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Welcome to a new episode of the opening bid podcast. I’m Yahoo Finance executive editor Brian Sai. Like I always say this, the podcast that will make you a smarter investor, period. And big news. This is our one year anniversary of this podcast. When we started over a year ago, we were like, yeah, let’s do a podcast. But 154 episodes later, I don’t know how I taped all these things, but we did. Uh, they’re out there on the internet. I encourage you to read all of them.Uh, one year later we’re here with, uh, 154 episodes, amazing conversations. I’ve learned a ton about leadership, investing markets, about human beings. Uh, so I’m very grateful to have done this. Shout out to the finance team. Uh, they work on these podcasts have been absolutely amazing. But given it is a special episode, I have to have, uh, brought you a special guest, and I have one. That is, uh, Pat Gelsinger. Pat.I, I didn’t know how to intro you, so I figured I’d just say it’s Pat Gelsinger. Pat Gelsinger, former Intel CEO, former VMware CEO, technologist and artist. I don’t even know you were, you’re an artist.
Yeah, my uh Rembrandt, the 846 in the Museum of Nat of uh modern Art in New York City. So, uh, you know, all these things you have to learn about me, Oz.
I, I, yeah, I just, I’m like, let’s just go with Pat cause I have talked to Pat for many years. It’s, it’s good to see you actually on that, let’s start on that that picture behind you. What, what, what is that exactly and what did you help create?
Well, I was uh architect, uh number one was the design manager bringing the 8046 into uh production. And uh so uh this is signed by myself and the chick architect John Crawford, and uh literally it was uh installed in the Museum of Nash of modern Art in New York when they had a series called Chip Art, right? You know, the artistic designs of uh chips, so.Yes, so one artist as well here and uh what I call my Rembrain, the 8486, which in its day was the chip.
It’s that, I imagine you’ve had some time to reflect in the past few months. Have you gone back to those days and and thought about, I’m gonna go into a career chips and everything, but have you thought about what you’ve created? Because, you know, I’ve talked to you so much, usually on earnings days or at the World Economic Forum, we’re there, short period of time, Pat, talking about numbers, but like, it’s hard to take a step back and reflect in your career, I imagine.
Yeah, and you know, obviously as you’re going through periods of transition like this sassy, you look back and uh you know, the 46, the 386, 0, I did 14 generations of microprocessors. OK, that’s pretty substantial. You know, USB and Wi Fi key interconnect, uh, that everybody uses when my granddaughter plugs in a USB stick, she says, thank you, Papa, right? AndAnd uh you know, the uh industry standard server that became the foundation for cloud computing and uh becoming a software executive at uh VMware and then coming back, you know, chipsack and restoring semiconductors in the US, you know, what an awesome journey for a farm boy who started at 18 years old at Intel. You know, it’s been awesome and you know, as my wife said, uh, after the retirement from Intel, you’re not done yet.So, uh, off we go on the next piece of the journey.
So after that, uh, after you leaving Intel, it was December last year, how do you spendThe next few months. I mean, these are, I have to tell you this, I mean these are pressure packed situations and I talked to you, Pat, uh, on times when, you know, earnings weren’t that great, and you always still came out with us, and the stock price probably didn’t react like you wanted to. Once you’re out of that pressure cooker, what do you do?
Well, you know, I did 100 meetings, Say, uh, as I say, you know, different venture capitalists, uh, private equity firms, you know, government roles, uh, university, uh, roles, different operating roles I might take on, and, you know, one of the, you know, you sort of make a decision tree and you work through it that one of our first decisions was, do you want to take on another 7 by 24 operating role.And I’ve you the CEO job 7 by 24, you are on everything’s yours. And we decided, OK, the next, the next phase isn’t gonna be an operating role, uh, and then, uh, you know, really sort of boil up to, you know, write big checks and private equity.And, you know, being able to make an impact that way, or move into a venture capital, uh, which we’ve done now with Playro Global, deep tech, long tech, and then the other passion I’ve had uh throughout my career has been uh faith.And uh with the role I’ve uh uh expanded at uh glue, you know, a faith tech business that just the magnitude of the faith community and how bad the technology is and being able to combine those together, right? You know, 3 to 50,000 churches in the US alone. So deep tech, long tech, faith tech, uh, that’ll be the next phase of the journey for Linda and I.
