WEBVTT - Intel Plunges Post-Earnings and the FTC's Big Tech Probe 0:00:01.560 --> 0:00:05.240 From Marhard. We're Innovation Money and Power co Line in 0:00:05.360 --> 0:00:10.560 Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and. 0:00:10.640 --> 0:00:11.719 Ed Ludlow. 0:00:25.840 --> 0:00:27.680 Live from Roomberg's World headquarters in New York. 0:00:27.720 --> 0:00:29.760 And Caroline Hyde and I'm Ed Lovelow as if by 0:00:29.840 --> 0:00:31.320 Magic also in the Big Apple. 0:00:31.400 --> 0:00:33.320 This is Bloomberg Technology. 0:00:32.800 --> 0:00:36.040 Coming up and Intel it plunges after disappointing investors with 0:00:36.080 --> 0:00:37.920 its forecast. We're going to be sitting down with the 0:00:37.960 --> 0:00:42.000 Intel CEO, Pat Gelsinger to break down the company's results. 0:00:42.200 --> 0:00:45.519 For bet Amazon and Microsoft facing FTC probes about their 0:00:45.560 --> 0:00:50.280 investments and partnerships with AI companies, Details ahead and salesforce. 0:00:50.320 --> 0:00:52.559 Look, it's adding to a brutal string of tech layoffs 0:00:52.560 --> 0:00:56.200 in twenty twenty four, announcing its slashing seven hundred workers. 0:00:56.520 --> 0:00:59.080 Well, look, there's just a single point of focus in 0:00:59.120 --> 0:01:01.200 tech right now, which is Intel. The stock in the 0:01:01.240 --> 0:01:04.600 session down more than ten percent intraday, biggest dropping around 0:01:04.640 --> 0:01:07.280 a year. If it closes down beyond ten percent, it 0:01:07.280 --> 0:01:09.520 will be the biggest drop since the end of twenty 0:01:09.560 --> 0:01:10.039 twenty one. 0:01:10.120 --> 0:01:10.840 What is going on? 0:01:11.000 --> 0:01:14.520 Well, the outlook has us worried, particularly about how Intel 0:01:14.600 --> 0:01:16.880 is faring in the market for chips that go into 0:01:17.000 --> 0:01:20.720 data centers. But remember they're also growing this fledgling foundry 0:01:20.760 --> 0:01:23.200 business and there was just a lack of detail. We 0:01:23.280 --> 0:01:25.880 don't know who the customers are, but there also doesn't 0:01:25.920 --> 0:01:29.040 seem to be enough dollars committed to that foundry and 0:01:29.080 --> 0:01:31.600 fab business. We're going to be speaking later in the 0:01:31.600 --> 0:01:34.240 hour with Pat Gelsinger, the CEO of Intel. If you're 0:01:34.240 --> 0:01:37.960 watching on Bloomberg Television, you're on the terminal ibs, contact 0:01:38.000 --> 0:01:40.400 us on social media with your questions because there are 0:01:40.400 --> 0:01:42.640 lots of questions to ask on where are we at 0:01:43.040 --> 0:01:45.920 in this turnaround plan that bat Gelsinger has kind of 0:01:45.959 --> 0:01:48.000 put in front of investors for a number of quarters. 0:01:48.040 --> 0:01:50.480 Right now, Cara and ed a lot of what he's 0:01:50.520 --> 0:01:53.920 been hoping for is well the wins of positivity coming 0:01:53.920 --> 0:01:56.240 from AI investment. But let's just talk about AI in 0:01:56.240 --> 0:01:58.720 a different way right now from the regulatory perspective, because 0:01:58.800 --> 0:02:02.240 the FTC has launch an inquiry into Alphabet, Amazon, Microsoft 0:02:02.640 --> 0:02:06.680 on their investments and partnerships with companies like Anthropic, like 0:02:06.720 --> 0:02:09.359 open Ai, those private companies. This is part of a 0:02:09.400 --> 0:02:13.200 study on how artificial intelligence is impacting competition in the 0:02:13.200 --> 0:02:16.280 tech industry and used to say bluemeggs. Jackie Davlas are 0:02:16.360 --> 0:02:20.400 AI expert and also Washington expert joins us now and Jackie. 0:02:20.520 --> 0:02:22.799 The FDC here is really trying to garner as to 0:02:22.840 --> 0:02:25.080 whether or not these are kind of M and A 0:02:25.200 --> 0:02:26.240 deals by a backdoor. 0:02:27.840 --> 0:02:30.600 Well, when you look at it, they're not small deals. 