200-day moving average, if it can stay above it, we have legs to move much higher. >> somebody asked me the ticker of joe t. >> really? >> wasn't sure if it was a joke or what. but at any rate, your final trade? >> allstate. one area to avoid is regional banks. >> good stuff. i'll see you on "closing bell." thank you, scott. welcome to "the exchange." i'm deidre bosa in for kelly evans. and here's what's ahead on our show. march cpi coming in hotter than expected. yields are dumping, stocks are falling and so is the probability for a june rate cut. but our market guest is here to tell us where he sees opportunity. and our trader says what is going on with nvidia is very strange and he's here with how he's positioning. google unveiling a new chip

and calling out the competition. don't miss my interview with google's cloud ceo. it's some of the strongest language we have heard from a google executive. we begin with dom chu and the numbers. >> it's not a good day for the bulls out there. it's red across the screen, but we are, dare i say it, off the session lows. here's what i mean. the dow, down 430 points, roughly about 1% declines there. 38,455 is the last trade. the s&p 500, broader measure of large caps, 5160 is the last trade there, down roughly 50 points. and to give you an idea of the range, it's been down all day. even at the highs, we were down 31 points and down roughly 65 at the lows. there is your range, so tilting a little more toward the downside, but off the worst levels of the session for now. the nasdaq composite, maybe

thanks in no small part to nvidia's performance is only off three quarters of 1%, 135 points to the downside. if you want to look at the rate picture, it stees big story. the two-year note yield is seen more as a proxy versus other parts of the yield curve on the bond market for that fed interest rate hike or tighten model. we did reach the highest levels going back to november of last year for that benchmark two-year note yield. so the rates very much a big focus. the high yield bond market, junk bonds, are not as levered to that rate story as investment grade bonds are. but take a look at this etf that attracting the high-yield bond market. it's trading in a range for all year long. but today, we are testing the lower end of that range. so even with the rate picture, high yield is seeing a little bit of stress. we'll see if these levels hold for junk debt. if you are looking for another place that's economically

sensitive, check out small cap stocks. i've put up there this blue line, which represents the 50-day moving average price, an indicator of trend and momentum. right now trading just underneath it. we tested it before over the past several months and we'll see if these levels hold. i'll send it back to you. >> today's action raises questions for the smaller caps. dom, thank you very much. let's get straight to the report that moved the markets. steve liesman has more from this morning's cpi print. >> this cpi report getting a cool reception in stocks and bounds. the chance of a rate cut slipping away. if you want to look at this from a holiday stand point, the market thought we would get a first rate cut before memorial day, it's only confident in a cut sometime after labor day. the june probability slipping 58% before the cpi number, down to 20%. july, below 50%.

september, well, 66%, down from darn near confidence at 92%. the january 2025 fed funds was a sharp 25 basis points, moving one rate cut from the 2024 outlook. had been at three. it's now pricing in actually under 50 basis points of ease thing year. so just below the two rate cuts it had been pricedin. before that, it priced in as much as 150 basis points. there are musings that if this continues, not only will the fed not cut, but may have to think about hiking rates in order to coax inflation back to that 2% target. for now, that's still a long way away, because the fed generally views itself as restrictive. the current 5.38% rate is, call it 280 basis points higher than the median neutral rate of 2.6%. all that is to say, the fed could and maybe even should cut where it is right now but won't in the face of stalling

inflation progress. best hope for the bulls is this year mimics last year with high inflation earlier in the year, followed by some relaxation as the year progresses, deidre. >> that had been the hope, that january and february had some seasonal effects. but today's cpi numbers makes that case harder to make, right? >> there was one of the analysts out there saying youneed two dots to draw a line, and you need three dots to draw a trend. we got that third dot today. that's the third dot. and that shows inflation pretty much stalling out here, that progress. but look, if you look at last year, i think we had a chart there, going back to january 2023. you'll see it was high. it came down. it's high now. maybe it comes down as the year goes by. >> right. st steve liesman, thank you very much. we have ten-year treasury notes up for auction and rick santelli is tracking that action. rick? >> deidre, this was one nasty

