In Chips We Trust…Again, Crypto Regulation Roadblock, and Fed Independence & Inflation 1/15/26

Summary

Podcast Summary: The Exchange (CNBC)

Episode: In Chips We Trust…Again, Crypto Regulation Roadblock, and Fed Independence & Inflation
Date: January 15, 2026
Host: Kelly Evans

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Overview

This episode of CNBC’s "The Exchange" dives into three major themes moving markets and business headlines:

1. The renewed optimism in semiconductor stocks following stunning results from Taiwan Semi,
2. The roadblock in U.S. crypto regulation as Coinbase withdraws support for a Senate bill,
3. Concerns about Federal Reserve independence in the context of inflation threats and political scrutiny.

Expert guests—from equity analysts to crypto executives and Fed watchers—offer deep insights into what’s driving these stories, their broader market implications, and what investors should watch for.

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1. Semiconductor Surge: Taiwan Semi Sparks Wall Street Rally

(00:58–07:09)

Key Points & Insights

• Market Reaction: Taiwanese chip giant TSMC reports a 35% jump in Q4 profit, driven by explosive AI chip demand. This lifts not only TSMC's stock (+6%) but also AMD, Western Digital, and leads to record highs for Europe's ASML.
• Industry Growth Outlook:
  • Aaron Rakers (Wells Fargo senior equity analyst) forecasts “the semiconductor industry could grow to $1 trillion-plus in revenue this year, up 29% YoY, with double digit growth into 2027.” (02:28)
  • Broad-based demand: AI, memory (Micron), and hard disk drives (Western Digital, Seagate) all benefit.
• AI Inferencing & 'Tokens':
  • Nvidia, Broadcom, and AMD singled out as primary beneficiaries.
  • On tokens: “The output is the token. How do I get more tokens generated per dollar or per watt as we move forward? … Deeper answers, but more importantly, quicker answers.” – Aaron Rakers (05:09)
• China Risk & AI:
  • China's restrictions on Nvidia's H200 chips: Rakers downplays risk, sees China as representing billions in potential revenue rather than a threat.
  • Lower-level AI chips used in China not enough to undermine the global growth story.

Notable Quotes

• "We've been consistently overweight Nvidia. I think they're playing a different ballgame." — Aaron Rakers (03:24)
• "You stand up the factories, the output is the token." — Paraphrasing Nvidia CEO via Aaron Rakers (05:15)

Timestamps

• TSMC report & market rally: 01:03–02:28
• AI chips, tokens, inferencing explained: 04:06–05:49

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2. Broader Market Trends: Beyond the Big Tech Rally

(07:09–11:50)

Key Points & Insights

• Rotation and Market Breadth:
  • Jared Woodard (Head of Research Investment Committee, BofA Securities) says: "Strength in artificial intelligence and broader industrial growth is something that affects almost every sector... it's a much broader story in 2026 than it was in 2025." (08:18)
• Global Economy:
  • US economic data strong—not just surveys but "real figures show profound strength."
  • Expansion is seen across GDP components: consumption, investment, trade deficit at narrowest since 2009.
• Investment Suggestions:
  • Woodard recommends small caps, Japan, quality and value in the US, and trending commodities like gold.
• AI & Industrial Economy:
  • Big tech now supports broader industry (e.g., willingness to pay more for electricity, building industrial capacity) to maintain sustainable growth and avoid political backlash.

Notable Quotes

• "It's hard to think of a sector in which artificial intelligence isn't now a very relevant and key part of the business model." — Jared Woodard (08:18)
• "Tech companies realize that if they don't bring the rest of the economy along ... they're going to be some pressure points and backlash." — Jared Woodard (11:14)

Timestamps

• Market breadth trends & investment ideas: 07:32–11:50

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3. Crypto Regulation Hits a Roadblock

(14:23–19:29)

Key Points & Insights

• Delay in Crypto Market Structure Bill:
  • Coinbase CEO Brian Armstrong criticizes the bill: “I’d rather have no bill than a bad bill… the current draft would kill three or four different product lines that we have.” (14:34)
• Bill’s Flaws:
  • Ban on tokenizing securities; kills rewards on stablecoins; blocks certain DeFi innovations.
  • Contradicts SEC Chair’s message encouraging asset tokenization.
• Industry Resilience:
  • Hunter Horsley (Bitwise CEO) says, “The space is moving forward… traditional financial services are now part of this ecosystem.” (17:34)
  • Crypto market continues to grow despite regulatory uncertainty. Adoption and demand expanding, with traditional banks now allocating client assets to bitcoin.
• Need for Clarity:
  • Clarity on DeFi, tokenization, and stablecoins would boost institutional adoption, but “no bill is better than a counterproductive one.”

Notable Quotes

• "This bill would have provided a firm regulatory framework for the industry. The delay is a setback, but hopeful something can get done soon." — Hunter Horsley (15:09)
• "An email I got from a client: it’s a large wealth management team at a bank. Just yesterday, they put 1% of clients’ assets into bitcoin this week." — Hunter Horsley (18:47)

Timestamps

• Why Coinbase withdrew support: 14:23–15:47
• Industry needs & outlook: 15:47–18:28

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4. Prediction Markets, College Sports, and State Regulation

(23:34–27:17)

Key Points & Insights

• Sports Betting Scandal:
  • 20 people, including 15 former college basketball players, charged in a point-shaving scheme.
• Prediction Markets vs. Sportsbooks:
  • Contessa Brewer explains rising use of prediction markets like Kalshi among young adults and in states where sports betting is illegal.
  • NCAA asks for federal action: “The NCAA head Charlie Baker has asked federal sportsbooks to stop offering college player props.” (24:04)
• States Losing Revenue:
  • Offshore and prediction betting circumvents official sportsbooks, which has tax implications for states—California and Texas have particularly high usage despite (or because of) their lack of legal sports gambling.
• Market Growth:
  • On Kalshi, college football trading surpasses NFL/NBA—trend since October.
  • “The enthusiasm around college sports is fueling prediction markets growth.” — Contessa Brewer (25:17)

Notable Quotes

• "18 to 20-year-olds who are too young to gamble legally in most states are contributing significantly to the growth of these prediction markets." — Barry Jonas via Contessa Brewer (24:26)
• “Once you say that state revenue is at stake, maybe we’ll get some action.” — Kelly Evans (27:09)

Timestamps

• Sports betting scandal & prediction markets explanation: 23:34–27:17

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5. Fed Independence & the Inflation Debate

(27:42–35:40)

Key Points & Insights

• Fed Rate Outlook:
  • Kansas City Fed’s Jeff Schmidt says “prefers to keep rates unchanged… inflation is too hot.” (27:42)
• Central Bank Independence:
  • Chicago Fed’s Austan Goolsbee: “Anything that's infringing or attacking the independence of the central bank is a mess. You're going to get inflation come roaring back.” (28:52)
• Why Fed Independence Matters:
  • Michael Darda (Roth Capital) and Steve Liesman argue that loss of independence can lead to inflation, higher interest rates, and even destabilize the economy (citing Venezuela/Iran as warnings).
  • Markets still trust the Fed in part due to Powell's actions and the Fed’s design, which separates it from easy political takeover.
• Inflation Outlook:
  • Despite recent disinflation, concerns linger about political pressure leading to future stubborn or resurgent inflation.

