
Loading summary
Lipu Tu
Nine of the 10 companies I invest halfway, they change their business plan because market have changed. So I like to have entrepreneur as team, not just one person. I always believe in when I was at Cadence and also at intel is first of all you crawl and then be humble, listen to customers and then first step for me is to strengthen my balance sheets, focus on the products and I really simplify the product, listen to the customer and then drive the next generation generation leadership products. And then right now the agentic AI and influence CPU become you know, highly in demand. And so in some way I'm happy right now the demand is very high for my cpu. Secondly, very happy that Jensen Huang, my old time friend, he also put 5 billion in investing and support me. His 5 billion become 25 billion. Now if you look at it 10 years from now, Huadda will be the winning company, the one that.
Host 1
Hi listeners, welcome back to. No Priors today Allad and I are here with Lip Bhutan, the legendary investor from Walden, then CEO of Cadence, now CEO of Intel. We talk about his plan to transform intel, having the US government as a major shareholder, how to be an amazing semiconductors investor, and whether or not we can make chips in the United States. Welcome Lip Bu. It's great to see you. We'll start with the obvious question. This is a really hard job to go be CEO of this incredibly important American semis company. Why take the job at all?
Lipu Tu
It's a good question. I'm 66 and people thought, well, you should retire rather than take on this hardest job in the industry. And so a couple of reasons. One is this iconic company and it's so important for the semiconductor ecosystem and also so important for United States. And so I decided, you know, do one more after Cadence.
Host 1
A lot has happened in this past year. What has been the most surprising to you?
Lipu Tu
Well, the most surprising that I don't learn from my previous job or even training is one day early morning, President Trump asking me to resign and conflict of interest and there's no exceptions. And so I had to convince myself, first of all, I don't need this job. I do it purely to save intel. And so take that personal issue out of the way. Then I figure out what can I do to be helpful to Intel. And so good news is I have a meeting Thursday morning and then Monday I have the meeting. And then he listened to me, like I have a chance to explain myself. You know, born in Malaysia, grown up in Singapore, went to MIT and I lived in US and never live outside country. And so something that I Share and then somehow he listened very well and then he gave me the chance and so I'm delighted.
Host 1
And now you have the chance to do the work. When you said, you know, the job is to save intel, it's a really important company, what does that look like to you? What does intel winning or thriving look like?
Lipu Tu
Yeah, I just passed 14 months. A lot of things happened in this 14 months. So a couple of things. One is to change the culture and then clearly want to drive more accountability and also in terms of decision making have to be faster. You know, I'm so used to startup culture and you move fast in the speed of light and going to have that bureaucracy layer of lay of meeting. And so something that I change accountability. Listen to the customer and the customer delighted. Someone like Lip was so humble, willing to listen and then address some of the problem that they face and then try to delight the customer. And also the other part from day one I decided all the engineering report. To me being an engineer by training, I want to know what went wrong and what are the things that I need to correct. Listen to the customer and delight the customer and then make sure that we have the right product, simplify our product line and really have the roadmap and the vision for the next five, 10 years.
Host 2
What is your vision of where intel should be in 10 years?
