WEBVTT - Tech Earnings in Focus: Intel and Amazon 0:00:01.440 --> 0:00:06.720 From Marhard where Innovation, Money and power Collie in Silicon Valley, NBN. 0:00:07.040 --> 0:00:11.080 This is Bloomberg Technology with Caroline Hyde and Ed loved Love. 0:00:24.920 --> 0:00:27.880 I'm Kroene Heindeer Bloomberg's world headquarters in New York, and 0:00:28.000 --> 0:00:29.440 I'm Med Lovelow in San Francisco. 0:00:29.640 --> 0:00:31.680 This is Bloomberg Technology. 0:00:31.280 --> 0:00:32.400 Coming up Intel. 0:00:32.600 --> 0:00:36.080 The shares they pop as the company's turnaround effort gains momentum. 0:00:36.440 --> 0:00:38.680 We'll discuss with the CEO, Pat Gelsinger. 0:00:39.520 --> 0:00:42.560 Plus we'll continue with the earnings coverage. Is Amazon's results 0:00:42.600 --> 0:00:45.000 show a boost in its cloud computing unit, We'll break 0:00:45.040 --> 0:00:45.760 down those numbers. 0:00:46.080 --> 0:00:48.320 And one year on since Elon must truck over, the 0:00:48.400 --> 0:00:51.600 company formerly known as Twitter and the Billionaire announces plans 0:00:51.640 --> 0:00:54.200 to take on the likes of YouTube, LinkedIn and push 0:00:54.280 --> 0:00:57.319 into payments more. We'll discuss that and so much more 0:00:57.360 --> 0:00:59.040 throughout the hour, but first has. 0:00:59.040 --> 0:01:01.120 Check in and what is a to finish up the week. 0:01:01.440 --> 0:01:04.639 It's notable, though, we're seeing a rally across stocks and bonds, 0:01:04.720 --> 0:01:06.480 which are usually at odds. And that's even as we 0:01:06.520 --> 0:01:09.840 see those inflationary pressures build. From a macro perspective, Certainly, 0:01:09.920 --> 0:01:13.240 consumers anticipated to see more inflation, so says Umiss, the 0:01:13.680 --> 0:01:16.920 University of Michigan numbers and indeed that all important PC 0:01:17.160 --> 0:01:19.800 number coming in strong. So we do though see tech 0:01:19.920 --> 0:01:21.560 on top. Is that all to do with earnings? We'll 0:01:21.600 --> 0:01:23.480 to get into it with you. Ed Nasdaq at one 0:01:23.520 --> 0:01:25.759 point two percent, but still down on the week. I'm 0:01:25.800 --> 0:01:27.400 looking at the two year yield just pulling in on 0:01:27.440 --> 0:01:28.960 the longer round, it's pulling in a little bit more. 0:01:29.160 --> 0:01:31.160 We're flat, but we're still above that five percent level. 0:01:31.240 --> 0:01:33.480 But is there like a risk aversion as we head 0:01:33.520 --> 0:01:36.240 towards the week and amid of course ongoing geo political concerns, 0:01:36.280 --> 0:01:38.920 particularly with the Middle East, Bloomberg Dollar Index is actually 0:01:38.959 --> 0:01:41.600 off by a quarter of percent despite that inflation gauge. 0:01:41.880 --> 0:01:43.800 Let's have a little look at what's happening in terms 0:01:43.800 --> 0:01:45.520 of the world a bitcoin, because over the last five 0:01:45.600 --> 0:01:47.920 days it has been on a tear. We're up some 0:01:48.080 --> 0:01:51.960 fourteen percent. Is this desire for haven Probably not. This 0:01:52.120 --> 0:01:55.160 is still more a focus, a hope, a prayer, a 0:01:55.240 --> 0:01:57.840 reality ed that maybe an ETF and spot bit coin 0:01:57.920 --> 0:01:58.440 is coming soon. 0:01:59.360 --> 0:02:01.279 Yeah, it's kind of like a broad risk on sentiment. 0:02:01.360 --> 0:02:03.720 And you talked about tech being on top and earnings 0:02:03.880 --> 0:02:06.000 is kind of the driver of that. Intel gave a 0:02:06.080 --> 0:02:08.359 sales forecast for the current period that at the top 0:02:08.440 --> 0:02:11.480 end of the range was way above street expectations, and 0:02:11.560 --> 0:02:13.840 the story that they're trying to tell is that the 0:02:13.919 --> 0:02:17.000 PC market is bottomed out. PC chips are their biggest 0:02:17.480 --> 0:02:20.160 sort of volume sales, and that's been important. We will 0:02:20.240 --> 0:02:22.639 speak to Pat Gelsinger later in the show. One point 0:02:22.680 --> 0:02:25.320 in the session where I'm