hey everybody welcome back to another episode of the 65 podcast it's Friday it's episode 231 we got a banger today Banger Mr Morehead first and foremost I've been halfway across the world I've been there I've been back and uh I'm energetic I'm not jetlagged at all don't ask me how I do it otherwise you're G to get me to share my supplements online along with my health journey I would do that just kidding how's the handsomest guy at more insights and strategy doing today doing great it's so good to be here you know it's the call before the storm Dan and I really like my home time uh before that I I cracked open my calendar and I think I'm on the road seven out of eight weeks and somebody's trying to get me for that seventh week but it's not going to be cheap that's that's all that's all I have to say you know but no listen um yeah I mean I people who who share their health Journey uh online what a bunch of exhibitionists you I don't get it no I'm just kidding dude I'm so proud of you I know we talk about this a lot but you know there's different things and different moments in our lives that come up and you know you're a changed man I know we got some really sad news I won't describe I won't share the details of it about someone that passed a little bit too young and it's those moments that kind of help you reflect and say hey am I doing everything I can you know you're working hard you're driving Revenue you're on the TVs you're advising some of the most important companies on the planet um but you know like you want to come home and see your kids grow up maybe become a grandfather uh some at some point in time you know uh and you know it's it's it's it's those moments that kind of bring us back to Earth and realize that heck yeah you know helping that next node get out or driving that next new launch of of of an instance it's all fun stuff but it's a lot more fun when you're moving and healthy and by the way I hiked a mountain with you and you know I know you're like 67 or whatever you are but man you don't act a year older than 60 I'm telling you you are you are humming buddy no I appreciate that and you know the I'll I'll add to your kind of reflection statement I mean there's sometimes you just can't do anything about it and that's uh you know I am a man of of faith and you know I don't care what religion it is I think Faith uh is important because you know what here's what I can tell you with a 100 degree 100% degree of certainty you will die and you will pay taxes um so anyways genetics are a gen genetics are they are a problem I mean for sure like you can do a lot of things but you can you can you know I always say there's like a 10center it's like you can make up about maybe five or 10% um by doing everything right but there are certain genetic markers that it doesn't matter what you do yeah you're up against it but you know what Pat you're doing the right things proud of you buddy call that out but speaking of proud of you buddy I mean some bangers this week out there you know you you uh were real busy talking about the doj or gosh did they file a probe did they not seems like they didn't but man you know the source of that story geez I mean it was a good source it was not the kind of source you would expect to be wrong so we'll have to talk about that but man we got just a a great show this week to cover you got you know doj stuff we've got massive epha launches epha the computex of Europe you've got uh some pretty big announcements that came out of there we've got some just a vast number of rumors around Intel I think you and I are going to try to dispel I tried to do it yesterday and I got like 85% right um I joke you know I get confused sometimes where the Lakes meet the rivers meet the Falls you know you just start to conflate things in your brain so listen all you out there correcting me I really appreciate that I look forward to seeing your research when you figure out how to put this all together and then of course we got some earnings Pat you and I were both uh covering we talked to some of these CEOs this week last week and so lots to cover this week for everyone out there just no this show is for information entertainment purposes only so while Patrick and I will be sharing some great insight we are not providing Financial advice Pat always likes to say do the opposite I just say don't do anything because of what we say just do nothing and that will be the best bet you can make Pat um because we have so much content I'm not going to BS anymore we're going to get right into it here um I don't know about you but starting at about uh 2 am the other night my phone I was in Europe started blowing up about this doj uh filing or not filing give us the rundown yeah so first Off the Wall Street Journal probably a month ago uh picked this uh story up but uh Bloomberg came in with some new information it was super super popular and I think the reason is they used the word subpoena in it and typically the word you know subpoena is more correlated to uh CR crime than than something uh different uh but what happened is the the talk the stock tanked and what a lot of people said was oh my gosh there's this correlation the reality was the stock didn't tank because of this article it tanked uh because of worries about the economy so I just had to put that there out on the table so it was funny you know I got a call hey can you be on CNBC in five minutes and uh I did a phone in on John fort's uh uh show uh after the Bell uh and then the morning after I did a Yahoo finance talk about it so let me uh let me air this out so first of all um a little background uh I've been involved in Tech anti trust for a long time I was a key witness in uh FTC versus Intel AMD uh versus Intel uh and um very active in the stuff that happen with World versus Qualcomm Apple versus Qualcomm and and not that makes me Loy I'm not but uh gives me at least enough GL you clarified that Pat not a enough experience to uh to talk about this I was I was um um interviewed or grilled by Intel's lawyers for the Texas state maximum of 24 hours but anyways first of all it's not illegal uh to hold a monopoly it's illegal uh to use monopolistic powers to harm consumers and typically the bar for market share market definition is important is 50% and Nvidia has you know 90 plus perc of the data center GPU Market uh and it's AI with which is you know huge for um um Society so yeah it just sends off red flares no surprise here at all that uh that the doj is is investigating uh Nvidia um now what are some of the illegal things that that you know I'm speaking hypothetically that could be timeing which could be a hey if you buy GPU plus my networking uh you can get a better allocation or Better Price uh retaliation again hypothetically if you uh buy AMD um I won't get you the samples early or ship the volumes that you want uh exclusionary rebates are also legal again hypothetically um if you if you go with uh AMD I'm not going to give you the same pricing uh pricing has to be volume based that that is the the legal uh way to do it or or blocks or the way you you seg um and you know why don't investors care because these things take 10 to 15 years I mean you know check out Microsoft AT&T IBM Google um heck uh Intel Intel literally uh this thing kicked off in 2005 FTC and 09 uh