auction. keep in mind that we are up big on yields, whether it's the short end that's up over 22 basis points, or our tens that are up almost 19 basis points. we tried to auction off 39 billion ten, and do keep in mind, this is a reopening. this is the second time we're adding into an original issue. each time, each iteration gets a smidge weaker. so i give this auction a d, and maybe that was kind, because 39 billion tens came off at 4.56. here's the problem. the one issue market, at 1:00 eastern when it buttoned up, was basically 4.529. let's call it 4.53. that means it tailed three full basis points. that is big. as you look at the intraday chart, you can see clearly that yields moved up a bit on that. but it wasn't only pricing, which i said you have to be a

little more generous on your grading, but all the metrics were nasty. 2.34 bid to cover, the worst since '22. directs at 14.2, weakest since november of '21. and if you look at the dealers, 24% the ten auction average is 15%. they cleaned up good chunk of the buffet on their own. that was the most dealers have taken since november of '22. so matter which way you go on this, i thought it could go either way. sometimes big selloffs are looked at as a concession when you're a buyer. this time it was more about the fear of rates going higher. deidre, back to you. >> that's having an immediate impact on equities. the dow at session lows, off by about 550 points. the s&p 500 is off about a third of a percentage point. and the nasdaq still holding up,

but down again at session lows. let's move on. one of my next guests is sticking with the june cut for now, even after today's cpi report. joining me now are my two guests. gentlemen, thank you for being with me onset. matt, i go to you first, because are you still expecting a june rate cut? >> i think our economists would tell you that this data point definitely causes risks to shift towards a cut later in the year. i think that's how they're framing it. so while they're still sticking with that june rate cut, they acknowledge that the risks are pointing to a rate cut that starts later in the year. >> okay. kevin, i wonder if you could react to what we're seeing in bond yields particularly, that ten-year that seems to have had an impact on equities. >> the path forward for three rate cuts this year, which the fed confirmed a couple of weeks ago, still exists. with which rate cut at the end

of july. they don't meet in august. they're not going to hike in september, because that might look too political. they come back in november, cut one more time 25 basis points and perhaps one cut in december, getting us to those 75 basis points in cuts this year. i don't know if that will happen, but the path forward exists. i don't know when they're going to cut first, but rates will be lower over the last three years, and that creates opportunities in stocks and bonds. >> right. but the fed is data dependent. >> of course. >> that could be changing with the latest numbers that we have had. how much weight do you put into these cpi numbers, the preferred metric is ppe that we get at the end of the month. we talked about this with steve, third month in a row makes a trend. do you think fed officials are going to be willing to call this seasonal and think maybe the economy can handle a cut? >> when you look at the underlying data we got today and

the implications for pce later in the month, i think it will cause the fed to say look, this could be a trend. we don't know. a lot of uncertainty in the economy. when we look at the underlying data that the fed likes to look at, this has been accelerating on a six-month average basis. so i would suggest that they're going to say maybe we need to see another three, four prints before we can be comfortable with the underlying trends here. >> there's inflation, but the other side of this is the jobs data and the economy. kind of proof that higher rates aren't actually as restrictive as many thought. so do you think there's a need to front run and perhaps cut to make sure that we get a soft landing? >> it's a really difficult question to answer, because the fed is really trying to thread the needle. the 1970s, the last time the fed cut rates higher.

inflation return hit double digit levels. paul vokele stepped in and raised it to 20%. we think 5 toy.25% is restricti imagine 20%. >> i want to ask you about the equity reaction. markets are at session lows, and they've been pretty resilient so far. has the character of the market changed? >> i don't think so, but it has gotten ahead of itself. pricing in a soft landing, but i don't think we're at that point this yet. there are other areas of the equity market that will continue to move higher, regardless of when the fed cuts rates for the first time, such as artificial intelligence. we're only in batting pra practice of a double-header with ai. so much opportunity lies ahead.