pointing to over there, biggest 0:02:25.400 --> 0:02:27.520 jump on the stock since January of twenty twenty one. 0:02:27.560 --> 0:02:30.239 But it's also the third straight quarter where investors have 0:02:30.320 --> 0:02:32.400 looked at the story of Intel and said, yeah, we 0:02:32.639 --> 0:02:35.200 like it. We believe you that the turnaround's happening. That's 0:02:35.240 --> 0:02:37.560 what we're going to discuss. The other big, big name 0:02:37.800 --> 0:02:40.639 is Amazon, and with Amazon right now, we've paired some 0:02:40.760 --> 0:02:43.520 of the sessions gains. We were up a little more 0:02:43.600 --> 0:02:46.840 than that, but we're still up significantly. The story was 0:02:46.919 --> 0:02:50.400 actually beats across the board apart from aws in the 0:02:50.480 --> 0:02:53.600 top line relative to expectations, but if you look at 0:02:53.639 --> 0:02:56.360 the bottom line, the cloud unit brought in almost one 0:02:56.400 --> 0:02:59.200 point five billion dollars of operating and come more than 0:02:59.200 --> 0:03:01.840 the street was expect they've added customers in the quarter, 0:03:02.160 --> 0:03:04.480 and generative AI is what's going to be the driver 0:03:04.600 --> 0:03:07.280 of growth for AWS, the cash cow of Amazon's business 0:03:07.560 --> 0:03:08.240 for years to come. 0:03:08.320 --> 0:03:10.560 That's the story that Andy Jasse wanted to tell. 0:03:10.760 --> 0:03:13.680 Let's get more with Bloomberg's Poonam goil Bloomberg Intelligence. 0:03:14.400 --> 0:03:16.880 That's the story. But what did the numbers tell you? Poonam? 0:03:20.800 --> 0:03:23.239 The numbers actually looked really good. 0:03:24.680 --> 0:03:27.560 From a results perspective. Three Q was strong both for 0:03:27.639 --> 0:03:30.280 AWS in our mind, the twelve percent game was in 0:03:30.400 --> 0:03:33.320 line with last quarter, and the retail business did much 0:03:33.360 --> 0:03:36.200 better than expected, which bodes well going into the all 0:03:36.240 --> 0:03:37.960 important holiday season coming up. 0:03:39.160 --> 0:03:41.520 So consumer looking more resilient. 0:03:42.080 --> 0:03:44.160 What was it that Andy Jasse was able to get 0:03:44.200 --> 0:03:47.160 across on the cool poonam that really studded nerves around 0:03:47.200 --> 0:03:48.920 AWS and cloud in particular. 0:03:51.200 --> 0:03:54.960 I think for EWUS, you know, the real important thing 0:03:55.080 --> 0:03:57.280 was his tone and the fact that he said the 0:03:57.360 --> 0:04:01.040 deal books were good and that things weren't any further 0:04:01.280 --> 0:04:04.240 So it's like the trend is kind of just continuing 0:04:04.360 --> 0:04:07.440 to stabilize, which was very encouraging, and it was in 0:04:07.680 --> 0:04:10.680 contrast to what we heard from the other tech companies 0:04:10.680 --> 0:04:13.840 are cloud providers earlier so I think that really was 0:04:13.920 --> 0:04:16.720 what took the stock up during the call, and I 0:04:16.800 --> 0:04:19.200 think that's what you're seeing today, just the confidence and 0:04:19.279 --> 0:04:22.160 the cloud business near term and of course for the 0:04:22.279 --> 0:04:25.520 longer term. We remain very optimistic on the cloud business, 0:04:25.839 --> 0:04:27.960 both on the margin side and the top line. 0:04:29.200 --> 0:04:32.680 All right, Pounam Goyle of Bloomberg Intelligence, thank you very much, Caroline. 0:04:33.200 --> 0:04:35.920 Some news crossing the Bloomberg terminal that I've broken with 0:04:36.080 --> 0:04:39.200 colleagues around the world in the last few minutes. ASC, 0:04:39.920 --> 0:04:43.440 which is a Japanese battery maker, has just closed a 0:04:43.520 --> 0:04:48.640 one billion dollar Series B led by GIC, Singapore's wealth fund. 0:04:49.160 --> 0:04:50.440 But what I'm hearing from. 0:04:50.400 --> 0:04:53.520 Sources is that they're also working already on a Series 0:04:53.680 --> 0:04:56.840 C with their bankers and advisors that would value them 0:04:56.880 --> 0:04:59.200 in the billions of dollars. This is a battery company 0:04:59.520 --> 0:05:01.960 that makes the seals that go into evs. It has 0:05:02.080 --> 0:05:04.440 deals with the likes of BMW and Mercedes here in 0:05:04.480 --> 0:05:08.240 the US, some of the automakers in the UK. But 0:05:08.320 --> 0:05:11.120 here's the next step that sources tell us they're looking 0:05:11.120 --> 0:05:13.719 at a USIPO down the line as well. 0:05:14.080 --> 0:05:14.800 And it's interesting. 