ExclusiveTrump Announces $500 Billion Private Investments in AI to Counter China | Business Matters (Jan. 22)

And welcome to Business Matters, allowed to get through today, starting with a new ride we'll be rolling out of the Stellantis plant in Illinois. Chrysler parent company Stellantis announced that it is moving forward with plans to build a new midsize pickup truck in Belvedere. And this comes after Stellantis said in the summer that it was delaying a plan investment at the Illinois plant. Stellantis planned to put one and a half billion dollars into the plant to build the new truck by 2027. A company spokesperson said the new truck will be available as a gas-powered vehicle, plug-in or all-electric. And Citi has raised its oil price outlook for this year. The bank is citing geopolitical risks centered on Russia and Iran that could potentially wipe out the 2025 oil balance surplus. Citi expects an average barrel of Brent crude to go up to $67. But the bank noted prices were likely to ease through the second half of the year. President Donald Trump has laid out a sweeping plan to maximize oil and gas production in the U.S. And of course, this includes speeding up permitting, rolling back environmental protections as well and withdrawing the U.S. from the Paris climate pact. Also prices on household goods could go up. This is in response to looming tariffs proposed by President Trump. U.S. consumer goods maker Procter & Gamble said it will again look at hiking prices on its products, for example, Tide. And P&G's CFO said this would be in response to Trump imposing new tariffs that would increase the cost of imports. Andre Scholten said the company would first try to offset impacts from possible tariffs with cost-cutting. P&G buys imports like chemicals, razor blades and small electronics from around the globe for its products. Now Amazon is planning to close all warehouses in Quebec, Canada, and this including the company's only unionized warehouse in the country. The company's spokesperson said 1,700 full-time jobs will be lost. Affected employees will be offered 14 weeks' pay and transitional benefits. Amazon said it will return to a third-party delivery model, which relies on small businesses. And this comes months after workers at a Quebec warehouse unionized. And they were in the middle of their first collective agreement negotiations. In a statement, the union, which represents 300 workers at the site, said the move made no business sense and directly targets the company's only unionized warehouse in Canada. And in a move to counter China, President Donald Trump announces a massive private investment in America's AI infrastructure. He said he secured trillions of dollars in new investments in the U.S. before the end of his first full day at the White House. NTD's White House correspondent Iris Tao has the details. So this is Trump's first full business day in office and he's already taking questions from reporters for over 40 minutes. And the event was meant for him to announce a massive private sector investment in AI infrastructure here in the U.S. So the investment was by OpenAI, SoftBank, as well as Oracle. And they're vowing to invest up to $500 billion to build data centers for AI development here in the U.S. Here's what Trump said about it. This monumental undertaking is a resounding declaration of confidence in America's potential As you said yesterday, this is the beginning of the golden age of America. We wouldn't be able to do this without you, Mr. President. And Trump says that one of the big reasons why this is needed in the U.S. is because China is also pouring in money on AI and the U.S. needs to step up its competition with it. What we want to do is we want to keep it in this country. China is a competitor. This is money that normally would have gone to China or other countries, but in particular China in total. And actually in an open handbook, the OpenAI company just warned last week that of the company, if the money is not invested in the U.S., that large amount of funds will go to China-backed projects. And that's why we're seeing this huge investment in AI right here. So one of the major topics that he spent time talking about was in TikTok. So a reporter asked him why he changed his mind on TikTok. And Trump says that he might just, well, negotiate on camera. He says they're talking about potentially giving a deal which would allow the U.S. to take half of TikTok and then give it a permit. He points out that without a permit to run in the U.S., the app is worthless. It's worthless if it doesn't get a permit. It's not like, oh, you can take the U.S. The whole thing is worthless. With a permit, it's worth like a trillion dollars. So what I'm thinking about saying to somebody is buy it and give half to the United States of America, half, and we'll give you the permit. And they'll have a great partner, the United States. And Trump, when asked if he's open to Elon Musk potentially buying TikTok, he says he's open to it if Elon Musk actually wanted to. And he also talked about tariffs on China. He says he's talking about a 10 percent tariff on China, especially given what China has done, allowing fentanyl to ultimately pour into the U.S. He also says that tariffs are actually the only way that you can get fairness. And on other topics, he talked more about the letter that President Biden left him in the Oval Office. Of course, we saw that moment when he was signing executive orders, when Trump actually found that letter right on camera during his live coverage, actually signing those orders. And Trump says that is actually a very nice letter, called it an inspirational note. So that's what we found out actually today. And Trump teased that he might actually make it public. And Trump also announced that he will visit California later this week to visit the areas impacted by the wildfires. He again criticized the response to the wildfires. Of course, we're going to hear more from him in the coming days as he announces more investments. He actually previewed that as well. So a lot happening already on day one, full day one of this Trump White House. Now, I know shoppers may despise them and myself as well, but they're definitely hurting sales. But it appears lock cases for shampoo and deodorant will be sticking around during an earnings call. Walgreens CEO Tim Wentworth said it's pretty conclusively proven that locking things up means not selling as many. He said Walgreens is looking for creative ways to stop thieves without locking up products, but has not found a worthy alternative. A spokesperson said that locked display cases are the most effective solution to combat retail theft. Analysts warned that lock cases are not a long-term solution since it will keep pushing customers to shop online, for example, on Amazon. And sportswear brand Puma has announced a cost-cutting program. And this comes after reporting 2024 net profits that fell