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Speaker 1: Welcome to our Bloomberg television and radio audiences worldwide. We

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Speaker 1: are live at CES Las Vegas, and we're joined by

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Speaker 1: an executive that leads a company whose technology, frankly, touches

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Speaker 1: every single display almost that is behind us at this

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Speaker 1: two point five million net square ft exhibition, Rene Haas,

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Speaker 1: ARM CEO. Look, I still have some difficulty in explaining

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Speaker 1: to people what ARM does with respect. And this is

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Speaker 1: an interesting example because if you take many of the

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Speaker 1: TV displays that are on display here other consumer electronics,

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Speaker 1: ARM has helped design the semiconductors that are inside them.

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Speaker 2: Is that accurate?

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Speaker 3: I think so.

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Speaker 4: If you think about all these devices becoming smart devices,

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Speaker 4: whether it's a smart rumba smart washer and dryer, smart TV,

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Speaker 4: they all need a brain inside that helps them learn

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Speaker 4: what to do. That brain inside is ARM. So we

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Speaker 4: were just chatting earlier about it, Well, where is ARM

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Speaker 4: inside the show floor?

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Speaker 3: Those four examples.

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Speaker 4: I just gave you a couple washer, a dryer, digital televis,

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Speaker 4: and a roomba. I can assure you each one of

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Speaker 4: those devices, ARM is the brain that makes those go.

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Speaker 1: The common connection between everything here is AI. Whether you're

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Speaker 1: an automotive company, consumer electronics, even a beauty and healthcare company.

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Speaker 1: ARM wants to be a part of the AI story,

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Speaker 1: So let's start with that.

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Speaker 2: You know, the.

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Speaker 1: Story of twenty twenty three was the H one hundred,

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Speaker 1: a GPU that goes into a server design. The server

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Speaker 1: design goes into a data center. ARMS not quite fully

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Speaker 1: in that market yet, but it wants to be.

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Speaker 2: So give us a scorecard, and where your progress has been.

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Speaker 4: I think you have to step back and say, well,

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Speaker 4: what is AI and where is AI going. AI has

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Speaker 4: been with us today already to some level, for example, Amazon, Alexa,

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Speaker 4: Google Assistant, Ring Camera, Nest camera, things that do facial

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Speaker 4: recognition for example, in those cameras, that's AI and that's

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Speaker 4: running on ARM today. So to some level, we've already

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Speaker 4: been there. Now what's happened with CHET, GPT and these

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Speaker 4: large language models has been this next level step up

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Speaker 4: of really a level of learning and AI we've not

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Speaker 4: seen before. So a lot of that work today is

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Speaker 4: taking place in the cloud with training. And you mentioned

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Speaker 4: H one hundred. In Vidia's next generation device, the GH

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Speaker 4: two hundred is Grace Hopper. Grace is the CPU all

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Speaker 4: ARM based, Hopper is the GPU.

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Speaker 3: So even in the most advanced training workloads. You're seeing

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Speaker 3: ARM being used on device.

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Speaker 1: Cristiano am On Ofquowcom was here earlier in that seat.

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Speaker 1: We need to talk about on device. What benefit does

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Speaker 1: ARM feel from a consumer that's willing to buy a

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Speaker 1: smartphone in particular where they can locally run a large

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Speaker 1: language model or a gender to a tool powered by ITS.

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Speaker 4: I think it's still early days in terms of what

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Speaker 4: are the applications that are going to be really killer

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Speaker 4: for the smartphones. The hardware is enabled now, so you

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Speaker 4: have capability now inside the smartphone that can run these

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Speaker 4: AI algorithms. But for example, two areas that people really

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Speaker 4: care about are latency and privacy. So if you're running

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Speaker 4: some chat GPT or personal assistants such as PI by

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Speaker 4: a company called Inflection AI, every query that you enter

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Speaker 4: on your smartphone goes up into the cloud. So people

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Speaker 4: who care a lot about security of their data are

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Speaker 4: going to want to have those AI algorithms running locally

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Speaker 4: and not the least of which they'll run faster because

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Speaker 4: they're running inside your hand.

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Speaker 1: We're trying to assess what the smartphone mark is going

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Speaker 1: to look like in twenty twenty four.

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Speaker 2: It's still the main stay of your business.

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Speaker 1: But it goes to a sort of functionality level. What

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Speaker 1: do you think it is that we can put into

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Speaker 1: a smartphone or enable a smartphone to do that drives

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Speaker 1: an upgrade cycle and brings consumer enthusiasm.

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Speaker 4: I think one thing that we've seen in this last cycle,

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Speaker 4: which I think hopefully we're on the bottom of it

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Speaker 4: is now we're starting to come out of it, is

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Speaker 4: that the premium smartphones, the most expensive smartphones, have actually

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Speaker 4: done very very well. And that's because people are trying

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Speaker 4: to future proof technology and their purchases to make sure

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Speaker 4: they last a long time before the upgrade. As I said,

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Speaker 4: it's still early days on what are these devices are

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Speaker 4: really going to do in terms of running the applications.

