Re-engineering the Semiconductor Supply Chain with Intel CEO Lip Bu Tan

Nine of the 10 company I invest halfway they change their business plan because market have changed.

So I like to have entrepreneur as team not just one person. I always believe in when I was at cadence and also at Intel is first of all you crawl and then be

humble listen to customer and then first step for me is to strengthen my balance sheets focus on the products and I really simplify the product listen to customer and then drive the next

generation leadership products and then right now the agentic AI and influence CPU become you know highly in demand and so in some way I'm happy right now the demand is very high for my CPU back

Certainly very happy that Jensen Huang my oldtime friend he also put 5 billion uh in investing and support me 5 billion become 25 billion now if you look at it

10 years from now what will be the winning company the one that Hi listeners welcome back to no prior today Allad and I are here with Lehutan

the legendary investor from Walden then CEO of Cadence now CEO of Intel. We talk

about his plan to transform Intel, having the US government as a major shareholder, how to be an amazing semiconductors investor, and whether or not we can make chips in the United

States. Welcome, Lipu. Lipu, it's great

States. Welcome, Lipu. Lipu, it's great to see you. We'll start with the obvious question. This is a really hard job to

question. This is a really hard job to go be CEO of this incredibly important um American semis company. Why take the job at all?

It's a good question. I'm 66 and people that well you should retire rather than take on this hottest job in the industry and so a couple reason one is um this is

iconic company and it's so important for the semiconductor ecosystem and also so important for United States and so I decided you know do one more after

cadence a lot has happened in this past year what has been the most surprising to you well the most surprising thing that I don't learn from my previous job or even

training is one day early morning President Trump asking me to resign and conflict of interest and there's no exceptions and so I had to convince

myself first of all you know I don't need this job I do it purely to save Intel and so take that personal issue out of the way then I figure out what what can I do

to be helpful to Intel and so good news is I have a meeting you know Thursday morning and then Monday I have the meeting and then he listen to me like I

have a chance to explain myself you know born in Malaysia grown up in Singapore went to MIT and I live in US and never live outside country

and so something that I share and then somehow he listened very well and then uh he gave me the chance and so I'm delighted and now you have the chance to do the work um when you said you know the the

job is to save intel It's a really important company. What what does that

important company. What what does that look like to you? What does Intel winning or thriving look like?

Yeah, I just passed 14 months. A lot of thing happened in this 14 months. So, a

couple of thing. One is to change the culture and then uh clearly want to drive more accountability and also in term of decision making had to be

faster. You know I'm so used to startup

faster. You know I'm so used to startup culture and you move fast in the speed of light and going to have that bureaucracy layer of layer of meeting

and so something that I change the accountability listen to the customer and the customer delighted you know someone like liberal so humble willing to listen and then address some of the

problem that they face and then try to delight the customer and also the other part from day one I decided all the engineering report to me I'm being an engineer by training I want to know what

went wrong and what are the thing that I need to correct. Listen to the customer and delight the customer and then make sure that we have the right product.

Simplify our product line and really have the root map and the vision for the next five 10 years.

What is your vision of where Intel should be in 10 years?

Yeah, I think couple of things. One I

always believe in when I was at Cadence and also at Intel is first of all you crawl and then be humble. listen to

customer and then secondly deciding to walk and then finally deciding to run in spring. So that's kind of my culture of

spring. So that's kind of my culture of step by step doing it and then first step for me is to strengthen my balance sheets and uh the balance sheet is really have

horrible in some way. So I'm delighted you know US government become a big shareholder just I explained to President Trump TSMC when they started they have the D Taiwan government as a

shareholder. If you look at Japan, you

shareholder. If you look at Japan, you look at Singapore, this is the infrastructure US government get to provide the support. Secondly, very

happy that Jensen Hong, my oldtime friend uh he also put five billion uh in investing and support me and I'm glad I at least do some good work. His five

billion become 25 billion now and uh or more. And then the other part is Soft

more. And then the other part is Soft Bank Master. I used to be at Soft Bank

Bank Master. I used to be at Soft Bank board and then he lend a hand to help me. So we strengthen the balance sheet

me. So we strengthen the balance sheet and then uh focus on the products and I really simplify the product listen to the customer and then drive the next

generation leadership products and then um in some way it's very lucky uh right now the agentic AI and influence CPU

become you know highly in demand and so you know versus one to eight in the training CPU to GPU now I can see one to four maybe one to

And I'm delighted CPU become important.

