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Quest Means Business
Meta Settles Landmark State Child Harm Claims for $18 Billion; Massive Flood Hits Nepali-Chinese Border, at Least 157 Dead; Bill Gates Proposes Major Limits on A.I. Development; Massive Flood Hits Nepali- Chinese Border; Debasement Trade Boosts Assets Like Gold and Bitcoin; Demand for Live African Music Goes Global; California Attorney General on Paramount Talks; Nvidia Reports $96.2 Billion in Q2 Revenue. Aired 4-5p ET
Aired August 26, 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": Closing bell is ringing on Wall Street. Innovative Industrial Properties ringing the
closing bell.
The market has come to an end. It is down. It has been down all session except for a little smidgen of green. Not huge losses. Nothing to get
terribly excited about. All the three indices are lower and a one, and oh dear! What a terrible gavel. No, I mean sir, you deserve this market today.
Wimpy gavel. Trading is over. Those are the markets and these are the main events that you and I will talk about over the next hour.
Meta's multi-billion dollar settlement will reshape how young people use Meta and its platforms. Tonight on the program, the California Attorney
General tells me it is a watershed moment for tech.
As night falls in Nepal, hundreds of people are still missing following the devastating floods. We are going to hear from a lawmaker there about the
disaster.
Also tonight, NVIDIA earnings will put the A.I. rally properly to the test. Those numbers are due any moment. We will have Paul La Monica, he will give
us some interpretation later in the program.
Together we are live. I am in New York. It is Wednesday. It is August the 26th. I am Richard Quest, and in New York, I mean business.
Good evening.
Let us begin tonight with a landmark legal settlement in the United States. Meta, that's the company that owns WhatsApp, Facebook and the like -- and
Instagram -- has agreed to pay about $18 billion and settle claims that it designed addictive platforms that harmed young people.
The deal was made with dozens of states and requires major changes for teen users. For instance, a two-hour daily time limit, restrictions overnight
and during school hours and fewer notifications.
Meta does not admit wrongdoing, and the company still faces hundreds of other lawsuits over alleged harm. The California Attorney General, who co-
led the lawsuit, said, "Today, we have secured settlement with Meta that will make social media less dangerous for our kids and make a world of
difference for children and their families."
Clare Duffy is with me.
Clare, I will get analysis from you after we've heard from the California Attorney General.
First of all, just give me the broad brush, the most significant parts of this agreement before we hear from the A.G.
Well, Richard, certainly this $18 billion is going to be really significant. That is a huge settlement. Many of these A.G.s pointed out
that this is the largest settlement in history with a Big Tech company, and that money will go toward funding state programs for youth mental health
and online safety awareness.
But perhaps even more important than the money is the changes that Meta has agreed to make to its platforms. I will walk you through just some of
those, although, you named a few in the intro as well, a two-hour daily time limit for teens 13 to 17 across Facebook and Instagram; nighttime mode
where teens won't be able to have access to Instagram and Facebook from midnight to 6:00 A.M.; school mode, where they will get fewer
notifications.
Instagram and Facebook is going to remove likes from teens' posts. They won't have access to extreme beauty filters, and they will also get prompts
every 15 minutes to remind them that they are scrolling and maybe thinking about getting off of these apps.
All of this is really what the state said that they were seeking here with this litigation, and certainly a win for Meta in the sense that it doesn't
have to put its CEO, Mark Zuckerberg on the stand in this trial to answer to some of these tough questions.
QUEST: We will talk more about the, if you will, the analysis in just a moment. Stay there, Clare, because I want you to listen to the conversation
I had.
The interview with California Attorney General earlier today. I spoke to California Attorney General Rob Bonta, and he told me the changes agreed
with Meta will make a big difference.
(BEGIN VIDEOTAPE)
(AUDIO AND VIDEO ISSUES)
ROB BONTA, CALIFORNIA ATTORNEY GENERAL: -- done before. It will reduce mental health harms that have been visited on kids in a number of different
ways, and you've got to sort of take them all together. But some of the main points are limits on use during the day.
Some kids are online all the time, like 24 hours a day, or when they are at least when they're not sleeping and it shows that this -- you know, that
social media use interferes with their sleep, but it limits the use to two hours a day.
And it also has a nighttime -- full nighttime block from 12:00 A.M. to 6:00 A.M., so it can't be used even if you tried.
[16:05:10]
It is time to go to bed. That's when you should be sleeping. No notifications during the nighttime or during school hours, because that's
when you should be studying or sleeping, not scrolling.
There is a ban on beauty filters, plastic surgery filters, which we knew harmed us kids, especially girls, you know; a block on likes being used.
So all of those, you know, they start as defaults. Theres also an opt-in for use of a feed that is organic as opposed to algorithmic. But it is
important because now Meta likes to say they have "safeguards" in place. I put them in air quotes because they are not really safeguards, any kid can
just wipe away the so-called safeguard with a swipe of the finger.
