The following is the unofficial transcript of a CNBC interview with Qualcomm President and CEO-elect Cristiano Amon and Intel CEO Pat Gelsinger from the CNBC Evolve Global Summit, which took place today, Wednesday, June 16th. Video from the interview will be available at cnbc.com/evolve.
All references must be sourced to the CNBC Evolve Global Summit.
JON FORTT: I've got to mark -- speaking of the unexpected, I mean, Qualcomm and Intel together in the same panel. Mark it down folks, it's happened. There are no knives out. This is great. So I've got to start off with some news. Cristiano was quoted earlier this week saying that, hey, if things with NVIDIA and Arm don't work out, Qualcomm would consider investing in a public Arm. Pat, got to ask you, would you consider the same?
PAT GELSINGER: We are on record as saying we're concerned about the NVIDIA Arm acquisition. And if there were other approaches possible, we'd definitely be interested in understanding them.
FORTT: Okay. All right. So let's go back to core chips here, and Cristiano, I want to start with you with this. The Senate passed a bill with $52 billion for semiconductor manufacturing and research in it. And of course you at Qualcomm have done tons of R&D on your own over the years. What does America need this money to do to have the greatest impact in the next decade?
CRISTIANO AMON: Well, thanks for the question, Jon. It's good to see you. We're very happy about that. I know it has to go to the House right now, but I think it's a step in the right direction. Semiconductor is really important, not only for the United States, but for the global economy. I think we all know that at this point. I think for a company like Qualcomm we do a lot of advanced research and design of semiconductors, so continuing to have incentives for that to happen is important. And we're also very happy about building a much more resilient supply chain with the on-shoring of semiconductor manufacturing. I think that's also very important. And you need investment at this order of magnitude for that to happen.
FORTT: Well, you know who's interested in on-shoring more of the domestic supply chain for chips. Pat is. So Pat, you at Intel are already a massive domestic manufacturer and global manufacturer, and you want to get bigger building chips for others in foundry, which is hard. How do you make sure in this? And I know we've talked about it before, but I'm still concerned. How do you make sure in this massive fab building boom, so many companies saying both in the U.S. and out that they're going to build fabs, that you don't get cut off at the knees making low-cost chips at market prices which head down because there's so much supply?
GELSINGER: Well, we believe that the market, the world, is in a very expansionary period. I predict there's ten good years in front of us, because the world is becoming more digital, and everything digital needs semiconductors. And, you know, COVID created this terrible situation that demand spurted and supply chains were disrupted. So we have years just to catch up to what we see on the books today, and we're hearing our customers, the backlog is remaining extremely strong. So we have to go catch up to the day. But the world is getting more digital, in every aspect, whether it's education, whether it's health care, whether it's work from anywhere, whether it's automobiles becoming computers with tires. It's just extraordinary what we're seeing across every aspect of human existence. So first, we believe there's a strong demand environment. Second, we believe we need to step into that. We've announced our new fabs in Arizona. I'm going to launch our next mega fab location in the U.S. and in Europe before the year's out, and we think these are essential to just keep up with the demand that we're seeing. Then, of course, we said we're going to open our doors wide, right, and we're going to be a foundry for the world, because the world needs a more geographically balanced supply chain. And they're also looking for the security for our economy and our national security of having it on U.S. and European soil, and that's exactly what we're going to do. We're thrilled with the CHIPS Act, both the manufacturing, the design, but also the research and R&D for long-term leadership, as well.
FORTT: Pat, this event, this conference, is called Evolve. And I can't help but think as you're talking that you're trying to evolve Intel, but you've also evolved yourself as an executive and a leader over the years. You almost literally grew up at Intel. You left for the software industry, got a lot of varied experiences. Now you're back and trying to evolve Intel. So when you think about evolve, when you think about change, especially in this environment where I think everybody in the world coming out of this pandemic, Lord willing, knows that change is necessary, when you think about change in those contexts, how is that different now than you might have thought it was five years ago?