0:05:14.880 --> 0:05:18.080 It started life as a JV between Nissan and NEC 0:05:18.320 --> 0:05:20.800 back in two thousand and seven. But in twenty eighteen, 0:05:20.920 --> 0:05:25.680 a Chinese energy technology company called Envision bought a controlling 0:05:25.839 --> 0:05:29.960 steak and Jang Lai, who is the founder CEO of Envision, 0:05:30.440 --> 0:05:32.520 is also the chairman of ASC. So a lot of 0:05:32.760 --> 0:05:37.120 questions from investors and insiders about how that ownership and 0:05:37.200 --> 0:05:40.680 the Chinese relationships perceived, especially in the context of the IRA. 0:05:41.040 --> 0:05:42.760 Check that story out on Bloomberg dot com. 0:05:43.120 --> 0:05:45.479 Yeah, a great big school coming from ued. I don't 0:05:45.480 --> 0:05:47.640 know where you find the time. Meanwhile, someone else is 0:05:47.680 --> 0:05:49.920 busy at the moment, and it's one Sam mag Munfried. 0:05:50.040 --> 0:05:52.640 He has taken a stand again today in the FDx 0:05:52.680 --> 0:05:55.320 flaud trial, now this time in front of a jury. Yesterday, 0:05:55.360 --> 0:05:58.880 of course we understood that there was a focus where 0:05:59.040 --> 0:06:02.000 the judges being allowed, in particular for sanbackmcfree to testify 0:06:02.080 --> 0:06:05.680 on ftx' data retention before this jury. At the moment, 0:06:06.160 --> 0:06:08.800 he is currently discussing really the terms of service that 0:06:08.839 --> 0:06:11.640 were created, he says back in May of twenty twenty 0:06:11.720 --> 0:06:14.760 two documents currently being displayed on the monitor. Actually in 0:06:15.000 --> 0:06:17.120 that particular court, he said he skimmed over a few 0:06:17.160 --> 0:06:19.920 times overall, and that he went through parts of it 0:06:20.000 --> 0:06:22.640 in more detail when they were released, But his understanding 0:06:23.040 --> 0:06:25.080 was that this was referring to two different features on 0:06:25.160 --> 0:06:28.080 the platform, first look coordation of user accounts, and second 0:06:28.160 --> 0:06:32.120 clawbacks or socializing losses Bagmenfred is talking about. This is 0:06:32.200 --> 0:06:37.920 basically all about explaining how maybe funds were used, particularly 0:06:37.960 --> 0:06:40.560 when it comes in between Alameda Research, the Hedge Fund, 0:06:40.920 --> 0:06:41.760 and FTX. 0:06:42.720 --> 0:06:44.920 Part of what he was trying to explain was kind 0:06:44.960 --> 0:06:47.320 of the role that FTX lawyers had in the lead 0:06:47.400 --> 0:06:49.400 up to the collapse, that, you know, just drawing on 0:06:49.480 --> 0:06:52.360 my own experience. As a parallel, I covered Trevor Milton, 0:06:52.400 --> 0:06:55.880 the Nikola founder's trial on securities fraud, and I raised 0:06:55.920 --> 0:06:59.520 that because Milton chose not to testify or his lawyer's 0:06:59.520 --> 0:07:02.120 advice not to, it's highly unusual. 0:07:02.240 --> 0:07:03.680 Not only the SBF is. 0:07:03.720 --> 0:07:07.480 Testifying, but he's actually going to do so twice and 0:07:07.600 --> 0:07:09.040 put it all on the line on the stand. 0:07:09.120 --> 0:07:10.679 So we'll continue to cover that one character. 0:07:10.720 --> 0:07:13.960 And of course no cameras inside the courtroom. That's why 0:07:13.960 --> 0:07:15.840 I was thinking so much drawing of all of this. 0:07:16.080 --> 0:07:18.240 But what's notable is we have got our reporters on 0:07:18.320 --> 0:07:20.640 the ground. We are getting a tea live blog chee 0:07:20.720 --> 0:07:22.480 throughout so go. Of course, that's one of the most 0:07:22.520 --> 0:07:25.240 red stories on the Bloomberg terminal today Tea live if 0:07:25.240 --> 0:07:27.600 you're lucky enough to have a Bloomberg. But overall, the 0:07:27.640 --> 0:07:29.800 blow by blow blogging account of really what's going on 0:07:29.920 --> 0:07:30.640 within that trial. 