Bloomberg Audio Studios, podcasts, radio news. Now investors look at how they're cheering Qualcomm's entry into AI, sparking the biggest inter day rally after their earnings since October. This is after the company revealed it will ship custom aichips to a major hyperscaler later this year, joining US now. Qualcom CEO Cristiano a'mon, who is the Hyperscala Christiano, I'll.
Tell you all about it on June twenty four.
It's going to be It's going to be three days after my birthday, June the twenty fourth.
We've got to hold on to But what does this signal about? You have been a man who's committed to telling the market that you are expanding the market. It's not just about mobile phones while Qualcom has really dominated the market share, but chips now in automotives, in IoT, but really in the data center. What sort of town, what sort of expansion of Colcom's business will this mean for you?
Yeah?
Look, you know this is a great question, and I want to maybe start the answer by saying, uh, you know why we're not anybody you know bet on qualcom diversification efforts.
We started as a mobile company. If you look at what we're doing right now.
We expanded into PC, we became one of the largest providers of semiconductor to automotive, We're going to industry, we're going to robotics, we're going to broadb in a networking and I think the data center was a natural thing. We have been working on this for the past couple of years. We've been consistently saying we're building assets, we acquire companies psy Alpha Wave. We have a pretty good CPU,
a very good accelerator. We're not a small company. We shipped forty billion chips, So I actually I don't know why people will bet against Qualcom, but I think it's okay. We're just being on this road to execution like we have done on the other business. And we're very exciting because I think what's really happening right now as we enter this next phase of AI. We went from training to inference now agents, which actually would generate demand for tokens.
It provides an opportunity across the entire Qualcom business. All of those devices where people are going to have agents running, where there's phones and PC's, they're auto they're going to go to an upgrade cycle and then from the assets that we build create opportunity for data center Christiano.
Specificity is so important here you said, and you can correct me if I'm wrong. You said it was an asick product, which I think the markets looked at and is a little bit surprised. So you are not doing your own chip, You're not doing merchant silicon, your own designs for market. You're doing an a sick with someone.
So we have said that our data center product and I need to make sure I don't front run my investor day, but trying our data Yeah, I understand that my data center. My data center product offering includes twe vectors. One is CPU. We are developing a CPU and we're very flexible. We can provide we can provide a full sc we can provide chiplets. So that's one asset. The other asset is an accelerator. We have the accelerator with
innovative memory architecture. We don't need HBM for the disaggregated inference. The other one is the ability to do custom chip which when we acquire Alpha Wave, they have both a lot of IP which is important for CUSTOMERSIC as well as a custom chip team when you put everything together, it creates a lot of opportunities for Qualcom. Now here's what is important to understand. The data center market is highly concentrated. Is correctly there are but six to eight
companies that represent the majority of it. And when you see what's happening in the market right now, a lot of solutions are becoming bespoke. They're no longer just merchant solutions. So I think as Qualcom entered the space, you should expect that we will offer a lot of.
Flexibility and we'll leverage our.
Supply chain in our design capability to do bispoke products.
And I think that's what.
We're doing four to six companies. That's interesting. So this depends on your definition of hyperscaler. Like, for example, Meta is not a cloud computing company, but it operates at hyper scale its own data center infrastructure. So maybe that's what we're talking about here, the definition of what is or is not a hyperscaler.
Look, I'm just gonna cut to the chase. We're talking about a large hyperscalers You should be thinking about one of the large cloud companies that we have today. It's a scale business.
So I think that's what we're talking.
About, oh, getting closer. The potential customers therefore are four to six, but they're huge and maybe they're even more than that. So just can you get specific about how big the opportunity is for this particular part of the business, how much I think it could ramp up revenues. So that's something you're able to push ahead before the investment meeting.
Look, we're not getting I don't want to get ahead of our skis.
We're executing.
We're very pleased with the engagement and what we said is it will be material in fiscal twenty seven. Now, if you look at the skill of the Qualcom revenue base, so I think you know, anything material to Qualcom is probably in the multiple of billion dollars in fiscal twenty seven. But look, we're just starting and we're very happy with the progress for our making.
Christian, I think back very fondly to when you and I are on stage together at the Bloombog Tech Summit. I think it was three years ago now, and we talked about the world where we switch to inference running on device. But actually Qualcomm's story has really changed in that time, right, So in this world where we're moving to inference and we're moving to AGENTIC. How are you positioning qualcomm right? The CPU is important, but you must think differently to how you did three years ago.
Look, frankly, it's exactly playing out exactly the way we thought.
And I know we have a limited time.
But when you start running agents, and when you start running things like open Claw and a bunch of other claws. Actually, what is fascinating to see what's happening in the phone industry. Every Android OEM right now is launching their own claw. And the way agents work, they actually operate your device for you. So what you're going to see at the end, you're going to see a lot of activity in the cloud, and you're going to see also activity on the device,
and it's all going to magically work. I almost like to say this, I am sure you have probably two hundred apps on your phone or close to that. We never have a discussion, We never have a discussion about how much each app is.
Doing on the cloud or doing on the device. It just works.
And I think that's how we see those agents working. They look of your data, they look at things on your device, they do things for you, and they do stuff on the cloud, and I think that's why I believe this actually builds into the Qualcom assets and the factor are present everywhere. Our engagement with the cloud companies right now they look at our devices at endpoint for AI, and that's also exciting. I think we're talking with all the AI companies about their new and exciting devices.
What's less exciting is when supply chain disruption. But you were really clear with investors and they liked it quickly. With thirty seconds memory, you see an endpoint at least in China.
Yeah.
Look, the reality is everything is memory, and AI drives more memory demand. If they drove a lot of the men of the data center, it CAUs a crunch on the consumer electronics. The good thing is we now see the bottom, as I said in the call, where under shipping market demand, we look at customer activations of devices and cell thual data, we see how what the demand is.
That's now we can call the bottom.
And you know, there's going to be more more supply and more suppliers and we'll see how this is going to play out.
The market is taking this really seriously. Qualcom having its best day since April twenty nineteen. Qualcom's Christiana im On, thank you very much.