ANNOUNCER:
THIS IS "BLOOMBERG TECHNOLOGY" WITH CAROLINE HYDE AND ED
LUDLOW. ♪ CAROLINE: LIVE FROM NEW YORK,
THIS IS "BLOOMBERG TECHNOLOGY."

INTEL SHARES RISE AS THE CEO
LEAVES THE COMPANY AFTER A FAILED TURNAROUND EFFORT.
TESLA AND BYD RAMP UP INCENTIVES IN CHINA IN A FINAL
PUSH TO MEET SALES TARGETS.

TENSTORRENT WITH A $2.6 BILLION
VALUATION. FIRST, CHECK ON THE MARKETS,
CHECK ON INTEL, UP MORE THAN 3% ON THE BACK OF THE NEWS THE CEO IS LEAVING THE COMPANY AND IT
IS GOING TO BE TWO INTERIM

CEO'S THAT TAKE THE HELM AS THE
BOARD SEARCHES FOR A REPLACEMENT AS THE DEPARTURE IS
POTENTIALLY SIGNALING MORE STRATEGIC SHIFTS. WE GET INTO THE DETAILS WITH
MANDEEP SINGH.

MANY WOULD SAY THEY ARE
SURPRISED. MANY WOULD SAY THE AUGUST
NUMBERS SHOWED THE RESTRUCTURING WOULD BE PAINFUL
AND THE BOARD LOST CONFIDENCE. >> I THINK IT PROBABLY SUGGESTS
THE NUMBERS FOR Q4 DO NOT LOOK

GOOD EITHER.
THE FOUNDRY BUSINESS WITH A BIG CONTRIBUTOR.
EVEN THOUGH INTEL HAS ABOUT $18 BILLION OF FOUNDRY REVENUE, IT
IS NEGATIVE GROSS MARGINS. WHEN YOU THINK ABOUT THE $18
BILLION NUMBER, HOW MUCH OF

THAT BUSINESS COMES FROM THE
OUTSIDE? THEY DO NOT HAVE ANY BIG
CUSTOMERS LIKE TSMC DOES WHEN IT COMES TO THE FOUNDRY
BUSINESS. IT IS MOSTLY INTERNAL WHEN YOU
THINK ABOUT THE $18 BILLION.

THAT IS WHERE THE QUESTIONS
WERE RAISED AROUND INTEL'S CAPEX AROUND $25 BILLION, WHICH
IS THE MAIN REASON THEY ARE BURNING $15 BILLION A YEAR.
I THINK PAT HAD ABOUT FOUR

YEARS TO DECIDE THE FATE OF THE
FOUNDRY BUSINESS. YOU HAVE TO ASK YOURSELF, WAS
FOCUSING ON THE FOUNDRY BUSINESS THE RIGHT STRATEGY?
THE ANSWER IS PROBABLY NOT

GIVEN IT HAS NOT TURNED AROUND
IN THE LAST FOUR YEARS. CAROLINE: AND YET THE U.S.
GOVERNMENT IS HANDING THEM A LOT OF MONEY TO BUILD PLANTS AND
BE THE FUTURE OF ONSHORING.

HOW RESILIENT DOES THAT LOOK? >> YOU ARE ABSOLUTELY RIGHT.
THE GOVERNMENT WANTS THEM TO SUCCEED ON THE MANUFACTURING
SIDE. THE PROBLEM IS THE OPTICS. WHY WOULD AMAZON OR NVIDIA NOT
GO TO INTEL FOUNDRY WHEN THEY

KNOW THAT IS A COMPETITOR?
INVESTING IN THE FOUNDRY BUSINESS WILL MAKE IT MORE PALPABLE FOR
COMPETITORS LIKE AMAZON AND NVIDIA TO USE SOME PORTION OF
THEIR FOUNDRY.

