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Speaker 1: Let's bring in Bloomberg Intelligence Senior tech industry analyst man
Speaker 1: Deep Singh joining me here in the Bloomberg Interactive Brokers
Speaker 1: studio at Bloomberg Headquarters in New York. So you heard
Speaker 1: the conversation that Ed Ludlow had with CEO Jensen Wang.
Speaker 1: What did you think? What's your reaction?
Speaker 3: Results were great, it's still a very solid growth story.
Speaker 3: But when it comes to convincing investors that there are
Speaker 3: more catalysts for upside relative to where expectations are, I
Speaker 3: think a lot of it right now is the on
Speaker 3: how the industry actually deploys generative AI. That's what Jensen
Speaker 3: highlighted that. Look, GENAI is transformational. It's changing how compute
Speaker 3: is done and everyone will use it and we are
Speaker 3: seeing that in their numbers. The data center growth is
Speaker 3: just unprecedented. Question for investors is will we see more
Speaker 3: positive revisions? Will estimates go up by five ten percent tomorrow?
Speaker 3: And the answer is no, simply because right now they
Speaker 3: talked about Blackwell getting delayed to four Q. Obviously they
Speaker 3: are very positive on the ramp, but everything is more
Speaker 3: like pushed out by a quarter and they I mean,
Speaker 3: Jensen was very positive with ed you know in the
Speaker 3: interview about how he expects twenty twenty five to shake out,
Speaker 3: So he's his enthusiasm is intact. It's just when it
Speaker 3: comes to estimates going up, probably investors didn't see enough.
Speaker 1: There was a lot of conversation around the hyperscalers. These
Speaker 1: are the big cloud computing companies that have been investing
Speaker 1: in this technology, and I think the big question for
Speaker 1: the street is whether or not these companies are going
Speaker 1: to begin to demonstrate a return on investment the ROA
Speaker 1: on AI. What do we know about that part of
Speaker 1: the story.
Speaker 3: I think with Hyperscalers, specifically, their cloud business will ramp up.
Speaker 3: And that's what he said, like he's not Nvidia is
Speaker 3: not competing with the hyperscalers. They don't intend to become
Speaker 3: a hyperscaler vendor like a Microsoft, Amazon, or Google. They're
Speaker 3: deploying within Microsoft and Google, and I think that's where
Speaker 3: probably you will see a lot of ramp up from
Speaker 3: the hyperscalers. But that doesn't mean they will continue to
Speaker 3: raise Capex for twenty twenty six and beyond. Ultimately, the
Speaker 3: question for Nvidia investors is is this CAPEX wave sustainable?
Speaker 3: How long of a tail it has and is there
Speaker 3: a cliff three years out?
Speaker 1: Well, you mentioned the Blackwell design, the new chip, the
Speaker 1: GPU that in video will roll out. Apparently there's some
Speaker 1: production issues right now. Is this more so on the
Speaker 1: design side, that's the sense that I'm getting, rather than
Speaker 1: production itself, right.
Speaker 3: Yeah, I mean, look, the complexity of the chips is growing.
Speaker 3: He talked about power, how Blackwell will use the same
Speaker 3: amount of power but be able to compute more than
Speaker 3: the current Hopper architecture. So clearly they're doing a lot
Speaker 3: more on the content side of the chip and it
Speaker 3: requires sophisticated production, which TSMC is doing. But again he
Speaker 3: came across very confident that they will ramp up four
Speaker 3: Q and then if going into twenty twenty five, Blackwell
Speaker 3: will be multi billions in revenue, so that conviction was
Speaker 3: there in what he said during the interview. It's more about,
Speaker 3: you know, will it be enough to drive more upside
Speaker 3: in terms of the incremental buyers CAPEX going up. I mean,
Speaker 3: he talked about there are more companies that are trading models.
Speaker 3: Is just not clear enough, like who are these beyond
Speaker 3: the hyperscaler sovereigns he mentioned sovereigns he did, and those
Speaker 3: are low double digit and billion dollars. But again when
Speaker 3: you compare it to the hyperscalers, it's not very clear
Speaker 3: if the magnitude of those buyers will be the same
Speaker 3: as the hyperscalers.
Speaker 4: End.
Speaker 1: So you mentioned the production side, that's TSMC, the company
Speaker 1: that is the foundry for these Nvidia chips. Do we
Speaker 1: have an indication that TSMC is going to be able
Speaker 1: to keep up with demand as well?
Speaker 4: Yes.