Notable Quotes

• "Fed Chair Powell should be applauded, not condemned… We could certainly do a lot worse." — Michael Darda (30:49)
• “Lack of independence does not create inflation. Lack of independence creates higher interest rates… When inflation comes along, a lack of independence means the Fed would not address it adequately.” — Steve Liesman (32:20)

Timestamps

• Fed comments & debate: 27:42–35:41

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6. The Future of Software in an AI World

(39:42–46:12)

Key Points & Insights

• Software Sector Woes:
  • Software stocks underperform, with existential questions: "Why does anyone need a software provider when their own engineers can spin up their own tools using something like Claude code?" — Deirdre Bosa (39:47)
• Incumbent Advantages:
  • Aaron Levie (Box CEO) argues most companies won’t rebuild mission-critical systems with in-house agent code; instead, “AI agents are one of the biggest boons for enterprise software.”
  • The division between core systems of record (CRM, document management) and more custom apps will persist.
  • “Agents need context. Context sits inside your software and its data.” – Aaron Levie (44:34)
• Monetization & Market Structure:
  • Platforms that house enterprise data will remain valuable, as that’s where agents can safely operate. Execution will determine winners/losers.
• AI Competition & China:
  • U.S. open source efforts lag behind China; potential call for Washington to fund more innovation, but also a belief that competition ultimately spurs more U.S. innovation.

Notable Quotes

• "AI agents are one of the biggest boons for enterprise software… If you imagine a world with 10 or 100 times more AI agents, then the platforms where those agents operate become even more valuable." — Aaron Levie (40:06)
• "The idea that the AI system takes all of the software just unfortunately doesn't work from a technological standpoint." — Aaron Levie (46:12)

Timestamps

• Software vs. AI agents, sector analysis: 39:42–46:12

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7. AI in Retail: Fighting Fraud with Returns

(36:08–38:59)

Key Points & Insights

• AI Combats Retail Return Fraud:
  • Happy Returns (owned by UPS) now uses AI to inspect and score returns—flagging up to 15% of high-risk items for fraud (“worth an average of $240 each”).
  • Reverse logistics companies using AI to spot both return fraud and delivery disputes, saving retailers millions.
• Scale:
  • 17% of holiday purchases expected to be returned, with 9% deemed fraudulent (around $75 billion/year).
• Competitive Advantage:
  • Happy Returns claims to be the first reverse logistics firm to deploy AI at the point of in-person return.

Timestamps

• AI and returns fraud segment: 36:08–38:59

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Notable Quotes & Memorable Moments

• “Anything that's infringing or attacking the independence of the central bank is a mess. You're going to get inflation come roaring back...” — Austan Goolsbee (28:52)
• “It's hard to think of a sector in which artificial intelligence isn't now a very relevant and key part of the business model.” — Jared Woodard (08:18)
• “I’d rather have no bill than a bad bill… the current draft would kill three or four different product lines that we have.” — Brian Armstrong (paraphrased by Jared Woodard) (14:34)
• "AI agents are one of the biggest boons for enterprise software… platforms where those agents operate will become even more valuable." — Aaron Levie (40:06)

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Takeaways & Closing Thoughts

• Semiconductors: The AI boom is fueling record-breaking results for chipmakers; the sector outlook is robust, with multiple players poised for more growth.
• Markets: Broadening leadership beyond big tech, with small caps, industrials, and commodities all showing strength—supported by real economic expansion.
• Crypto: Industry is resilient and growing despite regulatory uncertainty; clarity is important, but only in the form of good, enabling policy.
• Fed & Inflation: Political meddling at the Federal Reserve is viewed as a serious risk to economic stability and inflation control, but confidence remains high as long as independence is preserved.
• AI & Software: Rather than threaten incumbents, AI agents bolster the value of platforms with rich enterprise data, though execution will separate winners from losers.
• Retail Innovation: AI is quietly transforming reverse logistics, saving retailers millions by detecting and deterring fraudulent returns.

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For Listeners

This episode expertly ties market-moving news—semiconductor rallies, crypto regulatory battles, central bank independence—to long-term trends in tech and finance, delivering actionable and timely insights for investors and business leaders alike.

Transcript

[Kelly Evans]

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Thy ticket, lady Jennifer of Coolidge. Well, many thanks, good sir.

[Contessa Brewer]

Here is my Discover card.

[Kelly Evans]

They accept Discover at Renaissance fairs? Yeah, they do here. Discover is accepted at the places I love to shop. Get it with the times. With the times. You're playing the lute. Yeah. And it sounds pretty good, right?

Discover is accepted at 99% of places.

That take credit cards nationwide, based on.

The February 2025 Nielsen.

Thank you very much, Frank. In chips, we believe again, a big warning about Fed independence and coinbase delays the crypto bill. That's all coming up this hour. Welcome to the Exchange. I'm Kelly Evans. And stocks are rebounding after two days of losses after strong results from Taiwan Semi and the investment banks. The NASDAQ now turning positive on the week. Taiwan semi, 35% jump in profit, is reigniting the chips in the air trade today. Its stock itself is up about 6%. And that's got Amad, Western Digital and AMD all leading the market. ASML over in Europe hitting a new record high and crossing above a $500 billion market cap for the first time. The metals, meanwhile, and oil are taking a breather today. Gold and copper are lower, while silver, you just can't keep it down. It's trying to rebound. It's back to almost $92. And oil prices are slumping more than 4% as the president backs away from Iran's strike threats. So let's begin with the surge in semi names today after Taiwan semi reported that 35% jump in fourth quarter profit. Those record gains are thanks to strong demand for the company's AI chips, although it comes a day after China said it'll restrict the purchase of Nvidia's H200 chips. Let's bring in Aaron Rakers. He's a senior equity analyst at Wells Fargo. He just made some moves across his coverage universe, including upping the price target on several names. Aaron, welcome to you. This is very similar to what we saw last week. You know, you get a strong overseas report. The chip space lifts that was More in the memory space. But what does this tell you?