GLOBAL FOUNDRY HAS A LOT OF
BUSINESS OUTSIDE BECAUSE IT IS AN INDEPENDENT ENTITY.
THAT IS WHERE THE GROSS MARGIN PROFILE WILL BE A LOT LOWER FOR
THE FOUNDRY BUSINESS BUT AT

LEAST THE CORE INTEL BUSINESS,
WHICH IS HOW INVESTORS LOOK AT THE SUM OF THE PARTS, THE CORE
CLIENT P.C. BUSINESS IS STILL DOMINANT.
THE SERVER-SIDE IS BLEEDING SHARES TO NVIDIA.
MORE THAN 50% OF THE REVENUE

STILL COMES FROM CORE PC'S. EVEN THOUGH IT IS A SATURATED
MARKET, AI WILL HELP FOR A REFRESHED CYCLE AT SOME POINT.
CAROLINE: IT WILL COME UNDER NEW LEADERSHIP.
WE WILL HAVE PLENTY MORE IN A

MOMENT.
LET'S TALK MORE ABOUT THE U.S. FOCUS ON CHIPS. THE BIDEN ADMINISTRATION
UNVEILED NEW CURBS ON THE SALE IMPACTING 27 DIFFERENT TYPES OF
CHIP DESIGN AND FABRICATION

TOOLS AND HAS BLACKLISTED MORE
CHINESE ENTITIES. MACKENZIE HAWKINS HAD A BUSY
THANKSGIVING REPORTING THIS OUT. DID THIS LOOK SLIGHTLY BETTER
TO THE MARKET THAN SOME

ANTICIPATED? >> THIS HAS BECOME THE THIRD
ANNUAL UPDATE TO THE SWEEPING EXPORT CONTROLS THE BIDEN
ADMINISTRATION HAS LEVIED ON COMPANIES TRYING TO SELL
CHIPMAKING GEAR TO CHINA.

IT CAME IN SLIGHTLY SOFTER THAN
SOME PROPOSALS FLOATED EARLIER THIS YEAR.
THEY DID NOT SANCTION A HANDFUL OF CHINESE COMPANIES THEY
DISCUSSED SANCTIONING AND

EXEMPTED IMPORTANT ALLIES,
JAPAN AND THE NETHERLANDS, FROM THE RULES THAT RESTRICT
ADDITIONAL TYPES OF CHIPMAKING GEAR BEING SENT TO CHINA. CAROLINE:
THEY ARE TRYING TO HOME-GROW

CHIPMAKING IN THE UNITED STATES.
HOW MUCH DO YOU THINK THE U.S. GOVERNMENT WILL BE UPENDED BY A
CHANGE OF LEADERSHIP? >> INTEL LAST WEEK SOLIDIFIED
A DEAL FOR 7.8 BILLION DOLLARS

IN FUNDING FROM THE CHIPS ACT,
THE BROADER $52 BILLION PROGRAM, TO BRING CHIP
MANUFACTURING BACK TO THE UNITED STATES.
THE COMPANY SAID IT IS COMMITTED TO ITS U.S.
EXPANSION PLANS.

IT HAS PLANS TO EXECUTE ON
FACTORIES IN OHIO. HIS DEPARTURE SHOULD NOT CHANGE
THE PLANS BUT A NEW CEO WILL HAVE TO DECIDE WHETHER TO
PURSUE THE OPTIONS HE LEFT OFF THE TABLE. THE U.S.
GOVERNMENT WILL BE WATCHING

CLOSELY. CAROLINE:
THANKS FOR BREAKING IT DOWN. WE WANT TO GET THE
CIRCUMFERENCE OF THE CHIP SECTOR NOW.
YOUR FIRST TAKE ON THE ANNOUNCEMENT OF PAT GELSINGER
RETIRING, WERE YOU SURPRISED?

>> I WAS VERY SURPRISED BY THE
ABRUPT NEWS. A DIFFICULT SITUATION. WHEN ANOTHER CEO RESIGNED OVER
THE SUMMER IT WAS REFLECTING DIFFICULT CONVERSATIONS. IT LOOKS LIKE PAT LOST
CONFIDENCE AND DECIDED TO LEAVE

ABRUPTLY. THAT WAS A SURPRISE.
NOW THAT WE ARE FOUR YEARS INTO THE TURNAROUND, PAT'S DIRECTION
MADE INTEL LESS OF A LEADING MANUFACTURER. WITH MAXIMUM POLITICAL SUPPORT,
THEY PLANNED TO GO BIG.

