Power Lunch - Disney and OpenAI agree to licensing deal 12/11/25

Episode Date: December 11, 2025

Disney and OpenAI announce a licensing agreement for Disney's characters. The U.S. seized an oil tanker off the coast of Venezuela.   And a look at an alternative asset class that is having a record year.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Artificial intelligence is coming to your house and to the house of the mouse as Disney hops into AI. Welcome to Power Lunch, everybody. Alongside Kelly, I am Brian Sullivan. We'll hit that plus Oracle tanking, taking down part of Big Tech with it. That stock, seeing its worst day in more than 20 years before bouncing a little bit off the lowest concerns grow around its real AI. exposure. Plus Disney's billion dollar bet on artificial intelligence, reimagining storytelling and fan engagement. Its new partnership could redefine how the company builds characters and even entertainment ecosystems. And we are going to get your motors running with the one big asset

class that you could not only invest in, but you can drive. That's a live look. We got some hot cars here. That is just one of them. Okay, one and a half. We're going to show you more at the end of the show with Robert Frank. Man, that's beautiful. All right. We got a lot to do this hour. Hope you have it a great Thursday. No shortage of AI-related headlines today. And let us start with Open AI parent company chat GPT. No, this is not the Disney news you've heard about. We'll get to that next. But a hidden a little bit under that news is that Sam Altman and company are launching a new salvo in the fight to stay ahead of Google. Mackenzie Sigales broke the story. Joining us now from San Francisco. All right, McKenzie, what exactly is Open AI doing here and how serious is that

threat from Google? Hey, Brian. So today's Open AI headlines are really about going after the mass market, with Sam Altman clearly feeling the heat from Google and moving on to the offensive on two fronts. So on the consumer side, you're about to talk about this. It is turning its video generation app Sora into a play to get Disney superfans to pay for a chat GBT subscription. But then just in the last hour, they also rolled out GBT 5.2, which is aimed squarely at the enterprise customer. Opening eye is calling this new model its most advanced professional one yet, saying it is now beating or ties industry experts on about 70% of real workplace tasks across 40 plus professions. They are also touting big gains in long context reasoning and a sharp drop in

hallucinations. That is key if you are a lawyer or consultant trusting this. in front of your clients. And remember when we were talking last week about Altman declaring a code red after Google's Gemini three launch? Well, today is the first real answer to that, pairing this Disney deal for Buzz with a flagship enterprise model

that's meant to keep those big corporate customers from drifting over to Google ananthropic. But getting back to your overarching question here, Brian, that threat from Alphabet, it is very real. But also, so is Altman's retaliation. Google shares, I'm looking at those now, down two and a half percent today. Yeah, we think that's because of, well, not only the Disney news, but also maybe this news.

So this is not the hugest tech upgrade, as I understand it from you. And I don't understand all the tech. I'm not going to lie about that. But again, this is kind of the, they're just throwing body blows. Are they not at each other because they're all fighting for potentially the same dollar? Precisely, this is a battle being waged in these incremental updates. So as soon as you have a new model out, whether it's, you know, five, 5.2 or, you know, 6 would have been GBT, chat, GBT, 6 would have been the real step up here.

You are in the leader position at the top of that leaderboard for a couple of weeks until the next rival brings out the next incremental, you know, model update. And so that's part of the issue here. But what's more interesting to me is Sam Altman, he was on our air earlier this morning, and he brought up the fact that they are excited about the chips that they're working on with Broadcom. Broadcom reporting after the bell today. I'm going to be listening in to see if they mentioned progress on that project because

they signed that $10 billion deal. And that's really how you win this competition. Perhaps not in having the latest model come out, but in owning the entire stack because that's where you get competitive on pricing. And that's what Altman said this morning. He said he's, quote, very focused on having the cheapest cost per token in the industry at the highest level.

That's how you determine how much your enterprise customer pays. And that's huge when you talk about using these models at scale. Finally, Mac, we saw Oracle shares selling off last night, and they're still down significantly. And I wonder if investors are starting to push back on this theme of just kind of mega spending on and mega investment in these data centers and in kind of powering all of this AI. Is there anything that we should be concerned about in that regard? I mean, the whole narrative right now is around debt financing, especially in the case of Oracle, and whether or not their biggest customer accounting for the bulk, some of their RPO, that remaining performance obligation, will be able to pay up on the deals that they've signed. And I was down at the site where they broke around in Abilene, Texas.

