Transcribe your podcast

Ai was an overnight 40-year success. We think about the role of AI, we think about the role of social networks and online experiences, your finances or your autonomous vehicles, your connectivity and communication, everything's becoming more digital, and everything digital runs on semiconductors. And to me, that's what the siliconomy is about. Fundamentally, everything on the planet needs silicon going forward. Never was there a vote taken in Congress to get rid of the industry, but there were votes taken in China, Taiwan, Korea, Japan to get this industry. And shifting that unique role that Intel played, that's a really, really big deal.


That's Pat Gelsinger, the CEO of Intel. Intel has just announced a new AI everywhere strategy, including what it calls the world's first AI PC, in a bid to reestablish its dominance in the tech industry. I'm Bob Safian, former editor of Fast Company, founder of the Flux Group, and host of Masters of Scale Rapid Response. I wanted to talk with Pat because the rise in AI offers Intel both opportunity and challenge. Competitor NVIDIA has become an AI darling with Intel playing catch up, yet also having its own advantages. Since returning to Intel as CEO, Pat has channeled the spirit of legendary leader Andy Grove, who navigated the company through multiple transitions. Pat shares why the race for AI's future is still in early days and how Intel is preparing itself for that future, plus his advice on what every business should be doing now to strategically focus on AI. Pat also explains how he was, quote, wrecked when he was pushed out of Intel a decade ago, but that what he learned in the process has been essential and how he's applying it today. Let's get to it.


We'll start the show in a moment.


After a word from our.




Brand partner, Capital One Business.


We'd had all these crazy moments. I would never lock my door in my fourth-floor East Village walkup because I could never find my keys and it was just too much of a hassle.


That's Deepa Gandhi, COO and co-founder of Dagnidover, an accessory brand. And she's sharing a story about one of the many handbag problems her and her co-founders experienced as busy women on the go.


The immediate problem that we were trying to solve was just a great work bag for women. Can I have a bag that looks good, that's structured, that's made out of a durable material that also has a place for my laptop, where my water bottle won't spill over and ruin everything in the bag?


Deepa and her fellow founders, CEO Melissa Mash, and Chief Creative Officer, Jesse Dover, saw a need and started a company in order to fill it.


The first two products we launched were direct responses to challenges that we had personally experienced, and they were focused on the working woman. It was the perfect tote to fit your laptop, water bottle, keys, pens, anything and everything, and this clutch wallet. That could actually work as a system.


Dagnidover's focus on the simplicity of a great product made their bags must haves for working women. But their next best seller would expand their market in ways they'd never imagined. It's all part of the Refocused Playbook, a special series where Capital One Business highlights stories of business owners and leaders using one of Reed's theories of entrepreneurship. Today's Playbook Insight: Products that do too many things are hard to explain. Turn your focus to creating a simple product with a clear, simple story.


I'm Bob Safian, and I'm here with Intel CEO, Pat Gelsinger. Pat, thanks for joining us.


My pleasure, Bob.


We're just about a year since the public release of ChatGPT, and yet it's felt like we're in a new era. The attention on generative AI. On OpenAI, it's been intense. Today you're hosting an AI everywhere event, where, among other things, you're announcing the first ever AI personal computer to be on store shelves this holiday season. That's an unusually quick time frame for the semiconductor and electronics industry to turn that fast. What is an AI PC?


I always enjoy the Andy Grove quote, The PC, the ultimate Darwinian machine. It just keeps evolving. And what used to be big, Beige, and boring, then it became a laptop and Wi-Fi. It's just been evolving over time. And we think of the AI PC as this next major evolutionary step of the PC. And what does it mean? Well, all of a sudden you embrace the AI use cases as the core driver, and I've called it a Centrino-like moment, right? And if you remember before Centrino, we had WiFi hotspots but nobody used them. And there were two coffee shops in the nation that provided WiFi. And then CentRino, all of a sudden made WiFi everywhere. And now, right? There isn't a proper kid or college student. I mean, WiFi to them is more important than bread and water itself. We think of the AI PC as that same ushering in major new use cases that it'll drive the change and form factors of the PC, new applications. In the future, we'll expect that, hey, my AIPC records the conversation, it summarizes the conversation, it translates the conversation. It gives us new user experiences and how we communicate.


