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Dan Ives shares why he sees the tech bull market going for 2-3 years. Nvidia and AI's have and have nots (1:00). Qualcomm's Vinesh Sukumar on its AI ambitions (4:15). Generative AI investments and the enterprise space (6:20). How does competition play out over next 12-18 months? (8:50) Why Intel continues to be 'the biggest head scratcher in tech.' (14:30). Chips: tightwire act between China and US (21:00). Apple's historical developer conference (24:55).
Recorded live with Seeking Alpha’s Senior Editor and Team Leader of Technology, Chris Ciaccia, Qualcomm Senior Director of Product Management, Dr. Vinesh Sukumar and Wedbush Securities Managing Director of Equity Research, Dan Ives at Seeking Alpha's Investing Summit on June 18, 2024. Originally published with video here.
Transcript
Chris Ciaccia: Let’s start back, late 2022 when ChatGPT first was announced. And I think that really kind of was a watershed moment and a really kind of ushered in the age of Generative AI. And coming back a little further, closer to now, I've seen some estimates on Wall Street saying that AI-related spending could top $4 trillion by the end of the decade, and it's going to touch every area of tech, from cloud computing to enterprise software, chips, and more.
So Dan, I kind of want to start with you, given that you've been one of the most proponent people on Wall Street in talking about Generative AI. I think it was the early part of last year when you said that this was like a 1995 moment for tech. So, tell me what you mean by a 1995 moment with Generative AI and for tech?
Dan Ives: Yes, and it's great to be here. Look, covering tech since late ‘90s, there have been some themes that were ultimately hype. And we could go back throughout the last 20-years. This is the fourth industrial revolution, I've never seen anything like it in tech, maybe call it start of the internet mid-90s, 1995 would be the only thing similar, but not a 1999 moment.
And what I see traveling the world, we're in the first inning. I mean, I believe it's 9:00 p.m. at a party in Vegas, and this is going to a 4:00 a.m. Now I think part of the problem is, from a Wall Street perspective, you don't find AI in the 10th floor of your office building, in your spreadsheets or on Metro North or Jersey Transit. You got to travel the globe. And that's why I believe this is a tech bull market that's going for the next two, three years. I think it's a game changer. And I think it's just started.
Chris Ciaccia: So just to expand upon that, one of the biggest companies that everyone seems to pay attention to is Nvidia (NVDA). They've got relationships with the big hyperscalers, especially Amazon (AMZN). They've had a relationship with Amazon for the past decade or more, and on Nvidia’s earnings call, there was something that really stood out to me.
The management said that for every dollar spent on its AI infrastructure, the big cloud service providers could generate $5 in GPU instant hosting over a span of four years. And API providers could generate seven bucks over that same timeframe.
So that kind of really shocked me. When you heard that and when Nvidia said that, was that something that surprised you and did you feel like, okay, we've got this level, is there more to come?
Dan Ives: Yes, I mean that, I think about a year ago we talked about it was a -- for every GPU chip call it new oil, new gold, $8 to $10 would be the multiplier across software infrastructure. And that's why the second, third, fourth derivatives of AI are just starting to play out.
Now obviously it's being led by godfather of AI Jensen and Nvidia in terms of where we are - and of course, Nadella in Redmond, but it's just a start. And I think even when you look at the market, and we could call it a have and a have nots that's playing out, the installed base players, the Oracles (ORCL), the ServiceNows (NOW), of course, Microsoft (MSFT), I could go across software. That’s -- they are going to really now have a massive renaissance of growth, which is what we talk about going into the year.
NASDAQ 20,000, and it's not just going to be Jensen and Nvidia. Now it's the rest of tech. I believe this is a tech bull market that last another two, three years because this is -- it's a fourth industrial revolution now playing out across chips, software, and I think ultimately that's why Apple (AAPL), it was such an important week when I was there in Cupertino last week, because it's the start now of the consumer AI revolution that starts with Cook in Cupertino.
