Closing Bell - Closing Bell Overtime: Charles Schwab's Liz Ann Sonders on Strategy, Alexis Ohanian on AI, & Baker Hughes CEO on Energy’s Future 1/31/25

Episode Date: January 31, 2025

Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, gives a deep five on the markets and how her clients are positioning. Our Seema Mody reports on the Nvidia CEO Jensen Huang's visit to the White House. Joseph LaVorgna, Chief Economist at SMBC Nikko Securities America, talks tariffs and the potential econnomic impact. Morgan has an exclusive interview with Baker Hughes CEO Lorenzo Simonelli after strong earnings. Alexis Ohanian, Reddit co-founder, talks DeepSeek, the promise of AI and the cultural shifts in tech. Morgan interviews the Fire Earth Alliance for her latest Manifest Space, on how the company is transforming how fires are prevented. 

Well, that bell marks the end of regulation for the week. Church and Dwight ring in the closing bell at the New York Stock Exchange. CME Group, Invesco, and ProShares doing the honors at the NASDAQ. A downbeat finish on Wall Street as the specter of fresh tariffs looms. Stocks mostly lower for the week after the deep-seek volatility, the Fed meeting, and a wave of big tech earnings gave investors plenty to consider. That's the scorecard on Wall Street, but winners stay late. Up in the closing bell over time, I'm John Ford with Morgan Brennan. Well, coming up this hour,

Lizanne Saunders from Charles Schwab joins us with her take on where stocks head next as we wrap up trading for the month of January. Also, the biggest catalysts investors should be watching now. Plus, we'll talk to Joe Livogna, the former chief economist of the National Economic Council in President Trump's first term, about the fast-moving tariff situation in Washington. And Reddit co-founder and venture capitalist Alexis Ohanian will join us to talk about all of the tech headlines from this week, including DeepSeek's emergence and his new investment in genomics company Nucleus. Well, as always, let's start with the market and this late day pullback

on these tariff headlines. Let's bring in Charles Schwab, chief investment strategist, Lizanne Saunders. Lizanne, happy Friday. Good to see you. Happy Friday to you too, John. Thanks for having me. So we've had market attention shifting from rates to deep seek to tariffs. When are investors going to know whether to treat tariffs more like a global reality or a negotiating cudgel and how to factor that into their investing strategy? Does the I don't know emoji work here in response to that question? You know, I have no idea. Nobody has any idea. So I think this is not not yet. Not yet. Not yet. I mean, we now know the date is a little bit earlier than what even some within the administration had suggested when, as of yesterday, even this morning, it looked more like an early March thing. Now it's an early February thing. So this is a moving target and is one of the pages from the 2018 playbook that I think is applicable this time.

It's just the manner by which policy gets announced, often by social media, you know, shooting from the hips sometimes. I think the background conditions are a lot different than what existed in 2018, but that is going to be a volatility driver. But you also mentioned the others and different segments of the market. I think small caps to some degree are at the mercy of what yields are doing. Obviously, individual stocks are impacted by earnings. The misses have been hit disproportionately relative to the beats getting rewarded. So there are a lot of different forces driving different segments of the market. I don't think that changes anytime soon.

Zooming out to the macro and the consumer, data showed that personal spending is above personal income for a second month in a row. And we know more consumers are having trouble paying off their credit card bills every month. Is that a yellow flag, you think, for anyone? Maybe a mild yellow flag. If you look at debt levels of any variety, revolving, non-revolving, you can look at it in an absolute sense, but you also have to look at it from a ratio perspective, whether it's relative to income, relative to net worth, relative to assets. And on those metrics, the numbers don't look quite as ugly. But certainly,

you've got a bifurcated consumer and those down the income spectrum, particularly given all the excess savings in that cohort has been worked off. They don't have that traditional savings. Even the savings rate broadly is down to only 3.8 percent. So I think what will keep the consumer afloat is consistent strength in the labor market. I think that has been the most important pillar for the consumption side of our economy. So, you know, job reports are always important and next week's is important. But I think really keeping an eye on the labor market is key, not just in terms of the consumption side of the economy, but obviously because of Fed policy as well. Lizanne, I mean, I would say it's a spicy start to the year here, given the fact we did