0:02:30.639 --> 0:02:33.760 They might be creative and that it's not a traditional 0:02:34.160 --> 0:02:38.079 mergers and acquisition steal. But the FTC is well aware 0:02:38.120 --> 0:02:40.080 of that. And the reason they are on their radar 0:02:40.240 --> 0:02:44.040 is because it's a massive amount of money. It's nineteen 0:02:44.280 --> 0:02:49.400 billion dollars collectively between the thirteen billion Microsoft committed to 0:02:49.440 --> 0:02:54.320 open AI, the two billion that Anthropic raked in from Alphabet, 0:02:54.400 --> 0:02:56.639 and then the almost four billion. 0:02:56.440 --> 0:02:58.080 It got from Amazon. 0:02:58.280 --> 0:03:02.040 These are enormous stay and the FTC wants to understand 0:03:02.160 --> 0:03:05.480 should they be subject to the same types of merger rules. Now, 0:03:05.600 --> 0:03:08.960 they're not the only regulators that got that have these 0:03:09.000 --> 0:03:12.200 companies on their radar. The UK started their own inquiry 0:03:12.680 --> 0:03:15.800 in December, and then you had the European Union also 0:03:15.880 --> 0:03:17.720 starting to take a look at whether they should be 0:03:18.000 --> 0:03:22.280 kind of looked at like a merger would. Earlier this month, you. 0:03:22.240 --> 0:03:22.680 Know, Jackie. 0:03:22.720 --> 0:03:26.400 The FTC has the who's who of megacat tech in 0:03:26.440 --> 0:03:29.760 their sites and the leaders in building of lms. But 0:03:29.800 --> 0:03:32.119 I want to go to Microsoft specifically because of being 0:03:32.120 --> 0:03:35.360 the world's most valuable company as it stands, but also 0:03:35.840 --> 0:03:38.400 the Microsoft OpenAI thing is somewhere. 0:03:38.120 --> 0:03:39.680 Something We've done a lot of reporting on. 0:03:39.680 --> 0:03:42.200 What is Microsoft's response been to the news of the 0:03:42.240 --> 0:03:43.320 last twenty four hours. 0:03:44.240 --> 0:03:48.600 They defended the partnership and actually said that the US 0:03:48.800 --> 0:03:52.080 has been ahead in AI because of these partnerships. Their 0:03:52.160 --> 0:03:55.480 top competition's lawyer also said that they look forward to 0:03:55.520 --> 0:03:59.160 providing the information the FTC needs to really assess the 0:03:59.280 --> 0:04:03.920 nature of this relationship. But you're absolutely rated. Microsoft here 0:04:04.120 --> 0:04:07.120 is arguably more at risk than perhaps some of these 0:04:07.120 --> 0:04:11.040 other companies. Microsoft has overhauled its entire product line to 0:04:11.120 --> 0:04:16.240 integrate open AI's AAI technology and large language model into 0:04:16.279 --> 0:04:20.240 the most ubiquitous tools and its most profitable tools it has. 0:04:20.640 --> 0:04:23.920 And so of course, whether the FTC decides that there's 0:04:24.000 --> 0:04:27.480 nothing to see here, that these partnerships are valid, that's 0:04:27.520 --> 0:04:30.240 one outcome, But then the other one could mean untangling 0:04:30.279 --> 0:04:33.360 these partnerships in some way. And this is where Microsoft 0:04:33.520 --> 0:04:35.400 is arguably more exposed. 0:04:35.279 --> 0:04:38.080 Kay Bloomberg's Jackie Davlos out in DC with the reporting. 0:04:38.160 --> 0:04:38.400 Thank you. 0:04:38.520 --> 0:04:42.560 Let's continue the conversation with Christina Kafara, co founder and 0:04:42.640 --> 0:04:45.880 vice chair of the Competition Research Policy Network at the 0:04:45.960 --> 0:04:49.760 Center for Economic Policy Research in London. She's a specialist 0:04:50.000 --> 0:04:53.200 in antitrust and it is advised on high profile landmark 0:04:53.200 --> 0:04:57.159 competition cases on behalf of the tech companies Microsoft, Apple, 0:04:57.400 --> 0:05:00.640 Amazon and many others. We've been through the detail, but 0:05:00.720 --> 0:05:02.800 the timing for me is really interesting. There has been 0:05:02.800 --> 0:05:05.480 a large body of reporting, most of it from Bloomberg, 0:05:05.880 --> 0:05:09.880 about regulators around the world looking at the relationship between 0:05:10.080 --> 0:05:13.760 mega cat tech and the new players in AI. Why 0:05:13.760 --> 0:05:15.480 do you think the FTC is acted now. 0:05:17.120 --> 0:05:19.000 It's a pleasure to be here. Thank you for having me. 0:05:20.800 --> 0:05:24.919 The reason this announcement by the FDC is significant is 0:05:25.520 --> 0:05:28.039 that it is the first of the regulators who is 0:05:28.120 --> 0:05:33.599 actually doing a wide ranging type of investigation over these partnerships. 