Lipu Tu
Yeah, I think couple of things. One I always believe in when I was at Cadence and also at intel is first of all you crawl and then be humble, listen to customer. And then secondly you're starting to walk and then finally you're starting to run in spring. So that's kind of my culture of step by step doing it. And then first step for me is to strengthen my balance sheets. And the balance sheet is really horrible in some way. So I'm delighted US government become a big shareholder. Just I explained to President Trump TSMC when they started they have the Taiwan government as a shareholder. If you look at Japan, you look at Singapore, this is the infrastructure US government get to provide the support. Secondly, very happy that Jensen Huang, my old time friend, he also put 5 billion in investing and support me and I'm glad I at least do some good work. His 5 billion become 25 billion now or more. And then the other part is Softbank Master. I used to be at Softbank board and then he lent a hand to help me. So we strengthened the balance sheet and then focus on the products and I really simplify the product, listen to the customer and then drive the next generation leadership products. And then in Some ways very lucky. Right now the agentic AI and influence CPU become highly in demand and so versus 1 to 8 in the training CPU to GPU. Now I can see 1 to 4, maybe 1 to 1 and I'm delighted CPU become important. I talked to some of the AI model and developer and they said well in terms of reinforced learning, in terms of the speed of orchestrating all the agents and turn up the CPU is actually better. And so in some way I'm happy right now the demand is very high for my cpu. So I think overall build on the product on the data center server side. Then the other part is our foundry business and initially this is a capital intensive business and it's not easy and you really need to have couple of things. You need to have all the right IP so that you can support the customer. Like for example if it is a mobile related you got to have low power IP set that you need to have. Without that you cannot serve them. It's a service business, it's a trust business. If people want to give you orders to have wafer to come if the yield not good they will be toast in terms of revenue. Ms. So with that I think it's very important to really focus on the yield, defect density, the cycle time and then make sure that you really able to meet and serve the customer in high quality and reliable. And so those are the thing that I really focus on it and eventually you have to really move into a full stack. So not just a silicon, you need to have a software. And some of the customer asked me give me the whole rack. So there's a system that you have to build. And so I think those are the things that are quietly building step by step and recruit some of the best talent I can find. By the way, all the recruitment, I do it myself, no search firm helping. And so I think sometimes it's good to have a rotor deck that you know who to reach out to call for.
Host 2
Yeah, I mean you've been in the business for so long and you know you've run Cadence for I think 12 years before this.
Lipu Tu
And so 13 years.
Host 2
13 years.
Lipu Tu
And then two more years as executive chairman. So 15 years.
Host 2
15 years.
Lipu Tu
I signed up for three months. Three months. So right now I'd be very careful. The moment you said just do it for three months it turned out to be 15 years.
Host 2
Yeah, well it seems like you have a lot of longevity ahead of you here as well. And so the other big initiative that has been sort of talked about is Terrafab and working With Elon Musk on that. Can you tell us a bit more about how that came together and your involvement and how you all are collaborating?
Lipu Tu
Yeah, good. I mean Elon Musk, I think we all agree is one of the best, if not the best entrepreneur in this century. He and I, we share the same view that semiconductor infrastructure actually is not catch up with the AI growth. And in terms of you need the capacity, you need to have the productivity and you have the dry efficiency. And so those are the things that he and I, we share that there's something missing. And then secondly, it's just delighted to work with him and he's very, I call it unconventional and he basically questions every step and why this traditional way of doing things. And in some ways very refreshing. And I like that, you know, I like people have different opinion and let's work together, find what is the best route and we both going to learn a lot together. And then I think clearly he have a vision that his robots and his car, he need a lot of silicon. Yeah.
Host 2
Could you actually explain what Terafab is for people who aren't familiar with it?
Lipu Tu
Terrafab. He decided he wanted to build his own fab and then meanwhile we are delighted to work with him and then make sure that we can work together and enable him to be faster and quicker to the production and then using some of our technology and some of our process. And that's something that we both kind of collaborate together. And he's a very good team that I work with weekly and it's just refreshing to work with him.
Host 2
And he's talked about things like he wants you to be able to smoke inside the clean room and all these things that normally are.
Lipu Tu
I think I don't go that far. Maybe some part of the clean room you can do that. But I think something that is open mind and then we also listen and see whether we can do that.
Host 2
Yeah, I mean it's very exciting to see how you're morphing the business here in the US in terms of incrementally building out the foundry business in terms of collaborating with things like Terafab. If you think about the global AI and semiconductor supply chain. So say that you were to look at the changes that AI is driving on a macro basis, country by country. And if I look at certain countries, when I look at the layoffs that are claimed from AI, for example, most of them I think are overstated right now. You know, most of the layoffs are actually just overhiring during 2020 Covid period. Covid period. But the first things I see actually being cut are outsourced firms where you'd rather cut external headcount versus internal. So you're cutting external customer support, you're cutting external it. And that has more of an impact I think for certain countries which have big BPOs, the Philippines, India, et cetera. And so they may be impacted in the short run by AI. And then if you ask how do companies participate in the future in a positive way in AI you have to almost go country by country, right? Places with cheap energy will do data centers, places with the ability to train models will train models, but probably only the US and one or two other places. How do you think about the shift in global supply chain for the semiconductor industry? Should certain countries invest more? Should Israel be doing more given Melonix and Nvidia and intel presence there? And should they try to do more in semiconductors? Should the Philippines move back to more of a manufacturing base? How do you think about that on a global basis?