I talked to some of the AI model and developer. They said about in term of uh

developer. They said about in term of uh reinforced learning uh in term of the speed of orchestrating all the agents and turn up the CPU is actually is

better and so in some way I'm happy right now the demand is very high for my CPU. So I think overall build on the

CPU. So I think overall build on the product on the data center server side.

Then the other part is our foundry business and initially this is a capital intensive business and it's not easy and you really need to have couple of thing you need to have all the right IP so

that you can support the customer like for example if it is a mobile related you got to have low power uh IP set that you need to have without that you cannot

serve them it's a service business it's a trust business if people want to give you you know orders to have wafer to If the yield not good they will be toast

in term of revenue miss. So with that I think it's very important to really focus on the yield the defect density the cycle time and then make sure that

you really able to meet and serve the customer in high quality and reliable and so those are the thing that I really focus on it and eventually you have to

really move into a full stack. So not

just a silicon you need to have a software and some of the customer asked me give me the whole rack. So there's a system that you have to build and so I think those are the thing that I quietly

building uh step by step and recruit some of the best talent I can find. By

the way all the rec recruitment I do it myself no search firm helping and so I think sometime it's good to have a roer deck that you know who to reach out to call for. Yeah. I mean, you've been in

call for. Yeah. I mean, you've been in the business for so long and you know, you've you've run a cadence for I think 12 years before this and so 13 years. I'm sorry. Yeah.

13 years. I'm sorry. Yeah.

And then two more years as executive chairman. So 15 years I signed up for

chairman. So 15 years I signed up for three months. Three months. So right now

three months. Three months. So right now I be very careful the moment you said just do it for three months. It turned

out to be 15 years.

Yeah. Well it seems like you have a lot of longevity ahead of you here as well.

And so um the other big initiative that that has been sort of talked about is Terafab and working with Elon Musk on that. Can you tell us a bit more about

that. Can you tell us a bit more about how that came together and your involvement and how you all are collaborating?

Yeah, good. I mean, Elon Mus I think we all agree is one of the best if not the best uh entrepreneur in this century. He

and I we share the same view that the semiconductor infrastructure actually is not catch up with the AI growth and uh in term of you need the capacity you

need to have the productivity and you have the dry efficiency and so those are the thing that he and I we share that there's some something missing and then secondly he just delighted to

work with him and uh he is very I call it unconventional and he basically question every step and then why this traditional way of doing things and in some way it's very

refreshing and I like that you know I like people have different opinion and let's work together find what is the best route and we both going to learn a lot together and then I think clearly he

have a vision that his robots and his car you know he need a lot of silicon yeah could you actually explain what terapab is for people who aren't familiar with it and terab he decided he want to build his own fab

and then meanwhile we are delighted to work with him and then make sure that we can work together and enable him to be faster and quicker to the production and then using some of our technology and

some of our process and that's something that we both kind of collaborate together and he's a very good team that I work with weekly and it just refreshing to work with him and he's talked about things like he

wants you to be able to smoke inside the clean room and all these things that normally are the burger I think I don't go that far and maybe some part of the clean room you can do

that but I think something that is open mind and then we are also listen and see whether we can do that.

Yeah I mean it's very exciting to see how you're morphing in the business here in the US in terms of um incrementally building out the foundry business in terms of collaborating with things like terra fab if you think about the global

AI and semiconductor supply chain. So

say that you were to look at the changes that AI is driving on a macro basis, country by country. And if I look at certain countries, when I look at the layoffs that are claimed from AI, for example,

um most of them I think are overstated right now. You know, most of the layoffs

right now. You know, most of the layoffs are actually just overhiring during 2020 co period. But the first things I see

period. But the first things I see actually being cut are outsource firms where you'd rather cut external headcount versus internal. So you're

cutting external customer support.

you're cutting external IT and that has more of an impact I think for certain countries which have big BPOS the Philippines India etc and so they may be impacted in the short run by AI and then if you ask how do companies participate

in the future in a positive way in AI you have to almost go country by country right places with cheap energy will do data centers places with the ability to train models will train models but it's probably only the US and one or two

other places um how do you think about the the shift in global supply chain for the semiconductor industry should certain countries invest more like should Israel be doing more given uh Milanx and the Nvidia and Intel presence

there and should they try to do more in semiconductors? Should other should the

semiconductors? Should other should the Philippines move back to more of a manufacturing base like how do you think about that on a global basis?