0:05:33.640 --> 0:05:38.840 As your reporter mentioned, the uk CMA, the UK regulator, 0:05:38.880 --> 0:05:42.960 the European Commissioner already looking into this specific partnership between 0:05:43.160 --> 0:05:47.600 OpenAI and Microsoft, but there is a border focus in 0:05:47.640 --> 0:05:51.120 the FDC's announcement and what's behind it. And it is 0:05:51.200 --> 0:05:55.360 really common to all of these regulators that I certainly 0:05:55.400 --> 0:06:00.000 would describe them as a triad of fairly progressive regulators 0:06:00.040 --> 0:06:04.799 European Commissioned, the UK Regulator, and the US agencies. What's 0:06:05.279 --> 0:06:12.760 common between them is an anxiety that essentially we do 0:06:12.839 --> 0:06:16.560 not want to see the same playbook unfold again. What 0:06:16.680 --> 0:06:19.480 has happened in the past is that regulators has been 0:06:19.839 --> 0:06:24.279 very slow in intervening. For the first decade and the 0:06:24.279 --> 0:06:25.440 second decade, really. 0:06:25.279 --> 0:06:29.480 There's been a reluctance to intervening these sectors because there 0:06:29.520 --> 0:06:32.240 was a sense that anti trust is really a problem 0:06:32.279 --> 0:06:37.240 that affects law, innovation sectors, an analog rather than digital. 0:06:37.240 --> 0:06:40.880 And things will take care of themselves. So anti trust 0:06:40.960 --> 0:06:45.600 intervention as being late, and this is really what is 0:06:46.279 --> 0:06:49.719 powering the anxiety. The regulators are we cannot let this 0:06:49.880 --> 0:06:53.279 playbook unfold yet again. We need to be vigilant, We 0:06:53.320 --> 0:06:54.920 need to be seen to be doing something. 0:06:55.080 --> 0:07:00.560 Christina, what about the anxiety? Is it a reality that 0:07:00.720 --> 0:07:05.240 anxiety that basically these partnerships are more than partnerships, They 0:07:05.240 --> 0:07:07.719 are indeed em and a they are indeed control. 0:07:08.960 --> 0:07:09.120 Oh. 0:07:09.160 --> 0:07:14.960 Absolutely, the anxiety extends to this because The concern internal 0:07:15.120 --> 0:07:20.520 to the agencies is that boardrooms have internalized that the 0:07:20.600 --> 0:07:25.480 climate of enforcement has become more hostile to deals. I mean, 0:07:25.480 --> 0:07:28.520 if you think about Microsoft activision into two years and 0:07:28.560 --> 0:07:30.840 it is int obit there. So there is a general 0:07:31.040 --> 0:07:34.680 awareness that doing deals is much more difficult now, and 0:07:34.760 --> 0:07:37.800 there is an anxiety that companies are effectively the fact 0:07:37.800 --> 0:07:44.000 to circumventing merger control by dressing up these relationships as partnerships. 0:07:44.240 --> 0:07:47.160 So this is certainly the second leg of the anxiety. 0:07:47.240 --> 0:07:49.800 We've been too late, We've not done enough, and now 0:07:50.160 --> 0:07:52.640 we are exposed to the rest that these companies are 0:07:52.680 --> 0:07:56.080 actually doing deals by the backdoor. So that's really. 0:07:55.960 --> 0:07:59.679 Why Christian significant, Caroline and I have covered so many 0:08:00.160 --> 0:08:03.920 these FTC inquiries on this program Bloomberg Technology. All of 0:08:03.920 --> 0:08:06.600 them slightly different, but the question they all share in 0:08:06.640 --> 0:08:11.240 common is to whose benefit is the FTC acting. You know, 0:08:11.320 --> 0:08:13.680 people are worried about AI, but there's also a broad 0:08:13.720 --> 0:08:16.840 body of people that say this could really help humankind. 0:08:17.160 --> 0:08:20.560 It's very expensive to achieve, and those names that are 0:08:20.600 --> 0:08:23.520 the subject of this inquiry are those with the capital 0:08:23.880 --> 0:08:26.360 to drive the progress. Does the FTC put any weight 0:08:26.440 --> 0:08:27.520 on that latter argument? 