Lipu Tu
Yeah, good question. So I think clearly the AI is changing the whole landscape and I think the impact will be bigger than Internet and it's more profound also. So I think the AI initially is able to help you to do better things more efficiently and then with a lot of agent helping you to do things that is now kind of mundane that you need to do, but now they can give it to you faster. So in some way I think it can drive a lot of efficiency, even like semiconductor design, how much you can drive the efficiency in terms of timing, how quickly can you come out. And secondly the cost. And so I think those will be helping you to drive that. And then I think a couple of bottlenecks for the AI demand and growth. One is of course everybody knows power constraint, some countries the power they just don't have that it gets impacted. And then secondly, a lot of people didn't realize the helium impact can be also quite significant for semiconductor. And then thirdly is everybody know right now memory is the biggest shortage and everybody tried to scramble for memory. And then even though you have to build the fab to capacity increase, it will take a couple of years to do that. And same thing for cpu, gpu and all this will be highly demanded. And I think also the pricing also go up because we have to pass the price, the cost to the customer. So I think those will be the impact the industry growth. And then I think overall I felt that the company that most impacted is you are not embracing AI. And because AI can help you to drive a Lot of efficiency across all the different functions of the enterprise. We should embrace and also find a way to better use AI for your prediction, for your design, for all the different part of the workload. And I think that's tremendous.
Host 1
A number of people would say the simplistic argument against Terrafab, against Intel Foundry being competitive is really a question of, you know, there's all the factors internal to the building, right. You describe IP and velocity of just how you're doing business. Then there are external factors and you know, a lot's talking about a number of them, but one of them is the cost of labor and actually the manufacturing capacity. You know, in investing in the foundry business, you obviously believe there's a version where you can manufacture domestically and Elon does too. Can you talk a little bit about that and how real that constraint is? The labor constraint?
Lipu Tu
Right. So I think when I decided whether should double down on foundry or should I get out of the foundry? And I there's a lot of voices, a lot of voices in the marketplace. As you can tell.
Host 1
It's very expensive, it's very expensive, it's
Lipu Tu
not going to work. But I finally decided this is very important for United States and also very important for the industry. And I'll give you the idea that we all live through these challenges of supply chain. And it's very important for any of the big company in semiconductor and really have to think about the supply chains and you have to have a robust and resilient supply chain. You cannot just depend on one or two player in different geographic. And so I think more and more people are going to realize making in United States is critical. And then the most advanced process, like for example we have the 14A is like 1.4 nanometer and we are already starting to plan for 1 nanometer and 0.7 nanometer. It's getting smaller and smaller. So in a way it's much like our hair so thin. So it's a lot of complexity, it's not that easy to do. And every step if you make a mistake that you just go down, go down the drain. So in some way you have to be really precise in that manufacturing. So in some way this has become more and more going to be the bottleneck. So we felt that we have a lot of respect for tsmc, we are great partner. And then more important we both need to have more capacity to serve the customer. And so I think we decided by the bullet, longer term, I think it's critical and that's where I can create more value for the industry people have
Host 2
been talking for a long time about eventually hitting a point of resolution where you can't really miniaturize things further. Like the line width just gets too small to be able to keep going. When do you think we actually hit that limit?
