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Speaker 1: Bloomberg Audio Studios, podcasts, radio news from Mahard.

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Speaker 2: We're Innovation, Money and Power.

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Speaker 1: Collie in Silicon Vallet NBN.

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Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

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Speaker 3: Live from San Francisco. To our TV and radio audiences

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Speaker 3: around the world. Welcome to a special edition of Bloomberg Technology.

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Speaker 1: I'm Ed Ludlow.

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Speaker 3: In just a few moments, Intel CEO Pat Gelsinger will

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Speaker 3: join us for a live interview following their latest earnings report,

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Speaker 3: the company giving a fourth quarter revenue forecast slightly above estimates,

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Speaker 3: but sparking optimism that Intel is capable of reclaiming some

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Speaker 3: lost market share in keycages.

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Speaker 1: The shares are really surging.

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Speaker 3: But it's also important to note two other giants of

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Speaker 3: the technology world have also reported numbers this evening. Apple,

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Speaker 3: the world's most valuable company, down two percentage points in

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Speaker 3: after hours. It grew in every geography around the world,

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Speaker 3: apart from in Greater China. iPhone revenue overall beat there's

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Speaker 3: much to unpick there. Amazon gave a strong forecast for

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Speaker 3: the final three months of this year, whether it's on

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Speaker 3: an operating income basis or a revenue basis, and a

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Speaker 3: return to growth in its cloud unit AWS. There is

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Speaker 3: some signal that Amazon is regaining momentum. We will check

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Speaker 3: in on all three names throughout the thirty minutes, but

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Speaker 3: a focus right now is in Intel. It had a

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Speaker 3: painful third quarter gone and it's given us a signal

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Speaker 3: about what might come next. Let's first of all, go

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Speaker 3: to Bloomberg's senior executive editor, Tom Giles, who leads technology

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Speaker 3: coverage in the newsroom.

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Speaker 1: Where to start.

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Speaker 3: You know, Intel has moved on really from a painful

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Speaker 3: third quarter and tried to tell us that it's regaining

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Speaker 3: footing going fullwood.

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Speaker 1: Take it from that.

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Speaker 4: Tull slightly Slightly is the key here. A lot of

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Speaker 4: what they did in the most recent quarter was they

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Speaker 4: slash costs, slashed expenses, They cut headcount. They have taken

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Speaker 4: a step back on investor payouts, so a lot of

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Speaker 4: this is about retrenching. They did give a forecast for

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Speaker 4: the fourth quarter that slightly exceeded analysts expectations. That was

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Speaker 4: enough to get the stock moving. It's definitely up and

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Speaker 4: after hours, but I look at the report and I

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Speaker 4: see that they are not out of the woods yet

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Speaker 4: by any stretch of the imagination. I look at their

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Speaker 4: orders for AI chips. There's still not a lot of

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Speaker 4: momentum there. They're not going to meet that five hundred

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Speaker 4: million dollar threshold that they had talked about. We are

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Speaker 4: still wondering about whether there's going to be interest after

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Speaker 4: the election from an outside company. Bloomberg has reported on

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Speaker 4: Qualcomm and their potential interest in an Intel deal. We've

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Speaker 4: also reported that they're going to put that off until

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Speaker 4: after the election, maybe not see a lot of movement

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Speaker 4: there until after the new year. This was an investors

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Speaker 4: are breathing a sigh of relief. But Gelsinger still has

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Speaker 4: a lot of explaining to do and a lot of

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Speaker 4: expectations that he still needs to live up.

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Speaker 3: To, and we will get the opportunity to put those

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Speaker 3: questions to him. Bloomberg, Tom Giles, thank you, stay with us.

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Speaker 3: I want to bring in Bloomberg's Ian King, who's led

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Speaker 3: semiconductor coverage in the Bloomberg newsroom since nineteen ninety.

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Speaker 1: Eight and for a lot of that time.

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Speaker 3: In all seriousness, Intel has led in certain products, right

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Speaker 3: chips that go into PCs in some sense data center.

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Speaker 3: But the quarter that just happened, their third quarter was painful.

