Intel CEO Lip-Bu Tan谈美国芯片产业复兴

1. Introduction

In the past, Intel missed the big waves, like mobile, then cloud and AI. From here on, I said, “I’m not going to miss any of the big waves.”

Hi everyone. This is the Tech Surge Deep Tech podcast presented by Celesta Capital. Each episode we spotlight issues and voices at the intersection of emerging technologies, company building, and venture investment. [music] I'm Michael Marks, founding managing partner at Celesta. If you enjoy Tech Surge, subscribe and leave us a review on your favorite podcast platform. Visit techsurgepodcast.com to sign up for our newsletter and find our video episodes on YouTube. Hi everyone. Thanks for joining us. This episode of Tech Surge was recorded during the Deep Tech Week conference in San Francisco. Last year the world purchased more than 790 billion dollars worth of semiconductors. That is up more than 25% in a single year. The industry had set itself a goal of reaching a trillion dollars in annual sales by 2030. It is going to get there about four years early. For most of the time my guest has been doing this, nobody saw that coming. Lip-Bu Tan has been investing in silicon since 1987, long before this became the consensus it is today. From the outside, he funded the companies that disrupted computing. Now he's leading the one that originally defined it. And that same company might be carrying the most weight in the American technology industry. Intel is the only firm on US soil able to compete in making leading edge semiconductors at scale. And Washington, Nvidia, and SoftBank are all now investors. Lip-Bu and I have been good friends for many years. In this chat, we talk about his investment philosophy, what he's bringing from his turnaround of Cadence Design to Intel, and his priorities for the year ahead.

How do you feel about the fact that you’re competing with these people, you’re friends with them, and they’re invested with you? You compete with NVIDIA, and NVIDIA is an investor, and now the government is an investor.

I’m not the short-term guy. I’m looking at 10 years, 15 years from now. At my age, I can easily retire, but I decided this is so important that I want to step in and make an impact.

Lip-Bu and I have known each other for, gosh, it must be 25 years now.

More than that.

I think it’s more than that. We met early on. Lip-Bu joined the board of Flextronics, and then in 2013 we started this firm, Celesta, together with our partner Nick Braithwaite, so we’ve known each other a long time.

I just want this to be a conversation with old friends. You’ve done a lot of things. I think it would be helpful for the audience to hear how you got to where you are, where you started, and how you wound up in Silicon Valley. Why don’t we start there?

2. Lip-Bu Tan's Journey to Silicon Valley

Sure. I was born in Malaysia, in Johor, and then spent my high school and college years in Singapore. I thought the energy problem was a bigger crisis, so I enrolled at MIT for nuclear engineering. Unfortunately, the Three Mile Island accident happened, and the placement director told me, “You should get out of here. There are no new nuclear power plants. There’s no future career for you.”

So I said, “Okay.” I was in a PhD program, so I cut that short. Then I wrote the only résumé in my life to apply for a job. They sent a free ticket and hotel for me to come to California, to San Francisco. I said, “Why not? Such a nice, good deal.” So I came here, and I loved it. I’ve been here for—

How old were you when you got here?

I think it was about 20, early 20s.

3. Betting on Semiconductors Before AI

Okay, fantastic. You have been a technology investor and technology pioneer for all these years. What attracted you to hardware, if you will? You’ve done a lot of investing around hardware from early on. What about hardware got you interested?

Actually, I invest across the board. As you know, I’m very curious and I learn new things. I still remember investing in Google for search. I invested early in that. I invested in LookSmart in Australia.

Oh, okay.

My first investment returned 10 times the fund. The rest is not important. It returned 10 times the fund. Every investor is happy.

I always believe in building something that solves a problem the industry needs solved. Then you just zoom in and focus on whether you find the right people to do it. That’s kind of fun, too. Then there’s how to scale it. I learned a lot from Flextronics. Thank you for inviting me to be on the board.

Well, look, we’ve been around for a long time in Silicon Valley, and Silicon Valley started with hardware. When I listen to some of the debate, you almost forget that Silicon Valley started with Fairchild, National Semiconductor, and Intel, of course. Then it went through PCs, Cisco, and all these things—the PCs and cell phones and all that kind of stuff.

For about the last 20 years, everybody’s been doing software, software, software. Of course, it takes both. Now hardware has become really important. Everybody knows NVIDIA became the first $1 trillion company and is the most valuable company in the world. That’s changed the whole discussion around hardware.

How do you think about the transition back to a focus on hardware? Obviously, we have AI software, but the SaaS software companies have been under stress. How do you think about that from an ecosystem standpoint?

4. Why Hardware Matters Again

That’s a very good question. First of all, I think semiconductors are hard, and deep tech is very important. A lot of applications don’t work if you don’t have the silicon or the platform. For example, with my phone, I had to have 3 batteries because you run out of them in the middle of the day, unless you switch off some of the applications. In a way, I always thought that the semiconductor foundation is so important.

