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Quest Means Business

Chip Stocks Fall Around The Globe; U.N. Agency To Evacuate Sailors Stranded In Persian Gulf; U.S. Senate Votes To Limit Trump's Iran War Powers; Trump Explores Ways To Give Public A Stake In A.I. Firms; A.I. Firms Pour Millions Into New York Democratic Primary. Aired 4-5p ET

Aired June 23, 2026 - 16:00   ET

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

[16:00:14]

PAULA NEWTON, CNN INTERNATIONAL HOST: You know, the Dow really doesn't tell us what kind of a market day it has been. It basically got off scot-free,

essentially flat. But look at the NASDAQ, down better than two percent and much better than the way it started. Those are the markets and these are

the main events.

After months at sea, the U.N. is setting out a plan to get stranded ships out of the Persian Gulf. We will speak to the official leading that charge.

Chip stocks are tumbling once again as fears of an A.I. bubble go global.

And a heat wave in Europe shattering temperature records and disrupting daily life.

Live from New York, it is Tuesday, June 23rd. I am Paula Newton, in for Richard Quest and this is QUEST MEANS BUSINESS.

So chip stocks took a beating on Wall Street, Tuesday. Micron, NVIDIA and Intel all fell sharply. It helped drag the NASDAQ down about two percent.

The selloff started on Monday as SpaceX fell 16 percent. Now it recovered in today's session. You will see it there.

Still, the fallout bled into Korean stocks on Tuesday. SK Hynix fell 12 percent, and now investors are wondering if this marks a turning point in

the A.I. rally.

Anna Stewart is with us. We wouldn't expect you to know the definitive answer to that. But the trading today definitely left many, many people

queasy. Right?

I mean, what's behind the market volatility and given that at one point today, stocks like SpaceX, right, that could do no wrong actually fell

briefly below the IPO price.

ANNA STEWART, CNN REPORTER: I know and that's the brand new shiny exciting stock on the market, SpaceX, and it lost around $600 billion over three

trading sessions if we count the end of last week as well. That's quite a lot.

Elon Musk still a trillionaire. Don't worry about him, Paula, he is fine. He is still the wealthiest man in the world, but you know when we look at

sort of what this market is about, you have triggers and I think SpaceX is actually probably a trigger for the broader selloff, really yesterday,

announcing a massive bond sale trying to raise I think it is $20 billion, having just raised $86 billion in an IPO.

Some investors may be concerned here about cash burn. How much money is SpaceX and other A.I. companies trying to get through? How much will they

actually see in return?

And this gets to the heart of the issue underlying all of these little stories we see when it comes to A.I. valuations, is there a bubble? Isn't

there a bubble? Is it frothy? Isn't it frothy?

And honestly, it is quite fun looking at different analysts' notes, people are really divided on this. Yes. Price to earnings value sort of ratios are

very high, 40 times, if you look at NVIDIA versus traditional American stocks being around 15 to 20. But the potential for a company like NVIDIA

in terms of you're looking forward in terms of how much profit it can make out of the A.I. boom is potentially huge.

So, we go in circles around this, but SpaceX had a trigger this week. And we also have to look, of course, to last week when we had that new

signaling from the Federal Reserve, potentially we will see interest rates going higher sooner than maybe some people expected.

And again, that's that moment where investors start to question these valuations. Do they want to be in that asset? Do they want to go into

something else.

So a few things at play, it certainly has been an exciting first week back, I think, Paula.

NEWTON: And welcome back, Anna. You have been missed. And yes you have come at a very volatile, but exciting time for the markets. Anna Stewart, we

will be seeing more of you. Thanks so much.

Now, Gerry Fowler is the Managing Director of European Equity Strategy at UBS and he joins us now.

We want you to get in here. I point out that about two months ago, you thought the A.I. trade may be on the verge of a bubble. So what are your

thoughts now, especially given that A.I. related stocks are now, we have to say at only a few percentage points, some of them, after hitting all-time

highs.