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Speaker 3: Billions of dollars of impairment charges, headcount reduction. Take that

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Speaker 3: and explain why it's so important for this chip company

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Speaker 3: to have taken those actions.

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Speaker 5: Yeah, I mean Pat Gelsing has spelt it out. He said,

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Speaker 5: we are resizing the company for the size of revenue

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Speaker 5: that we expect going forward. And going forward we expect

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Speaker 5: maybe three to five percent growth. If we push it,

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Speaker 5: maybe we'll get into the sort of seven percent range.

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Speaker 5: So that is a long way off what Intel's direct

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Speaker 5: compares are doing right now, particularly in that AI chip market.

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Speaker 3: Ian one more to you please. You spoke to Pat

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Speaker 3: Gelsinger on the phone very quickly. Their business is split

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Speaker 3: in two. There's the chips that they make that go

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Speaker 3: into Pcason data centers. Then there's the manufacturing business. Gelsinger

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Speaker 3: explained to you sort of the plan to run them

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Speaker 3: as distinct divisions, but within one whole company.

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Speaker 5: Yeah, he's talking about them being sort of better to

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Speaker 5: be split but still together, which he was asked about

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Speaker 5: again on the call, And people are still kind of

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Speaker 5: struggling with this. It's like, well, how come if you're

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Speaker 5: splitting them up, you're not going to go the whole

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Speaker 5: way and split up the company and His point is like, no, no,

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Speaker 5: we need to manage the overall finances and guess what,

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Speaker 5: the majority of work that's going to be done in

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Speaker 5: those factories is go to be our chips for the

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Speaker 5: next couple of years.

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Speaker 3: That's the Bloomberg News reporting on the numbers that Intel posted.

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Speaker 3: You see them on the screen there, thanks to Bloomberg,

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Speaker 3: Zy and King. Let's get reaction from the investment community.

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Speaker 3: Joanne Feine is Advisor's capital management partner and portfolio manager

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Speaker 3: actually currently with no exposure to Intel, but you're someone

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Speaker 3: who's covered semiconductors semi capital equipment for many years at

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Speaker 3: multiple firms. Just your reaction to the Intel print and

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Speaker 3: what they told us about their progress.

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Speaker 6: You know, they made a lot of progress, and that's

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Speaker 6: an important step forward. They had a lot of cost

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Speaker 6: cutting to do. They seem like they got a lot

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Speaker 6: of it done last quarter, which is why we're seeing

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Speaker 6: such a big charge, which had a large impact on

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Speaker 6: that adjusted EPs. But you know, as Ian just said

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Speaker 6: that they have a long way to go because they

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Speaker 6: are taking a huge hit on their gross margin by outsourcing,

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Speaker 6: and that reflects the lack of execution in the past

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Speaker 6: on the manufacturing side.

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Speaker 1: And it isn't just to an end.

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Speaker 6: We didn't get good news about that this quarter. It's

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Speaker 6: in fact really not going to play through until twenty

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Speaker 6: twenty six when they rant Panther Lake in real volume.

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Speaker 6: And even then, on the call, Pat Gelsinger said that

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Speaker 6: seventy percent will be in house, but thirty percent will not,

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Speaker 6: And I think that's a smart business decision. They have

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Speaker 6: to be a reliable provider of that chip, and if

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Speaker 6: there's any kind of hiccup in the yields they're going

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Speaker 6: to get on Panther Lake, they had better have another

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Speaker 6: source so they can meet their customer demands. But you know,

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Speaker 6: the gross margin is everything. They've gone from over sixty

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Speaker 6: percent down to under forty percent. Yes, and that's because

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Speaker 6: they haven't executed.

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Speaker 1: Now.

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Speaker 6: I've always said that if somebody can write the ship,

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Speaker 6: it's Pat Gelsinger, a former Intel guy and back at

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Speaker 6: the Helm, and he's made incredible progress. He and Dave's

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Speaker 6: Inzer have made incredible progress here this last.

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Speaker 3: Quarter, and the stock is markedly higher and after hours.

