AMD's Lisa Su on 10 Years as CEO, and AI's Integrated Future
Jon Fortt and Lisa Su at AMD's Austin campus on March 11, 2024.
I dropped by AMD's campus in Austin, Texas this week to speak with CEO Lisa Su on CNBC Overtime about the enormous momentum in AI-related technology, and whether it can continue to power business results and stock performance higher. Here's a transcript of our conversation:
Jon
Lisa Su, thank you so much for having us here on Overtime here at the AMD campus in Austin. We're just talking about Oracle's report. Of course, we need to be careful that they always give their guidance on the call. But so much of what they're reporting is coming out of data center, which has been just a huge growth area for you. Today at South by Southwest, though, you were talking also about the AI PC, about the client side. So hoping to start there.
Lisa
Yeah, absolutely. So Jon, thank you for being in Austin. We're very happy to host you on our campus today. Look, it's been a great day. I really enjoyed being at South by Southwest. It seems like everyone is in Austin this week, all the movers and shakers. And yeah, what we talked about today at the keynote was really a bunch of different things.
I mean, first of all, AI is really still at the very beginnings of what we can do in technology. We can talk a lot about the data center. I usually start there, but I did spend some time talking about AI PCs, and I'm very excited about this continuum of AI products as you go from cloud to edge to PC and really trying to get the user experience such that everybody has AI somewhere in their lives.
Jon
Help me with my skepticism here though, on the AI PC itself. Because it seems like this latest boom in interest in AI and some of the economic activity came out of OpenAI's ChatGPT release and investors really started to realize okay, this is going to be big. I see it happening in the data center. But when we start talking about inferencing and the client side, I don't see my kids saying, I need a new AI PC to run this new AI version of Fortnite.
Right? They're still asking for the graphics cards AMD where AMD plays to do the same kind of things as before. So do we need to see new software that's putting demands on the hardware in a new way before the AI PC gets momentum? If it does?
Lisa
Yeah. Well, let me take a step back, Jon, and kind of tell you, describe a little bit of how I see the market evolving. So true, like ChatGPT and all of these large language models showed us that you can get access to a tremendous amount of capability with all of the training and inferencing that you do in the cloud.
But it turns out that people really have a lot of personal data. And the way you use your PC, it's actually a personal productivity tool. So what I see is that we're at the beginning of the era where we can make much, much more capable personal assistants in the PC form factor. And things like, I can ask my PC, when was the last time I saw Jon Fortt?
What did we talk about? Remind me what he was interested in. Those types of things. Which today I'd have to spend probably an hour looking through like all kinds of things. That's one example. Actually on the South by Southwest stage today, we showed a really good example of doing text to image where you could do it locally so you don't have to connect to the cloud.
You can do it right in your own PC. And again, these are things that as the technology gets better, I am absolutely sure that everyone's going to want an AI PC.
Jon
Also on stage, you're joined by Weta. You know, the really high end special effects creators. Does the AI PC, to your point about text to image, really catch on with professionals first in their iteration of ideas and then that filter through the way it has with so many other graphics powered capabilities?
Lisa
I do think that there is a thing about expert users will start first. So we actually had David Conley on stage from Weta FX. Actually, big congratulations to them. They won an Oscar last night for War is Over! that was entirely rendered on AMD technology. So we were very excited about that. But what you see is whether you're a Hollywood movie studio, or you’re a content creator, or you're just a sort of regular person who has lots and lots of data, AI can help you sift through that, can help you use it in a more productive way. It can take things that used to take days or hours and you can reduce it to minutes in terms of finding things, whether it's text to image or now you saw text to video. It's really an opportunity to just become much, much more productive. And the technology that we're putting in today's PCs, I'd like to say that we've had CPUs, GPUs. Now we have AI accelerators that are there just to make it much more powerful in very small form factors.
Jon
So now we've talked a bit about the PC. Let's broaden out because a lot of the analyst world has been abuzz for the past several weeks about this $400 billion total addressable market for AI related technology that you laid out. Again, my job to approach these things skeptically. We just went through this pandemic period where we saw this huge surge in demand for PCs, for e-commerce, for goods.
And a lot of companies said, this is going to continue up and to the right. And it didn't. So how can we be sure this is an exception?
Lisa
So Jon, the way I think about AI and you've heard this from others is, AI is actually the most important technology that we've seen over the last 50 years. It's arguably the most important. And when you think about what it can do for enterprises, for all of us, for research, for development, all of that capability, you need more compute.
Now, most people would say they've been really surprised at just how AI has taken off over the last 12 or 14 months. It is true. We've taken a technology that has been around for a while but was frankly very difficult to use, and we've turned it into something where everybody on the planet can use AI technology because it's language based and you don't have to be a programmer, you don't have to be an expert.
