Pat Gelsinger

we have a date plan to get together again. When you talk to him, do you feel like he learned something like? What did he take away from the conversation? You know, I gave him a twenty minute of briefing, you know, and some have said, you know is you know, how how there is he But he was engaged. He was asking questions, seeking to understand, excited about the benefits to the region. And I'll tell you, Emily, this this idea of the silicon heart land, it's just pulled on

something deeper in the nation. And uh, you know right, you know, the plans have sort of been underwork and all of a sudden, you know, hey, you know, let's get this announced. The want to want a kick in the pants for the chip sick. That's Intel CEO Pat Gelsinger sharing details on his recent meeting with President Biden at the White House. This after unveiling a plan to invest tens of billions of dollars in the American heartland of Ohio, create thousands of jobs, and bring chip manufacturing

back to US soil. It's part of an ambitious effort to revitalize a lagging company and rest control of an industry from Asia. But the question remains, will it work? Joining me on this edition of Bloomberg Studio at one point, oh Intel CEO Pat Gelsinger on his one year anniversary of becoming CEO. He's returned to the company where he spent the first thirty years of his career to shake things up, and he hopes to restore the chip maker's legacy. That's so good to be here with you. It's always

a joy, Emily, to be with you. Thank you for having me and here at the Intel Museum, which is obviously a sign of the legacy you're part of because you worked here for thirty years. Yeah, yeah, thirty years, you know, in eleven year vacation and then now back for just about a year. So tell me about that call when you got asked to come back as CEO or coming up on the one year anniversary. It was right before Thanksgiving a year plus ago, and the request

was would you consider joining the board? So I asked Michael, right, hey, Michael, what do you think? Right? He says, hey, they need to help go help him, and uh, yeah, you know that, Michael, And uh, you know, the vm Ware board was okay, yeah, you know they you know, with Michael supporting it, We're okay with that. So why interviewed to join the board for the month of December? They said, would you consider being the CEO? So it just ruined my Christmas season

last year. Your eighth grandchild is on the way, and you know, the vm Ware gig and I wanted to get the public offering of vm We're done and everything. So it was sort of like wow or wow, and you know, how was that going to play? So three weeks of chaos and then obviously the January fift announcement, you know, and the idea of coming home, you know, being a successful CEO, coming back now to the company

that I was born and raised in. As I like to say, I went through puberty here I started so young, and now the opportunity to lead and really help the resurgence and re establishment of this iconic company that really is the honor of a lifetime. Well, was it like to return to a company that has so much history which you were part of, but also knowing you needed to shake things up? The first first staff meeting, you know, February?

You know they usually started at nine I started the first one at seven am, and the first bullet of the first slide. We will have a toward pace, right, just setting them. Yeah, it's it's a new word in the intel of vocabulary. The industry is moving rapidly, massive shortages. Uh, the competitors are performing well. Hey, what we've been doing ain't working. Team. We have to set a new course for the future, and that's gotten underway very rapiding. We've

gotten a lot done over the first year. But you don't change, you don't fix, you don't re establish. After a decade of bad decisions and poor execution, It's gonna take a while, but we're well on our way after year one. He took a job in the middle of a pandemic, in the middle of a supply crisis. Two themes that are still with us today. If you could give yourself an honest one year report card, what would it say, give yourself a grade? Well, let me give

you two grades. Let me give you two grades. The board gives me an A. Myself, I give myself an A minus. Right now, in some regards, we're ahead of where I thought we'd be. In some areas were not as far as I thought we'd be. And it really is more a statement of the massive challenge in front of us. And we still got analysts out here. Someone piss me off, right, you know, I call them my bears and my perma bears at that and sort of say, yeah, it's the right strategy, pat, but I'm not sure if

I need to invest for a year or two. You know yet you know whence you're going to start materializing in the marketplace as well. So good progress. It's a good year behind us, and people are really getting excited about the new old. Do you ever have it out with the perma bears? Of course, you know, we'll debate on different aspects, and hey, I appreciate the virgent views. You know, that's part of the intel culture, right, you know, Andy would argue everything as I would say, if you

were right with Andy, you were wrong. Well, you know something about hard work because you grew up on a farm Robson. Yeah, I say, when you know, between Redding and Hershey halfway as rob a zone and we were five miles outside of town. So when you got nowhere, we were five more miles. But tell me about your upbringing. How do you go from farmer in the bile of Pennsylvania to engineer in Silicon Valley. My dad number nine of ten kids, and Grandpa said, you know, we have

enough farms in the family. Just work with your siblings. I'm the oldest boy. Had we had a farm, I'd be the farmer, because that's what the oldest boy does. Sixteen years old, accidentally took a scholarship exam and one so I ended up, you know, having the opportunity to go get a technicians degree, you know, community college. And so at sixteen years old, skipped my last year and a half of high school, finished my associate's degree, and

Intel came interviewing for technicians. So here I am eighteen years old. Intel on the West Coast invites me to come for an interview. Never been on an airplane, never been to the West Coast. How long do you think it said took for me to say yes offline to California, right, It was like to nano seconds and they offered me a job. And the interviewer said, you know, in the interview he said smart, aggressive, arrogant, he'll fit right in.