But now you have to have a verified parent get in there and say, we want you to be online more than two hours a day. We want you to have likes and
beauty filters. So there is a real durable enforcement mechanism here and safeguard in place now.
QUEST: Do you believe that there has actually been a change in intention and mental direction, in a sense at Meta. Listening to some of the
evidence, there was a lot about how in some cases there was, you know -- they knew it was addictive. They didn't put in place necessary --
Do you think they've essentially changed in their heart?
BONTA: I don't know, and you know, I don't know if that is necessary at this point to get the results that we need. Sometimes folks are forced to,
required to make change regardless of what is in their heart or what is not in their heart.
And, you know, here they continue to defend the case very poorly, I will say they were getting absolutely thrashed and hammered in court by my team
and by the other attorneys general that were taking them to task in court, showing them their own documents, their own studies, their own internal
knowledge and their own lies and there is nothing they can do about it.
And, you know, so, we forced them to and what is happening going forward is they are required to make changes, whether it is in their heart or not. And
so, the reduction in harm to our children is what matters, that will happen here whether they have changed their heart or not. Only they know what is
in their heart, but this shows that there is accountability, consequence when they hurt kids knowingly. And perhaps that will change their heart
over time.
QUEST: So it is really all about enforcement now, isn't it? Because you -- and enforcement is not only yourselves or other authorities, it is also
parents because this does now, to some extent, restore two parents, their obligation to make sure children are safe.
BONTA: Well, as a parent, parents always have an obligation to keep their kids safe. We do that when we make our kids wear helmets when they ride
their bike, seat belts when they ride in a car, when babies are fed food that is too big for them or are choking hazards, we cut that for them.
So, that has never changed. But what was the problem so far -- earlier with Meta was that they were guaranteeing, they were representing to the public
that their product was safe and they were saying, don't worry, parents, it is safe; we've got you and nothing to worry about here.
They were lying to parents, not arming parents with the knowledge that they need to take steps to protect their kids. And so we've uncovered the truth.
Weve armed parents with that knowledge, and we've armed parents with tools now where they can block certain features and designs of these harmful
products from getting to their kids and impacting their kids in an adverse and negative way.
QUEST: One more question on this, because I am old enough to have covered Big Tobacco and all the litigation that went on with their -- and you know
how it goes, the cases build up and build up, but eventually you get to a point where there is a line in the sand.
Now, this case that you've settled is probably not that line in the sand, because there are dozens, if not hundreds of other cases against Meta.
Do you see a line in the sand moment for social media cases analogous in a sense, to Big Tobacco?
BONTA: Yes. You know, I think people will look back and see this moment as that inflection point, that transformative moment, that watershed moment
(AUDIO AND VIDEO ISSUES).
Of course, there was wind at our back with the Southern California lawsuit verdict of the individual, who was -- as well as New Mexico. There are 51
states, the District of Columbia and territories all standing together, banding together, holding the line, bipartisan, holding Meta accountable
and making unprecedented historic, transformative, transformative changes which will echo and permeate throughout the industry.
It is just a matter of time, in my humble opinion before TikTok and YouTube and Snap come on board. So I think this is that moment.
(END VIDEOTAPE)
QUEST: That's the Attorney General of California, you'll hear more from him on Warner Bros Discovery and Paramount a little later in the program.
Clare, you heard two things really of interest here. How are they going to enforce this deal? And secondly, the other companies that haven't yet come
along with them. And as yet, what is the incentive for them to do so until they're sued?
[16:10:14]
DUFFY: Yes, Richard. I mean, I think when you hear A.G. Bonta talking about this as Bonta talking about this as the watershed moment, like we saw with
the Big Tobacco moments, I think that is really apt because the reason people were making that comparison is the idea, the hope in some cases, was
that this litigation could lead to changes in a way that Congress has been unable to, or unwilling to force these companies to make.
And I think that is what we are seeing here with regard to Meta now as part of this settlement agreement, Meta has said, look, we will pay 70 percent
of this $18 billion sort of up front, but the other 30 percent is contingent on TikTok and YouTube making similar changes.
Attorney General Bonta has said that they are willing to go after TikTok and YouTube in court as well, if they don't voluntarily come to the table
to make these kinds of changes. But I do think that this does set a sort of line in the sand, a baseline for how these companies have to operate with
regard to teens.
QUEST: Right. But, you know, if you remember with Big Tobacco, there were several big cases where large and with Big Pharma, where vast compensation
funds were put together. And it was -- you know, they almost got immunity thereafter, the companies.
This is not that, this is behavioral. There are still -- and structural to some extent, but there are still large number of cases that will go forward
to the courts with potentially many more billions of dollars in damages.
DUFFY: Certainly, I think we can expect to see other, you know, individual families and school districts using this as a model for their own cases.