Yeah, good question. So I think clearly the AI is changing the whole landscape and I think the impact will be bigger than internet and uh it's more profound

also. So I think the AI you know in

also. So I think the AI you know in initially is able to help you to do things more efficiently and then with a lot of agent helping you uh to do things

that is now kind of mundane that you need to do but now they can give it to you faster. So in some way I think it

you faster. So in some way I think it can drive a lot of efficiency even like semiconductor design how much you can drive the efficiency in term of timing

uh how quickly can you come out and secondly the cost and so I think those will be helping you to drive that and then I think couple of bottlenecks for the AI you know demand and growth one is

of course everybody knows power constraint some country the power they just don't have that it get impacted and then secondly a A lot of people didn't

realize the helium impact can be also quite significant for semiconductor. And

then the thirdly is everybody know right now memory is a bigger shortage and everybody try to scramble for memory and then even though you have to build a fab to capacity increase it will take couple

of years to do that and same thing for CPU GPU and all this will be highly demanded and I think the also the pricing also go up because we have to

pass the price the cost to the customer.

So I think those will be the impact the industry growth and then uh I think overall I felt that you know the company that most impacted is you are not embracing uh AI

and because AI can help you to drive a lot of efficiency across all the different function of the enterprise. we

should embrace and also find way to better use the AI for your prediction for your design for your you know all the different part of the workload and I think that's tremendous

a number of people would say the simplistic argument against Terraab against Intel foundry being competitive is really a question of you know there's

there's all the factors internal to the building right you describe um IP and velocity of just how you're doing business. Then there are external

business. Then there are external factors and you know Allah's talking about a number of them but one of them is the the cost of labor and actually the manufacturing capacity you know in investing in the foundry business you

obviously believe there's a version where you can manufacture domestically and Elon does too can you talk a little bit about that and you know how real that constraint is the labor constraint

right so I think you know the when I decided whether should double down on foundry or should I get out of the foundry Mhm.

And I there's a lot of voices, a lot of voices in the marketplace as you can tell.

It's very expensive.

It's very expensive not going to work.

But I finally decided this is very important for United State and also very important for the industry. Mhm.

And I'll give you the idea that you know this uh we all live through this challenges of supply chain and uh it's very important for any of the big

company in semiconductor and really have to think about the supply chains and you have to have a robust and resilient supply chain. You cannot just depend on

supply chain. You cannot just depend on one or two player in different geographic goal and so I think you know the more and more people going to realize making in United States is

critical and then the most advanced process like for example we have the you know 14A is like 1.4 4 nanometer and we already starting to plan for 1 nanometer

and 0.7 nanometer. It's getting smaller and smaller. So in a way it's much like

and smaller. So in a way it's much like our hair so thin. So it's a lot of complexity. It's not that easy to do and

complexity. It's not that easy to do and every step if you make a mistake that you just go down uh you know go down the drain. So in some way you have to be

drain. So in some way you have to be really precise and in that manufacturing. So in some way this is

manufacturing. So in some way this is become more and more going to be the bottleneck. Mhm.

bottleneck. Mhm.

So we felt that we you know we have a lot of respect for TSMC. We are great partner and then the more important we both need to have more capacity to serve the customer

and then uh so I think we decided bite the bullet longer term I think is critical and then that's where I can create more value for the industry.

People have been talking for a long time about eventually um hitting a point of resolution where you can't really uh miniaturaturize things further like the line with width just gets too small to

uh be able to uh keep going. Uh when do you think we actually hit that limit?

