this transition to the more popular categories is beneficial. There is much more upside there. But obviously, there were a

few months that don't look good on paper because of the lag between what we do and when it appears in the revenues.

NEWTON: Some of these pivots, though, must be jarring.

[16:40:01]

Can you give us some insight into what's causing it? I mean, it is the development of what's going on in the battlefield in places like Ukraine,

but also A.I. must help it in some ways, but also change the trajectory of what a company like yours has to do.

FINK: Yes. So we are seeing very fast transitions on both sides and both sides of that conflict are adjusting to each other. So certain types of

larger drones that operated at night, that's what we started from. They were becoming less and less effective on the battlefield. And so we saw the

quantities that manufacturers are making were essentially not growing. In some cases, it was even diminishing.

So for us to continue to pour our integration resources into working with those products didn't make much sense. It made much more sense to make a

bet on smaller attritable drones. Ukraine alone made more than four million of these last year. Right?

NEWTON: Wow.

FINK: And we would like our software to be on every single one potentially. Right? And other categories that are growing. So, yes, it is a jarring

transition. And we decided to go all in. And instead of maintaining multiple product lines, just bet on the ones that are growing. But that

means that we did have revenues and things under contract actually go in opposite directions for a while.

NEWTON: But I --

FINK: So as we were building our product, our sales backlog, the old products were winding down.

NEWTON: But I hear you, you're really looking at this as a long time trend. And I saw your quote in the press that you really want to be the Microsoft

of this drone software. But I have to ask you, I was able to witness some counter drone technology within a Defense Department recently, and I am

wondering when we have seen even the trajectory of the war in Ukraine changed so rapidly just with a few drones in the air, I mean, even from a

software perspective, how challenging will this be in the next year for us to really understand where this technology is going?

FINK: I don't think anyone knows what the end state of this technology is. So if we're using the Microsoft analogy, which you brought up, this is

1980. You don't know what the PC is going to look like, but it's becoming pretty obvious that the PCs are the place to be. It's the same thing with

drones. Counter-drone technology is also drone technology. It's just hitting targets that are moving in 3D space really fast.

But it is still a drone typically. And if the enemy is using a swarm of drones, the only way to shoot it down is a swarm of drones, which is why

we're making the bet on the software, the A.I., the teaming, the swarming, and software allows us to pivot relatively quickly with hardware design

cycles are sometimes three or four years. They wouldn't be able to pivot in three months. We could.

NEWTON: Alex Fink, really good to speak with you. I learned a lot in just a few minutes. I'm sure our audience did as well. Thanks so much.

FINK: Thank you.

NEWTON: Now, the S&P 500 and Nasdaq finished at fresh record highs. Hard to believe, isn't it? The S&P 500 gained nearly 0.6 percent and the Nasdaq up

1.2 percent. The Dow edged, though, about a 10th of a percent lower.

That is QUEST MEANS BUSINESS for us. Up next, "MARKETPLACE ASIA."

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