You can just ask the AI what to do. Now, the truth is, AI is still in its infancy. So we're still at a place where we know that it will get better. Like we know that you can make these models better. We know that you can make this inference faster. We know that we can make it more accessible. So I do see a place where we're going to see tremendous growth over the next three, four, five years. We are super excited about the partnerships that we have in AI in the cloud and really trying to deliver all of that infrastructure as well as in the edge and in the client form factors.
Jon
Speaking of partnerships, one of those is Microsoft, which has been using AMD chips in the cloud. I like to look at the calendar. We marked ten years since Satya Nadella was named CEO of Microsoft back in February. It's going to be ten years since you were named CEO of AMD in October. And I was also looking at the stock chart. We were around $3 a share on AMD when you came in, just shy of $200 today. That's pretty good. Also to note about those two tenures, Data center has been key.
Satya Nadella has Azure and work there that transitioned from server and tools into that, into cloud. And then your work. I think when you came in 90% of AMD revenues were in PC. In fiscal 23, less than half. Okay. So why was data center for both of these companies in retrospect so important over the last decade?
Lisa
Well, I will say it's been a great ten years. It feels like it's not been that long. But one of the things that's most important with every company is to decide what you're best at. And you're absolutely right. AMD has always been a very good company, but frankly, we needed to decide what we are best at.
And back then the bet was high performance computing, when it may not have been the sexiest part of the business. I fundamentally believed that high performance computing was going to be the most important technology trend for us going forward for the next 5 to 10 years. I think we've seen that. We've seen data center become much, much more important.
You've seen cloud become more important. It's really difficult to build these chips. We talk about our new Zen 4 and Zen 5 cores. We talk about chiplet technologies. We talk about our MI300, our latest AI chip has 150 billion transistors. So these are hard technologies. But once you put them together, you realize how much they really drive computing overall.
So, yes. Look, we love PCs. I can talk to you all day about that. But we also see a world where high performance technology really is the most important ingredient for solving some of the world's most important problems. And frankly, working with some of the most important partners out there. And so I'm very pleased with the progress that we've made. And data center is a place where you need the biggest iron and it's hard to build these systems.
Jon
So since you frame it that way, I have to ask you, what is your least popular current important bet that everybody else is caught up on high performance computing?
Lisa
Well, the beauty of our portfolio now is it's a very broad portfolio. We are in the largest data centers. We are in the client devices. We also have a very broad embedded portfolio. So, I'm super happy with the acquisition of Xilinx. We just passed the two year anniversary where we brought in an incredible embedded portfolio, 6,000 new customers. We’re in the Mars rover. I didn't say it's my least favorite in the Mars rover. We're in lots of –
Jon
I’m not saying your least favorite. I'm saying your most underestimated piece of your portfolio, strategically.
Lisa
I think the the most underestimated piece, Jon, is how all of these pieces come together. So it is not about just what you do in the datacenter or just what you do at the edge, or what you do in the PC. It's the fact that we are one of the very few companies that have all of the pieces.
So we have all of the compute engines that you need to optimize for your application. And I don't know that people really understand that. They don't understand necessarily yet how cloud influences client. That's going to become a lot clearer over the next several years. I'm very excited by that, by the way. Because when you think about where technology is going, as much as the largest data centers in the world are filled with these high performance computing chips, you realize that there's so many other places.
And if we can get these systems really integrated synergistically. And that's why when you ask me, you’re a skeptic about AI PC's, I would love to talk to you a year from now and see how you feel about it. Because I feel really that this is probably one of the most important inflection points for the PC form factor. And this is how people are going to experience AI at a personal level.
Jon
You talk about vertical integration, it makes me think of Supermicro, which is a company that you've known well for a long time. But they were like a specialty muscle car maker. And now in part because of AI, they've gone mainstream. And a lot of people are wondering, is this high performance computing wave changing the overall demand, mass market demand for hardware where performance and that kind of integration that they're doing — and it sounds like you're talking about for AMD in a different plane — is just going to be mainstream?
Lisa
Well, we love the partnerships that we have. You know, Supermicro is a great partner. Dell is a great partner. You know, Lenovo, HP Enterprise, we work with all of these guys. But I think what's different with computing today is there is a need for lots of different types of solutions. So as long as you think about the hardware solutions, it's not just one size fits all.
And the fact is people are willing to invest ahead of the curve in AI. When you look at four or five years ago, yes, infrastructure was important, but now, like AI is essential. Like every boardroom is talking about how you use AI. Every nation state is talking about how you use AI. And so people are willing to invest ahead of the curve.
And our job is frankly to make sure that there's more supply out there. The opportunity to work closely with our partners to give you lots of different solutions depending on what you're trying to do. And yeah, I think it's a good time to be in computing.
Jon
Well, you are. having a good time here in Austin, so thanks for having me here on your campus, here to talk about it, Lisa. I appreciate it.
Lisa
Thanks so much, Jon.