From around the globe, it's theCUBE. Covering HPE Discover Virtual Experience, brought to you by HPE. Hi everybody, this is Dave Vellante and welcome back to theCUBE's coverage of HPE's Discover 2020, the virtual experience theCUBE. theCUBE has been virtualized, we like to say. I'm very happy to welcome in Neil McDonald. He's the general manager for Compute at HPE. Great to see you again, Neil. I wish it were face-to-face, but this'll have to do. Yeah, well, it's great to see you, Dave. Next time, next time we'll do this face-to-face. Next time, hopefully next year, we'll see. We'll see how things are going. But I hope you're safe and your family's all good and they say it's good to talk to you. We've talked before, many times, it's interesting just to know the whole parlance in our industry is changing, even Compute in your title. In no long do we think about it as just servers or a box, you guys are moving to this as a service notion. Really, it's kind of fundamental or poignant that we see this really entering this next decade. It's not going to be the same as last decade, is it? No, I think our customers are increasingly looking at delivering outcomes to their customers and their lines of business. And Compute can take many forms to do that. And it's exciting to see the evolution in the technologies that we're delivering and the consumption models that our customers are increasingly taking advantage of, such as GreenLake. Yes, so Antonio obviously and his keynote made a big deal and has in previous keynotes about GreenLake. A lot of themes on the cloud economy and as a service. I wonder if you could share with our audience, what are the critical aspects that we should know really around GreenLake? Well, GreenLake is growing tremendously for us. We have around 1,000 customers delivering infrastructure through the GreenLake offerings. And that's backed by 5,000 people in the company around the world who are tuning and optimizing and taking care of that infrastructure for those customers. There's billions of dollars of total contract value under GreenLake now and it's accelerating in the current climate because really what GreenLake's all about is flexibility. The flexibility to scale up, to scale down, the ability to pay as you use the infrastructure which in the current environment is incredibly helpful for conserving cash and boosting both operational flexibility with the technology but also financial flexibility in our customers operations. The other big advantage of course at GreenLake is it frees up talent. Most companies around the world have challenges in freeing up their talent to work on really impactful business transformation initiatives. We've seen in the last couple of quarters even greater acceleration of digital transformation work for example, and if all of your talent is tied up in managing the existing infrastructure then that's a drain on your ability to transform and in some industries even survive right now. So GreenLake can help with all of those elements and with all of the pressure from COVID it's actually becoming even more consumed by more and more and more customers around the world. It's- Yeah, right. I mean, that definitely ties into the whole as a service conversation as well. I mean, to your point, digital transformation in the last couple of years is really accelerated but I feel like in the last 90 days it's accelerated more than it has in the last three years because if you weren't digital you really had no way to do business and as a service has really played into that. So I wonder if you could talk about your as a service posture and thinking. Well, you're absolutely right Dave. Organizations that had not already embarked on a digital transformation have rapidly learned in our current situation that it's not an optional activity. Those that were already on that path are having to move faster and those that weren't are having to develop those strategies very, very rapidly in order to transform their business and to survive. And the really neat thing about GreenLake and the as a service offerings that we provide in that context is how it can accelerate the deployment. Many companies, for example, have had to deal with VDI deployments in order to enable many, many, many more of their workforce to be productive when they can't be in the office or in the facility. And a solution like GreenLake can really help enable very, very rapid deployment and build out, but not just VDI. Many, many other workloads in high performance compute or in SAP HANA, for example, are all areas that we're bringing value to customers through that kind of as a service offering. Yeah, a couple of examples. Nokia software is using GreenLake to accelerate their research and development as they drive the leadership in the 5G revolution and they're doing that at a fraction of the cost of the public cloud. We've got Xenuity, which has built a private cloud for artificial intelligence and HPC that's been used to develop the next generation of autonomous software for cars. And finally, we've got Salsa Portia Informatic who have built a fully managed hybrid cloud environment to accelerate all their application development without having to bear the traditional costs of an over provisioned CAPEX infrastructure. So all of our customers are relying on that because compute and innovation is just at the core of the digital transformations that everybody is embarked on as they modernize their businesses right now. And it's exciting to be able to be part of that and to be able to be there to help. So of course in the tech business innovation is the main spring of growth and change, which is constant in our industry. And I have a panel this week with Dr. Go talking about swarm learning and AI and that's some organic innovation that HPE is doing. But as well, you've done some M&A as well. Recently you guys announced, and we covered it, pretty major investment in Pensando systems. I wonder if you could talk a little bit about what that means to the compute business specifically in HPE customers generally. So our partnership with Pensando is really, really exciting and it's great to see the momentum that it's building in delivering value to our customers. At the end of the day, we've been successful with Pensando in building that momentum in very highly regulated industries. And the value that is really intrinsic to Pensando is the simplifying of the network architecture. Traditionally, when you would manage an enterprise network environment, you would create centralized devices for services like load balancing or floral walls and other security functionality. And all the traffic in the data center would be going back and forth, back and forth, tromboning across the infrastructure as you sought to secure your underlying compute. The beauty of the Pensando technology is that we actually push that functionality all the way out to the edge at the server. So whether those servers are in a data center, whether they're in a colocation facility, whether in the edge, we can deliver all of that security service that would traditionally be required in centralized, expensive, complex, unique devices that were specific to each individual purpose and essentially make that a software-defined set of services running in each node of your infrastructure, which means that as you scale your infrastructure, you don't have a bottleneck.  