[Aaron Rakers]

Yeah, I think, Kelly, it talks to the strength that we continue to see in the infrastructure build out. So you know, we forecasted this morning that the semiconductor industry could grow to $1 trillion plus in revenue or in sales this year. That's up 29% year over year. And we're forecasting another, you know, double digit growth into 2027. So I think we're still seeing, we're moving from heavy training investment cycle to inferencing starting to proliferate and that's carrying the chip sector you mentioned earlier. TSMC results obviously very robust. I think they talked about a mid to high 50% compound annual growth rate in their semiconductor forecast from 24 through 2029, which was an uptick from their prior outlook. So I think it's broad based, broad based strength. We did move to overweight on, on Broadcom this morning and we put AMD as our top pick.

[Kelly Evans]

Is Nvidia in there?

[Aaron Rakers]

I'm sorry?

[Kelly Evans]

Nvidia, is that in there as well?

[Aaron Rakers]

Yeah. So we've been consistently overweight in video. I think they're going to have a good print this next cycle. You know, we came out of meeting with the company last week at CBS and you know, demand sounds very, very robust and we think that they are playing a different ballgame. Right. This, this notion of extreme co design up and down the stack I think makes them a clear differentiated platform provider. So we continue to like that name as well.

[Kelly Evans]

Yeah. Why does Broadcom, you know, you mentioned inference. Maybe you can talk a little bit more. When I'm using, you know, various chap, Gemini or ChatGPT, whatever it is and asking rather straightforward things. Do you, am I using its inferencing capabilities or is that something that's happening in the more sophisticated parts of the market?

[Aaron Rakers]

I think it definitely, it happens there. But I think, you know, more importantly as we move forward, this idea of long context inference workloads moving eventually to physical AI, it's all about token generation. So one of the things that we put in our note today was, you know, talking about token supply and how that might drive just this continued intensity of compute needs over time specific to Broadcom. I would say it this way. I think the stock has underperformed since they reported in December trades at a low 20 multiple on our updated calendar 27 EPS estimate.

[Kelly Evans]

Wow.

[Aaron Rakers]

And we want to be involved in this name as they diversify their custom base of business as we move forward. Obviously a lot of that today is driven by Google's TPU. But you've got opportunities with Anthropic OpenAI, Metta and others kind of come into the play or come into the story as we move through 26.

[Kelly Evans]

Help me understand your point about tokens. As I understand it, a token is a keystroke. So maybe I have a very basic grasp of this, but everything. That's why they always say don't type hello, don't say thank you. You're using tokens. Am I on the right barking up the right tree here?

[Aaron Rakers]

I think that's right. I mean you can see it in chatbots, right. You make a prompt or you make a request. Right. It's thinking, especially when you go into deeper thought mixture of experts. It's more and more token generation as being the output. Nvidia CEO said it right. Like you stand up the factories, the output is the token. And what we're now pivoting to is how do I get more tokens generated per dollar or per watt as we move forward to really proliferate AI more pervasively highlight more answers.

[Kelly Evans]

In other words, is that when you say more tokens, do you mean they're trying to give more answers per compute.

[Aaron Rakers]

Deeper answers, but more importantly quicker answers?

[Aaron Levy]

Right.

[Aaron Rakers]

How do I, how do I accelerate this and how do I also do this on a unit economics basis? Not just quicker but more cost effective. Right. To, to drive, you know, if you will. Elasticity of usage.

[Kelly Evans]

Yeah. So let's bring this then back to the kind of the bread and butter for investors who are figuring out whether to stay in the Nvidia trade as you suggest. Sure they can. You'd like a Broadcom. You've up to rang of names here and you mentioned the AI infrastructure. So this sophistication that they're going to use, you think should lift all those boats. We at the same time get these reports out of China constantly about, you know, a new AI model that was trained on lower level chips. And does any of that eat away at this story on the margin?

[Aaron Rakers]

Yeah, we think we're still early, early innings of seeing what the true inference workload looks like. So we don't see China as a big risk. Obviously there's, there's news this week of Nvidia's ability to sell back into China with the H200. We've estimated that that could be 25 to 30 billion of incremental revenue for the company over time. And then I think the other way to look at it is you do have the other names, right. You've Got the intensity around memory. We do like Micron for example in this regard. And just the overall data demand driving what we've seen, very strong results. And what we still think is upward trends in the hard disk drive names, Western Digital and Seagate.

[Kelly Evans]

All right, and that is a banner today. So Aaron, thanks for your time. Thanks for joining us. We appreciate it.

[Aaron Levy]

Thank you.

[Kelly Evans]

Aaron Rakers with Wells Fargo. The Dow's up more than 400 points as strength in the AI trade is helping the broader market recover from two days of losses. But it raises the question once again of whether we need the trade to keep making new highs. Here to answer that is Jared Woodard. He's head of the research investment committee at B of A securities. And Jared, I'll note everything was down yesterday except the Russell's. What do you make of that?

[Jared Woodard]

Hey, Kelly, it's good to be with you. I think the first thing to make of it is that the trade that so many investors were hoping for in years past that earnings and even returns would broaden out across the market they gave up on last year. That was one of the big outflows. I think that trade is back. It's part of our forecast at B of A research that we expect success and strength in the market to be a much broader story in 2026 than it was in 2025. And so far the evidence supports that.

[Kelly Evans]

Yeah, but so to those who have been burned by this trade a number of times, is there now something, you know, is it just a catch up trade? Like that's great all. You know, we're all going to kind of march along a pace as long as the trade is firmly in the leadership. Or could there be a stronger rotation here where something like the small caps even start to lead the way?

[Jared Woodard]

Well, we're very bullish on small caps for this year. But I think the key point is that the strength in artificial intelligence and broader industrial growth is something that affects almost every sector of the market now. I mean, of course is concentrated in some tech stocks, but there's a very real and legitimate sense in which, you know, some metals and mining companies, uranium miners, utilities, real estate. It's hard to think of a sector in which artificial intelligence isn't now a very relevant and key part of the business model or expectations of the future. We're seeing expansion in the US Economy across every component of GDP from consumption to corporate investment. Government investment is growing in key sectors. And even trade, which has been such a sour note in the economy for so long, as most investors know now was at the narrowest trade deficit since 2009 recently. So there's a, there's a very broad and real sense in which the hard economic data, real figures, not surveys, are showing profound strength. We have an analysis that we do on this measure and of course the survey data is quite poor in many areas. But that hasn't been a good predictor of market returns in recent years. What's been a much better predictor is the real economic data. And on that front we're seeing some of the strongest levels in years.