Speaker 3: In fact, he was very clear that supply is growing,
Speaker 3: and it's growing in a way where TSMC is able
Speaker 3: to accommodate in Vidia becoming a larger buyer of the
Speaker 3: manufacturing capacity that TSMC has. So all the things that
Speaker 3: he mentioned of the on the call pointed to a
Speaker 3: steady ramp up more supply of chips but what it
Speaker 3: didn't suggest is where are more upside catalysts. I mean,
Speaker 3: everyone knows about the new architecture, everyone knows about the
Speaker 3: ramp up and supply, So it's more a question of
Speaker 3: is the upside going to come from networking or software
Speaker 3: or cloud. He said they don't intend to become a
Speaker 3: cloud player. So the software business, they said they're going
Speaker 3: to end at a two billion dollar rund rate, So
Speaker 3: that upside for consensus revisions probably that is what is missing.
Speaker 1: One of the things that I didn't hear any discussion
Speaker 1: around was the high bandwidth memory chips. And you need
Speaker 1: those to kind of work with the GPUs, don't you
Speaker 1: when you're creating these cloud infrastructure units. Yes, and we're
Speaker 1: talking about companies like sk Heinez, like Samsung. Do we
Speaker 1: know that these companies are going to be able to
Speaker 1: keep up at the same level that Nvidia is producing chips?
Speaker 3: Yeah, And actually that's a great point. So when you
Speaker 3: look at the gross margins for Nvidia, they seem to
Speaker 3: have peaked last quarter. So last quarter gross margins were
Speaker 3: seventy eight percent. And remember this business right now has
Speaker 3: no seasonality. I mean, it's growing, you know, triple digits
Speaker 3: so obviously you can't factor in any seasonality. This quarter,
Speaker 3: the margins were seventy five percent. They said they can
Speaker 3: maintain that mid seventy percent gross margin. But the reason
Speaker 3: why gross margin may trend down going forward is because
Speaker 3: they have to buy more HBM chips.
Speaker 4: They have to.
Speaker 3: Buy more advance packaging capacity from TSMC. So that's where
Speaker 3: the bill of materials does add up for Nvidia and
Speaker 3: that will start to impact their gross margins.
Speaker 1: Great conversation, Man, Deep, Thank you so much. Bloomberg Intelligence
Speaker 1: senior tech analyst Mandeep Singh joining us here as we
Speaker 1: look at the price action in shares of Nvidia in
Speaker 1: late trading down nearly seven percent. I'm Doug Krisner, and
Speaker 1: this is Bloomberg. We welcome our guest, Mario Morales, Group
Speaker 1: VP of Enabling Technologies and Semiconductors at IDC. He's joining
Speaker 1: us from Silicon Valley, right down the road from San Jose. Mario,
Speaker 1: good of you to make time. What was your reaction
Speaker 1: to what you heard tonight from in Nvidia.
Speaker 5: Well, I think I'm a lot more positive than what
Speaker 5: I've been seeing after the market closed for in video.
Speaker 5: I think when you look at what they basically shared
Speaker 5: with us is that they're still growing pretty phenomenally in
Speaker 5: the data center. I think the other markets that they
Speaker 5: serve are now returning back to more normalized growth. So
Speaker 5: I think those are all positives. I think that the
Speaker 5: market sentiment was a little bit down just because the
Speaker 5: expectations have been so high for the company.
Speaker 1: What do you make of the fact that the company
Speaker 1: is having problems with this new Blackwell chip design? Is
Speaker 1: that a concern to you?
Speaker 5: Not really, because I look at the position and they
Speaker 5: have such a dominant position right now. Even if they're
Speaker 5: late by a quarter or two, it still will not
Speaker 5: change the pecking order in terms of the incumbency that
Speaker 5: they continue to enjoy within the data center market. I
Speaker 5: think what you're looking at nowadays is that these chips,
Speaker 5: whether it's the Black Blackwell platform or any other that's
Speaker 5: in the market, they're very complex chips, and they're basically
Speaker 5: now putting all of these chiplets together in one very
Speaker 5: intricate package, and so you're going to have some yield
Speaker 5: issues initially when you ramp some of these new technologies.
Speaker 1: I know that about forty five percent of Nvidia's total
Speaker 1: business comes from the so called hyperscaleers, the companies that
Speaker 1: invest in cloud computing names like Alphabet. Amazon is in there,
Speaker 1: along with Microsoft, IBM, you could even add Oracle. I
Speaker 1: think if it's forty five percent of the business that
Speaker 1: has been really restricted to companies that have already built
Speaker 1: out their AI infrastructure, isn't it reasonable to think that
Speaker 1: growth is going to begin tapering off because those companies
Speaker 1: really at this point aren't in a position to spend more.