And that is the next phase to what I believe a year from now we're going to be talking about $3 trillion, $4 trillion market caps. Godfather of AI Jensen and Nvidia, Apple and Microsoft.
Chris Ciaccia: So that brings me to a great segue. You mentioned chips and Vinesh, obviously, there's been a lot of attention on Nvidia, but Qualcomm (QCOM) is really just starting to gain attention from the tech community, and I think the investor community as well.
So given that you've been there for a long time, give me Qualcomm’s perspective on the value of investing in AI both in its ambitions and walk me through like how long this has been a part of Qualcomm’s ethos to get to where we are today?
Vinesh Sukumar: Yes. Hello, everyone. Thanks for stopping by today. At Qualcomm, we have been enabling a client-based or edge-based AI experiences for more than a decade now. I think the journey started off with enabling very simple use cases around audio processing, like noise cancellation, echo cancellation, which kind of laid the foundation for most of the video conferencing that became popular during the COVID time frame.
With time, we transitioned from audio processing to computer vision processing, which was very consumer-oriented and became quite popular with camera-based AI, video-based AI, that you could see in pretty much all your handsets. With time, using the experience and exposure that we have gained, transitioned into what we call complex workloads like Generative AI.
And I strongly believe we were the very first in the entire industry to showcase that text-based synthetic content generation can be created on client-based devices. And we were able to demonstrate that at Mobile World Congress last year. And it has gone into production into the premium Samsung 24 phones as early as this year, with the Generative edit and all kinds of magic things that it could do and remove wrinkles in your face using Generative AI. Just makes my 65-year old mom much more happier.
So all this is possible. So I think from a Qualcomm perspective, this has been going on for a very long time. We strongly believe in user privacy, element of personalization, and with the borrowed code what happens on the edge stays on the edge.
Chris Ciaccia: So you touched on the perspective a little bit and I want to go a little bit deeper into that especially in the enterprise space. What are some of the use cases that we're seeing, especially in the enterprise space, that global businesses are going to start to benefit as they really invest in Generative AI?
Vinesh Sukumar: Yes, great question. I think, I would say give or take in the last 18 to 24 months, with the boom of large models, the concept of AI assistant, or a personalized AI assistant, rather to speak it more broadly, chatbot has really morphed. And that kind of laid the foundation for most of these conversations in various enterprise markets, especially in IT, in finance, in the banking segment and plenty more.
And if you look at it, this also has kind of seeped its way into automotive markets, wherein you have a lot of command and control, hands-free kind of environment, wherein you can ask your dashboard a certain question about your environment, about your car, it kind of gives you a certain response. And we kind of expand on that to what we call as concepts of hybrid AI, wherein you could work with very cloud-based enterprise markets and support navigation or anything like that.
And these are all very productivity-based use cases, I would say, in enterprise markets. And we're kind of seeing the same thing in what we call content creation markets, wherein if you want to create any kind of synthetic background environment in gaming markets, it's all being done through Generative AI. So I think the market is quite strong, and you're going to see a lot more use cases coming forward.
Dan Ives: But I would say, I mean, and those are great examples, but look what's happened with names like Palantir (PLTR), the Messi of AI. I mean, now it's really starting, you're seeing the use cases build out. Look at Microsoft, look what you've seen in ServiceNow.
And what I think we're going to start to see now is those enterprise use cases goes back to a multiplier. It's not just about buying the GPU chip from Nvidia. That starts the process to now a tidal wave that's taking place across tech, of course, including Qualcomm and others, but we're just starting to now see that play out across enterprise.
Chris Ciaccia: So just to touch a little bit more on enterprise, you've been super bullish on Microsoft. I think you mentioned it was one of the companies that could see a $4 trillion market cap.
Dan Ives: And it's Microsoft's iPhone moment AI.
Chris Ciaccia: So just in terms of the big hyperscalers, AWS, Azure, and Google Cloud, how do you see this competition playing out over the next 12 to 18 months?