[Kelly Evans]

Which might be why, to quote you, markets are off to a boisterous start. Precious metals up 9%, small caps up 6. Emerging markets ex China up 5. Convertible bonds if you want to go there. And so you're kind of saying all of the components of this are in place. You're not warning about an air bubble, you're not saying we need it all. We probably, obviously it's got to be part of the story. But you're just saying go to lesser owned corners of the market and some of those. That's why we are starting with small caps. Maybe Japan if I'm getting this right. Quality and value in the US you mentioned gold, although that seems, you know, very well owned at this point. Some trending commodities. So where else would you kind of be pointing people to? And do you think that what we've started the year off of becomes the trend for the duration of 26?

[Jared Woodard]

I think the start for this year is a very interesting tell. I think the most important thing to focus on is where companies are investing and where, where we see strength in the consumer and where we have policy support. A lot of investors are concerned about valuations and about the, the incredible returns and whether they can continue. Our analysis suggests that the analogies people like to draw with past bubbles and past periods of real volatility may not be a good indicator for today. You're not seeing a kind of divergence, for example, between the returns to these stocks and the profits that they're earning and they're actually moving well in line with one another. Something that wasn't true in the dot com era. Typically, bubbles in the market burst when central banks are raising interest rates, not cutting them here and around the world as we expect for, for 2026. And even the investment plans of companies which have become so massive in recent years, even becoming a point of concern, really pale in comparison to the kinds of capex that was necessary say in the dot com era, which was almost double the kinds of investment that you're seeing today. I think one reason for this broadening that might, might be underappreciated by investors is that the tech companies realize that if they don't bring the rest of the economy along with them when it comes to utilities and transmission and scaling up industry, they're going to be some, some pressure points and some backlash. You've seen some deals even in recent days where companies have been willing to pay a higher price maybe for electricity or for components that they otherwise might have done in years past. I think because they recognize that using their cat, their fortress balance sheets to, to bring the rest of the suppliers and the industrials along is going to be a long term winning trade, oh, 100%.

[Kelly Evans]

And it's encouraging that they realize this now so we don't have to have, you know, awful fights about it or hold up progress that we're trying to make, especially from a, you know, from a national security point of view. Jared, thanks so much. We'll leave it there for now. Appreciate your time.

[Jared Woodard]

Thank you.

[Kelly Evans]

Jared Woodard with B of A securities Coming up, the crypto names are in the red today after Coinbase pulled its support for a key Senate bill. CEO Brian Armstrong said it had too many flaws to ask the world's largest crypto index fund manager where things go from here. Plus the prediction markets push. Some say it's just legalizing and letting people profit from insider information. This amid news of yet another game fixing scandal, this time hitting college basketball. And we're watching shares of Sony popping after announcing it struck an exclusive multi year deal with Netflix to stream feature films worldwide. This follows their full theatrical and home entertainment windows. Sony shares up about half a percent more after this.

This is the Exchange on CNBC. Now is your time to get into a new Dr. Horton home by taking advantage of its national red tag sales event going on right now through January 25th. Stop by any of its participating communities and find select red tag homes at incredible pricing. So whether you're buying your first home or looking for an upgrade, you don't want to miss the red tag sales event going on right now. Discover the Dr. Horton Difference. Tap your screen now or visit drhorton.com Dr. Horton, America's Builder and equal housing opportunity builder.

[Steve Liesman]

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[Kelly Evans]

Now you go to bed at night.

[Steve Liesman]

Scrolling on your phone. Well listen up America Carnival is here.

[Kelly Evans]

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[Steve Liesman]

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[Kelly Evans]

Find your fun [e-mail] Carnival is calling.

[Aaron Levy]

Ships registry Bahamas in Panama.

[Kelly Evans]

Thy ticket, Lady Jennifer of Coolidge. Well, many thanks, good sir.

[Contessa Brewer]

Here is my Discover card.

[Kelly Evans]

They accept Discover at Renaissance Fairs? Yeah, they do here. Discover is accepted at the places I love to shop. Getth with the times. With the times. You're playing the loot. Yeah. And it sounds pretty good, right?

Discover is accepted at 99% of places.

That take credit cards nationwide.

Based on the February 2025 Nielsen report.

The Senate Banking Committee is now delaying its crypto market structure bill after Coinbase pulled its backing last night. CEO Brian Armstrong told us his issues with the bill just a short while ago.

[Jared Woodard]

Frankly, I'd rather have no bill than a bad bill. Right. The current draft text that was shown.

[Aaron Rakers]

To us earlier this week, for instance.

[Jared Woodard]

Would kill probably three or four different product lines that we have already in market.

[Aaron Levy]

And so if this is going to.

[Jared Woodard]

Be a giveaway to the banks, I'd rather just stick with Genius, which is already in law, and we're able to operate our business just fine in that environment.

[Kelly Evans]

Although my next guest says this bill would have provided a firm regulatory framework for the industry, he calls the delay a setback, but is still hopeful something can get done soon. Let's bring in Hunter Horsley. He's the CEO of Bitwise Asset Management. Why do you think this bill was necessary? Hunter, welcome.

It's great to, Great to see you. In general, it's always helpful for investors and for a space becoming more mainstream to have clarity. So this bill would be constructive to that end. But I think at the same time, what you heard, heard from Brian there is that a bad bill or something counterproductive is worse than no bill. The reality is that the Genius act passed last summer. The space is hurtling forward. Corporates, our clients, banks and institutions are engaging and investing in the space. There's. The space is making progress regardless. So if there's an opportunity to enhance clarity, that would be good, and I think that we will get there.

What needs to be enhanced, what's. What's unclear right now.

So some of the things that, that I think would give large institutions like our clients, banks, wealth management firms, hedge funds, clarity would be more specific language around the treatment of defi. For instance, there are a lot of firms that want to tokenize securities equities. You've heard that from some of the world's largest asset managers. They want to, they want to, if possible, know clearly what the rules of the road are. So I think that those are the benefits that could come from, from a great version of this Bill, but the.

Bill was saying it would not allow tokenization. Is that right?