see that pullback in stocks halfway through the month. It's kind of incredible. We're actually finishing the month with all the major averages higher, even though we're lower this week for the S&P and the Nasdaq. But if you look at a month, a one month chart of the S&P and you put it up against a one month chart of the 10 year Treasury yield, it is almost a completely mirror chart from an inverse standpoint in terms of where we saw the highs for yields is where we saw the lows for stocks. So clearly we started the year with stocks taking their cue from the bond market. Is that something that continues? I do think it does. And I think it's both a function of level in terms of, say, the 10 year yield, but also speed of moves. And in particular, as you go down the cap spectrum, given that smaller companies have more variable

rate debt relative to many of the larger companies that have actually benefited from the higher rate backdrop because they're earning more interest on their cash and they're paying interest on their debt. So I think SWIFT moves up to the extent we get it in yields, not to mention levels like four and three quarters, certainly five percent, probably has a disproportionate impact in a negative sense down the cap spectrum. But I do still think it's one of the things in the driver's seat for the equity market even broadly. Gold's record highs again this week, another strong month, especially in the midst of all this uncertainty around things like tariffs. Is that something you buy into here? Yeah. So, you know, I'm not I'm not a gold expert,

nor would I necessarily classify myself as a gold bug. But I think it represents not so much an inflation hedge. But I think it represents not so much an inflation hedge, and I use that word somewhat generically, not specifically. I think what gold is represented in precious metals, maybe more broadly, is a way to protect a little bit against geopolitical uncertainty. And that would be inclusive of tariffs because of the multilateral nature of them. So I think gold does make sense in a portfolio. The one thing to be mindful of in areas like that, whether it's precious metals, whether it's commodities, even in currencies, is there's a lot more day-to-day trading

in these asset classes, including by individual investors, which means you've got to bring a sentiment component of the analysis in there. You can get swings that maybe move outside the bounds of what the fundamentals would suggest simply because of sentiment. And I think that needs to be a factor taken into consideration for investors going into those alternative asset classes. Lizanne Saunders, thank you for joining us. My pleasure. Thanks for having me. Great to kick off the hour that way. All the major averages finishing lower on the day,

but tech stocks getting hit today as well. With NVIDIA taking another leg lower and Apple giving up its post earnings gains. Let's get to Mike Santoli now for more on the mega cap moves. Mike. Yeah, Morgan, it was an interesting week in terms of investors trying to shuffle the big players around in terms of who was a net beneficiary of this latest phase of AI development. And here is a chart of the four big ones, not the big four,

going back to when ChatGPT was introduced, right? The end of November, 2022. I want to see the cadence of outperformance and then underperformance by some of these big names. So Microsoft and Orange, you see in the first 14 months, it was considered just a clear leader. There wasn't much dispute

that they had some kind of a head start with the open AI relationship. First 14 months of this phase, and they are a clear leader. Since then, flatline. And obviously this week have suffered a little bit. You have Apple, which was sort of riding along and then did nothing. This is in black right here. Just did nothing for months on end until getting this boost this week after the deep seek. And then just not to go one by one.

But Google, perhaps surprisingly, because it was considered a net loser at the very beginning because search was vulnerable, is absolutely a winner, along with Meta to some degree, developing their own and also touching the customer with AI. And then IBM invited to the party just this week. Now, take a look at a good proxy, in my view, for really fervent retail investor sentiment and momentum and activity in this market. Robinhood and Palantir. Palantir is an absolute retail favorite, one of the most avid and aggressive fan bases among retail investors as opposed to professionals. And you see it's basically been the same chart as Robinhood, which is itself. A leverage play on retail investor interest. In stocks options and crypto so you know this is getting pretty heady here

you know three eight hundred eighty four hundred twenty percent one year gains- you got to see if this sort of persists or exhaust itself finally. J. P. Morgan track the correlation on a daily price basis between small cap technology stocks and Bitcoin and showed that it was rising. So this is another way of visualizing kind of retail investor flow within this market. It's not quite back up to where we were here at the sort of peak of both the 2021 surge and then the 2022 bear phase. But it shows you that these things are walking together to a large degree, Morgan. I'll note we're going to get Palantir earnings right here on overtime on Monday. But I'm glad you brought in that chart about small cap tech versus Bitcoin,

because I was going to say the Bitcoin piece of the puzzle is very similar to a Palantir or Robinhood, too, and not just in terms of the cryptocurrency itself, but also some of those Bitcoin and crypto adjacent stocks. Without a doubt. And, you know, I always say that it's really about people who kind of own a lot of the same things or the same crowd has a similar feeling about this and they're willing to be enthusiastic about some version of the future that are represented by these assets. And that's what we're seeing right now. At some version of the future that are represented by these assets. And that's what we're seeing right now. At some point, it can boil over.