THE PLAN FAILED BECAUSE TSMC'S
MODEL CANNOT BE COMPETED AGAINST, I THINK. INTEL BEING ABLE TO PRESERVE
MANUFACTURING CAPABILITIES, YES, INTEL BEING SCALABLE LIKE
TSMC IS PROBABLY NOT POSSIBLE.

THAT IS WHERE THINGS FAILED.
CAROLINE: IN AUGUST, ON THAT VERY BLEAK
ANNOUNCEMENT OF NUMBERS WE HAD AND A DISASTROUS SELLOFF IN THE
SHARES, THE RESTRUCTURING

INVOLVED A LOT OF JOB LOSSES.
IT DID INVOLVE THE PEELING AWAY OF THE FOUNDRY BUSINESS TO BE ABLE TO BE MANAGED
SEPARATELY BUT ALONGSIDE INTEL. DO WE SEE PURCHASING COMING
FROM QUALCOMM IN THE CHIP

DESIGNER ARM? >> THE SITUATION IS GOING TO BE
VERY FLUID FOR QUITE SOME TIME FOR SURE.
LAST SUMMER, THE BOARD WAS SAID TO BE FIGHTING OFF ACTIVIST
SHAREHOLDERS

GETTING PREPARED TO FIGHT OFF
ACTIVIST MOVES. THE SITUATION IS COMPLEX.
INTEL HAS MANUFACTURING CAPABILITIES ONSHORE AND OWNS
THE U.S. COMPANY, A UNIQUE ASSET, VERY
VALUABLE IN TODAY'S

GEOPOLITICAL CONTEXT.
I THINK THEY NEED TO CONTINUE THAT. IT MAY BE TEMPTING TO SAY QUALCOMM AND INTEL COULD MERGE. I DO NOT SEE THAT AS A GOOD
OPPORTUNITY TO GENERATE SYNERGIES.

THE CHIPS ARE VERY DIFFERENT.
MANUFACTURING IS A COMPLEX BUSINESS. THAT SCENARIO SCARES ME MORE
THAN ANYTHING. BAD DECISIONS CAN TYPICALLY
ARISE IN A SITUATION LIKE THAT.

THE BEST THING IS TO BE LIKE,
HOW DO WE MAKE SURE WE CREATE A SUSTAINABLE U.S.-OWNED ON U.S.
SOIL MANUFACTURING CAPABILITY? IF YOU DO THAT, YOU HAVE TO
ADMIT YOU CANNOT COMPETE WITH

TSMC.
YOU NEED TO PARTNER WITH TSMC. YOU NEED TO FIND OTHER LARGE
PARTNERS THAT WILL SUPPORT YOU. THE ONE THAT COMES TO MIND IS
NVIDIA. LIKE AN INTELLIGENT PARTNERING
AROUND MANUFACTURING WITH TSMC

AND NVIDIA AS A PARTNER WOULD
BE A MUCH MORE INTERESTING ROUTE TO PURSUE FROM HERE.
CAROLINE: THERE IS ONGOING BREAKING NEWS
AROUND THIS STORY. BLOOMBERG IS LEADING THE CHARGE
WITH HOW PAT GELSINGER WAS

FORCED OUT AFTER THE BOARD
GROUP FRUSTRATED. THE BIGGEST FRUSTRATION WAS
THAT THEY MISSED THE AI EVOLUTION, JUMPING ON AND BEING
ABLE TO ENSURE WHAT THEY PRODUCED WAS ABLE TO COMPETE.
THEY ARE LIKELY TO MISS THE

$500 MILLION TARGET FOR THIS
YEAR WHEN NVIDIA'S IS MAKING ABOUT $100 MILLION A YEAR. >> I THINK THE FRUSTRATION CAME
FROM THE LACK OF PRUDENCE OF THE INITIAL PLAN.
GOING TOO BIG, TOO LARGE,