Lipu Tu
Good question. So I think I can see right now we have 18A and then now we're going to production of 14A. I can see 10 and 7. And so I think that path I think we can get there but couldn't be more and more expensive and more difficult to do. And that's why we need partners. We cannot just do it ourselves alone. Partner with the subscript vendor, partner with equipment vendors so that make sure that we can really drive those yield and performance. And then the other part also really become the bottleneck is packaging, the advanced packaging. And so we all know about Coward by tsmc. Now we have a really good one called Emift that is really next generation. I had to make sure that you become able to do in the production yield that meet the customer requirement. And now CMO starting to run out of steam like you described. So right now I also look at some new materials so become going back to the material size or the chemical table. So gallium nitride, silicon carbide and Indian phosphide. So I invest in all three and then looking at some of this new material, how can we really drive that? And then in terms of packaging I started to invest into glass. Glass is a very good heat insulator. So I invest adventure site called 3DGS. Then I realized that intel we have like 1000 pattern on the module. So how the subscript and the module put it together. And then we just announced a big program with Indian government to manufacturing in India plus in US and New Mexico. So I think this advanced packaging very important. I also starting to look at artificial diamond and that's another very good insulator. So I also invest into diamond foundry and that's something is the next generation to look at. So new material, new subscript material and new design methodology to drive that. So one thing good about being an engineer, you're always hitting the wall. Then you find a way to either jump over the wall or you work around the wall and then to get the better result. And that's what I have been long time as an investor and a building semiconductor. From the EDA tool to design to manufacturing. It's kind of nice to have that experience. Now I can help find a way to make a small contribution to the industry.
Host 2
Yeah, I mean it's very exciting. And one of the reasons I'm asking about it as well is to your point, there's always some things that you can vent around, but there are also physical limits where once you hit seven angstroms or whatever, the limitation is you start to run into new materials. Yeah, you need to find new materials or find other workarounds. And then the interesting question is, and we've been talking about this for a long time. I remember 20 years ago people were talking about how we'd eventually hit a point where we ran out of space on this is do you run into some sort of asymptote that actually normalizes performance across different foundries or not?
Lipu Tu
Yeah, good question. In terms of like most law is double and then the power and the cost and then you can double the performance but you cannot double down on the cost and area. So those are the things you have to give way. Unless you find some new way of material. New way of material and that become material science. Starting to hire more people in the material science. So that is kind of innovation in our area. How can we do that? And I still remember 18 years ago I still investing in semiconductor and actually most of the VC firm, some of them are very nice tier one venture firm. A good friend of mine and initially the partners meeting the whole partners in the room. Then after I talking about semiconductor half make excuse to run out the room. Then eventually the other half they said valuable, do you have any software service? So then they left with only two sympathetically listen to me. So it's kind of the history have changed and now semiconductor if you look at it, Jensen is a 5.3 trillion market cap company and then Broadcom and TSMC is 2 trillion market cap company. And Lisa Su, my good friend at AMD is almost 800 billion and I'm close to 600 billion. So in some ways kind of semiconductor become hot again and it become essential because 15 years, 20 years ago when I invest in semiconductor, no VC want to join me except you know, some of the big corporation like Samsung, you know ARM and SoftBank and others and investing with me. And then now I starting to see a lot of VC like to come investing in semi.
Host 1
So I'm very happy given the enormous interest in investing in this area. That used to be considered too hard, right?
Lipu Tu
Yes.
Host 1
What do you think? I mean you've been a venture investor with Walden for a very long time as well as an operator. You know the, the general fears. I'm just going to list a bunch of them. The, the general fears. Have been. It's very capital intensive and you should tell me what I'm missing. It's very unpredictable in terms of you know, shipping a design that works missing tape out and you need to understand the workload very well. I think there's a. There's another which is just like it's. It's very high risk for the customer to switch. Right. I think you know we've been involved in companies together where you know there's a design win and then there's still the question of like scaling order volume and then there's a cyclicality.
Host 2
Yes.
Host 1
Right. Of you know you, you build hard manufacturing capacity and demand may, may change or not in any, any given year. What is your view on how a bunch of you know what makes it hard as an industry and then the. The secular demand growth from a bunch of different areas. Right. So you have the recognition of how important the a more diverse supply chain is and then you have this like explosive demand growth. On the AI side. How do you. You're still an investor and then you're making the biggest bet ever like go be CEO. How do you like think about these different risks and advise others about where to invest in this supply chain? I. That's a very large question. But just given your. Your history with it I. I think there's a. There's a lot of like YOLO action of like there's a memory shortage by memory stocks as well as you know just an unwillingness to take on things that have a 10 year timeline like material science.