It takes traffic off your core networks, which gives you some benefits there, but fundamentally it's about a much more scalable, responsive, cost-efficient approach to managing the security of the traffic in your networks and securing the compute endpoints within your infrastructure. And it's really exciting to see that being picked up in financial services and healthcare and other segments that have very high standards with respect to security and infrastructure management, which is a great compliment to the technology from Pensando and the partnership that we have with Pensando and HPE. And it's compact too, we should share with our audience. It's basically the card that you stick inside of a server, correct Neil? That's exactly right. At Pensando's PCIe card together with HPE servers puts that security functionality in the server exactly where your data is being processed. And the power of that is several fold. It avoids the tromboning that we talked about back across the whole network every time you've got to go to a centralized security appliance. It eliminates those complex single purpose appliances from the infrastructure. And that of course means that the failure domain is much, much smaller because your failure domain is a single server. But it also means that as you scale your infrastructure, your security infrastructure scales with the servers. So you have a much, much simpler network architecture. And as I say, that's been delivered in environments with very high standards for security, which is really a great endorsement of the Pensando technology and the partnership that HPE and Pensando have in bringing that technology to market for our customers. So if I understand it correctly, the Pensando is qualified for ProLiant, Apollo, and Edge Alliance. My question is, so if I'm one of those customers today, what's in it for me? Are they sort of hopping on this for existing infrastructure? Or is it part of sort of new digital initiatives? I wonder if you could explain. So if you were looking to build out infrastructure for the future, then you would ask yourself, why would you continue to carry forward legacy architectures in your network with these very expensive custom appliances for each security function? Why not embrace a software defined approach that pushes that to the edge of your network, whether the edge are in colos or actually out on the edge or in your data centers? You can have that security functionality embedded within your computer infrastructure taking advantage of Pensando's technologies. So obviously things have changed, it's specifically in the security space. People are talking about this work from home and this remote access being a permanent or even a quasi permanent situation. So I wonder if we could talk about the Edge and specifically where Ruba fits in the Edge, how Pensando complements that. What's HPE's vision with regard to how this evolves and maybe how it's been supercharged with the COVID pandemic. So we're very fortunate to have the Ruba Intelligent Edge technology in the HPE portfolio. And the power of that technology is its focus on the analysis of data and the development of solutions at the site where the data is generated. Increasingly, the data volumes are such that they're gonna have to be dealt with at the Edge. And given that, you need to be building Edge infrastructure that is capable enough and secure enough for that to be the case. And so we've got a great complement between the Intelligent Edge technology within the Ruba portfolio with all of the incredible management capabilities that are in those platforms combined with technologies like Pensando and our HPE compute platforms bring the ability to build a very cohesive, secure, scalable infrastructure that tackles the challenges of having to do this compute at the Edge, but still being able to do it in both a secure and easily managed way. And that's the power of the combination of a Ruba HPE compute and Pensando. Well, with the expanded threat surface with people working from home, organizations are obviously very concerned about compliance and being able to enforce consistent policies across this sort of new network. So I think what you're talking about is very important that you have a cohesive system from a security standpoint, you're not just bolting on some solution at the tail end in your comments. Well, security always depends on all the links in the chain and one of the most critical links in the chain is the security of the actual compute itself. And within the HPE Proline platforms, we've done a lot of work to build very differentiated and exclusive capability with our hardware, our silicon root of trust which is built directly into silicon. And that enables us to ensure the integrity of the entire boot chain and the security of the platform rounds up in ways that can't be done with some of the other hardware approaches that are prevalent in the industry. And that's actually brought some benefit in financial terms to our customers because of the certifications that are enabled in the cyber catalyst designations that we've earned for the platforms. So we also know from listening to your announcements with Pensando and just observing security in general that this notion of micro segmentation is very important. Being able to have increased granularity as opposed to kind of a blob, maybe you could explain why that's important, the so what behind micro segmentation as well. Well, it's all about minimizing the threat perimeter on any given device. And if you can minimize the vectors through which your infrastructure will interact on the network, then you can provide additional layers of security. And that's the power of having your security functionality right down at the edge because you can have that security processor sitting right in the server and providing great, great security at the node level. You're no longer relying on the network management getting all of that right. And you also have much, much greater flexibility because you can easily in a software defined environment push the policies that are relevant for the individual pieces of infrastructure in an automated policy driven way rather than having to rely on someone in network security getting the manual configuration of that infrastructure correct to protect the individual nodes. And if you take that kind of approach and you embed that kind of technology in servers which are fundamentally robust in terms of the security because of the Silicon root of trust that we've embedded across our platform portfolio whether that's ProLiant or Synergy or Blade System or Edgeline, you get a tremendous combination as a result of these technologies. And as I mentioned, the cyber catalyst designation is a proof point of that. Last year there were over 150 security products put