Davos live updates: Blinken says it was ‘big mistake’ to tear up Iran nuclear deal; UBS CEO talks of ‘surreal’ return

Artificial intelligence has “bad sides” and “good sides,” said a top JPM executive.

Mary Callahan Erdoes, CEO of the bank’s asset and wealth management arm, said leaders need to embrace AI every day. “It’s the curiosity you apply to AI that gets the most out of it,” she said, during a panel discussion moderated by CNBC’s Sara Eisen at the World Economic Forum in Davos, Switzerland, on Wednesday.

“It has lots of dark sides to it as well,” she added, noting a raft of elections that are planned this year, including in Russia, India, Pakistan, Mexico and the United States.

“All of those can go the way voters want them to do, or AI can change that in a way that none of us have really contemplated, because none of us really understand what’s happening in the psychology of how AI is hitting us,” she said.

“We have to think about the bad sides of it and the good sides of it, but all of us have to embrace it,” Erdoes said.

— Lucy Handley

The new artificial intelligence (AI) era represents a huge moment the likes of which has not been witnessed in several years, according to a top executive at Facebook parent company Meta Platforms.

Nicola Mendelsohn, head of global business group at Meta, said today’s AI revolution is a “seismic moment we’ve not seen the likes of such in a decade.”

“We will look back on this year seeing a really pivotal year in terms of how it was across society,” she added, speaking in conversation with CNBC’s Tania Bryer at the World Economic Forum in Davos, Switzerland.

Mendelsohn is a key global executive at Meta, leading relationships with top marketers and advertising agencies.

IEA Executive Director Fatih Birol spoke to CNBC earlier, discussing the state of play in the energy transition and his reflections on the COP28 climate talks.

—Sam Meredith

The chair of Siemens Energy told CNBC he is less concerned by the recent rise in inflation in Germany than he is by the gloomy public mood.

Joe Kaeser, the former chief executive of German conglomerate Siemens, said base effects and the monthly and quarterly readings meant he was not overly focused on the annual headline inflation figure.

“I am more concerned about the mood which we have in Germany. People are downbeat, everybody’s asking what’s going to be next, what’s in for me. That’s what we need to explain to people so they are more upbeat again,” Kaeser said.

“I always say, look folks, the night is always darkest before dawn. Look at the opportunities.”

Kaeser said the German government needed to present a roadmap on energy, jobs and economic growth, and move past current industry disputes. Meanwhile, the country needs to be a role model on emissions reduction and invent products and services for the future that are economically feasible, he added.

On the major issues hanging over Siemens Energy’s lossmaking wind power unit, Kaeser said: “The skies will clear on wind when we are honest that we have an energy triangle which we cannot escape.”

This is about the balance between sustainability, affordability and security of supply, he said.

“If you want to be very sustainable, you have to do that at a cost. If you want to be affordable, you have to have a bridging technology such as gas-fired turbines which can also use hydrogen. So we have to have more honesty about the cost of sustainability.”

— Jenni Reid

U.S. Secretary of State Anthony Blinken said it was a “big mistake” to withdraw from the Iran nuclear deal, speaking at the World Economic Forum in Davos, Switzerland.

“I think it was a big mistake to tear up the Iran nuclear agreement. We had Iran’s nuclear program in a box. Since the agreement was torn up, it’s escaped from that box. And we’re now in a place where we didn’t want to be because we don’t have the agreement, so I think that was deeply unfortunate,” he said Wednesday, addressing delegates at the Congress Center in Davos.

The former U.S. President Donald Trump announced the withdrawal from the deal in May 2018, restoring wide-ranging sanctions against Iran instead. European countries expressed “regret and concern” at the time, and Iran has since enriched uranium at the highest levels in its history, while its economy faltered.

— Lucy Handley

Russian President Vladimir Putin has “precipitated virtually everything he sought to prevent” by launching an invasion against Ukraine to separate Kyiv from the West, U.S. Secretary of State Antony Blinken said at a panel discussion in Davos, Switzerland.

“Ukraine has been a profound strategic failure for Vladimir Putin and for Russia, in so many ways,” he said.

“You now have a Russia that overall is weaker militarily, it’s weaker economically, it’s weaker diplomatically. Europe has severed its energy dependence on Russia. Ukrainians are more united than they’ve ever been. The NATO alliance is stronger, is larger and will get larger still in the weeks ahead.”

Russia has repeatedly said that Ukraine’s NATO aspirations — which the country still upholds, along with membership to the EU — violated its national security interests.

“Putin has already failed in what he set out to do: He set out to erase Ukraine from the map, to eliminate its independence, to subsume it into Russia. That has failed, and it cannot and will not succeed,” Blinken said Wednesday, noting that Kyiv’s ambitions to deepen its relationship with the West and Europe need not have divorced it from Russia.

“That was not at all incompatible with maintaining close ties with Russia: cultural, economic and others. Those ties have now been obliterated because of Russia’s aggression,” Blinken said.

— Ruxandra Iordache

Andrea Orcel, the group CEO of UniCredit, spoke to CNBC this morning on the sideline of WEF.

He made his case for increasing mergers and acquisitions in the European banking space.

He also spoke about how European banks can compete with their U.S. peers, and how an EU banking union would revolutionize the sector.

—Matt Clinch

Saudi Arabia’s target to invest more than $3 trillion in upcoming projects risks high interest rates and potential inflation, Saudi Minister of Investment Khalid al-Falih told CNBC.