You actually became the chief architect of the processor Intel processor, right, yes, yes, And you had to pitch that to Steve John. I want to hear about that meeting. You know, Jobs and Andy they had argued early and Jobs went off on a different path, right, And because of that that we're using other microprocessors. And so I tried to convince Steve come back to Intel, right, So, and I tried to sell him in the three D six. He sort of

threw us out. I tried to sell him in the forty six, and he threw us out at the time. And eventually we want him over with the Centrino products some number of years later. But you know, it was also his insatiable detailed demand for engineering and industrial engineering excellence, you know, And to me, that's just what set him apart.

This is my conversation with the CEO of Intel, Pat Gelsinger, coming up, how the chip Giant plans to boost production to meet a surgeon demand by making bowl bets in the foundry business and new product lines. But can the company pull it all off? And at once we discussed Gelsinger's vision to bring manufacturing back to the United States. I'm Emily Chang, this is Bloomberg Studio one point out, stay with us. You became Intel's first CTO. When did you know you wanted to be a CEO? That you

wanted something more? So in my twenties, I had my first patent, I had my uh first book being written, Programming the six It was a best seller, Emily right, you know, had you know, gotten to be a VP of the company right at the youngest VP ever? And it was like, okay, what do I want to do next? Right? And then through that was sort of the soul searching time. And I wrote my mission statement that said become CEO of Intel. And you know, here I am six year

olds being You've got been kidding me? Right, you know what are you talking about? And but it became this driving force in me that I'd be in meetings with Andy Grove, Bob Noise sort of. I was armchair CEO ing for a decade and a half as I'm sitting in the room, you know, with these industry legends, and all the time it was making me better. A lot of people thought you would be a shoeing for the CEO job when that job came open. So why did you leave if this was your dream job? Yeah? You know,

there was a period of time under Odeline. He's a leadership where he had a different view of leadership, different view of what he wanted his successor it's to look like. And you know, literally I was nudged out of the company at the time and I was pushed out. Let's say, you know somewhere between those two. You know that eleven year period. By the way, Steve Jobs was outside of

Apple for eleven years, right, And there's something I'm trusting. Yeah, you know, being away and I call it the death of a vision, your period where you really have to sort of look and say, Okay, why am I pursuing this? Why wasn't I ready for that job? Out of these circumstances, What am I going to learn? I've also seen the vm Ware and the Dell and the e MC culture

up close. I just feel so much more equipped now and had I stayed on the linear path to CEO, I wouldn't have been the leader that I am today. So those eight years as CEO of vm ware hugely value. You wouldn't change a thing. I wouldn't change a thing, right, And I learned the value of software, and hey, and I's gonna do a whole lot more software in the future, I promise you. But it was also a period of personal development as well, developing humility, confidence, insights on how

to be a leader at this scale. Moore's law has guided the development of the chip industry for decades. It's not a law per se, but it's been critical to the development of semiconductors. We might even go super Moore's Law this decade. And you know four reasons I said this case. We know how to build transistors that we can see them scale for the next decade. We have power delivery. You know, how do you get the power into and out of the chip with our power via technology. Third,

we have the lithography. We also see that packaging will called two and a half and three D, which is becoming much more like wafer building as we look to the future. So here we are a hundred billion transistor chip will be our largest chip that we do today, or ponte Vecchio for high performance computing. By the end of the decade, we will deliver the trillion transistor chip. And I just say, you know, with utter confidence, I sit here and say, my team's gonna make that happen.

So industry, buckle up, Hang on, we are going for a ride. So what happens after a decade? I mean, do you think Moore's law can continue forever? To be Moore's Law has always been about a decade right where we can see in front of us the core technologies, the barriers. You know, we're lining up the things that will allow us to do it. So five years from now, we'll have the next interview, Emily, and you'll say, are you still good for a decade? And I hope to

be able to answer that question. Yes. So we have a date in five years there we go absolutely. Um, your strategy involves doing multiple things that Intel has never been able to pull off before at the same time moving into boundary for example, why do all of these things at once? These are reinforcing strategies. It's not like this one is in conflict or separate from the others, but they are making each other better. And let's talk