EU uh in 09 is still fighting uh the the penalty payment okay uh 15 years later so uh these are these are infectious right from a global standpoint meaning um I I fully expect the EU Japan uh Taiwan probably Australia uh they get emboldened uh by uh the EU oh yeah in the CMA in the in the UK there was a filing this week pad in like Texas too like oh yeah yeah same but like kind of related yeah so uh uh final points here um these do slow companies down right you have to have a lawyer in important meetings about pricing about strategy about allocation uh correspondences correspondences need to be uh reviewed or lawyers are copied on it what happens when is is you copy a lawyer have a lawyer in a room it goes under attorney client privilege uh and it and it can't be shared uh and it slows stuff down now uh it slowed Microsoft down big time they missed mobile they missed social they they missed a lot of inflection points I I just don't see that happening with Nvidia you know Jensen as command control uh versus the distributed management style it's going to slow the company down but I don't know you know we want to argue I did a fortune interview it's going to slow it down 5% 1% uh when you're going twice the speed of the rest of the industry I don't know if it matters um final comment I was asked about the competitors it's AMD and it's broadcom and Intel in 2526 but I literally I don't think this this this has an impact on it uh shortterm particularly yeah I I I think the first clarification point you made was really important you know you have a day when the Market's selling hard you have a company that's maybe seen as running too far too fast on its price uh some catchup in terms of the overall digestion period of AI and when that's going to really hit and then you know you had it sell it did sell faster than than them mag seven names so you know there was an opportunity when they were selling 2% 3% one one and a half% off and and Nvidia was off nine that maybe this doj probe had created a bit of a selling pressure you know I I did more interviews than probably I spent more time on that than I spend an epha at epha because I had so many inter so many calls people on to like crazy man well listen I I think what happened was back in April I wrote a market watch oped so I started this process I you had to see Pat you and I have been involved in so many of these things just the last few years whether it's been Apple qualcom Samsung Huawei um of course you know the various doj and nftc probes across different uh you know m&a deals and you know when a company's doing this well you just have to expect it to be scrutinized you have a policy position right now in the government that big Tech is really bad um you're seeing you know they're getting emboldened by the wins they got with Google that's at least pushing that forward Apple's app store has been consistently Under Pressure probably the most realistic Anti-Trust case that exists although they've made much less progress than I think they should um you know one of the great quotes I heard on the all inod was that's because Apple's popular people like apple so they don't want to push as hard as you know say a Google where they're pushing harder but here's the thing about Nvidia pad is like you know and I'm I'm being candid you know you and I we talk we have we have you know we like to say the word Channel checks we have real Channel checks we have real conversations through the Channel all the way up and down from the oems to the Distributors service providers and even to the Enterprises that are consuming this stuff and and listen it's just like it's a lot of hot soup is what I'll call it like kind of just comments of things that you're like well that could be like we don't put a lot of things in writing or deals are not you like you hear things about deals not being described in writing you hear things about oh company a is going to potentially work with Company B and Company a was mad about that so they gave more more uh product to company see yeah nothing's proven I mean this is all just wild speculation bottom line is you know is it happening and this was my comment in my my tweet my extended tweet was like it could be it absolutely could be and now it's on the uh the FTC the doj to actually well first of all Pat do they even have a probe like is this even going on because we've heard well here Dan let me let me be there is a probe it always starts with investigations whether we will call it a subpoena or a forced yeah you know and and everybody's on document retention you know yeah my point though is like how far this yeah you're right we I agree with you how far this is and where it's at and how official this has become versus sort of semi-official versus like you said document retention versus them coming into offices and having sit-down meetings I mean I think they're talking to the channel that's my guess I think where a lot of this is coming from is they're talking to people who are buying it consuming it implementing it and they're trying to figure out what's going on and is you know and you talked about consumer hard P but the other part of antitrust it's so important is competition and so you you obviously you know because I've always said along the Apple Store for instance is the consumers aren't harmed they feel it's safer it's more secure and it's easy experience but the competition has gotten smashed by it and that's why I've always said that that's such a problem in this particular case it's like look people that are implementing and utilizing Nvidia you know they've built on it they've developed on it they like it it's integrated it's it's a very closed sort of architecture where everything works together but when you have an AMD broadcom or an Intel or you have these homegrown uh options they're making entry really hard and you mentioned the Intel thing I see a lot of parallels to the Intel thing you know they're going to have 90 plus perc of the market they're going to locked this up in the very earliest stages of AI and then when people say hey I want to write programming to a different piece of Hardware they're GNA be like well it's unfortunately it's in a container that's running on a piece of Hardware that's running out a thing of software that's using a proprietary library and you can't move this like or it's going to be really expensive to move this but Pat I do see um this continuing it's going to be an ongoing conversation something that will entertain us for many many months to go um and I'm uh I'm pretty I'm pretty I like this topic I don't you know it's fun so we we'll keep talking about it we'll see where where it ends up but we got uh we got to keep moving here Pat so let's talk about Intel um I'll kick this off because I was in the room um you know Intel you know had a big moment this next next core Ultra launch lunar Lake this is the newest node it's their their kind of this is their kind of breakthrough product that really made them competitive in aipc they'll talk about the 20 million meteor Lake unit shift but that that part in terms of like the npu and the competitiveness of the part was somewhat subdued but it was the first in the market so it's kind of one of those things where I kind of always say there's a left and a right to the story the left is