Certainly, we could see additional financial penalties for Meta and the other big social media companies, but I think what this changes is, you
know, for years we've seen Meta and the other big companies say we are already doing enough, really saying anything more than what we are
currently doing is just not feasible.
It is not feasible to detect when users are lying about their age on the platform. It is not feasible to block them for these overnight hours, for
example, and this settlement proves that it is possible and that Meta is willing to agree to do it. And so I think that does set a precedent in a
really important way and certainly, we may see additional changes down the road because of those other cases.
QUEST: Clare, I am grateful. Thank you. Interesting moments.
This is QUEST MEANS BUSINESS, middle of the week, and we will be back in just a moment.
(COMMERCIAL BREAK)
[16:15:09]
QUEST: Catastrophic flash flooding has hit Nepal's border with China, and as a result, more than 150 people have been killed, with hundreds of people
still missing.
Footage on social media shows entire villages submerged, helicopters rescue people from rooftops as we can see.
The cause, scientists say, may have been a glacier that broke off and fell into the valley below.
Hanako Montgomery reports, and a warning to you, some of these images that you're about to see are disturbing.
(BEGIN VIDEOTAPE)
HANAKO MONTGOMERY, CNN INTERNATIONAL CORRESPONDENT (voice over): Dozens of people begin to run. What comes next in this surveillance video is hard to
imagine.
A mountain of mud and water taller than the building crashes down, wiping out everything in its path like something from a disaster film, but this is
a border crossing between China and Nepal.
It is the result of a deadly flash flood that swept through Himalayan villages on the Nepal-China border on Wednesday. Its enormous force
destroying homes and buildings, including in Nepal's Rasuwa District.
Aerial footage captured from a helicopter over the district shows the immense barrage of water flooding the valley below.
It is a popular area for hiking holidays. Hundreds of tourists, including foreign nationals have been reported missing, according to an initial
assessment by Nepal's Tourism Board.
Nepalese Army helicopters are helping rescue citizens from rooftops in the flood affected areas. The Red Cross is also deploying an emergency team
with relief supplies and in Tibet's Gyirong Port, China's President Xi Jinping has ordered all out search and rescue efforts to find those who are
missing after a mudslide caused major casualties, China's state news agency, Xinhua reported.
"The mudslide has cut off the region's roads, communications and power," Xinhua said.
Nepal's Foreign Minister said the deadly flash flood was caused by an earthquake, triggering a large landslide, which blocked the Bhote Koshi
River. The full scale of the devastation is yet to become clear.
Hanako Montgomery, CNN.
(END VIDEOTAPE)
QUEST: Joining me now is Dana Jay. I beg your pardon? I beg your pardon, allow me to continue.
Yes, Bill Gates is warning that A.I. could become either the greatest equalizer ever invented or a major source of injustice. In a long essay,
Mr. Gates argues that we are not ready for the radical changes the technology may bring. And he argues, "Unfortunately, right now, we are not
preparing for it. I don't see evidence that leaders, experts and communities are confronting the challenges adequately. There is no plan to
ease the entry into the A.I. era."
Gates was speaking to Anderson Cooper last night and shared the following idea on how to protect jobs.
(BEGIN VIDEO CLIP)
BILL GATES, PHILANTHROPIST, CO-FOUNDER OF MICROSOFT: I even go as far to suggest and start a debate on should there be areas of jobs like child care
or you know, some role in mental health helping people, should there be a number of jobs that we literally reserve and say that we don't want the
A.I. to take over those activities?
(END VIDEO CLIP)
QUEST: Connor Leahy is the U.S. executive director of ControlAI, a nonprofit dedicated to preventing existential risk from these
superintelligence. Obviously, I imagine you agree with the majority of what Mr. Gates has been saying and have probably been saying the same thing
yourself.
But the real problem is, we've been at this now for a few years, and no one is listening. The leaders are -- the blunt truth of what Gates says in his
articles, leaders are not putting in place the policies necessary.
CONNOR LEAHY, U.S. EXECUTIVE DIRECTOR, CONTROLAI: Bill Gates has been on the record as far back as even in 2023, saying that A.I. and the mitigation
of the risk of extinction that could be posed by A.I. should be a global priority. And unfortunately, to a large degree, what you're saying is true
is that not that much has changed in 2023.
But as someone who speaks every day with members of Congress and other people in Washington, D.C., things are starting to change.
The general public sentiment has been just a landslide change against technology and A.I. for many, many reasons and we are seeing more and more
policymakers starting to realize, oh, what are we actually dealing with here? As an example, the director of the NSA just a month or two ago said
that an A.I. system was capable of breaking into almost all of their classified systems in hours, not weeks.
[16:20:04]
And those are not words that the National Security apparatus likes to hear. So movement is starting to happen, but there is so much work still to do.