>> i usually sit in san francisco, but i want to ask you, do the fed minutes matter as much? we're going to get them in less than an hour. has there been so much fed speak between that last meeting and where we are now? how much weight should investors put into those minutes? >> these were crafted well ahead of the cpi report, so i would suggest that the market is going to be more focused on the ppi numbers we get later this week. the final implications for our pce report at the end of the month, and ultimately what that may mean for the fed and its decisions when it goes into the main meeting. so i think this minutes will be taken with a fair bit of salt there, and just people will say, you know what? let's just focus on ppi tomorrow. >> absolutely. kevin, you mentioned the ai trade. i mean, over the last few weeks, it's been losing a little steam. we've seen nvidia enter correction territory, but up today, defying the broader market.

where do we go for the rest of the year? do you think we continue to see that broadening out of the rally among other equities, or is it still the mega caps, because they're in defensive with their cash piles. >> we saw last year the mag seven accounted for 60% of the market return, now it's below 40%. but for the rally to really expand, we need the fed to cut rates. i don't think we get that for the second half of the year. a ifx will continue to grow, and people are going to continue to invest in the ai ecosystem, regardless of rates. microsoft is investing over $2 billion in data centers just this week. d of course, we're hearing all this news on the chip side and the money that taiwan semiconductor just got, as well. >> just last week, put the

selloff into perspective for us, because i know we'll talk to someone later on in the show who says we should be seeing bond yields even higher and equities should be down even more. is this almost a healthy reaction to potentially lower less risk this year? >> i believe it is. there can be more short-term bouts of volatility ahead as everyone continues to play the fed gasguessing came. if you look two, three years out, it's hard to make an argument that rates and inflation will be lower, and opportunity for stocks and bonds come to the forefront. >> matt and kevin, thank you very much for being with us today. >> thank you. today's spike this the ten-year treasury yield is hitting home builder stocks. diana has the details. >> reporter: yeah, that's right, deidre. the average rate on the 30-year fixed jumped nearly a quarter of a percentage point this morning,

following the hotter than expected cpi report. we're now at 7.2%, the highest level since the end of november. it had crossed over to 8% in october briefly, which was the highest in a few decades. now, the home builders are taking it on the chin, of course. the home construction etf falling below its s 50-day movi arm, but still off 6% year-to-date and a whopping 57% year of year. just a note, this includes home remodeling names like home depot and sherwin williams. dr horton, la then tlennard are below their 50-day average. and rocket mortgage down more than 11%. i would also note that reits are

having a particularly rough day across all reit sectors after outperforming yesterday. reits are particularly rate sensitive, given how commercial real estate is financed. back to you. >> diana, thank you very much. coming up, a view on the health of the economy from the head of a trucking firm. shares are coming off their best year never. we will look at what it means for the state of freight, but first, david fisher wrapping up his first full year on the job. shares are up 80%, as outperforming uber for the past three months. we'll check in with the ceo of lyft and see what's next for the company. and here's another check on the markets with the dow still down more than 550 points, though off session lows. the ten-year yield, at 4.456%.

"the exchange" is back after this.

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you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. welcome back. shares of lyft are up 80% since david risher took the helm. they're still juunderperforming uber, but the last three months, shares are up nearly 40%, beating those of uber. joining me to discuss is the ceo

of lyft. david, great to see you at one market, feeling a little home sick. >> deidre, it's not the same without. where are you? >> it's also the location we sat down with our first interview when you took this job a year ago. my first question to you, what would you do first as lyft's ceo to turn it around. you said you wanted to be competitive again. how have you been? >> yeah. well, we've been growing every quarter. up 10%, 17%, 26%. and that growth is because our customers, our riders and drivers are well done. we've got a lot more to do, but i'm excited about the first year. >> in terms of market share, have you been able to strengthen your position? part of that was making lyft more competitive against uber in terms of pricing and driver supply. any metrics to share on that front? >> i mean, look, when i started, i said we weren't going to focus just on market share. we were maybe in the high 20s.

