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Hello and welcome to World Business Report from the BBC World Service.
I'm Roger Hearing and on this edition, Elon Musk is trying to buy the artificial intelligence startup OpenAI.
Donald Trump is threatening 25 % tariffs on imported steel and aluminium.
A downturn in the number of burgers McDonald's is serving to its US customers, so what's going on?
And a short film drama about immigration, nominated for an Oscar.
We hear from the two brothers who directed it.
But first, what could $97 .4 billion buy you?
Well, Elon Musk hopes he can get the non -profit that controls open AI.
He's put together a consortium to purchase the artificial intelligence start -up, he says.
to block it from moving to a for -profit firm.
He's got a long -running feud with the OpenAI CEO Sam Altman and in reply, Altman posted on Musk's own X app No thank you, but we will buy Twitter for $9 .74 billion if you want.
So, what should we read into all this?
Well, joining me from New York is Ratika Gupta, our North America business correspondent.
Ratika, thanks for being with us.
This bid, is it a serious bid?
Well, it's an unsolicited bid, meaning that the owners of OpenAI have not required this bid.
But it is reportedly that they bid for over $97 billion has been submitted to OpenAI's board today.
And that is led by Elon Musk and a group of investors.
And it's being backed by Musk's own AI startup, XAI, which could merge with OpenAI following the deal, as well as the other investors.
Gosh, it's very confusing with all the various groups involved in this.
But as I understand it, OpenAI isn't it's not a publicly owned company.
So it's not something you can have a hostile takeover that would actually be considered for presumably.
Yes. And I think it's also interesting.
I mean, you saw you mentioned the tweet that Sam Altman replied in response saying, no, thank you on must media platform X.
What I think is interesting here is the proposal offer is $97 billion.
But the actual valuation of OpenAI could be a whole lot bigger than that.
SoftBank is close to finalising reportedly some $40 billion of investment there.
And SoftBank would, you know, pay out that funding.
That means it could value the company at some $300 billion or so reportedly.
So you saw his sort of comment back being like, no, thank you.
And I thought that was a very interesting point.
Yeah, it is, isn't it?
That's going through in that sort of way.
And I suppose at the same time, it's really, some people suggest Elon Musk is looking for something he can really put in place because some of his other ventures are, well, I mean, for example, Tesla.
Many people have speculated that that may not be a brand that's going to be terribly profitable for terribly long.
Well, I think one thing that it certainly does go back to is Musk and Altman having been locked in this sort of feud over the direction of this, of open AI.
And that's taken since its founding.
You know, and OpenAI, the interesting issue here is that they're now trying to transition into a for profit from a nonprofit entity.
And they say that that's, you know, in order to secure capital for getting the best or developing the best AI models.
But Musk has said that he and he actually filed a lawsuit against OpenAI and Altman.
And he had claimed that the founders had originally approached him to fund a nonprofit that was focused on developing AI to benefit humanity.
But it's now more focused on making money.
So a lot of it seems to be a feud between the two as well.
And at the same time, I suppose you'd be wrong perhaps.
But seeing Deep Seek in the background of all this, this Chinese AI app that seems to, well, certainly white loads off the value of a number of big tech companies.
Are we now seeing fighting breaking out amongst the US side of all this because they're scared of what that's bringing?
I mean, I think that is something to keep in mind.
I mean, in the wake of the arrival of this Chinese AI rival Deep Seek that claims to have made powerful AI models at just a fraction of the cost, we've seen a lot of, like, raffle, should we say, of the AI market and how these companies can monetize on AI.
they've been spending in such a big way, such big investments that these companies have been taking on and how they'll actually be able to generate returns.
That was one of the key themes, of course, at the French AI Summit that is taking place.
And I think one of the...
...brickell tariffs on countries currently taxing, as he puts it, U .S.
imports. No countries have so far been named.
So what's the effect on these metal tariffs likely to be?
Well, it's been interesting.
In the last hour or so, the Australian Prime Minister has had a conversation, he says, with Donald Trump, and he expects that an exemption from tariffs for Australian steel and aluminium is under consideration, apparently, a form of words agreed with Donald Trump in what?
The Prime Minister Albanese, Anthony Albanese, said was a great conversation with the US President.
But Canada is the country which exports the most steel and aluminium to the US.