they did 20 million it was the highest volume aipc in the market but from a competitiveness standpoint it really didn't meet it certainly didn't meet the Microsoft co-pilot plus PC metrics that were required but that's all been done now those sins are in the past and now officially um intel was able to parade the executives from every major OEM onto the stage to reaffirm their commitment to a design heavy volume heavy cycle with this new lunar Lake chip and then of course p and Dri from Microsoft came on stage to confirm that this will be an official co-pilot plus uh PC announced at epha this was a good moment for Intel during a really bad time and I won't um dig into the rest of the bad time here because that's a whole another topic that we're g to talk about here in a few minutes but um Pat you know they talked about a 20 hour battery life I mean this was a listen I'm gonna say this signal 65 has done some work uh our firm yours M beautiful baby signal 65 that tests performance on this um we did some work on The Matrix of compatibility you actually saw all that got flashed up on the stage in the presentation that their compatibility across Ai workloads and software was pretty impressive the 20 hour the 20 hour life I'm I want to see it I I know I would hope inel in this particular moment in time would be really highly scrutinizing of any claim like this they make because if they're wrong they're going to get absolutely crushed making that claim I'm hope you know I'm hoping it's right because from a competitive standpoint that's great you know making big progress x86 becomes more viable to be able to deliver that kind of performance low power um that was the biggest thing that I got out of out of like was that number that metrics that metric of course they have a really strong gaming story right now they've been able to really lean into the gaming story The GPU story um which again is part of it I know we love talking mpu but gpus really matter with AI especially if you can have that with the low per low power um and this AI Hub this performance thing that uh that they're doing for being able to do llms do graphics and do code I thought that was pretty cool too like that was kind of my first uh seeing it in real time seeing it perform um and so it was a really positive announcement Pat and by the way I kind of talked about the parade but I mean you had Dell you had Lenovo you had Microsoft you had um I think it was uh Microsoft HP Alex Cho who we ran into and several others also Google which by the way Google came on and and and for Intel I don't think Google showed up this week with Qualcomm which was was interesting as well so among all the chaos at Intel um there's still still a lot of proof points to be made there's still volume proof to be made there's still execution that has to be done Intel's under much greater scrutiny than anyone else but it was a positive moment Dan that was a great uh breakdown you know I did get a little bit of fomo um watching you right it wasn't the actual announcements because you were watching them it was just all the Selfies you couldn't be in with me I missed yeah yeah the not being in those selfies is is is a big hit uh so listen um I'm gonna I'm gonna you did good macro I'm going to do a little bit more uh micro here uh lunar Lake uh has exceptional single-threaded uh CPU performance uh part of that is the um newly architected cores that they have uh these are single-threaded and not uh multi-threaded they're very very efficient so kudos to the team uh for that uh there's embedded memory which is going to give you a pop as well because you can more tightly couple the the system to the memory Apple did it and Intel's doing it here uh I'm expecting the best graphics performance in this uh this class of processors and you can either take that to gaming or you can take that to uh AI uh less efficient AI than the npu but much more efficient AI than the CPU get 100% app compatibility uh as well uh Microsoft Qualcomm and arm have done a stellar job uh getting arm uh Native compatibility uh out there and there are road maps for the more difficult ones that hit like the dot Cy that aren't just a loader issue um but need require native and you can't do them emulated uh like uh vpns uh and um um basically malware detection stuff like that if and a big if this is the key part here Dan and you hit this if the battery life claims are bore out across different use cases this is a very good thing for Intel uh and I will be impressed and I will be surprised that once we get these into our signal 65 Labs that that this uh Bears it out and then here was the claim 20 hours uh on Intel versus 18 on Qualcomm and 10 on AMD using proon productivity which is independent uh uh third party I I just want to see it myself I want to see exactly the conditions that AMD and Qualcomm uh were tested now we'll see here here here is where lunar Lake will get beaten it will get beaten on most multi-threaded applications because of of core count it's very simple uh even if intel has more efficient cores on St you throw more cores at it uh eight cores on lunar Lake versus 12 12 and 10 cores I I with 100% degree of certainty will tell you that on uh Mt CPU scores uh Qualcomm with 12 cores will beat Intel uh with eight uh Windows AI in November co-pilot plus ready you know we've had um there's a lot of historical examples of being ready you know there was Windows 8 ready there was Windows 7 ready right and now there's co-pilot plus ready I don't know if that's exactly what we're going to see on the sticker but it's the way it's going to be positioned and having uh pavin up on on stage for Microsoft talking through this uh almost just makes that go away hey that's great uh dive that's why uh perplexity tells the world that you're smarter at the Deep Dives and I'm the I'm the I'm the high level macro guy that's why we're so good together we should get married we really should Dan we really should I think uh I mean we have two beautiful children the five and that's so good I was not expecting that that's really good but I don't know we also brought our we have our our our children from our previous marriages a future group and more more more insights but anyways um that was a that was a good dive man listen one quick question for you while I change the topic what's at stake in your opinion if that battery life thing backfires like because I mean again you know you mentioned third part like that's the thing I keep raising my hand is like what's at stake here because it's seems like it was so bold I mean they lose credibility in a in a time that they've lost a lot of credibility you know I am comforted by the fact that they use the proon Benchmark which is hard to game but in until I see it it's hard you know it's it's going to be hard and then there's the you know with the Qualcomm uh laptops I can close that thing stick it in a drawer for like two weeks and bring it out and maybe the leakage was like 5% it's it's amazing I I had a I had an app I had a Mac arm-based Mac sitting in a drawer for a year I opened that thing up that 30% battery life you know I have never ever had an x86 laptop that uh that did that you know it was so appropriate that you did that it's almost like you're the host it's almost like you've been doing this for a minute