Lipu Tu
Good. You have quite a broad range of questions. Let me try to explain that. So first of all I think you know the venture capital startup is in my blood and I really enjoy it. And so I think this is not tied to brag about it. And so there's some good exit. I still have 159ipo126ma and that's include semiconductor just break down to semiconductor. I invest over the years 238% is in US. So what I usually look at semiconductor
Host 1
just to be clear. That's incredible.
Host 2
Right.
Lipu Tu
Thank you. Thank you. It's just enjoy building it. And but more important I look at is first of all on the investment side. I always look at where is the bottleneck. What are you trying to solve? For example I invest in company called Credo Semiconductor Australia Lab is this interconnect become the bottleneck. So I decided to back and also back celestial AI you know optical side and then because speed become more important in the interconnect in the cluster. So I think optical become very important. Look at Jensen, he invests in almost every company is photonic related. And then the other part I'm looking at is okay, what are the solutions that need. For example, we talk about design and then the complexity and also the cost. Can you find some using AI machine learning to drive better design and better solution. So a couple of new startup actually go into the EDA related area to drive performance improvement. I think it's a gold mine to do that. And then the other part you look at the new material. We talk about this indium phosphide. That's why I invested in Infi. And then Marvell bought it. And then you invest into some of the new material. Gallium nitride and silicon carbide. And then some of the companies starting to being acquired. Include one of them doing power management. And ADI just bought called mpower. And so again this ivr that's a very, very good area in power management become bottleneck now in terms of converting from 40 volt down to 1 volt. And then those in term of that conversion you lost a lot of power. And how you do drive the power improvement. So I think power thermal those become the bottleneck. So I think I always look at from what is the problem you try to solve? Is it real? Is customer crying for it. And then I starting to invest. The next thing is look at it's very important. From day one you'd have to target the first customer. And usually I like the customer is hyperscale. They have the skill. If they like what you have, they're willing to pay millions of dollars next few years. And even giving some warden is worth it because you have a big one customer you can scale. So I always look at some of the formula how do you do that? And where do you get the talent. And then you know, sometimes it's very important to find the talent. That's why I'm really interested in US and then Silicon Valley and then some Austin. And then the other part is Israel a lot of talents. So I backed quite a few, quite a significant amount my investment in Israel. And then because they have very disruptive innovative entrepreneur. They work really hard. Even in this wartime. They still have conference call. And sometimes they say okay, there's a warning I have to go to underground. And then the Internet may not be good. Maybe we just use voice in some ways kind of fun. They kind of resilient entrepreneurship I really enjoy. So I think all in all I thought that there's a Lot of opportunity and especially in the AI and right now beside the agentic AI now you're looking at physical AI next to mixed big frontier and then you had to really look at the full stack. That's why I'm still involved with a lot of this frontier model that we very familiar. And some of the investment I back because I really like open source frontier technology for physical AI. I think that's a goldmine.
Host 1
You mentioned the opportunity to make certain parts of the design and test of chips faster, cheaper, more creative with AI. Given your cadence experience, what do you think is most fertile? Is there anything you think is already working?
Lipu Tu
Yeah, I think for almost 15 years with cadence and I'm so happy. One of my highlight is able to find my successor Anurud and I train him and he becomes super great CEO and then he really embracing the AI driving the agentic AI to drive more efficient. But there's good part I think synopsys Sachin also tried to do that and they have an investment from Nvidia 2 billion I think helping him to do a lot. And he acquired Ansys to move into the whole system design. So I think all in all they all do the best thing they can but also some opportunity for startup to do some of the more disruptive and then eventually they can either go public or being acquired by both of them or Siemens to acquire them. So I think there's opportunity for all depend on what the entrepreneurial vision. And then as long as I always have philosophy if entrepreneurs want to sell the company and this quicker way for exit you don't have a lockup, you don't have to worry about quarter to quarter earning and then some entrepreneur from day one they want to go ipo, you know for being a vc. I think three of you with three of us, we all vc we support the entrepreneur their dream and I help them to fulfill their dream.
Host 2
Yeah. If you look at the different areas that you mentioned in terms of future either product development or impact of AI on the semiconductor industry. There's companies like periodic doing materials. There's to your point folks working on the EDA side and design and other aspects and sort of throughout the chain there's manufacturing. Do you think that either intel or future semiconductor company 10 years from now looks radically different from today given AI and if so how.