GERRY FOWLER, MANAGING DIRECTOR, EUROPEAN EQUITY STRATEGY AT UBS: Yes, it is really an incredible run. But there are two things driving it. One is

the fundamental story, which is incredible and drives consistent earnings upgrades for many of the companies in the A.I. CapEx supply chain around

the world.

But the other is also the speculative mania that is associated with that, fueled by excess liquidity that still exists in the market. So, you can see

that in leveraged ETFs, which have become very popular, even down to single stocks, you can see it on 20 percent of the S&P 500 stocks that now have

call options that are more expensive than put options, that's rather rare, but basically suggests that investors are suggesting there are a lot of

upside, and we can see margin debt exploding as well, just to name a few of the things that make us worry a little bit about the mania and the

volatility that that creates.

NEWTON: The worry is largely warranted, and yet some analysts believe this is still, in fact, healthy for the tech market itself, right?

[16:05:10]

A bit of cleansing and it will propel higher. What's your take?

FOWLER: Yes, correct. I mean with a lot of volatility it does deter people using excess leverage. It squeezes out some of that leverage. We saw that a

couple of weeks ago. We've seen that in the last few months really. I mean it was only about a month ago that the KOSPI, which has a couple of the big

memory makers in it, fell 10 percent each of two days and then rallied back 10 percent on the third day, really fueled by some of the forced trading

that happens because of leveraged ETFs and other, you know, technicalities within the market structure.

So you can squeeze out some of that leverage and potentially create better opportunities for those that truly believe the fundamental story. The

fundamental story is very much driven by constant upgrades by those hyperscalers of what they intend to spend on building data centers, their

CapEx estimates. So as long as those CapEx estimates continue to not just show strong growth, but actually that the growth is being revised to ever

faster numbers, then the fundamentals will support ongoing buy the dip activity from investors.

But we are potentially getting to the point where there are some risks to the ability of those hyperscalers to continue accelerating expectations of

their CapEx spending.

NEWTON: But I think that is what is top of mind for so many investors, right? They are wondering, do you buy the dip here? Is there still upside

to be had? Is it a buying opportunity when you see days like this?

FOWLER: Yes, we do. I mean after one day not necessarily because one day can clean out some of the one-day leverage. You know, you get some

leveraged ETF trading and some call options and some margin debt that gets called, but that then can cascade, as we saw in March, into more aggressive

quantitative selling from other investors.

So there are CTA investors who will sell into negative momentum. There are risk control investors who will sell if volatility spikes. So there may be

ongoing flow, again, completely non-fundamentally driven flow that can exacerbate moves beyond just the first day into several days.

So it gets a little bit tricky to actually call a specific buy the dip moment. But at the moment, these themes, these A.I. themes, whether it is

memory or other parts, which is obviously being most impacted today, and other parts of the A.I. CapEx spending, beneficiary supply chain, you know,

there is still positive earnings revisions.

So even though they are expensive and crowded, which creates these vulnerabilities for volatility and reversals, the fundamentals are still in

place for them to rebound and grow. And we can we can talk about the fundamentals and what might cause an end to that. But certainly at the

moment the volatility we are seeing is very much a feature of market structure relating to the mania that we are in and the excess liquidity

that that the U.S. policy has created.

NEWTON: And Gerry, I don't have a lot of time left, but I do want to ask you because you said in January that this is why the next phase of A.I.-

driven returns could be less about the often expensive and crowded beneficiaries of A.I. I am quoting you here, A.I. spending and more about

the often cheaper and less well-owned companies. I mean, a lot of that has to do with productivity. What do you think?

FOWLER: Yes, absolutely. So we have been expecting that productivity will start to come through in various areas, particularly those companies with

lots of data, lots of processes, lots of customers. So we've been thinking things like banks, food retailers, transportation companies. What is really

doing very well today, particularly with the volatility are quite defensive companies, but in particular healthcare and the GLP-1 theme, which has been

really poorly performing for a while, but we are starting to see both more investor interest and for good reason.