0:08:28.560 --> 0:08:32.000 Of course, and I think Lina Khan in her announcement 0:08:32.080 --> 0:08:36.080 yesterday emphasized at the beginning that these points are well taken. 0:08:36.559 --> 0:08:40.000 I think humanity to the extent possible wants to benefit 0:08:40.080 --> 0:08:42.040 from this. And of course we're all aware that there 0:08:42.040 --> 0:08:44.480 are massive investments that need to be put into this, 0:08:44.559 --> 0:08:48.160 which is why these players out at the forefront of development. 0:08:48.240 --> 0:08:52.439 That said, we have a recent history, which is a 0:08:52.520 --> 0:08:56.520 history of failure of engaging with these questions and why 0:08:56.679 --> 0:08:59.720 one doesn't want to prejudge the outcome. One needs to 0:08:59.760 --> 0:09:04.320 be vigilant because we have spent the last ten years, 0:09:04.360 --> 0:09:09.079 certainly in Europe, but I reside trying to pursue exposed 0:09:09.120 --> 0:09:12.240 investigations of conduct. You're at that point in the US too, 0:09:12.280 --> 0:09:14.559 you have an number of complaints. How many years will 0:09:14.600 --> 0:09:17.760 it take before anything will move? Before everything comes even 0:09:17.880 --> 0:09:19.000 to a court? 0:09:20.520 --> 0:09:24.600 The google Christina's when you look at what's happening in Europe, 0:09:24.920 --> 0:09:29.160 they're actually taking regulatory action that forces a change. Will 0:09:29.200 --> 0:09:31.760 we see actually companies front run this. 0:09:34.559 --> 0:09:38.160 In Europe? What you've seen is because anti trust has 0:09:38.240 --> 0:09:41.680 failed spectacularly to deliver so far, we've been at it 0:09:41.720 --> 0:09:44.160 for fifteen years. There hasn't been a moving of the dial. 0:09:44.200 --> 0:09:47.559 There hasn't been a single anti trust decision on Google 0:09:48.080 --> 0:09:51.760 and others that has actually changed the situation on the ground. 0:09:51.800 --> 0:09:54.800 So we pivoted to regulation. Now it remains to be 0:09:54.880 --> 0:09:57.920 seen whether this is regulation which is now being implemented 0:09:57.960 --> 0:10:01.400 it's going to move the dial itself. These are all experiments, Frankly. 0:10:02.160 --> 0:10:04.880 The sense is therefore that if you kind of try 0:10:04.920 --> 0:10:09.560 and correct the issue when the monopolies are established, where 0:10:09.640 --> 0:10:14.520 market power is established, when power is entrenched, you struggle, 0:10:15.000 --> 0:10:17.960 you are not going to be able to effectively undo 0:10:18.600 --> 0:10:22.080 that power. And so the notion of looking at it 0:10:22.160 --> 0:10:25.880 early and looking at what the nature of this partnership, 0:10:25.960 --> 0:10:28.520 for example, is so, what are the potential issue here? 0:10:28.840 --> 0:10:32.000 I mean, think about this industry as a supply chain 0:10:32.080 --> 0:10:34.720 that's practicalized. Never mind that there is at the bottom 0:10:34.840 --> 0:10:38.200 a lot of competition. The issue is the power at 0:10:38.240 --> 0:10:40.679 the level of the inputs, the power the level of 0:10:40.720 --> 0:10:44.559 the models. Now, if that power is very concentrated, then 0:10:44.600 --> 0:10:46.800 the question that I relate us need to ask is 0:10:47.080 --> 0:10:50.080 how will that input which is essential to all of 0:10:50.120 --> 0:10:55.000 these products the general models be effectively supplied, will be 0:10:55.200 --> 0:10:58.400 supplied on conditions that are these advantageous that are extracted. 0:10:58.440 --> 0:11:02.439 That that exploi is actively remove the ability of arders 0:11:03.040 --> 0:11:06.640 to compete. The fact that at the product level there's 0:11:06.920 --> 0:11:11.720 thousands of people implementing AI application, it's jolly good. But 0:11:11.800 --> 0:11:14.920 if there's only one, two or three suppliers of this, 0:11:15.440 --> 0:11:18.360 then the question becomes will they preference themselves? Will they 0:11:18.400 --> 0:11:21.360 have advanced notice of the work Christina x development? 