It can get a little bit of an overshoot. But right now, it's not clear to me that this in itself is a source of instability or fragility in the market. We'll have to see. All right, Mike. We'll see you again in just a bit. Now we're getting more information on President Trump's tariffs. Megan Casella has the latest details. Megan.

John, a number of headlines flying right now out of the Oval Office where President Trump is speaking with reporters. We're reading these off of the wires as they're coming. So what we're learning now is that President Trump says nothing can forestall those tariffs from taking effect on Canada, Mexico and China sometime tomorrow. It'll be 25 percent on Canada and Mexico and 10 percent on goods imported from China on oil and gas specifically. He says that Canadian oil, there will be an exception here. The tariff on Canadian oil will be down to 10 percent instead of 25 percent. He also said that broadly he's looking at imposing oil and gas tariffs by February 18th. And then he's talking a lot about tariffs overall. He mentioned steel, aluminum, copper, pharmaceuticals and the

entire European Union as areas where he's considering future tariffs, though no specifics on those just yet. And then a couple other topics coming up here as well, John, in addition to the tariffs. He did meet earlier today with NVIDIA CEO Jensen Huang. Trump calls him a gentleman, said they had a great meeting. We know that they were talking about artificial intelligence policy and that it was meant to be a sort of introductory meeting between the two men. So Trump's saying now that it was a good meeting and we can potentially get more on that as well. John. All right, Megan, yes I'm hearing from those close to this that this was actually planned, the meeting

between Nvidia CEO and Trump a couple of weeks ago. Thank you. Well, coming up next, in defense of tariffs, we're going to talk to Joe Livornia, the former chief economist of the National Economic Council in President Trump's first term, about why he says tariffs like the ones being threatened on Canada, Mexico, and China will not end up being inflationary. And don't miss our conversation with venture capitalist Alexis Ohanian on the big tech disruptions this week from China's deep seek and on this new investment in genomics company Nucleus. We have a lot more show left. Overtime's back in two.

Welcome back to Overtime. Stocks falling today as President Trump says the U.S. is moving forward with a 25 percent tariff on goods from Canada and Mexico starting tomorrow. China is set to get hit with 10 percent tariffs. Joining us now is Joe Livornia. He's a chief economist at SMBC, NICO Securities America. And he's a former chief economist at the National Economic Council during the first Trump administration. Joe, happy Friday. Happy Friday. We got the president talking right now about these tariffs. We also had Phil Graham and Larry Summers, not normally op-ed fellows, in the journal this morning talking about the dangers of tariffs as a general tool for economic policy.

Why are you so convinced they're not inflationary if we're not exactly sure what they're going to look like yet? Because, John, inflation is always and everywhere a monetary phenomenon. And if you don't get expansive money and credit creation, you can't have inflation. So a tariff is a price level adjustment. And the problem I had with today's piece in the journal, it highlighted Smoot-Hawley. The environment was completely different then. The U.S. had been running 1 to 2 percent, 3 percent trade surpluses as a share of GDP. So by implementing tariffs, it was a self-inflicted wound. Today, it's the exact opposite.

We're running 4 percent trade deficits as a share of GDP. So the environment is completely different well when most i think folks in the u.s consumers think about inflation they think about prices being higher president trump did just say tariff costs are sometimes passed along to consumers so uh you know money supply aside if prices go up for consumers as a result of this, is that a problem? Here's the thing, John. What happens is the tariff is being used in conjunction with a lot of the pillars to the Trump economic plan. So the tariff is an incentive to keep U.S. production here, at the same time to relocate production outside into the U.S. And the reason, other than the tariff being the initial incentive,

is low and cheap energy costs, deregulation, and lower corporate tax rates on production from 21% to 15%. The tariffs will raise revenue. That will allow us to keep marginal tax rates lower. So the net effect on U.S. households should be positive, not negative. I want to get into the oil and gas tariff piece of this specifically, because we also know since January 20th, President Trump has unleashed a wave of executive orders tied to reigniting energy production in this country, looking at things like pipelines and infrastructure,

and basically, to your point, trying to drive inflation lower by making energy more accessible and more affordable. When you slap tariffs on other countries that import a lot of oil to us, what does that do, especially given the fact that I would imagine there are going to be geopolitical implications to this, too, which are not necessarily negative? Yes. I mean, look, if you look at the economy, energy is about 13 percent of GDP. Imports are 11 percent. But the thing with energy is that you've got a lot of indirect effects. So if energy prices go from 75-ish a barrel down into the mid to high 50s, as they were under President Trump's first term, you'll lose at least,