Oracle speaking with their new co-CEO, along with Sam Altman, about the project. And there is this question as to whether or not, you know, that's $500 billion toward that $1.4 trillion overarching compute spend commitment that OpenAI has made. And the question here is whether they will not just have the revenue to be able to do that, but whether in the meantime, these partners that they're working with will be able to secure the debt financing. And that's part of why Oracle has seen this historic sell-off. I mean, the biggest drop in 20 years, I believe, off the back of earnings. 46% off it's high. I want to add another quick layer here that, McKenzie. I know you were out with some colleagues in Indiana at this huge new Amazon data center about two months ago.

Great piece there. There's another layer here, Kelly, that we talk about the money. Okay, the money's there. We talk about the energy. The energy may be there. It may not be there. We don't know. Here's where I think the weak link in that chain may come from.

from something we never talk about, public support. In communities around America, there have been greater pushbacks on data centers. Are you going to steal our electricity? Is our electric bill going to go up? Is this going to consume all of our water? Will I have enough water to live on? And I wonder, Mack, if you saw that in Indiana, is this going to be the variable we're not talking enough about? And that is not, there's plenty of money.

There's maybe not enough energy, but the public support may be the, problem. When I was out in Indiana, I went to the weekly Tuesday evening town hall meeting that they have near South Bend. And one of the overarching, the overarching sentiment with the conversations that I had was the fact that this was inevitable. So they pushed back two years ago when Amazon first broke ground, but when it became clear so quickly that they wouldn't be successful in trying to prevent the buildup, because it's not just Amazon that's there. It's become this quarter for all of these data center builds. But that's also part part of why Amazon is at such a competitive advantage with respect to the hyper-scaler AI build-outs

because they've been in the warehouse business for 20 years now. So they already have a lot of these local connections with the public utility companies with these kinds of town council leaders who sway public sentiment. And that puts them at an advantage to move more swiftly. And that's why they've been so successful. And that data center site in Indiana was exclusively for Anthropic. We also know that Amazon recently signed a $38 billion deal with Open AI and they plan to break ground to build out a data center dedicated to their compute.

So I went and asked the population of Indiana, 2.8 million households. If you gave each of them $100, that's $280 million. You're telling me no big tech company might think at some point it'd be worth it to just say, how about a dividend back to help with your electricity bills in order to keep that public support behind this technology? Sometimes I wonder, I'm not saying Mac, that would ever happen, but sometimes I wonder if that would just be the easier way to go. But it is happening.

A thousand dollars. They can give each household living in Indiana. is happening. A thousand dollars they could give and it would cost $2.3 million. You mean a direct check. A direct check. Yeah, they could do that, but they are paying into the grid to lower utility costs. This whole narrative, kind of respectfully to the media, lazy narrative about how it's going to raise electricity prices. Many of these data center companies are paying huge premiums to make sure that electricity rates don't go up or maybe even come down. Cash goes a long way. Or just write the Kelly Evans check. McKenzie, thanks for now. We appreciate it.

Seagalos out west. Elsewhere, Disney CEO Bob Iger was on our air this morning to discuss this deal, this partnership that they have now with OpenAI, and how it has potential to become a great growth driver for the company. So it gives us an opportunity really to play a part in what is really a breathtaking growth in essentially AI and new forms of media and entertainment. Let's dig into the media angle on this partnership and how it could have. have a broader impact. For that, we turn to Alex Sherman. Alex, it's great to have you here. And, you know, what's the significance of this deal? And it's interesting that they're not just saying, we're going to allow you to use our characters in some way, shape, or form. They're taking

a stake in the company. They are. This deal is really about, I'm going to borrow Bob Iger's words. He talked about how this deal values and respects Disney's content in the realm of AI and, of course, SORA. He means values because it's a three-year licensing deal. So this kind of puts a template out there potentially for future media deals with other AI companies to say, look, if you're going to use our content, you need to pay for it. And it respects it because for the first time, it actually draws some guardrails around the usage of this content. You can think about how important that is to Disney that their branded characters are used in the right way. take a listen to what Bob Eiger said around this concept of guardrails.