about the foundry as an example of that. If I open my foundry doors up, that means I have customers benchmarking my process technology every day. Right, I'm not an internal guy anymore. Instead of just saying here's my chip or you and go to external foundries, I'm gonna say, let's go together and we'll bring some of your stuff, will optimize some of our stuff. Also, some of the new business areas that were launching. Hey, we've been in internal graphics forever. You know. Now we're going to do

discrete graphics. We're gonna build on things that we're already doing and doing well. Now. Investors seem to be really excited about the ambition, the speed, the aggression, that the torrid pace, if you will, But they're not excited about how much it's going to cost. And they want to know about margins. And I know you've said five years that's when you know those historically high margins will return. That's right. It's going to be at a couple of

years of investment. And I am proud of making those investments. We're not being managed on a quarterly Wall Street view right. We are investing for a long term return and I'm pretty darn proud of that. And you've budgeted up to twenty eight billion dollars here, but your rival Samsung t SMC, they're planning to spend way more than that. So is

there a chance this could cost even more than you're planning. Well, what we've said, you know, we've said, you know, twenty eight billion four this year, and it could go up next year in the year after. This is big business, This is big capital investments. This is a big manufacturing expansion. We're pretty proud of the position. And boy, having doubled my you know, my capital investments here and year. Hey, we're not being bashful about the big steps forward that

we're taking. And with the announcements that we've laid out, you know, we believe that we'll be back in fundamental process leadership. So I think I saw you wearing a Christmas sweater taking some shots at Lisa, Sue and a d I believe you said they're already in the rear view mirror. They're never going to be in the windshield again. I asked her about this, and she she said, you know, we're playing our own game. And we feel good about it. She didn't even say the word Intel. What's your reaction

to that. Well, Lisa's done done a good job with a m D as a company, and hey, you know, I think we're back to a leadership position in the client and uh server. Hey, we've got a little bit more work to do, uh in that area. Is it possible the industries in an arms race that will lead to spending itself into an oversupply. I mean that has happened before. We we we've looked at this very carefully. And the digitization of everything. Tell me what aspect of

your life, Emily, isn't becoming more digital? Well, I'm trying to prevent that. But yeah, you know, and COVID has accelerated that. The industry cost five billion dollars last year the semiconductor industry overall, and estimates are a trillion dollars a doubling by the end of the decade. At that point, I believe those estimates. It's not that there's not going to be some blips and turns on the way, and the majority of that is driven by leadership process technology,

of which only three companies can satisfy that need. Intel Samsung, TSMC, and we are destined to grow faster than the market to accomplish that objective. Over that time, you're listening to

my conversation with Pat Elsinger, Intel CEO up next. To regain the throne, Intel has to fend off stiff competition from rivals like TSMC and Samsung, companies that are getting significant funding support from their governments, and tech giants like Apple and Amazon boxing Intel out to design their own chips. Can Intel turn back the time? That's next? I'm Emily Chang, this is Bloomberg Studio. At one point, Oh, do you feel you're getting as much support as your Asian rivals

are getting from their governments? You know, I think in the past clearly they've gotten more right, unquestionably, and I think we've seen over the last number of months is really that the entire political uh infrastructure in the US realizes how critical this is. This isn't just any industry, right, This is the heart of what the automotive industry needs, of what the industrial industry needs, what the medical industry needs, the consumer industry, the cloud industry. Every one of those

relies on semiconductors. The national security relies on semiconductors. This is a priority for the nation. Well, speaking of national security, tension between the US and China is escalating daily. The US is your home market, China is your biggest market. Isn't that a risk to Intel's future? The US China relationship now very critical? Big market for US. So you know we're in China. We're navigating that carefully. US global market big important for US. And I'll say, you know,

how do you navigate that carefully? Right? Requires you to be deaf, thoughtful, engaged with the police, dical leaders, the business leaders on both sides. Definitely consumes a lot of our energy and we have to navigate it well. Intel asked suppliers to avoid shin Jiong, an area that the US has accused China of human rights of issues, huge backlash from China. Intel apologized for the trouble that it caused.

Why not stand up to China in that moment? If you believe human rights are at risk, but we don't know source out of Shinjion, You know, there's no reason for us to be calling one out over any other. We shouldn't be calling out individual things. You know, it's

not our job. Right in that respect. We're here to build great chips, and we have a consistent global policy or with regard to human rights expectations of our suppliers, and that's what we've reinforced, and you know, we feel confident that that's the right way to balance the views that we would have across the globe in this regard. Your customers are starting to make their own silicon Microsoft, Apple, Amazon, Alphabet.