Cody Blyce is a Liberal Party MP in Nova Scotia.
You know, our message is that if the United States unilaterally, again, breaches the trade agreement, we will have to retaliate.
We're a sovereign country and we will respond similar to the way in which we responded during the last Trump administration when they imposed these types of tariffs on steel and aluminum.
This is completely upending what has been a very strong partnership, and he has – the president, that is, in just a few short weeks, has completely changed the dynamic.
The genie is out of the bottle.
We do want to make sure that we can continue to have a strong economic partnership with the United States, but my constituents are expecting that Canada will be not only more self -sufficient, but that we will find other trading partners around the world to reduce our dependency on the United States.
Cody Blois, though, I should tell you in the last few minutes, Reuters is reporting that Donald Trump has been signing some proclamations, one that reinstates a 25 % tariff on steel imports for all countries.
Also, aluminium tariffs being raised to 25 % from 10%, very much along the lines of what he suggested before.
And also, he's extending an investigation into, I think, the areas of trade he's been concerned about.
let's pick up on some of this with Brian Raff who's vice president of sustainability and government relations at the American Institute of Steel Construction who joins us now Brian thanks for this being with us here on World Business Report as I was saying there it does now seem as if Donald Trump has gone
ahead with authorizing these new tariffs what effect do you think it will have well I think it's an interesting question and I first should start out by saying oftentimes steel is painted with a very broad brushstroke.
And we think of all that steel that is made at the steel mill.
But even more importantly, there's a whole slew of industries and downstream users that use that product that come from the mill that is currently not protected under any sort of protections at this time.
And so, you know, we're not exactly sure what the proclamation is going to say, but we are urging the administration to consider some of these downstream users of steel.
So if Donald Trump has gone ahead with authorizing these new tariffs, what effect do you think it will have?
Well, I think it's an interesting question.
And I first should start out by saying oftentimes steel is painted with a very broad brushstroke.
And we think of all that steel that is made at the steel mill.
But even more importantly, there's a whole slew of industries and downstream users that use that product that come from the mill that is currently not protected under any sort of protections at this time.
And so, you know, we're not exactly sure what the proclamation is going to say, but we are urging the administration to consider some of these downstream users of steel.
So for example, all of the steel fabricators that are taking that steel from the mills and turning them into construction projects, that is the backbone of any country's infrastructure and, you know, critical maintenance.
And it's going to be very important to see where the Trump administration ends up on fabricated structural steel and other downstream products.
Yeah, it is interesting that he's moving in that direction.
And I mean, just another line that's come through from Reuters the last few moments.
Apparently, he said no exemptions or exemptions in terms of what he's doing in terms of the tariffs.
So what we heard earlier from the Australian prime minister, well, that may not.
It seems to be happening that Australia would get an exemption on that.
But let me ask you, is it because America doesn't produce enough of its own steel?
Fundamentally, that is the problem, which isn't going to change overnight, even if these tariffs are in place.
No, I wouldn't say that's the case at all.
In fact, the United States, if we're talking round numbers, produces roughly 100 million tons of steel a year.
That's for all sorts of steel, defense and shipbuilding and construction, automotive.
And currently, the steel mills in the United States are operating roughly at 74 percent capacity utilization.
So there is still plenty of capacity and room for the steelmaking apparatus in the U .S.
to gear up and make even more steel.
And I can assure you, at least on the construction front, the steel fabrication industry certainly has the capabilities and the capacity to take on any additional demand.
So there wouldn't be a problem.
It isn't going to be any block in the system if tomorrow the tab is turned off.
For example, I suppose Canada and Brazil, the two major steel importers into the US, if that pretty much stopped, that wouldn't be a problem, you're saying?
Well, from our purview, again, the American Institute of Steel Construction focuses primarily on steel used in construction or structural steel.
And I can tell you from a construction standpoint, I don't believe that would be an issue.
So would you like to see tariffs of this kind continue?
Would it actually be, as you talked about, the protections that are necessary, but actually a good thing for U .S.
industry? You know, I think it is and it is for unfairly traded imports, right?
That's really what we're talking about.
And what we've seen, at least in the fabrication side of things, is there is a very unique nuance between the steel that someone would buy from a steel mill and fabricated steel.