That's right, yeah. So I think, I think that, I think both sides have a lot of goodwill and good faith here. But the draft that, that was circulated really killed rewards on stablecoins, put a ban on tokenizing securities, which contradicts the message from Chair Atkins of the sec who believes that traditional assets should come on chain and makes writing software defi. Very difficult. So I don't think it's coming from it from a place of attempting to be counterproductive. I think the reality is that these are complex issues and there's a lot of voices. And so what we heard from Senator Scott is they need more time. And that's, that's really the development this.

Week sounds to me like post genius, the industry felt like it has a stable enough regulatory framework to operate with the banking system and so forth. Like, I'm not sure it needs much further on that front. And correct me if I'm wrong, this would have gone a step further, which is to say allowing the tokenization of stocks, allowing the yields and all these other kind of financial plays that you mentioned, which while they would be nice for those business models, it sounds like instead of advancing and meeting those goals that a coinbase would obviously have, it was actually prohibiting them. So why does the industry want this bill at all?

Yeah, that's, that's, that's exactly right. Things are moving forward. I'm speaking regularly with the CEO of banks. The banks are coming in this space. It's no longer just a sort of a sideshow crypto industry. The traditional financial services space is now part of this ecosystem and trying to bring the benefits to their clients. So I think that in general, having more clarity around things like tokenization would be good. But if what's going to come down is ultimately counterproductive, then it'd be better not to have one, not to have a bill here because as you said, there already are other forms of clarity. And, and the market's also up this year. The Bitwise 10 crypto index fund is up 11% year to date. So things are going well and this would be great if it can come out in a good form. I think it will get there, but if not, it's not, it's not a make or break thing. The space is, is happening.

Anyways, so finally I was going to ask you about that. The strong performance we've had since the turn of the year, what to you is driving that and does it seem to you like the Kind of move where. Okay, that was it. That correction down to. Forget it. We got 80s. However low we got in the fall that that's over and behind us now.

It's hard to keep track of prices in crypto. Yes, I do. I think, I think that there are idiosyncratic development the fall that we chatted about last time we were together. But the, the main trend that people shouldn't lose sight of is that demand is growing, adoption is growing. We just launched a chainlink ETF this week. Access is expanding. I'll tell you an email I got from a client. It's a large wealth management team at a bank. Just Yesterday they put 1% of clients assets into bitcoin this week. So all we see is continued adoption and demand in the space and I think prices are headed higher amidst that.

I love those anecdotes. I also love your point that, you know, bitcoin may be less volatile than Nvidia. I don't know if that's a good or a bad thing. I think there's some even the bulls who would kind of like to see it swinging wildly like it did in its youth. But you're talking about big banks getting involved. So I think though, I think it's youth days are past, certainly. Hunter, thanks for your time today. Good to see you. Hunter Horsley with Bitwise Asset Management. Coming up is the software space facing an existential crisis, the IGV ETF dramatically underperforming the rest of the market in the past few months. We'll ask Box CEO Aaron Levy for his latest thoughts on that. And on the next leg of the air race, we're back after this. Thy ticket, lady Jennifer of Coolidge. Well, many thanks, good sir.

[Contessa Brewer]

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[Kelly Evans]

They accept Discover at Renaissance fairs? Yeah, they do here. Discover is accepted at the places I love to shop. Get it with the times. With the times. You're playing the loot.

[Jared Woodard]

Yeah.

[Kelly Evans]

And it sounds pretty good, right?

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Welcome back. Market regaining its footing, all thanks to Taiwan Semi. Some strong investment bank results as well. That's helping the Dow with Goldman in it. It's a 418 points right now. And here are some of the other movers this hour. BlackRock is up 5% after better than expected results and it now tops 14 trillion in assets under management. I remember we talked about 4 and 5 being a big deal. The shares are having their best day since April of nearly 6%. And Shake Shack is now on pace for its 11th straight day of gains. If you're keeping score at home, that's a 25% jump. And it's enjoying its longest win streak since a 12 day rally back in May. So not that uncommon. Let's get to Kate Rooney now for the CNBC news update. Hi, Kate. Hi there, Kelly. A federal judge today allowed construction to resume for an offshore wind project in New York. The judge, a Trump appointee, said the Empire Wind project could restart while he considers the government's arguments. Another developer won a similar reprieve earlier this week. Last month, the Trump administration froze five big offshore wind projects, citing national security concerns. Developers and states sued to block the order. Meanwhile, a federal appeals court today reversed a lower court decision that released Mahmoud Khalil from an immigration jail. He is the Palestinian activist and Columbia graduate student who was arrested by ICE last year. The three judge panel ruled that the lower court didn't have jurisdiction over the matter. And finally, Federal prosecutors charged 20 people, including 15 former college basketball players in what they call a point shaving scheme to rig NCAA and Chinese Basketball association games. Prosecutors say the group of quote fixers recruited the players with bribes between 10 to 30 thousand dollars per game. Kelly, back over to you. I It's so infuriating. It's awful. It's so pervasive. It's happening so much at every level. It's horrible.

We'll move on.

Kate, thank you. In fact, we're going to stick with sports markets because Wells Fargo is upgrading draftkings to overweight and downgrading fanduel parent flutter to equal weight. Today, the $49 price target on DraftKings does imply about 40% upside from here. And they say the gambling platform could get a boost from its new event contracts business, a total addressable market of $75 billion there. They estimate DraftKings and FanDuel are just two of the many companies getting into these prediction markets. Contessa Brewer is here with more Contessa.

[Contessa Brewer]

So let me just say Kelly, on that front about the point shaving scandal. The NCAA head Charlie Baker has gone out and he has asked federal that federal sportsbooks stop offering college player props. And he's asked the, he's asked the the CFTC to crack down on college sports offers in these prediction markets until appropriate safeguards are in place. He just says it is unregulated gambling on college games. His concern may not just be for the integrity of college sports, which you know is clearly under threat. But Truist analyst Barry Jonas wrote this week that 18 to 20 year olds who are too young to gamble legally in most states are contributing significantly to the growth of these prediction markets. He writes Kalshee specifically needs to figure out how to broaden its base beyond those youngest adults. Now Kalshee and CNBC have a business relationship. Data from HoldCrunch, which is an analytics company, shows that Kalshee is getting more trades on college football than on NFL and NBA, which certainly is not true for the regulated sportsbooks. During the week ending January 4th, Cowshi's college football handle hit its highest percentage at a total of 32%. The platform said the NFL accounted for 24% of total wagers. The NBA represented 22%. That's a tide, Kelly, that has been shifting in that direction since October that the enthusiasm around college sports is fueling prediction markets growth, which is fascinating.