How do turn back that trend? These companies are at such scale now I can say, oh, we can hire another hundred engineers. Let's go start a silicon project. And that's part of my foundry strategy as well. That's right, Google, Amazon, Microsoft, do it with us, right, come and use our foundry. And when you do that, you know, when you show up to use our foundry, right, we're going to allow

our I P to be used by your designers. Or let's designed together, right, you know, and let's bring together your innovations with our innovations and our leading edge process technology and manufacturing capacity, so we are creating better products that meet your unique needs. Tim Cook, CEO of Apple, recently said on the earnings call that it's because of the Apple design chips that more customers are buying Max. That MAX sales went up for a year earlier. How

does it feel if Intel is being designed out? Yeah, very sad because you know they designed a better chip for their purposes than we were giving to them. So what's my mantra to my team? Design a better chip? Right? We have to create products and technologies that Apple says, huh, that's better than I could have done myself. So you think you can get that business back? Oh yeah, if we do what I said, build better chips. Obviously, you know,

winning the microprocessor back. You know they've made those decisions about every decade, you know, so I'm not expecting this. We have a number of years to get our act together. At that point, back you said Bitcoin was bad, design, extreme and climate intolerant. Do you still feel that way? Indeed, I do. A single ledger entry in bitcoin consumes enough energy to power your house for almost to day. That's a climate crisis right at that point. And the more

you use it. So if we produce a technology that consumes that much energy, wow, that's not okay. And then you sort of say most of the uses when I said that, we're a listen, that doesn't mean it's not a good technology, but we're not using it good yet. Well, Intel's about to bring forward a blockchain chip. You know, that's dramatically better. What about the metaverse? What's how are

you going to use the metaverse? Right? I don't know yet, you know, and I do think that there's going to be you know, a set of i'll say, business to business applications in the metaverse, as well as consumer applications. Well, in the consumer applications, the nearest embodiment of that would be advanced gaming. So many of our graphics initiatives and PC initiatives absolutely are going to place us in the metaverse. We're also going to help to build the back end

cloud infrastructure for metaverse. We're moving into our lightning rounds. We are going to move at a torrid pace to be there's some rapid fire questions. Okay, um, I hear you were a late night radio DJ. Is that true? What were you spinning back in the day? Oh, this was easy listening to music? Can you give us your intro? This is Pat Gelsinger w FMZ Allentown. Good morning to everybody in the Lehigh Valley. I love it. Um, what's

the latest TV? Show you've been. You know, we're running out of things to watch for my wife and Landa. So it was alias was our last been? Okay? Best piece of advice that you would give someone in their twenties relationships more important than results. Best piece of advice for someone in their forties. Mentors, how much does faith guide your decisions? Every day? Every way? I'm working for something much bigger and more important than just being the

CEO of Intel. Speaking of that, you have how many kids these days? Four kids, grandkids, grandkids? Are you getting tapped to babysit? We're with the kids or have the kids most weekends right between three different families. You know my wife, you know she is like Grammy of the year, if not the century. How do you do that? NVS CEO at grandkids? Hey, Saturday's, Sunday's. You know we find ways to fit it in. And as I would always say, you know your pa, you know life doesn't make room

for your priorities. You make room for your priorities. I hear you climb Mount kilivan Jar to raise money for one of your charities. Do you still give away half of your money going up every year? Favorite family meal to cook for the kids and the grandkids. Oh, I'm the grill master. Anything on the grill, you know, and uh, you know, a great steak on the grill, you know, salmon on the grill. We just had ribs on the grill. I haven't waiting for this one. Do you still have

the vm ware tattoo? That a real tattoo. No, it was one of those month long tattoos. My wife said it fit ain't gone before our vacation. I'm ripping it off of your arms. Since you said the farthest ahead that you can see is ten years, take me to ten years. We're gonna go on a growth journey as a company that is going to establish us as one of the law just companies on the planet. You know, we will become a very substantial provider of foundry services.

I said, the number two company in the industry for foundry overall major business. You know, we're going to be the unquestioned leader in delivering compute to the planet, including things like AI graphics, accelerated high performance computing. Will be you know, the company that's creating entire categories like autonomous vehicles, Tesla Intel unquestioned. So it's gonna be a tourd ten years? Are you going to be here in ten years? Are

you gonna be with those eight grandkids? When we took the job, we said there's a five year assignment, and it's not what that we're done in five years, but we knew it wasn't less than five years. So we'll see where we are at the five year mark and decide how much longer and how much more energy I have. But right now we're quite enjoying the journey, all right, Intel, CEO pack Alsinger, thank you so much for joining us. Fascinating so much enthusiasm. It's been great to be here.

Thank you, Emily, Yeah, Bloomberg Studio at one point. I was produced and edited by Lauren Ellis and Matthew Soto, with special assistance from Mallorie Abelhausen and Ian King. If you like our show, please share it or write a review on Apple Podcasts or wherever you get your podcasts. I'm Emily Chang, your host and executive producer. This is Bloomberg