Transcripts For CNBC Squawk Alley 20240713

To watch closely as the succession happens, david . Yeah. Its not unexpected carl it was done in unexpected fashion given so many things that are different right now at t was having its annual meeting and doing it remotely, virtually, and mr. Stephenson announced it during the course of the annual meeting, that as you said, he will be stepping down at the end of june to be replaced by mr. Stankey as ceo mr. Stephenson will remain on as chairman of the company until january of next year stankey will become a member of the board of directors taking the role of ceo. He is president and coo he got that promotion back a number of months but questions in terms of whether he would get the top job and whether the board of directors would support him for that mr. Stephenson made it clear that he was going to leave the company as its leader most likely this year and obviously choosing to move forward with that, despite the Current Crisis his 13 years at the helm of the company, of course, have been marked by his inquis stive nature he wanted to acquire tmobile, a huge horizontal deal stopped by the department of justice and came in for a good deal of criticism by shareholder Elliott Management this year, saying and reminding people of the 5 billion in value that was delivered to tmobile both through spectrum and through actual monetary penalties that at t was forced to pay when that deal many years ago at this point was stopped. The acquisition of direct tv which has been a difficult one in some way, added cash flow to the company, some saying enabling it to make sure its dividend was secure but at the same time the erosion of subscribers at these direct broadcast Satellite Companies is well known and then, of course, the time warner deal that mr. Stephenson oversaw as well, transforming at t into far more than a Wireless Company or delivery of satellite video but into one of the larger entertainment providers in the world. The launch of hbo max will take place soon i did sit down with mr. Stankey at the end of october. We were in los angeles when they unveiled hbo max and i did ask him about his desire for the ceo job. Do you want to become the ceo and do you feel the pressure to actually perform over this next period of time in terms of what were talking about here in order to potentially ascent to that job you know, ive been working for 34 years and i think in virtually every job that ive taken i always felt a pressure to perform and actually add value back to the business i dont think that changes or i feel any different about that. Ive got a lot in front of me to do right now this introduction of this product is incredibly important. Every job ive come into its always been what needs to change, whats something that can add value to the business and how do you focus on doing it well thats what im going to do right now and thats all im concerned about right now. What comes from it comes from it the beauty i have is i have this wonderful luxury in my life that i really dont have to work, i work because i want to work, and thats a blessing. Its a blessing for me im here because i want to do this and i want to do whats in front of me right now. Well, hes got a lot of in front of him right now as you know with that large debt load continuing at the company with the erosion of subscribers at directv perhaps has peaked at this point and with continued questions about the warner assets and the important launch of hbo max which is coming up quickly. Priced at a fairly high point, some in the marketplace wondering about that, although the current environment may be conducive for it john stankey taking over july 1st, carl, as ceo of at t. Randall stephenson, 60 years old, stepping down after 13 years. Stankey by the way, 57 david, certainly news of the morning and something that even President Trump has been weighing in on twitters just a few moments ago. Im curious about Elliott Managements role in all of this obviously theyve come out and pushed for executive changes at at t, says today that they, quote, support stankey as the companys next ceo how do you think that factors into what the priorities look like as he takes the helm . A couple months . Yeah. Its a great question that you ask, morgan. There are some who wonder, well, if elliott is on board, as they are, which i read a statement from them im trying to access again, basically saying they were supportive, there was a search undertaken by the board of directors, but we wonder what in particular is going to be the future of a directtv is there something that company can do there to potentially create value unclear. There have been plenty ofrumor in terms of what they might be able to do when you go back and look at the original letter from elliott they had a lot of suggestions for the company at that time they did kind of it wasnt an official settlement. They did come to a broad agreement, elliott signing on for what they decided to do, potentially taking costs out of the business and addressing what they said was the operational underperformance overall, but what it means with his ascension and elliott saying were supportive of it and whats to come, unclear, but some reporting