It will also do work on our behalf. Give me a draft legal brief on this subject. Give me my AI bot to agent for today. When was the last time I talked to Bob? Make me smarter on the things we discussed before and the topics I should raise from the day. All of those will be done on my behalf. My medical experiences, my financial experiences, all of those will be augmented intelligence as a result of the AI PC. Why have we been bound to the keyboard? In the future, I'll just be able to talk in my natural language more proficiently and effectively to my PC, which will enable new evolutions of the form factor of the PC as well. All of this will be the AI PC generation.


And the new AI PC that you're announcing now. So it's both hardware that enables software that can do some of the things that you're describing. We're not all the way there yet.


Yeah, this is the beginning. And we've been working on these technologies for three, four years. So it isn't just today. As I like to say, AI was an overnight 40-year success. Because the core ideas of AI, and we went through multiple AI winters, they've been bumbling along for decades. And then all of a sudden, with major breakthroughs and vision and large language models and ChatGPT, all of a sudden they got good enough. We had enough data, enough compute, the algorithms got mature, and all of a sudden it's doing amazing things. But the next two years, we're going to have the next ChatGPT. And then two years later, the next one and the next one and the next one. We see a decade or more of continued evolution. We have the next two, three generations already well underway where we enhance the neural capabilities, the audio, visual capabilities, and bring far more unique capacity for the AI workload that everybody's PC will enable for them.


Intel started talking earlier this fall about something you call the Siliconomy. There's nothing about being silly. It's about Silicon, right? Can you explain what the Siliconomy is about for you? Yeah.


I like to think about it in three different dimensions, Bob. One is the core geopolitics of the planet, where oil reserves have defined the geopolitics of the planet for the last five decades, where economies are built, how nation-states position each other, where silicon and technology supply chains is more important for the next five decades. So that's one aspect of the siliconomy. Second is the pure economics, where today, when the order of 20 % of the entire GDP of the nation and almost 50 % of the growth in the GDP is a direct result of technology. An everything technology, everything digital runs on silicon. So you see it as truly the underlayment of economic growth for the nation. And that became acutely visible through COVID when all of a sudden the supply chains got disrupted, and a $30,000 car manufacturing plant couldn't proceed because you didn't have a $1 semiconductor. But the third aspect is the future of society itself. And as we think about the role of AI, we think about the role of social networks and online experiences, I often ask audiences, What portion of your life is not becoming more digital? Is your health care, is your finances, or your social networks, your autonomous vehicles, your connectivity and communication, everything's becoming more digital, and everything digital runs on semiconductors.


And to me, that's what the Siliconomy is about. It's maybe an interesting word play, but fundamentally, everything on the planet needs silicon going forward, and that is the essence of what the siliconomy is describing.


One of your colleagues said to me, It's been a crazy time for Intel, describing 2023, and all the buzz in the industry anchored around Invidea, which is a difficult tide to turn or to put yourself into. What's the difference between Intel and Invidea?


Yeah, we think about this role of AI. Hey, obviously, NVIDIA has uniquely positioned itself to be a beneficiary in that, right? And they've worked hard in this area. But we think of the AI domain as this is a long game. And we're in the first or second inning if we can use a baseball analogy. So we have a long way to go. And we've defined our strategy in AI as AI everywhere. We are the volume PC player. We are the one who's been defining the category. We put AI at the edge, every device, every store, every manufacturing and supply chain. That's what we do. And we're going to be competing for those highest end inference and training systems as well. We're very respectful of what NVIDIA has done, but we also say the world needs open systems around AI, and that's what we do as a company. The second aspect of our strategy here is very much to be a manufacturer at scale. Nvidia relies on other people to manufacture their chips. We manufacture chips, right? There's only two companies in the world we believe that can be that leading edge technology manufacturer at scale.