Speaker 1: They have enough.
Speaker 5: You know, when you look at the cloud service provider
Speaker 5: space and how they procure silicon, it tends to be lumpy.
Speaker 5: But the investment in AI has been so strong that
Speaker 5: I think it can continue on. Maybe not necessarily only
Speaker 5: by the cloud service providers, but I think the next
Speaker 5: wave that's going to come will be from telcos and enterprise.
Speaker 5: These are all industries that are very large that are
Speaker 5: just beginning to experiment with AI and want to really
Speaker 5: turn it on in a big way across their enterprises.
Speaker 5: So I see more growth ahead. I think the cloud
Speaker 5: service corriders might take a pause maybe over the coming quarters,
Speaker 5: but I still believe that fundamentally on a longer term basis,
Speaker 5: we're just still you know, maybe in the second inning
Speaker 5: of what we're seeing today in terms of the amount
Speaker 5: of investment that we're seeing in AI.
Speaker 1: So Nvidia designs that they are manufactured at a foundry
Speaker 1: that's operated by TSMC. That's essentially what TSMC does, they're
Speaker 1: the manufacturer. Are you concerned that TSMC may not be
Speaker 1: able to keep up with demand.
Speaker 5: Yeah, I mean that's continued to be the theme right
Speaker 5: for over a year now. I think last year we
Speaker 5: saw a correction in the semic metor space, but when
Speaker 5: you look at TSMC, they tend to buck the trend.
Speaker 4: They're a very.
Speaker 5: Strong player in the founder space. The leader they control
Speaker 5: over sixty percent of the market. Where they're investing heavily
Speaker 5: now is in advanced packaging. So when you hear about costs,
Speaker 5: all of that means is that that's where they're seeing
Speaker 5: the big investments that they need to make in order
Speaker 5: to serve companies like Nvidia and Broadcom and AMD and
Speaker 5: others that are now beginning to use more advanced packaging
Speaker 5: in order to continue to drive integration.
Speaker 1: So the GPUs that are designed by Nvidio manufactured by TSMC,
Speaker 1: they have to be paired with the high bandwidth memory
Speaker 1: chips do they not, and those devices or chips are
Speaker 1: created by companies like Samsung and s k Heinex in
Speaker 1: South Korea. How are those companies How have they been
Speaker 1: able to keep up with the demand. Should we be
Speaker 1: concerned about maybe a little weakness on that side.
Speaker 5: Well, we're not seeing the weakness. In fact, since probably
Speaker 5: September of last year, the memory companies began to change
Speaker 5: their operations in order to get back to profitability, but
Speaker 5: demand returned, especially from the data center, and today we're
Speaker 5: expecting that both DRAM and NAND will grow significantly from
Speaker 5: a revenue basis, close to seventy three percent in terms
Speaker 5: of revenue growth, so very phenomenal growth. A lot of
Speaker 5: that led not just by high bandwidth memory, but also
Speaker 5: DDR five that's being used in the flagship smartphones and
Speaker 5: the upcoming aipcs that we'll see later during the holiday season.
Speaker 5: So I think in general that the demand for memory
Speaker 5: will still remain robut this year and likely into twenty
Speaker 5: twenty five.
Speaker 1: One of the things that is simply stunning when you
Speaker 1: look at any area of high technology is the rate
Speaker 1: of change, how quickly technology evolves. Give me a sense
Speaker 1: of what we're seeing now with not only a company
Speaker 1: like in Nvidia, but broadly when it comes to companies
Speaker 1: that are involved in artificial intelligence. Is some of this
Speaker 1: equipment going to be obsolete a year from now? Do
Speaker 1: you think?
Speaker 4: Well?
Speaker 5: You definitely. When you look at the SEMAC, nintor space,
Speaker 5: it's always followed Moore's law, which means that that performance
Speaker 5: or power changes every eighteen to twenty four months. Now
Speaker 5: you add AI to this, and when you start looking
Speaker 5: more at the large language models, they're actually changing every
Speaker 5: three to four months. So we've seen an acceleration of
Speaker 5: change that's happening. And you look at companies like in
Speaker 5: Nvidia or AMD, they're trying to go and keep up
Speaker 5: with that change. And I think that's going to be
Speaker 5: the big challenge for these companies because they've been operating
Speaker 5: with More's law in mind. But these but the market
Speaker 5: for AI is moving so much faster. So now AMD
Speaker 5: and Nvidia and Intel now have to basically introduce products
Speaker 5: every single year now, and you're going to have some
Speaker 5: hiccups because of that, because the cadence is now changing
Speaker 5: in order to keep up with this demand and this
Speaker 5: appetite that the world has for AI, especially around infrastructure.