to do there. Im looking at the broader picture here and randall stephenson, if im not mistaken, became the ceo of at t right at the beginning of the smartphone era, right around mid2007 i would argue that that that largely defined his time and he came up in that through the cfo track. John stankey, interestingly, came up through the cio, cto track and we have kont and 5g looming as challenges. Those will probably be pretty important, at least in the early part of his tenure in defining the job, wont they . Yeah. They will. Certainly 5g, of course, is a key cycle right now that theyre in the midst of. At t reporting earnings, giving some sense that permitting problems in the current environment may slow things a bit, but its funny for me because the company has talked so long about diversifying and some of us saying almost running away, i would say that and some others would from its wireless business, not fair perhaps to say that, but diversifying away from the wireless business and thats what theyve come back to when they talk about creating value at the company right now the strength of the wireless business and well see what happens right now given the inability of people to potentially pay, whether or not theyre going to be hindered in any way and rolling out 5g across the country, whether the devices will get in the hands of consumers so that they can use them all questions that mr. Stankey is going to be dealing with. Jason kilar was put in to take over warner media recently as well he has that squared away in terms of leadership. David, thanks for that. David faber on stephenson and stankey. That succession at at t. Getting breaking coronavirus news good morning, sue. Good morning, carl. This concerns a study done and published just now by the journal of the American Medical Association and basically what it is saying is that the treatment of covid19 by hydroxychloroquine and chloroquine should only be done in a hospital setting. The study that was done basically has raised some questions about the efficacy of the use of one or more or the combination of those drugs this has triggered basically it was a bad outcome the primary outcome in many patients is death. That triggered an fda response saying do not use hydroxychloroquine or chloroquine for covid19 use outside of a hospital setting. They have been shown not to be effective for treating or preventing covid19. Hydroxychloroquine and chloroquine can cause abnormal heart rhythms such as qt interval pro longation, measured on an ekg, measures the times it takes the ventricles in the heart to contract and relax. The combination of the drugs combined with zits row maya sin lengthsens the time. For patients that have underlying heart issues that is not good they say it also can cause a dangerously rapid heart rate these risks increase when the medications are combined with other medications that prolong the qt interval, such as the antibiotic azithromycin used in some covid19 patients without fda approval patients with other Health Issues such as heart and Kidney Disease are likely to be an increased risk of these heart problems and death its a big warning by the fda, the study by the journal of the American Medical Association did not show good results for either one of those drugs or the combination of those drugs with azithromycin were going to watch and see what happens, but not good news at this point. Morgan, back to you. Seue herera, thank you for te latest more on the markets well turn our attention back and joined on the Cnbc Newsline by jpmorgan Asset Management phil and Morgan Stanleys chetan ahya. Phil, ill start with you. Just taking a look at the market, the s p specifically, the fact that weve been range bound not only today but in recent trading sessions after we saw it retrace 50 of its decline, where do you see it going from here and what do you see as the biggest potential catalyst is it still medical headlines like the ones we got a moment ago from sue herera or are there other pieces, other factors that are going to continue to drive the Market Action . Yeah. Morgan, good morning greetings from the great state of new jersey. So when we as asset allocators we made a very, very short move by taking our equity allocation in our multiasset portfolios by about 20 . That was a very bearish stance at this point, though, morgan, you know, were not were not nearly as bearish as we were back then and while still underweight weve replaced almost 50 of that risk. I think its driven by the confidence around policy weve spoken as lot about it the fed stopped, you know, libor from increasing, corporate debt is starting to act as a good diverse fier congress has responded much more than what people were expecting through is Small Business loans and Unemployment Insurance thats whats being digested by the markets in terms of being range bound. The question now remains, what is the right multiple for the market given this extraordinary policy response, right, and we areassuming in our base case that q2 will mark the low point in Economic Activity in this crisis and i think thats why you shouldnt really lean as bearish and were taking our cues now in this kind of final part of the standard reopening of