now we're in the low thirds. the focus is on women plus connect. online pickup promise at the airport. 70% driver earnings guarantee. these are the features and the services, as well as good pricing, fast pickups that drive our share and business every single day. when riders and drivers do better, we do better. >> what you described is your strategy of doubling down on your core, which is ride sharing, new products and teachers. we have a graphic that we can show you. all the things that you have implemented. that's also helped you and the company get closer to break even gap profitability. does that continue? do you continue to make that the priority in year two, or do you start to think about investment again? >> you know, so my thesis is customer obsession is what drives profitable growth. so the more we obsess over our riders and drivers, the more

we're going to grow. i love seeing the growth we've got. we have good growth in the united states. we are on a tear in canada, which is wonderful to see. so that will be the start of our investment is continuing to invest in products and services that drive more loyalty, drive more preference. >> so david today, we're watching markets sell off on hotter than expected cpi data. what are you seeing from your customer, the lyft riders, are they taking on more or less rides, premium or lower priced share rides? >> we're in a quiet period, which frustrates me. so i can't say too much about it. but what i can tell you i like what i ee. this past weekend, eclipse weekend, it was a big deal for us. we had millions of people across the united states kind of moving into position. love that. we have more drivers than we've had in history, since precovid. so not seeing a lot to worry

about there, but to be honest, if people are worried about pricing, we have a program called wait and save. i haven't seen anything to worry about. >> talk about supply, because i know that this is just such an important part of the equation, but just fierce competition in this industry of ride sharing, how have you been able to boost lyft's supply? >> i love that you're asking this question. when we talk about supply, which sounds very technical, we're talking about how many drivers choose us every day. we have over a million drivers on our platform, which is amazing. and they make about $30 an hour after their expenses, that's after gas and maintenance and so forth. so the first most important thing is you have to make sure the drivers are paid fairly. that's what we did when we issued the 70% earnings guarantee, which means they'll

always make at least 70% of what a rider pays after certain fees. so you're really asking, are we doing a good job attracting and retaining drivers? again, we have more drivers than ever. it's a great story. >> last question, regulatory threats. i covered the industry for a long time. they always seem to bubble up, but not always front and center for investors, because you've been successful so far in keeping drivers on as contractors, not full-time employees. but you're facing off with regulators in minneapolis. you and your rooival have threatened to leave the city if it doesn't go your way. is that still the case? are you optimistic you'll reach an agreement there? >> i'm super optimistic. we have -- the state of minnesota has put forth what we think is a reasonable bill. this is the thing, i know people talk about our threats to leave. i don't consider it a threat. we're just not going to put a service in place that just is a

bad service. and a bad service means one that's overpriced where drivers make less, because fewer riders take lyft. so you don't work in a place here where you can't deliver for customers. but i think we'll come to a good point. i certainly hope so. >> there's a lot of anecdotes about ride sharing becoming more expensive. does the data support that? >> not significantly. i mean,like anything else, we have cost saving increase, our insurance is up a little bit, like everybody's is. but honestly, we're talking about something that is in the $15 to $20 range. are you were talking about builders before. that's a whole different level. we're talking about a daily purchase for people and we're not seeing a change there. >> david, thank you for being with us. hope to talk to you year two, and see you back in san francisco. >> i love it.

thanks, deidre. coming up, alphabet's cloud computing event is underway. i sat down with google's cloud ceo to talk about the ai arms race. we'll look at whether google is in the midst of a strategy shift when it comes to competitors. here's another check of the markets, well off session lows. the dow is down now only about 400 points. it was down more than 550 not long ago. "the exchange" is back after this. (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose.