Pat, did you get to take a vacation? I, I, I’m, I’m a very, I’m an extremely energetic guy, but there was a point in 2023 and 24, numerous points. I didn’t know where you were next. You were traveling the world. I was trying to like follow you through your ex account he’s he’s literally in a different country, he’s meeting with then President Biden. I have you just, have you had the time to just take a week off and just, you know, go on, drink a drink somewhere maybe or I don’t know, sip something?
Well, you, you’ll you’ll you’ll enjoy this. We took the cruise in uh Asia, Cambodia, Thailand, Vietnam, and, you know, got some time away, some more time, all the grandkids kiss Christmas programs this year and, you know, some a break, but you know, I’m wired pretty aggressively as you know, Say, so here we are on the on a cruise, right? We’re floating down a little river boat in the Cambodia.In jungles, right, uh, mangrove jungles, and the idea comes of me to write a children’s book for my grandchildren. So I’m now working with a publisher, right? Because even when I’m taking a vacation, I can’t quite take a vacation. So we, you can look forward to a copy of the mangrove Monkeys. You know, I’ve put, uh, all 8 of my grandchildren into the monkey family and their jungle critters, so.Even when I’m resting, I couldn’t quite rest too much.
So tell me, tell me this children’s book. I didn’t see that one coming, Pat. Um, tell me this children’s book somehow ties into semiconductors and chips. These monkeys are using chips, or are they machines?
Absolutely not. This is just monkey critters and, you know, little monkeys, and each one of our kids has a character.Each one of the grandkids is a caricature in the monkey family. The rest of the family is, you know, uh, you know, is alligators and eagles and jaguars, and so anyway, I’ll show you a copy of the mangrove Monkeysomeday.
Yeah, yeah, I, yes, I, I don’t like that sign, sir. So you are now.So you got that out of the way, you’re on your cruise, you got the book idea. Now your general partner at Playground, and for those investors not familiar, what is Playground up to? My, you know, according to my research has what, $1.2 billion of assets under management, that’s a very big number. What are they investing in and what are you up to there?
Yeah, and, you know, as we were going through our 100 meetings, 100 days of uh what’s next, when you walk into most venture capitalists, you see a wall of tombstones as I call it, right? You know, the, the plexiglass of you too can be like an Airbnb, like a Netflix, and, you know, the wall uh of those uh IPOs. When you walk in the playground, you find an engineer’s playground.You’re greeted by robots, right? You see the world’s largest 3D printer, right? You have the world’s largest free electron laser, chemical labs, etc. and a little playground in the middle, right? You know, this is truly an engineer’s playground, and it is deep tech long tech, we uh our motto is, uh, we invest somewhere between the impossible.And the improbable, right? You know, taking those deep tech things like quantum computing that we started seven years ago, you know, next generation light sources for EUV, you know, practical robotics, uh, next generation MRNA, biomarkers, you know, deep tech, long tech, uh, activities, and, uh,I’ll be the 4th general partner here and, you know, quite excited about it, as you know, I’ve always been, you know, a geek at heart.
It’s like playground, uh, sounding like a big free agent there, Pat. Um, you mentioned practical robots. Are you a big guy that that is in on these robots that we’re all gonna have them in our house and I’m gonna have a robot doing my laundry and pushing a vacuum?
Well, you know, a couple of our companies, uh, are, uh, you know, like Agility and, uh, you know, fabric, you know, these companies, it’s not about how you replace humans, it’s how you augment humans.And you know, with that uh uh warehouse uh configurations, automating uh delivery systems and really bringing robotics into those uh environments and, you know, uh, the, uh, you know, I’ve never been a AI is gonna replace us or eat us guy. I’m always, how do we use technology to enhance.existence. And in this case, uh, we’re finding extraordinary success where uh you bring robotics under the command of warehouse workers, for instance, and you get extraordinary efficiency, uh, the ability to augment simple things like cart movements and so on, uh, the, uh, ability to have humanoid like robots, but are.Aimed at tasks, uh, in manufacturing locations and all of that, of course, is the superpower is AI, you know, vision, you know, uh, physical AI, the ability to move and uh operate. So yeah, it’s a pretty exciting uh domain. So like,
let’ssay I come in uh and I have a robot start up, Pat, and I’m in that room and I have to piss you. Um, what doWhat are you looking for in terms of a human being that you would give money to, but also, how do you know their slide deck is it a bunch of crap?