the economy and ill also remind you with the stock market, there is a historically compelling dividend yield versus where fixed income is right now. Treasury rates so, so low, that worked in a major way in the last cycle and i think were going to continue to point to a tailwind on stocks being so compelling versus debt and the last thing ill say as asset allocators we need to think about the right defense, both government bonds and Investment Grade credit, yielding 2 to 3 over treasuries right now. Yeah. Just to followup on that, what is the right multiple for the market where do you put it . Were doing the same calculation everybody is doing if you see a material reduction in earnings, thats worse off than where we were in the beginning of the year. What we are getting, okay, is the fed is basically buying anything thats not nailed down. If the fed walks into your store, prices are going to go up i think that the average multiple at 16 times that weve seen over multiple decades is probably too low in this environment, even with the material reduction in earnings and growth i thinks the market is looking through that and expecting that. Thats why we had the policy response i thinks the multiple should be higher than longterm average in the near term given this just extraordinary historical wartime spending from congress and the fed really buying everything they can to stabilize capital market. Good morning. I want to go back to this headline we just got on hydroxychloroquine and because its something that president had touted as a game changer and now the scientific studies are showing that the primary outcome from taking it can be negative outcome can be death. Do you expect any Market Reaction from that or are we mostly looking at things like the amount of testing thats available, whether it is virus testing, Antibody Testing and the ability to get back to the economy opening up in various states yeah. I think the market is probably going to be focusing more on the staggered opening that we were discussing earlier on. Thats basically watching hows the states are beginning to reopen i think the rule book right now for the market is still to look at what had happened in china, so once the number of new cases peaked out in a few weeks you started to see actions being taken to reopen. In the white houses guidelines, if you take that into consideration, 14 days after the new cases peak and they are declining, you will see opening of several states. And so we are actually looking at 28 days, not 14 days, because phase one is not [ inaudible ] meaningful opening in 28 days we will probably if you take the data on the new cases peaking out, by middle of may, you would have about 48 of gdp. The states which are accounting for 48 of gdp will begin to see meaningful opening if you take that guideline as well as the data an new cases into consideration. So i think the market is probably going to be more focused on that and above anything that indicates that new cases are not peaking quickly or not rolling down, that will be a bigger factor weighing on markets mind than the news on therapy drugs. So chetten, i know one of the things youve written about recently is reopening in china and what Economic Activity has been looking like there. How much of what weve seen take place in that country can actually be applied to the u. S. And where were starting to see the reopening plans emerge. We are seeing a lot of similarity, actually the only difference is that the scope of the outbreak in europe and the u. S. Has been much bigger so we are kind of observing that all the activities in terms of reopening is lagging china by about three months, that is that china started to see the outbreak a bit earlier and then the u. S. And europe has had a wider scope of the outbreak. There is a lot of similarity and things which were learning and were seeing something similar going on in europe we think the Global Economy is going through a rolling bottom chinas data bottomed in february europe is bottoming in april and the u. S. Will also bottom in second half of april then we are going to see opening of most of the places or several of the parts of u. S. And europe in the month of may. The Economic Data will be recovering from month of may for u. S. And europe. Its pretty much following the china track with a different level of lag because of the scope of the outbreak. Thank you markets trying to stay out of the red today when we come back well talk to bob swan of intel on the heels of their earnings and guidance which was kind of nice to get in this environment where so Many Companies have pulled. Back in a moment it is an understatement to say that i was extremely worried. I was overwhelmed. And i didnt know where to begin. I came across sofi and it was the best decision of my life. I feel cared about as a member. Theres no extra costs for it or anything like that. Its all kinda like, through the app. Were getting a super competitive Interest Rate on our money. Were able to invest through the same exact platform. I really liked that they didnt have any hidden or extra fees. Sofi has brought me peace of mind. Truly thank you for helping me prepare for whatever the future has in store. Its