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Speaker 3: In a minute, I'm going to ask Ian about that

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Speaker 3: kind of history of Intel and its leadership in the

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Speaker 3: field of semi conductors. AI accelerators. Those are the GPUs,

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Speaker 3: the high performance chips that we've all been talking about,

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Speaker 3: because they go into data centers and they use to

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Speaker 3: train AI models. And what Intel told us is that

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Speaker 3: their version of that Goudy is not getting traction nowhere

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Speaker 3: near the traction frankly that in video and AMD to

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Speaker 3: a lesser extent of getting What did you make of that, Joan.

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Speaker 6: Yeah, they're a distant follower and it's going to take

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Speaker 6: them a lot to really make any inroads there. And

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Speaker 6: it isn't just in video and AMD's new products, but

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Speaker 6: it's also custom silicon that are coming out of the

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Speaker 6: cloud guys themselves, like Google for example, working with Broadcom,

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Speaker 6: Open Ai also evidently working with Broadcom. So there's a

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Speaker 6: lot of players already there that have really outstanding products

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Speaker 6: and you can see that in their soft guidance for

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Speaker 6: twenty twenty five. They're targeting three to five percent revenue growth.

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Speaker 6: That's what they're managing the business to and that really

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Speaker 6: does reflect the different opportunity Intel has. It isn't just

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Speaker 6: the AI accelerators, it's also that they've lost so much

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Speaker 6: market share in server to AMD Okay. They used to

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Speaker 6: be ninety seven percent. Now they're just around forty percent.

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Speaker 3: Those are one of the questions that we'll get to you, Dranfeeni,

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Speaker 3: stay with us for a moment. I want to go

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Speaker 3: back to Bloomberg's Ian King. Historically, Intel was the leader

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Speaker 3: in the product categories, but also in its margins. It

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Speaker 3: was a company that had sixty percent margins or above.

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Speaker 3: That is not the case anymore.

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Speaker 5: Why Historically, what the massive advantage that they had was

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Speaker 5: the best factories in the industry. Right These factories coust

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Speaker 5: multiple tens of billions of dollars to put in the ground.

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Speaker 5: But if they're good and if they give you better products,

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Speaker 5: that's an asset. Right now, that is the reverse where

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Speaker 5: they are not the best and they are weighing on

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Speaker 5: the margins. And as we talked about it, and that

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Speaker 5: was all of the questions they got, when are these advancements?

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Speaker 1: Were the answers, well, two years.

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Speaker 3: And what do you mean by So there's this foundry business,

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Speaker 3: and part of it is serving Intel. They're their own

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Speaker 3: biggest customer in the first instance, but they've named some

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Speaker 3: pretty impressive people out there that they hope to manufacture

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Speaker 3: chips for. There seems to be now a timeline building

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Speaker 3: and when that might happen.

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Speaker 5: Yeah, I mean the optimistic view is like, now we've

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Speaker 5: made our factories great again. Now they're good. That'll help

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Speaker 5: our products and it will also help us attract outside money.

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Speaker 5: The analyst are turning around and saying, well, when and

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Speaker 5: what's happening in the interim is, as Johanne said, they're

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Speaker 5: still outsourcing a big chunk of their best stuff. So

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Speaker 5: obviously that's horrendous margins and it has the negative impact

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Speaker 5: of if you've got factories and you're not running them

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Speaker 5: flat out making your best stuff, that's not a place

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Speaker 5: where you want to be in this.

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Speaker 1: Industry, Joanne.

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Speaker 3: When I moved to California six years ago, Intel was

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Speaker 3: part of the law and history of Silicon Valley. It's

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Speaker 3: why people speak about them in that respect. In the

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Speaker 3: court of gone, they took very painful decisions. And when

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Speaker 3: I posted on social media that Pat Gelsinger was doing

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Speaker 3: this special program, many voice support for him, but did say, look,

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Speaker 3: there are some very difficult questions we still have. What

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Speaker 3: would your difficult question be for him?

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Speaker 6: How are you going to bring that gross margin up?

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Speaker 6: And I guess the second one, and related is how

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Speaker 6: do you convince potential foundry customers that they're going to

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Speaker 6: get priority in those wafer starts when they need them?