Open AI is putting guardrails essentially around how these are used so that really there's nothing for us to be concerned about from a consumer perspective, meaning this will be a safe environment and a safe way for consumers to engage with our characters in a new way. And also, let's be mindful of the fact that these are 30-second videos. One of the interesting parts of this deal is that curated videos are actually going to be on Disney Plus. So this idea of user-generated content or at least quasi-user-generated because I think Disney will have some say in what shows up on Disney Plus. That will become a part of the viewership experience. And you can just imagine the data that Disney can get from this as they see how their super fans use the content in a non-inappropriate way.

and maybe that can even dictate future storytelling for Disney. So it's not just for Disney. It's not just the fact that they're kind of getting into AI in the early stages of it. But there's certainly a data impact of this also that may, in fact, dictate storytelling down the road. So the idea, I think, please, I don't know anything about this, but I'm going to propose something and tell me if this is directly correct, which is the idea is that you use Open AIs, video, generation, SORA, right? And you say, make me a 15 second video with a video of my daughter and Snow White and Bambi in the video. And then they get to watch this video with their daughter in it using the Disney characters because Open AI is getting money from Disney or vice

versa to do that. Is that basically what we're talking about? At its foundation, absolutely. That's the way that Disney wants people to use this. And then again, there will be some sort of curated sampling of the most interesting or entertaining of these videos that will likely end up on Disney Plus. The details around that, I think, are still vague. But in basic words, what you laid out will be the desired experience here. And then, of course, Disney will get paid for the usage of those 200-odd Disney characters that will be licensed to SORA.

That's fascinating. Who's next? Well, you know, Sam Altman talked about how Disney kind of really stood out among media companies because David Faber actually asked Sam who's next. And he was like, look, we've, we've talked to Disney for a long time about this deal. But the reason we focused on Disney is that they really stand out among the media companies in terms of who our users want to engage with. So I don't know the question about who's next. It does speak to the value of Disney's IP compared to all the other ones. But you can certainly guess, you know, there's other obvious candidates out there,

the big media companies, Paramount NBC Universal, that have these troves, Warner Brothers Discovery, these troves of IP that they've been sitting on for decades and decades, and now finally may have a template to actually get some money back from the AI companies rather than having them just pirate this content for no money. It's going to take a lot of power to make that video with Snow White and Bambi. You're going to need a lot of coal to make that video on OpenAI, Alex, Sherman. You don't need to comment on that. Alex, thank you. need to be coal, the rate that we're going. Not going to be a lot of other options. No, I know. It's Indiana. Or whatever may be. I'm not joking. You get coal if you're good this

year. That's what you want in your stocking is actually coal because you could power something. Thank you, Alex. Coming up, the U.S. seizing an oil tanker off the coast of Venezuela yesterday. That is often spoofed its location to hide where it really was. We'll have full details and the significance of their action right after the break. Crypto.com is America's premier crypto platform. We have some breaking news, some new reports on the U.S. preparing to seize more oil tankers off the coast of Venezuela. Amon Jabbers is here with the details from the White House. Damon? Kelly, yeah, let me walk you through it. First of all, Caroline Levitt, the White House

Press Secretary just told reporters in a briefing here at the White House a short time ago that the U.S. does intend to seize the oil on the tanker that has already been secured. That tanker will be moved to a U.S. port. She said that officials are on board the tanker, interviewing the crew, scouring the ship for information and evidence, and ultimately an investigation will be launched as to whether the assets, the ship and the oil and anything on it, should be seized by the U.S. government. No information from the White House on what will happen after that. Secondly, we've got a report here from Reuters just within the past few moments as well, suggesting that the United States is preparing to seize more Venezuelan oil tankers in

the open ocean. I just talked to a White House official here in the West Wing about that a couple of moments ago. That White House official not disputing that report at all, quite the contrary, saying that the United States government is prepared to enforce the law. and also saying that seizing more tankers is definitely something that this administration would want to do. To that, and Kelly, our intrepid producers on the news desk at CNBC Global Headquarters have spotted the OFAC list the Treasury puts out. That is the seized asset list or the sanctions list by the Treasury Department has just been updated. And on it are a number of oil tankers. These are now designated oil tankers that are allegedly in violation.

allegedly in violation of U.S. sanctions. Those include H. Constance, a crude oil tanker with a Panama flag. Caria M, a crude oil tanker with a Panama flag. Latafa, a crude oil tanker, also a Panamanian flag. Monique of Cook Islands flag. Tamia, a crude oil tanker with a Hong Kong flag, et cetera, et cetera. You get the idea.