0:07:32.800 --> 0:07:36.480 Welcome to our Bloomberg TV and radio audiences worldwide. Shares 0:07:36.480 --> 0:07:39.360 of Intel popping today as the chip maker predicted a 0:07:39.480 --> 0:07:42.360 return to sales growth in the fourth quarter, fueled by 0:07:42.360 --> 0:07:45.280 a rebound in the personal computer market but also a 0:07:45.360 --> 0:07:49.440 more competitive product lineup. Joining us now is Intel CEO 0:07:49.560 --> 0:07:52.200 Pat Gelsinger. And look, Pat, there was quite a long 0:07:52.280 --> 0:07:54.960 list of things that investors cheered, right. This is the 0:07:55.080 --> 0:07:58.600 third quarter where the market's basically said, Pat, we believe 0:07:58.680 --> 0:08:03.240 you on the turnaround story, on your to do list, 0:08:03.640 --> 0:08:05.240 where do you think you are and what do you 0:08:05.280 --> 0:08:08.040 think you have left to do on that turnaround story? 0:08:08.960 --> 0:08:09.160 Yeah? 0:08:09.280 --> 0:08:11.360 Thanks Ed, And you know, overall, hey, it was a 0:08:11.440 --> 0:08:14.559 great as we say, just a clean beat and raise 0:08:15.080 --> 0:08:18.120 on all the financial metrics, but even more important was 0:08:18.200 --> 0:08:21.160 the operational performance. And you know, as we said, hey, 0:08:21.240 --> 0:08:25.520 getting back to process leadership, and we delivered key milestones 0:08:25.560 --> 0:08:27.480 and we still have at least another year or two 0:08:27.560 --> 0:08:31.320 to go on getting that done, but major milestones starting 0:08:31.360 --> 0:08:33.040 to deliver foundry customers. 0:08:33.320 --> 0:08:35.000 You know, I promised one at the start of. 0:08:35.000 --> 0:08:36.840 The year, and now we have three on our most 0:08:36.880 --> 0:08:41.280 advanced process technology, major packaging wins, and of course the 0:08:41.520 --> 0:08:46.600 product execution you know, clean launch of the AI PC generation, 0:08:46.960 --> 0:08:50.439 but also the server business getting back to profitability ahead 0:08:50.480 --> 0:08:53.679 of schedule and a little bit better performance there and 0:08:54.080 --> 0:08:58.600 delivering the AI Everywhere message with our accelerators our server 0:08:58.760 --> 0:09:01.839 product line. So a really excellent quarter, and I'm just 0:09:01.920 --> 0:09:04.280 so grateful for the Intel team. It's been a journey 0:09:04.600 --> 0:09:06.359 and we are clearly coming. 0:09:06.160 --> 0:09:09.640 Back a pat You've talked to investors and indeed to 0:09:09.760 --> 0:09:14.000 Caroline and I about these new customers for the foundry business. 0:09:14.760 --> 0:09:16.679 When do we get names? When are you going to 0:09:16.720 --> 0:09:18.120 announce who these customers are? 0:09:19.520 --> 0:09:21.959 Well, you two things there, ed, One is it's not 0:09:22.240 --> 0:09:25.840 generally the practice of the foundry industry for the foundry 0:09:25.960 --> 0:09:28.200 to be declaring their customer names. 0:09:28.559 --> 0:09:30.680 So one, it's not practice, and also many of. 0:09:30.679 --> 0:09:35.720 The customers consider it confidential and part of their competitive advantage. 0:09:35.240 --> 0:09:37.280 And how and what technologies they choose. 0:09:37.400 --> 0:09:40.719 So I can't promise names but we're going to characterize 0:09:40.760 --> 0:09:43.040 them as best we can. And as we said, these 0:09:43.080 --> 0:09:46.840 are high performance and AI customers. And we've really seen 0:09:46.880 --> 0:09:50.240 the surge of interest in using the Intel technologies and 0:09:50.400 --> 0:09:54.360 foundry for different AI offerings in the marketplace. And that's 0:09:54.400 --> 0:09:58.040 both a wafer but also a packaging and this idea 0:09:58.080 --> 0:10:00.760 of advanced packaging. In addition into the three on the 0:10:00.800 --> 0:10:04.080 wafer side, we had two advanced packaging customers in AI 0:10:04.520 --> 0:10:08.000 and that revenue materializes more rapidly and six more in 0:10:08.040 --> 0:10:12.040 the pipeline, so overall a really substantial quarter. And the 0:10:12.200 --> 0:10:14.800 AI space in particular has been the customers that have 0:10:14.880 --> 0:10:16.160 seen the most enthusiasm. 