Speaker 1: What is your sense of the competition that in Vidia
Speaker 1: may face in the future. Right now, there is clearly
Speaker 1: very little. The company is essentially a monopolist when it
Speaker 1: comes to these GPUs. But can you imagine a world
Speaker 1: where Nvidia begins to look over at shoulder a bit?
Speaker 5: I think so. I think over the coming year, you're
Speaker 5: definitely going to see AAMD stepping up their game. They
Speaker 5: you know, back in computext in June they announced an
Speaker 5: annual cadence for their own accelerators with the M three
Speaker 5: hundred beginning to fray, and then you got the three
Speaker 5: twenty five and three fifty. So you're going to see
Speaker 5: AMD now introducing an annual cadence of accelerators in order
Speaker 5: to try to catch up to Nvidia. But I think
Speaker 5: in Nvidia's own customers continue to chip away little by
Speaker 5: little in terms of the instances and services that they're
Speaker 5: turning on with their own silicon, And so when I
Speaker 5: look at the competition, I think it's going to come
Speaker 5: more so from the customers. Initially, so a company like
Speaker 5: Google and Microsoft and AWS all developing their own chips
Speaker 5: and using some of those ships with their infrastructure, and
Speaker 5: then on a longer term basis. Broadcom is still a
Speaker 5: significant player here that not a lot of people talk about.
Speaker 5: But when you think about a lot of the designs
Speaker 5: of the APIs that are today serving the cloud service providers,
Speaker 5: a lot of those acs are designed in collaboration with
Speaker 5: Brock them, so I would call them the number two player.
Speaker 5: And then AMD coming in being able to leverage their
Speaker 5: CPU entrenchmen, especially in the data center, and hopefully that
Speaker 5: will help accelerate their own entrance into the GPU market
Speaker 5: for training and infancy.
Speaker 1: Mario very quickly in about thirty seconds. A big semiconductor
Speaker 1: industry a conference next week in Taiwan. What do you
Speaker 1: think the big issues are for the semiconductors supply chain
Speaker 1: in Asia right now?
Speaker 5: I think that we're still seeing a slower recovery in
Speaker 5: the spending and I'm talking about capital spending of the
Speaker 5: major companies. Even though TSMC has increased their numbers, the
Speaker 5: rest of the industry is still a lot more cautious
Speaker 5: around spending. So that's going to be one of the
Speaker 5: key things. How much of the tools are still making
Speaker 5: their way into China. That is also becoming something that
Speaker 5: governments are watching more closely. And then how long can
Speaker 5: we continue to sustain the growth that is needed to
Speaker 5: believe it there billion dollars.
Speaker 1: Mario Morales, this is Bloomberg. We bring in our guest,
Speaker 1: Dan Newman. He is the CEO of the Futuram Group,
Speaker 1: joining us from Austin, Texas. Dan, pleasure to have you
Speaker 1: on the program. I hope you had some time to
Speaker 1: go through what we heard from Nvidia tonight. The stock,
Speaker 1: as I mentioned, was down more than seven percent in
Speaker 1: the late US trading. Do you think this is an overreaction?
Speaker 4: Yeah, thanks for having me, and I have spent some
Speaker 4: time and actually listened to a really compelling interview that
Speaker 4: was done Bloomberg with Ed Ludlow. I think the overall
Speaker 4: reaction is a little bit of what I would have
Speaker 4: expected based on them just doing enough. And as crazy
Speaker 4: as this sounds, just doing enough was beating raising and
Speaker 4: being really solid and consistent in what the company is delivering.
Speaker 4: The problem is, over the last several quarters, we've come
Speaker 4: to expect these massive beats, huge revenue upside, these guides
Speaker 4: that look phenomenal, and this sort of endless upgrade cycle
Speaker 4: and this just was good. And you know what I
Speaker 4: said coming into this, it has to be great or
Speaker 4: there's only.
Speaker 1: Downside the price to perfection story. I think we can
Speaker 1: agree on that, right. But are you troubled at all
Speaker 1: by the word that in Nvidia is having problems with
Speaker 1: that new Blackwell chip design.