Yeah, so, you know, I say two things about uh uh as a playground. The first thing is, most VCs are looking for you to have had successful IPOs already, right? We are not. We are looking for people with deep tech. You know, a better team for us to partner in would be, you know, a handful of PhDs, a professor, you know, 5 people who are the experts in their domain.So, that’s who we’re looking for, teams that otherwise probably wouldn’t find funding, uh, wouldn’t be able to get started up, and then we invest heavy early into those teams.So we’re looking for, I’ll say, you know, we, we love technology risk, we hate market risk. In other words, if this works, OK, the market is obvious, but it’s proving it works. So we want the best people, you know, we invest heavily, we partner with them early, and then grow them into a big uh successful uh startups that everybody wants to invest in by the time they get to the.CD or E round of funding, so we’re seed AB round uh funders and, you know, with it, hey, I love these technologists, and they’re excited to have a guy like me on the team who’s operating companies of scale, who’s had to walk the halls of of uh Congress to get funding and to uh you know, truly shape technology policy.
All right, hang with us, pal. We’re gonna go off for a quick break on opening being. Lots more to get to. Don’t go anywhere, please, a special, uh, one year episode. We’ll be right back.All right, welcome back to Opening bid. Uh, as I’ve been saying, this is our 1 year episode, 154 episodes, and of course I had to bring you a very special conversation. Uh, Pat Gelsinger, former Intel CEO, former VMware CEO, uh, I didn’t realize he’s about to be an author, children’s book. Uh, he’s surprised with me, uh, surprised me with that one. Looking forward to, uh, checking that one out, even though I have no kids. I’m still gonna read it cause I, I wanna see what you’re up to, Pat. Um, you mentioned youYou, uh, you in Congress, you know, I always saw you, uh, meeting with lawmakers, of course, you met with then President Biden on the on the chips Act.I just had a conversation with Treasury Secretary Scott Bess and I came away thinking, Pat, wow, um, we really need to get more chip production in this country, and we need to do it like yesterday. Like how important is this that this gets done.Not only using the chipsack money, but companies like in Intel and Nvidia and AMD which we have seen Nvidia and AMD and of course Intel, but they really put their foothold in the US.
Yeah, and you clearly and, you know, uh this is quite a rich uh topic area, uh, Sai, and, you know, hey, I spent 4 years, uh, uh, a lot ofEffort and, you know, I’ll say shoe leather and, uh, you know, the political cycle to help get chipsack done. And I still believe it’s the most important piece of industrial policy uh since World War II, right? We have to be investing, creating the manufacturing incentives, but more importantly, even the long term R&D.So, I do think that remains important. Reshoring manufacturing is a critical piece of that. However, manufacturing alone isn’t enough. We need the technology here, right? And if you are still dependent on Asia to design the transistor, then you’re still dependent on Asia.And in the semiconductors, R&D and manufacturing are hand in hand uh with each other like few other industries are. So we need the R&D here as well, and that’s why, you know, the uh intels, global foundries, microns are so critical, uh, but also things like Natcast and NAP MP. We have to keep that long term R&D.One of the companies that attracted me most to join Playground was XLight. And if you think about Fab, what’s in the middle of Fab, lithography, or EUV as it’s called, what’s in the middle of lithography? Light.God said, let there be light, and XLight is building next generation light sources out of free electron lasers, and, you know, this is one of the companies that I believe will help us rebuild the long-term view of semiconductors uh here in the US and quite excited. We just announced that I’m now the board chair uh for XY.And jumping on that one quite aggressively. And, you know, we do, you know, want to see that become a centerpiece of the US semiconductor R&D initiatives, but also that, uh, you know, we really use it to transform the economics, as well as the long-term capacity of Moore’s law in the US. And then, of course, you know, the two other things that we’ve seen in this administration, you know, puts more pressure on, you know, one is tariffs.And, you know, having supply chains neutral means they don’t move. You must create incentives for supply chains to move, and I do think tariffs is a piece of that. You know, the other is uh the investment fund that they’ve announced as well, essentially the US sovereign wealth fund. You know, we have to be putting our financial capacity to drive the long-term build out of not just theManufacturing and R&D and the long term, uh, restoration of these engines. So all those together, you know, I’m quite excited that, uh, yeah, I think uh we have the opportunity and those three pillars, the chips Act tariffs and uh sovereign wealth fund, I think, pretend to be a powerful combination.