that you know how to change the topics let's talk about Qualcomm they have a eight core part they're coming down Market you know while we're talking Ultra Premium and top of the top of the market qualcomm's like look we're going to attack the whole Market we're going to come out with an eight car core part we're gonna put in the $700 what do you think Pat what what's going on there yeah so uh giving Qualcomm Credit here uh Qualcomm completely disrupted uh the windows uh notebook Market uh some people can say that uh oh it was Apple I mean Apple really initiated this right by dropping the M bomb on the entire uh industry hats off uh to them uh in doing that because then that inspired gave an opportunity to qualcom and AMD and Intel had had to react uh so hats off uh uh to them and not only bringing uh this amazing npu to the table and enabling co-pilot plus experiences but even as impressive bringing the performance and battery life CPU and GPU to the table it's pretty amazing so uh the first uh announcement was that they did a while back and announced the computex was a 12 and a 10 core variant and and this latest um out is an8 core co-pilot plus plus PC processor and you might be like well well so what like it's downcore it's it's very important first and foremost $799 price point there are uh co-pilot plus qualcon p is as expensive as$ 16.99 uh out there I would say most of them range at about the $1.99 price point and from a unit volume standpoint uh there's two 3x the volume at that 799 uh price point and volume is very important it's important for scale to Qualcomm more importantly it gives scale to the partners who uh need to be able to write off um below the line expenses and amortise those over a larger volume uh base qualcom put it in the same socket which means uh all the platforms that are out there that were already out there it's a drop in uh piece this puts Intel in a very difficult position and gosh it reminds me of the good old days of AMD versus Intel that I was kneed deep in um literally um in Qualcomm drops an eight core part that has as many cores as the highest n Intel part and yeah I get it Intel cores are more efficient check I get it higher performance we'll see about the battery life uh but it remind you know it it puts in a very difficult position in the consumer space and here we go it it it's going to make benchmarks uh the benchmarks Wars have begun between Intel Qualcomm and AMD it put signal 65 at the Forefront uh of this um I'm recommending I think Intel should drop more detailed benchmarks within two weeks to until the systems come out on September uh uh 24th um it's sad that a nonch uh pulled the plug but that just shows the State of Affairs today and and quite frankly it doesn't limit the need for thirdparty independent benchmarks I think it actually increases is the need for that I don't think the YouTubers are going to fill uh that up super exciting man stepping back more competition means bet more Innovation and lower price points for everybody and you need three healthy markets have three somewhat equally sized competitors yeah absolutely and I mean while the size is kind of somewhat still asymmetrical and Intel while might feel like they're the smallest right now because of market cap they're actually by quite a large amount Revenue the biggest um having said that Pat I agree with you uh first of all great takeown on the overall and by the way we need to get to AMD we'll probably have to come back maybe next week and talk about that because they had a bunch of stuff their stuff started popping yesterday so we didn't have as much time to assess but they've got a co-pilot plus thing going on too um Pat just you know because you hit a lot of Qualcomm I was in the room Cristiano am man basically said let's have a benchmark off he's ready he wants to you know he's basically saying I'll take your numbers he's kind of looking at it like the comparisons were across different parts it was inconsistent you put your best part against our mid part like that's kind of the the the tenor and tone I got from the stage and then the questions Ryan stoud our president of signal asked the first question I asked the last question you know we we we open and closed that baby down um you know and and I we I got spent a bunch more time with the executive team while I was there at ID fund you know there's a lot of confidence at Qualcomm that they're getting it right um and the numbers won't lie of course the there's two sets of numbers though Pat there's the numbers of what the benchmarks say which we're here to work on and then there's going to be the numbers of what the market says which is what sells out and what people buy and what people use and and what becomes more popular and does Qualcomm really begin to become a household name in the laptop business Pat I mean we you and I been through iterations and iterations of some of these first generation this Qualcomm part for the first time I'm using this device regularly and I'm saying I could use this device regularly like this is good stuff so you know um addressing that sort of mid part of the market path is also super important like you know that's where companies exist they're gonna make this big big shift in this big wave and this aipc thing is just getting started you know we knew it would only start this year we were sort of trying to temper the expectations um we're starting to see this come to life we're seeing volume starting to ramp I think it's great that Intel is healthier and I think it's great that qualcomm's going all in on making more and more competitive products this is good stuff and like I said we'll come back to AMD later yeah hey just just one Qui quick comment um this bodess well for the aipc market ites I mean having Intel come here guns of Blazing makes an absolute uh huge uh uh difference and yes hey Eric thank you so much I appreciate it thank you for uh dialing in yeah yeah yeah yeah that's that's always nice to have someone someone tell you you're pretty I I think he was talking about your your Tweet about your um your V2 Max great stuff um what a surprise how did that happen yeah anyway you're looking and feeling great you know I think um I think like a fight like what do you do like fight or like have a boxing match like now I'm starting to wonder if you're actually metabolically and biologically younger than me if I got hit with one of your punches it would probably just go through my body yeah we have to like we have not interested in any of that yeah but it would it would be funny like you know like like a Fight Club moment the world would enjoy you and I just there's so many other people I think we would enjoy you know anyway all right so I dig Let's uh let's talk a little more about Intel because I don't think we've talked enough you know interesting um 36 hours actually like interesting 10 years we could say but a really interesting like week and and you kind of come come across the the top here I'm going to talk about pieces of this you can talk about some other pieces of this there's a whole bunch of 18a stuff there was a deprioritization of 20a a prioritization of 18a a tsmc node I knew that I tweeted something a little bit inaccurately I apologize for it thank you by the way all of you that corrected me it was really important