[Kelly Evans]

You know, I'm such a nerd that I was so excited for prediction markets as from a news point of view.

Right.

It's almost like live polling gives you a sense, a way of interpreting information into markets contested that could kind of tell us whether to anticipate, anticipate certain events. And yet here we are and what a mess this has kind of made. And the question I guess now is who's going to act on that. And to your point, they're now, we're now seeing more calls for people to really crack down here.

[Contessa Brewer]

And the other thing, the other thing that you're going to see is state regulators looking at whether they should offer sports gambling or should they change the rules around sports gambling. You have states like Nebraska considering it once again should we authorize sports gambling? Because what's happening is states where sports gambling isn't legal are seeing the growth of prediction markets. Juice Real, which is this app that tracks wagers, that allows gamblers to track their wagers and it offers analysis, says its customers from California, 9% of them have prediction markets accounts. In Texas, 6% of them have prediction markets accounts. What is not available in California or Texas, legal sports gambling. And so you can see the propensity for betting is there. They're using offshore accounts, they're using daily fantasy, they're using sweeps. And by the way, in New York, they're doing that, too. New York is losing a lot of state tax revenue from these offshore and predictions accounts and the like. And part of that is because DraftKings and FanDuel won't let what they call Sharps, you know, these guys who really know what they're doing, right. They don't let them on the platform platformer. They limit them because it eats into the profit.

[Kelly Evans]

Right. Well, I have to, you know, once you say that the state revenue is at stake, then, then maybe we'll get some action. Yeah, we'll see.

[Contessa Brewer]

We'll see.

[Kelly Evans]

Contessa, thanks very much. We appreciate it. Today. Contessa Brewer reporting. Coming up, just when we thought the inflation threat was in the rearview mirror, Chicago Fed President Austan Goolsbee tells CNBC it could come roaring back if the White House isn't careful. We'll have those details next. Welcome back. Some breaking news out of the Kansas City Federal Reserve. Steve Liesman here with the headlines.

[Steve Liesman]

Hey, Kelly. Jeff Schmidt, who will not be voting this year but was a voter and a dissenter twice last year. He said he prefers to keep rates unchanged. He's been on the more hawkish side. He says the economy is showing momentum while inflation quote is too hot. He says cutting will not provide much benefit for the job market and monetary policy is not very restrictive. By his own measure, tax policy deregulation are likely to spur business investment, support consumer spending and growth. This year, the impact of tariffs AI and increase and increased productivity may not have been totally felt yet, says the Kansas City Fed president. And the question becomes, Kelly, who, who, who among the incoming new presidents will replace him perhaps as the dissenter?

[Kelly Evans]

But he meant no cut in a few weeks or no cut.

[Steve Liesman]

He does.

[Kelly Evans]

No cut.

[Steve Liesman]

No, he's, he's happy where we are right now.

[Kelly Evans]

Okay.

[Steve Liesman]

Although maybe not so happy because he wanted us to not be where we are right now.

[Kelly Evans]

No inflation. Stay right there. Because you also interviewed Austan Goolsbee this morning of the Chicago Fed, he had a warning as well. And this one was more about the unintended consequences of the DOJ investigation into Powell. But take a listen. What made our ears perk up?

Anything that's infringing or attacking the independence of the central bank is a mess. You're going to get inflation come roaring back if you try to take away the independence of the central bank.

It's twice we've heard the inflation word. My next guest also says upending Fed independence could backfire and that Powell should be commended, not condemned. Let's bring in Michael Darda. He's the chief economist and macro strategist at Roth Capital Partners. Michael, every time. Look, I think intellectually these arguments all make a lot of sense. But often when we raise them, though, those who say we're on a larger disinflationary trend almost laugh and say there's no way this is, we're really going to have an inflation problem, you know, perk back up. What would you say to them?

[Michael Darda]

Thanks for having me on, Kelly. Well, I would say, look, I mean, this is not leading in a positive direction and you put a lot of political pressure on the central bank. If eventually the central bank buckles and starts to just behave in a political manner and not an economic one, that does lead to very unfavorable consequences. I mean, look, Venezuela has been in the news. Iran is in the news. You know, these are countries that do not have central bank independence. What they have is a lot of inflation currencies that have collapsed in middle class living standards that have imploded. So that is really not a path down which we want to walk.

[Kelly Evans]

No, but you're raising that analogy. I mean, look, here's what I'm trying to say in the data, Mike, what do you see? And the GDP data has been very strong, but then the labor market has been kind of weak. And I think it was Dave Zervos yesterday who said he would focus on the labor market data. And those are the avenues giving us the all clear to keep lowering rates or people would say high productivity. I guess you could make that argument both ways. What about PC or cpi? I mean, what kind of problem do you think we're going to face?

[Michael Darda]

Well, I mean, I think the Fed's basically nailed it here. I mean, that's why I mentioned Powell being, you know, not being condemned. You know, but I think we should applaud him. You know, the fact is that they were able to raise rates so much and seemingly, you know, Cut them at just the right time. The business cycle has carried on. We didn't end up in a recession. You know, the unemployment rate has moved about a percentage point off the lows. Typically when that happens, it keeps shooting up at an accelerating pace. And that has not played out at all. Nominal growth has been like perfectly stable right around 5% last year. It looks like we're trending mid fours right now. I mean, you know, that's about as good as it gets and creates a backdrop for asset prices that is very favorable. So, you know, I really don't understand what the, you know, what the complaint is about monetary policy, about the, you know, about Fed Chair Powell. We could certainly do a lot worse. And it could also backfire in this way. You know, Fed Chair Powell may decide to stay on as a voting board member. His board seat extends out until 2028. And so one of the reasons that markets may not be pricing in a lot of inflation or a big, you know, live threat to central bank credibility here is that the way the Fed was set up is to really reduce political interference. And even with all of these threats accumulating, markets are still pretty confident that the Fed's going to achieve its goals. We shouldn't take it for granted.