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welcome back to "the exchange," everybody. i'm tyler mathisen with your news update at this hour. former president donald trump says arizona's ruling on abortion went too far. the state supreme court ruled yesterday a near total ban on abortion from the civil war era was enforceable. trump predicted arizona's governor and others will bring the law back to reason. it comes after earlier this week, trump issued a video message says he thinks the issue of abortion should be left up to the states to decide. florida governor ron

desantis signed a domestic violence bill inspired by the killing of gabby petito today. it would require law enforcement officers to conduct a lethality investigation when investigating domestic violence. the u.s. army corps of engineer posted on x images of the francis scott key bridge following the collapse on march 25th. this was captured using an underwater sonar. salvage efforts have continued since the bridge's collapse. weeks away from clearing that channel. >> quite the imagery. that's under water we're looking at. tyler, thank you. coming up, a look at the state of freight from the ceo of xpo, with shares up 300% over

the penn ast 12 months. and here a look at the stocks hitting 52-week lows. walgreens hitting the lowest level since 1998. "the exchange" is back after this.

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welcome back to "the exchange." xpo shares trading near an all-time high, and they have surged more than 300% over the last year. the truck operator benefiting from rising prices following the bankruptcy of yellow last year. xpo is reopening one of the service centers purchased from the liquidation today. joining me now to discuss is xpo chief executive mario hollis. frank, take it away. >> mario, good to see you, as always. it's a big day for the economy. i want to ask you about that higher than expected cpi report and the fact that it may be putting questions out there about whether or not we are going to get rate cuts. how does that impact your business and the business of your customers like a ford or g snervegs >> rates being high, frank, lead to lower economic activity overall. so we see the cross inflation in

our business, as well. but for us, given all the work we are doing for our customers, historicallywe haven't had as much capacity. we're seeing the environment being stable, slightly improved in the fourth quarter, and it's tough to call on the macro the next couple of quarters here. >> what about the rise in oil prices that will translate into higher gas prices, how does that impact your business? and again, the willingness of your customers to shift freight. >> for gas prices, when we build our customers, there's a mechanism called a fuel surcharge where we pass on the fuel charges back to the customers. so when they are higher, the customers pay a higher amount on their bill. so we are not as impacted by it. what customers value is great quality service. they want to make sure that we

can pick up the freight and deliver it on time. we are delivering at record levels. >> mario, it's great to get your insight. let's get to your business. you're opening up a service center that you purchased from the yellow liquidation there in nashville. talk how that will help your business. since we first heard about the possible bankruptcy of yellow, they have spiked about 50% since then. how is that benefiting your business? >> so we're starting at the service center. it's a great day for us here. we just opened up a facility in nashville. we just had the ribbon cutting this morning here. what that means is more capacity to service our customers. the immediate benefits that you would get is a service benefit by adding more dock space and facilities and we can offer

better service for the customer. here we dispatch drivers, and now they're driving five or ten minutes to get to the customer's location. in the long run, we're improving freight markets, and this will enable us to send more freight in the ten years plus to come. >> you're looking at moving freight from mexico into the u.s. looking tat latest figures, in february, a 13% rise in cross border freight movement from mexico. you also in this liquidation purchase, you got a service center near the mexican border. talk to me about your business when it comes to that. >> well, mexico is a very important market for us. as you said, frank, there's a big trend especially with industrial companies, is manufacturing. so moving manufacturing to

mexico, or in canada, and today we can cover all of mexico and canada. and one of the service centers we bought is in arizona across the border from mexico. we have customers lined up where they're moving some of that freight from mexico to the u.s. and for mexico specifically, today we have seven border crossing locations in areas like el paso or southern california where we can support our customer's needs. >> not only are u.s. companies looking to mexico to move operations and manufacturing, chinese companies are, as well. a lot of news this week with secretary yellen in china. she said that these chinese companies can sell their evs here in the u.s. have you heard more from chinese companies looking to near shore closer to the u.s. market? >> predominantly our customers are north american customers.

we service more than 30,000 companies across north america. we haven't heard a lot of chinese manufacturing moving over to the u.s., but what we have heard more of is existing customers that are u.s.-based companies. >> all right. mario, shares up 300% over the last year. congratulations to you. deidre, back to you. >> thank you, frank. coming up, chipmakers are among some of the biggest drags on the nasdaq 100 today, but nvidia is bucking the trend. business continues to strengthen. one trader says shares are defying gravity. he will tell us if there is more room to run. and stocks are heading back toward session lows. the dow is down about 550 points. the russell 2-k is getting it the hardest. and the nasdaq is a little more