QUEST: -- with clean hands, because some of those people who are worried about A.I.'s existential nature are the very same people who will happily
use it for their own advantage. It is not quite nimby, but you get the point and that's really the problem.
Companies say everybody else, you know, well, we must protect other peoples' jobs. But if I need to lose jobs to make savings, then that's
okay, because it is my factory. And, you know, I am a good guy.
LEAHY: Absolutely. This is a very classic Economics 101 public goods problem. If you run a chemical company and you could make your product
cheaper by polluting nearby waterways, well, maybe you're a nice guy and you won't do that. But the guy down the road, he might start a new chemical
company, pollute the river. His product is cheaper than yours. You go out of business.
We have a standard solution for these types of problems, and it is regulation. The same way that we regulate other harms or risks to the
general public, we can't allow companies to decide how much toxic waste goes into our water. That is something that is set by a democratic process.
QUEST: Right.
Now, let's take aside for the purpose of the rest of this discussion, the malevolent or the bad actor, or the terrorist or even the state actor,
because I don't want to focus on because that's really one set of risks and threats, there is not a lot of law enforcement. I am much more interested
in the societal risk that comes from an adoption of A.I. like Bill Gates was saying that, you know, we failed in the Fourth Industrial Revolution.
We failed in the dot-com boom and bust, and millions of people were put out of work.
But this time, we are talking about potential of tens of millions, hundreds of millions.
LEAHY: Yes, absolutely. I think you hit it right on the head, is that to a large degree, we failed to regulate and integrate, say, the internet and
social media in a really pro positive way into our society in many ways. And now, we have this even more crazy technology coming about, because it
is very important to understand that A.I. is very different from traditional software.
Traditional software is written with code line by line, telling the computer exactly what to do. This is not how A.I. works. A.I. is more like
a grown rather than pretend. And so even less --
QUEST: I am going to suggest you, but for the very reason that you've just said that regulation is not only very difficult, but arguably impossible,
it will be impossible to regulate sufficiently for the protection of jobs and quality of life.
LEAHY: I think we've done a lot of things in the past that seemed impossible. I think we managed to avoid a nuclear war. After the creation
of the nuclear bomb, many people thought it was inevitable that every single country in the world would have nuclear weapons, and that they would
be used by terrorists constantly. We did avoid that world, and this took a lot of work, a lot of diplomacy, a lot of law, a lot of law enforcement,
and a lot of complex institutions to be built.
Now, can we do the same again, potentially something even more complicated to allow us to prevent such risks such as autonomous A.I. systems that can
fully replace and outcompete humanity? It is a very hard task, but we kind of have to do it if we want to have a good world, which is, I think,
something that all of us want.
QUEST: I am grateful to you, sir. Thank you for joining us tonight. Much appreciated.
Big issues that we will only talk about here on QUEST MEANS BUSINESS.
California's Attorney General says Paramount is on the back foot in court.
Part two of my interview with the A.G. Rob Bonta after this. Good evening to you. Delightful to have you with us.
(COMMERCIAL BREAK)
[16:26:55]
QUEST: Hello, I am Richard Quest. Together, we've got a lot more Quest Means Business that we will be going through. We will have more from the
interview with the California Attorney General, this time discussing the antitrust case against Paramount and its takeover of CNN's parent, Warner
Bros Discovery. Also, we will bring you the latest earnings from NVIDIA, only after the headlines, because this is CNN, and on this network, the
news always comes first.
An urgent, desperate search is underway for survivors of a catastrophic flood along Nepal's border with China. Hundreds of people are missing and
the death toll is expected to rise. Scientists -- some believe that the deadly flash flooding was triggered when a chunk of glacier broke off and
that created a massive landslide of ice and rock.
Meta, owner of Facebook and Instagram has agreed to pay nearly $18 billion as part of a landmark settlement involving social media addiction claims.
The lawsuit was filed jointly by 29 states and accused the owner of Facebook and Instagram of intentionally designing addictive platforms that
are designed to harm young peoples' mental health. Meta did not admit to wrongdoing as part of the settlement.
Hollywood is remembering the actor, Tim Curry.
Curry passed away at his Los Angeles home at the age of 80. He was known for his roles in "The Rocky Horror Picture Show" and "Clue" amongst others.
Curry had been dealing with health problems after suffering a major stroke some years ago.
It is just after 2:00 in the afternoon -- I am sorry, in the morning, I should say in Nepal, and hundreds of people are still missing after the
devastating flash floods there.
Joining me now is a member of the Nepal Parliament, Dhananjaya Regmi. He is not only a member of parliament, he is also a mountain geomorphologist and
also a founder and chairman of Himalayan Research Expeditions.
Sir, lets test the line. First of all, can you hear me?
DHANANJAYA REGMI, MEMBER OF PARLIAMENT, MOUNTAIN GEOMORPHOLOGIST; FOUNDER AND CHAIRMAN, HIMALAYAN RESEARCH EXPEDITIONS: Hello.