ASSUMING DEMAND WOULD FOLLOW. IT ENDED UP NOT BEING A
GROWING PART OF THE MARKET. LAST SUMMER WAS PARTICULARLY
ABRUPT WITH THE COMPLETE FAILURE OF INTEL'S AI CHIPS AND WOULD NOT AT ALL BE ON THE
MARKET WITH A SUSTAINABLE NICHE

POSITIONING IN THE MARKET.
THAT WAS PART OF IT. I THINK PAT STUCK TOO MUCH TO
HIS INITIAL PLAN WHICH WAS AN AMBITIOUS, LARGE-SCALE PLAN,
AND HE SHOULD HAVE 18 MONTHS AGO TALKED ABOUT CHANGING TACK
TO SMALLER CAPABILITIES WITH

OTHER PLAYERS IN THE MARKET.
CAROLINE: MUCH OF THIS PREDATED PAT
COMING BACK IN 2021. THAT COURSE WAS ALREADY PAVED
AND HE DID NOT REORIENT QUICKLY ENOUGH.

WHERE ARE THEY IN THE ECOSYSTEM?
>> INTEL COULD SPECIALIZE IN MANUFACTURING IN THE U.S.
WITH U.S. CONTROL AND OWNERSHIP INSTEAD
OF COMPETING, KEEPING A POSITION AT THE
LEADING EDGE AND LIBERATING THE

PRODUCTS. CAROLINE:
THANK YOU SO MUCH FOR YOUR EXPERTISE TODAY. STICKING WITH THE AREA OF AI,
SHARES OF SUPER MICRO ARE SOARING.
THEY FOUND NO EVIDENCE OF WRONGDOING IN THE COMPANY AND WILL
APPOINT A NEW CEO.

THIS IS A COMPANY THAT USES
NVIDIA CHIPS WITHIN THE SERVICE ITSELF TO KEY CLIENTS, UP 14%
OVER THE LAST TWO TRADING DAYS. WE WILL BREAK DOWN THE BLACK
FRIDAY SALES DATA AND THE

TRENDS FOR CYBER MONDAY WITH
RACHEL TIPOGRAPH. STICK WITH US. CAROLINE: TODAY IS CYBER MONDAY.
ADOBE EXPECTS CONSUMERS WILL SPEND A RECORD $13.2 BILLION,
UP 6% YEAR ON YEAR.

ONLINE SPENDING IS EXPECTED TO
PEAK BETWEEN 8:00 AND 10:00 LATER TONIGHT WITH $15.7
MILLION SPENT EVERY MINUTE. THAT IS EASTERN TIME OF COURSE.
LET'S LOOK AT WHAT HAPPENED

WITH BLACK FRIDAY ON THE
WEEKEND. IT FEELS LIKE A BIG YEAR.
I'M GETTING HIT WITH A LOT OF MARKETING.
IS IT FEELING THAT WAY FOR YOU? >> IT IS.
DESPITE WHAT IS HAPPENING IN

THE ECONOMY, CONSUMERS ARE
SHOWING UP TO SAVE. I WANT TO SAY SPEND BUT IT IS
REALLY ABOUT SAVINGS NOW. CAROLINE: INTERESTING.
IT IS MORE ABOUT DEALMAKING.

HOW ARE THE COMPANIES ACCESSING
THEM ACROSS VARIOUS PLATFORMS? DO WE HAVE SOME TECHNOLOGICAL
ISSUES? RACHEL: ABSOLUTELY. WHEN WE LOOK AT WHAT HAPPENED
FROM THANKS -- HELLO?

