WEBVTT - Qualcomm CEO Cristiano Amon Talks Earnings

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Now investors look at

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<v Speaker 1>how they're cheering Qualcomm's entry into AI, sparking the biggest

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<v Speaker 1>inter day rally after their earnings since October. This is

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<v Speaker 1>after the company revealed it will ship custom aichips to

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<v Speaker 1>a major hyperscaler later this year, joining US now. Qualcom

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<v Speaker 1>CEO Cristiano a'mon, who is the Hyperscala Christiano, I'll.

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<v Speaker 2>Tell you all about it on June twenty four.

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<v Speaker 3>It's going to be It's going to be three days

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<v Speaker 3>after my birthday, June the twenty fourth.

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<v Speaker 1>We've got to hold on to But what does this

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<v Speaker 1>signal about? You have been a man who's committed to

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<v Speaker 1>telling the market that you are expanding the market. It's

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<v Speaker 1>not just about mobile phones while Qualcom has really dominated

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<v Speaker 1>the market share, but chips now in automotives, in IoT,

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<v Speaker 1>but really in the data center. What sort of town,

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<v Speaker 1>what sort of expansion of Colcom's business will this mean

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<v Speaker 1>for you?

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<v Speaker 2>Yeah?

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<v Speaker 3>Look, you know this is a great question, and I

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<v Speaker 3>want to maybe start the answer by saying, uh, you

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<v Speaker 3>know why we're not anybody you know bet on qualcom

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<v Speaker 3>diversification efforts.

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<v Speaker 2>We started as a mobile company. If you look at

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<v Speaker 2>what we're doing right now.

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<v Speaker 3>We expanded into PC, we became one of the largest

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<v Speaker 3>providers of semiconductor to automotive, We're going to industry, we're

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<v Speaker 3>going to robotics, we're going to broadb in a networking

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<v Speaker 3>and I think the data center was a natural thing.

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<v Speaker 3>We have been working on this for the past couple

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<v Speaker 3>of years. We've been consistently saying we're building assets, we

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<v Speaker 3>acquire companies psy Alpha Wave. We have a pretty good CPU,

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<v Speaker 3>a very good accelerator. We're not a small company. We

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<v Speaker 3>shipped forty billion chips, So I actually I don't know

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<v Speaker 3>why people will bet against Qualcom, but I think it's okay.

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<v Speaker 3>We're just being on this road to execution like we

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<v Speaker 3>have done on the other business. And we're very exciting

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<v Speaker 3>because I think what's really happening right now as we

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<v Speaker 3>enter this next phase of AI. We went from training

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<v Speaker 3>to inference now agents, which actually would generate demand for tokens.

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<v Speaker 3>It provides an opportunity across the entire Qualcom business. All

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<v Speaker 3>of those devices where people are going to have agents running,

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<v Speaker 3>where there's phones and PC's, they're auto they're going to

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<v Speaker 3>go to an upgrade cycle and then from the assets

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<v Speaker 3>that we build create opportunity for data center Christiano.

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<v Speaker 4>Specificity is so important here you said, and you can

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<v Speaker 4>correct me if I'm wrong. You said it was an

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<v Speaker 4>asick product, which I think the markets looked at and

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<v Speaker 4>is a little bit surprised. So you are not doing

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<v Speaker 4>your own chip, You're not doing merchant silicon, your own

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<v Speaker 4>designs for market. You're doing an a sick with someone.

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<v Speaker 3>So we have said that our data center product and

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<v Speaker 3>I need to make sure I don't front run my

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<v Speaker 3>investor day, but trying our data Yeah, I understand that

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<v Speaker 3>my data center. My data center product offering includes twe vectors.

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<v Speaker 3>One is CPU. We are developing a CPU and we're

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<v Speaker 3>very flexible. We can provide we can provide a full

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<v Speaker 3>sc we can provide chiplets. So that's one asset. The

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<v Speaker 3>other asset is an accelerator. We have the accelerator with

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<v Speaker 3>innovative memory architecture. We don't need HBM for the disaggregated inference.

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<v Speaker 3>The other one is the ability to do custom chip

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<v Speaker 3>which when we acquire Alpha Wave, they have both a

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<v Speaker 3>lot of IP which is important for CUSTOMERSIC as well

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<v Speaker 3>as a custom chip team when you put everything together,

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<v Speaker 3>it creates a lot of opportunities for Qualcom. Now here's

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<v Speaker 3>what is important to understand. The data center market is

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<v Speaker 3>highly concentrated. Is correctly there are but six to eight

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<v Speaker 3>companies that represent the majority of it. And when you

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<v Speaker 3>see what's happening in the market right now, a lot

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<v Speaker 3>of solutions are becoming bespoke. They're no longer just merchant solutions.

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<v Speaker 3>So I think as Qualcom entered the space, you should

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<v Speaker 3>expect that we will offer a lot of.

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<v Speaker 2>Flexibility and we'll leverage our.

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<v Speaker 3>Supply chain in our design capability to do bispoke products.

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<v Speaker 2>And I think that's what.