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Speaker 6: And that's always been the challenge in eras past. When

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Speaker 6: Intel has talked about starting a foundry business, the concern

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Speaker 6: among potential customers was, how do we know we're going

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Speaker 6: to get the wafer starts that you promise us? How

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Speaker 6: do we know you're not going to prioritize your own products?

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Speaker 6: And then secondly, do they have the extensive libraries that

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Speaker 6: they need to build chips for other companies? And that's

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Speaker 6: a set of libraries that obviously have built up over many,

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Speaker 6: many years and decades at TSMC and Samsung, But it's

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Speaker 6: a new thing for Intel, and can they execute to

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Speaker 6: build other companies' products as well as they do for

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Speaker 6: their own.

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Speaker 3: Amtheenia of Advisors, Capital Management, and of course Bloomberg's Ian King.

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Speaker 3: Thank you to you both. Now we are joined by

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Speaker 3: the Intel CEO, Pat Gelsinger, who's come straight from the

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Speaker 3: company's call with analysts. Kindly, you are joining us live

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Speaker 3: on Bloomberg Television and Radio, and Pat, thank you for

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Speaker 3: your time.

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Speaker 1: In the quarter gone.

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Speaker 3: We were just talking about how you made painful decisions,

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Speaker 3: and those showed up as impairment charges and were reflected

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Speaker 3: on the bottom line to start, Could I ask if

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Speaker 3: that's it now that those actions are taken and you

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Speaker 3: now have line of sight on what you want to do,

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Speaker 3: or if there will be more sort of restructure to come.

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Speaker 7: Yeah, we worked very hard this quarter to get this

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Speaker 7: done and the people actions, the restructuring chargers you'll largely

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Speaker 7: finished this quarter, so it was a challenging quarter that way,

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Speaker 7: but to also deliver better than expect the results if

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Speaker 7: we eliminate those one time chargers and to take our

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Speaker 7: guidance up for Q four.

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Speaker 2: I'm very proud of our team being able to do

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Speaker 2: both of those this quarter.

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Speaker 7: Some of the most difficult restructuring charges maybe in the

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Speaker 7: history of Intel since our memory microprocessor decision almost forty

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Speaker 7: years ago. Getting that done and still beating results and

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Speaker 7: taking the guide up, this was a very significant quarter

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Speaker 7: for our team to execute. Very proud of their discipline results.

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Speaker 3: Pat the investor base of cheering you. I'm going on

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Speaker 3: the reaction of your stock in after hours, but a

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Speaker 3: lot of that does seem to be a focus on

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Speaker 3: what you were guiding to in the final three months

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Speaker 3: of this year. Away from sort of the financials and numbers,

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Speaker 3: could you talk a little bit about the product business

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Speaker 3: and the foundry business that gave you some confidence in

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Speaker 3: that guide.

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Speaker 7: Yeah, and if we take it apart a little bit,

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Speaker 7: the client business, we've launched our lunar Lake product, the

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Speaker 7: second generation of our AIPC and the AIPC category very solid.

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Speaker 7: We'll be launching the commercial version of that into a

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Speaker 7: good market, believe next year for a Windows refresh, a

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Speaker 7: corporate refresh cycle, and we start to see more strength

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Speaker 7: in the AIPC category overall, with strong set of use

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Speaker 7: cases and ISVs bringing new software into the marketplace. So

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Speaker 7: we feel good about the client business. Data center quarter

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Speaker 7: on quarter a little bit better than people forecast for

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Speaker 7: that business, and a stronger product line with our Xeon

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Speaker 7: six products now starting to ramp, you know. And finally

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Speaker 7: on the Intel foundry quarter and quarter growth in that area,

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Speaker 7: and a strong pipeline of external customers. We announced Amazon

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Speaker 7: and two other AT and A customers, some additional advanced

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Speaker 7: packaging customers. So we're starting to see that business come

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Speaker 7: to life. And that's a long term business because when

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Speaker 7: people move designs, it takes several years for major designs

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Speaker 7: to move into our foundry. So we've been at it

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Speaker 7: now a couple of years, and we're starting to see

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Speaker 7: the results of those hard work and getting back to

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Speaker 7: competitive process technology with AT and A. So a very

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Speaker 7: good quarter of operational results.