I calculate, at least half a point on your headline inflation rate. You'll lose another 80 basis points from all the indirect effects that lower energy costs have in terms of production, distribution of goods, services, airfares, all those sorts of things will come down dramatically. Because the U.S. is the consumer of last resort, the U.S. is in a much stronger negotiating standpoint vis-a-vis our other trading partners. And with respect to China, whom we have the largest deficit with, the U.S. is in a much stronger negotiating standpoint vis-a-vis our other trading partners. And with respect to China, whom we have the largest deficit with, the U.S. economy is very strong. The Chinese economy is very weak. It's a totally different situation from eight years ago.

Look at the Chinese bond market. They're telling you growth is significantly weakening. It's much softer than the official figures show. So, again, when we look at tariffs, they've got to be looked at holistically. They have to be looked at as a negotiation tool. They have to be looked at as a source for revenue. And to me, when it's approached that way and not just narrowly focused, which so many economists are focusing on, looking at that narrow sliver, in totality, they make a lot of sense. How are you factoring in changes to population and to workforce? Because we are starting to see the immigration crackdowns on illegal immigration this week, sweeps in major cities and places across the country. You also have economists who are saying this, too, is going

to be inflationary. Well, I mean, again, people kind of forgot the lessons from Milton Friedman. Again, money supply and credit growth will cause inflation. That's what happened during the last four years. We had a massive increase, historic increase in government spending, and then the Fed monetized it. With respect to immigration, labor force participation is slowing. The BLS reported that they've overstated employment by 80,000, sorry, 800,000 workers. So this notion somehow that we're going to run out of workers through immigration is just complete pie in the sky. It doesn't make any sense. So, LaFornia, great to get your thoughts. Thanks for joining us. Up next, we'll hear from the CEO of the energy services company Baker Hughes, speaking of,

about how tariffs could impact his business and the oil and gas industry at large. And later, Reddit co-founder and venture capitalist Alexis Ohanian on what he makes of the deep-seek disruption in the tech world this week. We'll be right back. Welcome back. Baker Hughes up over 3% today after the oil field services company reported an earnings beat thanks largely to the strong growth in the industrial and energy technology segment. IET includes equipment and technology that relates to NatGas and LNG, among other things. Well, earlier today, I spoke exclusively with Baker Hughes, CEO and Chairman Lorenzo Simonelli, and I asked him what's fueling that demand. It's the first for energy. And as you look at the consumption globally and also the opportunity

to take natural gas, liquefy it to Southeast Asia, to Europe, when you think of also the increased demand from generative AI and the requirement from data center perspective, overall, as you look at the predictions, there's going to be an increase in energy demand of 10% over the course of the next decade. So that is something that as population continues to increase, we continue to consume more energy. So as is the case with SLB and Halliburton, Baker Hughes Oilfield Services business specifically, that remains soft. Oil companies like ExxonMobil and Chevron are becoming more efficient at pulling more crude out of the ground with less equipment. So I asked how this dynamic affects Baker Hughes. Well, it fits right into our strategy and being able to do more with less, and it's the mature asset solutions. When you look at Baker Hughes and our oilfield services and equipment segment, over 50% is

related to the production side. When you look at electrical submersible pumps, you look at chemicals. And there is a theme that we've been calling out for the last few years that's continuing, which is utilizing the assets and getting more recovery from the assets. So it really fits into the mature asset solutions that we offer at Baker Hughes. And we've seen a more stable and growing opportunity for us in that section. What does that mean in terms of the services you can offer and the role something like AI would play in it? So AI will be able to, again, efficiently drive productivity and also help recovery. So we apply when we're going through

directional drilling, the aspect of precise drilling. So you go to the spot with the largest recovery. When you look at our products that we provide, it's again, uptime from an electrical submersible pump and being able to use the data analytics and also the algorithms and generative AI to make sure that you're predicting, anticipating, so you don't have the downtime. So across our portfolio, we actually have a number of AI, generative AI, analytical tools