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Speaker 4: But I think security, and I think latens and power

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Speaker 4: efficiency when you're running those algorithms are very key.

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Speaker 3: Those are three are areas that ARM is really good at.

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Speaker 1: For our Bloomberg television and radio audience worldwide. Were sat

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Speaker 1: here with ARM CEO Rene has at CS to in

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Speaker 1: some sense, it's like speed dating. Be here, right, all

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Speaker 1: of your customers and partners are here in one place.

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Speaker 2: What is it that they're wanting to talk to you about?

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Speaker 2: Right now while they've got the time with you.

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Speaker 4: Yeah, one hundred and fifty thousand plus. I'm not sure

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Speaker 4: what the exact number is. It's a huge, huge audience.

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Speaker 4: ARM is a unique player ed in that we are

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Speaker 4: in so many different ecosystems. We're in the PC ecosystem,

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Speaker 4: the automotive ecosystem, digital TV ecosystem, semiconductor ecosystem. It's one

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Speaker 4: place where everyone comes and goes, and it's a great

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Speaker 4: meeting to essentially align with what are the targets for

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Speaker 4: the year, what do we see happening now? I was

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Speaker 4: mentioning to a colleague earlier. We spend a lot of

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Speaker 4: time candidly worrying about what's going to be at CES

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Speaker 4: twenty twenty six of CES twenty twenty seven, and we're

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Speaker 4: having those discussions now with partners about what are those

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Speaker 4: enabling technologies. So, believe it or not, you'd be surprised

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Speaker 4: most of these meetings are not about what's going to

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Speaker 4: come out in six months, but about what's going to

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Speaker 4: come out three or four years.

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Speaker 1: One thing that has surprised me about ARM is my

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Speaker 1: old stumping ground, the automotive sector. You are deeper in

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Speaker 1: that than I think perhaps people realize how is that

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Speaker 1: business going and where do you Does ARM touch the

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Speaker 1: ulsomosive sector.

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Speaker 4: So the way to think of an automobile now is

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Speaker 4: essentially a high class computer, whether it's the digital cockpit

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Speaker 4: or anything around automated driving. All of that requires an

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Speaker 4: incredibly high software load. It requires a broad ecosystem again,

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Speaker 4: all things that ARM is very very good at. So

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Speaker 4: when you look around the show floor here and you

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Speaker 4: see chips from Nvidia, or chips from Qualcom, or chips

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Speaker 4: from media Tech or NXP or a Nassauce all in

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Speaker 4: the Mercedes and Audi's and BMW's, all of that runs

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Speaker 4: on ARM. I will assure you every single vehicle on

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Speaker 4: the show floor here at the show has ARM in size.

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Speaker 4: So you win in any event.

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Speaker 3: One way to look at it.

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Speaker 4: But we've done a lot of work over the years

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Speaker 4: relative the software ecosystem. I think to really put us

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Speaker 4: in a place where fundamentally it's the right choice for

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Speaker 4: consumers and designers.

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Speaker 1: I want to go back to the next goal, which

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Speaker 1: is that higher value server market.

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Speaker 2: Do you see a road where you have.

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Speaker 1: A clear picture of the percentage of that market that

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Speaker 1: you can touch compared to where you are now.

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Speaker 3: You know, we've been at this for a long time.

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Speaker 4: We started the server effort, believe it or not, in

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Speaker 4: twenty ten, and now here in twenty twenty three, we're

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Speaker 4: really starting to see significant market share. We're now in

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Speaker 4: double digits, and for me, double digit market share starts

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Speaker 4: to mean you've made a meaningful footprint. AWS, one of

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Speaker 4: our great partners announced Graviton four, fourth generation of ARM.

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Speaker 4: Microsoft just announced their own ship called Cobalt. We have

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Speaker 4: a lot of other great announcements coming up with other hyperscalers,

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Speaker 4: and one of our partners, Ampeer, of course, has chipped

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Speaker 4: with ARM, and of course I've mentioned them again.

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Speaker 3: Thank you. Nvidia.

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Speaker 4: Grace Hopper, the most advanced training chip on the planet,

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Speaker 4: uses ARM.

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Speaker 1: In your most recent earnings, some investors, I think we're

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Speaker 1: a little confused about what's happening right now in the

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Speaker 1: current period and what you said would happen for the

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Speaker 1: course of the year. What do you think it is

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Speaker 1: that those investors misunderstood?

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Speaker 4: You know, we're in a quiet period, So there's that

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Speaker 4: much I can really say about where we are in

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Speaker 4: the earning standpoint. But as I said, most of my

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Speaker 4: focus ed is on three or four years from now,

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Speaker 4: and I'm incredibly bullish about where arm is going. I

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Speaker 4: think you just have to look at the show floor

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Speaker 4: again and then layer AI on top of it and

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Speaker 4: you see where armis has an amazing opportunity going forward.

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Speaker 3: So I'm really excited about our future.

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Speaker 2: Rene Hassam, CEOs