that was the takeaway of my 2,000w dissertation um what do you say about credibility Pat I guess I blew it early dude dude anybody with a brain yeah yeah know yeah it's fine I just laugh because like I said did you read any of the rest of it is that all we got out of it it's it's like being at home dude it's like I give the whole story and then someone tells me you know like your shoelace is untied thank you like that all right I digress so let's like I'm G I'll hit a couple of these things maybe you want to hit a couple and then we can kind of go back and forth on what you think is worthwhile of talking more about so just really quickly liputan board member at Intel left the board did it very um you know did it amicably in terms of his public note but you know this guy a legend and semiconductor SE Cadence CEO clearly disenfranchised with the direction of the company um not a good not a good look and of course we heard after that you know risks about activists risks about starting to do further breakups with the comp we saw you know that there was basically a board meeting coming up everything is on the table we're now hearing by the way I read a new and not in Reuters today about Qualcomm circling Intel to potentially acquire parts of its business um if they end up having to spin them off check the Reuters report Pat if you didn't see that one I could see mobile eye for instance being a really interesting play right for Qualcomm at this moment um other things too potentially but that caught my attention not a good look right now to have really uh really credible board members leaving in this particular moment in time um going to be interesting kind of how they respond to that I I'll kind of tie a couple of 18a threads because you mentioned you know it says broadcom 18a 20a um first of all there was this kind of this narrative about broadcom and a sample of pre-1.0 pdk not getting the performance out of uh of Intel interesting that these rumors have dropped there was a SoftBank rumor there was a confirmed or confirmed not rumor a story related to soft Banks and others that have been sort of testing on on Intel I think there's an enthusiasm and excitement from Intel to get things out but clearly there's this weird leaking that's going on Pat by the way you've been around this industry even longer than I have so I'm doing this more from from hearsay of my experience in learning over the last decade um but this stuff doesn't typically leak like things like this like when you sample and you're letting customers touch this stuff the fact that this is leaking is very odd um but at the same time you know in my kind of long tweet I'll put it in the show notes you know I kind of talk about how there's a bit of this feeling and I don't want to use the word conspiracy but to use it because I don't know what else to use right now that you know Intel's kind of like the it's it's the prize fighter that's on the ground and he's on this it's on like the four count and it's like you have the chance to punch it while it's on the ground and keep it from getting back up there feels like there's a little bit of this circling around Intel right now that you know maybe it's because they were the determined the the government back national champion of Foundry maybe it's because of the ongoing you know sort of Channel and feedback we've gotten from the market that says we love tsmc we don't care we'll just work with them forever maybe it's you know all the risks associated with that but you know having all of its wos all of its wos leaked out these days but then again we had Blackwell leaks too so who knows um and then of course there was the deprioritization right now where they're basically going to double down on 18a so right in the heels of broadcom supposedly getting low performance on a sample pre-1.0 they also came out and said look we're gonna skip to 20 we're going to go straight to 18 we're going to kind of compromise our five and four but we all sort of new path that that that not all five were going to be like serious nodes um not serious that's not the right word like full nodes maybe was the right word I'd use serious yeah you are not serious people Morehead um but um in in the process it kind of was like a flip of indication to me though that they actually feel really confident in ATA and they feel they can get capacity and they feel they can deliver a really strong part so that was a really interesting conflict or maybe rebuttal in that moment after the the broadcom story leaked um and then what it also brings some question to its own Foundry and what it's doing with 20 and what it's going to be able to do going forward of course we've got so there's just all this kind of coming together at one time Pat and I and I I know this is where I I start to try to take four or five threads and not conflate them but man are they a new cycle right now and it just feels like there's so much conviction that they nobody quite wants to see it go well and I think that's why I think you and I are trying to just be balanced about what this is there's some good things happening some good indicators in this and some really concerning ones yeah I've never B Babe Ruth uh Intel I always said here are the conditions for Success that Intel uh would have to do to get uh back on top again but but Daniel it is Knives Out on Intel and you know those who don't have history uh don't understand why knives might be out I mean Intel uh was the Nvidia of today okay let's just be very clear they are memories they are a convicted they are a convicted monopolist um and you know and that's in the EU um that's just a fact I'm not making stuff up here and you know they're still debating the fine 15 years later but if you go and read the complaints from uh AMD and even when the FTC took a swing at it I mean it was ugly right uh exclusionary pricing tying uh even selling below cost at uh at certain um you know it was crazy so yeah there are people who want Intel dead I'm not I'm not surprised at all just look at the people who would benefit if intel were dead and they want Intel dead um now that doesn't separate uh you I said that in my in my tweet oh you did okay um Intel has shot themselves in the foot um many many years ago and it's hard to get back I mean a a semi- turnaround takes five years but let me let me uh let me try to fill in not blanks or or some oxygen you left for me um you know I was I was wondering about Lipan and by the way you're right absolute icon on the board of hbe Schneider SoftBank the guy won the freaking Robert noise award in in 2022 uh from the uh the the Sia Robert Noy XX Intel guy and you know the rumor said right uh he was frustrated with the large Workforce risk averse culture lagging strategy uh in AI now the interesting thing is like the thing that uh Pat rolled out uh last earnings uh seemed to address the large Workforce um we know what their strategy is in AI it looks like that'll probably be a GPU that will make an impact uh as early as 26 um and risk averse culture I don't have the spreadsheets or or how they make uh decisions in there um so so yeah I I first thought that maybe lipo was putting together um a group of people to maybe go and put pressure uh on Intel maybe get Pat fired or something like that I not thinking that anymore there