SOTS 2nd Hour: OpenAI CFO, An Authentic Look At Retail, and Energy’s Next Move 5/22/25

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Sara Eisen (1:09)

Good Thursday morning, welcome to Squawk on the Street. I'm Sarah Eisen with Carl Quintanilla and David Faber, live as always from Post 9 of the New York Stock Exchange. Stocks are holding up, S&P's up two tenths of 1%.

It's driven mostly by technology, though. Communication services is the best performing sector, Alphabets climbing 4%, Meta, Disney, those are all higher information technology, the other big sector that's driving the gains today, thanks to Palantir and Palo Alto Networks and some of the trip makers like Nvidia. The rest of the S&P, though, is getting pressured. Utilities down 2%, energy down 1.5%. As for treasuries, we are watching very carefully what's happening with bonds because we've seen this elevated bond yield. The 10-year yield now comes off the highs, 4.591. Watching the 30-year, though, in particular, because it remains higher, 5.1. So looking to see if we are going to break that 2023 high after the big, beautiful bill passes the House. Just breaking news here, crossing on OpenAI, more of it. Let's get to Christina Partzanevalos with details. Morning, Christina.

Christina Partzanevalos (2:10)

Good morning, Sarah. Well, tech giants are uniting to bring AI infrastructure to the Middle East. OpenAI, SoftBank, Oracle, Nvidia, and Cisco announcing right now the creation of UAE Stargate, which would be a 5-gigawatt AI computing campus in Abu Dhabi. It would actually be the first international deployment of Stargate, which is OpenAI's largest data center here in the United States, building in Texas. The campus, though, in the UAE will be built by Emirati from G42, with 200 megawatts expected to go live in 2026 and operated by OpenAI as well as Oracle. UAE will become the first country, according to the release, in the world to enable OpenAI's ChatGPT nationwide. Nvidia will be supplying its latest Grace Blackwell systems needed to run these large AI data centers, much like it announced with Saudi Arabia just a few weeks ago. But this Middle Eastern expansion really signals a notable policy shift from Washington, until recently companies like Nvidia, AMD required special US licenses to export advanced technology to countries like the UAE or Saudi Arabia. Why? Because of concerns that the technology would eventually land in the hands of China. G42, the company operating this Abu Dhabi data center, did have close ties with China. But according to an American think tank, a CSIS report from just this past January, Emirati officials claim to be decoupling from China in AI. Notice they use the word claim. They're saying, divesting Chinese investments and removing China made equipment from its other data centers in the country. We're not expecting major stock reaction perhaps just yet. I did break this news last Friday. We're getting it officially right now. And a lot of analysts just over the last two weeks have said that most of these Middle Eastern deals have been priced in, especially because they lack specific details on how many chips, the specific construction timeline. But nonetheless, news for this hour, guys.

Carl Quintanilla (3:58)

Christina, thank you. Christina Parts-Nevalos. By the way, OpenAI CFO Sarah Friar is going to join us exclusively in just a minute. Talk about the Stargate headlines and the breaking news yesterday, of course, that OpenAI is buying iPhone designer Johnny Ives AI devices startup for more than $6 billion. Got some breaking news. Surprise drop in existing homes. Let's get to Diana Olek. Hey, Diana.

Diana Olick (4:19)

Hey, Carl, that's right. Existing home sales in April fell 0.5% to a seasonally adjusted annualized rate of 4 million units, even sales down 2% from April of last year. The Street was looking for a gain of 2.7%.