QUEST: Well, it is a poor line, so we will give it a go and see how we get -- how far we get.
What more do we know about the current situation? What can you tell me?
REGMI: Richard, a very good morning from Nepal. And well, the situation, now, we don't have much updates after 6:00 P.M. Whatever the information we
had till 6:00 P.M. this evening, last evening only, that is the information that we have.
So still, you know, hundreds of people are missing. Obviously, that is there, but we successfully rescued around 114 people this afternoon. This
is the one update.
And second, some of the people who are working on the Custom Office, which we were told are missing, they have just come on contact and they informed
that they ran away to the nearby hill and some of them saved themselves from the flood.
[16:30:23]
QUEST: Right.
REGMI: So some people they started to come under contact and some people still, you know, some people are out of the reach. So, again, the search
and rescue operation will be started tomorrow morning. So until then, we cannot say anything. There are different offices who are now calling and
telling that the people from their respective office are missing and the pilgrimage people on pilgrimage, they were also missing. So this is the
situation.
QUEST: Right. Right. Let me jump in here. Do the authorities have -- have the authorities got everything that they need or is there still a demand
for more search and rescue teams, equipment and the like? Because these pictures that we're looking at, this video is just horrific.
REGMI: Well, in fact, whatever the possible facilities were available, Nepal government is applying all of them. Most importantly because it is
everywhere flooded. Many roads were broken. All, you know, all are disrupted. And so the helicopter is the only option to reach those remote
places. So the government is using around 35 helicopters throughout the day.
QUEST: Right.
REGMI: And they were taking a number of flights on different areas. So that is one part. Besides that, Nepal has this, you know, disaster prevention
unit, which is also actively working. So there are many armed police force people who are also working on it. But even saying this, but still, we
don't know that what we are lacking. So far, you know, hospitals are now OK. Whoever were rescued, they are getting a proper placement in the
hospitals. So that is also a good part. But only thing is the flood was so big that still we don't know where the people.
QUEST: Right. Can I --
REGMI: Where the people are looking for the help. So -- and yes.
QUEST: Yes. Can I just jump in? This idea that it was a glacier or part of a glacier that fell into a lake or something like that, what do you think
was the cause of this? Because you are an expert in this area.
REGMI: Yes. So many speculations were made throughout the day, but now we are more or less clear that it was overall collapse of our glacier. The
glacier wasn't quite a steep slope. And there -- it is said that there was some rock slide or the rockfall activity something like a week ago. And
because of that, the glacier area might be shaking a little bit. And somehow this morning it was just collapsed down.
This is the latest information that I have received from some of my scientist colleagues who are working on the -- who were analyzing the
satellite images. So far this is the latest update.
QUEST: Right.
REGMI: There were many different kind of stories that arctic was there. And because of that, there's this all the disaster happened. But we still try
to identify what happened first. First, the glacier collapsed down. And because of that, the land was shaking or the earthquake was there. We don't
know the sequence, but, yes, something --
QUEST: All right --
REGMI: But we are looking at the previous events that happened in Nepal. We believe that it is the glacier collapse that shakes the ground and people
recorded it as an earthquake.
QUEST: I'm grateful to you, sir, and I look forward to hearing more from you in the next day or so as we follow closely. And we're, of course,
sending our thoughts, prayers and best wishes to you. Thank you for joining me.
Now, as we continue tonight, we will of course update you on that story.
The so-called debasement trade is giving -- driving up the price of assets like bitcoin and gold. It's also driving up costs for borrowers. Bob
Diamond is here, CEO of Atlas Merchant Capital. There he is. Former president of Barclays. He'll be with me on QUEST MEANS BUSINESS. Bob is
next.
(COMMERCIAL BREAK)
[16:36:59]
QUEST: The Fed's preferred inflation measure came in slightly higher in July. It's the PCE and it rose 0.2 percent in July, an annual 3.7 percent.
Not good news, though, for the Treasury, which has been trying to lower borrowing costs with bond buybacks. Those efforts and broader concerns have
led to a resurgence in the so-called debasement trade.
This is where hard assets like gold and bitcoin get a boost when investors want to hedge against the consequences of high government spending. You can
see both. You see them both have risen sharply in recent weeks.
Bob Diamond is the CEO of Atlas Merchant Capital, joins me from New York.
Bob, you are well, well familiar with the principle of the debasement trade. Over your career you've seen many occasions where rampant inflation
has led to people shifting to gold. This -- I guess bitcoin is a new wrinkle in a sense in the whether or not you think it's a safe haven, but
you are seeing a rush to quality.
BOB DIAMOND, CEO, ATLAS MERCHANT CAPITAL: Yes, I think, Richard, first of all, it's great to be here with you. It's been a while.
QUEST: Yes. Thank you.