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we're keeping an eye on markets and all three major averages are down over 1%, while the ten-year climbs back above 4.5 after that hot inflation print. my next guest says he's surprised stocks aren't under more pressure. joining me now is jeff killberg, a cnbc contributor. jeff, you say some odd stuff is happening. explain that to me. >> deidre, a lot of cross currents in the marketplace, but i have to go back to my bond leadership. i cut my teeth in this business trading futures in chicago. when you see a 20 basis point jump in that ten-year note after a lousy auction on the fact that cpi came in hotter than expected, i see resiliency. but the vix is only above 16, which is odd.

and then nvidia, which has turned into a safe haven. yes, deidre, a safe haven it seems like as we see sellers booking profits but still piling into nvidia. so i do have some concern about the backbone of the leadership we have seen in nvidia. if you look at a chart here, because i think it's defying gravity when you look at a technical chart. the moving day average is $50 lower. the 200 day average is down lower. when you see technicals line up like this, that $800 level is coming, and that could move the vix higher and cause a deeper pullback around 4950 in the s&p 500. >> when you look at the fundamentals of nvidia, it's a different picture. it's had blowout quarter after blowout quarter, making that valuation seem more reasonable, even though the stock has become more expensive. >> that's the last $500 in nvidia. yesterday, you see intel come

out. we didn't get a pricing on their chips, but they talked about a fraction of the cost and nearly 50% more efficient. we didn't see a move off of that. so i understand that nvidia is the leader. i have exposure. i'm still long nvidia, but we have a hedge in place to overlay our position, because i have concern that it's been too much, too fast. today is an interesting example when the market pulls back and nvidia is up 2%. >> intel and nvidia, that's apples and oranges. >> we're still talking fruit, though, and you are going to see some of that market share -- we have orders with nvidia's chips, if you have a small deposit down there and you are going to get presented to buy those chips at 50% less, you're going to cancel that order. >> increasingly, nvidia is a software company. jeff, what does it tell us about the broader markets? as we head into this period of more volatility, when there's questions about the number of

interest rate cuts, if any, when there's questions about commodities and inflation, do you go to those defensive market leaders like the mega caps that carried the markets last year? >> i think there's bifurcation, not right now, but there's a lag effect. you are seeing some of these names defy gravity. we haven't seen the ten-year note since last october. when you talk about last october, that sentiment, that mindset is that we had six rate cuts coming in 2024. i think they've all been taken off the table. we are seeing three consecutive months of hotter than expected inflation. i think the fed's handcuffed. therefore, that ten-year note up here, there's going to be a lag effect. we're seeing 30-year mortgages move higher. we can't see yields move higher with no effect on equities. >> i know you're looking at the vix. does that show complacency or resilience? do you think there's more pain

ahead? >> yes. i've been cautiously optimistic. i think we have to get through this pocket of volatility, but the vix at 16, that's historically low. if we go back to where the vix has been, we haven't seen it above 25 in a year. we have to go back to october of '22 when we saw markets in turmoil to see the vix above 30. so there is a spike in volatility and i think it will be bought. right now, you have to buckle up your chin strap. >> jeff, thank you. coming up, google might have taken a few stumbles out of the ai gate, but after his keynote yesterday, one exec called out microsoft and amazon while touting google's proprietary offering. we'll hear more with my interview next. and before we head to break, take a look at some of the fintech names, as investors expect sticky inflation to keep rates higher. affirm is down by more than 6%,

the biggest laggard. we'll be right back.