It is because those companies have been very weak on their fundamentals, but are really starting to improve. So, a lot of investors want to start to

trim their CapEx-related exposure, transition into other things, which includes things, you know, sensitive to the U.S. acceleration in healthcare

and that is what is causing this volatility, it is a little bit of rotation to other things that aren't just the A.I. thing.

NEWTON: Right. Gotcha! Gerry Fowler for us thanks so much. Appreciate it.

Now thousands of stranded seafarers are now set to be evacuated after months stuck in the Persian Gulf. The International Maritime Organization

says it has gotten necessary safety guarantees, and this is crucial, to try and begin this massive operation. It says 11,000 seafarers are currently

stranded and it will conduct evacuations in cooperation with the United States, Iran and Oman restoring safe shipping. I don't have to remind you,

it will be a difficult task.

Hundreds of ships are still stuck in the region, and many no longer ready to sail after months of anchor. Arsenio Dominguez is the Secretary General

of the International Maritime Organization, and he joins us now.

Good to have you on the program.

As we try and figure out this next phase, so you can tell us what has been agreed to, what does this operation look like, and how long do you believe

it will take?

ARSENIO DOMINGUEZ, SECRETARY GENERAL, INTERNATIONAL MARITIME ORGANIZATION: So the traffic separation scheme established by IMO back in 1968, we know

that right now is not safe to be used.

[16:10:10]

Iran issued some information regarding navigation north of the Strait of Hormuz, so we have been working particularly with Oman, in order to use

this corridor in the south part of the Strait of Hormuz, and this is focusing on evacuating these 11,000 seafarers in over 500 vessels.

I just got confirmation that following the announcement of this route, which we know that is safe and this is paramount for any activity in the

region, the first ship is already crossing, and of course, we will see an increment, a periodic increment of transit using both corridors, because

our first step is of course, to start bringing those vessels into position in order to have safe evacuations, avoiding any collisions.

NEWTON: How long do you think it will take to get all of these stranded ships out?

DOMINGUEZ: So we are talking about over 500 vessels. We've seen since of the weekend that there is an increase of around 30 vessels have been

transiting every day. We will then start increasing those numbers using this corridor from Oman. So we expect that in the next few weeks, we

actually will be able to at least evacuate those seafarers that innocently have been affected by this conflict.

And in the meantime, also continue the conversations to start resuming the operations and ships traveling into the Persian Gulf.

NEWTON: Yes, that is also crucial to this operation for many reasons in terms of getting those supply chains going. We talked about some of the

challenges you're facing. What do you regard as the most difficult part of the operation? And I want to go back to something that you stated, right,

the traditional route that you call the TSS, it is the Traffic Separation Scheme you say is not safe because Iran, in fact, has mined much of that

route.

Tell us how this alternate route that you explain that is both north and south, how will it work? And crucially, here, you know, Iran announced

Friday that it is going to force companies to register with the country to clear the Strait. Is that still true? Will there be tolls?

DOMINGUEZ: So the Traffic Separation Scheme, as you mentioned, was established by IMO in 1968, and it has been operated ever since, conjointly

by Oman and Iran.

What we know right now, and this was also stated in the MOU, was that there are mines in this region, in this Traffic Separation Scheme, and there is a

commitment to de-mine it.

Now, in the meantime, we need to start using alternative routes. By that, we already went through the geographic coordinates with Oman in order to

safeguard this route and start evacuating the vessels. Equally, Iran has already published information for the routes that have been using north of

the Strait. This is closer to the territorial waters of Iran.

Of course, they need to communicate both to Iran and Oman because this needs to be a safe passage. That's the way that it used to be on the TSS in

the past. What we are not going to work on right now is on any issues relating to tolls or fees.

My position has been very clear that it is not in accordance to international law, but what I will do, and we already started some

conversations with the countries in the region is looking for mechanisms like those that we have established in other parts of the world that meet

international law and can provide assistance to the countries in the region, in managing Straits, particularly for aids of navigation, marine

pollution prevention and maritime security.