all because sofi let us see light at the end of the tunnel. So thank you. Thank you. Intel shares are under pressure down about 2 after earnings we have analyst lowering price targets and raising and maintaining. Well talk to ceo bob swan next. Stay with us every Financial Plan needs a cfp® professional confident Financial Plans, calming Financial Plans, complete Financial Plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. A beat on the top and bottom lines has not been enough to keep intel in the green this morning. The company is one of the few to issue guidance this earnings season saying the Current Quarter is tracking just below the streets estimates questions on gross margin here as different analysts interpreting different ways. Joining me now is intel ceo bob swan good morning, great to see you good morning, jon, how are you today . I am doing well i am thankful that you are too lets start first with a broad look at this quarter and where intel is tell me about the workforce, how stable is it, your partners and customers, where is demand, do you see a way out of this crisis that were in . Yeah. Thanks, jon. First let me start with the quarter we just closed really it was an outstanding quarter for our company. 23 top line growth. Our operating margins expanded 10 points. Earnings grew over 60 all in all in the First Quarter it was even better than we expected when things started out. What we saw during the course of the quarter was the resiliency of our workforce we started out, when the covid19 began by really focusing on the welfare and safety of our employees first and foremost secondly, ensure that we are delivering for our customers because in so many ways, they were counting on us more than they ever have third, as you and i spoke time giving back to our community in these troubling times. Through the course of the quarter, our Global Supply chain delivered more than we expected for our customer and our employees are safe and we go into the Second Quarter having raised our outlook for revenue on the top line. So far so good to the first half of the year. As we go into the second half of the year things are too cloudy at this stage to give insight about what to expect for the full year. The first four months performed extremely well in incredibly challenging circumstance. A number of people are scratching their heads about the gross margin guide for q2. 56 , down 6 points, sequentially you did explain this on the Earnings Call and talked about three primary reasons for that, but i want to try to highlight what mainly this is because the move to 10 nanometer and the way that intel manufactures, even a lot of investors arent so familiar with that is this 56 gross margin because youre putting your foot on the accelerator with the transition to 10 nanometer even during this difficult time yeah, jon its really two things first, in the First Quarter, our Gross Margins were better than expected thats good, solid foundation. But the two things that are compressing gross margin the Second Quarter is, number one, our excitement about the qualification of a product that we will deliver in the Third Quarter and so what that means in the Second Quarter until that product is qualified is all of our expenses flow through to the pnl, but that comes back in the second half of the year. The indication there is good news were on track to qualify a product in the Third Quarter that will be a very good product for the industry, which is our Second Generation 10 fan knnano product for the pc were confident in our 10 nanometer node and with that confidence on how yields have been performing in our factory network, were going to go even faster, both on the pc product and on a 5g soc product that were launching as we go into the second half of the year. Were qualified in a wonderful product and were accelerating the volume were putting on our ten nanometer platform normally i dont consider gross margin compression as a bad thing, but in this case, for both those reasons, the compression of gross margin in the Second Quarter is a good thing, its time or yeiented fou and its confidence rolling out our new process node faster than we anticipated. That clarifies for some people and makes some sense. I want to get into the pc now and understanding how thats been affected by this. You as a former cfo and george kind of have a reputation for being conservative in guidance so i want to parse that, not that thats a bad thing, but your guidance on the pc segment flat to up slightly, based on the demand that youre continuing to see in cloud, in service provider, it seems to me like part of whats driving that is the same kind of demand driving the pc business. Why is the guide on pc flat to up compared to the stronger guide for the other segments thats a great question, jon. First, in the First Quarter, our pc business grew by 14 . The end market demand that were degree in the industry really strengthened during the course of the quarter, and particularly in march and the latter parts of march. The end market demand is relatively strong. The challenge in the supply chain during the course of the quarter is we were able to ship in to our odms and the oem customers we have, they