A lot of crude oil tankers are now on Treasury's OFAC list. So we could watch for more seizures by US forces as they track down Venezuela oil imports that they say are in violation of U.S. sanctions. And one more thing, Kelly, the big question here is what happens to that oil that's on that tanker? Where does that go? Now, typically, the process for any law enforcement seizure is that those assets would be deemed through a legal process to be forfeited to the U.S. government. At some point down the line, quite a bit down the line, there will be an auction, often by the U.S. marshals to auction off those seized assets that the U.S. government does not need to hold anymore. So frequently you see

the U.S. Marshals auctioning off houses and Ferraris and other assets that have been seized by drug dealers and other lawbreakers. In this case, that is one option, although the White House is not committing to going down the path of having U.S. Marshals auction for thousands of barrels of oil seized on the open ocean. Kelly, back over to you. Well, I would say eight minutes, Brian, jump in. Yeah, we reported on some of the names of these ships back in 2022. I'm sure the names have been changed many times or the ships are out of commission. Now, the oil is one thing. What do we know, Amon, if anything, about the ships themselves?

Most of these are old and kind of beaten up. Are they going to be just let go or will those be sold off or scrapped or sunk? Well, presumably, now we're a couple steps in the process ahead of this, but if we go down the process to the point at which there is a forfeiture determination by the U.S. government under the law, then that asset is forfeited. So it's just like a drug dealer's Ferrari. And then the U.S. government has to decide what to do with it. Often, they do auction those assets off at the end of the process. In this case, you know, you'd wonder whether there is any market value at all for some of these ships. As you say, they're in often terrible

condition. They might not be worth much on the open market other than for scrap or for parts, but presumably there's somebody out there who might buy them for some legal purpose down the line. But we have a ways to go, several steps in the process before we get to that point, Brian. Amon Javre's in D.C. Fascinating story, Amin. Thank you very much. All right. For more on this story and the tensions with Venezuela, bringing Michelle Cruz-Gabreira, CEO of MCC Global Enterprises, CBC contributor, former anchor of such shows as this one. Michelle, this is escalating. For sure. Probably no surprise. I would say it's fair to say that the financial sanctions that were put on these countries a couple years ago that were lightly enforced.

if at all. This is the next step. This is a design step to kill the cash flow, I assume, from Maduro and others. Yes, this tanker is part of the shadow fleet, as it's called. S&P Global says there's probably close to 1,000, maybe 18% of all tonnage capacity for tankers in the world are shadow fleet, these old tankers. They turn off the transponders, they change the flags, they change the names, et cetera, so that they can work for Venezuela, Russia, and Iran. And so, yes, this tanker was reported to be headed to Cuba, but the vast majority of Venezuela's oil goes to China. And this is certainly, to your point, an effort to curtail the cash flows to Venezuela. I think it's the same efforts they're making when they go after the drug

boats as well to curtail any cash that's going to the government to pressure Maduro to leave his post as the leader of the country. Can I ask why the urgency right now for an issue? We've known about the dire conditions in Venezuela for years now. But why is this now rising to the level at which we're seeing the government ratcheting up its response and looking for some, I don't want to use the word regime change, but to that effect. Basically, that's what they are looking for for sure. I think we got a clue a week ago today when the national security statement, the new one came out from the Trump administration. And one of the very specific things they say, one of their goals in there, is to eliminate the need for mass migration.

in the Western Hemisphere. You can read it right there. We want to ensure that the Western Hemisphere remains reasonably stable and well-governed enough and to discourage mass migration to the United States. Because remember, nearly 30%

of the Venezuelan population left the country. Right, and they've talked about changing their temporary status in the U.S. and all the rest of this. But so in other words, now every country that we are getting a lot of migrants from, we are putting on watch to say that your government were holding responsible for what's happening,

Is this a unique situation? So I think, yes, to the first part, but this is also unique because they're the largest cause of migration in the Western Hemisphere. I mean, there are Syria to the Western Hemisphere, right? I mean, we're talking to seven or eight million people who have disrupted the situation in Peru, in Colombia, in all of the neighboring countries. They've really struggled with this huge departure of people because the situation was so dire there. Well, you also look at a country which has the biggest oil reserves in the world. Venezuela has more oil underground than Saudi Arabia does. They used to produce over 3 million barrels of oil a day.

They're now down to 700,000, 800,000, basically one ship per day. It's been a disaster. It's also at risk of being an environmental disaster because you don't have the infrastructure investments being made. I think, and I'm going to speculate a little bit here, Michelle, from this side, comment, which is that you get Madero out. You put in somebody like Machado, who just made it to Norway, by the way, the opposition leader. They improve the conditions for the people. They get some money. They get to eat actual food.