that we provide to our customers as software. We've seen a flurry of executive orders come out of the Trump administration since January 20th. We already touched on it a little bit with LNG, but we know that this is an administration that wants to see drill, baby, drill. Do you expect that to happen? How are you planning for the possibility of more production coming online, if in fact it is going to come online here in the U.S.? We do see slight production increase in the United States. And I think the administration theme around energy security is one that fits again well from a Baker Hughes standpoint and our sustaining of the production that's in place and assisting if there's incremental production

that's going to be happening. I think the EMPs will remain, again, disciplined with their capital deployment. And it's all going to be a function of what happens from an oil market perspective and the pricing. Now, I also asked Simonelli how he is planning for tariffs, which the president could slap on Mexico, Canada and China as soon as tomorrow, including potentially these oil and gas tariffs that would go into effect on Canada and Mexico come February 18th. Have a listen. We've looked at this before and it's not new that tariffs have been talked about. We've got a supply chain that is very versatile and we simulate different things. And so we look at it as being immaterial from a Baker Hughes perspective and we will navigate the course accordingly.

Now, of course, those comments coming just a few hours before these most recent headlines we got from the president. But nonetheless, you get a sense of how yet another company here in this space is gaming out trade policy. You can watch the full interview on CNBC.com. Very timely. All-time for CNBC News Update with Seema Modi. Seema.

John, at a news briefing this afternoon, D.C.'s Fire Chief John Denneley said the bodies of all 67 victims from Wednesday night's fatal crash near Reagan Washington National Airport are expected to be recovered. So far, the remains of 41 people have been recovered, and of those, 28 have been identified. Donnelly added that the jet fuselage likely will need to be removed from the Potomac River in order to recover the rest of the victims. The head of the FBI Washington field office was notified yesterday that he was going to be fired and is preparing to leave the bureau. That's according to two senior law enforcement sources who spoke to NBC News.

David Sundberg is the highest ranking field agent so far to be fired by the Trump team. The D.C. field officer was heavily involved in former special counsel Jack Smith's investigations as well as the probe into the January 6th riot at the Capitol. And a Louisiana grand jury indicted today a New York doctor for allegedly prescribing an abortion pill online in the state. The case appears to be the first instance of a doctor being criminally charged for accusations of sending the pills to another state since the overturn of Roe v. Wade in 2022. Morgan and John. Seema, thank you. Well, it might seem like the market has been choppy lately,

but volatility has actually been relatively subdued. We're going to look at why the VIX has been kept in check next. And later, venture capitalist Alexis Ohanian will join us to talk about the tumult in tech this week and about his new bet on genetic testing. Overtime. We'll be right back. Welcome back to Overtime. The S&P 500 ending the month of January with gains of more than 2.5% since the start of the year, but there's been a torrent of activity beneath the surface. Mike Santoli is back to explain. Mike?

Yeah, John, and really stocks going their independent way increasingly in the last few weeks. This is a statistical measure using options on very large stocks, as well as the S&P 500 index, to sort of say how much are individual names correlated, how much are they moving as one, and how much are they not? Are they kind of offsetting one another? And we're basically at record lows here going back to the mid 2000s. So when it's a very macro driven market, when it's all about, you know, sovereign debt crises or the Fed or yields going up or recession scares, a lot of times all stocks act as one. And then right now, when you have this very interesting situation with a concentrated index, sometimes the index itself is moving in a different direction than the majority of stocks.

And that's why we get down here. Now, in theory, this should create that wished for stock pickers market because the opportunity to pick a stock that does better than the index or at least acts differently than the index is higher. Of course, also easy to pick the ones that get left behind. But for active managers, it's a larger kind of opportunity pool there. Take a look at the volatility index. This is actually suppressed when things are moving their own way. The index level volatility has been much lower than the average stock volatility. And that has actually caused the VIX to sort of wane down toward 15, although we did perk up right near the close on this tariff news. Yes, we can go lower. We have been lower in slow times. But this usually means

the market's in gear, but maybe it's not ready for any kind of an unexpected shock. Mike, in that first chart, I think it's 2018. We went from a pretty low level of correlation to a pretty high one pretty quickly, right? We did. Well, 2018. 2018. Yeah. Heading into 2020. What you're seeing here is COVID. Yeah. That's all right. Now that makes sense. But interestingly, interestingly, though, early 2018 is something to keep an eye on here in terms of very low level of correlation that can go higher in a hurry. We had a very, very calm market in 2017, basically just kind of ratcheted higher all year, no corrections. And then you had what was called volmageddon in the beginning of 2018.