The idea being that if somebody buys steel and then they drill a hole or bolt two pieces together or weld them together, they become classified as something different, i .e.
fabricated structural steel.
And because there are no protections in place, what we've been seeing is a lot of foreign countries have been buying foreign steel, assembling it, or in other words, fabricating it into something that, again, is classified as something different, and then shipped into the United States, circumventing
all of the tariffs that are currently put in place.
Brian, thank you for being with us.
Brian Raff there of the American Institute of Steel Construction.
And just a reminder that within the last few moments, Donald Trump has signed into order these 25 % tariffs on imports of steel and aluminium into the U .S.
You're with World Business Report from the BBC World Service.
Now, the burger chain McDonald's has reported sales and earnings falling.
It had been dealing with the fallout of an E.
coli outbreak, which hit its U .S.
business last year.
But the company also said its US same -store sales declined 1 .4 % in the three months going up to the end of December, driven in part by customers spending less money per visit.
The company's profits slipped 1 % to $2 billion, while revenues were essentially flat at $6 .4 billion.
Now, there have been similar problems with other fast food outlets in the US.
So, what is going on with consumers there?
I asked Sarah Sanatore, who's the Bank of America Security's senior restaurants analyst.
One of the things where I would start is just looking at these same -store sales, which is a better measure of the brand health perhaps than revenue because revenue can be influenced by how many restaurants they own as well as certainly outside of the U .S., things like currency.
So when we look at their same store sales, they were actually quite healthy through most of 2023.
So, you know, actually had a very, you know, it sounds, I don't mean to be glib, but 2020 COVID was actually in the U .S., you know, not as much hardship for them as it was for other restaurants.
And then they had very strong same store sales globally in 2021, 22, and 23.
and into the beginning, early parts of 2024.
And that's when we started to see things deteriorate.
So in the U .S., it was really macro combined with having been a little bit on their back heels in terms of or wrong -footed in terms of value offerings.
And then international markets, certainly some of the same macro pressures, but then also some geopolitical tensions.
There is not as much hardship for them as it was for other restaurants.
And then they had very strong same store sales globally in 2021, 22 and 23 and into the beginning early parts of 2024.
And that's when we started to see things deteriorate.
So in the U .S., it was really macro combined with having been a little bit on their back heels in terms of or wrong footed in terms of value offerings.
And then international markets, certainly some of the same macro pressures, but then also some geopolitical tensions.
There is a combination of lower income consumers being under pressure.
So we've just seen more muted spending from that group as a whole.
We know that that is a group that is probably a plurality of consumers in fast food as opposed to the full service restaurants and even fast casual, which are going to skew a little bit higher income.
And then certainly McDonald's and our work suggests probably increased prices more than than some of the other restaurants that we cover or most of the other restaurants we cover.
And I would say the segment as a whole, fast food hamburger segment as a whole, increased prices a little faster than other segments and McDonald's was really at the forefront of that.
So that's really interesting that we're moving from a point where it was the food almost that you knew was affordable, whether it's McDonald's or other burger outlets or fast food outlets, to being something that people are perhaps more wary of.
It may be a trend, do you think?
A worry is a good word.
And to some extent, you know, other restaurants and other segments have actually capitalized on this.
So we're actually seeing in some cases restaurant advertisements in full service, for example, that compare a burger and fries at a full service sit down restaurant pricing compares favorably even to fast food.
And we've certainly seen McDonald's is always in the spotlight because of the brand and the size.
So we have seen, you know, articles and that focus on pricing at McDonald's specifically.
What we're seeing now is really an effort on the part of McDonald's to change that narrative.
So to launch these national value price points that they can speak to, you know, both with respect to the five dollar meal that they launched last year and now with the McValue menu, which is a permanent menu, part of their menu offering.
So too early to say that America's fallen out of love with fast food.
I don't think America will ever fall out of love with fast food.
And actually, I would say that just globally.
There is something enduring about food that is very consistent, it's tasty, and where the value proposition is strong.
And that last piece is something that they're really trying to claw their way back to.
Shares jumped, I think, almost 5 % after there was a surprise rise in the global comparable sales.
Yes, I think they're discounting what occurred in the U .S., the downfall due to the E.
coli outbreak here.
But on the other side, they did were very encouraged by what was happening overseas to see that growth there.
And I think that's primarily what the investors responded to.