Lipu Tu
Yeah, I think so. I think first of all back to Sara, your question about capital intensive and a little bit unpredictable and cyclical. So you have to kind of put that into factor into your decision making investment, you know I usually like to go in very early, put a team together. It's kind of fun to do that. I think you also do that. And then secondly you try to find the right investor that can co partner with you. It's not just forever the brain and firm. I usually go for the individual. And then who are the individual that really knowledgeable in this space. The most important to find a partner to difficult time and good time. A lot of time people are very enjoyable. Working with you is a good time. When the company do trouble, they just walk away. I like to have partner that really work through a lot of successful companies. They have multiple time almost bank clubs that eventually take off. So I think it's important to find a partner willing to do that. And then the other part is look at what are the strategic investors that can help you either in manufacturing or memory connectivity or various way to add value to the company. And also have couple of friends that are in the growth stage and also in the hedge fund. And I really enjoy them because they have a different perspective. They know about the public market. You can guide the company entrepreneur where not to go. And so those can be very helpful. So I think all in all I think it's just fun to do that. And then just realize is engineering for startup is like problem solving. Each step of the way you have to find people to help you to solve the problem. And then if you trigger that then great next frontier to work on. And then frankly speaking, I look back nine of the 10 companies I invest halfway. They change their business plan because market have changed. So I like to have entrepreneur as team, not just one person. Secondly open mind willing to listen and listen getting coaching from us. And then eventually they formulate their own plan. It's not just do what I want, it's more they figure out the best thing is you give them enough feedback. They draw their own conclusion that you exactly what you like and all different that you can embrace is the right decision. That's kind of fun of doing startup. They get much faster. So back to your question. If you look at it 10 years from now, what will be the winning company? This is just my personal view, the one that articulate and laser focus on one niche area and also find the right partner and also able to scale the company. And so in some way back to my point about full stack. So in the way you need to have a full stack solution. And so it can be big company they transform themselves to be looking at big platform. Like Jensen. I admire him, you know, he focused on cuda he focused on I want to be a platform company and he did it. And so in some way you can do that. All startup companies like Entropic OpenAI, they find a way to do it in a more elegant way. They change the game and then startup move fast, speed of light, you can really become a dominant player. And hopefully intel can play the role because we have the XPU and we have the advanced packaging and we have Foundry, if you put that all together, can build some of the purpose built Silicon Valley for different workload. I think that's where I'm going.
Host 2
Yeah, that makes a lot of sense. And I guess part of the question I was wondering is where you're going and the other part is does it fundamentally change how you work? Because when I look in the software world, I think there's a very big shift happening right now in terms of who you hire, in terms of who you think you want on board, in terms of people managing multiple agents. And so you know, many people now that I know are hiring people more in their 30s, 40s, 50s because they're used to managing teams and they think that transfers directly over to managing agents in terms of understanding the complexity of what to set up and the QA and everything else. And I wonder in the context of the physical world or in the context of a fab, how you think about shifts in terms of either team structure or capabilities or how AI layers on. And so I just wasn't sure if it's a natural slow evolution or if there's areas where there's a radical shift where it's like oh, for materials now we should just use these three AA models plus some chemistry or whatever it is. So that's why I was a little bit curious about how you think about the future world there.
Lipu Tu
Good question. I think as I back to that crawl, walk and run. So I think crawl you basically try to I recruit some of the best talent in the semiconductor industry and then now I starting to look at what are the software talent I need to bring on board in order to build a full stack. And now I starting to look at my every age of my team in the late 40s, 50s I need to bring in some new talent and then so that understanding the workload, understanding the frontier model, open source, that is important. So find out that my son become my teacher now. So every time he invites me to go to his house, we're playing the grandkids, I starting to tap on him on all the AI machine learning. He's more plugged in than Me so I learned a lot and then try to understand investing and then bring some of the talent to come in. So we are changing. Intel used to be a very old legacy spreadsheet company. Now I'm transforming it to become AI enabled using some of our design and also across all the organization embracing AI and then so they become less dependent on the spreadsheet and label to do that. And you're going to combine the two talent plus the best AI tool that I can use not only for my organization, not only for my sales and then now I starting to look at not just marketing and now the design and then to embrace that.