CAN YOU HEAR ME? CAROLINE:
APOLOGIES. THERE IS A BIG DELAY. DO CARRY ON. RACHEL: HELLO? WHEN YOU LOOK AT WHAT HAPPENED
BETWEEN THANKSGIVING AND

SUNDAY, THE MAJORITY OF TRAFFIC
CAME FROM SOCIAL. META BEING NUMBER ONE, TIKTOK
BEING NUMBER TWO, AND YOUTUBE BEING NUMBER THREE.
IF WE ARE LOOKING AT RESULTS

FROM THIS YEAR, YOUTUBE WOULD
NOT HAVE MADE THE TOP THREE. WHAT IS CLEAR RIGHT NOW IS
BRANDS ARE RECOGNIZING SOCIAL IS THE THIRD SHIFT.
WHEREVER CONSUMERS ARE, THAT IS WHERE BRANDS ARE INVESTING
DOLLARS AND TIMES TO GAIN MIND

SHARE TO DRIVE TRAFFIC TO BLACK
FRIDAY DEALS. CAROLINE:
HOW ARE THE COMPANIES DOING WELL LIKE WALMART AND TARGET,
HOW ARE THEY TRACKING IT AND MAKING SURE THEY HAVE THE
MEASUREMENTS THAT PROVE THE

INVESTMENT IS MAKING SENSE FOR
THEM? RACHEL: ABSOLUTELY. IF YOU LOOK AT AMAZON'S
EARNINGS OR WALMART EARNINGS, IT IS VERY CLEAR THESE
RETAILERS ARE BECOMING DATA

BUSINESSES.
THEY ARE MAKING 80% TO 90% MARGIN SELLING DATA AS A
SERVICE. WE KNOW THEY ARE NOT MAKING
THAT MARGIN ON PHYSICAL GOODS. WHEN IT COMES TO MEASUREMENT,
MAJOR BRANDS ARE FIRST RELYING

ON RETAILERS' FIRST-PARTY DATA
BUT THEY HAVE TO MARRY THAT WITH THIRD-PARTY SOURCES
BECAUSE WE CANNOT BE GRADING OUR OWN HOMEWORK.
THEY ARE TURNING TO OTHERS TO VALIDATE WHAT IS HAPPENING.
BETWEEN MIKMAK AND ADOBE DATA,

WE ARE SEEING THE SAME THING. IN MIKMAK, WE HAVE SEEN A 1%
INCREASE IN CONVERSION RATES DURING THE BLACK FRIDAY WEEKEND
THIS YEAR COMPARED TO LAST YEAR. IF YOU EXTRAPOLATE THAT TO WHAT
ADOBE IS SEEING, ADOBE SAW AN

INCREASE OF $1 BILLION IN
REVENUE. THAT 1% INCREASE IN CONVERSION
RATE MERITS THE $1 BILLION INCREASE IN REVENUE. BY MARRYING MULTIPLE SOURCES,
WE CAN SEE THE PICTURE THAT

CONSUMERS SHOWED UP, WERE
CHOOSY WITH THEIR DOLLARS, AND TURNED TO PLACES LIKE WALMART
BECAUSE THAT IS WHERE THE VALUE IS AND WHERE THE BREADTH OF
MERCHANDISE IS THIS SEASON.

CAROLINE:
COMING UP, THE END OF YOUR RUSH FOR EV MAKERS TURNING TO CHINA
TO MEET THEIR ANNUAL SALES TARGETS. THAT IS NEXT.
THIS IS "BLOOMBERG TECHNOLOGY."

CAROLINE: TIME FOR TALKING TECH.
FIVE CANADIAN PUBLISHERS HAVE SUED OPENAI FOR BREACHING
COPYRIGHT, ALLEGING THE COMPANY SCRAPES CONTENT TO TRAIN
ITS PRODUCTS. ACCORDING TO THE OPENAI

SPOKESPERSON, IT IS TRAINED ON
PUBLICLY AVAILABLE DATA GROUNDED IN FAIR USE.
IN HIS LATEST COURT FILING, ELON MUSK REPEATED EARLIER
CLAIMS THAT OPENAI BROKE ITS PROMISE

TO HIM AND ABANDONED ITS
FOUNDING PURPOSE AS A CHARITY WHEN IT ACCEPTED BACKING FROM
MICROSOFT IN 2019. THE CEO IS SET TO MEET THE THAI
PRIME MINISTER ON TUESDAY.