Good question. So I think I can see you know right now we have 18A and then now to going the production of 14A I can see 10 and seven and so I think that path I

think we can get there but going to be more and more expensive and more difficult to do and that's why we need partners we cannot just do it oursel alone partner with the subscript vendor partner with

equipment vendors so that make sure that we can really drive those yield and performance and then the other part also really become the bottleneck is packaging the

advanced packaging and so we all know about co by TSMC now we have a really good one called e-ip that is a really next generation I had to make sure that

it become able to do in the production yield that meet the customer requirement and now see starting to run out of steam like you describe so right now I also look at some new material so become

going back to the material size or the chemical table so guardian nitrite, silicon carbide and Indian fastfite. So

I invest in all three.

And then looking at some of this new material, how can we really drive that?

And then in term of packaging, I starting to invest into glass.

Glass is a very good heat insulator.

So we I invest a venture site called 3DGS. Then I realized that Intel we have

3DGS. Then I realized that Intel we have like 1,000 pattern on the module. So how

the you know subscript and the module put it together and then we just announced a big program with Indian government to manufacturing in in India plus in US in New Mexico. So I think

this advanced packaging very important I also starting to look at artificial diamond and that's another very good you know insulator. So I also invest into uh you

insulator. So I also invest into uh you know diamond foundry and that's something is the next generation to look at. So new material,

new subscript material and new you know uh design methodology to drive that. So

one thing good about being an engineers you always hitting the wall then you find way to either jump over the wall or you work around the wall and then uh to

get to the better result and that's what I being uh have been long time as a investor and building semiconductor from the EDA tool to design to manufacturing

it's kind of nice to have that experience now I can help find a way to make a small contribution to the industry. Yeah, I it's very exciting and

industry. Yeah, I it's very exciting and one of the reasons I'm asking about it as well is to your point there's always some things that you can vent around but there are also physical limits where once you hit seven inst whatever the limitation is you start to run into yeah

you need to find new materials or find other workarounds um and then the interesting question is uh and we've been talking about this for a long time I remember 20 years ago people were talking about how we'd eventually hit this hit a point where we ran out of

space on this um is do you run into some sort of asmtote that actually normalizes performance across different foundaries or not?

Yeah, good question. In term of like most law is a know double you know.

Yeah.

And then the power and the cost and then you can double the performance but you cannot double down on the cost and and area.

So those are the thing you have to give give way unless you find some new way of material new way of design and then become material science. I starting to hire more people in the material

science. So that is kind of innovation

science. So that is kind of innovation in our area. How can we do that? And I

still remember 18 years ago and I I still investing in semiconductor and actually most of the VC firm some of them were very nice tier one venture firm a good friend of mine and initially

the partners meeting the whole partners in the room then after I talking about semiconductor half make excuse to run out of the room then eventually the

other half they said available do you have any software service so then they left with only who sympathetically listen to me. So it's

kind of the history have changed and now semiconductor if you look at it Jensen is a 5.3 trillion market cap company and

then Broadcom and TSMC is two trillion market cap company and Lisa my good friend at AMD is almost 800 billion and I'm close to 600 billion. So in some way

it's kind of semiconductor become hot again and it become essential because 15 years 20 years ago when I invest in semiconductor no VC want to join me except you know some of the big

corporation like Samsung you know ARM and soft bank and others and investing with me and then now I starting to see a lot of VC like to come investing in semi so I'm very happy

given the enormous interest in investing in this area that used to be considered too Right. Yes.

Right. Yes.

Um what do you think I mean you've been a venture investor with Walden for a very long time as well as an operator.

Uh you know the the general fears I'm just going to list a a bunch of them. Um

the the general fears have been uh it's very capital intensive. Um and you should tell me what I'm missing. It's

very unpredictable in terms of you know shipping a design that works missing tape out. Um and uh you need to

tape out. Um and uh you need to understand the workload very well. I

think there's a there's another which is just like it's it's very high risk for the customer. Yes. To switch, right? I

the customer. Yes. To switch, right? I

think you know we've been involved in companies together where you know there's a design win and then there's still the question of like scaling order volume. Um uh and then there's a

volume. Um uh and then there's a cyclicality. Yes.

cyclicality. Yes.

Right. Of you know you you build hard manufacturing capacity and demand may may change or not in any any given year.