0:10:16.440 --> 0:10:19.440 And let's talk about the AI space because the running 0:10:19.480 --> 0:10:21.839 of AI models is where you see your future. It's 0:10:21.840 --> 0:10:24.240 not all just about the foundation models. It's actually the 0:10:24.360 --> 0:10:27.599 running of them, not the building. But can you just 0:10:27.679 --> 0:10:29.959 relieve some of the anxiety coming from investors about a 0:10:30.040 --> 0:10:32.839 lack of clarity over data center future and indeed, what 0:10:33.040 --> 0:10:34.599 is it that they need to hear from you? What 0:10:34.920 --> 0:10:37.439 more can you articulate that really makes it clear to 0:10:37.480 --> 0:10:38.760 them that you're going to be front of center in 0:10:38.800 --> 0:10:39.440 the AI race. 0:10:40.360 --> 0:10:42.360 Yeah, thanks Carolyn, And you know, really. 0:10:42.559 --> 0:10:44.679 You know, first, let's characterize what we're talking about in 0:10:44.720 --> 0:10:49.520 this idea of creating you know, these frontier or foundation models. 0:10:49.559 --> 0:10:53.000 This is described versus using right and the training and 0:10:53.160 --> 0:10:56.640 the inferencing against those models, and I sort of compare 0:10:56.679 --> 0:10:59.400 it to like weather models. Not that many people generate 0:10:59.480 --> 0:11:01.839 weather models, but a lot of people use them. And 0:11:01.960 --> 0:11:04.360 that's how we think about this next phase of AI. 0:11:04.760 --> 0:11:07.160 How do we make this inferencing or the use of 0:11:07.280 --> 0:11:10.199 the models broadly available. And that's going to be in 0:11:10.360 --> 0:11:13.840 the client, right we talked about the AIPC. It's going 0:11:13.880 --> 0:11:17.160 to be at the edge right in retail and manufacturing 0:11:17.640 --> 0:11:20.360 and supply chains. But it's also going to be an 0:11:20.480 --> 0:11:23.079 on premise data centers. And as we've said, instead of 0:11:23.440 --> 0:11:26.000 taking my data to the cloud, I want to bring 0:11:26.120 --> 0:11:29.240 the AI to my data center where the data is 0:11:29.600 --> 0:11:32.520 already and finally work in the cloud. 0:11:32.679 --> 0:11:34.240 And for the data center proper. 0:11:34.320 --> 0:11:37.040 As your question talks about, hey, you know, we knew 0:11:37.120 --> 0:11:39.120 we were going to lose some market share here, right. 0:11:39.240 --> 0:11:41.839 Those losses happened last year and they're sort of playing 0:11:41.880 --> 0:11:45.480 out in the marketplace. But our roadmap is strong and 0:11:45.600 --> 0:11:49.559 we over executed in the quarter on our next gen 0:11:49.679 --> 0:11:51.679 R Gen four product that did a bit better than 0:11:51.720 --> 0:11:53.920 we thought in a lot of AI use cases in 0:11:54.000 --> 0:11:57.480 this area of inferencing. The next generation Gen five, we're 0:11:57.600 --> 0:11:59.960 already ramping that in production and that's going to get 0:12:00.200 --> 0:12:03.680 announced in December. But next year's products, we're already seeing 0:12:03.720 --> 0:12:05.760 great health and we're ahead of schedule in those and 0:12:06.080 --> 0:12:09.320 those really improve our competitiveness. And the twenty five products 0:12:09.360 --> 0:12:12.439 will go into fab in the first quarter of next year. 0:12:12.559 --> 0:12:15.880 So our whole roadmap and execution has really improved, and 0:12:16.000 --> 0:12:18.760 we start to see ourselves regaining market share in twenty 0:12:18.840 --> 0:12:20.679 four in that area. And I think that will be 0:12:20.760 --> 0:12:23.959 