And then you increase oil production. So you decrease reliance on Russia and or Iran. Does that sound directly correct? I think all of that is absolutely plausible for sure. What you don't know is what is the after-Madu-O plan? I'm sure there is one. Could it be worse than him? Well, no, I think that the conversations I hear are do you try to

install someone who was elected in a stolen election. They had an election. Somebody won. Maduro wouldn't step down. Do you try to put that person in? Or do you make a deal? You say, Maduro, you have to leave. Your top three henchmen have to leave all these other people. And then they make a deal with the lower levels of the military. That's what we don't know. They want stability. And the question is, because remember, when you topple someone, you don't necessarily get stability, right? We've learned that over and over again. We've learned that in Iraq. We learned that in Libya. We've learned that in Sudan, et cetera, right? So it could be worse.

So what is the post plan? That is less clear. The opposition has been on an investor roadshow, trying to make the case that they are ready to lead, that they are ready to put in all the laws that would make the place much more investor-friendly, would improve the economy, et cetera. But we don't know what happens afterwards.

So in a weird way, when we see these headlines, it could be bearish for the oil price, to the extent that we're talking about, potentially more barrels down the line and more stable Venezuela, but again, discounting that with the likelihood that we actually achieve that outcome instead of a worse one. Yeah, so people who are very familiar with the Venezuelan infrastructure believe they could easily get back to $3 million, 3 million barrels per day by 2030.

There's lots of existing infrastructure there because that's how much they used to produce. And in fact, when Hugo Chavez came to power, the actual plan was for the Venezuelan oil company to eventually producing 6 million barrels per day. They have so much oil, and it's easy oil. It's cheap to extract. To see the poverty there is such a tragedy, knowing the wealth potential that the country has.

It was the richest country in South America, in Latin America for a long, long time. The big winner here on the stock side, number one, the big winner would be hopefully the Venezuelan people. Because I want to be clear on that. Maduro and his strong men, they're stealing money. They've got, they're rich. while people are literally eating garbage or fleeing to the United States with nothing in their hands

they're crossing the dairy and gap and Panama super dangerous. But from a stock perspective, if you were looking at a name, you'd probably have to say Chevron. Why Chevron? Because Chevron is the only American company that is currently producing oil in the United States. If you folks go to 7-Eleven and you get Citgo

gasoline, Citgo is largely a Venezuelan company, but Chevron would be the one name I think that could benefit if we got a regime that was Western-friendly and actually cared about investing back in these assets because it's not impossible to think that Venezuelan oil production at some point could go to zero or at least that would seem like the Trump administration's potential goal here. Well, it's certainly to reduce any cash they get, right, to reduce the exports dramatically because if they're going to go after these tankers, they're going to go after other shadow tankers.

They know what they are. They know which ones they are. And so if they can't sell it. Every ship that leaves like Maracaibo. Jump on it. Boom. Take it. At some point, you run out of storage capacity.

So then you have to stop producing, right? So yes. It's fascinating that that could be. And like to your point, it'd be we hope there's a plan for way they're clearly ratcheting up the pressure. I assume there is plan. There must be a reason. But, but I can't imagine you, you know, things can always go wrong, right? So you have to have a decision tree. Well, if this happens and we do this or if this happens and you know. We have such a great history with regime change to your previous point. Please note sarcasm. It's very hard to do and And Maduro is there. I mean, he's not, he hasn't indicated he's going anywhere. No, no. And there's also been interesting reporting that, you know, he's surrounded by Cuban intelligence services. Cuba relies very heavily on them. Cuba's grid still runs on petroleum. It's one of the few in the world.

You know, the rest of the world has moved on to natural gas and coal and maybe some renewables. They're still working on petroleum. So they need that Venezuelan oil. And some of the reports coming out of Washington are that they believe that the Cubans, would assassinate Maduro if he agreed to step down. So he's maybe a prisoner in some way. And then the other question is, where would he go? Exactly.

Would you go to Cuba? I mean, if I were Maduro, I wouldn't go to Cuba because what if that falls, right? And then you're back to where you started. Moscow's cold. And the Hague is a jail cell. He'll be in a jail cell like Charles Taylor from Liberia was. Yes, or there's speculation that he could end up in Turkey in Istanbul. That's probably the one safe place where he could have a, for him, a quality of life.