And one of those is in Asia. One of them is an American company who's done our R&D here in the US. We've been super involved in things like ChIPSAC. Frankly, I want to manufacture for admittedia, for AMD, for Google, for Amazon. We want to be that supply chain provider because the world needs a Western supply chain at scale. And we see the AI surge as driving tremendous interest in Intel as a manufacturer, as a foundry for those opportunities as well.


Tell me, what do people misunderstand about the CHIPs Act or not appreciate about it? The most.


Critical piece of industrial policy legislation in US and in Europe to rebuild the industry. This most critical, everything going digital industry. And hey, never was there a vote taken in Congress to get rid of the industry, but there were votes taken in China, Taiwan, Korea, Japan to get this industry. And shifting that into continents and the unique role that Intel played as part of accomplishing that, that's a really, really big deal and important trajectory that we've reset. I believe that the industry, as a result, we'll look back on what we do in the last year and say that was the turning point for the entirety of the semiconductor industry, and we will be living on that for the next five decades.


Listening to Pat, you get a sense for how deeply central technology is to our world and how early we are in AI development. So how should business leaders be acting and planning to stay up with the AI curve? We'll hear, Pat, strategies and advice after a quick break.


We'll be back in a moment. Afterward from our premier.


Brand partner.


Capital One Business.


I ended up having my first child the September that we launched the diaper backpack.


We're back with Deepa Gandhi of Dagnidover. She's been telling us how they founded their business around a simple, straightforward idea, build a better bag for working women. But the founder's lives and their needs were changing.


We had parents on the team. We had friends that were having kids. We knew we needed to make a better diaper bag, one that was gender neutral because products should be designed for both parents.


Dagny Dover's neoprene diaper backpack was an immediate hit. But then something unexpected happened.


We saw people carrying it that were clearly not parents. If you remove the changing pad, you can use it for anything. Where we originally intended to put wipes in a post-COVID world, everybody's carrying wipes. One of our team's strengths is just being able to say, Well, if there's opportunity, let's run after it.


Dagnetover was rapidly expanding, but they were able to meet the challenge because they had a clear simple focus, says Lauren Tresco of Capital One Business.


Expansion is such an exciting time.


For business owners.


But it.


Can often create.




Or misdirection. Savvy entrepreneurs know how important it is to scale.


With intention and.


Keep the simple story of their product top of mind.


Where would this expansion take Dagnetover? We'll find out later in the show. It's all part of Capital One business's Spotlight on Entrepreneurs following Reed's Refocus Playbook at all levels of scale.


Before the break, we hear to Intel CEO, Pat Gelsinger, explain how early we still are in AI development. Now, he shares how he's adjusting practices inside Intel as a result of AI and his four priorities advice for other business leaders to keep themselves on course. Plus, lessons he learned after being pushed out of Intel earlier in his career and how he's applying them now. I've spoken to a bunch of CEOs over the past year about AI, and their enthusiasm is often matched by uncertainty about how and what changes to make now. You have customers across all kinds of industries. What conversations are you having with other leaders? And how do you help them think about what this transition to AI means.


It really is understanding their business practices and where they can maximally apply AI to their business. And for instance, one of the initiatives that I have underway is how do I use AI inside of Intel? We probably have 120, 130 AI projects inside of Intel, a big company going on. But I've said, hey, these are my four things that I do more of than anything else. And I want to know how we're driving AI into those four things. And my four things are how we use it in Silicon design, how we use it in the systems and Silicon validation, how I use it in manufacturing, automation, telemetry, maintenance aspects, and how I use it for software development. Those are my four. And I am personally reviewing those four on a regular basis. But I ask every business leader, what are you for? Where are the things that you do the most of that are most important to your competitiveness? And how are you putting AI to work in those areas? Because these are dramatic changes. When people could say, Hey, my leading software developers are 10 times more productive when they're using copilot-like techniques. Okay, you better be figuring out how to do that if you're a software developer.