Um what is your view on how a bunch of you know what makes it hard as an industry uh and then the the secular demand growth from a bunch of different

areas right so you have the um recognition of how important the a more diverse supply chain is and then you have this like explosive demand growth on the AI side how do you you're still

an investor and then you're making the biggest bet ever like go be CEO how do you like think about these different risk and advise others about where to invest in this supply chain. I realize

that's a very large question, but just given your your history with it, I I think there's a there's a lot of like yolo action of like there's a memory shortage by memory stocks um as well as

you know just an unwillingness to take on things that have a 10-year timeline like material science.

Good. You have quite a broad range of questions. Let me try to uh explain

questions. Let me try to uh explain that. So first of all I think uh you

that. So first of all I think uh you know the venture capital startup is in my blood and I really enjoy it and uh so I think uh this is not tied to brag

about it and so there's some good exit you know I still have 159 IPO 126 uh you know M&A and that's include

semiconductor just break down the semiconductor I invest over the years uh 200 and 38% is in US so what are actually look at some mechanisms just to just to be clear that's

incredible right thank you thank you it's just enjoy building it and uh but more important I look at is first of all on the investment side I always look at where is the bottleneck what are you trying to

solve and for example I invest in company called uh cradle semiconductor australa lab is this interconnect become the bottleneck so I decide to back and

also I back uh celestial AI you know optical sign and then because speed become more important in the interconnect in the cluster. So I think optical become very important. Look at

Jensen he invests in almost every company is photonic related and then the other part I looking at is you know okay what are the uh solution

that need like for example we talk about design and then the complexity and also the cost. Can you find some using AI

the cost. Can you find some using AI machine learning to drive better design and better solution? So a couple of new startup actually go into the EDA related

area to drive performance improvement. I

think it's a goal mine to do that. And

then the other part you look at the new material and we talk about you know this u you know Indian fastfi that's why I invest in infi and then well bought it and then uh then you invest into some of

the new material that gallium nitrite and then silicon carbide and then some of the company starting to being acquired include one of them you know doing power management and ADI just

bought empower and so again this IVR that's a very very good area in power management become bottleneck in term of converting from 40 volt down to one volt and then those in term of that

conversion you lost a lot of power and how you do drive the power improvement so I think power thermal those become the bottleneck so I think I always look

at from what is the problem we try to solve is it real is customer crying for it and then I starting to invest the next thing is look at it's very important from day one you'll have to

target the first customer and usually I like the customer is hyper the skill. They have the skill. If they

the skill. They have the skill. If they

like what you have, they're willing to pay million of dollars next few years and even giving some warrant is worth it because you have a big one customer you

can scale. So I always look at some of

can scale. So I always look at some of the formula how do you do that and then where do you get the talent and then yeah you know sometime it's very important to find the talent. That's why

I'm very interested in US and then Silicon Valley and then some Austin and then the other part is Israel a lot of talent so I back quite a few quite a significant amount my investment in

Israel and then because they have very disruptive innovative entrepreneur and they work really hard even in this wartime they still have conference call and sometime they say okay there's a

there's a warning I have to go to underground and then the internet may not be good maybe we does use voice in some way it's kind of fun the kind of resilient entrepreneurship I really

enjoy so I think all in all I felt that there's a lot of opportunity and especially in the AI and then right now beside the agentic AI now you're looking at physical AI next a mix big frontier

and then you had to really look at the full stack that's why I'm still involved with a lot of this frontier model that we very familiar and some of the investment I back because I really like

open-source frontier uh you know technology technology for physical AI. I

think that's a goal, mate.

You mentioned the opportunity to uh make certain parts of the design and test of um of chips uh faster, cheaper, more creative with AI um given your cadence

experience like where do you what do you think is most fertile? Is there anything you think is already working? Yeah, I

think you know uh for almost 15 years with Cadence and I'm so happy one of my highlight is able to find my successor on the road and I train him and he

becomes super great CEO and then he really embracing the AI you know driving the agentic AI to drive more efficient uh but there good part I think synopsis

sashin also tried to do that and they have investment from you know Nvidia 2 billion I think helping him to do a lot and he acquire answers to move into the whole system uh design. So I think all