below the prior years. The CEO said that the company achieved solid sales growth last year and made meaningful progress in its strategic initiatives. But he said the company is not satisfied with its profitability. Puma said the program would look for savings in areas, for example, in personal expenses. A spokesperson said the company aims to keep its headcount stable and has no global target for layoffs. People displaced by the California wildfires have caused a massive surge in demand for housing in Los Angeles. Supply was already limited before that, and many people looking for housing say price gouging is rampant. Here's more. I opened up my curtains and all I see was orange, red, black, smoke, everything. All the parking structure was on fire. So my instinct was to get out. Rosa Olvera escaped this Saltadina apartment. I could literally feel my windows hot. Covering her two daughters in blankets. They've been staying at an evacuation shelter in Pasadena ever since. One day I was good with my daughters. Next day, I don't have anything. Her scorched two-bedroom unit cost her $2,400 a month. But now the single mom says similar units nearby are going for almost $3,000, which she cannot afford. Those looking for larger single-family rental homes are also finding stiff competition and inflated pricing. They chose a family that was willing to sign a three-year lease and pay one year full in cash over us. The Los Angeles area's housing market was already tight before the fires, but now tens of thousands of displaced residents are looking at the same limited supply. You walk into these open homes, there's hundreds of people there. And they're just price gauged. I mean, it's how much are you going to give me? How much are you going to give me? By one estimate, rental data website Zumper shows average rents so far in January for houses in the city of Los Angeles jumped 42 percent compared to the average in December. And anecdotes of soaring rental prices have become commonplace. I feel lost. My wife feels lost. Hugh Adair and his wife lost their recently renovated Altadena home. Now, as they search for a rental… Yeah, let's see here. $10,000 deposit. Who has that, right? Just had in the back pocket. Oh, yeah, let me just here's 10 grand cash. He says they lost out on a rental home when someone else bid $1,000 more a month. Since the fires, California's price gouging statute has been in effect, prohibiting a price increase of more than 10 percent on things like food, emergency supplies, hotel rooms and rental housing. Violators could spend a year in jail, be fined up to $10,000 plus civil penalties. Landlords can't get around this by encouraging a bidding war. They've now sent at least 200 warning letters to hotels and landlords who could be violating the law. But with enforcement just beginning and long-term scarcity of supply coupled with overwhelming demand, Olvera wishes she could tell landlords. When things like this happen, that's when everybody comes together. It doesn't even matter what you have because you can lose it. Now, I got not so good news for Netflix users. The company is raising prices on most of its subscription tiers in the US and Canada. The streaming giant reported 19 million new subscribers in the last quarter of 2024. It's Netflix's biggest ever jump in subscribers and puts the company at 302 million worldwide, and this solidifying its hold on the top spot in the industry. Netflix also reported revenue increased 16 percent from the same quarter the previous year, exceeding $10 billion for the first time in the company's history. Meanwhile, operating income totaled $2.3 billion, an increase of more than 50 percent from the year before. Now, on to the ongoing discussion over TikTok. The investment company of Saudi Arabia's crown prince, Kingdom Holding Company, or KHC, might invest in the social media company, and that's if Elon Musk or others buy it. That's the message from KHC's CEO in a recent interview. TikTok's future is now uncertain after President Trump delayed a US ban by two and a half months. President Trump said yesterday that he would support Musk buying TikTok if Musk wanted to. Musk has not directly signaled an interest in buying the social media app, but has long opposed the ban and citing free speech protections for the reason. Trump added he's thinking about trying to find a buyer who would give half of the company to the US government. Trump framed it as the piece of securing a US government permit to operate the platform. Worth noting, though, Saudi investor KHC already holds stakes in other Musk ventures. Syria's foreign minister said his country will open its economy to foreign investment. He also said Syria is working on energy and electricity partnerships with Middle Eastern states. Syria's foreign minister spoke at the World Economic Forum meeting in Davos, Switzerland. He said his country is focused on investments in energy, telecommunications, roads, airports, education, and health. He said a committee of representatives would work on a new Syrian constitution. The country's president fled last month, leaving Syria without a leader after 14 years in power. Silk Road founder Ross Ulbricht has been pardoned by President Trump. The 40-year-old had been serving two life sentences plus 40 years in prison. On day one, I will commute the sentence of Ross Ulbricht. On day two of his new administration, President Trump pardoned Silk Road founder Ross Ulbricht. Ulbricht was sentenced to two life sentences plus 40 years for running an illegal bitcoin drug market. Trump had promised to pardon him back in May at the Libertarian National Convention. He's already served 11 years. We're going to get him home. Ulbricht entered prison at age 29. He is now 40. Prosecutors say Silk Road was a black market where over 100,000 people bought and sold over $200 million worth of illegal drugs. They also alleged that Ulbricht tried to hire hitmen to assassinate people who were a threat to Silk Road. One supposed hitman was actually an undercover agent. Ulbricht's sentence was controversial. Many thought two life terms plus 40 years was too harsh. Myself and the rest of the tech community have pretty mixed reactions to this. On one end, the Silk Road was utilized obviously to sell drugs. Tech expert Star Cashman says the judge wanted to make an example of Ulbricht since he was the first to commit such a crime. She says the tech community wants to see people held accountable for their actions. Similarly, some people see the pardon as an opportunity where this really intelligent young man can now have another chance at life and maybe even contribute to the U.S. On Truth Social, Trump called Ulbricht's sentence ridiculous. It alleged that some of the prosecutors in the case were also involved, quote, in the modern day weaponization of government against me. Of course, the Nasdaq 252 up 1.2%. All right. And with that, everything on today's business matters.