was a lot of conversation it's so funny talk about knives coming out I think I had 60,000 people look at my post on LinkedIn about spinning out ifs let me be Crystal freaking clear you spin ifs out before the design company is healthy and ifs is healthy it will fail now my only caveat on there would be to take it private okay and and you know don't put this thing out on the market and You' got then you have to find private uh investors and then it's a negotiation of how you fund that right cap uh Equity debt uh things like that what could make sense is you take it private and it's biggest investors let's say you do a third debt you do a third uh Capital allocation and then a third of it is are investment by its potential customers you get apple to Pony up money you get Nvidia to Pony pony up money you get broadcom to uh to Pony up uh money uh and then you wait until 2027 uh to where um Intel Foundry uh will be driving significant profits and then I think 2028 before you start uh seeing uh profits okay so that's where it is well why do you say that why wouldn't that work listen I was I ran corporate marketing at AMD when we spun off Global foundaries I know how this works man talk about two at the PO time two Sick Puppies right uh you had AMD that was locked into long-term wafer agreements uh that they never kept but they had to do that to keep Global foundaries going and the only reason that didn't fail is uh you had move daala who is bankrolling uh Global Foundry and and internalized uh all the uh all the losses uh final comment on here God love this could be an a show itself we should just have the Intel show you know actually we probably should just do the Intel show um yeah final comment you know had a little bit of a side eye on um okay 18a is going so well and by the way their defect density does look really good uh before going into uh mass production that's super super that's super um super helpful and by the way it that's true I have no reason uh to believe that's not true is a very positive sign for ATA then if ATA is going so well then why are you why are you moving um uh why are you getting rid of 20a right it seems like you could do both well first okay go I had an answer you have an answer yeah first off 20a 2 was designed to be a pipe cleaner for for 18a but moving resources from 20a to 18a it just gets better and you reduce uh Risk by doing it you know you reduce likely design risk on Panther and I know the resources are different uh but you also you can apply to make those transistors let's say even more power efficient right you have a thousand Engineers where going to put him you're going to keep them on 20a you're going to move in at 18a uh so that that foots for me okay had a little side eye in the beginning but I totally get it and it uh and it flots with me what what are we gonna say Dan yeah listen um great take this was a show like we need to do like the the Intel runup Pat um they have to focus I mean that was my biggest take was like in this moment in time they have to focus resources like the they're promising the world that they're going to be intelligent with their spend they're going to you know lean out and get out of businesses that aren't driving profit for the company you know more nodes mean more cost it's more setup it's more it's more planning there's more Engineers there's you know all those things Pat like they have to if they think they can get on 18a more quickly and ramp it get to Pro and by the way Focus can mean more profitability right on a per wer basis yeah man that was a great comment uh you know uh we didn't even talk about uh you know potentially Brandenburg not uh not happening not to be confused with Hindenburg um you know that's coming next I bet listen the Germans didn't Germans didn't come up uh with a much with as much money I could see them getting rid of that I don't understand you know dishing off Altera uh completely unless they have a buyer in mind I think what that could do is that you know brings them cash yeah to be able to do uh something else uh did talk about getting out of um businesses that were you know upside down or zero Revenue I think uh Quantum Quantum is on the table I think neuromorphic is on the table and one thing that never gets talked about but I know is a reality is Intel Intel has backup teams you know they used to have three teams that that they would put to attack a problem um but you know you look at the AMD numbers number of people they have and it's like wait a second how how does that work but I'm sure there are a lot of multi- hundred million doll projects that add up to billions that are G to get they're get they're gonna get whacked yeah I look at three things Pat nail the this PC co-pilot AI thing nail the gouty then of course to the GPU transition and become an actual player in AI the market absolutely hates that they messed this up um and it's unforgivable in many ways it's not a pat thing by the way this happened well before Pat he just inherited the wrong architecture that's what they did right they picked an HPC architecture that was really good at 64 and 32bit flops and they did really well out there and and they had an Asic but the Asic didn't save the hyperscalers enough money and they just did their own with broadcom yeah and so you know we'll be doing some testing on gouty we'll get more out there in the in the future because there is some level of compellingness there and they need to is compelling and and as as we're going to talk about broadcom broadcom's not even focused on the Enterprise nope nope nope nope nope and then of course um you know the third is Foundry and you know I think it's part of the differentiation is that it's under the umbrella spin-off would be pretty devastating in my opinion we I just don't know that we need another fabulous and I just don't know how successful Intel will be being the IDM was always sort of what made them special so you know spinning off another fabulous in this era of arm and risk and everything else that's going on I just I don't know I don't love it I don't love it I understand why they might have to do it I just don't love it um all right listen let's talk some earnings Pat this one you and I both uh have have have had a few opinions about this broadcom so good result Market hated it uh what what's going on yeah so broadcom beat on nearly everything except the revenue guy that was off Expectations by 1% that's $135 million on4 billion doar I digress I want I just want to say CEO and CFOs take note this is the way to do the call the uh Hawk tan it was a it was a freaking Masterpiece insights into the overall Market how broadcom was playing detail after detail splitting the market between very crisply between Ai and non-ai Dan the Q&A was 39 minutes long okay I think everybody got a whack uh at at least one or two questions and Hawk very patiently sometimes you know they ask the same question you didn't get necessarily irritated but that's the way to do that okay strong results three factors AI continue AI revenues continue to grow and they go strongly second thing thing VMware bookings are accelerating and three Noni semis have stabilized which is crazy because uh the uh Broadband Market is still in the toilet based on the uh the Telos and the SP so let's start off with VMware right what