in all they all do the best thing they can but also some opportunity for startup to do some of the more disruptive and then eventually they can I go public or being acquired by both of

them or seaman to acquire them. So I

think there's opportunity for all depend on what the entrepreneur vision and then as long as I always have philosophy if entrepreneur want to sell the company

and this quicker way for exit you don't have a lock up you don't have to worry about quarterto quarter earning and then some entrepreneur they from day one they want to go IPO you know for being a VC I

think three of you with three of us we all VC we support the entrepreneur their dream and then help them to fulfill their dream Yeah, if you look at the different areas that you mentioned in terms of future either product

development or impact of AI on the semiconductor industry, there's companies like Periodic doing materials, there's to your point folks working on the EDA side and uh design and other aspects and sort of throughout the chain

there's manufacturing. Um do you think

there's manufacturing. Um do you think that either Intel or future semiconductor company 10 years from now looks radically different from today given AI and if so how?

Yeah, I think so. I think first of all uh back to Sara your question about capital intensive and a little bit unpredictable and cyclical. So you have to kind of put that into factor into

your decision making investment you know I usually like to go in very early put a team together it's kind of fun to do that I think you you also do that and then secondly you try to find the right

investor that can co-partner with you uh it's not just the whatever the brain firm I usually go for the individual and then whoever the individual that really

knowledgeable in this space you can the most important to find a partner to difficult time and good time. A lot of the time people are very enjoyable working with you is a good time. When

the company trouble they just walk away I like to have partner that really work through a lot of successful company they have multiple time almost bank club that eventually take off. So I think it's

both important to find a partner willing to do that and then the other part is look at what are the strategic investor that can help you either in manufacturing or memory connectivity or

various way to add value to the company and also have couple of friend they are in the growth stage and also in the hedge fund and I really enjoy them because they have a different perspective they know about the public

market he can guide the company entrepreneur where not to go and so those can be very helpful. So I think all you know I think is just fun to do

that and then just realize is a engineering for startup is like problem solving each step of the way you have to find people to help you to solve the problem and then if you trigger that

then great next frontier to work on and then frankly speaking I look back nine of the 10 company I invest halfway they change their business plan

because market have changed. So I like to have entrepreneur as team not just one person. Secondly open mind. Yeah.

one person. Secondly open mind. Yeah.

Willing to listen and listen you know getting coaching from us and then eventually they formulate their own plan. It's not just do what I want.

own plan. It's not just do what I want.

It's more they figure out the best thing is you give them enough feedback they draw their own conclusion that you exactly what you like and or different that you can embrace is the right

decision. That's kind of fun of doing

decision. That's kind of fun of doing startup. you know they can much faster.

startup. you know they can much faster.

So back your question if you look at it 10 years from now what will be the winning company this is just my personal view the one that articulate and laser focus

on one niche area and also find the right partner and also able to scale the company and so in some way and back to my point about full

stack. So in the way you need to have a

stack. So in the way you need to have a full stack solution and uh so it can be big company they re you know transform themsel to be looking

at big platform like Jensen I admire him you know he focus on kuda he focus on elibu I want to be a platform company and he did it and so in some way you can

do that or startup company like entropic openai they find a way to do it in a more elegant way they change the game and and then it start up move fast you

know speed of light you can really become a dominant player and hopefully Intel can play the role because we have the XPU and we have the advanced

packaging and we have foundry if you put that all together can build some of the purposebuilt silicon for different workload I think that's where I'm going yeah that makes a lot of sense and I guess part of the question I was I was

wondering is where you're going and the other part is does it fundamentally change how you work because when I look in the software world I I think there's a very big shift happening right now in terms of who you hire, in terms of who

you think you want on board, in terms of people managing multiple agents. And so,

you know, many people now that I know are hiring people more in their 30s, 40s, 50s because they're used to managing teams. And I think that transfers directly over to managing agents in terms of understanding the complexity of what to set up and the QA

and everything else. And I wonder in the context of the physical world or in the context of a fab how you think about shifts in terms of either team structure

or capabilities or how AI layers on. And

so I just wasn't sure if there's if it's a natural slow evolution or if there's areas where there's a radical shift where it's like oh from materials now we should just use these 3A models plus some chemistry or whatever it is. So

that's why I was a little bit curious about how you think about the future world there.