had to ramp back postchinese new year to get back to full production what happened, we had a very strong First Quarter thats gone into the supply chain, but it hasnt gone into end market consumption. A strong 14 growth in First Quarter, a roughly flat growth in the Second Quarter, and the aggregate has consumption in high Single Digits which i think is stronger than ever in the industry anticipated when we came into the year the real question, so demand is stronger, supply chain working through the inherent challenges caused by covid19 the challenges for us and the industry what are the longer term implications for the current environment . Will it mean more and more demand for pc and peripherals if the home Going Forward, or is this a temporary spike in tee manned that will normalize over time that question hasnt been and as yet. What do you think i think that a number of people are recognizing that the pc is a piece of essential equipment if you have an aging one at home and thought maybe i could let it go and use a tablet or my smartphone, youre thinking the kids will need that for school, im going to need it to get work done, i might need a web cam, i have to keep that updated, could we see a shift in refresh cycles, not just initially, but a compression of them Going Forward based on that and when will you foe know . Yeah. Thats the question. Maybe three different answers. In the real near term, which is what we experienced in the first and Second Quarter, there was a spike in demand for the needs to allow us to work from home or to study from home. The real short term, we saw real spike in demand. Over the long term i believe that will continue the pc as an essential component of every day life, i think only gets greater over the long term. That bodes well for the industry, that bodes well for intel. The challenge is going to be in the medium term, really as unemployment has gone up dramatically in a relatively short period of time, as global gdp has compressed quite a bit in a very short period of time, the question right now is more this near term what is going to happen in the second half of the year. While we feel very good about the first half, while we feel very good about the importance and how essential the pc will be Going Forward, its a temporary period in the second half where we just dont have great visibility is yet. It was 40 years ago where the industry, intel and the industry, talked about getting a pc in every home now i think more the presumption is as we continue to deliver Great Technology in a world where the pc is even more essential than ever, we have not just a pc in every home but pc in every room in every home. Finally, ill try to make this quick, i want to ask you about the company, when california does green light a return to work, is intel going to redesign work spaces, is the area of high density, open plan offices over are you starting to think about that yet were starting to think about it, but we havent quite resolved it. I think right now our priorities as you and i spoke last are the health and welfare of our employees first and foremost, delivering for our customers and helping our community in these trying times what that means for the Office Environment for sure distancing will be a more important ingredient than working in the office well figure what the right solution is over time. All right and youre showing us in your shots the sun is coming out in california we will take that as a good sign. Bob swan, ceo of intel, thanks for being with us. Thanks so much, jon good stuff. Thank you. Shares of intel down about 2 . Well take a commercial break. A check on the markets before we do the s p sliding or slipping between gains and losses really hovering near the 2800 level, though. Similar story for the dow which is down about 76 points. Stay with us it is an understatement to say that i was extremely worried. I was overwhelmed. And i didnt know where to begin. I came across sofi and it was the best decision of my life. I feel cared about as a member. Theres no extra costs for it or anything like that. Its all kinda like, through the app. Were getting a super competitive Interest Rate on our money. Were able to invest through the same exact platform. I really liked that they didnt have any hidden or extra fees. Sofi has brought me peace of mind. Truly thank you for helping me prepare for whatever the future has in store. Its all because sofi let us see light at the end of the tunnel. So thank you. Thank you. Yeah, everything is runningis smoothly with the now platform. bling see, incident resolved. How did you. Gotta enjoy the small wins. You keep being you, derek. Keep being you. And sometimes, you can find yourself heading in a new direction. But when youre with fidelity, a partner who makes sure every step is clear, theres nothing to stop you from moving forward. Shark tank. Welcome back new york state out with its latest number on covid19. Heres Governor Andrew Cuomo moments ago. Total hospitalizations, down, good news. 14,200 all the evidence suggests were on the downside of the curve, were headed down. Net change in hospitalizations is down. Net change in intubations is down again and they have been down for a while. This