One of the top tier consultant groups are 4X more productive if they're using AI techniques. Well, you better be figuring out how to use AI techniques in your consulting practice. And as we're launching the AI PC, one of the demonstrations that I'll be giving as part of it is, okay, this is how we're now putting a core ultra to work in our manufacturing line. I need the highest end manufacturing PCs that are AI capable for my manufacturing to be AI enabled.


Often when there are new areas, people want to put that off at the side because they're worried about disrupting their current practices. If I'm hearing you, you're saying you need this. This is such an accelerant and a competitive advantage that if you don't have it in your core areas, you're going to have limitations.


Yeah. And the numbers that people are demonstrating in terms of business practice, transformation, automation efficiency, like Boston Consulting Group, one of our partners that we've worked with, they were demonstrating 10 X productivity improvements on the part of their consultants being able to develop proposals for their clients. 10x, right? You're not talking about little gains, huge gains. And if you're not doing that, well, trust me, one of your competitors is or a startup that wants to replace you will be. So you better be looking at it in the context of your core business practices and then saying, okay, how do we make this happen?


You worked at Intel earlier in your career. You left for a while, and then you came back as CEO. How was Intel different when you returned than when you left? And were there things that you picked up and learned along at your other posts that you're most trying to apply now?


When I left Intel, I was pushed out of the company. It wrecked me. I wanted to be the CEO. It's just one of those gut punch periods. But when you go through that experience, you also grow and learn, right? And most of your growth and learning happens in your disappointment, in your pain, in your failures. So it began a period of great personal growth for me, personal maturity, leadership maturity, but also new skill development as well, learning new cultures of companies. I am the first CEO of Intel that was a CEO before becoming the CEO of Intel. I brought a whole set of things, how to work with the board of directors, how to speak to analysts, how to set vision. And I brought a software culture and a systems culture to my leadership capacity. And I came back to Intel. That was for over a decade. I wanted to combine those new learnings with many of the things that Intel was traditionally great about. And I often talk about we're going to get back to the Grovian culture. Half the company... And it was exactly what I'm talking about. When we say Andy Grove and his manic, paranoid, survive, data-driven, engineering-centric culture, half of the company has no idea what I'm talking about.


We are the company that puts Silicon into Silicon Valley. We are the stewards of Moore's Law. We're not going to let Moore's Law die until the periodic table is exhausted. And we have a lot of elements yet to go. This deep passion that we truly are the shakers of chemistry and molecules that truly will change the lives of every human, every person on the planet in fundamental, life-improving ways. That's the company that we're rebuilding, and it plays this seminal role in the nation in manufacturing and in the economic and security requirements of the nation for the future. And because of that, there's just this resurgence and enthusiasm around the company. And once again, we're launching today the AIPC category because we did it once with the Centrino category. We did it once before that with the PC, and we're going to do it again. That's the company that we are rebuilding and restoring, and the world needs us, the world wants us, and we will deliver.


It does sound like it's been an intense transition for you all the way through. And in some ways, a good thing that it happened, even though it didn't feel that way at the time.


Yeah. And hey, out of the greatest challenges and failures, that's when some of the greatest growth and opportunities emerge, right? The company is clearly humbler now and more customer-centric. And the industry recognizes the unique capacity that we bring, but we also have to then go earn. As I like to say, we earned the industry's distrust. Now I have to rebuild and earn their trust into the future. And we're well on that journey to become the manufacturing technology, the standard bear once again. And I think today's announcement is just a great milestone in accomplishing exactly that.


Well, Pat, this has been great. Thanks so much for doing it. I really appreciate it.


Very good.