forward for the cyber catalyst designation and only a handful were actually awarded, I think 17 of which two were HPE compute and Aruba. And the power of that is that many organizations are now having to deal with insurance for cyber security events. And the catalyst designation can actually lead to lower premiums where the choice of the infrastructure that you've made such as HPE compute has actually enabled you to have a lower cost of ensuring your organization against cyber security issues because infrastructure matters and the choice of infrastructure with the right innovation in it is a really critical choice for organizations moving forwards in security and in so many other ways. Yeah, you mentioned a lot of things there. So for defined that's going to enable automation and scale, you talked about the perimeter of the traditional moat around the castle. That's gone to the perimeter. There is no perimeter anymore. It's everywhere. So that whole, you know, weakest link in the chain and the chain of events. And then the other thing you talked about was layers, you know, very, very important when you talk to security practitioners, you know, building layers in. So all of this really is factoring in security in particular, it's factoring into customer buying decisions, isn't it? Well, security is incredibly important for so many of our customers across many, many industries. And having the ability to meet those security needs head on is really, really critical. We've been very successful in leveraging these technologies for many customers in many different industries. You know, one example is we've recently won multiple deals with the Defense Intelligence Systems Agency who you will imagine have very high standards for security worth hundreds of millions of dollars of that infrastructure. So there's a great endorsement from the customers that who are taking advantage of these technologies and finding that they deliver great benefits for them in the operational security of their infrastructure. Yeah, I wonder if I could ask you a question on the edge. I mean, as somebody who is, you know, with a company that is really at the heart of technology and I'm sure you're constantly looking at, you know, new companies, M&A, you know, et cetera, you know, inventing tech tech, but I want to ask you about the architectures for the edge and just in thinking about a lot of data at the edge, not all the data is going to come back to the data center or the cloud. There's going to be a lot of AI inferencing going on in real time or near real time. Do you guys see different architectures emerging to support that edge? I mean, from a compute standpoint, or is it going to be traditional architectures that support that? It's clearly an evolving architectural approach because for the longest time, infrastructure was built with some kind of hub, you know, whether that's a data center or in the cloud and all of the devices at the edge would be essentially calling on. So edge devices historically have been very focused on connectivity, on acquisition of data and then sending that data back for some kind of processing and action at some centralized location. And the reality is that given the amount of data being generated at the edge and now giving the capability even of the most modern networks, it's simply not possible to be moving those kinds of data volumes all the way back to some remote processing environment and then communicating a decision for action all the way back out to the edge. First of all, the networks can handle the volume of data is involved if every device in the world was doing that and secondly, the latencies are too slow. They're not fast enough in order to be able to take the action needed at the edge. So that means that you have to countenance systems at the edge that are now actually storing data, that are now actually computing upon data. And in a lot of edge systems historically, they would evolve from very proprietary, very vertically integrated systems to perhaps PC controller based systems with some form of IP connectivity back to some central processing environment. And the reality is that if you build your infrastructure that way, you finish up with a very unmanageable fleet. You finish up with a very fragmented disjointed infrastructure. And our perspective is that companies that are gonna be successful in the future have to think of themselves as an edge to cloud approach. They have to be pursuing this in a way that views the edge, the data center and the cloud as part of an integrated continuum, which enables the movement of data when needed. You heard about the swarm learning that you talked about with my colleague Dr. Go where there's a balance of what is computed where in the infrastructure. And so many other examples, but you need to be able to move compute to where the data is and you need to be able to do that efficiently with a unified approach to the architecture. And that's where assets like the HP data fabric come into play, which enable that kind of unification across the different locations of equipment. It also means you need to think differently about the actual building blocks themselves. In a lot of edge environments, if you take a classic 19 inch rack mount compute device that was originally designed for the data center, it's simply not the right kind of infrastructure. So that's why we have offerings like the edge line portfolio in the HPE products set because they're designed to operate in those environments with different environmental than you find in the data center with different interfaces to systems of action and systems of control than you'd typically find in the data center environment, yet still bringing many of the security benefits and the manageability benefits that we've talked about earlier in our conversation today, Dave. So it's definitely going to be an evolving and new architectural approach at the edge and companies that are thoughtful about their choice of infrastructure are going to be much, much more successful than those that take a more incremental approach. And we're excited to be there to help our customers on that journey. Yeah, Neil, it's a very exciting time. I mean, you know, much of the innovation in the last decade was find inside the data center and in your world, a lot of times, you know, inside the server itself what you're describing is this end to end system across the network and that system's view and there's going to be a ton of innovation there. And we're very excited for you. Thanks so much for coming on theCUBE. It was great to see you again. It's great to be here and we're just excited to be here to help our customers and giving them the best value for the workloads, whether that's taking advantage of GreenLake, taking advantage of the innovative security technologies that we've talked about or being the edge to cloud platform as a service company that can help our customers transform in this distributed world from the edge to the data center to the cloud. Thanks for having me, Dave. You're very welcome. Awesome summary and always good to see you, Neil. Thank you for watching everybody. This is Dave Vellante for theCUBE, our coverage of the HPE Discover 2020 Virtual Experience but right back for this short break.


From theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. Semiconductors are the heart of technology innovation. For decades, technology improvements have marched the cadence of silicon advancements in performance costs, power, and packaging. In the past 10 years, the dynamics of the semiconductor industry have changed dramatically. Soaring factory costs, device volume explosions, fabulous chip companies, greater programmability, compressed time to tape out, a lot more software content, the looming presence of China. These and other factors have changed the power structure of the semiconductor business. Chips today power every aspect of our lives and have led to a global semiconductor shortage that's been well covered, but we've never seen anything like it before. We believe silicon success in the next 20 years will be determined by volume manufacturing capabilities, design innovation, public policy, geopolitical dynamics, visionary leadership, and innovative business models that can survive the intense competition in one of the most challenging businesses in the world. Hello and welcome to this week's Wikibon Cube Insights powered by ETR. In this Breaking Analysis, it's our pleasure to welcome Daniel Newmanin, one of the leading analysts of the technology business and founder of Futurum Research. Daniel, welcome to the program. Thanks so much. Dave, great to see you. Thanks for having me. Big topic. Yeah, I'll say I'm really looking forward to this. And so here's some of the topics that we want to cover today if we have time. Changes in the semiconductor industry have said they've been dramatic, the shift to no fab companies. We're going to talk about volume manufacturing, those shifts that have occurred largely due to the arm model. We want to cover Intel and dig into that and what it has to do to survive and thrive these changes. And then we want to take a look at how alternative processors are impacting the world. People talk about as Moore's law dead. Is it alive and well? Daniel, you have strong perspectives on all of this, including NVIDIA. Love to get your thoughts on that. Plus talk about the looming China threat, as I mentioned in the intro. But Daniel, before we get into it, do these topics, they sound okay? How do you see the state of the semiconductor industry today? Where have we come from? Where are we? And where are we going at the macro level? There are a lot of different narratives that are streaming alongside and they're not running in parallel so much as they're running and converging towards one another, but it gradually different degrees. So the last two years has welcomed a semiconductor conversation that we really hadn't had, and that was supply chain driven. The COVID-19 pandemic brought pretty much unprecedented desire, demand, thirst, or products that are powered by semiconductors. And it wasn't until we started running out of laptops, of vehicles, of servers, that the whole world kind of put the semiconductor in focus again. Like it was just one of those things, Dave, that we as a society had sort of taken for granted. Like if you need a laptop, you go buy a laptop. If you needed a vehicle, there'd always be one on the lot. But as we've seen kind of this exponentialism that's taken place throughout the pandemic, what we ended up realizing is that semiconductors are eating the world. And in fact, the next industrial, the entire industrial itself, the complex is powered by semiconductor technology. So everything we do and we want to do, right? You went from a vehicle that might have had $50 or $100 worth of semiconductors on a few different parts to one that might have 700, 800 different chips in it. Thousands of dollars worth of semiconductors. So across the board though, yes, you're dealing with the dynamics of the shortage. You're dealing with the dynamics of innovation. You're dealing with Moore's law and sort of coming to the end, which is leading to new process. We're dealing with the foundry versus fab versus invention and product development situation. So there's so many different concurrent semiconductor narratives that are going on, Dave. And we can talk about any of them and all of them. And I'm sure as we do, we'll overlap all these different themes. You know, maybe you can solve this mystery for me. There's this chip shortage and you can't, vehicle inventory is so tight. But yet when you listen to the ads that the auto manufacturers are pounding the advertising, maybe they're afraid of Tesla. They don't want to lose their brand awareness anyway. So this is just by the way, a background. I want to get a little bit academic here, but bear with me. I want to introduce, actually reintroduce the concept of rights law to our audience. We all know about Moore's law, but the earlier instantiation actually comes from Theodore Wright. T.P. Wright, he was this engineer in the airplane industry. And the math is a little bit abstract to apply, but roughly translated it says, as the cumulative number of units produced doubles your cost per unit declines by a fixed percentage. Now in airplanes, that was around 15%. In semiconductors, we think that number is more like 20, 25% when you add the performance improvements you get from silicon advancements it translates into something like 33% cost declines when you can double your cumulative volume. So that's very important because it confers strategic advantage to the company with the largest volume. So it's a learning curve dynamic. Let's like Andy Jassy says, Daniel, there's no compression algorithm for experience and it definitely applies here. So if you apply rights law to what's happening in the industry today we think we can get a better understanding of, for instance, why TSMC is dominating and why Intel is struggling. Any quick thoughts on that? Well, you'd have to take every formula like that in any sort of standard mathematics and kind of throw it out the window when you're dealing with the economic situation we are right now. I'm not actually throwing it out the window but what I'm saying is that when supply and demand get out of whack some of those laws become a little bit more difficult to sustain over the long term. What I will say about that is we have certainly seen this fabulous model explode over the last few years. You're seeing companies that can focus on software frameworks and innovation that aren't necessarily getting caught up in dealing with the large capital expenditures and overhead, the ability to, as you suggested in the topics here, partner with a company like ARM that's developing innovation and then offering it to everybody, right? For a licensee and then they can quickly build. We're seeing what that's doing with companies like AWS that are saying we're gonna just build it. Alibaba, we're just gonna build it. These aren't chip makers, these aren't companies that were even considered chip makers. They are now today competing as chip makers. So there's a lot