Too many bets on that volatility staying low kind of blew up. And we did have a nasty correction in a volatile year. And we also had the implementation of tariffs that I think helped trigger that volmageddon, too. You had the Fed tightening and a a lot of. Yeah. All right. Mike, thank you. Up next, venture capitalist and Reddit co-founder Alexis Ohanian on how this week's deep seek news could change investing in startups. And later, find out how a public private partnership, including Google, is helping fight the world's wildfires from space. We'll be right back. Your scientists were so preoccupied with whether or not they could that they didn't stop to think if they should. You know that quote? It's a famous line from the movie Jurassic Park. But today, John takes time out with the CEO of a genomics company

that did stop to think about it and found good reasons to try bringing back extinct species. Ben Lamb is CEO of Colossal. It's a company using computational biology and genetic engineering to pioneer what it calls de-extinction. And the woolly mammoth is near the top of the list here. Now, before you say that sounds crazy, I'll note Colossal just raised a $200 million Series C financing round at a $10.2 billion valuation earlier this month. Now, Lam is a serial entrepreneur who's founded at least a half a dozen companies, depending on how you count it. But he majored in finance and accounting in college because when he was a teen, an uncle worried he would be unemployable. I have a little bit of ADD. I'm dyslexic. I kind of focus on lots of, I try to focus on things that I'm interested in. That's not always school. I bounce around in different ideas a lot. I mean, if you look at

my career, I haven't stayed at a company longer than four years. And so those are my companies. So I think that they were probably right that the path for me to not live at home or be homeless was probably to start my own stuff. So why start a company that reminds everyone of the overly ambitious scientists in Jurassic Park? Well, Lamb says the breakthroughs necessary to bring back the woolly mammoth or the dodo bird can also help people beat diseases and help the environment too. So what's crazy about it is the technologies that we're using to create stem cells, to do genetic engineering to these species, to reconstruct genomes, all of those have applications to human healthcare. So part of our business model is spinning off technology companies that have application directly to human healthcare or other big use cases.

And so we're only three years old and we've already spun out two businesses. The first was a computational biology platform called FormBio that looks at genomes and how we can actually do better drug discoveries around genomes. The second one was actually a plastic degradation tool. So it's pretty interesting. The Wyss Institute discovered this little microbe that eats any type of plastic that you throw at it. Now, when I say eats, I mean it doesn't break down the plastic into smaller microplastics, which we're hearing all about. It actually breaks the chemical bonds and just makes biomass as the byproduct. It's an incredible discovery. So the timeout takeaway, old dino, new tricks.

Now, we might seem to be living in the opening scenes of dystopian 80s and 90s movies like Terminator and Jurassic Park, but maybe there's more to these AI and genetics breakthroughs than greed and recklessness. Like crop rotation and reforestation, maybe a thoughtful approach to de-extinction can actually make the planet healthier and make investors money at the same time. We'll see. Morgan. I love, love, love this time out, John. This is really awesome. And actually, this sets us up really well because up next, we've got much more on the world of genomics when we're joined by the CEO of genetics testing company Nucleus, along with investor Alexis Ohanian. And Vertex Pharma was one of the big winners on Wall Street today.

The FDA approving the company's non-opioid painkiller. This is a drug analysts believe could generate more than $1 billion in annual sales. Welcome back. AI is helping bring down costs across a wide range of industries, from manufacturing to tech to healthcare, including gene editing. Well, this week, Nucleus, one of the companies working to unlock cheaper and faster gene editing, closed its Series A round with some well-known investors, including 776 and Founders Fund. So joining us now for an exclusive interview is Nucleus founder and CEO Kian Sadeghi,

along with Reddit co-founder and 776 founder Alexis Ohanian. It's great to have you both here. Welcome. Alexis, I'm going to start with you because we've been hearing about the possibility of genomics for a while. Why make an investment in this area now and why this company specifically? Well, I'll tell you what, this is the time and we didn't just invest in this round. I've invested over $10 million into Nucleus since their first round a couple of years ago. And the big why was that the cost of sequencing a whole human genome was plummeting to a few hundred dollars.

