Intel CEO on AI PC market: We're ramping this thing like crazy

Intel (INTC) hosted its "AI Everywhere" event on Thursday, showcasing a range of products and services which all include artificial intelligence. Included in the showcase was the Gaudi3, an artificial intelligence chip for generative AI software. The chip will officially launch next year. Intel CEO Pat Gelsinger joins Yahoo Finance to discuss the implementation of AI across the company and its products and how the AI market will move into next year and beyond.

Gelsinger comments on future use cases for AI: "I do think that enterprises are just going to find a lot of critical use cases for this. We showed a couple today in some of the communications technologies. Imagine realtime translation, transcription, summarization, contextualization, 'wow, this is cool', but also cases like manufacturing lines. We showed even our manufacturing line where high-resolution imaging and being able to detect machine variations and being able to improve line yields in our big factories."

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

Video Transcript

- Intel, today, accelerating its AI chip game with a focus on incorporating the tech into PCs and laptops. Comes as the Semiconductor Index rose. Rising to a record high earlier in the session, topping its 2021 peak.

Intel is saying the launch today is part of the company's largest architectural shift in 40 years. And CEO Pat Gelsinger joins us now live from the NASDAQ, along with Yahoo Finance's very own executive editor, Brian Sozzi. Brian.

BRIAN SOZZI: All right, thanks so much, Josh. Pat, good to see you. I was in that room. Packed house over at the NASDAQ when you unveiled these new products, Pat. And you started off your keynote in front of a really that packed house, noting this is the dawn of a new era in tech. For investors in Intel, what does that exactly mean?

PAT GELSINGER: Well, we announced two critical new products today. One was our next generation Xeon server. Where we're building AI right into Xeon so that every data center can use it. But the other was what we were just commenting on-- was the AI PC.

And I described it like this Centrino moment where we first brought Wi-Fi into popular delivery. And every coffee shop, hotel, and business had to add hotspots and Wi-Fi capabilities. Well, we think of the AI PC like that kind of transformational moment where new applications, new use cases, just usher in a new period of the AI PC.

And with that, we're quite excited today to introduce our Core Ultra product line. That's the first one delivering this at scale. And we have a rich pipeline of products coming next year and the year after to really enable AI everywhere. And that's what our announcement was about today.

Bringing in not just at high-end training in ChatGPT, but every use case across Edge, across client, across data center and cloud.

BRIAN SOZZI: What industry do you think will be most impacted by some of the technology that you uncork today?

PAT GELSINGER: Well, I do think that enterprises are just going to find a lot of critical use cases for this. We showed a couple today in some of the communications technologies. Imagine real-time translation, transcription, summarization, contextualization. Wow, this is cool.

But also cases like manufacturing lines. And we showed even our manufacturing line where high resolution imaging and being able to detect machine variations and being able to improve line yields in our big factories-- wow. One day of improvement and I paid for every PC upgrade I would ever do. So all of these use cases, I think, are important.

But consumers as well. Content creators are going to find these to be much more productive ways. And we had a musician here showing off a project that would have taken her weeks, now was getting done in the single day because of these new generative capabilities.

So much like the Centrino moment, AI PC is for everyone. It's a new generation of PCs. And we're just getting started.

We had 100 application vendors here with us today, and we expect hundreds more are going to find exciting use cases that we haven't even yet imagined for the AI PC.

BRIAN SOZZI: Yeah, Pat. I think that singer walked out with the first AI PC. I was a little jealous. But that was pretty cool.

PAT GELSINGER: I was jealous too. I was like, hey, I'm the boss.

BRIAN SOZZI: Come on, you run the company, Pat. You should be able to get a couple of those for the family. But look, take us through-- what is the outlook for these AI PCs? How many will you sell next year? And when do you start making them?

PAT GELSINGER: Yeah, well, we are already in volume production. And hey, I'm probably going down to B&H, just down the street here from the NASDAQ, and pick one up on my way out of town before I leave. So they are on shelves right now. We're expecting to see good pick up as people finish their Christmas shopping this year.

But we're going to be volume. We're ramping this thing like crazy. It's going to be tens of millions next year. We said, in the next two years, it'll be over 100 million AI PCs in the marketplace.