DIAMOND: And I think you and I have talked about this over the years. The real underlying issue here that the markets are grappling with, I think, is
the debt levels. And, you know, a lot of people have talked about the fact that we've just crossed over 40 trillion in debt. That's up four times
since the financial crisis. And during that period, the economy has been pretty positive. It's up almost two times since COVID.
So I think the challenge that we're seeing is really the debt levels and the recognition that 40 trillion is a big number, and it --
QUEST: OK.
DIAMOND: You know, the interest payments on that are pretty serious.
QUEST: OK --
DIAMOND: And what are we going to do about that?
QUEST: Right. But as an investor, as somebody who actually lives in the markets and capital.
DIAMOND: Yes.
QUEST: I mean, this big macro idea of 40 trillion debt and this worry about, how do you -- how does that metastasize itself on a daily basis in
terms of the decisions that you make of where to deploy capital?
DIAMOND: So I think what you're dealing with, Richard, is fundamentally, we have a strong economy. We've had inflation above 2 percent for five years
now. We have a chairman of the Fed in Chairman Warsh who's been very consistent in saying that getting inflation back to that 2 percent level or
below that 2 percent level is certainly something that he's very, very focused on.
So with a pretty strong economy, really strong earnings, really good financial markets, and of course, the boost in investment spending and the
income that comes from that with A.I., I think what we have to recognize is that rates are going to be here or higher for a while, rather than see a --
you know, I don't see the beginning of a decline in interest rates. So I think that's the biggest factor for people in terms of investment in fixed
income.
[16:40:19]
QUEST: Do you think this Treasury twist that they tried last week and have said they'll do again, waste of time, waste of money?
DIAMOND: I don't think it's going to be -- it depends on what the objectives are.
QUEST: Right.
DIAMOND: And we've always seen the Treasury recognize the importance of kind of, you know, operating in a way that the off-the-runs are in line
with the on-the-runs and things like that. So, you know, I think that can be effective. But in terms of, will this activity lower the 10-year or
lower the 30-year in yield relative to all the other factors that we just talked about, no, I don't think so. And then I think the proof is in the
pudding so far.
QUEST: Right.
DIAMOND: That there's been really no change or maybe a tick a little bit higher in terms of rates for the 10-year and 30-year.
QUEST: What part of the investment world at the moment do you like? What's the bit that still gets you excited and that you think now really we need
to focus here?
DIAMOND: Well, thank you for asking a question like that. And I think, you know, you mentioned bitcoin, which is, you know, in its best version a
digital version of gold.
QUEST: Right.
DIAMOND: But what really focuses our mind in the digital world or the crypto world is blockchain. And probably the single best example of that is
hyper liquid. And the exchange that's trading real world assets on chain 24 hours a day, instantaneous settlement, at truly a fraction of the cost and
the speed of the internet. And I think this is having a big impact on, you know, kind of the convergence of what I would call traditional finance or
traditional banks and the best of digital or crypto, which is blockchain, and all the unbelievable advantages that are coming from that.
QUEST: I'm grateful, Bob, and perhaps we'll talk more about blockchain because several years on and I still don't fully understand exactly its
advantages, but that's a discussion for you and I to have on another or over lunch. Good to see you, sir.
DIAMOND: We'll do it.
QUEST: Thank you.
Now, building a world class stage directly on a Portuguese beach, it's got incredible challenges, but it hasn't stopped tens of thousands of music
lovers from flocking to Afro Nation, a celebration highlighting global black music culture as a Adefemi Akinsanya tells us in our "Africa Inc."
series.
(BEGIN VIDEOTAPE)
OBI ASIKA, FOUNDER, THE MALACHITE GROUP: You know, we're a festival, you know, if you want, your foot will be on the sand for the whole time. It's
not, you know, it's not the beach over there. And the festival is over here in the background. It's you are on the festival and with that comes lots of
costs because it's very difficult to build on sand. And it's also in its -- we also have to be very careful with the environment of it being a blue
flag beach.
ALEXANDRA JAMES, HEAD OF LIVE OPERATIONS, THE MALACHITE GROUP: We broke ground on the beach around the 25th of May. So that's about four weeks of
pre-production and build-up. We are building on an uneven surface. It's constantly moving and changing. The wind blows it away. It gets hot. So
there's a huge challenge just around that.
ADEFEMI AKINSANYA, CNN INTERNATIONAL CORRESPONDENT (voice-over): But none of those challenges seem to deter fans from flocking to this site or from
paying the premium cost to attend.
UNIDENTIFIED FEMALE: I come from Switzerland. It's my third time here in Afro Nation.
UNIDENTIFIED MALE: I'm coming from Miami.
UNIDENTIFIED FEMALE: I'm from Singapore, my first time in Afro Nation.
UNIDENTIFIED FEMALE: I am from Senegal, but I live in France.