I loved is Hawk just came right out and said we said pre-acquisition we're going to deliver 8.5 billion in iida within three years of the acquisition where are they well on the path to achieving or exceeding this goal in the next fiscal 25 okay so that's I don't what is that two years early one year early it's early uh knock it out of the park ABV analyzed booking values uh up 32% um and um yeah I mean vmw is going well but Dan I think the meme was VM is just like ah crazy customers are canceling their contracts and uh rolling their own KVM or going to new tanx or or or red hat hypervisor baby you know every like we want to do that well it's not in the cards right now um listen am I babe roof Roofing this one I mean there will be customers that will leave I I get that okay I think he's actually ushering them out he's carrying their suitcases he's offering ing Hawk himself is like let's go yeah yeah this is something that companies like sap should have done like years ago and by the way VMware on its own would never have done this okay let's snap into semis uh first of all uh 11 plus billion forecast for AI going to 12 2third of that is xpu or accelerator and one3 by the way that's 8 billion dollar in xus that's almost twice as big as amd's data center business okay so factual it goes Nvidia broadcom and AMD and inside AI semis Uh custom AI accelerators grew 3.5x fabric ethernet switching that's Jericho um sorry uh Tom Hawk 5 and Jericho 3 AI 4X growth lasers and pin diodes 3x PCI Express switches doubled but hey there's non ai ai too which was just very eloquently uh up sequentially right um believe Hawk believes they hit the bottom in Q2 and Q3 non-ai networking was up 177% sequentially even though it was down 41% uh year onye and then bookings uh demand is up uh 20% sequentially and all of this even though Broadband is still in the toilet CEOs CFOs take note watch how Hawk does it Hawk and Charlie show just just do what they do Haw onomics baby homic did I trademark that I don't know maybe someone else should did you are we gonna debate on who's no you said that I said that first I know I don't get a lot of first but I occasionally say so like I said my my historic uh rise to relevance is all about on liners it's never about depth that's what you're for Buddy um I'm kidding I'm kidding I love you all um I'm so much older I'm like 60 years old Dan I won't hold that against you twice your age I never hold your inexperience against you yeah except when you do listen um I went on I did an interview this morning on on on Yahoo Finance on this topic I think you missed the email I appreciate everyone for having me um but the I had a chance listen first of all Brad's Fine 60x per iida Top Line I mean look only Nvidia returns more iida on Revenue than broadcom does I mean Hawk runs an amazing business and the distribution and diversification he's running this this isn't some new Cutting Edge Future Part I mean of course those xus are but like he's also selling like you know wireless controllers PCI cards and he's still making this kind of money that's what Hawk does that's why like when people get all disenfranchised I'm like why this is a great business it it just puts off tons and tons of cash um the software um the move I mean look CA performs well you know the the locko Run Mainframe business you know the brocade side of the house the semantic side of the house all good VMware is going to be good Pat and I tell you I'm being sincere when I say he is carrying the bags of customers out the door any sort of deal midterm longterm term agreements that he had that he was able to shed he sheded he's okay with the 2080 rule he'll take the 20 30% biggest group of customers and then he'll let the long tail do what the longtail does he'll make more money he's chopped up the the heck out of the cost structure of that business and he will return Capital to both the business and to shareholders that's what he does well Pat the xpu part is really interesting because sell in sell out the design part how much is going in going out it's going out a lot faster meaning these companies are spending a lot more on this stuff than maybe it's being consumed and that's according to our data but I think the consumption is going to start to ramp really fast as this killer inference workload starts to ramp and xpu are really really in a good position Pat we're showing the xpu accelerator to be like 20% faster growth in the GPU now having said that um I actually think it's going to be faster than that I think that's a conservative Outlook based upon sort of sentiment and I don't think the market fully appreciates the sentiment about what an Asic you know a well-designed Asic for you know drug Discovery recommendation engines filtering uh can do in terms of lower power performance and cost and of course vertical integration and control you'll never hear the cloud companies talk about vertical integration they're all going to go down the path of vertical integration and broadcom's become really astute at building these xus so they they know the plan they know the cost they know the structure and Hawk talked useum about how this kind of Market pivot is going on Pat I actually think this is a Killer Business and then by the way all this we're barely even talking about the fact that networking look all these companies that don't want to be beholden don't want to be locked into the kind of Nvidia infin and and and in the rack out of the rack and be link who are they gonna go to like broadcom is super well positioned in this particular space that 12 billion number here's my take on why the market you know kind of crapped all over it is they wanted it to be like 15 they were looking for some it was the same as that whole kind of whisper number with Nvidia like oh they only are going to beat by two and a half billion next quarter it's like that's not good enough look they're trading at something like 26 times forward it's not a super high multiple or premium for a company that's delivering 60x per iida they've Diversified they've got different businesses Hawk always makes them profitable and one other thing Pat the whole Wireless and connectivity part of the business the PC uh the stuff they do with apple and smart devices the ramp on that is just starting meaning like that old kind of part of their business they're not really on the AI side of apple as much in the in the device devices but as this ramps and becomes what I think will be one of the most popular Parts this iPhone 16117 broadcom's got the most content out of any silicon provider to Apple that partnership is deep and we're not even seeing that in the numbers that's the part that's lagging right now so all of a sudden next year with these new PCS the new Macs the new iPads and the new phones broadcom will deliver Pat I'm super bullish on this one um I I know we're late we said we knew we're going to be late the show is too good um we still got another topic I have to do this in five minutes or less I'm going to move pretty quickly um you talked to Antonio right I did I did and I'm glad you didn't fall asleep for it I stayed awake this time but this time I was only like it was like 10 at night I was at 4 in the morning I was trying to do that call when I was in Taiwan that was idiotic blame me um so we both HB Pat