Quality of life. Not that we care, but he would care. That's fascinating. Michelle, thanks. Appreciate it. Pleasure. Yeah, crazy. Michelle Crusoe Cabrero, MCC, Global Enterprises.

All right, coming up, your market navigator looks at one financial sector that might be under your radar right now, but maybe should not be. Welcome back. It's that time this hour for our market navigator. And with a third consecutive rate cut in the books now, question is what impact that will all have on the private equity space? Our next guest says it'll be easier for companies to do their business and bring better returns to investors. He likes some of the names because of that. Bob Lang is founder and chief options analysts at Explosive Options. And Bob, you're looking specifically at Apollo. Why? Yeah, hi, Kelly. Good to see you again. So Apollo Global is one of the best names in the private equity space. We've got names like Blackstone and KKR and Carlisle Group. But I think that Apollo Group, because of its heavy holdings in real estate and other diversified areas, is probably the best positioned out of all four of those names to advance higher

in the coming year, especially with lower interest rates coming up. We had the Fed, obviously, cut rates yesterday. They're probably going to be cutting rates once, maybe twice more in 2026. All that is good for financing, Kelly, for these companies. Apollo Group seems to be in the best position of all four of those. You would just buy and hold. Why is Blackstone? It's lagging today.

It's been a bit of a laggard past few months. What about them? Yeah, they have some real estate holdings as well, too. But Apollo seems to have a bit more of an advantage over Blackstone. They have a little bit better equity. position in some of these names. Also, with Blackstone, they recently bought a company in joint with TPG. They bought Whole Logic, which is going to be a great acquisition for them. But at $18.6 billion costs, they had to do a capital raise. And that may hinder that a little bit. Eventually, over the

long haul, that's going to be a great acquisition for them. But I think that with the real estate holdings portfolio that Blackstone has versus what Apollo is, I think the advantage goes to Apollo here. Quickly, Bob, what is we're showing on the screen here? What is your options trade? Yeah, you know, I like Apollo here. The stock is modestly overbought right now. It's had a great run for the past six or seven days.

I'm looking at Kelly, a 145 call strike in February. It's trading in around $9.5 to $9.70. Now, that carries a delta of 56, which tells me it's about a 56% chance that the stock is going to get to. that strike and through that strike by the February expiration, it's February 20th. So I think we can hold this through January, through February, through a little bit of turbulence. That extra delta gives us a little chance to be a little bit more patient with the trade at about $9.40. The option price is only 6.7% of the price of the stock, which is really rather reasonable here. And the expected move, of course, of the stock is always something that I

look at. $17.50. It's almost double what the the cost of the option is. So if it gets through that expected price, Kelly, we're looking at nearly a double on this option by February. All right, a space many are keeping an eye on, especially in this private credit era with the Fed's move as well. Bob Legg, thanks so much. We appreciate it. Great to see you. After the break, we're showing you a mystery chart here of a stock that lost $70 billion in market cap just since yesterday's close. Tag me or Brian on X with your guesses. The reveal is right after this. Welcome back. A banner day in many ways for the market, but not quite like you might expect.

We have small caps at all-time highs. We have the NASDAQ lower, though, and Oracle is down 10% heading toward its worst day in nearly a year. Investors are getting a little nervous about their heavy spending on AI. None of it comes as a surprise for our next guest, though. Joining us now is Rothschild and Red Burns, Alex Hazel. He holds Wall Street's loan cell rating on the name. In fact, since his call back in September, Oracle has fallen 35%. So round of applause, Alex, welcome. Why are they being differentiated

or are they being differentiated for their heavy CAP-X plans? Thanks for having me on the show. I think they're really two building blocks, and the first one really applies also to other hypers, like these large-scale GPU deployments overall generate very little value. And I think that's a fact that is always,

estimated across the industry, we really estimate that for one Kappex dollar spend, you only generate around 20 cents NBV, and that's like a fix compared to the cloud. So there was like a massive evaluation. And with Oracle specifically, because the funding is really increasingly coming from that. If you take an Amazon, Microsoft or Google, they have sufficient operating cash flows to fund all of this. And that's why investors are even more nervous on Oracle. So they jump out to you as a sell because they don't have the cash flows to fund all of this. What should the company do? I mean, first of all the question is, what is the role of Oracle? Because, as you know, they don't own the data centers. And now they're opening up also the idea that, you know,