Pat, you know, on the topic of tariffs and and the trade war, how, when you see news as we have that China is going to restrict critical earth minerals to, I, I would imagine the US, um, and these things get used in semiconductors and various other electronics. How concerned are you thatWhat China is doing on this front and other fronts in technology could impact the US economy and the US market.
Well, of course, I’m concerned in that regard, and I’ve always been a free trade, uh, you know, perspective in that res uh, you know, view and, uh, opinion. You know, that said, uh, you know, rare, it’s not the availability of the minerals, it’s the refining.Yeah, you know, we, we have enough rare earths, you know, we’ve allowed the refining, some of that’s been driven by economics, some of that’s been driven by environmental policy. You know, we need to bring the refining back and it either needs to be onshored, near shored, or friend shored uh going uh forward. And, you know, I think as uh we’re trying to see those supply chains readjust.In the more balanced way, you know, we also hope that’s a friendly. Uh, you know, countries like Australia have deep, long experience in mining and refining. Hey, you know, let’s get our French shoring to, uh, accelerate some of these, but we also see that some of this is just great innovation, and some of the playground companies as well are finding.New more effective ways uh to uh bring minerals to life. Uh, one of our companies is doing a quantum detection, uh, to be able to identify more sub-earth opportunities for ores, mining and uh reserves. So, hey, you know, I think technology, you know, remains the way that we find our path forward.
I, I, Pat, I, I dig this new version of you because I can probably, I can ask you certain things now that maybe I couldn’t ask when you were leading Intel, and this is going to be one of them. Why isn’t Apple making iPhones in this country? And then secondarily, will they, can they make iPhones preferably in the US in our lifetimes?
So there’s there’s two different perspectives there that I think deserve, you know, one is, hey, they have enough profits, you know, margin, etc. they can choose to go invest them appropriately. Now the thing about supply chains is, I, I, I call them sedimenting.Mm. Right. You know, and what happens is you start to build on a certain place, and then the plastics company is built near where they are, and then the resistor company, and then the display company, right? And so what happens is these other elements of the supply chain start to aggregate around the core elements of the supply chain. So they sediment into those locations, and that sedimentation takes decades.Right? It’s not like this happens overnight, uh, you know, for, you know, even though you say, hey, you know, let’s throw down concrete, let’s move equipment in, let’s start building in this. This takes decades for these to occur. So, you know, that’s why I think the, you know, the, the need for policy today, because CEOs need to stand up and make decisions that will be decades long.And that’s why we can’t have flip flopping of tariff policies, etc. you know, we just say, here’s our policy objectives, and then here’s how we support them with the right financial inducements for those to occur. And absolutely, we can see those supply chains moved. You know, and some of the things, if we go back to the earlier part of the interview, you know, the primary reason supply chains moved to Asia was low cost labor.Well, as we get more and more AI driven robotic automation, right, you’re able to say, hmm, you know, I, I can now run a US robot at $1 per hour compared to $6 per hour for a low-cost Asian site versus $30 per hour for a high cost US site. Hmm.You know, use the technologies to allow us to reshore, but it’s gonna take a while of consistent policy and investment for that reshoring to occur.
But an iPhone.In an iPhone made in the US, it still would cost more than what is being made out of China. I mean, the iPhone 1 900 bucks. I mean, but I, I couldn’t, I was trying to figure out if the administration when I talked to Secretary Bess and if they would be OK with having an iPhone cost more if it’s made in America, and I, I just couldn’t figure that out.
