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Speaker 1: I'm delighted to say we are joined by Pat Gelsing

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Speaker 1: at Intel CEO. Pat, the stock is down more than

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Speaker 1: ten percent. What is it that the market is not

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Speaker 1: understanding here for Intel?

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Speaker 2: Well, thanks, Ed, and always a pleasure to be with

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Speaker 2: you and Carolyn on the show.

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Speaker 3: First, we finished a great year.

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Speaker 2: At Q four, beat on top and bottom line, finishing

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Speaker 2: a year that was comfortably ahead and showing the transformation

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Speaker 2: journey that we're on, and we believe we're putting points

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Speaker 2: on the board for a long term transformation of this

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Speaker 2: iconic company.

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Speaker 3: In light of that, Hey, the Q one you know,

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Speaker 3: at the low end of seasonal.

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Speaker 2: So we think the market reaction is a bit overstated

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Speaker 2: in that respect. We understand it, but our company, our

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Speaker 2: employees are doing an incredible job at delivering our process technology,

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Speaker 2: restoring product leadership, defining new categories like the AIPC. We're

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Speaker 2: on a multi year journey and we're not going to

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Speaker 2: be judged on ninety day shot clock. We are out

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Speaker 2: to rebuild this company and we had a great twenty

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Speaker 2: three and I'm confident in a Grade twenty four for

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Speaker 2: this company.

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Speaker 1: Pat, there were there were so many questions on the

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Speaker 1: call about your foundry business and for our global audience,

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Speaker 1: that's the sort of contract manufacturing business where you make

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Speaker 1: chips for others. And you seem to say that you

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Speaker 1: didn't get as many committed dollars as you thought you might,

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Speaker 1: and I wonder what's standing in the way of that

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Speaker 1: customers committing to backing your foundry business.

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Speaker 2: Yeah, and we're very comfortable with the progress. You know,

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Speaker 2: we said that we'd have one on our leading edge

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Speaker 2: node eighteen A as it's called, and we delivered four

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Speaker 2: for the year. We also found that there was a

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Speaker 2: lot of momentum in our packaging business where we now

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Speaker 2: have five major customers on our advanced packaging technology and

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Speaker 2: we said, hey, we went from four billion to over

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Speaker 2: ten billion of lifetime deal values.

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Speaker 3: So good momentum.

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Speaker 2: But most importantly is the process technology itself. Are we

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Speaker 2: back to a leadership technology and we're hitting all the

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Speaker 2: milestones this audacious five nodes and four year plan and

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Speaker 2: all of the milestones are on track to have us

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Speaker 2: back to process leadership in twenty five. And as I say,

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Speaker 2: a foundery company, they want to know that if they

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Speaker 2: design on us, they can build the best products. And

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Speaker 2: we're gaining momentum in delivering on exactly that promise, and

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Speaker 2: so proud of my team's for delivering on such an

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Speaker 2: audacious plan.

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Speaker 3: We're on track.

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Speaker 4: What about track for AI accelerators, not just AI on

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Speaker 4: the PC, but I put it bluntly, pat and videos

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Speaker 4: run away with this, when or can you regain any

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Speaker 4: sort of leadership in that space?

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Speaker 2: Yeah, and clearly that's been an area of strength for them.

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Speaker 2: We appreciate that they've, as I say, focused on that

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Speaker 2: for many years and the market has come their way

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Speaker 2: in a strong way.

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Speaker 3: But our roadmap is gaining momentum.

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Speaker 2: Gouty two we said, we're seeing a significan an expansion

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Speaker 2: in the customer pipeline that we have. We're ramping up supply,

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Speaker 2: so I'll say we're chasing to have enough supply to

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Speaker 2: meet marketing. We're well underway on our next generation Gouty

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Speaker 2: three as it's called, with four x the compute, two

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Speaker 2: x the network in the lab, gaining really really good

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Speaker 2: early debug in bringing that product to market later this year.

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Speaker 2: So we feel like, hey, you know, yes, we have

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Speaker 2: a lot of work to do here, but the momentum

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Speaker 2: is building. The market is looking for alternatives and our

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Speaker 2: roadmap is strengthening.

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Speaker 3: As we go through the year.

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Speaker 2: But more importantly, Carolyn, is this idea that last year

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Speaker 2: was the year of high end training. This year it's

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Speaker 2: about how do I use those models? And that's much

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Speaker 2: more about the enterprise strengthener. Intel is at the edge

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Speaker 2: in the PC and in the enterprise data center. So

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Speaker 2: we see the market coming our way in AI in

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Speaker 2: twenty four and twenty five.