of different dynamics going back to your comment about Wright's law. Like I said, as we normalize and we figure out this situation on a global scale, I do believe that the who can manufacture the most will certainly continue to have significant competitive advantages. Yeah, so that's a really interesting point that you're bringing up because one of the things that it leaves me to think is that the chip shortage could actually benefit Intel, I think will benefit Intel. So I want to introduce this some other data and then get your thoughts on this. Very simply, the chart on the left shows PC shipments which peaked in 2011 and then began its steady decline until COVID and the PCs as we know have popped up in terms of volume in the past year and looks like they'll be up again this year. The chart on the right is cumulative ARM shipments. And so as we've reported, we think ARM wafer volumes are 10x those of x86 volumes and as such the ARM ecosystem has far better cost structure than Intel and that's why Pat Gelsinger was called in to sort of save the day. So Daniel, I just kind of again opened up this can of worms but I think you're saying long-term volume is going to be critical that's going to confer low cost advantages but in the near to midterm Intel could actually benefit from this chip shortage. Well, Intel is the opportunity to position itself as a leader in solving the repatriation crisis. This will kind of carry over when we talk more about China and Taiwan and that relationship and what's going on there. We've really identified a massive gap in our, an America supply chain and the global supply chain because we went from, I don't have the stat off hand but I have a rough number Dave and we can validate this later but I think it was in like the 30ish, high 30ish percentile of manufacturing of chips were done here in the United States around 1990 and now we're sub 10% as of 2020. So we offshored almost all of our production and so when we hit this crisis and we needed more manufacturing volume we didn't have it ready. Part of the problem is you get people like Elon Musk that come out and make comments to the media like oh, it'll be fixed later this year. Well, you can't build a fab in a year. You can't build a fab and start producing volume and the other problem is not all chips are the same. So not every fab can produce every chip and when you do have fabs that are capable of producing multiple chips it costs millions of dollars to change the hardware and to actually change the process. So it's not like oh, we're gonna build 28 today because that's what Ford needs to get all those F-150s out of the lot and tomorrow we're gonna pump out more sevens for a bunch of HP PCs. It's a major overhaul every time you want to retool. So there's a lot of complexity here but Intel is the one domestic company US based that has basically raised its hand and said we're gonna put major dollars into this and by the way, Dave, the arm chart you showed me could have a very big implication as to why Intel wants to do that. Yeah, so right, that's a big part of foundry, right? Is get those volumes up. So I want to hold that thought because I just want to introduce one more data point because one of the things we often talk about is the way in which alternative processes have exploded onto the scene. And this chart here, if you could bring that up, Patrick, thank you, shows the way in which I think you're pointing out Intel is responding by leveraging alternative fab. But once again, kind of getting serious about manufacturing chips. So what the chart shows is the performance curve it's on a log scale and the blue line is x86 and the orange line is Apple's A-series and we're using that as a proxy for some of the curve that arm is on. And it's performance over time, culminating in the A-15 and it measures trillions of operations per second. So if you take the traditional x86 curve of doubling every 18 to 24 months that comes out roughly to about 40% improvement per year in performance and that's diminishing as we all know to around 30% a year is the Moore's Law is waning. The orange line is powered by arm and it's growing at over a hundred percent really 110% per year when you do the math and that's when you combine the CPU, the neural processing unit, the XPU, the DSPs, the accelerators, et cetera. So we're seeing Apple use arm AWS to your point as building chips on Graviton and Tesla's using arm the list is long and this is one reason why. So Daniel, this curve feels like it's the new performance curve in the industry. Yeah, we are certainly in an era where companies are able to take control of the innovation curve using the development, using the open ecosystem of arm, having more direct control and price control. And of course part of that massive arm number has to do with mobile devices and IoT and devices that have huge scale. But at the same time, a lot of companies have made the decision either to move some portion of their product development on arm or to move entirely on arm. Part of why it was so attractive doing video, part of the reason that it's under so much scrutiny that that deal, whether that deal will end up getting completed, Dave. But we are seeing an era where we want, I said lust for power, I talked about lust for semiconductors, our lust for our technology to do more, whether that's software defined vehicles, whether that's the smartphones we keep in our pocket or the desktop computer we use. We want these machines to be as powerful and fast and responsive and scalable as possible. If you can get 100% or you can get 30% improvement with each year and generation, what is the consumer going to want? So I think companies are as normal following the demand of consumers and what's available. And at the same time, there's some economic benefits they're able to realize as well. I don't want to go too deep into Nvidia arm but what do you handicap that the chances that that acquisition actually happens? Oh boy. Right now, there's a lot of reasons it should happen but there are some reasons that it shouldn't. I still kind of consider it a coin toss at this point because fundamentally speaking, it should create more competition but there are some people out there that believe it could cause less. And so I think this is going to be hung up with regulators a little bit longer than we thought. We've already sort of had some previews into that Dave with the extensions and some of the timelines that have already been given. I know that was a safe answer and I will take credit for being safe. This one's going to be a hard one to call but it certainly makes Nvidia an amazing, it gives amazing prospects to Nvidia if they're able to get this deal done. Yeah, I agree with you. I think it's 50-50. Okay, I want to pose the question is Intel too strategic to fail in March of this year? We published this article where we posed that question. You and I both know Pat pretty well. We talked about at the time the multi-front war Intel is waging. They're in a war with AMD, the ARM ecosystem, TSMC, the design firms, China. And we looked at the company's