Yeah, and I, you know, there there there will be cost associated with bringing supply chains back. You know, again, it took decades for them to sentiment away. They don’t return because you asked them to.They return because you’ve created economic incentives, capital, uh, capacity to drive their return. So I think unquestionably you’re gonna see some cost increases, but the ultimate cost of a highly automated robotics driven supply chain is less than an Asian supply chain. Yeah, there is the promise on the other side, and hey, you know, I’m not shipping it across the ocean multiple times, but this will take a while.You know, takes new automation and it takes economic policy to drive the resettlementation of the supply chain around French shore or near shoring of those uh technologies. So, uh, you know, somebody who says it can’t be done, I would say hogwash. This can be done, but it requires investment and consistent policy for it to occur, and of course a little bit magic of technology.
Uh, another one of those questions, Pat, that maybe you, you could probably answer now. Now you went to Nvidia’s GTC, uh, if I’m correct, you saw Jensen Wong do his thing, lay out a product road map for the next 5 years? What company’s doing that? And take a step back, how far exactly is Nvidia out in front of rivals with its technology?
Yeah, it’s uh, uh, you know, there’s 22 aspects uh that you see. They are executing well.Right, you know, at the end of the day, and, you know, Jensen is on it, right, driving his teams to stay in the front end, because, you know, as I say, I can’t throw a rock, right, without hitting a new AI startup in the Bay Area, right? And I throw OK, but not that good, right? Yeah, yeah, right, yeah, I mean, they’re all over the place because that multi $100 billion silicon AI accelerator market is so attractive.So, they know they have to run and run hard to stay in front, but second, uh, at that point, it was this flurry of activity uh around them, you know, they’ve built meaningful moats. It isn’t just that they’re executing well, you know, but, you know, and the link is a moat, right? They have the best, you know, connectivity, uh, CUDA, hey, you know, you can malign it, you could talk about Pythonic.Programming and you know what Deepse did with eliminating everything for optimization purposes. But most developers just take the easy path, and there’s a lot of CUDA out there. Again, another moat that uh reinforces their positions. So, you know, they’re executing well and they have built meaningful moats around their franchise. Now on the other side of it, as I also said at GTC,The need for low cost, high performance inferencing and, you know, we’re not a little bit away from what we need. I said it needs to be 10,000 times cheaper and more available than it is today, so that we have that true internet-like moment, right, where my kids are on the internet, you know, if I keep them off of it for 10 seconds, I have ruined their existence.Right? Well, we need that with our AI technologies, and that requires a dramatic reduction. And I’m not sure that the GPU, I’m pretty convinced that GPU is the right architecture for training purposes today. I’m not convinced it’s the right architecture for inferncing workloads, which will dominate, uh, going forward as you go to lower precision and.Memory computing, memory bandwidth limitations, etc. So, you know, I do think there’s going to be architectural opportunity to take leaps, uh, ahead of where we are today. Can
the Nvidia and I’ll put AMD in there. Can these companies, Pat, you think they can keep their moats for the next decade, or there’s another Nvidia somewhere out there that people don’t see and they don’t realize it.
Yeah, I, I, I’ve always viewed that there’s sort of this 10X rule saucy, right, where if you’re not 10x better than the king.You’re not gonna displace that, right? And, right, you know, here you have to be at least sustainably 10x better, and then people will say, OK, yeah, I’m gonna go invest in that. They get a lot of interesting things going on in the connectivity, uh, in the memory, uh, architecture, low radix compute, uh, sparse, uh applicate or sparse memory.Environments as you go to reasoning where it isn’t just compute, compute, compute, right? It’s now, I’ll say a much more balanced view of models that are more traditional compute with uh AI or GPU centric models. So I do think there’s disruption because there’s architectural innovations going on and the workloads are changing as well.
Uh, and of course we’re gonna go into a little bit of overtime here because it is our one year anniversary episode 154, and, uh, it’s not often you get access to a top executive like Mr. Pat Gelsinger. Pat, now I’ve got some time away from um, from Intel. What is theWhat is the future of this company?