Speaker 4: I'm not really troubled because it seems he has the
Speaker 4: situation under control. He talked about the update to the mask,
Speaker 4: which was going to improve the yield, which in the
Speaker 4: in the near term means probably an uplift from Hopper.
Speaker 4: These Hopper chips are still very significant, and they're still
Speaker 4: selling in volume. Amazon and Microsoft are still building out
Speaker 4: significant infrastructure with them, so is x and Tesla and others.
Speaker 4: I think where this is going to head, though, is
Speaker 4: when does that ramp, that one year cycle continue to
Speaker 4: drive these triple digit growth rates. And we're starting to
Speaker 4: see that slow down. And I think whether we see
Speaker 4: this ship into the fourth quarter or even if it
Speaker 4: falls into the first quarter, what we end up having
Speaker 4: happen is we've got an entire world that's kind of
Speaker 4: watching this stock and saying triple digit revenue growth, triple
Speaker 4: digit earnings growth, and now we're starting to see that
Speaker 4: quarter on quarter you're on youar it's decelerating and then
Speaker 4: bigger questions about AI digestion and when does this start
Speaker 4: to really find its way into companies like Salesforce, as
Speaker 4: Numbers and others that reported today that didn't get as
Speaker 4: much attention.
Speaker 1: Yeah, you're right about that. It's a good point too.
Speaker 1: But let's get back to Nvidia and the approved fifty
Speaker 1: billion dollars in additional stock buyback. Is that a good
Speaker 1: way to kind of repurpose or redeploy capital.
Speaker 4: I think if the company is looking at the situation
Speaker 4: as hey, there may be some some hesitancy, there may
Speaker 4: be some sellers. We saw some selling pressure into the
Speaker 4: numbers today. The company wants to be armed, to be
Speaker 4: able to lower the flow and to be able to
Speaker 4: take advantage of a lower share price as it expects
Speaker 4: that this Blackwell and then followed by Rubin will continue
Speaker 4: to drive this acceleration. You know, we did hear from
Speaker 4: Mark Luckerberg center of a Chai, you know, Satia Nadella.
Speaker 4: There was really no indication that they plan to slow
Speaker 4: their capex spending. And that means good things for Nvidia
Speaker 4: because despite the fact that all of them are making
Speaker 4: investments or have been making investments in somewhat competitive offerings.
Speaker 4: In the current moment, these companies are building the bridges
Speaker 4: and roads and tunnels with Nvidio, and if they want
Speaker 4: to be competitive, they don't want their Blockbuster moment, they
Speaker 4: don't want to have their BlackBerry moments. So I think
Speaker 4: they are going to keep investing. And I think that
Speaker 4: bude really well for Justin Wong in video.
Speaker 1: So I hear what you're saying when it comes to
Speaker 1: the cloud computing companies, those so called hyperscalers talking about
Speaker 1: their intention to continue with the current level of cap x.
Speaker 1: But won't that largely be determined by whether or they
Speaker 1: or not they get a significant return on their investment.
Speaker 1: The so called ROI on AHI has to be the key, right.
Speaker 4: You would think so. But if you listen to Mark
Speaker 4: Zuckerberg's comments, he was pretty clear that he was willing
Speaker 4: to bet even if that ingestion period, even if that
Speaker 4: consumption period is longer than we expect. And we know
Speaker 4: that he's done that before with Reality Labs, and the
Speaker 4: market sort of pushed back at him until he had
Speaker 4: to pivot on his as capex investments on that side.
Speaker 4: But AI is not virtual reality. It is very clear
Speaker 4: that this is going to change every industry from autonomous
Speaker 4: driving to drug discovery to these large language models that
Speaker 4: are going to change software and the way we sell,
Speaker 4: the way we buy, the way we watch. And so
Speaker 4: when you put all these things together, I think these
Speaker 4: companies are willing. They have great balance sheets, most of
Speaker 4: them are strong cash positions. They're willing to make the bet.
Speaker 4: But I agree with you, I think we need to
Speaker 4: see more measurable returns downstream from these software companies. Who
Speaker 4: else is making money besides Nvidia and these cloud companies
Speaker 4: have not been really clear. I think Azure amy Hood
Speaker 4: gave the best numbers so far, but you're talking to
Speaker 4: single digit percent about Azure revenue.