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Speaker 3: Pat we have a question from our audience, and that

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Speaker 3: question comes from Clem DeLong, who's the CEO and founder

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Speaker 3: of Hugging Face, and he makes the point that on

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Speaker 3: his platform there are many more smaller models now available

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Speaker 3: and it's leading him to have a question for you

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Speaker 3: about Intel's place in the on device trend we're seeing

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Speaker 3: with AI and how you're going to enable more on

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Speaker 3: device AI use.

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Speaker 7: Well, thank you, Clem, A great question, and a Hugging

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Speaker 7: Face a great company, and you know, as you think

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Speaker 7: about these models, you know we do see it moving

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Speaker 7: from the training phase of you know, trillions of parameters

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Speaker 7: to the inferencing phase, and exactly like the questioner says,

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Speaker 7: in that inferencing phase, more of that will happen on

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Speaker 7: prem for data center customers, and many of those smaller

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Speaker 7: models will be retrained with enterprise's own data.

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Speaker 2: A lot of those.

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Speaker 7: Will just run on zeon need a special accelerator, or

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Speaker 7: it'll be zeon plus an accelerator, but also then the

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Speaker 7: edge use cases and AIPC use cases.

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Speaker 5: Ed.

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Speaker 7: I call it the three laws of the edge, right,

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Speaker 7: the laws of physics, right, the.

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Speaker 2: Speed of light.

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Speaker 7: If I have to go to the cloud, I had time.

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Speaker 7: Your second law is the law of economics, right, it's

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Speaker 7: cheaper to run on my device. And finally the laws

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Speaker 7: of the land. My data on my device in my

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Speaker 7: data center. So we see it moving from a cloud

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Speaker 7: training world to an edge and on prem world for

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Speaker 7: inferencing for the future.

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Speaker 3: I therefore have to ask you about GOUDI. Your AI

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Speaker 3: accelerator did not get the traction that you'd hoped and

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Speaker 3: you won't be making the outline target of five hundred

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Speaker 3: million dollars in sales for this fiscal year or calendar year.

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Speaker 3: Why is it a use case issue that the data

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Speaker 3: center operators aren't looking at it or something else.

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Speaker 2: Yeah.

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Speaker 7: Two factors that we pointed out. One is is that

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Speaker 7: now we have Gouty three coming out, so there's more

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Speaker 7: enthusiasm for the next generation product that we're just starting

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Speaker 7: to ramp now. The second one is the software and

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Speaker 7: the software use cases the AI world has moved very

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Speaker 7: rapidly and innovating very quickly, and the robustness and the

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Speaker 7: completeness of the Gouty software stack hasn't been as great.

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Speaker 7: And it's an accelerator, not a full reprogrammable GPU, so

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Speaker 7: that makes some of the software porting and optimizations a

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Speaker 7: bit more difficult. Obviously, as we get more of that

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Speaker 7: running on Goudy, we solve the software problems. But secondly

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Speaker 7: then it's also to move to a complete GPU capability,

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Speaker 7: which we'll be doing out in time, and that development

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Speaker 7: effort is also well underway, so we feel we have

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Speaker 7: a solid position. The world is coming to more on

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Speaker 7: prem and enterprise use cases. Like the last question ask

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Speaker 7: and Gouty three good early indications from the marketplace and

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Speaker 7: its success as we ramp it in twenty five.

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Speaker 3: If you're just joining us on Bloomberg Television and Radio,

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Speaker 3: we're live with the Intel CEO Pat Gelsinger. Pat Bloomberg's

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Speaker 3: reported that arm and Qualcom, two of your peers, are

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Speaker 3: interested in buying some or part of Intel. Can you

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Speaker 3: confirm whether or not you received a formal offer from

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Speaker 3: them or anyone else, and what Intel's consideration of them

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Speaker 3: would be.

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Speaker 7: Yeah, and Obviously, there's been rumors and churn in the industry,

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Speaker 7: and I think all of that just indicates how important

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Speaker 7: Intel is to the Intel into the industry structure and semiconductors,

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Speaker 7: and how important those supply chains are.

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Speaker 2: For the world.

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Speaker 7: We don't view any of these rumors as particularly emeritus.