moves which seemed to be right from a strategy standpoint that looking at the potential impact of the US government, Intel's partnership with IBM and what that might portend. US government has a huge incentive to make sure Intel wins with onshore manufacturing and that looming threat from China. But Daniel, is Intel too strategic to fail and is Pat Gelsinger making the right moves? Well, first of all, I do believe at this current juncture where the semiconductor and supply chain shortage and crisis still looms that Intel is too strategic to fail. I also believe that Intel's demise is somewhat overstated. Not to say Intel doesn't have a slate of challenges that it's going to need to address long term just with the technology adoption curve that you showed being one of them, Dave. But you have to remember that company still has nearly 90% of the server CPU market. It still has a significant market share in client and PC. It is seeing market share erosion but it's not happened nearly as fast as some people had suggested it would happen with right now with the demand in place and as high as it is Intel is selling chips just about as quickly as it can make them. And so we right now are sort of seeing the TAM as a whole a demand as a whole continue to expand. And so Intel's fulfilling that need. But where are they really too strategic to fail? I mean, we've seen in certain markets and certain process in client for instance where AMD has gained, of course that's still x86. We've seen where the M1 was kind of initially thought to be potentially as a product that would take some time. It didn't take nearly as long for them to get that product in good shape. But the foundry and fab side is where I think Intel really has a chance to flourish right now. One, it can play in the arm space. It can build these facilities to be able to produce and help support the production of volumes of chips using arm designs. So that actually gives Intel an inroads. Two is it's the company that has made the most outspoken commitment to invest in the manufacturing needs of the United States, both here in the United States and in other places across the world where we have friendly ally relationships and need more production capabilities. If not Intel would be. And there is no other logical company that's US based that's gonna meet the regulator policy makers requirements right now that is also raising their hand and saying we have the know-how, we've been doing this, we can do more of this. And so I think Pat is leaning into the right area and I think what will happen is very likely Intel will support manufacturing of chips by companies like Qualcomm, companies like NVIDIA. And if they're able to do that, some of the market share loss is that they're potentially facing with innovation challenges and engineering challenges could be offset with growth in their fab and foundry businesses. And I think Pat identified it. I think he's going to market with it and convincing the street. That's gonna be a whole another thing that this is exciting. But I think as the street sees the opportunity here this is an area that Intel can really lean into. So I think people generally would recognize at least the folks I talked to and it'll be interesting your thoughts and really know this business that Intel had the best manufacturing process in the world. Obviously, that's coming to question. But for instance, people say, well, Intel's 10 nanometer is comparable to TSM 7 nanometer and that's sort of overstated their nanometer loss. But so they were able to point as they were able to sort of hide some of the issues maybe in design with great process. And I believe that comes down to volume. So the question I have then is, and I think so I think Pat is doing the right thing because he's going after volume and that's what foundry brings. But can he get enough volume? Or does he need for instance, I mean, one of the theories I've put out there is that Apple could save the day for Intel if the US government gets Apple in a headlock and says, hey, we'll back off on breakup big tech but you got to give Pat some of your foundry volume that puts him on a steeper learning curve. Do you worry sometimes though, Daniel, that Intel just even with like Qualcomm and Broadcom who by the way are competitors of theirs and don't necessarily love them. But even so, if they could get those wins that they still won't have the volume to compete on a cost basis. Or do you feel like even if they're a number three even behind Samsung, it's good enough. What are your thoughts on that? Well, I don't believe a company like Intel goes into a business full steam and they're not new to this business but the obvious volume and expansion that they're looking at with the intention of being number two or three. These great companies and you know, that's same thing I always say with Google Cloud, Google's not out to be the third cloud that they're out to be one. Well, that's Intel will want to be stronger. If the US government and these investments that it's looking to make in this $50 plus billion, it's looking to pour into this particular space which I don't think is actually enough. But if the government makes these commitments and Intel being likely one of the recipients of at least some of these dollars to help expedite this process, move forward with building these facilities to increase manufacturing. Very likely there's going to be some precedent of law, a policy that is going to be put in place to make sure that a certain amount of the volume is done here, state side with companies. This is a strategic imperative. This is a government strategic imperative. This is a putting the country at risk of losing its technology leadership if we cannot manufacture and control this process of innovation. So I think Intel is going to have that as a benefit that the government is going to most likely require some of this manufacturing to take place here, especially if this investment is made.  So I think we're concluding, and I correct me if I'm wrong, but Intel is too strategic to fail. And I sometimes worry they could go bankrupt, trying to compete with the likes of TSMC. And that's why the public policy and the partnership with the US government and the EU is, I think, so important. Yeah, I don't think bankruptcy is an immediate issue. I think while I follow your train of thought, Dave, I think what you're really looking at more is can the company grow and continue to get support? Where I worry about is shareholders getting exhausted with Intel's the merry-go-round of not growing fast enough, not gaining market share, not being clearly identified as a leader in any particular process or technology, and sort of just playing the role of the incumbent. And the company needs to, whether it's in AI, whether it's at the edge, whether it's in communications and service provider space, Intel is doing well. You look at their quarterly numbers, they're making money. But if you had to say, where are they leading right now? Which thing is Intel really winning consistently at? You look at like AI and ML and people will