Dan Ives: Look, right now, Microsoft's in the Bugatti in the left lane 100 miles an hour. Amazon is in the minivan, right lane, like 55, with like a bumper sticker saying like my kid was just on the honor roll in third period. And then Google (GOOG) (GOOGL) is somewhere in between.
Because when you look, Nadella, right now, Nadella's at the top of that mountain. It's not just because of OpenAI, it's because of Copilot and because enterprise installed base, that's where they play. I mean, you are in Microsoft's backyard. That's why I think it continues to get stronger and stronger.
We think you could have an incremental $25 billion of revenue next year from a cloud perspective. If you look what's happening from a Google perspective, they've significantly turned things around. I think Google has significant momentum on the cloud. I think it's actually part of the reason that we're very bullish on Google from the sum of the parts. I think $30 to $40 could get added to that valuation as they ultimately execute on GCP.
Look at Amazon, Jassy, I mean you're talking about like Mount Rushmore when it comes to cloud, right? Like what he's been able to do. But now they're behind the eight ball. They got to aggressively go after cloud. That's the key of the valuation. I mean, if you're a bull on Amazon, it's about them getting AWS, but specifically AI right. And right now, they're showing some traction, but they're still in that minivan in the right lane.
Chris Ciaccia: So is there space on that Mount Rushmore for like a fourth player? Maybe it's like Oracle, especially after that deal last week with Microsoft and OpenAI, or maybe it's in (IBM) or somebody else?
Dan Ives: Well, I think, look, Arvind's doing a great job at IBM in terms of turning it around. But I think what's happened in Oracle, what Safra has been able to do, it's a huge part of, I think the re-rating that's happened in Oracle. And it goes back to installed base, what these companies are doing.
If someone told you Dell (DELL) was an AI company six months ago, they'd say, you know, that's impossible. But look what's happening with Dell. So it speaks to like old becomes new again, like, and that's when we talk about tech, I think you are starting to see the rerating in names like IBM, Dell, Oracle, now like Cisco (CSCO). Cisco doesn't buy Splunk if it's not for AI. So it's also going to spur M&A.
And then a lot of the small niche players, they could be on the outside looking in. That could lead to M&A. And as you've seen like within the air pocket, these stocks get crushed. UiPath (PATH), Mongo (MDB), Salesforce (CRM) got crushed. So it's going to be a clear have and have nots. Because we can talk about all the hope of AI, but now it's about execution phase, right now.
Chris Ciaccia: So we've touched a lot on the enterprise use and how Generative AI is impacting that. I want to come back down a little bit in other areas of tech, chips, media, and you mentioned the edge, which are consumer devices like PCs and smartphones.
Vinesh, obviously there's been a tremendous amount of buzz for Qualcomm, especially with the release of Snapdragon X Elite. You had the Microsoft announcements a few weeks ago. I feel like Qualcomm is really starting to push further into the PC space and compete against companies like Intel (INTC) and AMD, which have largely dominated that space.
So from your perspective, what changes are you seeing from the company's commitment to support this, whether it's additional resources that leadership is putting forth, or anything else that you're seeing?
Vinesh Sukumar: Great question. So I think, you know, from a PC perspective, we are seeing the next level of evolution. As our CEO, Mr. Cristiano Amon, mentioned during the PC Computex last week or so, that this is like a graduation moment, wherein we had closely partnered with Microsoft and many other PC OEM vendors like Dell, HP (HPQ), Lenovo, to actually bring in what we call as Copilot Plus on client.
And we happen to be the first and only exclusive partner that we have established it. It's actually going live in most of the channels today, in fact. And working closely with Microsoft, we've been able to really enhance the next level of productivity use cases. And there are plenty of them.
Recall is one such example. We have also enhanced a lot of experiences around teams, especially around video conferencing capabilities, and as well integrated AI experiences into what we call as co-creator or image co-creator, wherein you can get any first grader to be a content creator. So kind of providing a platform, providing an opportunity space where every age group can scale has been something fantastic.