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Speaker 7: We laid out a strategy, we reaffirmed that with our

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Speaker 7: board of directors, and obviously, as we've taken these steps

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Speaker 7: this quarter and restructuring and getting our costs where they

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Speaker 7: need to be, we have the capacity to go on

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Speaker 7: the journey that we've laid out to produce sustainable profitability

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Speaker 7: and result in shareholder return. So with that, I'm committed,

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Speaker 7: the team's committed, we have the board support for the

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Speaker 7: strategy that we've laid out, and Q three shows that's

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Speaker 7: exactly what we're going to do.

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Speaker 3: But I've been trying to help our audience understand Intel's

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Speaker 3: historic and current business right the products, but also foundry.

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Speaker 3: And what you said was that twenty twenty six is

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Speaker 3: when those third party customers start to show up. But

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Speaker 3: could you just outline the path to that what you

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Speaker 3: want to hold yourself to for next year in developing

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Speaker 3: that business as a sort of standalone unit.

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Speaker 7: Yeah, and it's a great question ed and clearly we've

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Speaker 7: started to see that already emerge. And even this quarter

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Speaker 7: we saw quarter and quarter growth of the external foundry business,

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Speaker 7: largely driven by some of those early.

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Speaker 2: Packaging design wins.

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Speaker 7: So these advanced packages are sort of a faster on ramp,

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Speaker 7: but ultimately it's becoming a wafer foundry for the d street.

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Speaker 7: And as we said, three major design wins this quarter,

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Speaker 7: you know, one with Amazon and two other compute use cases.

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Speaker 7: So we'll be updating you know, the market as we

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Speaker 7: win more of those customers and describing the lifetime deal

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Speaker 7: value of those to the marketplace as well. So we'll

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Speaker 7: give some of those breadcrumbs along the way. But it

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Speaker 7: takes a couple of years for people to move these designs,

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Speaker 7: a year to design it, a year to bring it

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Speaker 7: into production until it starts to ramp in the marketplace.

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Speaker 7: So key milestones for eighteen A that customers are now

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Speaker 7: beginning those design cycles, the design tools, the design libraries.

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Speaker 2: Are being moved over to eighteen A, but.

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Speaker 7: It really isn't until twenty six that those results start

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Speaker 7: to really help Intel's products. And then twenty six twenty

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Speaker 7: seven until we start to see meaningful volumes externally.

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Speaker 3: That way just days away from an election in this country,

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Speaker 3: and I'm particularly interested in your assessment and planning for

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Speaker 3: might happen to the Chips Act programs. Of course, I

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Speaker 3: don't expect you to know what will happen in the election.

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Speaker 3: You do not have a crystal ball. But former President

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Speaker 3: Trump has kind of made disparaging remarks about President Biden's

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Speaker 3: economic agenda. How are you planning for that?

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Speaker 1: Please?

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Speaker 7: Yeah, And I'd say maybe three different perspectives. Number One,

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Speaker 7: the Chips Act was a bipartisan act and with that

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Speaker 7: strong support from both sides of the aisle. And with that,

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Speaker 7: we believe the importance of that in terms of industrial policy.

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Speaker 7: The semiconductor industry is well supported by Congress and both parties. Second,

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Speaker 7: we are disappointed by how long and how slow the

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Speaker 7: dispensing of funds has been and well over two years

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Speaker 7: at this point. I've invested thirty billion in capital and

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Speaker 7: we've seen zero dollars of the Chips grants at this point.

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Speaker 7: So we do believe that that has been too slow,

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Speaker 7: and we're somewhat frustrated by that, and we've taken out

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Speaker 7: of our financials four this year. That said Yil, there's

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Speaker 7: also the Investment tax credit that we are seeing in

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Speaker 7: It is much larger than the grant portion of the

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Speaker 7: CHIPSAC and that is now law, and that will be beneficial.

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Speaker 7: But clearly, I think whoever wins the election, the importance

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Speaker 7: of this industry, the importance of rebuilding this supply chain

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Speaker 7: of manufacturing is well supported. And Intel as a designer,

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Speaker 7: R and D and manufacturer is unique in the United

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Speaker 7: States and in the overall structure of the industry. And

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Speaker 7: we expect the broad support rate of the administration regardless

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Speaker 7: which party wins as a result.