sort of the final piece of the turnaround story. When 0:12:24.240 --> 0:12:27.559 you know the market sees okay, data center is backstrong, 0:12:27.640 --> 0:12:30.079 they're winning in the AI space. You know that'll be 0:12:30.320 --> 0:12:32.760 the end of the turnaround story and people say, Okay, 0:12:32.920 --> 0:12:33.319 they did it. 0:12:33.880 --> 0:12:36.839 We'll go back to that building that training of data. 0:12:37.320 --> 0:12:39.680 Can you talk a little about stability AI. Of course 0:12:39.920 --> 0:12:42.520 you've got to deal to build their AI supercomputer. Was 0:12:42.559 --> 0:12:46.360 that them really going to you for ultimately what GOUDI 0:12:46.400 --> 0:12:48.760 can provide over what in video would or is it 0:12:49.480 --> 0:12:52.400 that you wanted to really be sort of offering them 0:12:52.480 --> 0:12:54.559 some carrots in the situation to be able to be 0:12:54.679 --> 0:12:56.000 helping with the training of the models. 0:12:56.840 --> 0:12:57.680 Yeah, great question. 0:12:57.800 --> 0:13:01.000 And you know, now with Goudi, we're now deliver performance 0:13:01.080 --> 0:13:03.199 and benchmarks that are as good as the best in 0:13:03.280 --> 0:13:06.120 the industry. So we've gotten our performance there. You know, 0:13:06.160 --> 0:13:07.959 there was also some of this work that you know, 0:13:08.040 --> 0:13:11.640 the models were created and much of the software industry 0:13:11.800 --> 0:13:14.280 was working, you know, on the n video platform, so 0:13:14.360 --> 0:13:16.079 we had to do some of the software work to 0:13:16.160 --> 0:13:19.440 get those running on the Gaudy platform. And they're looking 0:13:19.520 --> 0:13:22.360 for more cost effective choices and ones that are supply 0:13:22.520 --> 0:13:25.880 chain available in the industry. And as we're ramping our 0:13:25.960 --> 0:13:28.640 Goudy product line, we're getting that software work done. 0:13:28.960 --> 0:13:30.680 You know, they're priced more competitively. 0:13:31.000 --> 0:13:34.160 Customers are saying, wow, I can do that work and 0:13:34.320 --> 0:13:37.280 do it at a much lower power performance envelope than 0:13:37.320 --> 0:13:41.240 the alternatives and have a much more cost effective model 0:13:41.320 --> 0:13:45.079 training and inferencing at scale. Okay, you were seeing a 0:13:45.200 --> 0:13:47.720 real surge of interest, and as I said, we doubled 0:13:47.760 --> 0:13:51.040 our pipeline of customers this quarter, you know, and we 0:13:51.480 --> 0:13:53.400 you know, like others in the industry, are now supply 0:13:53.559 --> 0:13:56.000 chain constrained and we're racing to catch up to that 0:13:56.120 --> 0:13:58.160 demand on our gaudy product. 0:13:57.880 --> 0:14:02.360 Line throppening by radio and television audience worldwide. We're speaking 0:14:02.440 --> 0:14:05.720 to the CEO of Intel, Pat Gelsinger. Pat, the story 0:14:05.800 --> 0:14:08.920 of this week has been chip companies entering the PC 0:14:09.120 --> 0:14:14.640 processor market on architecture, how do you hold off those newcomers? 0:14:15.040 --> 0:14:18.520 You know, attention for example one Apple this coming Monday, 0:14:18.640 --> 0:14:20.720 and they have done well in that domain. 0:14:22.520 --> 0:14:26.720 Yeah, and I think of the AI PC as an 0:14:26.760 --> 0:14:30.720 exciting category and this is one that we announced. We've 0:14:31.000 --> 0:14:33.520 been the first company on that and we're now ramping 0:14:33.880 --> 0:14:37.680 our first generation AI PC products called the Core Ultra. 0:14:38.080 --> 0:14:40.560 So others are talking about what they might do in 0:14:40.640 --> 0:14:43.880 a year or two years, we're ramping products in the marketplace. 