And at the same time, you know, this experience creation is, you know, kind of investment across the entire stack. What we're doing from a hardware perspective, there's been a lot of buzz, a lot of noise about a 45-TOPS machine, which Snapdragon supports. And that laid the foundation for most of these experiences. We've also kind of closely partnered with Microsoft to make sure that the native experiences that you seek on x86, anything to do with 365, anything to do with apps, or 365 content runs quite smoothly. It's not emulated, it actually runs physically or natively on Qualcomm chips.
So all this combination of things has been years of work, close partnership with Microsoft, really kind of create a unique perspective wherein the PC understands the user, rather than the user understands the PC.
Dan Ives: And also, you talk about Qualcomm, the aggressive moves they're making, and then Intel, that continues to be, in my opinion, that's the biggest head scratcher in tech.
Chris Ciaccia: Why do you say that?
Dan Ives: Well because if you looked up debacle in the dictionary, there'd essentially be, because they had every opportunity and then they got beat at their own game by Apple. You look what's happened with Jensen and just really what I view is really a new industrial revolution taking place across chips. I think Pat, the big problem that they have is trying to turn that around, getting some piece of this next phase, ‘25, ‘26 in terms of the AI revolution.
But I'll bet on Lisa Su and (AMD) over Intel right now, relative to where we are. So Intel they're going to have to make aggressive moves. And I think that continues to be probably the biggest disappointment when you think about just broader tech that we've seen. Because it just speaks like, look at that installed base, but yet they haven't been able to execute. And that's why the stock has, you know, speaks for itself.
Chris Ciaccia: So just to kind of expand upon that, obviously, these companies like Nvidia, AMD, Intel that you mentioned, they're all known for semiconductors. But you're starting to see, or you've seen this over the past few years, companies like Amazon, Microsoft, Google, they're creating their own chips.
They don't want to be reliant on the Nvidias and the AMDs and the Intels of the world. Obviously, Intel's had its own problems. But are you worried, Dan, that these companies may be going too far outside of their area of expertise? Or is that not something that really plays into your mind?
Dan Ives: I think it's longer term. Like if you look what Apple is going to do, what Microsoft -- from a chip perspective. At the end of the day, when they have red phone, they're still going to have to call Jensen. And they'll eventually have to call AMD and other. Like that's something that I don't see from a chip perspective for another three to five years.
Smart move relative to where this is all going because look what Apple, I mean, essentially Apple many could be like, innovation I haven't seen it the phones -- but the reason the stock's gone from $1 trillion to $3 trillion and I believe going to $4 trillion is because they have the installed base.
It's all about innovation from a chip perspective, from a software perspective, and that just gives them more and more cash flow margins and installed base tap into it. That speaks to what more and more of these companies are doing. That's where Nadella, look, Nadella continues to play chess, others play checkers, and you see it playing out again, again, again.
Chris Ciaccia: So just to kind of harp on that point a little bit, I mean, you kind of talked a little bit negatively about Intel. Intel's been one of the biggest, maybe the biggest beneficiary of the CHIPS Act that President Biden signed last year. I think they've on order somewhere about $12 billion or $16 billion if my memory serves correctly in terms of grants, loans.
Do you feel like this is money that the U.S. government right now is just throwing down the drain, competing against Taiwan Semiconductor (TSM), Samsung (OTCPK:SSNLF), and the other foundries, or is this something that, you know, Pat is really going to turn the ship around?
Dan Ives: It's the first smart thing I've probably seen from a tech perspective come out of 202 area code in decades in terms of Chips act. Because look, I've always felt you spend so much time in Asia and you go there and you come back and they'll be like, you know, I'll talk to a politician when I'm down in DC and like we got to build iPhones here.
Mike, look if you want a $3,000 iPhone we should build them in New Jersey, if you want a $1,000 iPhone that are made well, you build them in China in terms of what we see. So I think the Chips Act has started to turn that around. You will see more of that IP come here. It is important. It's a talent for Intel. But that in itself is not changing the story.