[Steve Liesman]

I'm afraid that the market has, or even Austin, adding to the confusion, has the sequencing wrong of what the concern is. And let me see if I can walk through this. I'm interested in Michael's opinion of this. Lack of independence does not create inflation. Lack of independence creates higher interest rates. And that would mean that the market would exact an inflation compensation for the lack of independence. What happens is when inflation comes along, a lack of independence would mean that the Federal Reserve would not address it adequately. And so it's a concern about future inflation from a Fed that is not independent. And if you want an example of that, just look at what happened in the post pandemic. Period. People argue the Fed was too late in addressing it. Okay, that's a different argument. What happened when the Fed did address inflation? The Democratic appointees, the Republican appointees all gathered together. Lisa Cook, the besieged Fed governor, what did she do when she first her first board meeting hiked by 75 basis points. What kind of loyalty was that to Biden? That was not the Biden appointees. The Trump appointees all gathered. And what just happened recently? They all gathered. A couple of them dissented, some for more, for less. Mostly they gathered to cut interest rates for president or during the presidency of Donald Trump. One other area of concern this is extreme. But Senator Warren just talked about this, this idea of if a Federal Reserve Board is completely beholden to the President, what happens to things like access to the discount window, implementation of banking laws? Could people be debanked? They spun the people on that call today spun a very, very worrisome or scary outlook for a Fed that is totally beholden, which is not where we think we're headed right now. But totally behold to. The President said don't allow this, this bank access to the discount window because they don't support my policies. That's a very dangerous situation, Mike.

[Michael Darda]

Yeah, those are all good points. I mean, look, hopefully we don't end up with the Federal Reserve completely offsides and then having to make, you know, erratic, dramatic decisions. But you want them to be independent so if they do make a mistake, they can try to correct it. Right. And that's what they were doing in 2H22 and moving into 2023. But, you know, this is all very worrisome and it doesn't, you know, it doesn't lead to a good outcome if it continues. So, you know, frankly, I, you know, what do we want Fed Chair Powell to do? He cut interest rates last year by 75 basis points, 100 basis points the year before and the economy has stayed out of recession. You've had a brilliant stock market. Even with the tariff shock last last year we almost had a 20% s and P500 gain. I mean, what the heck do we really want? Things seem to be going pretty well. We could do a lot worse, that's for sure.

[Kelly Evans]

More job. I'm sure they said more. Look, could talk about this for twice as long, but I think this is a good opening discussion, if I could put it that way. For an argument that is now shifting more about whether the Fed pauses or even hikes as we talked about with Mike Fro. Yes, take a look. That's not been just to back up.

[Steve Liesman]

We have a quick chart, Kelly. I'm sorry. Yeah, quick chart which shows what happened to the outlook for Fed rate hikes or great cuts with what happened the other day, which is right to Michael's point, odds of cuts have gone down. So this is really backfired on the President.

[Kelly Evans]

All right. For now, gentlemen, thanks Michael Dard. I appreciate it. There's your chart, Steve.

[Steve Liesman]

As thank you very much.

[Kelly Evans]

The current moves right there. As you can see for the next few meetings, we'll have more on trade and tariffs coming up on Power Lunch. Top of next hour, just about 20 minutes time we'll hear directly from Commerce Secretary Howard Lutnick. Looking forward to that. And coming up, both Google and Microsoft announcing some new AI powered online shopping tools over the past week. And it's not the only way retailers are using AI. They're also using it for returns returns. Courtney Reagan is in Valencia, California with more. Hi Courtney.

[Courtney Reagan]

Hi Kelly. So retailers have been using AI to personalize return policies for some of users for a little bit of time. But Happy Returns, since it's the first reverse logistics firm to use AI to potentially detect decoy returns. I'll explain how it works when the exchange comes back.

[Kelly Evans]

Feels like it was last year because was but Christmas was only three weeks ago, which means we're still smack in the middle of returnuary. The NRF estimates 17% of holiday purchases will be returned, but not all of them may be legit. Courtney Reagan is in California with a look at how retailers are using AI to try and fight fraud.

[Courtney Reagan]

High Court hi Kelly. Yeah, so this Happy Returns hub is going to process about 40% of the year's total return retail goods this month and last. There are about 25 employees here and 10 times times as many robots. What they're doing is they're aggregating, they're processing and then they're shipping millions of returned items every month, but only after inspecting and scoring each one for possible fraud. Using both humans and AI, it saves retailers from paying fraudulent claims and protects honest shoppers from absorbing fraud costs in the form of higher prices. Around 9% of all retail returns every year or 75 billion billion worth are fraudulent. Happy Returns, which is owned by ups, accepts unboxed returns for Gap, Sheehan, Under Armour and hundreds more retailers at 8,000 return bars at Ulta, Staples and UPS locations. The box free return allows the employees to do a first line inspection and score every item. The medium and high risk fraud scores are separated then photographed with an AI analysis to detect possible defects decoys that the human eye can miss.

[Aaron Rakers]

About 15% of the items that we.

[Aaron Levy]

Flag as high risk returns that are.

[Aaron Rakers]

Audited here end up actually having fraud and on average those transactions are worth about $240.

[Courtney Reagan]

Happy returns as it's the only reverse logistics firm that is using AI to detect fraud at the point of return. Now Navarre is another reverse logistics firm that is using AI to help retailers detect possible cases of fraud. When a consumer says a package wasn't delivered and tries to get their money back, they say using AI, they have helped 1500 retailers including Lululemon and DSW to lower the cost of fraudulent claims by 25%.

[Kelly Evans]

Kelly Logistics Co. I love that. Don't get hit. Cordy. I'm afraid they're going to knock you over over and take you out back there.

[Courtney Reagan]

No, they're not. Don't worry. We, we are in a safe cage and these guys, they don't bump into each other earlier. A sock fell off and it might have stopped everyone they're aware of, like when anything is in their way that shouldn't be. It's really compelling to stand here and watch this.

[Kelly Evans]

I'm kind of just watching it in the background, like, wow, what do they call it on brain rot. But it's fascinating. It is fascinating. Courtney, thank you very much. Courtney Reagan. Coming up, shares of Box are down about a percent today and they're down 15% over the past couple of months as software where names take a hit. We'll speak with CEO Aaron Levy about that concern next. Claude Co work Anthropic newest offering is pressuring the software stocks as new AI tools raise questions about the future of their business models. Here to discuss the future of software, his company's brand new AI tool is Aaron Levy, CEO of Box and our very own Deirdre Bosa. Welcome to both of you. Deirdre, kick things off.

[Contessa Brewer]

Thanks, Kelly.

[Kelly Evans]

Aaron, hi.

[Contessa Brewer]

And thank you for making the time. Thanks.

[Kelly Evans]

For sure.

[Contessa Brewer]

You've noticed it's been an ugly start to the year for software stocks. Feels like we're in this kind of like existential crisis. And the question that's increasingly being asked is why does anyone need a software provider when their own engineers can spin up their own tools using something like Claude code?