0:14:44.400 --> 0:14:47.640 Today we announced over one hundred is svs in our 0:14:47.880 --> 0:14:51.720 AI Acceleration program, so they're coming on board, and before 0:14:51.840 --> 0:14:54.880 others have their products even shipping in the marketplace, we'll 0:14:54.880 --> 0:14:58.200 be launching our next generation, our lunar Lake product, which 0:14:58.240 --> 0:15:01.240 we've already demonstrated for next year, and panther La like 0:15:01.320 --> 0:15:04.440 our twenty five product. We're sending that into fab on 0:15:04.600 --> 0:15:08.600 our leadership Intel eighteen A process Technology and Q one 0:15:08.960 --> 0:15:11.200 so I feel like we have a very strong roadmap, 0:15:11.480 --> 0:15:15.000 and Hey, the idea of an ARM based PC, you know, 0:15:15.040 --> 0:15:17.320 they've always been sort of niche and low end, with 0:15:17.400 --> 0:15:19.800 the exception of Apple, and there it's not ARM, it's 0:15:19.840 --> 0:15:24.040 Apple and their ecosystem. So for the broader windows are market, 0:15:24.160 --> 0:15:27.840 you know, it's always been pretty low end and insignificant 0:15:27.880 --> 0:15:30.240 in the bigger context. And as long as we deliver 0:15:30.400 --> 0:15:33.360 our roadmap, I feel very confident that it's other surge 0:15:33.440 --> 0:15:36.360 into the AIPC space. You know, this is a lift 0:15:36.680 --> 0:15:40.640 to the overall PC market and will be uniquely positioned 0:15:40.680 --> 0:15:41.400 to benefit from that. 0:15:42.680 --> 0:15:45.120 Pat going back just a second to Stability in the 0:15:45.160 --> 0:15:48.520 AI supercomputer. That's kind of in the assembled component domain. 0:15:49.000 --> 0:15:51.240 But are you saying or are you able to confirm 0:15:51.320 --> 0:15:55.040 that's a paid relationship with Stability to praise you for 0:15:55.240 --> 0:15:55.960 use of Goudy. 0:15:56.880 --> 0:15:59.120 Oh yeah, yeah, this is a is a major customer 0:15:59.560 --> 0:16:02.680 and we'll be building that with them, of course, working 0:16:02.760 --> 0:16:06.000 closely with them, but this is a paid customer relationship. 0:16:06.280 --> 0:16:06.440 You know. 0:16:06.520 --> 0:16:10.720 We also see quite another set around our OEMs. 0:16:10.760 --> 0:16:14.200 We announced the major partnership with Dell right for not 0:16:14.360 --> 0:16:17.800 only Xeon's but also Goudy's as they come on premise 0:16:17.880 --> 0:16:20.040 and their cloud offerings. You know, we've seen a big 0:16:20.200 --> 0:16:24.040 upsurge in Goudy interest in the Intel Developer Cloud. We 0:16:24.120 --> 0:16:27.200 had a five x increase in the developers on our 0:16:27.280 --> 0:16:30.600 developer cloud, much of that on the Goudi platform. And 0:16:30.640 --> 0:16:33.760 as I said, we saw you well over a billion 0:16:33.840 --> 0:16:37.920 dollars last quarter. We've approximately doubled that to this quarter 0:16:38.040 --> 0:16:43.400 of Goudy demand worldwide, and those are largely paid customer engagements. 0:16:43.760 --> 0:16:47.280 So overall, we're just seeing a surge of interest with stability, AI, 0:16:47.480 --> 0:16:48.520 Dell and many others. 0:16:50.160 --> 0:16:54.280 Pat we every earnings look to your forecast for the 0:16:54.400 --> 0:16:58.560 PC market and you're slightly more positive than consensus in 0:16:58.720 --> 0:17:01.600 terms of literally how many PCs you think we'll ship 0:17:01.640 --> 0:17:04.520 around the world this year. I guess part of that 0:17:04.760 --> 0:17:07.720 is baked into your sales forecast for the current period 0:17:07.760 --> 0:17:11.440 as well. What gives you that confidence and why is 0:17:11.520 --> 0:17:14.280 it that consumers will return to buying PCs? 0:17:15.240 --> 0:17:17.239 Yeah, and there's probably three different factors there. 0:17:17.359 --> 0:17:19.280 You know. One is I can say, hey, we gave 0:17:19.359 --> 0:17:23.920 this two hundred and seventy million ish PCs being sold 0:17:24.040 --> 0:17:26.560 through this year, and we said that earlier in the year. 0:17:26.720 --> 0:17:28.440 Many thought that we were too optimistic. 0:17:28.800 --> 0:17:31.320 Hey, we look at it today and we're almost spot 0:17:31.400 --> 0:17:35.920 on with our accuracy on that forecast. Second, we've seen 0:17:36.000 --> 0:17:39.640 the industry, you know, not just Intel, but the industry overall. 