And this is one of those secular shifts in a technology that it took decades to have happen. And I, like a lot of people, I swabbed and signed up for 23andMe decades ago didn't get much value out of it but hoped for what the future could bring and and the future is here and nucleus is building that massive database of whole human genomes that I think is gonna help a lot of us live much healthier much longer much better lives and we're showing a stock chart of 23andMe which is now a tiny stock. It's a microcap. It went public during the SPAC craze of a couple of years ago. Kian, what is it about Nucleus in terms

of these new technologies, these new capabilities? What does AI bring to the equation? And perhaps just as importantly, since people do seem to be a little bit gun shy about their genetic data, how do you keep it secure? Yeah, so, you know, 23andMe collapsing is indicative, it's sort of like Blockbuster or like Netflix. It's not the sign of industry destruction. It's actually about brand transformation. And Nucleus is leading that transformation. So as Alexis mentioned, it used to be about $100 million to look at all your DNA. So 23andMe had to only look at a very small fraction. And because of that, they fundamentally couldn't give people insight into their individual health. They couldn't help them plan families. They couldn't tell them what drug dosages are right for them. These are all things

that Nucleus can do. Regarding privacy and security, we're actually a medical provider. So we're a physician order test. We're clear certified. We're CAP accredited. So we're as stringent with our policies as your hospital or doctor's office. Alexis, good to see you. It's been a while. Let me shift the topic to DeepSeek and the idea now of efficiency and AI that you can get maybe more done with less expensive hardware. Is that shifting your investing strategy overall at all? Well, I would look at that number that they advertised with a raised eyebrow. I do think, though, you know, the big story here is that because this is open source, it lets everyone else level up their game. And it speaks to what we've been betting on for the last few years, ever since ChatGPT sort of reframed or reset the possibility for AI and what it can mean, it just makes me more excited

because the real value here, at least I believe, is going to be in really the data and the unique models that you can train based on that unique data. And at the end of the day, our DNA is just a lot of data. And especially with a whole human genome sequenced, you're looking at a lot of data that the average person or even the smartest person could take infinite lifetimes to try to understand. But this could not be happening at a better time because the models on which we're going to be able to train are just even more capable than just a couple of years ago. And what it means, and I think it bodes pretty well for a very near-term future of a very different way of of health and health care medicines that can be prescribed on

an individual on a genomic level for us we've only begun to understand what our dna holds and if you think about even the small steps we made forward things like the brachygine which we know leads to or often leads to breast cancer. If we get this right in another five years, 10 years, that little bit of knowledge we had will seem almost like Bronze Age technology compared to what we'll be able to do. And that's the part that gets me most excited. It means lots of people getting access to better health care. Kian, doubling down on that, how do you envision Nucleus working such that people, consumers will actually want to share their genetics info out to dating platforms or

wherever else and believe that they're only sharing the portions that they want to share? Because, you know, if the wrong insurance agency starts making calculations based on information people don't want to share, they could end up in a bad spot. Yeah, well, so, you know, Nucleus, again, we're like a medical provider, so people have complete control over their data. If you talk about insurance, for example, GINA, actually the Genetic Information Non-Discrimination Act, made it legal for health insurance companies to use genetic data. It's really important for people to say, especially nationally, because a lot of people don't know that, and that stops them from doing genetic tests. I think there's no one in the world that

doesn't want to be healthier, that doesn't want to have healthier children, and that doesn't want to get the drug dosage that is right for them. Data insecurity, especially if you look at the way that Nucleus is built and that we don't share any genetic or other protected health information with any third party, that should never get in the way of someone getting life-saving insights. Alexis, we've talked about the tech titans heading down to Washington being either involved officially or unofficially with this administration or at least engaging in conversations, including just today, Jensen Huang from NVIDIA with President Trump.

I want to get your thoughts on what this administration could mean in terms of policy for AI, for health care, also for crypto. Well, you've heard it loud and clear out the gate, and it's very interesting. I don't know if it's because I've gotten older or because tech really has a sort of deep connection to the administration now, but I know more people that are either connected to or in the White House than I can ever imagine in any administration. And look, I do think this is a direction that I think we as Americans, all of us should be cheering for, which is a direction that is espousing, you know, excellence, that is espousing a chance for us as a country to really really really do

what this country has an amazing history of which is innovate and excel and you know especially when it comes to all these emerging technologies i think it is more important than ever you talked about ai it's more important than ever that the united states continues to be a leader there uh you know try asking deep seek uh about uh orwellian states and you know the answer will amuse you um i think we all want to live in a world where we get to see the very best of technology and and frankly i'd love to see it with one that espouses our values um so i think it's imperative that we we lead we continue to lead and and again we're doing it with the the the values the rights to privacy that we talked about,

especially when it comes to things like our health and data, but as well as the freedoms and the values that we know help us get to the best possible future. And I want to see it in space. I want to see it in AI. I want to see it here on Earth. Alexis, a couple years back, you gave up a board seat saying that you wanted to give the board the opportunity to get more diverse. Now, the culture nationally anyway has shifted since then. Would you do it again? You know, a hundred times over, yes. It has been such a blessing for me professionally since I stepped back. And frankly, it was the right decision for Reddit.

