Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Now investors look at
Speaker 1: how they're cheering Qualcomm's entry into AI, sparking the biggest
Speaker 1: inter day rally after their earnings since October. This is
Speaker 1: after the company revealed it will ship custom aichips to
Speaker 1: a major hyperscaler later this year, joining US now. Qualcom
Speaker 1: CEO Cristiano a'mon, who is the Hyperscala Christiano, I'll.
Speaker 2: Tell you all about it on June twenty four.
Speaker 3: It's going to be It's going to be three days
Speaker 3: after my birthday, June the twenty fourth.
Speaker 1: We've got to hold on to But what does this
Speaker 1: signal about? You have been a man who's committed to
Speaker 1: telling the market that you are expanding the market. It's
Speaker 1: not just about mobile phones while Qualcom has really dominated
Speaker 1: the market share, but chips now in automotives, in IoT,
Speaker 1: but really in the data center. What sort of town,
Speaker 1: what sort of expansion of Colcom's business will this mean
Speaker 1: for you?
Speaker 2: Yeah?
Speaker 3: Look, you know this is a great question, and I
Speaker 3: want to maybe start the answer by saying, uh, you
Speaker 3: know why we're not anybody you know bet on qualcom
Speaker 3: diversification efforts.
Speaker 2: We started as a mobile company. If you look at
Speaker 2: what we're doing right now.
Speaker 3: We expanded into PC, we became one of the largest
Speaker 3: providers of semiconductor to automotive, We're going to industry, we're
Speaker 3: going to robotics, we're going to broadb in a networking
Speaker 3: and I think the data center was a natural thing.
Speaker 3: We have been working on this for the past couple
Speaker 3: of years. We've been consistently saying we're building assets, we
Speaker 3: acquire companies psy Alpha Wave. We have a pretty good CPU,
Speaker 3: a very good accelerator. We're not a small company. We
Speaker 3: shipped forty billion chips, So I actually I don't know
Speaker 3: why people will bet against Qualcom, but I think it's okay.
Speaker 3: We're just being on this road to execution like we
Speaker 3: have done on the other business. And we're very exciting
Speaker 3: because I think what's really happening right now as we
Speaker 3: enter this next phase of AI. We went from training
Speaker 3: to inference now agents, which actually would generate demand for tokens.
Speaker 3: It provides an opportunity across the entire Qualcom business. All
Speaker 3: of those devices where people are going to have agents running,
Speaker 3: where there's phones and PC's, they're auto they're going to
Speaker 3: go to an upgrade cycle and then from the assets
Speaker 3: that we build create opportunity for data center Christiano.
Speaker 4: Specificity is so important here you said, and you can
Speaker 4: correct me if I'm wrong. You said it was an
Speaker 4: asick product, which I think the markets looked at and
Speaker 4: is a little bit surprised. So you are not doing
Speaker 4: your own chip, You're not doing merchant silicon, your own
Speaker 4: designs for market. You're doing an a sick with someone.
Speaker 3: So we have said that our data center product and
Speaker 3: I need to make sure I don't front run my
Speaker 3: investor day, but trying our data Yeah, I understand that
Speaker 3: my data center. My data center product offering includes twe vectors.
Speaker 3: One is CPU. We are developing a CPU and we're
Speaker 3: very flexible. We can provide we can provide a full
Speaker 3: sc we can provide chiplets. So that's one asset. The
Speaker 3: other asset is an accelerator. We have the accelerator with
Speaker 3: innovative memory architecture. We don't need HBM for the disaggregated inference.
Speaker 3: The other one is the ability to do custom chip
Speaker 3: which when we acquire Alpha Wave, they have both a
Speaker 3: lot of IP which is important for CUSTOMERSIC as well
Speaker 3: as a custom chip team when you put everything together,
Speaker 3: it creates a lot of opportunities for Qualcom. Now here's
Speaker 3: what is important to understand. The data center market is
Speaker 3: highly concentrated. Is correctly there are but six to eight
Speaker 3: companies that represent the majority of it. And when you
Speaker 3: see what's happening in the market right now, a lot
Speaker 3: of solutions are becoming bespoke. They're no longer just merchant solutions.
Speaker 3: So I think as Qualcom entered the space, you should
Speaker 3: expect that we will offer a lot of.
Speaker 2: Flexibility and we'll leverage our.
Speaker 3: Supply chain in our design capability to do bispoke products.
Speaker 2: And I think that's what.