customers can bring their own ships. So what are the customers actually paying for? I mean, you could make the case and say they're basically paying for the leasing duration risk to get access to the data centers, but don't have to sign the list themselves. From our perspective and speaking to a lot of investors, it would actually be better just to reduce, you know, the RPO and the capacity and just focus on the core business, because clearly that doesn't generate a lot of value on this massive burden for the stock. But should they just sit around? You know, they seem to perceive that the near-term risk is worth it for the far-term,

you know, rewards that they might be getting. I mean, we would disagree because they're really, these two building blocks. First of all, orally signing, let's say, 50. year data center leases, and then you have a contract with Open AI, let's say, of five years. So you need, like, do refresh cycle, actually to generate, like, a positive NBV in all of this. They should be sitting around, but I think less customer concentration risk and maybe also, like, you know, a slower base of growth. They don't have to catch up with the hyperscalors in a very short period of time, so more measured

would be better. Alex Hazel, with a cell rating on Oracle, I'm sure you're also watching the credit default swaps, which continue to go up as well. Really appreciate your time. Thank you very much. All right, speaking of bonds, but government bonds, not Oracle debt. The Federal Reserve, of course, cutting rates yesterday, but bond yields still higher than they were to begin the month.

What exactly is going on here? Rick Santelli, joining us now with more from Chicago, Rick. You know, I'll tell you, Sully, you asked the only question that really matters, and hopefully a lot of congressmen and maybe administration officials should pay attention to this dynamic as well. look at a one week chart, we'll start out with one week, one week. Last week, the two year closed at 356, 10 year closed at 413 plus. Right now we're just down three basis points or so in a two. We're unchanged on the week in a 10. Okay, now you said the beginning of

the month. Let's go to the beginning of the month. On the beginning of the month, well, we had a 408 10 year and a 353 two year. Once again, basically unchanged two years. The 10-year, obviously, is about five or six basis points, higher in yield. But maybe all of this is leading to the best chart of all, Brian. We've seen a total of 100 basis point easing in 24, 75 easing and 25, 175 basis points. Let's go to the day before the September beginning of last year. So September 17th, the easing started on the 18th. Where was it two-year?

At 360. Where was it 10-year? at 365, basically 50 basis points lower than it is right now. This is big stuff because what it tells me is that the long end especially has a life of its own, and when I see QE light, I can't help but think that the Fed doesn't like what's going on here, but ultimately, if you squeeze that water balloon, it pops out somewhere else, manipulating and managing rates through quantitative easing, has many dark sides associated with it. Back to you.

Rick Santelli, thank you and appreciate the conversation. Thank you. And coming up, we're going to take a look at a, shall we say, streaking sector that's also fun to drive. Some cool stuff coming up. Look at that Dow move, Bri. All I see is myself. Sixty-one points. That's a pretty shocking move for day two.

It's an all-time record intraday high for the Dow and the Russell. But not a new record for the XLK, big tech ETF. Let's pour one out. 13 straight days up in a row. We tied the all-time record, but unless we see a big turn, put your buy-orders in. I'm kidding. We are not going to have a new record for the XLK. Blame Oracle, last day.

Let's get to Bertha Coombs now for the news update. Bertha? Kelly, the Republican-controlled Senate shot down competing proposals. today to address rising Affordable Care Act premiums. The failed votes raise the likelihood that enhanced subsidies passed in 2021 will expire at the end of the year and cause premiums to double on average

for some 22 million Americans. Next Monday is the deadline to sign up for coverage starting in January. A CDC study released today found COVID vaccines continue to protect healthy children from severe illness. A conclusion, some top federal health officials have questioned in recent months. According to the findings, vaccines reduced the risk of COVID-related emergency room and urgent care visits by 76% among children aged nine months to four years and by 56% for kids 5 to 17. And MyPillow's CEO, Mike Lindell, officially entered the

race today for Minnesota governor. Lindell, a close ally of President Trump, joins a crowded Republican field competing against incumbent governor and former Democratic vice presidential candidate Tim Walz. Lindell has faced scrutiny in recent years for promoting debunked allegations of fraud in the 2020 presidential election. Kelly, back over to you. Thank you very much, Bertha. Okay, after this, some really cool and beautiful cars are here right outside. We'll tell you the price tag for these lovely ones. Brian will take them for a spin and that's right after this break. Welcome back to Power Lunch. I'm Emily Wilkins.