NEWTON: So you're talking about money being applied, not necessarily for tolls, but Iran will still claim its tolls, even if it is used for ease of

navigation.

DOMINGUEZ: That is what I am saying. If I use one of the examples of the mechanisms that we have in Asia, this is voluntary contributions where it

is very well structured. The IMO plays a part in this, and it is only to provide that assistance when required when it comes to navigations, moving

away from any discussions about tolls and fees, because that is not in accordance to international law.

NEWTON: Okay. Got that.

What other complications do you see here with insurance, maybe cleaning the bottom of the boats, because we know some of them are compromised and

they're not exactly seaworthy the way they should be right now.

DOMINGUEZ: This is where we also start working with the littoral states in the region now that we have a conflict, and they can start providing some

assistance for the vessels that will need the hull to be cleaned in order to actually be seaworthy and start transiting the Strait of Hormuz, and of

course, moving into trade outside the region.

The next step for us as well is all the safe guarantees in providing that the TSS will not have any mines. This will increase the confidence and the

trust with insurance companies. And of course, there is a coalition of the countries that are ready to provide assistance in this respect.

[16:15:10]

All of that in order to build the confidence in working with insurance companies to do the same thing.

NEWTON: In your statement today, you note that this will and I am quoting you, "... end the unacceptable attacks against civilian shipping." And you

note critically that 14 seafarers have lost their lives. We've discussed that there are thousands stranded at this hour. You know what has been lost

here in terms of the safety and integrity of maritime shipping?

DOMINGUEZ: I mean, shipping has been geo-politicized and this is not the first time, it is becoming, unfortunately, a trend in the last few years.

And it has a very negative impact on the innocent seafarers, the people on board that work for all of us, for our benefits. And of course, it has a

negative effect on everybody else because shipping transports over 90 percent of global goods, and of course, that affects the global economy.

Also, one of the biggest challenges that we will be having in the future is attracting the younger generation into this amazing sector. So this is why

I continue to call on countries around the world to also do their part. Whenever there are differences of opinion, of course, not to bring shipping

or not to utilize shipping in this way.

We can be resilient. We can find new routes of operations and avoid conflict areas. But the reality is that those essential goods that need to

be transported for everyone else then would actually get stuck in the countries because we are not able to reach them.

NEWTON: Arsenio Dominguez, we will continue to check in with you as this Strait begins to open in the next few hours, days, and weeks. Grateful for

the interview. Appreciate it.

DOMINGUEZ: Thank you.

NEWTON: Now, the U.S. Senate is adopting a resolution directing President Trump to remove military forces from the conflict with Iran. Now, the vote

was 50 to 48, four Republicans, joining all but one Democrat to limit the President's war powers. It is a significant rebuke to Mr. Trump.

Manu Raju is with me now.

I mean, Manu, just explain why this is important politically, if not operationally though the President doesn't really have to pay any attention

to it if he doesn't want to.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, he can ignore it, but it is a symbolic rebuke and a significant one now that we have both

chambers of the United States Congress, really speaking in one voice, and that voice says that the President cannot escalate this war with Iran. And

if he does, he has to come back to Congress to get explicit approval. In fact, calling essentially ending the war as we know it, unless Congress

said, yes, you can go ahead and wage that war.

But this resolution is not going to force his hand. It is more of a symbolic resolution at that. So you're right, he can absolutely ignore it

if he wants to. But one thing that is pretty clear here is that there is a growing number of Republican members who are concerned about the

President's handling of this war, whether it was the four Republicans who just joined with 46 Democrats to vote to approve this measure, or the

number of Republicans who, frankly, are concerned about this Memorandum of Understanding that was reached between Iran and the United States and worry

that it could embolden Iran and, in their view, would be a worse deal than the so-called JCPOA, the deal that was cut during the Obama administration

and Iran.