Host 1
I think a lot of investors, you know, at least for me the last few years since I started a firm it's been very educational thinking about the different capital sources for more capital intensive companies. I did a lot of software before and so your need to have smart friends with a very different stance and balance sheet was less if you're like ah, I need $150 million before this thing gets to some critical mass. And so you've lived that for a very long time and then you have the unique experience of working with the government as a large stakeholder. How do you think this sort of industrial policy it's led to huge successes like tsmc, right. The most important companies in the world. It's also been a bit frowned upon in American business culture for a long time. How do you think that should change now or where is it relevant?
Lipu Tu
Good question. So I think clearly for capital intensive business and infrastructure play you need to access the capital and then in some way I think for our early day venture capital investment now starting become very capital intensive and some of the venture firm willing to put 1 billion into some company is very unheard of in the VC business. Now it's happening and so in some way you just have to be. I like this kind of bell curve. Either you go in very early and because it's starting to do the series a is over 1 billion valuations and so you have to go in pre money, pre seed to go into that kind of 20, 30 billion valuation is very rare right now. So you just have to do that pick the right one and then the other part is able to find capital to scale. And that's why some of this mutual fund they also like to move into the pre market early states to join me to investing. I delight them because they are very less sensitive of whether had to own 20% of the company. There's not too many 20% to give. So you have to find the right investor to come in. And then in terms of the capital intensive like AI in a factory and also the foundry. And then you really need to tap either government funding or some sovereign fund and also some very big capital. You know there's some big fund, they're doing that and they are really the fund they've organized is basically support the infrastructure and we like to tap into some of them and then to make sure that they can scale our operation. So I think in overall government sovereign fund become very important. And also as a public company I also purposely want to focus on some of the investor they are more long term growth oriented and so that they can help me to grow the business. And then rather than short term asking capital location, you know, where you're going to, you know, buy back your shares. Those are good question. But meanwhile I also had to build the business and so I think it's kind of that balance is important.
Host 1
Do you think there is something that investors most misunderstand about intel at this moment?
Lipu Tu
Quite a few things. First of all I think you know I said back to this crawl, run and walk, last four months, I crawl and then. But people are starting to recognize that potential of it. And so the other part is very important. We need to really get the best product out either PC client. We still have a market share but we really need to really build more, perform better performance. So that's why I'm quietly building up the CPU architect, GPU architect and the software architect so that we can leapfrog. Just like I look at Intel, I want to be a multiple of startups culture so that we move fast and we can leapfrog using better technology. And then the other part is beside the product there are some new energy coming in like agentic AI, the physical AI. There's a lot of area that we can invest market is huge. That's on the product side and the foundry side. We are very distant from TSMC and then in terms of their performance. So we have to be humble. Looking at building the building block like I mentioned earlier, the ip, the yield, the defect density and the cycle time to make it more efficient and more reliable is a trust business. People want to trust you before they give you the waiver to count on you. So those are the things will take longer time. But I think by 2030, 2032, 31, 32 I think I was starting to surface up. People may not understand how big potential I can be in terms of product, not a PC client. That's our bread and butter. And we move up to the edge and move into the physical AI and agentic AI. And because right now in the past you basically provide the server, provide the PC for human, now you're starting to have another different dimension. It's millions of agents, they need to accept the computer, the access into the software stack. So I think that part, I think we have a chance to really play the game is not over yet. We can play on the injected AI and also the physical AI. So that's kind of where I'm going. And the AI is just the beginning. You have the training that Jensen own the edge. And also in terms of agentic AI with agents and also physical AI, I think is the jumbo. Everybody have a chance. So I think that's part that I want to go for it. And so I think hopefully the investor will know. Even though in 14 months we make six time return to the shareholder, it's just a beginning. We still have a lot of room to go.
Host 1
There's venture returns from here.
Lipu Tu
Yeah, so I always look for 10x. Being a venture at heart, you want to look for 10x at cadence. When I stepped down as a CEO, I think we make about close to 76 times starting from interim CEO $2.42 and then when I retire executive chairman about 85 times return to the shareholder. So it's hard to do that at intel because the base is bigger. So I kind of said okay, let's do it at 10x and 5 year, 10 years we can do 10x. I think it's a good return. Being a venture capital at heart, that's kind of my goal.