[Aaron Levy]

Yeah, I mean, it's first of all, it's a very fun conversation. Obviously sometimes you wish it wouldn't impact the stock market as quickly, but I think there's going to be a pretty wide separation or gulf between the kinds of apps that you build internally very quickly for an internal workflow or obviously the software you're building for your customers and the core systems of record that you use to power your operations. And you're just the core way that you run your business. And so, you know, thinking about CRM systems, ERP systems, document management platforms, I think these are the core backbones of how companies operate. And you know, maybe some companies will, we'll play around with the idea of could you compress that stack by, by building that out yourself. But at the end of the day, you know, most companies want to be focused on their core competency and usually that's not rebuilding, you know, kind of IT systems that they can get off the market. I would actually flip it a little bit. And I think the part that maybe is sometimes missed is AI agents. And AI generally is one of the biggest boons for enterprise software. Because if you imagine a world where there's 10 or 100 times more AI agents that are using technology in the future because they can run around and use our tools, then actually the platforms where those agents are operating in and the data that they have access to, we believe will become even more valuable. So we picture a world where again, you have AI agents that are running around being able to read your documents, automate processes, extract critical intelligence from your data. And so the platforms that can house those agents and create the guardrails for those agents to operate in, we think ultimately will become more valuable over time.

[Contessa Brewer]

Right, that's what those agents are doing right now. They're reading through documents, they're analyzing, etc. But I mean, it's just improving at such a rapid pace. I know that just last week you said deploying agents are hard. I mean, if you asked me a week ago as well, vibe coding is hard, but you know, today it's not. That's how quickly everything is changing. So aren't these agents just going to get more and more capable and be able to do some of those core functions you said are still better left to the CRMs or the software providers of the world? Isn't that just going to be easier for agents to do?

[Aaron Levy]

And I would, I would sort of separate the non deterministic work, which is sort of what people do. So you look at information, you make a decision, you use some judgment to review something or move something in a process from the deterministic parts of a workflow. That's the, the surrounding software that ensures that every single time something happens, people don't have access to the wrong data or the workflow gets triggered exactly in the right way every single time. And it's very clear that you'd want to separate your non deterministic from your deterministic systems. So having an agent try and predict what information a user should have access to and then occasionally give them the wrong data that they shouldn't have access to is obviously a non starter for any, any mission critical workflow or process. So I think you're always going to have the separation of the system of record that, that stores the data that contains the workflow around that data, and then the agent that needs to operate in that system of record. And so then the big question is, which Platforms can go and monetize those agents that are working on their platform. Does that monetization happen off stack? And so does it come from another company? Or can that existing software provider actually go and commercialize those agents on their platform? And I don't think that you can universally sort of just say that there's going to be one winner or one loser across the field. You have to look at each individual platform and how they're building agents and how they're attacking this market. Obviously we're very excited about our position because we store hundreds of billions of documents in box and every single one of those pieces of information contain incredible intelligence for our customers. And so we think we're a very natural place for agents to operate on that data. It's not going to be true of every single SaaS platform. But I do generally like how I'm seeing other SaaS peers executing in this space right now.

[Kelly Evans]

It's in its Kelly here. And it makes sense to me that you guys would be in a prime position. You have the data, it's company's data, they trust you to kind of do what you're going to do with it. So I am a little surprised. But this isn't just a recent thing either. When you hear that Salesforce has been virtually flat since being added to the Dow like five years ago, I mean that's, that's a pretty damning statement. So what's going on here? I take your allusion to the fact that the market's kind of pricing this in so quickly even though we're just at the early edge. But I mean obviously you would kind of describe this as a buying opportunity for investors, that these platforms are going to figure it out. Do you think they all are or are we going to have to wait and see? They're just going to emerge a few winners here.

[Aaron Levy]

You know, obviously I can't provide stock picks kind of across the board. I think about this more from an architectural, philosophical sense, which is agents need software and incumbent software that again houses the workflow or the data I think is, you know, tend to be in the pole position for powering those workflows. But you do have a little bit of a continuum of what platforms have the data that actually is useful for agents. What, what platforms have the right kinds of workflows that agents can kind of pop into in a natural way. And so, you know, again it's very hard to take a broad based view across the board when making these, you know, investment decisions or market market based views. But you Know, in general, the kind of core thesis is that agents need context. Context right now sits inside of your software and it sits inside of the data that you have in that software. And so every enterprise that's going and trying to deploy agents in their organization is going to have to decide do I want to rebuild that workflow in a new system and have the risk of an agent running around grabbing the wrong information to work with or answer the wrong question or produce a contract that has the wrong data in it, or do I like the platforms where my data might already exist or where my workflows have already been built out and that I want agents to be added to that platform? That's going to be the conversation and the debate for the next couple of years. And then I think it's really up to all existing software companies to execute on that, that vision and opportunity. And at the same time there's going to be incredible new startups that emerge for the gaps where maybe an existing software isn't executing. But ultimately the, again, the idea that the, that the sort of AI system takes all of the software just unfortunately doesn't work from a technological standpoint.

[Contessa Brewer]

Okay, Aaron, let me quickly ask you about adoption. Microsoft recently put out this report showing global adoption of AI models and it showed that Deep Seek is gaining momentum in places like Europe and Africa, even here. How does Washington prevent China and its models from becoming the global standard everywhere outside of us in the U.S. you.

[Aaron Levy]

Know, it's, I would say the biggest challenges is maybe less about what Washington can do and much more about what, what the companies, you know, within the U.S. you know, need to do. And this is why we don't have.

[Contessa Brewer]

Very many open source models that are competitive with the Chinese ones.

[Aaron Levy]

So yeah, so that's sort of the big question now Maybe, you know, maybe Washington, if they, if they wanted, could say, okay, let's go fund a national research project for open source AI and put, you know, $10 billion into that. That might be something that Washington could do. But actually I'd argue that Washington, David Sachs in particular, have done a great job ensuring that, that, you know, we get the right level of innovation in the US and then this big question is, you know, should they put their thumb on the scale, specifically on open source? That's a super open kind of question and topic right now. But, but I think, I think we need a competitive environment and it's actually healthy that China is able to have great breakthroughs and it forces us to be even more competitive and have greater.

[Kelly Evans]

Ingenuity made the Chinese market pretty good lately too. Aaron thanks Deirdre. Appreciate you bringing us that interview. And thanks for watching the exchange. A big power lunch is coming up right after this. Introducing Fidelity Trader plus, the next generation.

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