GELSINGER: Well, you know, first my own return, it's 11 years. I call it my 11-year vacation in systems, in software running, as well. You know, curiously, I just was reading Isaacson's book on Jobs. It was 11 years that he was out of Apple. Right? I thought, hmm, that's an interesting coincidence. But, you know, that time when you're away gives you a fresh perspective coming back to it and for it. Clearly now, as an experienced CEO, right, it just gives you a lot of assets, bringing that software, SaaS understanding. You know, when you've grown up in a culture, everything is that culture. It's not right or wrong; it is. And when you've had the chance to be outside and come back, you look at things fresh and new and in a more balanced way. And I think as we look to the other side of COVID, every one of us went through a traumatic experience. But then I say how does it make us better; what are we going to do differently, you know, just in the workforce? Every one of us said, well, we sort of got along okay. Products kept shipping. Things were able to execute. We wouldn't have done it that way. But now, how do we make ourselves better? How do we evolve as a result of this? And we expect that a full half of our workforce will be hybrid workforce going forward, and it's going to enable us to be more diverse, more distributed and we believe more productive as we combine being together as well as being distributed.
FORTT: And Cristiano, a similar question but with a different spin for you. I mean, speaking of the wilderness, Qualcomm had been through a heck of a few years with everybody wanting a piece. And it seems like every cycle -- right, in wireless we go through this, where people come after, you know, Qualcomm has advantage on this and countries challenge, but you've come out the other side of it. You take over officially as CEO beginning of July, in just a couple of weeks. What is the change in the company, in your posture, now that that period is more behind you and you're leaning into what's beyond, say, the smart phone?
AMON: Look, great question. Qualcomm is changing a lot. The history of the company, we change at every new generation of wireless. I think we have evolved as the wireless industry had evolved. Right now we have an incredible opportunity for us, and it's already showing. 5G kind of opened up demand for Qualcomm technologies across a number of different industries. And what you're going to see from Qualcomm more and more is this ongoing diversification, where we can go beyond mobile into other industries. And at the end of the day, you know, it's interesting when you look at the conversation about both Qualcomm and Intel, we come from the digital transformation at different perspective. I think Intel sees incredible amount of growth in the cloud. And we are the company with connectivity, basically driving the intelligent edge that is going to be connected to the cloud with 5G, and that's going to take us into a number of different industries, and we're very excited about that. Just to give you an example. Accenture just indicated that we're looking at about 1.5 trillion between '21 and '25, enabled by economic growth, enabled by 5G. About -- all of those things are going to be connected, and you should see Qualcomm be very active in diversifying itself, taking advantage of this technology transition.
GELSINGER: I would just add to that –
FORTT: I've got to ask you, Cristiano, about -- go ahead, Pat.
GELSINGER: Yeah. I was just going to say, Jon, you know, you joked about it at the start, Intel and Qualcomm on the same panel, right? You know, I thought this was the Hatfields and McCoys. And I do think that Qualcomm has evolved. Intel is evolving. We do see that as we bring together our strengths in compute with theirs in communication. Cristiano as a new leader, me as a new leader. I do think there's great opportunities for us to think about how we shape the industry. I've described it as these four superpowers: Of cloud, connectivity, AI and edge. Well, between these two powerhouses of U.S. technology, I think we can do some pretty amazing things and complement in conjunction with each other and really help accelerate U.S. competitiveness, not just in semiconductors, but in core technology areas for the planet.
FORTT: That's exactly what I wanted to go back to. Cristiano, when I thought about this conversation and the significance of, again, Qualcomm and Intel together in the same virtual stage, I thought back to 2007, Jobs and Gates on the same stage. And then I thought back to 2013. It wasn't so much a two-people thing, but Satya Nadella with a MacBook, Apple laptop, on stage at Microsoft's Developer Conference and then months later saying Microsoft loves LINUX. And people thought, what is that -- to me it means that old fights matter less, and there's a new challenge to focus on ahead. So Cristiano, I want your perspective on that. Does that apply here? What's the old fight that's over, and what do you see as the new challenge signaled by the two of you together on the CNBC Evolve Global Summit stage?