Even the Republicans who voted against -- who opposed the Obama nuclear deal and who voted against this resolution just moments ago, are saying

that this deal that the President cut, in their view, could make Iran even stronger.

(BEGIN VIDEO CLIP)

RAJU: Are you concerned about the oil sanctions being eased right now?

SEN. THOM TILLIS (R-NC): Yes, I mean, my gosh, we are back to pre-JCPOA relief on oil sanctions and so I am just saying maybe the President just

got more of a trusting vibe with these folks. I think they are stringing him along.

Look, if all we do is get back to the JCPOA, that would be an absolute catastrophe, in my opinion. In terms of the investment that we've made, I

expect a much higher return than just getting back to where we were with different language.

SEN. MIKE ROUNDS (R-SD): A lot of us have expressed concern that if we take sanctions off of them with regard to simply bringing them to the

negotiating table, that that puts us at a disadvantage long term.

(END VIDEO CLIP)

RAJU: Now, those two Republican senators, Thom Tillis and Mike Rounds, actually, they were not part of those four Republicans who just voted

moments ago with the Democrats to rebuke the President on Iran. Those four Republican senators who just voted yes included two more moderate senators,

Senator Susan Collins of Maine, Lisa Murkowski of Alaska.

Collins, in a difficult reelection race right now, and also more libertarian minded senator, Senator Rand Paul, who frequently opposes

Republicans on the issues of foreign policy interventionism and one senator, Bill Cassidy, someone who the president actually essentially

pushed out of his Senate seat when he endorsed his primary challenger earlier this year. Cassidy has since come back to the Senate and has broken

with the President, including on this key vote.

[16:20:10]

But you're hearing some other voices, those other Republicans you just heard, more hawkish senators that are concerned about the President's deal

with Iran, worried that it may make Iran even stronger at the end of the day and a key thing to watch tomorrow, Paula, is when the President comes

to Capitol Hill, he meets with Senate Republicans behind closed doors. The first time they met in many, many months.

What will the President say about Iran, and how much pushback will he get from GOP senators? That's going to be a key question to watch tomorrow

during what will be a critical day on Capitol Hill.

NEWTON: Yes, and the timing made all the more interesting after this vote. Manu Raju for us. Thanks for that. Wrapping that up. Appreciate it.

Now Europe is sweating it under a suffocating heat dome. Up next, a live report from Paris, which is suffering some of the most extreme

temperatures.

(COMMERCIAL BREAK)

NEWTON: A sweltering heatwave is tightening its grip on Europe. A heat dome is trapped in record high temperatures. Madrid 40 degrees Celsius today,

that's 104 degrees Fahrenheit; Rome 36 degrees Celsius, nearly 97 degrees Fahrenheit; London 34 degrees Celsius, 93 degrees Fahrenheit.

Now, hundreds of schools in the U.K. are either closing or moving to half days. U.K. officials are also warning of severe impacts on energy and

water.

Now, nowhere right now is feeling the heat more than France. It is at the epicenter of the soaring temperatures. France posted its hottest day on

record for this day. The national average hit 29.8 degrees Celsius. That's more than 85 degrees Fahrenheit. The French Prime Minister says that 40

people have drowned in the last six days, all of which are linked to extreme heat.

Melissa Bell is in Paris for us, and I am tempted to ask you a couple of things. One is, how does it feel? How has it felt in terms of how

oppressive it has been?

But also, we mentioned the deaths, and this is one thing that I have reminded myself over in the next few years. It is not just about being

uncomfortable, it is a threat to many people, especially those who are very young or very old.

MELISSA BELL, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right, Paula and it is important to realize that it is a threat here on the European

continent. By the way, the fastest warming on the earth, because we are simply not equipped for these temperatures.

Over the last few years, I feel like we've talked so often together about the heat wave that's come early, that's more intense. This one is the worst

of all.