We have our next generation products are already sampling the customers. So today's Core Ultra is the starting gun. Application vendors, new form factors, new PCs starting to emerge. But we're just getting started. The next two years are going to be thrilling, going to be in volume.

And we are delivering this at scale, enabling the software industry, and making sure it's end-to-end. From the data center and cloud to the client and the Edge. AI everywhere.

BRIAN SOZZI: What are some of your biggest fears around AI?

PAT GELSINGER: Well, one of the things-- and I comment on this in my keynote-- that some people are a little bit concerned. It's sort of like artificial intelligence over there, what's it going to do to me? And I suggested that we might reframe it as augmented intelligence where we're making it part of how we live, how we work.

One of the things is, hey, I wear hearing aids. A family defect. And I now have neural enhanced hearing aids. It's not over there, this is part of improving my life and experiences. When it's in my PC, it is making me more productive on a daily basis.

And we think part of our job as a company, we believe in this power of technology as a force for good. That we're going to shape technology. All technology is neutral. Neither good nor bad. It's how do we shape it for good? How do we make sure it's regulated? It's safe, it's secure, it's trusted. All of those things are what we do and that's how we're going to make AI useful for every customer on earth.

BRIAN SOZZI: Pat, I was just on the Yahoo Finance platform. Your stocks near a 52 week high. Up 70% year-to-date. We have markets at records here. I'm not going to sit here and ask you to predict Dow 40,000, I know that's not your gig. But what do you think about these markets rallying? And from your standpoint, is your company doing so well that-- and your industry for that matter-- to justify where stocks are right now?

PAT GELSINGER: Well, I do think, as we talked about, AI is a driving workload. And that workload, we said, the semiconductor market, $600 billion or so today, a trillion plus by the end of the decade. And we see AI as one of those things driving a larger market.

Further, right, those leading edge technologies. These are the things that we uniquely do. Only a couple of companies in the world can do this and only one in the Western world. And that's Intel.

So with that, we see a lot of market value creation. Yet, in front of us, we're still well undervalued compared to many peers. Even as we've made good progress this year. So I see a lot of opportunities for us to create value for our customers, to create value for our shareholders. And with that, we're pretty thrilled by today's announcement because it really just is the beginning point of a lot of great things that we're doing. And what I believe will be one of the greatest turnaround stories in business history and technology industry history. The rebuilding of the iconic Intel.

BRIAN SOZZI: Last week, Pat, I had some time to catch up with one of your competitors, Dr. Lisa Su, over at AMD. They released their new chip. You're out here with new chips today. Should investors be comparing your two companies?

PAT GELSINGER: Well, in some ways, of course. We're traditionally in this market together. But in other ways, very different, right. And our IDM 2.0 strategy is a crucial piece of why different. We manufacture chips at scale. We manufacture our chips but increasingly, as you know, Sozzi, we're becoming a manufacturer for everybody's chips as well.

And then you have the [INAUDIBLE] model. And that's companies like Qualcomm, NVIDIA, AMD. And I have many products that I build as well. So essentially, I'm building two companies inside of one. A major foundry manufacturer at scale and a [INAUDIBLE] company.

So in some ways I compete. But in other ways, hey, I want to manufacture all of NVIDIA's chips, all of AMD's chips, as well as all of Intel's chips going forward. And we are rebuilding the world's supply chains for the most important resource of the future.

Remember, everything is going digital. Everything digital runs on semiconductors. We allow this industry to move from Western shores. We want to rebuild it back. The world needs balanced, resilient supply chains. That's what we're off to do. That's why we help drive the US CHIPS Act. That's why we're building these major manufacturing footprints. And that's why the total AI markets available to us, both our products and for our manufacturing.

BRIAN SOZZI: Well, good luck at the rest of the event. It's been fun to follow that turnaround story at Intel. Happy holidays to you and yours. Intel CEO, Pat Gelsinger. We'll talk to you soon. Josh, back to you.

PAT GELSINGER: Thank you so much, Sozzi. Always a pleasure.

BRIAN SOZZI: Appreciate it.

- Brian, thanks so much. That was great. Appreciate it.