like look you know you and I will sometimes talk about like kind of these OEM businesses being singled digit not to double digigit growth this quarter very excited for HP they saw 10% growth I made a joke I said they grew faster than one of the largest CRM SAS companies on the planet this last quarter how fun is that um you know margin Integrity in place Antonio was very uh optimistic about not just AI but actually seen growth in their traditional server business who's done that I mean nobody's had good numbers in servers and he really talked a lot about discipline and rigor in the way they're they're running the business right now we're seeing sort of this chasing of these Mega AI deals big margin erosion High Revenue growth rates kind of exciting AI anouncements I think HP is kind of taking the other I was a little critical of the Allin on Nvidia thing not because Nvidia is not great but because I worry about the hedging that that's going to create risk and maybe could differentiate but look it seems to be working that 1.7 billion number the margin looked good on it he sort of said they're not taking deals that they're not doing well on so they're being a bit discriminate in kind of how they're doing that business at the same time Proliance performing um and and Pat you know the other number I really liked is Green Lake 3,000 new customers um and I want to do a little compounding for you here they got into close to 40,000 customers at the growth rate they're doing 10% per quarter compounded by the end of the uh like 2025 26 they're run a run ratees have a 100,000 customers running on Green Lake now as a company that we kind of call a big Iron old hardware company that sure looks like a software model to me a 100,000 subscription customers driving billions of dollars in Revenue that's really positive Pat look I you know I don't always get excited about these businesses but I came away from the conversation with Antonio for the first time I told him this this must be probably the cleanest one of the best looking quarters I've seen from from hbe in a really long time I'm optimistic about it they seem to be playing their cards right they're not chasing they're not chasing the bigger the companies that kind of can go that way they're playing their game they're running their race they're sticking with green like um there there's probably some flaws in it Pat but I want to give credit where credits do and it was a it was a good quarter yeah in my tweet it was like double digit baby it just makes a difference you know at 10% plus you know you you can I you can you should be considered a growth company uh uh for sure I was really enthused by the split between Ai and non AI you know servers were $4.3 billion dollar up 35% uh and operating margin increased from 10.1 to 10.8% uh that was Ai and and non-ai investors got spooked about AI profitability uh because you know gross margin uh was down 420 bips um Edge and hybrid Cloud Revenue uh and operating margin was down uh year-over-year and cash flow and FCF were down uh as well but there were a lot of highlights that uh that that pushed out the uh the low light there um and I was the margin erosion Pat was not nearly what others have faced in the it wasn't and that was the Dell moment the previous quarter where people got spooked uh on margins they looked at the flow through uh to to profitability and I I think I think they had a very similar uh reaction 37,000 Green Lake customers is is I mean it's impressive and yeah I know there's a lot in Green Lake but that's green and it's um you know Subscription Service uh I love that one comment that that that Antonio made with me he said that HP infrastructure was in hyperscalers that was a new one for me I I followed up on on who hey are we sure this isn't tier 2 csps here but hyperscalers they were like it's hyperscalers we'll see I think that's very provoc we heard that from um um Pure Storage uh uh as well and I'm guessing it's uh it's meta there so who knows um 35% uh Improvement in ARR and that's attributable to Green Lake and I'll close this out by talking about uh the future opportunities here um private AI just went GA I cannot way to talk to customers I'd love to do an economic study across them as well interview some of their customers and and what they're the benefits that they're seeing I got the demo of private Ai and it is freaking impressive it's it's really good I'm a Hands-On guy uh I'm not you know I'm not as hand on Hands-On as you know Keith or or Matt but I was super uh impressed by that uh Morpheus data right build out that how do they monetize that uh and Juniper is on tap uh close end of 24 start of 25 as we've seen in the era of AI networking is as important as ever uh there's one 800 pound gorilla in the western world for core switches and it's called Cisco will Juniper help out uh in that they're they're heavy heavy dialed into the SP Market but um Wonder of what they can do in the future so much there Pat what a show man I knew we knew this one was going to be a banger you know sometimes you just call out that they're like this one's gonna be good and then some weeks we're like oh these are like we talking about sand sand again and laser beams no that's all fun but I mean this this stuff is fun man the rumors the speculation and of course the hard data that would drop this week and and you know you see um P the path that uh our little our our newest child together our signal the the testing benchmarks whether that's data center uh servers and networking or that's going to be the next generation of PCS and smartphones just exploding and everyone out there hopefully follows us because we're GNA have the latest and greatest here um you know guys our back our our backlog for Signal 65 is is gigantic our our signal business is is is bigger than futurum was like two and a half years ago already we what's crazy listen we can Pat ourselves uh on the back but all the time I mean listen we we both saw a need in the market that that was going away and quite frankly you know the independent benchmarks and you know on the data center side that that went away a long time ago and then you know the the huge demand with aips whether it's processor companies whether it's OEM odms and stuff like that people want to know what the numbers are yeah and we'll leave it at this Pat Uh you know making sure that there's a pivot from just testing and performance for being a geek and actually helping businesses and markets understand what this means and how it's going to deliver value I think that's where we can really shine that's where we do really shine and by the way we just want to say thanks to everybody out there that tuned in for this show great comments today appreciated all the positive vibes all the comments that came in hopefully you enjoy subscribe share with your friends stay ask questions man we want more questions on the socials hit us on LinkedIn hit us up uh hit us up on the X Twitter be in our community look for long long long tweets from me and Smart Ones from Pat um you know and just stick with us here on the show we promise we're going to keep it interesting keep it engaging but for this show for this episode I got to say goodbye to everybody thanks for tuning in see you next 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