Even tonight, it is just after 10:00 P.M. here in Paris, and we are dripping in sweat. It has been the hottest day on record, this is the most

severe heat wave that we have had here in France.

[16:25:10]

Amongst the most severe over the course of the last few years, and now it has spread across vast parts of the European continent.

(BEGIN VIDEOTAPE)

BELL (voice over): It is already proving a devastating heat wave, with firefighters battling wildfires in Greece and in France, and temperature

records being shattered across Europe, like in Cognac in Southwestern France, where they rose above 106 degrees on Monday.

It is the second heat wave in Europe in as many months, with schools closing like here in Pithiviers, where all nursery and primary schools will

remain closed for the week according to CNN's affiliate, BFM-T.V.

Trains too have been cancelled and public services across France are under pressure as the heat turns deadly.

Beyond the heat-related deaths, authorities in France say that 40 people have drowned since the extreme heat began last week. In Germany too, people

are doing all they can to stay cool with red heat alerts affecting several parts of the country and even London is bracing for even more heat.

UNIDENTIFIED FEMALE: I find it quite unbearable and I think it is a sign of climate change, and I just think that London is not a city that's meant to

be hot.

UNIDENTIFIED MALE: The weather is really hot, but ultimately it is not good for a lot of people and I think we need to be more aware. It looks like we

are all having fun here, but there are lots of people living in homes which are overheating.

BELL (voice over): The U.K. has also issued a rare heat alert and closed some of its schools.

UNIDENTIFIED FEMALE: I mean, there is only so much that can be done, especially as schools haven't got the funding to, you know, to cover the

cost of adaptation.

UNIDENTIFIED BOY: I do feel a lot more hot, and it is harder to go to the park and have a nice time outside.

BELL (voice over): Few European homes are equipped with air conditioning, making heat waves even more dangerous.

In Paris, parks normally closed in the evening were left open to allow Parisians some respite as Monday into Tuesday proved the hottest night on

record.

Also a better place to watch France's World Cup match against Iraq than stifling apartments.

UNIDENTIFIED FEMALE (through translator): The park also offers some privacy for sleeping, and I think it is quieter, so I think it should stay open

like this all year round for homeless people as well.

UNIDENTIFIED MALE (through translator): And today, I think it is a reality that we can no longer deny, even on an individual level, like when we come

to a park at 11:00 P.M. to find a bit of cool air. The fact is, global warming is very much here.

BELL (voice over): People are being urged to stay out of the sun, to stay cool and to stay hydrated as Europeans brave one of the worst heat waves on

record.

(END VIDEOTAPE)

BELL (on camera): The point, Paula, is that this is not a continent equipped for this kind of heat. You have a 20 percent A.C. rate in homes

across Europe, compared to 90 percent in the U.S. The other difference with this particular heat wave isn't just how extreme the temperatures are, but

the fact that normally the heat wave, it sort of goes up to a peak and then it gets cooler.

This is seen a sort of plateau over the course of the last week, and it just gets hotter and hotter and hotter. We are expecting these temperatures

to continue now into Wednesday and Thursday with some schools remaining closed throughout the week and all across France, Paris, you'll see people

doing what they can to stay cool.

But the weather, the heat is unbearable and we are just not ready to deal with it -- Paula.

NEWTON: Yes, and as you point out, this is not ending in the next 24 hours. It will go on for some time this week.

Melissa Bell, grateful to you. Thanks.

Now, U.S. President Donald Trump is looking into how the publica can share -- the publica -- pardon me -- how the public can share in the profits of

major A.I. companies. The Nobel Prize winning economist, Joseph Stiglitz will join us to discuss next.

(COMMERCIAL BREAK)

[16:32:07]

NEWTON: Tech stocks in the U.S. fell sharply today, with the Nasdaq closing more than 2 percent lower. Now the index is down about 5 percent from its

record close earlier this month. It's important to say that. Shares in the major chip companies have also fallen from record highs.

One analyst says the selloff is not closely tied to fundamentals. Instead, it could simply be investment normalizing after reaching very high levels.