That's why, look, I think Gelsinger can turn this around, but this will be a turnaround for the ages if Pat could do that. I mean, look, I've seen him do similar things at VMware and others, but that, I think, is the big missing piece when you look at broader tech, especially when at the top of that mountain you have Nadella, you have Jensen, look what McDermott is doing at ServiceNow, look at Safra at Oracle, look what ultimately I think AMD and Lisa Su are going to do. This is a Game of Thrones getting played out that we see in tech.
Chris Ciaccia: So just to that point, you mentioned IP and talking to politicians and they want to keep things in here. There's been a lot of concern, especially in the news media industry, about how Generative AI impacts, whether it's a negative or a positive, from the tech side.
Are you seeing the money that they will spend -- these companies like OpenAI, Google, and some others who've signed deals with the news media companies, whether it's News Corp, Financial Times, and some others that have been public, do you think that's money that they're spending, training their models on news content? Do you think that's a good ROI, or do you think that's just kind of throwing the news media industry a little bit of a lifeline on a sinking ship?
Dan Ives: I think ultimately it's going to be a potential area of growth from the news media, because it's all intertwined. If I want information on iPhone 16 ChatGPT where's that information coming from? So essentially what it's really doing is it's creating that funnel where that plays a very important role.
And I think when you look at all these dollars that are getting spent, in terms of the trillions, it's not just going to be infrastructure and tech that benefit. That's why I'm not as much of a believer, like AI take away jobs, it's a negative. I think in the near-term, it's actually innovation. I think from a U.S. perspective, it's very important, because for the first time in 30-years U.S. is ahead of China when it comes to technology and that is very bullish, but you need to double down on that and you need to spend in the right places.
Chris Ciaccia: So you mentioned that the U.S. is ahead of China on this. And I think a lot of that has come out of what's coming out of Washington in terms of export controls, what's allowed to be shipped there. You've seen some export controls on Nvidia and AMD.
Do you see, no matter who wins in November, do you see that kind of ethos kind of continuing, or do you think that could change at all?
Dan Ives: I think it continues. But remember, it's this tightwire act, because where are the chips produced? In Taiwan. So it's one of those things where you could talk in front of the microphone, but the reality is, it is a fine balance. You know, as obviously they know well at Qualcomm.
Our view is presidential elections, especially when I travel internationally, it's always a top question, is that negative? Could that negatively impact the AI revolution? I don't believe it will. I mean to me it's one where playing that trade has been a loser's trade for decades, in terms of from a political perspective.
I think as long as it's a split DC, regardless which side of the aisle you're on, that's bullish, because nothing really gets done. And I think that our view is playing that as sort of like a negative catalyst, doomsday, person on Twitter with 30 followers, I'm not down that road. I think this bull market will have some volatility. The China issue is probably the biggest risk.
But I think it navigates, because at the end of the day, we need China, China needs us. And I think that more and more in Beijing, they're starting to recognize that as well, which is why you've seen a little more of the red carpet rolled out for Musk, Jamie Dimon, Cook, and many others.
Chris Ciaccia: So you mentioned the bull market and AI, and obviously a lot of that's been Nvidia, the big names, Microsoft, Google, Apple started to finally see some love from Wall Street, but there are obviously a lot of other companies.
You mentioned ServiceNow, Palantir. What are some of the other names that investors should really be paying attention to that maybe aren't getting as much love from, whether the media or investors right now?
Dan Ives: Yes, look, I think, I mean, to me, you mentioned a bunch of them, but I think there's ones where when you look across software, this is really going to be a huge area of growth.
So I look at names like, even there's names like when I look at what's happening in Oracle, I look at ServiceNow, I look at Workday, I look at some of the bigger tech players from an installed based perspective I think it's actually just starting on software. And I think cybersecurity is really where some of the bigger areas are.
Zscaler (ZS), CrowdStrike (CRWD), Palo Alto (PANW) despite the speed bump that we saw there. I think cybersecurity, you talk about second derivatives, front and center, names like CyberArk (CYBR), Tenable (TENB) among others.