0:11:22.120 --> 0:11:23.160 Will they and. 0:11:23.160 --> 0:11:28.599 To conclude, will they effectively favor the development of technology 0:11:28.640 --> 0:11:29.439 ways that suit them? 0:11:30.240 --> 0:11:32.719 Some food for thought for sure, Christina Kafara, We thank 0:11:32.760 --> 0:11:35.120 you for the time and the expertise Center of Economic 0:11:35.200 --> 0:11:39.240 Policy Research over in London, Happy weekend. Meanwhile, sticking on 0:11:39.280 --> 0:11:42.120 a theme of AI open, AI CEO Sam Altman when 0:11:42.120 --> 0:11:44.280 he's actually visiting leaders in South Koreas se in conductor 0:11:44.320 --> 0:11:46.840 industry this week. This is as he's weighing, of course, 0:11:46.880 --> 0:11:50.320 a pretty ambitious move into chip production. Altman has arrived 0:11:50.360 --> 0:11:53.120 in Seoul last night and he's touring some songs chip 0:11:53.120 --> 0:11:56.199 fabrication plants today. According to a source, he's also scheduled 0:11:56.360 --> 0:11:58.720 to meet the CEO of rival s k Heinex to 0:11:58.760 --> 0:12:00.760 discuss ways to collaborate and something. 0:12:00.600 --> 0:12:02.120 We're reporting that yeah, big time. 0:12:02.360 --> 0:12:05.200 So in another effort to cut costs, Salesforce is now 0:12:05.240 --> 0:12:08.800 the latest big tech company resorting to layoffs. Gloomberg's Brody 0:12:08.840 --> 0:12:11.920 Ford has details and Brody Salesforce has already kind of 0:12:12.240 --> 0:12:15.200 number of staff. This time. It's small than percentage form, 0:12:15.320 --> 0:12:17.679 But seven hundred is nothing to be sniffed. 0:12:17.400 --> 0:12:20.920 At, right, Yeah, it's tempting to say that, hey, a 0:12:21.040 --> 0:12:24.520 year ago there was you know, seven thousand people cut. 0:12:24.600 --> 0:12:26.920 Now it's seven hundred, so we don't care so much. 0:12:27.000 --> 0:12:29.720 But it's still What it shows to us is that 0:12:29.800 --> 0:12:33.000 the tech industry is still focused on cutting costs, and 0:12:33.040 --> 0:12:37.080 this may become a more regular part of the year. Right, 0:12:37.800 --> 0:12:40.240 It's like we're going back to nineteen fifty and ge 0:12:40.280 --> 0:12:41.200 and stack ranking. 0:12:41.320 --> 0:12:41.480 Right. 0:12:41.520 --> 0:12:45.400 We saw this with Microsoft, Amazon, Google. Companies that made 0:12:45.440 --> 0:12:49.560 big cuts last year are doing well financially still see 0:12:49.600 --> 0:12:53.559 it in their interest to trim a couple percentage points periodically, 0:12:53.679 --> 0:12:56.079 So I expect this to be a trend to continue. 0:12:56.320 --> 0:12:59.160 The point of difference from this time last year is, yes, 0:12:59.280 --> 0:13:01.000 the size of the c but if you go on 0:13:01.080 --> 0:13:04.680 any website of those that have cut Salesforce, Microsoft, whatever, 0:13:05.000 --> 0:13:08.840 they're also hiring and where they're hiring is clear as day. 0:13:08.840 --> 0:13:12.719 Brody, Yeah, where there. I mean, it's two letterers. We've 0:13:12.720 --> 0:13:14.160 been here and every day for the last year and 0:13:14.200 --> 0:13:18.440 a half. AI Right Salesforce has told me that they're 0:13:18.480 --> 0:13:21.440 really hiring for engineering roles and for those who are 0:13:21.520 --> 0:13:24.720 going to market for their AI products. I think a 0:13:24.720 --> 0:13:28.520 lot of companies salesforce more than most, really focused on 0:13:28.600 --> 0:13:32.160 pairing back these traditional sales and marketing rules. Yeah, so 0:13:32.240 --> 0:13:34.200 now they're kind of investing in what's going to bring 0:13:34.240 --> 0:13:38.600 them further. And you know, unfortunately for some workers, it 0:13:38.679 --> 0:13:41.800 is probably cheaper to fire than hire externally than it 0:13:41.880 --> 0:13:43.680 is maybe to retrain some of your people. 