is still not great news, number of new people coming into the hospital, number of new infections, is slightly down, but thats basically a flat line and that is troubling. About 1200 new, 1300 new infections every day number of lives lost is still heartbreaking news, 422. Again, this is at an unimaginable level, and its dropping somewhat, but its still devastating news well keep our eye on the briefing by Governor Cuomo in recent days not so much about the data, but some of the secondary stories hes brought us, for instance, that serology study from yesterday in the meantime as states begin trying to reopen their economies, the nations labor unions worry about Worker Health and safety de taylor, a Union Representing more than 300,000 hospitality workers in the u. S. And canada thanks for joining us today. Good morning. Thank you. Were definitely seeing pockets of concern regarding worker safety and now vegas has turned out to be this sort of flash pot of what to do, whether its comments from the mayor, comments from the Las Vegas Sands issuing playbooks on how to open. How would you characterize the interest in going back to work in vegas specifically . Well, in vegas specifically, were not going to be in a laboratory like a mayor suggested. When we reopen, we want to make sure scientists and Health Experts are in the middle of that decision making, but we want to be part of how it reopens. We want to insist on testing, ppe, hand sanitizers, cleaning to cdc standards, enforcing social distancing, and give health care for those who dont have health care because we dont think anybody should have to choose between your life and your job so how much distance do you think there is right now between the status quo as it is . If we had to open today and the kinds of precautions you want to see in place, your union wants to see in place when, in fact, things do reopen well, the wynn resorts released what they thought the cleaning and the safety protocols are. They did that last weekend were very encouraged by that and think companies should follow that. We think testing should be involved too, besides heat sensors, hand sanitizers and ppe and cdc standards of cleaning. Were going to be involved with this not just in las vegas, bought throughout this country were not going to have our workers and the workers in this industry, whether represented by us or not, be viewed as rats in a lab that get tested whether precautions have been good enough well do Everything Possible to make sure people in the Hospitality Industry are protect. D. , i realize your union represents hospitality workers there are already reallife examples of worker forces, unionized worker forces that are still operating in factory and showing up to work, defense companies, transportation logistics, auto workers making ventilators and, ppp right now are you having conversations with other unions what you would like to see in place and how closely are you tracking that . We have been in conversations and been in conversation with Health Experts, independent of any company. Weve also been talking to the companies. I think the Companies Realize this in our industry, its not just a worker safety if guests dont feel like theyre safe theyre not going to come into those establishments this is about not only the workers but the actual clients and the guests, its for both. Anybody who doesnt see that doesnt understand our industry and the comments that were made by the mayor in las vegas, are completely irresponsible and frankly i think theyre immoral because not only are you putting workers in jeopardy youre putting guests in jeopardy that is the death moment of any Hospitality Business if guests do not feel like theyre safe. Absolutely. When i see a stat like over 95 of unite care members in the u. S. And canada are laid off or furloughed, were talking about workers that pay dues to the union every year, how are you helping them financially and what does it mean in terms of the unions own financial viability in the coming months. Yeah were helping them in several ways i feel good our extended members have health care because of our health care funds. Im not just thinking about our members but people in the Hospitality Industry, 26 million, who millions have lost their health insurance, congress has been completely irresponsible. They just spent over 2 trillion dollars on the Health Care Crisis and not figured out how to extend health care to people who need it the most its criminal in my opinion what congress has done. Number two, were helping in the unemployment system. The unemployment system in almost every state is unbelievably dysfunctional florida being the worst. 1. 