UNIDENTIFIED FEMALE: The ticket? Uh --
UNIDENTIFIED FEMALE: I took the golden ticket because it's really worth it. It was around 700 euros.
UNIDENTIFIED MALE: We got the golden ticket, the most expensive. We bought it kind of late, but spent about $1,000 on the ticket.
UNIDENTIFIED FEMALE: For the tickets 600, because I'm a girl.
UNIDENTIFIED FEMALE: More than 1,000 dollar Singapore.
UNIDENTIFIED MALE: But nothing like it doing it in Portugal.
AKINSANYA (voice-over): Depending on when you buy and the level you want, three-day passes can range from $325 to over $1,000 U.S., and they go fast.
NATASHA MANLEY, CEO, THE MALACHITE GROUP: 180 plus countries come to our show, right? 90 plus percent of countries on earth come to our show. Often
we go on sale with what we call a blind presale. So that's without any artists mentioned at all. Not many brands can do that. We just look at who
is buying and how they buy. We also track how they are when they're buying on the customer journey.
[16:45:03]
So from entering the site on a pre-sale to how they move through the site, where do they dwell? Where do they drop off? What puts them off? What
engages them? What makes them go to the basket, pay in the end, who doesn't pay and why?
AKINSANYA (voice-over): It's a massive job catering to the thousands of attendees at Afro Nation, but the performing artists and their teams need
just as much attention.
JAMES: We host up to 300 artists and touring party per day here at the artists village. We have 19 dressing rooms here in the backstage. We host
artists here all day at the artist village, so they get to use the space of the cabins all day. They receive their hospitality riders and we feed them
some really good West African inspired food by our partners Jollof Mama.
Everything is new. We've grown so quickly and that it's like flying a plane and building it at the same time, right? Because you've got to make it all
work and you've got to keep on finessing it, to keep on adapting it and making it better and better. So that's why I enjoy coming back each year.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
QUEST: California's attorney general has told me he'd like to settle an antitrust lawsuit against Paramount and Warner Bros. Discovery.
Rob Bonta is challenging Paramount's bid for Warner Bros. Discovery, the parent company of CNN. He canceled a meeting this week with Paramount and
accused it of acting in bad faith through leaks and misspeaking and lies. Paramount has denied leaking or misrepresenting settlement talks. Even so,
Bonta tells me the two sides do remain in touch.
(BEGIN VIDEOTAPE)
ROB BONTA, CALIFORNIA ATTORNEY GENERAL: We continue to move our case in the courtroom. We've been winning every step of the way from a temporary
restraining order, the equivalent of a preliminary injunction, the trial date that we want. Paramount continues to lose. And Paramount has reached
out to us. They very much want us -- want to meet with us to talk about the potential for resolving this case.
We've always said we prefer to resolve our cases in the boardroom rather than courtroom. And if someone reaches out to us, a party that we're in
litigation with and wants sincerely in good faith to resolve the case, we will. So they've reached out to us. And we're talking to them, but we do
not have any further settlement negotiations scheduled at this time.
QUEST: On the actual gravamen of the case, you described it as this is just a straight up bread-and-butter, black and white, meat and potatoes
antitrust case.
[16:50:03]
And when you filed the case, the one thing that I noticed in all the analyzes, you didn't go for political stuff with the president and you
didn't go for CNN, CBS. You went for good old-fashioned antitrust. But that arguably is the hardest bit because it's the purview generally of the
federal government, which is responsible in most of these cases. The uphill struggle is the antitrust.
BONTA: Not at all. We feel that is our strength. It is the core of our case. It is exclusively our case. This is an antitrust case and an
antitrust case only. And the judge has already said in this case that we're likely to win this case when it's all said and done. It's all likely to
succeed on the merits. One of the elements of granting a temporary restraining order, the federal government does not have exclusive
jurisdiction to enforce antitrust law.
It is shared jurisdiction, concurrent jurisdiction. States are additional watchdogs on the same block enforcing antitrust law. And so we have every
right, as we've exercised many times, including taking Ticketmaster-Live Nation to trial when the federal government bowed out with a slap on the
wrist settlement, and we got a jury verdict, and we're still in court seeking remedy. So this is very much our lane.
We very much have a strong case. We've already shown its strength. Honestly, Paramount-Warner Bros. is reeling and on the backfoot because we
keep beating them in court. The only place that matters.
QUEST: Two more questions and then I'll let you get on with your very busy day, Attorney General. And regulators around the world, now, I know you say
you have your concerns, but lots of regulators that should by rights have the same concerns that you do on movie studios, on distribution, on
streaming, have passed this, particularly the E.U., particularly the U.K. and others.
So it begs the question that some people are saying is that you're on a different hunt here than they are because nobody else has managed to come
up with the same reasoning.