Speaker 4: We're doing four to six companies. That's interesting. So this
Speaker 4: depends on your definition of hyperscaler. Like, for example, Meta
Speaker 4: is not a cloud computing company, but it operates at
Speaker 4: hyper scale its own data center infrastructure. So maybe that's
Speaker 4: what we're talking about here, the definition of what is
Speaker 4: or is not a hyperscaler.
Speaker 3: Look, I'm just gonna cut to the chase. We're talking
Speaker 3: about a large hyperscalers You should be thinking about one
Speaker 3: of the large cloud companies that we have today. It's
Speaker 3: a scale business.
Speaker 2: So I think that's what we're talking.
Speaker 1: About, oh, getting closer. The potential customers therefore are four
Speaker 1: to six, but they're huge and maybe they're even more
Speaker 1: than that. So just can you get specific about how
Speaker 1: big the opportunity is for this particular part of the business,
Speaker 1: how much I think it could ramp up revenues. So
Speaker 1: that's something you're able to push ahead before the investment meeting.
Speaker 3: Look, we're not getting I don't want to get ahead
Speaker 3: of our skis.
Speaker 2: We're executing.
Speaker 3: We're very pleased with the engagement and what we said
Speaker 3: is it will be material in fiscal twenty seven. Now,
Speaker 3: if you look at the skill of the Qualcom revenue base,
Speaker 3: so I think you know, anything material to Qualcom is
Speaker 3: probably in the multiple of billion dollars in fiscal twenty seven.
Speaker 3: But look, we're just starting and we're very happy with
Speaker 3: the progress for our making.
Speaker 4: Christian, I think back very fondly to when you and
Speaker 4: I are on stage together at the Bloombog Tech Summit.
Speaker 4: I think it was three years ago now, and we
Speaker 4: talked about the world where we switch to inference running
Speaker 4: on device. But actually Qualcomm's story has really changed in
Speaker 4: that time, right, So in this world where we're moving
Speaker 4: to inference and we're moving to AGENTIC. How are you
Speaker 4: positioning qualcomm right? The CPU is important, but you must
Speaker 4: think differently to how you did three years ago.
Speaker 3: Look, frankly, it's exactly playing out exactly the way we thought.
Speaker 2: And I know we have a limited time.
Speaker 3: But when you start running agents, and when you start
Speaker 3: running things like open Claw and a bunch of other claws. Actually,
Speaker 3: what is fascinating to see what's happening in the phone industry.
Speaker 3: Every Android OEM right now is launching their own claw.
Speaker 3: And the way agents work, they actually operate your device
Speaker 3: for you. So what you're going to see at the end,
Speaker 3: you're going to see a lot of activity in the cloud,
Speaker 3: and you're going to see also activity on the device,
Speaker 3: and it's all going to magically work. I almost like
Speaker 3: to say this, I am sure you have probably two
Speaker 3: hundred apps on your phone or close to that. We
Speaker 3: never have a discussion, We never have a discussion about
Speaker 3: how much each app is.
Speaker 2: Doing on the cloud or doing on the device. It
Speaker 2: just works.
Speaker 3: And I think that's how we see those agents working.
Speaker 3: They look of your data, they look at things on
Speaker 3: your device, they do things for you, and they do
Speaker 3: stuff on the cloud, and I think that's why I
Speaker 3: believe this actually builds into the Qualcom assets and the
Speaker 3: factor are present everywhere. Our engagement with the cloud companies
Speaker 3: right now they look at our devices at endpoint for AI,
Speaker 3: and that's also exciting. I think we're talking with all
Speaker 3: the AI companies about their new and exciting devices.
Speaker 1: What's less exciting is when supply chain disruption. But you
Speaker 1: were really clear with investors and they liked it quickly.
Speaker 1: With thirty seconds memory, you see an endpoint at least
Speaker 1: in China.
Speaker 2: Yeah.
Speaker 3: Look, the reality is everything is memory, and AI drives
Speaker 3: more memory demand. If they drove a lot of the
Speaker 3: men of the data center, it CAUs a crunch on
Speaker 3: the consumer electronics. The good thing is we now see
Speaker 3: the bottom, as I said in the call, where under
Speaker 3: shipping market demand, we look at customer activations of devices
Speaker 3: and cell thual data, we see how what the demand is.
Speaker 2: That's now we can call the bottom.
Speaker 3: And you know, there's going to be more more supply
Speaker 3: and more suppliers and we'll see how this is going
Speaker 3: to play out.
Speaker 4: The market is taking this really seriously. Qualcom having its
Speaker 4: best day since April twenty nineteen. Qualcom's Christiana im On,
Speaker 4: thank you very much.