Yeah.Yeah, my goals for Intel haven’t changed.Oh, Intel, right, as the onlyActive R&D for leading edge transistors in the US.That’s critical.And you know, this idea of them becoming an IDM 2.0, a foundry and a products company, I think remains the right path, and the company has said nothing different uh since I’ve left in terms of strategic uh objectives, uh, you know, for it, and I still think that’s the right path. 18A is a great process technology, and 14A was gonna be even better, uh, for it when I left. So I stillI think that’s necessary. I think it’s necessary for the company, necessary for the nation, you know, and I wish nothing but the best, and will do anything I can to be helpful in the company and the new CEO accomplishing exactly that.
A lot of folks do tell me, Pat, that it is important for the country that Intel.Gets its mojo back and and you busted your butt off to make that happen. I mean, in terms of uh getting the chipsack money passed, building these plants to make your own chips, butIs it fair to say the next 3 years are defining for Intel, and if, if they don’t get this right, or whatever this is, what does the next decade really look like for them?
I think it’s a critical couple of years, you know, when I took the job, I said it was 5+ years. Yeah,
I remember that.
Yeah, yeah, and I said it over and over again. Uh, you know, so I think, uh, you know, as 18A materializes, you now have leadership transistors back in the US, uh, the pathway for leadership manufacturing is Arizona.Uh, in Ohio, uh, come online, the most advanced packaging, uh, in New Mexico. So I continue to believe all these pieces are super important, uh, as well. And again, I wish nothing but the absolute best for uh the new CEO for the leadership team there because this is critical for the industry and thenation.
To pull off their turnaround, Pat, do they, do they need partners? Are they gonna need partners to make it happen?
Oh, of course, of course, and obviously you have people like ASML that are important, uh, but more important at this point would be big foundry customers.
Lastly, yeah, sure, good,
good. Yeah, right, and you know, we know the names of that, but, uh, you know, the US designs and sells well over 50% of semiconductors.Today, 55, 58, you know, different studies, you know, have shown that, uh, and those big companies, they need to become foundry customers for Intel to build those, to build those big factories, to have the volumes, drive the manufacturing and the long-term technology. Those are the most important partners for Intel at this point.
Lastly, Pat, did you, you know, over the course of, I mean, I covered you day one, you got the Intel job, and you came on with us every single quarter, no matter what these results were, um.Now you have time to reflect. What did you learn over these five years about you, about leadership, that when that next technologist comes into playground, you’re gonna maybe take them off to the side and share a little inspirational wisdom with them. What, what do you share with them from this experience?
Well, you know, clearly, uh, you know, building a great leadership team, uh, is, uh, essential, right? No matter how good the CEO is, you need a great leadership team, uh, around them, uh, stay true to the vision, uh, for it. And, uh, you know, I, uh, you know, believe that from day one. You
never wavered. You never wavered, not once.
Right, uh, you know, for, and then you need the financial capacity and board alignment to support it. And you know, clearly as I come onto the board of some of these uh playground, you know, companies building the right uh right financial capacity, but also the right board dynamics to uh get it to the finish line.
Pat, uh, I wanna thank you for always making time with me. Uh, you’ve always been gracious time-wise, uh, been talking to me for, for many years. We appreciate it. I wish you a lot of success in these new roles, uh, in your new book. Uh, keep the artwork coming, uh, waiting for that signed copy. Uh, thanks for being here for a 1 year episode, and we’re on to, I guess, 300 more episodes soon. I mean, because what else do you do intent land? You just create more content, Pat.
And I look forward to chatting again. Say being back sometime before the 2 year anniversary. Yes,
you will indeed be back, sir. All right, Pat, thank you so much. That of course was Pat Gelsinger, former, uh, Intel CEO, former VMware CEO, technologist, artist, and soon to be author celebrating our one year out of.anniversary, uh, on the opening bid podcast, 154 episodes. Hat tip the Yahoo Finance team. This team crushes it every single day. They wake up every morning to help millions upon millions upon millions upon millions of investors globally build their wealth, and I’m really thankful to be a part of this team. That’s it for the latest episode of opening bid.