Host 1
So there's Godspeed on this very, very large mission from this huge base already there's an embedded belief in what you described about where the workload is right where I think some would say like we're just going to build bigger and bigger data centers and a gigawatt is the beginning. But the centralization and the efficiency from running even the inference compute in a centralized way is the Dominan versus thinking about the edge, thinking about the client. Do you think that there's an equilibrium state that you believe in of where the compute is or is it just we will find out from the workload. How do you think about that?
Lipu Tu
Yeah, I think that's a very good question. Right now there's a massive buildup in terms of the AI. I think it's the right thing to do. I don't see that's anything to slow it down because the workload is increasing a lot and then I think the
Host 1
question mark is and we are supply constrained.
Lipu Tu
We are supply constrained. So I think anything slow down is the supply constraint. But I think the other part is I always look at all this infrastructure buildup. At the end you have to look at what is the solution, what is the application you want to drive. And I'm more focused on application. So if you can identify the application that is humongous or add up a few applications to become meaningful and you focus on that, it's not everybody going to be winning. And so some going to be winning big time and some going to lose over time or go sideways. So just like Internet, you can see some of them turn out to be very big like Amazon, like Netflix. And then some of them kind of go sideways and disappear or being acquired. And so I think to me it's the same approach. Then they really focus on what application they try to serve. And that application, how big is that and whether it's sustainable or not or is very crowded. So if it's too crowded, maybe one or two may survive. The other maybe just consolidate. So I think there's an industry go through that big growth and then starting to consolidate, maybe eventually one or two become the real winner. So I think that's kind of. We've watched the movie before, so it's not surprise to me. But focus on application like Netflix is application, you know, Amazon is a real application that to me they're winning.
Host 1
But you're assuming that some of these applications, they will be better served by client or edge compute than only by the data.
Host 2
Exactly.
Lipu Tu
Okay.
Host 2
Exactly.
Host 1
Yeah. I mean, I will say as a, I'm an investor in a number of companies that, you know, they're doing robotics, they're doing defense. And so the compute on the device is a very important choice in terms of our. And what we assume around it. Like let's say you have a robot in the home eventually. Like what you assume is in the home and in connectivity around it determines what you're able to do. And I think that it was kind of forgotten for a little bit in the SaaS era.
Lipu Tu
Yes, yes. I think I'm more. My investment thesis is find a problem that is really need to solve. And secondly, who are the players that you can partner with? And then thirdly, look at the application, how big is that application? Is that sustainable? And if it's really big, you believe in it, double, triple down.
Host 1
But you're including betting on applications that have not yet been broadly deployed.
Host 2
Okay, amazing. Well, thank you so much for joining us today. It was a pleasure.
Lipu Tu
Thank you so much.
Host 1
Thanks Lipu.
Lipu Tu
Thank you.
Host 1
Find us on Twitter oprierspod. Subscribe to our YouTube channel. If you want to see our faces, follow the show on Apple Podcasts, Spotify, or wherever you listen. That way you get a new episode every week and sign up for emails or find transcripts for every episode@no-priors.com.
Release Date: June 18, 2026
Guests: Lip Bu Tan, CEO of Intel; Co-hosts: Sarah Guo and Elad Gil
In this insightful episode, Sarah Guo and Elad Gil are joined by Lip Bu Tan—legendary semiconductor investor, former CEO of Cadence, and now the CEO of Intel. The conversation explores Lip Bu’s ambitious vision for transforming Intel, the challenges and innovations in re-engineering the semiconductor supply chain, the impact of AI on global manufacturing, working with Elon Musk on Terrafab, government involvement in tech, and Lip Bu’s philosophy on investment and leadership in this new era of semiconductors and AI.
This episode is a masterclass on the evolving semiconductor landscape, AI’s outsized disruptive impact, and the necessity for courageous leadership and systematic, stepwise reinvention. Lip Bu Tan’s blend of humility, engineering rigor, and venture instinct positions Intel—and his listeners—to seize new opportunities amidst industry upheaval.