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Speaker 1: Thank you, Pat.

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Speaker 3: Two quarters ago your CFO told me you were two

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Speaker 3: over indexed to CPU, and we know what happened with Goudi.

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Speaker 3: You made painful decisions in the court to gone reduce

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Speaker 3: headcount by sixteen five hundred. Do you now have the

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Speaker 3: plan in place and are you confident from here?

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Speaker 7: You know, we laid out a clean sheet program that

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Speaker 7: we went through to really benchmark the business. We took

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Speaker 7: a conservative view of the funding plan, as we call

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Speaker 7: it internally, saying you know, we're taking a modest growth

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Speaker 7: outlook and we're building our cost structure to that very

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Speaker 7: modest outlook, but we've also built now a lot of

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Speaker 7: optionality to scale up into the business. We have a

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Speaker 7: shell ahead where we have capacity that we can scale

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Speaker 7: into if necessary, and we've made a smaller, more efficient

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Speaker 7: Nimbre company that is able to execute with more agility

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Speaker 7: and speed as well. So we feel like we're now

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Speaker 7: well set up for the future. This was a challenging

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Speaker 7: quarter for me for the company, but we feel like

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Speaker 7: we're well set up for the future. And the good

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Speaker 7: operational results that exceeded the markets expectations and the increased

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Speaker 7: guidance for Q four, we feel like we're now in

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Speaker 7: a very solid position.

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Speaker 3: Intel CEO Pat Gelsinger, thank you for joining us here

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Speaker 3: on this special bluebot technology straight from the analyst school.

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Speaker 1: Appreciate your time.

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Speaker 3: Thank you, ed like always, Okay, let's get more reactions

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Speaker 3: to that conversation the numbers and what is the big

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Speaker 3: earning story this Thursday Bloomberg Intelligence and this Congensabani who's

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Speaker 3: just posted his reaction on the Bloomberg terminal saying details

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Speaker 3: on two new eighteen eight customers will be key to

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Speaker 3: offset pains from the third quarter pains that We've just

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Speaker 3: been through extensively, Kunjan, But just go a bit deeper

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Speaker 3: into your thesis and your reaction to what Pat said.

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Speaker 8: Yeah, this is a name that I struggled with most

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Speaker 8: ed there were a lot of positives. If you want

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Speaker 8: to take a positive view, right, they came in slightly better.

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Speaker 1: You have to if you want to.

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Speaker 8: But to be fair, they came in slightly better than

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Speaker 8: feared on most top line Q three, Q four, the

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Speaker 8: free cash flow target is moving in the right direction.

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Speaker 8: The gross to netcapax, the ratio is improving. But at

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Speaker 8: the same time, we thought the gross margin floor was

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Speaker 8: sort of something they already said last quarter. Right, so

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Speaker 8: we have this massive significant impairment charges. Yes, you can

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Speaker 8: ignore that, and the gross margin was better than a

448
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Speaker 8: bit of there, but you have to make sure, right,

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Speaker 8: how many times are we going to draw this clean

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Speaker 8: sheet and go on?

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Speaker 3: From their AI accelerators, the chip that everyone talks about,

452
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Speaker 3: Goudie's not getting traction. They won't make five hundred million

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Speaker 3: dollars in sales this year. What was your reaction to that.

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Speaker 8: That's part of sort of the negatives out of today, right,

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Speaker 8: the AI story doesn't seem to get any better In fact,

456
00:24:21,040 --> 00:24:23,440
Speaker 8: this announcement makes it sort of slow down even more.

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00:24:24,080 --> 00:24:27,399
Speaker 8: Based on the implied guide of for DCAI, it seems

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00:24:27,480 --> 00:24:30,080
Speaker 8: that the share loss have not stopped. And on the

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Speaker 8: other hand, you have the competitor AMD suggesting strong turing

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00:24:33,600 --> 00:24:36,480
Speaker 8: ramp next quarter, right versus a flatish guide from Intel.

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Speaker 8: So that tells me both in CCG and Data Center

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00:24:39,880 --> 00:24:41,680
Speaker 8: that the share loss have not stopped yet.