AMON: Well, it's a great topic of conversation. Look, as Pat outlined, I think both Pat and I are part of the class of 2021, both Intel and Qualcomm. We see now incredible importance of semiconductor, we see a transformation by digital and connectivity happening everywhere, and it's a lot of opportunities for the companies to cooperate. Look, we look at Intel and Qualcomm as true technology companies in the United States. We do a lot of advanced and fundamental research to push the industry forward. And yes, we compete in some areas, especially as we see a lot of conversions between mobile and compute. We expect that to happen. And competition will probably keep us sharp and continue to drive innovation. But we have a lot of areas to cooperate. It's more of a relationship of "coopetition," if that word can be used. We've been cooperating –
FORTT: We use it all the time.
AMON: Yeah, cooperating the possibility of semiconductor manufacturers. I think Intel becoming a foundry is a great opportunity for Qualcomm for the United States. We have opportunities to cooperate in connectivity in a number of things. They're really connecting the intelligent edge with the cloud. And I think, you know, I will be remiss if I don't mention about transition of infrastructure to Open RAN. So there's plenty of opportunity for both of the companies to grow and cooperate, while continuing to compete, and that's going to drive innovation.
FORTT: Yeah, Pat, I know that's one of your favorite subjects. To you also, what is the fight that's over, and what is your perspective on Open RAN and maybe how that's shifting the 5G conversation? There's been so much talk about China and the running start that they've had in 5G and Huawei equipment and what that means for people buying it or not buying it on the global stage. Where are American technology companies including Intel and Qualcomm positioned and how does O-RAN fit into that?
GELSINGER: Yeah, the first part of that, you know, it really is, I think that's just simple recognition. We are the unquestioned compute leader, and Qualcomm is the unquestioned coms leader. I think the intelligent edge is just going to be this extraordinarily blossoming, explosion of new use cases, and it really requires the best of compute and the best of communications and connectivity to come together. And I think that's realizing that, boy, you know, we both did a really good job executing on those cores. And we don't need to own the other. We can partner and create the combination powerfully together. With respect to O-RAN, to me this is a success story. And I was excited to talk to today with you about it, Jon. Because if we were here three or four years ago it would be, oh, no, right, we can't do 5G. It's owned by these vertical stacks. Huawei has won that market and they're crushing everybody else. Every piece of my communications, your communications is at risk as a result of that. Here we are four years later, strong focus on building the 5G industry, doing it with open platforms, and most of those are built on Intel silicon. Then with Open RAN as an open interface breaking apart the air interface from the base stations that run on it and a flourishing ecosystem of new companies are emerging, many of them American. So it's like all of a sudden software and silicon have conquered -- innovation has conquered what was seen as a geopolitical crisis just three or four years ago, technology wins and we're able to open up the engine of technical innovation of America, we will do just fine. And that's exactly what we're seeing with O-RAN, vRAN, and 5G right now. It really is great success story for American ingenuity.
FORTT: Now we alluded to this earlier. But, Cristiano, I want to zero in on it a bit more here. Not so much a technology-centered conversation but certainly evolution in workforce conversation influenced by technology. And that has to do with hybrid work. How is Qualcomm thinking through how to do that, who to bring back, how much. You know, Apple is scheduling, hey, expect to be in the office three days a week and expect it generally to be Monday, Tuesday, Thursday. What's the model that's going to work for Qualcomm, and what do you think the impact is going to be on cities like San Diego?
AMON: Look, it's a great topic of conversation, and one thing that we have done throughout the pandemic, you know, we -- we're a company that kind of drank their own Kool-Aid, so we had the ability to connect everyone, people that were in the office, people that were remotely. Also we connected our assets, our labs. You know, and the harder a business it's difficult for you not to have people on site, and we were able to use connectivity to connect everyone. In doing this process we learned a lot. And I think there's a lot of trends that are going to stay. You know, we've seen that, for example, the enterprise transformation of the home, it's staying right now, and it's going to be part on how the enterprise think about where the workplace is. But as we look into the future, we see benefits are both. And the way we're thinking about that is we're going to keep all the good things we learned through the pandemic and the ability to have a remote workforce, but we want to also keep the culture of collaboration and innovation that's been so important for Qualcomm over the years. I think what we're going to face right now, you know, not all locations are the same way, you know? I think we're doing great in San Diego and in California. We hope that all of our other locations can be like that. You know, it's a difficult situation in India right now, as you know. But for the locations that are doing better, we started to bring people back. We're doing that in phases. We're learning as we go along, and we're striving to keep the best of both worlds, the culture of collaboration and interaction between people, plus what we learned from the pandemic.