5 Million People have applied for unemployment in florida and open 40,000 people have been thats a level of incompetence or deliberately denying people the kind of unemployment were helping people with food weve set up food banks. Food insecurity is a huge issue. We have an ongoing one here in vegas. We just did one in Atlantic City and one in los angeles, Food Insecurity four, shelter. As you know, we have some predatory land lords who try to want to evict people we are in the middle of that 100 the last thing we need is people out on the street due to this situation right now. Then finally, we are urging in the strongest possible way, that those millions and millions of people who have lost their jobs recently through no fault of their own, we have got to figure out health care for those workers. Congress has not stepped up. Its criminal. They have got to step up well beyond our industry, well beyond our membership, that has to happen. Speaking of no fault of their own, larry kudlow this morning talked about the white house looking at the issue of Liability Protection for Small Businesses to protect them from lawsuits in case a customer or an employee gets coronavirus through no fault of their own. He says i dont think there should be a lawsuit. Small businesses buried in litigation are to good to themselves or their employees. Yeah. Listen, i am very supportive of Small Businesses i think the first round of loans, the big corporate ones that got it was outrageous and im glad weve embarrassed them to return some of the money like ruth chris on the other hand if they are talking about litigation, what kind of safety procedures those companies are doing to ensure the workers and guests are in the best possible position not to contract it at work, and also, to have an environment where people are tested and checked before they come to work, at least the very first time you cant have one without the other in my opinion. He talks about the liability he doesnt talk about the safety protocols that every business should actually be mandated to do before they reopen. Finally, georgia is going to be a big test case over the weekend. Weve talked about it this morning. How much exposure do you have to georgia and are you getting the sense that workers in the union are anxious to go back to the degree they can . Well, its not just georgia thats the whole country its not like the buyer stops at a state line if somebody is in georgia and they travel to new york or they travel to texas or louisiana, its not like it stops georgia, in my opinion, is being completely irresponsible to the rest of the country. Our workers, nobody is more anxious to go back to work than our members and folks in the Hospitality Industry they want to go back, but they want to go back to a safe environment where theyre not risking their lives. I think theres an old english highway robber statement that used to go to the carriages, give me your life or give me your money well, everybody always chooses their life over their money. We shouldnt go back to their days lets allow people to have ir that life and health and earn money at the same time we appreciate you sharing your thoughts and hope you come back huge issue for the American Work force as we try to figure out how to unlock this puzzle. Now were going to take a quick commercial break with the major indices about flat stay with us markets at a pretty narrow range going between the red and green ahead of a very busy week forearnings next week with names like 3m, starbucks, comcast, microsoft, tesla and more rba aer srtreak veterans, in times of crisis, youve served our country. If youre a vet and youre experiencing any symptoms of the coronavirus, please contact your local va hospital. Protecting your health is our greatest duty. Dad, im scared. Its only human to care for those we love. And also help light their way. Its why last year chevron invested over 10 billion to bring affordable, reliable, ever cleaner energy to america. Im going to start the bidding at 5. Thank you, sir. Looking for 6. 6 over there do i hear 7 . 7 in the front 7 going once. Going twice. Sold to the onion lover in the front row next up is lot number 17, a spinach and artichoke dip, beautifully set in a hollowedout loaf of sourdough bread. Dont get mad get e trade and get more than just trading investing. Banking. Guidance. Welcome back realtime voice Transcription Service ott terks r ai is integrating. They will have live meeting notes. Joining us to discuss the partnership is otter ai ceo. Good morning i got to say off the top, im an otter user. Heard about it fromproducers here at cnbc really been impressed at how it trib transcribes interviews in realtime during this period of lockdown over the last month of so, what sort of usage changes have you seen we have seen tremendous growth in the usage in the last months we have seen 5x growth in terms of meetings being transcribed. Many meetings are done over zoom or other Video Conference systems. The number of meetings, the number of hours people use the service has grown tremendously why is that, do you think its kind of obvious this is the way that people meet now, but even with in person meetings, i dont necessarily get a transcript of the meeting. Is it because people who arent in meeting need to understand what happened or what should we take away what should we learn from that shift in usage theres several reasons e when everybody is in the office, you can walk over and ask questions. When everybody is working from home, you have to use some technologies to communicate. Zoom and otter Video Conferencing system are the best two you use. Having all this meetings, when working from home one reason is youre often distracted by other things the kid, the dogs