0:13:44.200 --> 0:13:48.719 Goodbye marketing, Hello computers, Bloombog's Brody forward, Thank you very much. 0:13:48.760 --> 0:13:51.400 Now coming up here on Bloomberg Technology, we go back 0:13:51.440 --> 0:13:54.280 to Earning's coverage and we sit down with Intel CEO 0:13:54.480 --> 0:13:58.079 Pat Gelsinger amid the company's results that often investors a 0:13:58.200 --> 0:14:02.200 disappointing forecast in the stock down significantly as a result. 0:14:02.360 --> 0:14:09.760 That's coming up next. This is Bloomberg Technology. Welcome to 0:14:09.800 --> 0:14:14.160 our Bloomberg television and radio audiences worldwide. The focus Intel 0:14:14.400 --> 0:14:17.040 and the chip makers earnings a forecast for the current 0:14:17.080 --> 0:14:21.440 period that makes the market nervous about Pat Gelsinger's turnaround 0:14:21.520 --> 0:14:25.640 plan for Intel, some worry about its data center business 0:14:25.880 --> 0:14:28.760 and a fledgling foundry business. I'm delighted to say we 0:14:28.840 --> 0:14:33.840 are joined by Pat Gelsinger, Intel CEO. The stock is 0:14:33.880 --> 0:14:37.600 down more than ten percent. What is it that the 0:14:37.680 --> 0:14:40.880 market is not understanding here for Intel? 0:14:41.800 --> 0:14:44.160 Well, thanks, Ed, and always a pleasure to be with 0:14:44.200 --> 0:14:45.320 you and Carolyn on the show. 0:14:46.240 --> 0:14:47.800 First, we've finished a great year. 0:14:47.920 --> 0:14:51.160 At Q four, beat on top and bottom line, finishing 0:14:51.160 --> 0:14:54.720 a year that was comfortably ahead and showing the transformation 0:14:55.200 --> 0:14:56.640 journey that we're on, and. 0:14:57.040 --> 0:14:58.680 We believe we're putting points on. 0:14:58.640 --> 0:15:03.320 The board for a law term transformation of this iconic company. 0:15:03.640 --> 0:15:05.840 In light of that, Hey, the Q one, you're at 0:15:05.880 --> 0:15:08.280 the low end of seasonal, So we think the market 0:15:08.320 --> 0:15:12.240 reaction is a bit overstated in that respect. We understand it, 0:15:12.560 --> 0:15:16.480 but our company, our employees are doing an incredible job 0:15:16.760 --> 0:15:22.240 at delivering our process technology, restoring product leadership, defining new 0:15:22.320 --> 0:15:26.400 categories like the AIPC. We're on a multi year journey 0:15:26.520 --> 0:15:28.120 and we're not going to be judged on a ninety 0:15:28.200 --> 0:15:30.960 day shot clock. We are out to rebuild this company 0:15:30.960 --> 0:15:34.120 and we had a great twenty three and I'm confident 0:15:34.200 --> 0:15:35.920 in a grade twenty four for this company. 0:15:36.240 --> 0:15:38.280 Pat there were there were so many questions on the 0:15:38.320 --> 0:15:41.360 call about your foundry business, and for our global audience, 0:15:41.400 --> 0:15:44.880 that's the sort of contract manufacturing business where you make 0:15:45.000 --> 0:15:49.200 chips for others, and you seem to say that you 0:15:49.320 --> 0:15:53.200 didn't get as many committed dollars as you thought you might, 0:15:53.240 --> 0:15:55.440 and I wonder what's standing in the way of that 0:15:55.960 --> 0:15:59.760 customers committing to backing your foundry business. 0:16:00.720 --> 0:16:03.240 Yeah, and we're very comfortable with the progress. You know. 0:16:03.320 --> 0:16:05.600 We said that we'd have one on our leading edge 0:16:05.640 --> 0:16:09.120 Node eighteen A as it's called, and we delivered four 0:16:09.200 --> 0:16:11.280 for the year. We also found that there was a 0:16:11.280 --> 0:16:15.520 lot of momentum in our packaging business where we now 0:16:15.560 --> 0:16:20.320 have five major customers on our advanced packaging technology and 0:16:20.360 --> 0:16:22.920 we said, hey, we went from four billion to over 0:16:23.000 --> 0:16:24.880 ten billion of lifetime deal values. 0:16:24.920 --> 0:16:26.120 So good momentum. 