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Speaker 4: And let's go to that core segment. Let's go to

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Speaker 4: data centers. Because you promised that you are not losing

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Speaker 4: market share there, how do you show that evidence of

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Speaker 4: that path?

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Speaker 3: In Q four?

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Speaker 2: Our estimates are we are about flapped in market share

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Speaker 2: in Q four, So clearly we lost share weakness of products,

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Speaker 2: but that's now being overcome. We are executing on our

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Speaker 2: product roadmap, and we're ahead of schedule on the products

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Speaker 2: for twenty four. We're seeing great momentum for the twenty

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Speaker 2: twenty four product line, good execution, and I'm very happy

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Speaker 2: to say we sent our first twenty twenty five product

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Speaker 2: on eighteen A already into FAY. I'm ahead of schedule,

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Speaker 2: so our execution momentum is building. We see that we've

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Speaker 2: stabilized our market share, and now it's time for us

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Speaker 2: to rebuild where we were before, and we have the

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Speaker 2: products and the strength to go do it. Really proud

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Speaker 2: of our team's progress here.

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Speaker 1: For a Bloombag television and radio audience worldwide. We're speaking

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Speaker 1: with the Intel CEO, Pat Gelsinger, and Pat when I've

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Speaker 1: been down to Santa Clara and sort of seeing the

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Speaker 1: reality of Intel, it's always strikes me as being more

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Speaker 1: multifaceted than say in video right, and it's high and

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Speaker 1: performance GPU. A part of that is the packaging, A

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Speaker 1: part of that is your differentiation with Foundry. But I

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Speaker 1: go back to Caroline's point on the core business. What

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Speaker 1: seems to be happening in the context of data center

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Speaker 1: is CPU and I just wondered if you'd explained to

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Speaker 1: our audience what you think is happening in that market

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Speaker 1: specifically on the CPU side.

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Speaker 2: Yeah, and then the CPU last year was clearly here

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Speaker 2: there was more energy on the GPU right for these

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Speaker 2: high end training systems.

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Speaker 3: But as we come into this year, we think there's

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Speaker 3: going to be more.

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Speaker 2: Balance between the CPU and the accelerator marketplace. Clearly we're

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Speaker 2: going to be participating more in the accelerator but the

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Speaker 2: strength of Intel has been our Xeon, the core data

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Speaker 2: center CPU. And you know, coming out of World Economic

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Speaker 2: Forum and Davos and CES, I probably met with fifty

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Speaker 2: customers and the enthusiasm that they have and the traditional

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Speaker 2: strength that Intel has in the enterprise. And you know,

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Speaker 2: we're in year twenty of the cloud and sixty percent

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Speaker 2: of computing is in the cloud, but eighty percent of

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Speaker 2: the data remains on prem in the enterprise data center.

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Speaker 2: That's where Intel is uniquely strong, and our CPUs and

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Speaker 2: accelerators are going to unlock that capability for our customers.

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Speaker 2: This is an exciting time for us to really enable

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Speaker 2: them to use those models. And that's the strength for

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Speaker 2: Intel and our CPUs.

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Speaker 1: Pat When I look at the cloud and the hyperscalers themselves,

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Speaker 1: the really interesting story is their in house design work

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Speaker 1: and their in house silicon progress. Do you consider that

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Speaker 1: a factor in how your own business in the data

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Speaker 1: center and cloud side performed and how you think it

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Speaker 1: will perform going forward.

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Speaker 3: Yeah.

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Speaker 2: And one of the things that I said, Ed is

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Speaker 2: Intel has the opportunity of one hundred percent of the

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Speaker 2: AI market for it because we're going to have our

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Speaker 2: product offerings Zion is strong showing up with greater improvement

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Speaker 2: in our Accelerator product line. But we're also going to

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Speaker 2: to be a foundry and all of those internal programs

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Speaker 2: that you see at Amazon and at Google and a Microsoft. Hey,

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Speaker 2: I want to be the foundry for those and all

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Speaker 2: of the competitors' products. I want to be the foundry

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Speaker 2: for them as well as we're seeing the momentum of

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Speaker 2: our packaging technology.

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Speaker 3: So when you think.

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Speaker 2: About it that way, Intel uniquely is the company that

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Speaker 2: has the opportunity.

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Speaker 3: To participate in one hundred percent.

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Speaker 2: Of the AI market with our products and our foundry,

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Speaker 2: and that's exactly what we're intent upon doing.