and other things how do you take note sns we have a surveyed a bunch of people, they may have 20, 30, even 40 hours of Video Conferencing every week back to back meetings makes it really hard. What youre seeing on your screen is a live transcription of this interview right now on otter so the viewers can see in realtime how it works. Morgan thank, john sam you mentioned 5x growth. How do you keep all that data safe all the data is stored in the u. S. Its encrypted in transit and rest the user has full control when ever the users decided to delete anything, we absolutely erase everything we have a very strict Privacy Policy in terms of service to ensure the confidentiality and security what do you say to those who, at least when it comes to zoom, have said we dont trust the technology whether its u. S. Schools or the alphabet. What is the best sales pitch to say come back . First of all, i think in zoom they have been super transparent. The ceo is doing a great job they are open. They invited an external audit they might have made some mistakes but i think they are fully transparent. We have seen some fully trust zoom Bridgewater Associates is a customer for otter , your Linkedin Profile says that otter is hire, currently. Not a lot of companies are what are you hiring for . What does it have to do with this surge in usage and people concerned about the business take away from the fact youre still hiring in this period its terrible time however, people rely more on Collaboration Technologies like zoom and other Video Conferencing system and now otter comes into play and provide a new way to collaborate and communicate. Our users growing, our workload has been growing tremendously. We do need to hire more engineers, more ai experts to further improve the Technology Creating new Processing Technologies to analyze the meeting and help people track and understand and share the information better were hiring across the spectrum, engineering, sales and marketing to further grow the business sam, i realize that otter premium is a theres a subscription fee but the basic plans come at no cost. How are you making money on this this is a free model, Premium Model similar to other collaboration software, including zoom, slack, dropbox we provide some free service to meetings with users and just to give them chance to experience the service and one day see the value many of them decide to operate and subscribe to the premium or our enterprise plan our service is based on the Monthly Subscription or any subscription its good to see innovation continuing, hiring continuing, even despite the situation we find ourselves in. Sam, the ceo and founder of otter ai, thanks for being with us thank you very much getting some new guidelines from the Small Business administration on ppp loans and how they pertain to hedge funds and private connect. Lets get to aemon what theyre saying is hedge fund and private equity firms are not allowed to get ppp loans. This new guidance saying that hedge funds and private equity funds are engaged in investment and speculation and such businesses are there for ineligible to receive a ppp loan theyre saying the administrator of the sba does not believe it was congresss intent for these types of businesses which are generally ineligible for these types of Small Business loans to get ppp financing. That clears up one element of the mystery around all of this one of the other elements is this idea their emphasizing here that you have to certify as a borrower, that the uncertainty around covid is impacting your business and they are warning here, that they may go back and check. Those companies that are now applying for ppp loans whether or not they really were impacted by covid or whether they were struggling previous to the viruss impact thats one thing for borrowers to watch marco rubio, the senator who is keenly involved in this tweeted he believes the ppp program will be back up and running, fulltime, on monday well see how long those new funds last that first round went awfully quick and the expectation is this new round will go quick as well carl yeah. Even earlier this morning robert frank tweeted a figure of the number of Public Companies who severed ppp assistance and its amazing how this one program, which is barely a few weeks old had multiple political sand traps. Yeah, absolutely. Companies really didnt know what they were getting into. This all happened so quickly people had to make jumdgments very, very fast. Maybe a lot of them were thinking in terms of dollars and cents and not the political impact youve seen harvard reverse course and back out of funding they got a lot of companies realizing theres a political element as well as a bottom line element. All right thanks well watch that closely head of a very busy week of earnings have a great weekend wooe well get to the half and the domino thanks very much our breaking News Coverage on cnbc continues right now im dominic chu in for scott wapner markets running out of steam and reasons to march higher as bad news keeps come ng about the state of the economy what does it mean for you and your money and where do we go from here . Were going to debate that with our Investment Committee today