BONTA: We are in a different hunt because it's a completely different market and a completely different country with completely different rules
and laws that are in place. And it can completely different set of regulators with authority. The -- what the Mexican regulator does under
Mexican law with the impact of this merger in Mexico's economy has absolutely nothing to do with our lawsuit and the impact on the American
economy.
Apples and oranges, no relation. It's just a talking point that Paramount- Warner Bros. likes to use when they say all these other foreign regulators have approved our case. So what's the therefore? So therefore because this
is legal in Mexico, then in a different market with different laws, it's legal in America? Of course not. Literally the court would throw that out
as completely irrelevant and not pay any attention to it. It's just a public relations talking point.
So we looked at this market, the American market, the impact of this merger under federal law, the Clayton Act, Section Seven. Mexico doesn't have
that. The U.K. doesn't have that. Europe doesn't have that. So it's apples and oranges. And we're just head down, straight up, enforcing antitrust law
here.
QUEST: My final question, sir. Do you feel both the ticking fee of October and the final fee in June, you know, if it all doesn't go ahead, William
Cohen writes on Puck, he sort of says, eventually, you know, this has got the attention of Paramount. This has got them back to the table. Is it your
feeling? Can you feel that the economic costs of this deal are now starting to weigh on the parties?
BONTA: I don't know, you know, they're self-imposed. This is a bed that they made, now they're sleeping in it. Paramount decided to impose the
ticking fee on itself. We had nothing to do with it. Paramount decided to impose a breakup fee on itself. We have nothing to do with it. Paramount
knew that regulators were looking at this deal to see if it complied with law, including us. And they knew that we might sue and that that suit would
take time, although it's moving lightning fast from complaint to trial, will be a mere eight months. I have cases that have lasted for five years,
six years. So whatever they might feel is up to them and imposed by them on themselves.
(END VIDEOTAPE)
QUEST: That's the attorney general of California.
Nvidia has just reported its Q2 earnings. The chipmaker's revenue more than doubled from the year before. It brought in $96 billion, billion, mostly
from its data centers. The CEO Jensen Huang told investors -- excuse me -- that A.I. has reached its inflection point. Even so, shares are down on the
outlook.
Paul La Monica is senior markets analyst -- analysis writer at Barron's.
Paul, it is good to see you. What -- you've had a chance to look at the numbers. What do you make of them?
PAUL LA MONICA, SENIOR MARKETS ANALYSIS WRITER, BARRON'S: Yes, it really continues to show that A.I. spending is not slowing down at all.
[16:55:01]
Data center revenue up 117 percent from a year ago. It really is a testament to the fact that the hyperscalers, Microsoft, Amazon, Meta,
Alphabet, Oracle, they are all spending a lot on A.I..
QUEST: Right.
LA MONICA: There are obvious concerns that maybe they're spending a little too much and having to go into debt to do so, and post negative free cash
flow in some cases, but they are spending. It's real money.
QUEST: And Nvidia is doing -- I mean, the focus of Nvidia a lot now is it's doing deals, not just the obvious ones where it's lent people money to buy
its chips, but it's creating an entire ecosystem around itself, deals within deals within deals.
LA MONICA: Yes. There are some of the worries about vendor financing who bring up, you know, kind of an ugly byproduct of the dotcom bust when, you
know, companies were spending to finance deals for networking equipment customers. And that didn't go well. Just ask Lucent and Nortel and Alcatel.
But I think with Nvidia, what's interesting is that they're spending obviously a lot investing in OpenAI, which is looking to build a massive
data center in Ohio.
There's a $105 billion commitment from Nvidia there. But at the same time, OpenAI is also developing A.I. chips. They have one called Jalapeno that is
competing with Nvidia and, you know, could potentially be something where Nvidia and OpenAI may become frenemies, if you will. And that potentially
could happen down the road with Anthropic and Claude, too.
QUEST: I'm glad to see you, sir. You're looking better than ever. Good to see you. Thank you.
Now we will take a "Profitable Moment" after the break. QUEST MEANS BUSINESS. Good evening.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment," we heard from the attorney general of California on Meta. Big tobacco is the analogy that I was putting to him.
These cases go for years. And eventually, of course, the damages become absolutely astronomical and they're already way up there. But what Meta did
today, of course, was throw in the towel in part. They didn't admit anything, agreed.
But the watershed moment that Bonta talks about, I'm not sure, we'll only know that in hindsight. In the rear view mirror, when you see how their
behavior continues of Meta because at the end of the day, YouTube and TikTok are not involved. Will they be forced into a similar agreement?
That's really the true test of whether what we've seen tonight is just a blip on the road or a true watershed moment to a future of tech and social
media regulation.
That's QUEST MEANS BUSINESS for tonight. Mid-week. I'm Richard Quest in New York. Whatever you're up to in the hours ahead -- delighted to have had you
with us. I'm off tomorrow. And whatever you're up to in the hours ahead, I hope it's profitable.
END