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Speaker 4: Has any of the weakness in demand thus far been

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Speaker 4: because of this in house design and build commitment from

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Speaker 4: some of these companies, or have you already managed to

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Speaker 4: sort of seal verbal approval that you'll be doing these

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Speaker 4: for them from a foundry business at.

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Speaker 2: This point, I'd say it's pretty early. I don't think

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Speaker 2: it's really affected the market that much, Carolyn, so far.

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Speaker 2: But I do think this forward looking view is a

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Speaker 2: unique one for Intel that we do get to participate

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Speaker 2: in both sides.

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Speaker 3: Of that market.

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Speaker 2: There's a lot of energy here as the cloud vendors

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Speaker 2: are saying, how do I have a more cost effective

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Speaker 2: solution for these large training and inferencing demands of generative AI?

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Speaker 3: And for that, every one of them has these projects.

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Speaker 2: Underway and we're engaging with all of them as we speak.

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Speaker 2: So I really see that as a long term opportunity.

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Speaker 2: Takes multiple years for those to materialize. What our technologies

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Speaker 2: as they gain momentum are showing up at just the

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Speaker 2: right time to satisfy a unique AI market for those

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Speaker 2: cloud vendors.

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Speaker 4: And we've just been hearing how within this change that

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Speaker 4: we see around AI, so comes a change in talent.

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Speaker 4: And many of these companies. Are you in any way

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Speaker 4: having to reorientate your own workers, your own colleagues, Pat,

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Speaker 4: are you having to let go of people?

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Speaker 2: Well, every day it's focused on talent and in the

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Speaker 2: technology industry, Carolyn talent right, as one of our CFOs

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Speaker 2: used to say, he said, we start with sayd right,

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Speaker 2: the second most into full material on Earth, and everything

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Speaker 2: else is talent between then and delivering our products and technology.

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Speaker 2: So this idea of talent is so critical to our markets.

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Speaker 3: Now.

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Speaker 2: Intel has a well tenured and very capable based in

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Speaker 2: both software and in hardware, but we're reorienting them very

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Speaker 2: fast to the AI requirements, to data skills, to software skills.

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Speaker 2: What we build on a very firm foundation, and we're

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Speaker 2: making good moves to bring additional talent into the company

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Speaker 2: as well to continue to have the best people to

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Speaker 2: do the best products to enable the best customer experience

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Speaker 2: that they could possibly have. And a great example of

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Speaker 2: that is the AIPC, where we're unquestionably defining the category,

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Speaker 2: have a strong roadmap and delivering on it at scale

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Speaker 2: with ISVs and our OEMs in the marketplace today.

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Speaker 1: Pat, before we let you go, you mentioned eighteen A.

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Speaker 1: You in the past have been kind and explained to

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Speaker 1: me what it takes to jump generation to generation on

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Speaker 1: the manufacturing side and kind of the process to retain

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Speaker 1: and regain technology leadership. So in the time small time

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Speaker 1: we have left, what evidence do you have that that

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Speaker 1: beautiful chart you drew from me on the whiteboard is

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Speaker 1: playing out the way that you expected to.

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Speaker 2: Well, we delivered the design collateral, it's called a PDK

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Speaker 2: and Q four of last year. We've seen our customers

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Speaker 2: expand against that, and most importantly, we sent our first

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Speaker 2: major product into the fab just before Earning's call started

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Speaker 2: ahead of schedule.

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Speaker 3: And if you could take.

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Speaker 2: A big processor design like a server chip and send

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Speaker 2: it with stable design rules into manufacturing, that's a pretty

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Speaker 2: definitive statement of momentum. And we're adding customers and we

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Speaker 2: have seventy five test chips in the plan right now,

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Speaker 2: so lots of customers are saying, let me try my design.

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Speaker 2: And importantly, we have our founder Day, this opening of

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Speaker 2: the doors of Intel Foundry coming up in February, so

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Speaker 2: a moment for the ecosystem, the EDA partners, the IP providers,

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Speaker 2: and our customers to show up and see the progress

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Speaker 2: that we're making. And for the first time we'll talk

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Speaker 2: about what comes after eighteen A.

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Speaker 3: You know, we're not finished. You know the Moore's law.

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Speaker 2: We are the stewards until the periodic table is exhausted.

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Speaker 2: We ain't finished, and we're confident we're the company that's

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Speaker 2: going to keep innovating in process technology for decades to come.

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Speaker 3: Moore's Law.

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Speaker 1: Indeed, Intel CEO Pat Gelsinger, thank you