Good question. I think you know the as a back to that crawl walk and run. So I

think crow you basically try to I recruit some of the best talent in the semiconductor industry and then now I starting to look at what are the software talent I need to bring on board

and in order to build a full stack and now I starting to look at you know my average age of my team in the 40 late 40 50 I need to bring in some new talent and

then so they're understanding the workload understanding the frontier model open source uh that is important So I found out that my son become my teacher now.

So every time he invite me to go to his house, we're playing to grandkids. I

starting to tap on him on all the AI machine learning, he's more plug-in than me. So I learned a lot and then try to

me. So I learned a lot and then try to understand investing and then bring some of the talent to come in. So we are changing Intel used to be a very old

legacy spreadsheet company. Now I'm

transform it to become AI and not uh AI enable uh using some of our design and also across all the engine uh all the organization embracing AI and then so

they become uh less less uh depend on the spreadsheet and label to do that and you're going to combine the two talent plus the best AI tool that I can use not

only for my organization not only for my sales and then now exciting to look at not just marketing and now the design and then to embrace that.

I I think a lot of investors um you know at at least for me the last few years since I started a firm it's been very educational thinking about the different capital sources for more capital

intensive companies. Uh I did a lot of

intensive companies. Uh I did a lot of software before and um and so your need to have smart friends with a very different stance in balance sheet was less if you're like ah I need $150

million before this thing gets to you know some critical mass um and and so you've lived that for a very long time and then you have the unique experience

of um working with the government as a large stakeholder. How do you think uh

large stakeholder. How do you think uh this sort of industrial policy it's led to huge successes like TSMC right the most important companies in the world um

it's also been a bit frowned upon in American business culture for a long time like how do you think that should change now or where is it relevant good question so I think you know

clearly you know for capital intensive uh business and uh infrastructure play uh you need to access to the capital and then in some way I think for our early

day venture capital investment you know now starting become very capital intensive yes and some of the venture firm willing to put 1 billion into some company is very unheard of in the VC business

now it's happening and so in some way you just have to be you know I like this kind of bell curve either you go in very early and then because you're starting to do the series

A is over one billion valuations and so you had to go and pre- money uh preede to go into that kind of a 20 30 billion valuation is very rare right

now. So you just have to do that pick

now. So you just have to do that pick the right one and then the other part is able to find capital to scale and that's why some of this mutual fund they also

like to move into the pre-market uh early states to join join me to investing I delight them because they are very less sensitive of whether I had to own 20% of the company there's not

too many 20% to give so you have to find the right investor to come in and then in term of the capital intensive like AI you know factory and also the foundry

and then you really need to tap either government funding or some sovereign fund and also some very big capital uh you know there are some big fund they're

doing that and they really the fund they've organized is basically support the infrastructure and we like to tap into some of them and then to make sure that they can scale our operation so I

think in overall government sovereign fund become very important and also as a public company. I also purposfully want

public company. I also purposfully want to focus on some of the investor that are more long-term growth oriented and so that they can help me to grow the

business and then rather than short-term asking capital location you know where do you going to you know buy back your shares those are good question but meanwhile I also had to build the business and so I think it's kind of that balance

is important do you think there is something that investors like most misunderstand about Intel at this moment quite a few thing. First of all, I think

um you know as a back to this uh crawl, run and walk last four month I crawl and then but people starting to recognize that potential of it and so the other part is

very important. We need to really get

very important. We need to really get the best product out either PC client we still have a market share but we really need to really build more perform better

performance. So that's why I'm quietly

performance. So that's why I'm quietly building up the CPU architect, GPU architect and the software architect so that we can leaprog just like I look at

Intel I want to be a multiple of startup culture so that we move fast and we can leaprog using better technology and then the other part is beside the product

there are some new energy coming in like aentic AI the physical AI that's a lot of area that we can invest market is huge that's on the product side and the

foundry side we are very distant from TSMC and then in term of their performance so there uh we have to be humble looking at building the building

block like I mentioned earlier the IP the yield the defect density and the cycle time to make it more efficient and more reliable is a trust business people

want to trust you before they give you the wafer to count on you so those are the thing will take longer time but I think by 2030

2032 31 32 I think I was starting to surface up people may not understand how big potential I can be in term of product you know the PC client that's

our bread and butter and we moved up to the edge and move into the physical AI and a gentic AI and because not right now in the past you basically provide

the server provide the PC for human now you're starting to have Another different dimension is millions of agent they need to access to the compute they

access into the the software stack. So I

think that part I think we have a chance to really play the game is not over yet.