0:16:26.200 --> 0:16:30.360 But most importantly is the process technology itself. Are we 0:16:30.560 --> 0:16:33.520 back to a leadership technology and we're hitting all the 0:16:33.560 --> 0:16:37.960 milestones this audacious five nodes and four year plan and 0:16:38.080 --> 0:16:40.200 all the milestones are on track to have us back 0:16:40.200 --> 0:16:43.120 to process leadership in twenty five and as I say, 0:16:43.160 --> 0:16:46.080 a foundery company, they want to know that if they 0:16:46.120 --> 0:16:48.760 design on us, they can build the best products. And 0:16:49.080 --> 0:16:53.120 we're gaining momentum in delivering on exactly that promise, and 0:16:53.160 --> 0:16:56.400 so proud of my team's for delivering on such an 0:16:56.400 --> 0:16:57.280 audacious plan. 0:16:57.400 --> 0:16:58.160 We're on track. 0:16:58.720 --> 0:17:02.520 What about track for AI accelerators not just AI on 0:17:02.560 --> 0:17:06.879 the PC, but I put it bluntly, pat and videos 0:17:06.960 --> 0:17:10.840 run away with this, when or can you regain any 0:17:10.880 --> 0:17:12.199 sort of leadership in that space? 0:17:13.240 --> 0:17:16.000 Yeah, and clearly that's been an area of strength for them. 0:17:16.200 --> 0:17:19.080 We appreciate that they've as I say, focused on that 0:17:19.160 --> 0:17:21.880 for many years and the market has come their way 0:17:21.920 --> 0:17:25.000 in a strong way. But our roadmap is gaining momentum. 0:17:25.040 --> 0:17:28.600 Goudy two, we said, we're seeing a significant expansion in 0:17:28.600 --> 0:17:30.800 the customer pipeline. 0:17:30.359 --> 0:17:30.880 That we have. 0:17:30.960 --> 0:17:33.399 We're ramping up supply, so I'll say we're chasing to 0:17:33.440 --> 0:17:36.639 have enough supply to meet marketing. We're well underway on 0:17:36.720 --> 0:17:40.359 our next generation Gouty three as it's called, with four 0:17:40.520 --> 0:17:43.040 x the compute, two x the network in the lab, 0:17:43.520 --> 0:17:49.200 gaining really really good early debug in bringing that product 0:17:49.240 --> 0:17:51.880 to market later this year. So we feel like, hey, 0:17:52.040 --> 0:17:54.199 you know, yes, we have a lot of work to 0:17:54.240 --> 0:17:57.080 do here, but the momentum is building, the market is 0:17:57.119 --> 0:18:00.159 looking for alternatives, and our roadmap is strengthening is we 0:18:00.160 --> 0:18:03.159 go through the year. But more importantly, Carolyn, is this 0:18:03.320 --> 0:18:06.720 idea that last year was the year of high end training. 0:18:07.040 --> 0:18:09.560 This year it's about how do I use those models? 0:18:09.720 --> 0:18:12.439 And that's much more about the enterprise strength. 're Intel 0:18:12.640 --> 0:18:15.760 is at the edge in the PC and in the 0:18:15.880 --> 0:18:18.600 enterprise data center. So we see the market coming our 0:18:18.640 --> 0:18:21.760 way in AI in twenty four and twenty five. 0:18:21.680 --> 0:18:23.960 And let's go to that core segment. Let's go to 0:18:24.080 --> 0:18:27.320 data centers. Because you promised that you are not losing 0:18:27.440 --> 0:18:30.240 market share there, how do you show that evidence of 0:18:30.240 --> 0:18:30.720 that path? 0:18:31.720 --> 0:18:32.360 In Q four? 0:18:32.440 --> 0:18:35.720 Our estimates are we are about flat in market share 0:18:35.720 --> 0:18:39.040 in Q four, So clearly we lost share weakness of products, 0:18:39.200 --> 0:18:42.080 but that's now being overcome. We are executing on our 0:18:42.080 --> 0:18:44.919 product roadmap and we're ahead of schedule on the products 0:18:44.960 --> 0:18:47.840 for twenty four. We're seeing great momentum for the twenty 0:18:47.880 --> 0:18:52.240 twenty four product line, good execution, and I'm very happy 0:18:52.280 --> 0:18:55.000 to say we sent our first twenty twenty five product 0:18:55.040 --> 0:18:58.360 on eighteen A already into fab ahead of schedule, so 0:18:58.480 --> 0:19:02.440 our execution momentum as building. We see that we've stabilized 0:19:02.440 --> 0:19:04.800 our market share, and now it's time for us to 0:19:04.920 --> 0:19:07.560 rebuild where we were before, and we have the products 0:19:07.880 --> 0:19:10.119 and the strength to go do it. Really proud of 0:19:10.119 --> 0:19:11.440 our team's progress here. 0:19:11.680 --> 0:19:14.679 For our Bloomberg television and radio audience worldwide, we're speaking 0:19:14.680 --> 0:19:18.040 with the Intel CEO, Pat Gelsinger, and Pat when I've 0:19:18.040 --> 0:19:20.840 been down to Santa Clara and sort of seeing the 0:19:20.880 --> 0:19:24.120 reality of Intel, it's always strikes me as being more 0:19:24.200 --> 0:19:27.800 multifaceted than say in video, right, and it's a high 0:19:27.880 --> 0:19:31.400 end performance GPU. A part of that is the packaging, 0:19:31.440 --> 0:19:35.320 A part of that is your differentiation with Foundry. But 0:19:35.400 --> 0:19:38.080 I go back to Caroline's point on the core business. 