THE MEETING COMES AFTER NVIDIA
ANNOUNCED A BUILDOUT OF MANUFACTURING IN THAILAND IN
OCTOBER. STICKING WITH ALL THINGS ASIA,
LET'S TALK ABOUT CHINA AND EV MAKERS.

TESLA, BYD, WE ARE GETTING DATA
THAT THEY HAVE UNLEASHED MORE DISCOUNTS AND INCENTIVES IN
CHINA IN A FINAL PUSH TO MEET ANNUAL SALES TARGETS.
LET'S BREAK IT DOWN WITH DAVID

WELCH.
WHAT ARE WE GETTING ON OFFER IN CHINA? DAVID:
THEY HAVE BEEN FIGHTING FOR MARKET SHARE ALL YEAR AND NOW
EVERYONE IS TRYING TO HIT THEIR SALES GOALS IN THE LAST MONTH.
IT REMINDS ME OF TOYOTA'S

DECEMBER TO REMEMBER EVERY YEAR
IN THE U.S., BUT THIS IS ELECTRIC VEHICLES IN CHINA.
THEY ALREADY ANNOUNCED DISCOUNTS LAST WEEK ON THE
MODEL Y. BYD HAVE BEEN DOING THIS FOR A
WHILE, LAUNCHING A PRICE WAR TO

PUT PRESSURE ON COMPETITORS,
GAIN MARKET SHARE. BYD IS ONE OF THE FEW EV MAKERS
IN CHINA THAT EVEN MAKES MONEY SO IT PUTS PRESSURE ON DOMESTIC
RIVALS.

TESLA IS TRYING TO HANG IN
THERE IN A TOUGH MARKET FOR EV MAKERS.
THEY WANT TO KEEP THE SHARE UP AND KEEP THE CARS MOVING.
A VERY GOOD DEAL IF YOU ARE LOOKING FOR AN EV IN CHINA AND
YOU'RE SEEING SOME INDIE U.S.

AS WELL. CAROLINE:
SOME 0% LOANS. THERE ARE NEW ENTRANCES. TESLA IS DEPENDENT ON CHINA IN
MANY WAYS AND MANY WONDER IF THEY WILL MEET THEIR
FOURTH-QUARTER TARGETS IN TERMS

OF SALES.
HOW DIFFICULT IS IT TO NAVIGATE CHINA? >> DAVID: VERY DIFFICULT.
THE EUROPEANS HAVE HAD A TOUGH TIME, SO HAS GENERAL MOTORS.
TESLA IS TRYING TO STAY IN THE

GAME.
THEY ARE HAVING TO DISCOUNT. ONE OF THE REASONS YOU ARE
SEEING OTHER CAR COMPANIES STRUGGLE IS THEY ARE NOT AS
WILLING TO DISCOUNT AND SELL AT A LOSS AS DOMESTIC PRODUCERS
ARE.

BYD IS DRIVING A LOT OF THIS
BECAUSE THEY ARE HUGE, THEY ARE PROFITABLE, TRYING TO GROW ALL
OVER THE WORLD. THEY HAVE LOWER COSTS SO THEY
ARE ABLE TO DO IT IN A LOT OF

WAYS.
THERE IS A BIT OF A DARWINIAN GAME PLANNING IN CHINA WHERE
THE TOP PRODUCERS WILL GO FOR MARKET SHARE, PUSH OTHERS
OUT OF BUSINESS OR INTO DOWNSIZING SO THEY DOMINATE THE
MARKET ONE DAY.

CAROLINE:
DAVID WELCH WITH A BRUTAL OUTLOOK ON EV'S IN CHINA.
THANK YOU. STELLANTIS IS LEFT WITHOUT
CLEAR LEADERSHIP AFTER A SURPRISE DEPARTURE FROM THE CEO,
WHICH WAS REPORTED EARLIER.