Speaker 1: TSMC is obviously the foundry that produces these chips. I mean,
Speaker 1: are you confident that TSMC can keep up with a
Speaker 1: level of production required.
Speaker 4: Well, TSMC is continuing to talk to how it will
Speaker 4: expand its capabilities. We've heard about some of the you know,
Speaker 4: the availability of its three danimeter being really sold out
Speaker 4: through twenty twenty five. We of course they're hearing about coosts,
Speaker 4: you know, the packaging technology, and that was part of
Speaker 4: what was going on with some of the potential delays.
Speaker 4: This new cost l technology and TSMC has the market.
Speaker 4: They have a huge percentage of this AI movement, and
Speaker 4: of course a lot of Nvidia's business, and they're going
Speaker 4: to have to invest substantially. TSMC is a clear winner here,
Speaker 4: and you know, while we are waiting on some of
Speaker 4: these others, the sks and microns, and they're building the
Speaker 4: HBM side this partner ecosystem, and Jenson said this on
Speaker 4: the interview with that ed it was very clear that
Speaker 4: this supply partnership is monumental in terms of the company's
Speaker 4: ability to continue to hit its growth. TSMC has given
Speaker 4: us no reason to doubt its ability. But this technology
Speaker 4: keeps getting more complex and that puts a lot of
Speaker 4: stress on TSMC to deliver well.
Speaker 1: You mentioned the high band with memory chip manufacturers sk Heinix,
Speaker 1: Samsung in South Korea. Are they kind of the weak
Speaker 1: link in this chain, which is to say, if they
Speaker 1: don't keep up with the level of output that in
Speaker 1: Nvidia is striving for that the overall move in the
Speaker 1: build out of some of these AI infrastructure models, I
Speaker 1: mean that it's held back a bit.
Speaker 4: I think this continues to be the reason why whether
Speaker 4: Blackwell's a little bit delayed or not, they're going to
Speaker 4: produce as much of the hopper as possible. The overall
Speaker 4: situation as it pertains to memory is they're also constrained there.
Speaker 4: So you heard me talk about three nanometer constrained, coosts constrained,
Speaker 4: and of course HBM constrained. So right now you are
Speaker 4: literally seeing these five or so major hyperscalers plus global
Speaker 4: hyperscalers and Tier two's taking up the vast majority of
Speaker 4: the demand for all of these major parts of the supply.
Speaker 4: And you know, Jensen talked about it being around forty
Speaker 4: five percent coming from the three or four biggest, but
Speaker 4: they are taking most of the demand and until we
Speaker 4: can expand capacity. So it's on Micron, which is investing,
Speaker 4: it's on sk and Samsung, all of which are investing.
Speaker 4: But it can't happen fast enough. This does take.
Speaker 1: Time, given the export controls that the Biden administration has
Speaker 1: put on some of this advanced technology from Nvidia to
Speaker 1: the Chinese market. Is it fair to say that the
Speaker 1: US is far out in front of China when it
Speaker 1: comes to AI or are you concerned possibly about Chinese
Speaker 1: advancement in this area and maybe at some point it
Speaker 1: becoming a greater rivalry.
Speaker 4: I am always concerned about China's willingness, will power, capacity
Speaker 4: and capabilities to build and deliver even in the most
Speaker 4: difficult situation. Of course, the US has been incredibly innovative,
Speaker 4: are fabulous leaders, not just in Nvidia, AMD, of course, historically, Intel, Qualcom,
Speaker 4: these companies have all been tremendously important to this innovation wave.
Speaker 4: China is doing what it can to follow suit. It's
Speaker 4: been somewhat successful in mobile devices, in PCs. We've seen
Speaker 4: it with Honor and Huawei. We are hearing that it
Speaker 4: is having some level of success building competitive products to
Speaker 4: the tuned down in Vidio chips, the B twenties h twenties,
Speaker 4: that they could be able to compete in this particular space.
Speaker 4: I never would rule them out. I think that would
Speaker 4: be a tremendously large mistake. Having said that, in Vidia
Speaker 4: has a substantial lead beyond everyone else right now, and
Speaker 4: then others like AMD and like what the hyperscalers are
Speaker 4: building is very advanced, and I do think China has
Speaker 4: significant challenges, but I wouldn't doubt their ability or resolve
Speaker 4: to find a way.
Speaker 1: Well, leave it there, Dan, thank you so much. Always
Speaker 1: a pleasure Dan Newman, he is the CEO of the
Speaker 1: Futurum Group, joining us from Austin, Texas here on Daybreak Asia.
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