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<v Speaker 4>We're doing four to six companies. That's interesting. So this

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<v Speaker 4>depends on your definition of hyperscaler. Like, for example, Meta

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<v Speaker 4>is not a cloud computing company, but it operates at

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<v Speaker 4>hyper scale its own data center infrastructure. So maybe that's

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<v Speaker 4>what we're talking about here, the definition of what is

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<v Speaker 4>or is not a hyperscaler.

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<v Speaker 3>Look, I'm just gonna cut to the chase. We're talking

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<v Speaker 3>about a large hyperscalers You should be thinking about one

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<v Speaker 3>of the large cloud companies that we have today. It's

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<v Speaker 3>a scale business.

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<v Speaker 2>So I think that's what we're talking.

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<v Speaker 1>About, oh, getting closer. The potential customers therefore are four

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<v Speaker 1>to six, but they're huge and maybe they're even more

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<v Speaker 1>than that. So just can you get specific about how

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<v Speaker 1>big the opportunity is for this particular part of the business,

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<v Speaker 1>how much I think it could ramp up revenues. So

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<v Speaker 1>that's something you're able to push ahead before the investment meeting.

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<v Speaker 3>Look, we're not getting I don't want to get ahead

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<v Speaker 3>of our skis.

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<v Speaker 2>We're executing.

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<v Speaker 3>We're very pleased with the engagement and what we said

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<v Speaker 3>is it will be material in fiscal twenty seven. Now,

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<v Speaker 3>if you look at the skill of the Qualcom revenue base,

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<v Speaker 3>so I think you know, anything material to Qualcom is

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<v Speaker 3>probably in the multiple of billion dollars in fiscal twenty seven.

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<v Speaker 3>But look, we're just starting and we're very happy with

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<v Speaker 3>the progress for our making.

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<v Speaker 4>Christian, I think back very fondly to when you and

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<v Speaker 4>I are on stage together at the Bloombog Tech Summit.

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<v Speaker 4>I think it was three years ago now, and we

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<v Speaker 4>talked about the world where we switch to inference running

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<v Speaker 4>on device. But actually Qualcomm's story has really changed in

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<v Speaker 4>that time, right, So in this world where we're moving

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<v Speaker 4>to inference and we're moving to AGENTIC. How are you

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<v Speaker 4>positioning qualcomm right? The CPU is important, but you must

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<v Speaker 4>think differently to how you did three years ago.

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<v Speaker 3>Look, frankly, it's exactly playing out exactly the way we thought.

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<v Speaker 2>And I know we have a limited time.

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<v Speaker 3>But when you start running agents, and when you start

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<v Speaker 3>running things like open Claw and a bunch of other claws. Actually,

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<v Speaker 3>what is fascinating to see what's happening in the phone industry.

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<v Speaker 3>Every Android OEM right now is launching their own claw.

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<v Speaker 3>And the way agents work, they actually operate your device

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<v Speaker 3>for you. So what you're going to see at the end,

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<v Speaker 3>you're going to see a lot of activity in the cloud,

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<v Speaker 3>and you're going to see also activity on the device,

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<v Speaker 3>and it's all going to magically work. I almost like

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<v Speaker 3>to say this, I am sure you have probably two

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<v Speaker 3>hundred apps on your phone or close to that. We

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<v Speaker 3>never have a discussion, We never have a discussion about

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<v Speaker 3>how much each app is.

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<v Speaker 2>Doing on the cloud or doing on the device. It

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<v Speaker 2>just works.

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<v Speaker 3>And I think that's how we see those agents working.

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<v Speaker 3>They look of your data, they look at things on

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<v Speaker 3>your device, they do things for you, and they do

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<v Speaker 3>stuff on the cloud, and I think that's why I

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<v Speaker 3>believe this actually builds into the Qualcom assets and the

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<v Speaker 3>factor are present everywhere. Our engagement with the cloud companies

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<v Speaker 3>right now they look at our devices at endpoint for AI,

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<v Speaker 3>and that's also exciting. I think we're talking with all

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<v Speaker 3>the AI companies about their new and exciting devices.

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<v Speaker 1>What's less exciting is when supply chain disruption. But you

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<v Speaker 1>were really clear with investors and they liked it quickly.

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<v Speaker 1>With thirty seconds memory, you see an endpoint at least

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<v Speaker 1>in China.

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<v Speaker 2>Yeah.

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<v Speaker 3>Look, the reality is everything is memory, and AI drives

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<v Speaker 3>more memory demand. If they drove a lot of the

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<v Speaker 3>men of the data center, it CAUs a crunch on

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<v Speaker 3>the consumer electronics. The good thing is we now see

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<v Speaker 3>the bottom, as I said in the call, where under

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<v Speaker 3>shipping market demand, we look at customer activations of devices

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<v Speaker 3>and cell thual data, we see how what the demand is.

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<v Speaker 2>That's now we can call the bottom.

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<v Speaker 3>And you know, there's going to be more more supply

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<v Speaker 3>and more suppliers and we'll see how this is going

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<v Speaker 3>to play out.

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<v Speaker 4>The market is taking this really seriously. Qualcom having its

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<v Speaker 4>best day since April twenty nineteen. Qualcom's Christiana im On,

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<v Speaker 4>thank you very much.