Well, let's focus on what seems to be the main thing of the moment, which is, of course, tariffs again, Because as I was saying earlier in the program, we're now seeing Donald Trump put into place sign off on 25 percent tariffs on imported steel and aluminium.
Now, we knew this was coming or thought it was.
How did the markets respond?
They seem to take it in stride.
The overall market was up seven tenths of a percent, saw good performance out of industrials.
They actually outperformed the broader market.
So I think people either see this as something the U .S.
economy will label to bear or they see it simply as a negotiating tactic.
Yeah. And I mean, it's interesting.
And the other metal I suppose you talk about is gold.
Very different, of course, precious metal, but seen as an absolute bellwether for global confidence.
And the price just keeps rising, doesn't it?
It does. It does. It's kind of interesting.
there are a lot of these themes here that aren't quite matching up because gold you would think of as you know certainly a safe haven a harbor uh yet at the same time the u .s market just keeps rising yeah i mean what's going on do you think there is i mean confidence is measured in lots of different
ways is there confidence there in the markets generally i think there is right at this moment um i think people are confident here um but you know that that's a majority it's not a unanimous decision.
So there's certainly a possibility that some people are frightened and driving up the price of gold.
Feels like it, doesn't it?
Peter, thank you, Peter Jankauskis there.
Now, it's less than a month ago to the Oscars, and the nominated Hollywood blockbusters are campaigning to get their movies noticed by the voters of the Academy of Motion Picture Arts and Sciences to win that all -important statuette with no expense spared in promotions and gift bags.
But there are some nominated films that aren't in that sort of world at all.
The short movies, documentaries and dramas, made on a shoestring and free to view, lacking the glamour and star power, but often with a strong purpose and message.
For example, A. Lien, nominated for the Best Live Action Short Film, and it tells a story of what happened to a Hispanic man, his American wife and their daughter, as they go through a meeting intended to legalise his status and get a green card allowing him to work and the family to stay together.
It's a white -knuckle ride through a seemingly inhuman bureaucracy.
I'm Officer Reed with the New York Immigration Services Unit, and this is the interview to determine the validity of...
Some nominated films that aren't in what?
In that sort of world at all.
The short movies, documentaries and dramas, made on a shoestring and free to view, lacking the glamour and star power, but often with a strong purpose and message.
For example, Alien, nominated for the best live -action short film, and it tells the story of what happened to a Hispanic man, his American wife and their daughter, as they go through a meeting intended to legalize his status and get a green card allowing him to work and the family to stay together.
It's a white -knuckle ride through a seemingly inhuman bureaucracy.
I'm Officer Reed with the New York Immigration Services Unit, and this is the interview to determine the validity of your I -130 spousal petition.
I understand that you are here to give evidence that Sofia Gomez is your lawful wife and you were eligible to start the credit card process.
There we are. That's a clip from the film.
I've been speaking to the film's directors and the brothers, Sam Cutler -Kreutz and David Cutler -Kreutz.
But first, why that title, Alien?
It's obviously a play on Alien, but what does it signify?
We thought that it was this amazing combination of looking at a lien and thinking about liens.
A lien is a financial and legal claim that gives a creditor the right to take possession of a debtor's property if the debtor doesn't pay.
So it's a pretty complicated legal structure, but we thought in some ways it really showed off the complication of the immigration system in some way and of this concept of a debt needing to be paid.
On the flip side, we thought it was an amazing play on words on Alien and, of course, the concept of being an alien, being away from being home, being at home in your own space.
We thought there was a really interesting dynamic of the film.
Well, Sam, just first of all, explain also to us what happens in the film.
It's 15 minutes, it's a drama.
Just give us the sense of what happens.
Yeah, it's about a couple, a young couple.
The wife, Sophie, is an American citizen.
Her husband, Oscar Gomez, is not, and they're going in together for him to do his green card marriage interview, which is an interview that happens when a non -citizen marries an American citizen, and you go in for this interview, and as it turns out, there is a strange and a really unpleasant process
where ICE sometimes can entrap you at this interview.
ICE is the sort of authorities who deal with immigration in the US.
Part of what the tricky thing is in this case and what was so kind of shocking about this practice to us was USCIS, which does the interviews, and ICE, which are both kind of under the same umbrella, are not the same organization.