FORTT: Pat, when I talked to you about this when you were leaving VMware, it's a little bit different, right, the software? You can't make chips from home. A clean room at home requires a vacuum cleaner, but that doesn't quite cut it when you're making chips. So talk about how you balance that and the workforce locations that make sense for Intel.
GELSINGER: Yeah. And I call it, Hey, I've got a lot of people in fabs and labs. Right? Boy, they've got to touch the things. You know, we make real things. My mom is excited, I'm back to a company that she knows what I do. She can see it and touch it. The software, what are you talking about, son? And we were successfully able to keep that even through the pandemic. You know, the fabs kept running, the labs kept running, you know, we were able to have that physical... But about 60 percent of our workforce doesn't need to be in fabs and labs. And for them, we're presenting them the hybrid alternative. We expect that we'll probably end up with only 10-ish percent end up with permanent offices as we go forward with a large portion going to this hybrid work model. Looking forward to the fall, as we have our opening events, and I really want to make them moments for the team where we're back together, we're in team, we're in culture, we're collaborating, we're celebrating the other physically even as we expect most of them to spend most days in a distributed workforce fashion. So we'll have fabs and labs. We will have some small number that are permanent office dwellers, but then a large portion that are going to be hybrid and a lot more flexibility. We've shown it works, and it gives people more quality of life choices; moving closer to family, living with less commuting, being able to be in locations that are maybe more cost effective for their lifestyle. And all of this we think is good because the power of teleworking and what we've shown with work-from-anywhere or work-from-home has been such a powerful aspect.
FORTT: Pat, does that raise the stakes for the in-person moments when you have fewer of them? As a leader who is thinking about culture, who is thinking about change and communicating in all kinds of ways that change is happening, does it raise the stakes for those moments when you do call everyone together?
GELSINGER: Absolutely. Absolutely. And when you're together, you know, they need to be moments or as -- you know, the Heath book on moments that stick, right? We just need to make them memorable moments and team building and collaboration events and planning. Because those really do become these cultural markers that we all need to be investing in. So it is supercritical that when you're together, you really make it stick in that aspect. And if you have those relationships, it's easier to work when you're apart. So it really does, as you say, really emphasize the value of those moments together. I know stepping in as the CEO my first 100 days here, I only met some of my staff members in person for our first off-site last week. You know, I looked at two of them and said, "Ah, you're shorter than I thought you were." It was one of those moments where everyone is laughing, connecting, you know, "give me a hug" kind of events, because you really do want to make those special so that when we're apart we can still be efficient, productive and confident in how we interact with each other.
FORTT: And Cristiano, please give us a closing thought on both the workforce and the technology and the work ahead as Qualcomm sees it.
AMON: Well, look, the workforce, one thing that is great about what we learn and how we think about the future is you can get talent from everywhere, and I think for companies like Qualcomm, and I'm sure Pat will feel the same way about Intel, is we always want to attract the best and brightest, because we're really focused on pushing technology forward and changing the word with technology. Now, as a closing comment on technology, I want to relate to something that Pat said. The easiest way to talk about 5G, the elevator pitch on 5G is connect everything to the cloud 100 percent of the time in a reliable manner. And what basically is, 5G allows us to build on one integrated computer from the edge and the cloud. You have computing and connectivity all working together. And with that it's we're going to see a significant transformation in our era. In the same way that 4G mobile broadband drove computing to go to the palm of your hand as well, 5G is going to connect everything. We're going to see context and data links and artificial intelligence evolving at a much faster pace. And we're really excited about the future ahead and especially for Qualcomm, the opportunity to diversify into other industries as well.
FORTT: All right. Connectivity and compute. Cristiano Amon, President and CEO-elect of Qualcomm. Pat Gelsinger, CEO of Intel. It's been great, it's been historic having you here with us at CNBC Evolve Global Summit. Thank you.
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