You know, in the months after my protest protest resignation the site finally did ban hate communities and i i know that has been good for business um and i think something that should not be lost here these values that i have are are rooted first and foremost in in excellence and i hate when these things get twisted um you know having a broad broad funnel to reach out to the widest range of people possible does not undermine the pursuit of excellence in hiring. And it's a shame this stuff gets so politicized and so twisted. And Michael Seibel, who ended up taking over that board seat for me, I think has done a great job and he is excellent. He's a successful exited CEO and a partner, Y Combinator to this day. And yeah, I'd do it all over again.

And like I said, for me, it's actually been great. And I spend my money and my time now investing in amazing founders like Kian who are going to hopefully build a better future for all of us. Well, gentlemen, thank you for joining us. Alexis Ohanian and Kian Sadeghi. Up next, how new satellite technology could ultimately help prevent wildfires from raging out of control. And sticking with space, check out shares of AS2 Space Mobile, which are sky high today. After the FCC temporarily authorized the company to test its satellite broadband service with AT&T and Verizon, shares finished up 11%. In the wake of California's devastating wildfires, new technology is emerging that promises to transform the way blazes are monitored, fought and ultimately prevented.

The Earth Fire Alliance is a public private partnership that includes Google, the Gordon and Betty Moore Foundation, Mindaroo Foundation, the Environmental Defense Fund and a startup called Muon Space. Executive Director Brian Collins says the alliance was created to bring space-based data and AI together to address the world's wildfires. At Earth Fire Alliance, we like to say the big part of our name is actually the alliance part, which is our assembling the community, and that is fire and incident response agencies to be ready to use the data as soon as it comes down from the satellites, as well as the fire science community to begin to look use the data as soon as it comes down from the satellites, as well as the fire science community to begin to look at our data and start coming up with new ways to understand what's happening on the fire. And then the emergency management community to see the data and begin coming up with new concepts of how to make decisions.

So the first of the alliance's Firesat satellites will head to space in March. More will launch early next year, and with those, initial operational service to early adopters. Johnny Dyer, CEO and founder of Muon Space, says the drop in costs coupled with the increase in capability are what make a service like this now possible. You know, one of the core kind of thesis for Muon when we started the company was that there's going to be this tick tock feedback mechanism with AI and things like satellite data. So we're now at a place where we can build large constellations of mission targeted satellites and collect massive quantities of new and important data. But we're also in a place where the technology with things like AI is set up to enable us to make use of that data in a much more effective way than I think has been possible in the past. He would know. Dyer worked at the first venture backed new space company, Skybox, which was acquired by Google and when it was helped

implement satellite data into Google Maps and other apps. So there's traffic, there's weather. Google has now implemented fire, sort of fire alerting in the Google Maps system all the way up to their search product. And I think it's, you know, much of this kind of behind the scenes is working on the combination of unique geospatial data collected from things like satellites with AI applied to it to do things like detection and monitoring and sort of extraction of useful information from that data. And so Google's really the best in the world at solving these type of problems where you have, you know, a difficult, very, very large data set that has to be managed and understood and sort of insights extracted from it. And that's been, you know, already just the work that we've done with that team has been truly fantastic because we've been able to think about this problem end to end. It's not just the Alliance either. Rocket Lab recently announcing that it will launch a fire monitoring specific satellite for Germany's Aurora technologies as well.

For more, go to Manifest Space. You can use the QR code that's right there on your screen, or you can download the episode wherever you get your podcasts. Such an interesting field, of course, Alexis Arhanian mentioning Space 2. Such an interesting week. We have this handoff from DeepSeek driving the market to now TariffTalk driving the market. And we're in this interesting position where Apple, Microsoft, NVIDIA all lower year to date in month of January now over the S&P up two and a half percent. What happens next? Amazon earnings next week, Alphabet earnings, AMD earnings. We're going to keep on going, but that's going to do it for us here at Overtime.