0:17:40.080 --> 0:17:43.160 Inventory levels are now healthy, you know, and we look 0:17:43.160 --> 0:17:46.200 at our selling rate versus sellout rate, you know, the 0:17:46.280 --> 0:17:49.280 product is selling through. I'd also say, hey, we're off 0:17:49.320 --> 0:17:51.240 to a good start in Q four. We're a couple 0:17:51.280 --> 0:17:52.960 of weeks into the quarter, and as I said on 0:17:53.000 --> 0:17:55.800 the earnings call, really good start. 0:17:55.640 --> 0:17:56.760 To Q four as well. 0:17:56.840 --> 0:17:59.520 And you know, seasonality is a bit above in Q 0:17:59.760 --> 0:18:02.920 four or historical levels. We also have things like Windows 0:18:03.040 --> 0:18:07.000 ten end of service coming from Microsoft. Microsoft's about to 0:18:07.560 --> 0:18:11.399 release their copilot products. But I'd say the sizzle in 0:18:11.480 --> 0:18:16.119 the marketplaces around this AIPC brad new use cases for 0:18:16.200 --> 0:18:19.359 the PC. And I've compared it to the Centrino moment 0:18:19.760 --> 0:18:23.119 of twenty years ago when Centrino really ushered Wi Fi 0:18:23.320 --> 0:18:26.280 at scale into the industry. And we think that's exactly 0:18:26.359 --> 0:18:28.520 what's going to happen with the AIPC. It will be 0:18:28.600 --> 0:18:32.240 a driver of new applications and use cases for the 0:18:32.320 --> 0:18:35.720 PC and bringing a bit more excitement, a bit acceleration 0:18:36.000 --> 0:18:38.600 more users coming into the marketplace because it's going to 0:18:38.680 --> 0:18:41.800 give significant new capabilities to PC users. 0:18:42.160 --> 0:18:43.920 Is that what gives you your gross margin level of 0:18:43.960 --> 0:18:46.280 sixty percent? Again, is that where the confidence comes from. 0:18:47.760 --> 0:18:50.919 Well, to get our overall gross margins up above sixty percent, 0:18:51.080 --> 0:18:54.480 I need the whole business to improve, Carolyn. Obviously we're 0:18:54.840 --> 0:18:57.600 making good progress in the PC. I also need to 0:18:57.640 --> 0:19:01.520 improve my factory network. And as we get back to leadership, 0:19:01.640 --> 0:19:05.520 we finished this super aggressive five nodes in four years. 0:19:05.560 --> 0:19:08.600 You know, I'm churning through capital very rapidly to get 0:19:08.640 --> 0:19:11.680 back to leadership. That's a big factor getting the data 0:19:11.760 --> 0:19:14.560 center business healthy. Going back to one of your earlier questions, 0:19:14.560 --> 0:19:18.840 another factor in getting back to our margin structures. One 0:19:18.840 --> 0:19:20.760 of the other things we did this quarter was also 0:19:20.920 --> 0:19:24.520 have great operational success on our cost saving initiatives, and 0:19:24.600 --> 0:19:27.640 we said, you know, we would result in three billion savings. 0:19:28.119 --> 0:19:29.560 We've also cleaned up the company. 0:19:29.600 --> 0:19:33.080 I've exited ten businesses since I've been here, and now 0:19:33.200 --> 0:19:34.960 we think we're finished with that phase and we just 0:19:35.040 --> 0:19:37.919 get focused on growing the company again to the future. 0:19:38.320 --> 0:19:40.520 So part of its growth, part of it's this focus 0:19:40.640 --> 0:19:43.520 areas across the businesses and part of it's just increased 0:19:43.560 --> 0:19:46.840 operational discipline. But this quarter's results were well on our 0:19:46.880 --> 0:19:47.920 way to accomplishing that. 0:19:48.320 --> 0:19:50.760 And you talk of operations there, and we didn't get 0:19:50.840 --> 0:19:52.359 time to talk about it, but we know that you do, 0:19:52.440 --> 0:19:55.800 indeed have operations in Israel, and we think of your 0:19:55.880 --> 0:19:59.520 own employees and your infrastructure there at this time, Pats, 0:19:59.600 --> 0:20:01.520 so thank you, thank you very much for spending some 0:20:01.640 --> 0:20:03.200 time with us and walking us through your numbers. 0:20:03.240 --> 0:20:05.120 Intel CEO Pat Gelsinger. 0:20:04.680 --> 0:20:14.679