point to Nvidia. You look at innovation for client, and even AMD has been super disruptive and difficult for Intel. Of course, we've already talked about in like mobile, how impactful ARM has been, and ARM is also playing a pretty big role in servers. So like I said, the market share and the technology leadership are a little out of skew right now, and I think that's where Pat's really working hard is identifying the opportunities for Intel to play market leader and technology leader again and for the market to clearly say yes. Fab and Foundry, could this be an area where Intel becomes the clear leader domestically? And I think that the answer is definitely yes, because none of the big chip makers in the U.S. are doing fabrication, they're all outsourcing it to overseas. So if Intel can really lead that here, grow that large here, then it takes some of the pressure off of the process in the innovation side, and that's not to say that Intel won't have to keep moving there, but it does augment the revenue, creates a new profit center, and makes the company even more strategic here domestically. Yeah, and Global Foundry tapped out of sub 10 nanometer, and that's why IBM's suing him. Hey, wait a minute, you had a commitment there. The concern I have, and this is where again, your point is really important with the chip shortage, you know, to go from initial design to tape out, took Tesla and Apple, you know, sub 24 months, you know, probably 18 months. With Intel, we're on a three year design to tape out cycle, maybe even four years, so they've got to compress that, but that as you well know, that's a really hard thing to do, but the chip shortage is buying them time, and I think that's a really important point that you brought out early in this segment. So, but the other big question, Daniel, I want to test with you is, well, you mentioned this about seeing ARM in the enterprise, not a lot of people talk about that, or have visibility on that, but I think you write on. So, will ARM and NVIDIA be able to seriously penetrate the enterprise, the server business in particular, clearly Jensen wants to be there? Now, this data from ETR lays out many of the enterprise players, and we've superimposed the semiconductor giants and logos. The data is an XY chart, it shows net score, that's ETR's measure of spending momentum on the vertical axis and market share on the horizontal axis. Market share is not like IDC market share, it's presence in the data set. And as reported before, AWS is leading the charge in enterprise architecture, as Daniel mentioned, they're designing their own chips, Nitro and Graviton, Microsoft is following suit, as is Google, VMware has Project Monterey, Cisco is on the chart, Dell, HP, IBM with Red Hat are also shown, and we've superimposed Intel, NVIDIA, China and ARM, and now, we can debate the position of the logos, but we know that one, Intel has a dominant position in the data center, it's got to protect that business. It cannot lose ground as it has in PCs, because the margin pressure it would face. Two, we know AWS with its Antiperna acquisition is trying to control its own destiny. Three, we know VMware has Project Monterey and is following AWS's lead to support these new workloads beyond X86, general purpose, they got partnerships with Pensando and ARM and others. And four, we know Cisco, they've got chip design chops as does HPE, maybe to a lesser extent, and of course, we know IBM has excellent semiconductor design expertise, especially when it comes to things like memory desegregation. As I said, Jensen's going hard after the data center, you know him well, Daniel, we know China wants to control its own destiny, and then there's ARM, it dominates mobile, as you pointed out, and IoT, can it make a play for the data center, Daniel? How do you see this picture, and what are your thoughts on the future of enterprise in the context of semiconductor competition? It's going to take some time, I believe, but some of the investments and products that have been brought to market, and you mentioned that shorter tape out period, that shorter period for innovation, whether it's the Graviton on AWS, or the AIML chips that with Tranium and Inferentia, how quickly AWS was able to develop, build, deploy to market an ARM-based solution that is being well-received and becoming an increasing component of the services and products that are being offered from AWS. At this point, it's still pretty small, and I would suggest that Inferentia and ARM, in the spirit of trying to get this deal done, probably don't want the enterprise opportunity to be overly inflated as to how quickly the company's going to be able to play in that space, because that would somewhat maybe slow or bring up some caution flags of the regulators that are monitoring this. At the same time, you could argue that ARM offering additional options in competition, much like it's doing in client, will offer new form factors, new designs, new SKUs, the OEMs, will be able to create more customized hardware offerings that might be able to be unique for certain enterprises, industries can put more focus. We're seeing the disaggregation with DPUs and how that technology using ARM with what AWS is doing with Nitro, but what these different companies are doing to use semiconductor technology to split out security, networking and storage. And so you start to see design innovation could become very interesting on the foundation of ARM. So in time, I certainly see momentum. Right now, the thing is, is most companies in the enterprise are looking for something that's fairly well-baked off the shelf that can meet their needs, whether it's SAP or whether it's, you know, running different custom applications that the business is built on top of, commerce solutions. And so Intel meets most of those needs. And so ARM has made a lot of sense, for instance, with these cloud-scale providers, but not necessarily as much sense for enterprises, especially those that don't want to necessarily look at refactoring all the workloads, but as software becomes simpler, as refactoring becomes easier to do between different technologies and processes, you start to say, well, ARM could be compelling.  