Listening to Pat, I'm struck by not just his enthusiasm about Intel and technology, but his enthusiasm about the idea of change. There's so much uncertainty about the direction of our world right now with debates about AI just one case in point. But on matters big and small, we can take more control and guide ourselves toward the future we want if we approach even the tough moments with passion and positivity. I'm Bob Safian, thanks for listening.


Now, a final word from our.


Premier brand.




Capital One Business.


If you told us when we launched the brand that men would make up currently 30 % of our customer base, I would actually say that feels right because I think our thesis always was like, you can do Dagene for everything.


We're back one more time with Deepa Gandhi of Dagene Dover. She was telling us how their gender neutral, neoprene typer bag became a surprising hit with people who weren't parents. And that got them thinking about further expansion.


Men were like, Can you make a Dagni for me? They love the material, right? It's super athletic. It's technical, and so men really like that.


But Dagnie Dover didn't launch a line for men. Instead, they rethought their entire brand identity. Any bag could be carried by anyone. And with that, they stayed true to telling a simple, clear story, says Lauren Tresco of Capital One Business.


Deepa and her co-founders did something really smart. They didn't stray from their core mission by doing too many things or.


Chasing trends.






Doubled down on the simple.


Product that.


Their story.


Was built on.


Dagnetover is scaled rapidly by broadening their customer base without over complicating their products or their story.


The one thing that has never really shifted, our true north was building this great brand and have a great high-quality product and a loyal customer base.


Capital One Business is proud to support entrepreneurs and leaders working to scale their impact from Fortune 500 to first-time business owners. For more resources to help drive your business forward, visit capitalone. Com/business-hub. Again, that's capitalone. Com/business-hub. As with every ad on Masters of Scale, the entrepreneurs you just heard from were real and unscripted. Because Capital One is a financial institution, it's important to them to be transparent about their relationship with the entrepreneurs we interview. Some of these entrepreneurs are Capital One customers, and some aren't. Capital One did compensate all of them for participating in this campaign. Masters of.


Scale Rapid Response is a wait-what original. I'm Bob Saffi and your host and Masters of Scale's editor at large. Our executive producer is Chris McLeod. Our producers are Chris Gautier, Adam Skuz, Alex Morris, Tucker Legarsky, and Masha Makotonina. Our Music Director is Ryan Holiday. Original music and sound design by Eduardo Rivera, Ryan Holiday, Hayes Holiday, and Nate Kinsella. Audio editing by Keith J. Nelson, Stephen Davies, Stephen Wells, Andrew Nolt, Liam Jenkins, and Timothée Lulee. Mixing and mastering by Aaron Castinelli and Brian Pew. Our CEO and chairman of the board is Jeff Berman. Wait What was co-founded by June Cohen and Darren Triff. Special thanks to Jaudine d'Orsee, Alfonzo Bravo, Tim Cronin, Erica Flint, Sarah Tarter, Katie Blazing, Marie L. Kerrcker, Chinemie Ozaquena, Colin Howarth, Brandon Klein, Sammy Aputa, Kelsey Cezon, Louisa Velaz, Nicky Williams, and Justin Winslow. Visit mastersofscale. Com to find the transcript for this episode and to subscribe to our email newsletter. Chad, GPT, I produce a podcast called Masters of Scale, and I'm looking for a way to get listeners to leave us.


A five-star review.


On Apple Podcasts. Do you have any suggestions?


Absolutely. One effective way is to engage with your listeners directly during your episodes. Remind them how much a five-star review can support your show.


What about to try to convince listeners to share one of their favorite episodes with somebody in their life? Do you have any suggestions for that?


Certainly. People love to share content that has made an impact on them. So remind your listeners how sharing an episode can start meaningful conversations with friends or help others discover insights they've benefited from.




It be okay if I use.


Maybe our conversation as a segment on the show?


That sounds like a creative approach. Using a meta conversation about engaging your audience as a segment could be quite engaging.


This is executive producer Chris.




And I urge you to take ChatGPT's advice and leave us a review on Apple podcasts and share an episode with a friend. It really, really helps.