THIS COMES AT A TIME WHEN
STELLANTIS IS UNDER PRESSURE TO HALT THE SALES SLIDE IN THE
U.S.. IT HAS ALSO SUFFERED WITH THE
EUROPEAN MARKET WHERE THE DEMAND FOR EV'S IS WANING.
CHINESE MANUFACTURING IS

EXPANDING IN THE REGION.
COMING UP, ONE STARTUP HOPES TO BREAK NVIDIA'S DOMINANCE WITH
HEAVYWEIGHT BACKERS INCLUDING JEFF BEZOS AND SAMSUNG.
WE SPEAK WITH JIM KELLER NEXT.

A QUICK CHECK ON INTEL.
IT IS THE KEY NEWS OF THE DAY THAT WE HAVE SEEN PAT GELSINGER
STEP ASIDE AND ANNOUNCED HIS RESIGNATION ON THE BACK OF A
FRUSTRATED BOARD WHO COULD NOT

GET BEHIND HIS TURNAROUND OF
THE ICONIC CHIPMAKER. WE ARE UP 7% AS WE HAVE TWO NEW
INTERIM CEO'S NAMED FOR THE TIME BEING.
THIS IS "BLOOMBERG TECHNOLOGY."

♪ CAROLINE:
WELCOME BACK TO "BLOOMBERG TECHNOLOGY."
LET'S GET A QUICK CHECK ON THE MARKETS.
LET'S FOCUS IN ON WHAT IS HAPPENING WITH CHIPS. A 5% RISE IN INTEL AS THE CEO,
HIRED BACK IN 2021 TO TURN

AROUND THE ICONIC CHIPMAKER,
WILL LEAVE THE JOB AS THE TURNAROUND HAS FAILED AND HE HAS
LOST THE CONFIDENCE OF THE BOARD ACCORDING TO BLOOMBERG
REPORTING. NVIDIA IS UP 10%.

INTEL SHARES DROPPED 60%.
NVIDIA SHARES WENT UP. LET'S TALK CHIPS MORE BROADLY
AND HOW THERE ARE SOME NEW ENTRANTS.

JEFF BEZOS AND SAMSUNG ARE
BETTING BIG ON TENSTORRENT. JOINING US TO DISCUSS IS THE
CEO OF THE COMPANY, JIM KELLER, WHO IS HIMSELF A LEGEND IN THE
CHIPMAKING WORLD.

THE MONEY YOU ARE RAISING, WHAT
IS IT YOU ARE HOPING TO DO? YOU ARE WANTING TO MAKE A
CHEAPER OPERATION AN OPTION FOR AI ACCELERATOR CHIPS? >> THAT IS RIGHT.
WE ARE BUILDING UP A TEAM.

WE ARE BUILDING OUT OUR
PRODUCTS. WE ARE STARTING TO SHIP
PRODUCTS. OUR MISSION IS TO BRING ON
DEVELOPERS AND EARLY CUSTOMERS. CAROLINE:
LET'S TALK ABOUT THE CUSTOMERS

AND WHAT YOU OFFER THAT IS NOT
IN THE MARKET. WHAT IS YOUR SELLING POINT? JIM:
WE HAVE A COUPLE OF THINGS. WE LICENSE OUR I.D.
AND WE ARE BUILDING A BUSINESS ON THAT. WE ARE SELLING LOW-COST
SYSTEMS. I'M INTERESTED IN

HITTING A LOWER COST POINT.
PEOPLE LIKE THE TRANSPARENCY. THEY CAN SEE EXACTLY WHAT THE
TECHNOLOGY IS DOING. IT HAS TURNED INTO A GREAT
RECRUITING VEHICLE.