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welcome back to the xhachg snchlts stocks are still under pressure, drifting back to session lows. the dow is down 525 points with the 10 year yield still above 4.5. earnings keck off this week, new catalyst with the banks and then big tech a few weeks later. investors will be watching cloud commuters and a new battle in the cloud wars, one where access to the best a.i. models and tools is key. google has long been a pioneer in again a.i. and has had the best talent but they have not been as aggressive with messages as rivals such as microsoft. on the consumer side, strategy is uncertain. there was controversy around the image generator and the interface dilemma facing the core search business. on the enterprise side, google can afford to go on the offense

and that is happening with the cloud. i stat down with ceo thomas kurian. take a listen. >> we vertically optimize but we are open and offer choice. we are not a closed system. we are not trying to lock people into the tools and technology. we allow people to use it in exactly the way they want to. they have a choice of models, choice of tools, choice of chips, choice of many other elements. that is part of our success, providing this open platform. at the same time, deeply integrating the pieces so that people get performance, scale, security, reliability. >> how is that different than what other hyperscalers are offering? >> one of them is offering a closed system. they have one model, one provider of that model. the other one does not have any a.i.

expertise so they only offer third party models. we blend both. we have our own models and we have the expertise to build systems and integrate these models into our products so people can use it. at the same time, we are not taking a closed proprietary view. when we say vertically optimized, we don't mean it is a lock in. we are monetizing a.i. in a variety of ways. for the start ups and people building foundational models, they use our infrastructure and pay us for the use of the infrastructure, just like the way they used to pay for classical computing. heapal who use our models pay us for the use of our models and tools. >> is that replacing spend in other areas or cloud providers? is that newspend for them? >> it is new spend and in many cases it is doing something that they could not do before.

i will give you an example. we processed over a million calls for one customer every day using our customer service a.i. if you think of a human being answering those calls, they can do about 100 to 200 calls a day. that is a lot of people they would have to hire. the reality is they would not be able to staff such a large organization. the calls are not being answered. so now that they are able to do that using our customer service a.i., they are able to solve a problem they couldn't afford. it is net new spend for us. it is giving their customers better customer experience and that in turn willdrive monetization for them. >> obviously, google has had the talent in this race. when it comes to anthropic and you made a mention of your rival working with a clefd source model, google was first to work with them and then amazon came in with a big investment. can you explain to our audience

how that works? why you didn't lock up anthropic for example in the same way that amazon locked up open a.i. or did it? and how does that relationship work? >> anthropic started with us and they are still a close partner of ours. we trained the models and integrated it into our platforms. we are giving our technology along with anthropic to many customers. in fact, there are meetings today along with the anthropic team with several customers to show people how they can use the anthropic model on top of our platform. along side gemini we do that too. we never wanted to say if you want to serve a model through us, you have to be owned by us or tethered to us. we give model providers, whether they are open source like llama

2 from facebook or meta, we give them a choice of where they want to run the models. if we do an exceptional job, we will get more customers using our platforms along with their models. >> so both google and amazon have announced multibillion dollar investment into the gen a.i. start up anthropic. but the partnership could be more important to amazon than google because google has its own version of gem noy. and the anthropic model clod is a big model to use. before we go, there is still time to register for the inaugural cnbc change makers event on april 18th. we will hear from some of the women transforming business including commerce secretary gina ramaundo. you can scan the qr code on your screen or go to cnbcevents.com/change maker.

you don't want to miss that. that does it for the exchange. expectations for june cuts are fading after inflation was hotter than expected. we will get an idea of the feds thinking just minutes away. tyr gtileisetng ready and i will join him on the other side of this break. (bobby) my store and my design business? we're exploding. but my old internet, was not letting me run the show. so, we switched to verizon business internet. they have business grade internet, nationwide.

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welcome to power lunch, everyone. along with deirdre bosa, i'm tyler mathisen. welcome to power lunch. stocks are down a little bit dow down 480 points after cpi came in hotter than expected. the dow is down as i mentioned nearly 5 # 00 points right now. we will go to steve leaseman now with the feds minutes. >> minutes to the federal reserve march meeting show there was general agreement that the fed policy was at the peak and almost all judged it would be appropriate to reduce rates if the economy evolved as expected. hold that thought. they later go on to say that participants did not see it appropriate to reduce the rates if they were not confident that inflation was falling towards the 2% target. a lot of that is in the statement. what we see in the minutes is the beginning of a debate between hawks and doves on how to think about the inflation numbers that have come out