0:19:38.280 --> 0:19:40.520 What seems to be happening in the context of data 0:19:40.560 --> 0:19:44.160 center is CPU and I just wondered if you'd explained 0:19:44.200 --> 0:19:46.960 to our audience what you think is happening in that market, 0:19:47.200 --> 0:19:49.400 specifically on the CPU side. 0:19:50.359 --> 0:19:53.560 Yeah, and then the CPU last year was clearly here 0:19:53.600 --> 0:19:56.800 there was more energy on the GPU right for these 0:19:56.840 --> 0:19:59.560 high end training systems. But as we come into this year, 0:19:59.560 --> 0:20:01.480 we think there's going to be more balanced between the 0:20:01.560 --> 0:20:05.200 CPU and the accelerator marketplace. Clearly we're going to be 0:20:05.280 --> 0:20:08.399 participating more in the accelerator. But the strength of Intel 0:20:08.440 --> 0:20:12.480 has been our Xeon, the core data center CPU and 0:20:12.640 --> 0:20:16.080 you know, coming out of World Economic Form and Davos 0:20:16.119 --> 0:20:19.600 and CEES, I probably met with fifty customers and the 0:20:19.760 --> 0:20:23.119 enthusiasm that they have and the traditional strength that Intel 0:20:23.200 --> 0:20:25.960 has in the enterprise. And you know, we're in year 0:20:26.000 --> 0:20:29.919 twenty of the clouded and sixty percent of computing is 0:20:29.920 --> 0:20:33.040 in the cloud, but eighty percent of the data remains 0:20:33.280 --> 0:20:36.720 on prem in the enterprise data center. That's where Intel 0:20:36.800 --> 0:20:40.919 is uniquely strong, and our CPUs and accelerators are going 0:20:40.960 --> 0:20:43.960 to unlock that capability for our customers. This is an 0:20:44.000 --> 0:20:47.000 exciting time for us to really enable them to use 0:20:47.040 --> 0:20:50.600 those models. And that's the strength for Intel and our CPUs. 0:20:50.200 --> 0:20:53.400 Pat When I look at the cloud and the hyperscalers themselves, 0:20:54.160 --> 0:20:57.560 the really interesting story is their in house design work 0:20:57.960 --> 0:21:01.199 and they're in house silicon progress. Do you consider that 0:21:01.280 --> 0:21:05.119 a factor in how your own business in the data 0:21:05.160 --> 0:21:07.920 center and cloud side performed and how you think it 0:21:07.960 --> 0:21:09.240 will perform going forward. 0:21:10.359 --> 0:21:12.280 Yeah, And one of the things that I said at 0:21:12.320 --> 0:21:16.160 is Intel has the opportunity of a hundred percent of 0:21:16.200 --> 0:21:18.480 the AI market for it. 0:21:18.280 --> 0:21:20.320 Because we're going to have our product. 0:21:20.000 --> 0:21:24.879 Offerings Xeon is strong showing up with greater improvement in 0:21:24.920 --> 0:21:27.960 our Accelerator product line, but we're also going to be 0:21:27.960 --> 0:21:31.119 a foundry and all of those internal programs that you 0:21:31.200 --> 0:21:34.840 see at Amazon and at Google and a Microsoft. Hey, 0:21:34.920 --> 0:21:37.600 I want to be the foundry for those and all 0:21:37.640 --> 0:21:39.960 of the competitors' products. I want to be the foundry 0:21:40.000 --> 0:21:42.879 for them as well as we're seeing the momentum of 0:21:42.880 --> 0:21:45.920 our packaging technology. So when you think about it that way, 0:21:46.040 --> 0:21:49.280 Intel uniquely is the company that has the opportunity to 0:21:49.280 --> 0:21:52.600 participate in one hundred percent of the AI market with 0:21:52.680 --> 0:21:55.359 our products and our foundry, and that's exactly what we're 0:21:55.480 --> 0:21:56.600