Welcome back to Power Lunch. I'm Emily Wilkins with some breaking news from Capitol Hill. The House has passed with strong bipartisan support legislation that would hope to expand both the private and public markets and help more companies go public. It would also expand the number of investors who would be allowed to invest in, in private markets and reduce regulations on VCs. The legislation now goes to the Senate where Senate banking chair, Tim Scott, has made it one of his priorities for the year.

Power Lunch will be right back. We've got to have some fun right now. McKeel Haggerty, CEO of Haggerty with us, along with Robert Frank of Inside Wealth, and man who knows how to get some really cool cars, man. We have some great cars today, Brian. McKeel, thanks so much for joining us. So, Haggerty, your stock is up about 30% this year.

What's working well? You're the largest insurer of classic cars as well as a platform for collectors. So what's driving the business right now? Well, there's a new generation of collectors coming into the space. And they like newer, you know, sporty cars. And it's not that there's anything wrong with all the previous generations. It's just the next generation is showing itself. So here we go.

And that's like Gen X, millennials, Gen Zers, that we never thought would collect cars. They are. They are. And the data proves it. So we've been watching this, and it's every year we publish a list of the cars that are kind of up and coming. And we have 11 this year. So it's been pretty fun to put together and to watch the next gen come along. So that's the bull market list.

We're going to talk about these cars in a second. But broadly speaking, we saw the classic car market do this huge run up right after the pandemic. Everybody had time to kill, money to burn. Then things settled down. Where's the market right now? What's ahead for next year, do you think, in terms of demand and prices? Well, it's mixed. A lot of the market's kind of flat, but it's flat up.

up against all of that, those gains that we saw during the pandemic. Some of the earlier generation stuff, those are finding new homes as older collectors are, you know, shedding some of their assets. But again, this newer segment that's coming along is, you know, it's off-road vehicles, it's sports cars, and then supercars or hypercars, which are that really fun phrase. Every time you're here, I expect to be blown away by what we're going to walk out into. And I don't mean this to offend my, what is this Mazda Miata doing over here? Well... It feels like it's like, what... Why?

Are you telling me this one of a very valuable car these days? Okay, so Miles and Miadas, they've made 1.2 million of these. So it's the most successful... Not rare. So this is the most successful two-seater convertible ever built. My mom desperately wants one, by the way. Well, there you go. So it's a great thing.

So this is the second generation of them. And this is what we're seeing in the data that, you know, these were kind of $10,000 cars. Now they're like 16, 17, 18,000. And they're just an awful lot of fun on a side. Sunday, summer afternoon, and that's what we're all about. And the point is, these are cars that are good values, so they're fun to drive and not expensive. You don't have to have $1.9 million.

This is expensive. Yeah. Can I get this one? There's four of us and four cars. Well, it is the holiday. So, Robert, you brought it, which is, which one are you picking? Eric, this is, Brian. I'll take the Alfa.

Yes. Kelly, you get the Miata for your mom. McKeel, you get the zero six, yes. You can take the Carrera GK. How much is that? Uh, 1.6 million, 1.8 million. That's a lot of, even for Robert Frank, that's a lot of money. Yeah, that's his, that's his world.

That's a good starter car. But that's iconic. How much would that be worth in 20 years, you think? Well, those are, I mean, that's the last true analog supercar. So that car is incredibly fast, no electronic aids whatsoever. It's just like the perfect analog car. You know, the Corvette is the most collected of all American cars. This is the sixth generation, the C6, the ZO6 of the Z6.

So these are, but these are very reasonable. reasonably priced, great performance, and nothing's more fun than a Corvette. And so these are good value. In terms of that new generation of collectors, what's hot? Okay, so again, sporty cars in all sorts of different segments, off-road vehicles that we're starting to see. So you think everybody drives SUVs today. People want earlier variants of those cars.

What about trucks? Yeah, trucks. So Broncos, Jeeps, Land Rovers, those sorts of things. And, you know, it's just, it's been this really amazing. story that we predicted the generational shift would happen. And it's happening. I just can't believe Mazumiatas is a classic car. Yes, it is. What does that mean for us? I mean for us? I'm a classic human. I'm a classic. We're classics. Just get better with it. Thank you. Great. And your stock's up, markets up. Everything's up. Happy holidays. So we'll take it. Yeah, exactly. Well, thank you.

It's been a fun, chilly finish to the show out here for Power Lunch today. Thanks for watching. Closing Bell starts right now.