Persistently high interest rates could be a “headwind,” meaning that Riyadh must “make sure that our projects and our investments and our sectors are sufficiently robust to provide the terms that would overcome that increase in cost of capital to investors,” the minister said on Tuesday.

He added that $1.8 trillion of the targeted $3 trillion sum will be into various projects, noting: “A lot of them will be construction contracts, a lot of them will be real estate as well as industrial facilities, ports, infrastructure. That has the potential to create inflation, project inflation, and therefore that will also impact project return.”

To mitigate that risk, Riyadh is bringing in global constructors to tackle these initiatives and building local supply chains and inventories, the minister said.

Amid an existential threat to fossil fuels, the backbone of the Saudi economy, Crown Prince Mohammed bin Salman has spearheaded the ambitious Vision 2030 to diversify the kingdom’s revenue streams and sectors.

— Ruxandra Iordache

Red Sea turmoil amid Houthi attacks could lead to tanker shortages and shipment delays, as ships take longer alternative routes, the CEO of Saudi state-controlled oil giant Aramco told Reuters.

“If it’s in the short term, tankers might be available … But if it’s longer term, it might be a problem,” Amin Nasser said in Davos, Switzerland. “There will be a need for more tankers and are they going to have to take a longer journey.”

Citing security concerns, several shipping providers have now fully suspended or are avoiding travel through the Red Sea and the Suez Canal — the swiftest link between Europe and the Middle East, along with broader Asia. The alternative route by the Cape of Good Hope adds over 10 days of voyage.

Aramco can avoid exposure to the Red Sea through a pipeline linking its eastern oil facilities with the western coast, Nasser told Reuters. Saudi Arabia is the world’s largest oil exporter and was previously subjected to Houthi attacks against its oil facilities in 2019.

— Ruxandra Iordache

Markets are “getting ahead of themselves,” with rate cut expectations which “might become self-defeating,” Dutch central bank President Klaas Knot told CNBC.

The European Central Bank member said that, while he and his peers are optimistic about a return to inflation at 2%, there are risks to that scenario.

“Underlying that projection is an interest rate path, assumed interest rate path, that contains significantly less easing than is currently embedded in market pricing. So that runs the risk to become self-defeating.”

Knot said that the euro zone’s central bank looks at overall financial conditions, and that “the more easing the market has already done for us, the less likely we will cut rates.”

— Jenni Reid

Sergio Ermotti, CEO of UBS, described taking the role as “quite a surreal experience,” having returned to the job in 2023 after running the bank for nine years between 2011 and 2020.

Clients and employees “were quite shocked in the first round, and now they embrace the new model,” Ermotti said of its acquisition of embattled rival Credit Suisse in March 2023 after a series of scandals and losses. Ermotti took over from former UBS CEO Ralph Hamers in April.

Ermotti, who was speaking to CNBC at the World Economic Forum in Davos, described the period since he took over as “pretty good.”

— Lucy Handley

The European Union’s investigation into state subsidies given to Chinese electric vehicle makers is progressing and should deliver its results within nine to 11 months, Valdis Dombrovskis, executive vice president of the European Commission, told CNBC on Wednesday.

The probe was launched by the European Union in September to address alleged market distortion from the price of Chinese EVs being kept artificially low.

“What we are assessing when launching this investigation, whether there is a threat of injury for EU industry,” Dombrovskis said.

“And if you look just at the fact that market share of Chinese brand battery electric vehicles in EU market in two, three years time has increased from less than 1% to 8%, and this growth is continuing, clearly we see this threat of injury and that’s why we’re acting.”

Dombrovskis also discussed the need for the EU to address its trade deficit with China, as well as its broader long-term competitiveness, and said the institution continued to have concerns about the U.S. Inflation Reduction Act.

— Jenni Reid

OpenAI founder and CEO Sam Altman said he felt “super confused” and “super caught off guard” the night when the company board removed him from his post, describing the experience as “wild.”

“I immediately just went to … thinking about what I was going to do next,” Altman said at an event held at the Bloomberg House in Davos on Tuesday.

Concerns over AI safety and OpenAI’s role in protecting consumers were at the center of Altman’s brief ouster from the company.

Altman was forced out in November and reinstated into the role less than a week later.

Read the full story here.

— Lucy Handley

Iranian Foreign Minister Hossein Amir-Abdollahian said his country wants to “stop the war in Gaza” and that U.S. cooperation with Israel is “the root of insecurity in the region.”

“The U.S. should not, Mr. [Joe] Biden should not tie their destiny to the fate of Netanyahu,” Amir-Abdollahian said, speaking to CNBC’s Dan Murphy at the World Economic Forum in Davos, Switzerland, on Tuesday.

The U.S. has expressed steadfast support for Israel in its war against Hamas in Gaza, and the minister’s comments came as the Israel-Hamas war dragged beyond its 100th day.

He sought to deny claims that the Islamic Republic is aiding Yemen-based Houthi rebels, who have disrupted global trade in their attacks on vessels in the Red Sea.

Read the full story here.

— Lucy Handley

U.S. Secretary of State Antony Blinken talked to CNBC about his meeting with Ukraine’s President Volodymyr Zelenskyy at Davos on Tuesday.

“We need to make sure that with Congress, we get the supplemental funding that President Biden’s asked for, we’re working very hard on that,” he said.

Blinken said he believed there was bipartisan support for this in both Houses but explained that this would be an issue if the funds were not secured.

“Look there’s no magic pot of money — if we don’t get that money, it’s a real problem,” he said.

— Vicky McKeever