And then I think you're going to see from an infrastructure perspective those second, third derivatives play out across tech, which is why software and cyber probably been some of the ones we were most bullish on as the second derivative, because it just keeps coming down to, an enterprise buys a GPU from Nvidia.
It doesn't stop and this is like the most important -- it doesn't stop there, it starts there and you -- that was a great question when you talk about what Jensen talked about on the call, that multiplier we will see for years and years.
Unless you have a telescope, hard to find a recession. Fed's next move is a cut, not a hike. You could debate when it happens, September, October. That's a bullish environment. And that to me is, that speaks to our whole thesis the last few years. And I think coming in here from Jersey, I saw a bunch of bears in their caves in hibernation mode with their spreadsheets still waiting for some black swan event.
Chris Ciaccia: So one more question before we turn it over to the audience for Q&A. Obviously the big event over the past couple weeks was Apple's developer conference. You were out there.
Dan Ives: Historical, historical.
Chris Ciaccia: I think when a lot of people watched the keynote or read stories, whether it was on Seeking Alpha, hopefully, or other platforms, I think initially the reaction was, this is ho-hum, this is a lot of what's already been announced, whether it's Google, Microsoft, and then the next day you saw the stock pop and then you saw it again.
So is it investors finally realizing this is Apple, maybe they're not late to the game, but this is Apple putting its own branding on AI, and this is really going to usher in more iPhone upgrades, or is it something else?
Dan Ives: Look, the haters always hate, right? So during that event, when I'm there, haters coming out, nothing here, the stocks at 191, all this, And I'm sitting there watching it being like, this is historic. It's over. They will now own AI and the consumer.
Because that's Cook being like, we don't got to be first, but we have 2.2 billion iOS devices, 25% of the world will access AI through us. Developers, they got to build apps through us. That's just, it's not just more and more revenue, that's the catalyst in the upgrade cycle. 270 million of 1.5 billion iPhones have been upgraded in four plus years.
Now I get it, you could be like at dinner and the uncle like, I'm not, never upgrading the iPhone. Okay, well eventually they're going to get phased out and then all the AI technology is going to be on iPhone 15 and iPhone 16 ultimately iPhone 17 and this is really going to spawn a huge renaissance of growth, so the delayed reaction was more I think institutional investors overnight realizing like this is it -- it's now a historical moment. And I think the start of Apple, eventually, I believe $4 trillion within a year.
Chris Ciaccia: Well, that's, I mean, if that happens, that's another 33% from where we are today. So I think that pretty much concludes what we've got. I'd like to thank Dan and Vinesh for excellent answers, and from now, we'll turn it over to the audience for some Q&A on the topic.
Male Speaker: You're being so ultra positive, I was wondering if there's ever been a crack in your confidence that maybe some of the smaller companies, like not saying like Microsoft and Google, that some of these smaller companies are racing themselves to the bottom with the amount of money they're spending and as quick as they're spending it?
Dan Ives: Yes, look, we get, of course we have like cracks that happen, confidence haters, the whole thing. But to me, like that's why we spend so much time on the talking to the users, talking to enterprises, seeing where the spending are, seeing everything in Asia.
So when all of a sudden like something negative happens, or let's say a quarter, or guidance is soft, or whatever it may be, we don’t -- I view that as kind of like, okay, that's odd, but actually that's more pound the table time.
Now in terms like others race to the bottom, look, you're right, like there's a lot of companies now. They're spending money like 1980s rock stars. Pick your -- whoever your favorite one was. And that’s some of them, eventually the Board's going to just clock strike midnight. They're going to have to sell. It's going to lead to massive consolidation, that I think. But strong gets stronger in big tech, which is why I think, we're talking about $4 trillion, $5 trillion market caps.
And again, those that are negative on tech, the last 20-years, at least like for institutionally speaking, it goes back to like, it's 9:00 p.m. in the party. If you want to be on the outside looking at the party being like, I think it's better to go back to my room eat ice cream and watch news, enjoy. I'd rather be in the party till 4:00 a.m. let's meet at breakfast and let's see you at a better night.