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Speaker 3: Bloomberg Intelligence analyst can Jensavanni, we just talked about his research,

464
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Speaker 3: but check it out on.

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Speaker 1: The Bloomberg terminal.

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Speaker 3: I want to get the final word with Bloomberg Senior

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Speaker 3: executive editor Tom Giles, who has led this news rem

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Speaker 3: for a long time.

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Speaker 1: Interesting interview.

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Speaker 3: I think, you know Pat Gelsia coming clean on how

471
00:25:00,240 --> 00:25:02,800
Speaker 3: it is, but he still projects confidence.

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Speaker 1: I just watch you.

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Speaker 4: My overall takeaway from that conversation with Pat was he's

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Speaker 4: really trying to accentuate the positive. He acknowledged it's difficult

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00:25:15,320 --> 00:25:18,280
Speaker 4: to cut sixteen five hundred jobs. They made some really

476
00:25:18,320 --> 00:25:23,280
Speaker 4: hard decisions in the quarter. At the same time, he's

477
00:25:23,359 --> 00:25:26,160
Speaker 4: being as honest as he could about the AI outlook.

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00:25:26,520 --> 00:25:29,080
Speaker 4: You need to have if you're a ship maker right now,

479
00:25:29,400 --> 00:25:32,560
Speaker 4: you need to be able to sell an AI story

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00:25:32,800 --> 00:25:35,240
Speaker 4: and Intel is just not doing that right now.

481
00:25:37,080 --> 00:25:40,119
Speaker 3: Ian King has been sending the headlines we're reporting on

482
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Speaker 3: the terminal right that this is difficult, but they demonstrated progress.

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Speaker 3: Bloomberg's Tom Giles, who leads the news room here at

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Speaker 3: Bloomberg Technology, thank you very much. This was part of

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Speaker 3: a mega earnings period. Right when it comes to the megacaps,

486
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Speaker 3: Intel's still the story.

487
00:25:55,080 --> 00:25:56,640
Speaker 1: It's up eight percentage points.

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00:25:56,920 --> 00:26:00,000
Speaker 3: Apple, the world's most valuable company in Amazon also reports.

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00:26:00,600 --> 00:26:01,520
Speaker 1: But the movements in.

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00:26:01,520 --> 00:26:05,480
Speaker 3: There after hours stock was a little bit more muted

491
00:26:05,680 --> 00:26:09,920
Speaker 3: and a difficult one. Intel up eight percent. It's an

492
00:26:09,920 --> 00:26:10,720
Speaker 3: interesting one.

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Speaker 2: You know.

494
00:26:11,119 --> 00:26:13,960
Speaker 3: I don't know whether or not investors will stay with

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00:26:14,000 --> 00:26:16,439
Speaker 3: the momentum in the stock. If they believe it, they

496
00:26:16,480 --> 00:26:19,720
Speaker 3: will have to. I guess Tom Giles digest what Pat

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00:26:19,880 --> 00:26:20,840
Speaker 3: Gelsinger told us.

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Speaker 4: Yeah, absolutely. I mean it's surged a lot, it's come

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Speaker 4: back a little bit. I think as the market as

500
00:26:28,040 --> 00:26:30,840
Speaker 4: the reality sinks in that they've got a tough row

501
00:26:31,080 --> 00:26:35,639
Speaker 4: to hold ahead. And it's just it's there was not

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00:26:36,000 --> 00:26:40,160
Speaker 4: enough in this story to say that Intel is in

503
00:26:40,200 --> 00:26:43,320
Speaker 4: the clear, and I thought Pat was upfront about that

504
00:26:43,400 --> 00:26:45,560
Speaker 4: as much as he really tried to accentuate how good

505
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Speaker 4: things are going.

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Speaker 1: Got it.

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Speaker 3: Bloombg's Tom Giles again, Senior executive editor for Bloomberg Technology.

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Speaker 1: We appreciate it.

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Speaker 3: That does it for this edition, special edition of bloombate Anology.

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Speaker 3: We'll be back tomorrow morning and we'll review the entire thing.

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Speaker 1: This is Bloomberg