Now, President Trump says he's actually exploring ways to give the public a stake in A.I. companies. Trump has suggested the government could take an

equity stake in those major firms. So that's putting him in the same camp, get this, as Vermont Senator Bernie Sanders.

Sanders has introduced legislation to create an A.I. sovereign wealth fund. It would give the public 50 percent ownership in the largest A.I. companies

through a one-time tax paid in stock. Sanders explained his reasoning to Anderson Cooper the other day.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (D-VT): A.I. is the most transformative technology in the history of humanity. It's going to impact every man, woman and child.

Right now, it is being owned and pushed by the wealthiest people in the world. Mr. Musk, Mr. Bezos, Zuckerberg, Ellison and others.

Given the fact that human beings, Americans, helped build A.I., we deserve, A, to be able to stop bad things from happening, and B, with 50 percent

ownership of the stock financially gained from the profits that A.I. may well create.

(END VIDEO CLIP)

NEWTON: The Nobel Prize-winning economist Joseph Stiglitz joins us now from Spain.

It is good to see you, and we thank you for being on the program. I want your take on this. Is this a good idea? And would it actually work like a

sovereign wealth fund? And you know the old adage is always that the government shouldn't be picking winners and losers. Is it a nothing to lose

situation by getting into those A.I. companies?

JOSEPH STIGLITZ, NOBEL LAUREATE ECONOMIST: Well, first, I agree with Senator Sanders that we have a problem with an oligarchy, that we don't

have enough competition. They have too much influence in our politics. There's a real problem. But that doesn't justify moving towards actions

which you would expect in Putin's Russia or Xi's China. Government doesn't ask voluntarily firms to turn over their shares.

We have a corporate profits tax, which is an arrangement by which those who make profits share those profits -- a part of those profits with the rest

of us. Of course, the disappointment is the Trump administration has weakened the corporate profits tax.

[16:35:06]

But the corporate profits tax applies to all companies. I think one could argue that one should have a higher corporate profits tax on companies that

are making more profits, that progressive corporate profits tax. But that's not the issue here.

NEWTON: And then -- go ahead.

STIGLITZ: The issue of sharing ought to be done in a way through a rule of law. And let me tell you, I wouldn't trust the Trump administration's

administrators to manage a sovereign wealth fund in the national interest. We see over and over again the kind of favoritism that they give to their

cronies, including to the oligarchs.

NEWTON: OK, now, going, though, to this concept that it should be shared. And I hear what you're saying about a corporate tax, a close tech CEOs

actually like the tax system because they say it basically encourages and inspires more innovation and more profit. I do want to get to this book

that you, you know, researched probably three years ago, came out more than two years ago. It's called "The Road to Freedom and the Good Society."

Now you're the one who put forward the concept of progressive capitalism. Is there a way that you believe anything to do now with A.I. or quantum

computing can build on the concept that you put forward in this book in tangible ways the current Trump administration notwithstanding?

STIGLITZ: Well, yes, I think there are many ways. I mean, first, we need to increase the corporate profits tax. Remember, the corporate profits tax

allows the deduction for all R&D, deduction for investment. It does not discourage R&D and investment. It shares the monopoly profits with the rest

of America. So raising the corporate profits tax is part of the answer.

We also need to regulate them because one of the real concerns here is the interest of the oligarchs is not well-aligned with the interest of the

United States citizens. And we've seen that numerous ways in which they have undermined our politics, created mis and disinformation, created

problems among our youth. A whole host of problems.

The irony is the Trump administration's recent executive order made it very clear that they were not going to regulate these A.I. companies. So it's a

real victory for the A.I. companies.

NEWTON: Yes, it is a difficult thing to regulate, especially as so many are just starting to come to terms with this technology.

Joseph Stiglitz, we will leave it there for now, but we hope to have you back. Appreciate your time.

STIGLITZ: Thank you very much.