Male Speaker: I think it's for Dan. We're being told for 20-years to buy on weakness, to look for the best deal in town for stocks, and now it seems that, that's been changing. I mean, when it comes to AI, it keeps going up and up, and any pullback that we see, it's minor? Is this a new way of approaching the stock market when it comes to AI stocks from now on?
Dan Ives: Look, I mean, to that point, it's like I view it as like, look, it all depends on the individual and valuation. I mean, I was on an airplane like three months ago and like stocks are like getting crushed and like this woman's probably 85. I'm like sitting there watching Netflix (NFLX). She's like, oh do you need help like with your -- with anything on the airplane? She's like, no I just got to asked you, should I sell my tech stocks?
So the point is like, and I'm like, look, depends on your risk tolerance. No, but the point is, I think for the winners, like if I look at Nvidia, I mean, earnings been up 5x, I look at, when I look at like Microsoft, you look at Oracle, you look at Palantir, you look at ServiceNow, some of these others, I think Street massively underestimating where numbers are going.
We could definitely have volatility, technicals, Fed, when 20 Fed speakers speak 5 times every week we'll have that, but I think overall NASDAQ 20-K market goes higher, winners lead, but the losers, the losers just continue I think to struggle. And I think that, to that question, that's going to be the issue. It's going to a have, have not tech market.
Male Speaker: You mentioned the iOS thing with 2 billion users, so that's a plus for Apple on there? Wasn't there an issue of security, because Apple has no way to access the GPT, except through maybe Siri, but still that leads into Microsoft's Azure cloud? So what about that?
Dan Ives: It's a great question. Talking about OpenAI partnership with Apple, because look, Apple was late to the game, they needed OpenAI with that AI partnership. As a lock box technology, there's no one better than Apple. Like data privacy, that data's not sold. As opposed to other big tech where maybe there's a marketing angle and everything else.
In terms of the OpenAI partnership, like that's a siloed partnership. It's not like OpenAI is getting that data, and be like, oh, I don't want OpenAI with data. Musk talked about no iPhones and Tesla (TSLA). There's no way that that's going to happen. That's just more Musk being Musk. And we've said maybe Tesla actually does her own phones.
But for Apple, that's their strength. Because they -- 99.4% of iPhone users stay Apple users. And that's the opportunity for them to further monetize it. And then you're going to have other big tech players, Google, Meta (META), other. They're obviously going to monetize it on advertising from a data perspective. And that's just another angle how AI is going to get monetized on enterprise, but then on the consumer.
But betting against Apple, remember, like they come out with AirPods, I remember everyone like, if they sell 5 million AirPods, that would be insanity. They sold 98 million that year.
Male Speaker: This is a question for Vinesh. You know, on Qualcomm, Qualcomm as a company has what I would call a mixed record in terms of its relationships with its partners and its clients over the years.
How is Qualcomm reimagining its approach to partnerships with its client, particularly in the context of what's going on with AI and the explosive growth that's happening?
Vinesh Sukumar: Yes, great question. So I think, you know, over the years, the partnership has been going quite strong. You can see that expand on multiple swim lanes. A partnership with Meta, for example, releasing the Ray-Ban glasses with the augmented reality mixed with AI as an example. You're seeing a strong partnership with Microsoft on the PC space and we being the exclusive partners of enabling Copilot Plus on the edge pretty much.
You're kind of seeing also that expansion into other markets like automotive, where in the infotainment or ADAS-related experiences working with BMW or even other premium tier partners is quite evident, right?
So I would suspect this is kind of expanding across multiple domains. We've also done the same thing on the handsets. We're working with Google and team. We have deployed what we call as the Gemini Nano Version 1. And Samsung S24 was one of the very first phones to actually showcase this in commercial deployment.
So I would say confidently, with time, we have learned. And that is kind of showcased in various consumer and enterprise experiences that's being enabled across various swim lanes.
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