We can play on the in the injected AI and also the physical AI. So that's kind of where I'm going and the AI is just a beginning. you know you have the

beginning. you know you have the training that Jensen own and the in the edge and also you know in term of agentic AI with agents and also physic AI I think is the jumbo everybody have a

chance so I think that's part that I want to go for it and so I think hopefully uh the investor will know even though in 14 month you know we make six time return to the shareholder they just

a beginning we still have a lot of room to go there's venture returns from here yeah so you know I always look for 10x you know being adventure at heart. You

want to look for 10x and know at cadence when I step down as a CEO I think we make about close to 76 time you know

starting from interim CEO $242 and then when I retire executive chairman about 85 time return to the shareholder so it hard to do that the

Intel because the base is bigger so I kind of say okay let's do it at 10x you know and then and five year 10 years if we can do 10x X I think is a good return

uh being a venture capital at hug that's kind of my goal.

So there's a Godspeed on this very very large mission from this um from this huge base already. Um there's an embedded belief in what you described about where the workload is right where

I think some would say like we're just going to be build bigger and bigger data centers and a gigawatt is the beginning and then uh uh but the the centralization and the efficiency from

running even the inference compute in a centralized way is the is the dominant way versus thinking about the edge thinking about the client. um do you

think that there's like an equilibrium state that you believe in of where the compute is or or is it just we will find out from the workload? How do you think about that?

Yeah, I think you know that's a very good question. You know the right now

good question. You know the right now there's a massive buildup in term of the AI you know the I think it's the right thing to do. I don't see there anything

to slow it down uh because the workload is increasing a lot and then I think the question mark is how we are supply constraint.

We're supply constraint. So I think anything slow down is the supply constraint. But I think the other part

constraint. But I think the other part is uh I always look at all this infrastructure build up at the end you have to look at what is the solution what is the application you want to

drive and I'm more focused on application. So if you can identify the

application. So if you can identify the application that is humongous or add up a few application to become meaningful and you focus on that it's not everybody build going to be winning

and so some going to be winning big time and some going to lose over time or go sideway so you know just like internet you can see some of them turn out to be

very big like Amazon like the Netflix and then some of them is kind of go sideway and disappeared or being acquired and so I think to me it's the same approach Then they really focus on what

application they try to serve and that application how big is that and whether it's sustainable or not or is very crowded. So if it's too crowded you know

crowded. So if it's too crowded you know maybe one or two may survive the other maybe just consolidate. So I think this industry go through that big growth and

then then starting to consolidate maybe eventually one or two become the real winner. So I think that's kind of a

winner. So I think that's kind of a we've watched the movie before so it's not surprise to me but focus on application like Netflix is application

you know Amazon is a real application that to me they're winning but you're assuming that some of these applications they will be better served by client or edge compute than the than than only by the data

exactly okay exactly yeah I mean I I will say as a I'm an investor in a number of companies that uh you know they're they're doing robotics they're doing defense and so

the compute on the device is a very important choice in terms of our and what we assume around it like let's say a robot in the home eventually like what you assume is in the home and in

connectivity around it um determines what you're able to do right um and I I think that that's been kind of it was kind of forgotten for a little bit in the in the SAS era

yes yes I think I more my investment thesis is find a problem that is really need to solve and secondly who will be the player that you can partner with. And then thirdly,

look at the application. How big is that application? Is that sustainable? And if

application? Is that sustainable? And if

it's really big, you believe in it, double, triple down.

But you're including betting on applications that have not yet been broadly deployed. Okay,

broadly deployed. Okay, it's amazing.

Well, thank you so much for joining us today. It was a pleasure. Thank you so

today. It was a pleasure. Thank you so much.

Thanks, Leu.

Thank you.

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