The average person, the average data, you know, they look at many of these companies the same. In enterprise, it's always mattered. Kind of like in the PC world, it used to really matter. That's where Intel inside was born. But as we continue to grow up and you see these different processes, these different companies, NVIDIA, AMD, Intel, all seen as very worthy companies with very capable technologies in the data center. If they can offer economics, if they can offer performance, if they can offer faster time to value, people will look at them. So I'd say in time, Dave, the answer is ARM will certainly become more and more competitive in the data center like it was able to do at the edge of the mobile. Yeah, one of the things that we've talked about is that, you know, the software-defined data center is awesome, but it also created a lot of wasted overhead in terms of offloading, storage and networking, security. And much of that is being done with General Purpose x86 processors, which are more expensive than, for instance, using ARM. If you look at what, as you mentioned, great summary of what AWS is doing with Graviton and Tranium and other tooling, what Ampere is doing in Oracle. And you're seeing both of those companies, for example, particularly AWS, get ISVs to write so they can run General Purpose applications on ARM-based processors as well. It sets up well for AI inferencing at the edge, which we know ARM's dominating the edge. We see all these new types of workloads coming into the data center. If you look at what companies like Nebulon and Pensando and others are doing, you're seeing a lot of their offloads are going to ARM. They're putting ARM in, even though they're still using x86 in a lot of cases, but they're offloading to ARM. So it seems like they're coming into the back door. I understand your point, actually, about they don't want to overplay their hand there, especially during these negotiations. But we think that long-term, you know, it bears watching. But Intel, they have such a strong presence. They got a super strong ecosystem, and they really have great relationships with a lot of the enterprise players, and they have influence over them. So they're going to use that. The chip shortage benefits them. The relationship with the US government, Pat, is spending a lot of time working that. So it's really going to be interesting to see how this plays out. Daniel, I want to give you the last word, your final thoughts on what we talked about today and where you see this all headed. I think the world benefits as a whole with more competition and more innovation pressure. I'd like to see more players coming into the fray. I think we've seen Intel react over the last year under Pat Gelsinger's leadership. We've seen the technology innovation, the angstrom era, the 20A. We're starting to see what that roadmap is going to look like. We've certainly seen how companies like NVIDIA can disrupt, come into market, and not just using hardware, or using software to play a major role. But as a whole, as innovation continues to take form at scale, we all benefit. It means more intelligent software-defined vehicles. It puts phones in our hands that are more powerful. It gives power to cities, governments, and enterprises that can build applications and tools that give us social networks and give us data-driven experiences. So I'm very bullish and optimistic as a whole. I said this before, I say it again. I believe semiconductors will eat the world. And then you look at the, we didn't even really talk about the companies, whether it's in AI, like Grock or Graphcore. There are some very cool companies building things. You've got Qualcomm, Botnuvia, another company that could come out of the blue and offer us new innovations in mobile and personal computing. I mean, there are so many cool companies, Dave, with the scale of data, the growth and demand and desire for connectivity in the world. It's never been a more interesting time to be a fan of technology. The only thing I will say as a whole is a society, as I hope we can fix this problem, because it does create risks, the supply chain, inflation, the economics, all that stuff ties together. And a lot of people don't see that. But if we can't get this manufacturing issue under control, we didn't really talk about China, Dave, and I'll just say Taiwan and China are very physically close together in the way that China sees Taiwan and the way we see Taiwan is completely different. We have very little control over what can happen. We've all seen what's happened with Hong Kong. There's just so many, as I said, when I started this conversation, we've got all these trains on the track. They're all moving, but they're not in parallel. These tracks are all converging, but the convergence isn't perpendicular. So sometimes we don't see how all these things interrelate. But as a whole, it's a very exciting time. Love being in technology and love having the chance to come on here and talk with you. I love the optimism in your right. That competition, that's gonna come from China as well. Xi has made it a part of his legacy, I think, to reincorporate Taiwan. That's gonna be interesting to see. I mean, Taiwan ebbs and flows with regard to its leadership. Sometimes they're more pro, I guess I should say less anti-China. Maybe that's the better way to say it. And China's putting in big fab capacity for NAND. And maybe people look at that, some of that is the low end of the market, but Clay Christensen would say, well, go take a look at the steel industry and see what happened there. So we didn't talk much about China, and that was my oversight, but they're after self-sufficient. It's not like they haven't tried before, kind of like Intel has tried Foundry before, but I think they're really going for it this time. But now, what do you believe that China will be able to get self-sufficiency, let's say within the next 10 to 15 years? With semiconductors? Yes. I would never count China out of anything if they put their mind to it, if it's something that they want to put absolute focus on. I think right now China vacillates between wanting to be a good player and a good steward to the world and wanting to completely run its own show. The politicization of what's going on over there, we all saw what happened in the real estate market this past week, we saw what happened with TechEd over the last few months, we've seen what's happened with innovation and entrepreneurship. It is not entirely clear if China wants to give the more capitalistic and innovation ecosystem a full try, but it is certainly shown that it wants to be seen as a world leader over the last few decades. It's accomplished that in almost any area that it wants to compete. Dave, I would say if this is one of Gigi Ping's primary focuses wanting to do this, he would be very irresponsible to rule it out as a possibility. Dave, I gotta tell you, I love collaborating with you. We met face to face just recently and I hope we could do this again. I'd love to have you back on the program. Thanks so much for your time and insights today. Thanks for having me, Dave. So Daniel's website, Futurum Research, that's three U's in Futurum. Check that out, futurumresearch.com. This individual's really plugged in. He's forward thinking and a great resource. At Daniel Newman UV is his Twitter, so go follow him for some great stuff. And remember, these episodes are all available as podcasts wherever you listen. All you gotta do is search for Breaking in Hell's podcast. We publish each week on wikibond.com and siliconangle.com. And by the way, Daniel, thank you for contributing your quotes to Silicon Angle, the writers there love you. You can always connect on Twitter. I'm at Dave Vellante. You can email me at david.vellante at siliconangle.com. Appreciate the comments on LinkedIn. And don't forget to check out ETR.plus for all the survey data. This is Dave Vellante for theCUBE Insights, powered by ETR. Be well and we'll see you next time.