But they've been living in the country for a long time.
For instance, they crossed as little kids with their families.
You know, they didn't have a choice.
They've been living in the United States for a long, long time.
They found the loves of their lives here.
They've gotten married.
They've had kids. And they're trying to legally follow the process to become a U .S.
citizen. And, you know, I think we certainly hoped when we made the peace that it would be less relevant.
We'd hoped that all these issues would be resolved.
But unfortunately, they're not.
And at this time, it really is, you know, such an incredibly relevant time as immigration is a topic.
And that is ubiquitous in the national conversation right now.
And Sam, I just want to talk about the business of making this film, because a lot of people think, well, you know, think of the Oscars.
I think these gigantic, huge budget feature films.
But of course, there are films like yours that are also in contention for some of the categories.
And how much does it cost to make a film like this, a 15 minute drama?
You know, this film was made for essentially zero dollars.
If you compare it to any of the other films that got made in the Oscars this year, our film is percentage wise, absolutely almost nothing.
Everyone is working for free.
Everybody's on the project was, you know, working because they're either friends of ours or people who just passionately cared about the issues or cared about the film or the filmmaking process.
It was truly a labor of love by a small group of people who poured their heart and soul into it.
And so it's really amazing to see a film like this succeed at the Oscars because we're going up against just absolute goliaths of the industry here.
and we truly are the little film that could and I think it's the touching story and the social relevance and everyone's incredible hard work and talent and the actor is just amazing performances that really put us in contention with everybody else.
So Sam I mean there wasn't any money went into this I mean did you put your own money in?
How did it work? Yeah totally I mean a little bit of money you know $10 ,000 somewhere in that range really really just peanuts compared to what it costs to make an actual movie Yeah and David I mean did you get any sponsorship did anyone think this was a thing that should be made and therefore put money
into it? No, unfortunately.
At the time, we struggled to find any kind of sponsorship.
And so it was really just made through, as we say, eating a lot of ramen.
Yeah, pure passion, really.
Passion from all the people that are involved.
And it's an important topic, one that we felt compelled to make a film about.
And I think people got on board because they felt compelled the same way we did.
It is really interesting the way these things work because obviously it's out there.
You don't make money from people watching it, do you?
No, but I think, you know, for this film, the reward has been the awareness, you know, and it has been as people come to understand the process.
I think one of the things that filmmaking in general is, you know, such an incredible medium for is it allows you to put the viewer into the shoes of the characters in a way that no other kind of like art form can do.
And so it's been amazing to just watch people watch the film and watch the response come in and understand a lot of ramen.
you know it's a pure passion really passion from all the people that are involved and it's an important topic one that we felt compelled to make a film about and i think people got on board because they felt compelled the same way we did it is really interesting that the way these things work because obviously
it's out there you don't make money from people watching it do you no but i think you know for this film the reward has been the awareness you know and as has been as people become to understand the process i think one of the things that filmmaking in general is you know such an incredible medium for is it
allows you to put the viewer into the shoes of the characters in a way that no other kind of like art form can do and so it's been amazing to just watch people watch the film and watch the response come in and understand you know this is something that is really resonating with people throughout the country
and around the world but you gotta david you gotta sell this in a way because it's up for nomination the process works you get the nomination and obviously you want it to win so what do you do how do you work that to try and get the votes from the Academy obviously we're in you know an Oscars race right
now but also you know at the end of the day the biggest win is just that the Oscars provides such a platform for people to go out and see the film and to change people's hearts and minds you know which is really at its core what we're hoping to do with it and David I'm just going to the future I mean if you
if you get the the award obviously that you can put that on your uh on your posters and things but but you guys are going to make some other film I guess you make the films together your directors both what plans do you have what are you going to do next absolutely well we have a another short film
that is that's going through the festival process currently it won south by southwest this past year it's a film called trapped and so that will hopefully be coming out sometime in the next six months to a year and then we're currently working on our debut feature debut feature the next one a big film
yeah yes yeah that's the hope right can you uh sam can you give us any uh indications on what that is it's not an expansion of what we're doing currently but it's you know it's in the same world in terms of intensity and pace i can't shed too much details on it right now but i think if you like our current shorts you're gonna love the feature sam and david cutler
quites there and their film's called alien and you can find it online that's it from world business report.