NEWTON: Now, A.I. companies have, as to our point here, poured millions of dollars into a Democratic primary in New York, which is being framed as a

battleground for the future of A.I. regulation. The fight centers around State Assemblyman Alex Bores, a former Palantir employee who has campaigned

hard for strict A.I. safety laws.

Now, he was key in pushing through landmark state legislation over A.I. security, a group backed by ai software company Perplexity and a co-founder

of OpenAI, has spent $8 million opposing him. Anthropic, meanwhile, gave $20 million to support -- to a group supporting Bores' campaign. As voters

head to the polls today, the outcome could influence federal government policies on A.I..

Jeff Zeleny is with us in New York.

I mean, look, we just heard from a Nobel Prize winner about how this distorts politics, this kind of involvement. And here we are in the

primaries. We're awaiting the results from the campaign. But so much about this campaign has already surprised me specifically the issue with A.I. and

data centers, but also the issue of support for Israel.

What are you expecting in the hours to come?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: I mean, Paula, this really is playing out in real time. If every election sort of tells you a

story about the state of the country, this one certainly does about the state of A.I. and how artificial intelligence really has come into all of

our lives. And certainly the government has been rushing to keep pace with it.

But Alex Bores, as you were saying there, he's an assemblyman from here in New York, and he was leading the charge on regulating and trying to rein in

some of the A.I.. Well, that has been a complication in some respects in his campaign, but it also has elevated him in a way. So he's seen as one of

the leading contenders.

We caught up with him just a short time ago to ask him about what kind of a message this will send regardless if he wins or loses tonight.

[16:40:07]

(BEGIN VIDEO CLIP)

ALEX BORES, DEMOCRATIC NEW YORK STATE REPRESENTATIVE: If they win, they're going to gloat. They're going to go to every member of Congress and say,

hey, if you try to regulate us, we're going to end your career. But if we win, they're going to have to rethink their strategy. And I think you're

going to see a lot more courage from members of Congress.

(END VIDEO CLIP)

ZELENY: So, look, we will see if Congress really steps up and does the regulation that they really struggled to do with the emerging technologies

of A.I.. Now, this is not the only issue in this race of course. In fact, even for Alex Bores, he said it's not the top issue. He thinks

affordability is a central issue.

But you mentioned Israel that also, of course, is a central through line of all of these Republican or these Democratic primaries, excuse me, here in

New York City. It's one of the reasons the new mayor, Zohran Mamdani, has really inserted himself into these races. He's endorsed in three races,

including against two sitting Democratic members of Congress. A highly unusual thing to do for a Democratic mayor.

But, look, it is showing that the ideological opportunity is here for him. He's trying to pull his party left. Of course, Hakeem Jeffries, also from

New York, would be the speaker of the House should Democrats win in November.

Now, none of these races are going to affect the control of Congress. New York City is deep blue, but so many other issues here are coursing through

this campaign. So the polls are still open in New York for about four and a half more hours -- Paula.

NEWTON: Yes. And of course, this will matter in 2028.

Jeff, I only have about 30 seconds left, but on the screen, we did show Jack Schlossberg. He is a Kennedy of some distinction. What did he learn in

this campaign? Because he certainly had a controversial one.

ZELENY: He did. And he, of course, is still very much in the thick of this. His volunteers are right outside this voting center where we are. So, look,

he's the grandson of John F. Kennedy. We will see if the power of that dynasty really resonates here, or if this is sort of an outsider's

environment where the establishment does not really hold sway. But he's very much still in this race. But tonight could be very instructive on the

strength of that Kennedy family name -- Paula.

NEWTON: Yes, an exciting night to come for sure, as we await those results.

Jeff Zeleny, for us, grateful to you.

Now, as we have been saying, markets ended down as tech continues to drag Wall Street. The Nasdaq and S&P 500 both fell to one week lows, and the Dow

was down about 45 points.

That is QUEST MEANS BUSINESS for us. Up next, "RICHARD QUEST'S WORLD OF WONDER.

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