FOR SOFTWARE. CAROLINE:
LET'S GO TO THE PRICE POINT. A CHEAPER OFFERING.
A LOT OF THAT IS BEING DONE BY HAVING LESS PRICEY COMPONENTS.
NVIDIA CHIPS ARE INCREDIBLY EXPENSIVE.
PEOPLE PAY IT BECAUSE OF WHAT

THEY OFFER, THE FULL STACK.
BUT THEY STRUGGLE WITH HIGH-VALUE MEMORY CHIPS.
YOU DO NOT NEED THEM. WHY NOT? >> IT'S PARTLY ABOUT CHOICES.
THERE ARE TWO CHOICES. IF YOU PICK AN EXPENSIVE MEMORY
TECHNOLOGY, YOU WILL NEVER GET

THE PRICE DOWN.
YOU NEED TO THEN MAKE TECHNOLOGY DECISIONS TO LOWER
YOUR COSTS. IN OUR ARCHITECTURE, WE KEEP
THE DATA ON SHIP MORE. WE HAVE A SOFTWARE STACK GOOD
AT PARTITIONING.

THEY CAN SEND INFORMATION TO
EACH OTHER WITHOUT HAVING TO GO THROUGH MEMORY.
THAT LOWERS WHAT IS REQUIRED AND LETS US SCALE NATURALLY.
CAROLINE: I AM A NEW INVESTOR, YOU
BROUGHT ME ON BOARD. I'M

INTERESTED, JEFF BEZOS,
SAMSUNG. YOU SAY I WILL DO THIS WITH CHEAPER OFFERINGS -- WITH
CHEAPER OFFERINGS. WHAT SORT OF PRICE POINT ARE WE
LOOKING AT? JIM:

THE MARKET IS SO BIG, THE
PRESENT WE HAVE TO GET IS PRETTY SMALL TO BE A REAL VALUE
PROPOSITION. NEXT YEAR, WE WILL DO FINE AND GO
TO HEAVEN IF WE MAKE $200 MILLION.
WE HAVE ALREADY BOOKED $50

MILLION IN REVENUE.
I'M INTERESTED IN FINDING SMALL, EARLY PLAYERS, PEOPLE
WHO WANT TO OWN THEIR TECHNOLOGY.
PEOPLE ARE EXCITED ABOUT OUR SOFTWARE AND HARDWARE
ARCHITECTURE.

WANT TO GROW ORGANICALLY FROM
THERE. SOME PEOPLE HAVE FOCUSED ON THE
BIG GUYS FIRST. THAT IS NOT HOW NEW TECHNOLOGY INTRODUCTIONS GO.
YOU FOCUS ON SMALLER PLAYERS,

PEOPLE WHO NEED DIFFERENTIATION.
THAT IS OUR MISSION. CAROLINE: WHAT IS THE MISSION BUILDING
IN, IN TERMS OF LONG-TERM VALUE OF GENERATIVE AI APPLICATIONS?
DO WE THINK WE ARE IN SOME SORT

OF THE HYPER CYCLE?
DO YOU THINK THE MARKET IS AS BIG AS MANY ARE THINKING? JIM:
THERE WILL BE MULTIPLES. PEOPLE SAY IT WILL GO DOWN NEXT
YEAR. IT WILL GO UP AND DOWN.

LOW COSTS FILTER ALL OF THAT
STUFF. AI IS GOING TO DOMINATE COMPUTING OVER THE NEXT 10
YEARS. WE ARE JUST STARTING. THE HARDWARE IS GOING TO CHANGE
A LOT. THE SOFTWARE IS GOING TO CHANGE
A LOT.

ONE DAY, YOU READ IN THE PAPER
THAT LOM'S CAN DO ANYTHING AND THE NEXT DAY THEY HAVE HIT THE
LIMIT. IGNORE ALL OF THAT. WE ARE JUST STARTING.
THERE WILL BE MASSIVE TRANSPORTATION --
TRANSFORMATIONS.

I WANT GREAT DESIGNERS, AI
PROCESSORS, CHIP DESIGN, SYSTEM DESIGN, SOFTWARE DESIGN.
THE OPEN-SOURCE STUFF IS INTERESTING BECAUSE THAT
ENGAGES A COMMUNITY OF PEOPLE PASSIONATE ABOUT THAT TO
CONTRIBUTE BACK. CAROLINE:

Intel's CEO Retires, Retailers Ready for Cyber Monday | Bloomberg Technology

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