5. Investing in Deep Tech

Twenty years ago, that was not very popular. I went to some of the tier-1 venture firms—friends of mine, and also yours. Initially, the whole partnership attended the meeting with me. Then, after I talked about semiconductors, half of them found an excuse to leave the room, politely. Later on, only 2 were left to sympathetically listen to me.

At the end, they said, “Do you have any software service company startup?” It wasn’t very popular. Then I decided to be a contrarian investor. That’s why I have the name Walden. It’s about being a contrarian investor.

Right.

Then you and I talked, and I decided to focus on semiconductors. Even some of my investors thought, “Are you nuts? It’s a sunset industry. All the tier-1 venture funds are getting out of it, and you want to double down, triple down on it?”

But I believed that was the right thing to do as a contrarian. Lo and behold, I still remember one of the investments we made together. One of the co-investors asked me, “Name me 1 semiconductor company with more than $1 trillion in market cap.” I tried to argue with him, “Don’t shut down the semiconductor part of the business.”

I’m so happy right now that question is gone. The most valuable company is a semiconductor company.

Yeah, it really is. One of the interesting things is that a lot of the investors and media who are here, and who are part of this whole Deep Tech Week and these events around it, are obviously focused—as they should be—on NVIDIA. Now Cerebras has gone public and all this kind of stuff. These big things. Sam Altman was on the stage here as well.

I think people tend not to think about all the little companies and all the little things that take place. For example, you talk about energy use, batteries, and stuff. There are all these little companies that we’ve invested in together, and that the venture guys have invested in, that make chiplets to take energy out, stuff like that.

I like to remind people that the hardware side of the semiconductor space is a big space. It’s not just these big companies we know about. You’ve been very good at picking those little companies and investing in them early. What brings you to think about it that way?

6. Learning Through Boardrooms

It’s an interesting question. When I started, I always believed in putting in the hard work to learn what’s going on. I always have a curious mind.

When you reached out to me to join the Flextronics board, initially I said no. Later on, I decided to do it. The main reason was really understanding the supply chain and logistics, and how to source the material. I learned a lot by being on the board, including how to scale the operation. That taught me a lot.

Every time people ask me to join a board, I want to figure out what I can learn from it. For example, Schneider Electric. I thought it was very important for me to learn why on earth Siemens bought Mentor, my competitor.

Then there was this whole electronics ecosystem with SIMATIC and all the software for electronic design, and also the mechanical digital twin. How do those tie together? Why on earth did they buy Mentor? I want to learn what’s going on in this whole chain.

That turned out to be very helpful for me in terms of power management and also industrial automation. So, for every company I'm involved with, I try to understand what I can learn and what I can contribute.

On the startup side, I look back, and I've been in the industry for a long time. I've invested in close to 550 companies. I enjoy doing startups and finding ways to solve some of these bottlenecks. Sometimes, the best thing to learn is from smart entrepreneurs. They want to do a startup, and I learn a lot by talking to them. Along the way, I accumulate experience and hopefully can be helpful to them.

Right.

Well, that's a the natural follow-up to that is what got you interested in SambaNova, which was, you know, now a hot company is on the stage, big deal. Like a lot of these companies, you know, our first investment there, which was led by you, was $2 million in 2017. So, I think the valuation was something like $12 million or some silly little number. What got you interested in that one? And how you followed along and as you I think you all know, Lip-Bu was also the chairman of SambaNova still and thank you for your work there. But what did you see back then?

7. Building the Next Generation of AI Infrastructure

Yeah, that's a good, interesting question. I was an early investor in some graphics companies, like S3 and others, and I understood that the GPU is very power-hungry. I strongly believed generative AI was going to be the future and much bigger than the training side. I thought this would be interesting to address, knowing that GPUs are very power-hungry. That was 9 years ago, almost 10 years ago.

I backed 2 companies and 2 technologies that I thought were very useful. One is Cerebras. This is wafer-scale technology, and it's not easy to do. I really admired what Andrew tried to do, so I was an investor in Series A. The same thing with SambaNova: this is the RDU, a dataflow architecture, where you can get much better performance and much lower power.

Yeah.

I backed both of them. I liked SambaNova because the CEO and 2 professors came to me with the idea. In fact, I tried to persuade Rodrigo. Some of you know Rodrigo. He came to my office; he used to be my customer when I ran Cadence, and he was at Sun Microsystems. I encouraged him to come out and do something. I said, “Let's go—you and I, we'll back it.”

Yeah, we backed the company.

He was very curious. Every time, he invited me to lunch. Finally, one day, he called me and said, “I'm going to start a company with these 2 professors, with this new disruptive technology.” After doing some technical review, I thought this was a good architecture.

I've been funding him from Series A through the B, C, and D rounds, and now the F round. Every round, I was involved in bringing the right investors in. I'm in the process of closing a Series F round somewhere between $800 million and $1 billion. We're delighted to see, finally, that the money is coming in.

Coming in—not the valuation.

Obviously, there are themes going on here. Let's talk a bit, if we might, about the global nature of technology. You're from Malaysia, and you've traveled around. India is now trying to put a big effort into getting more technology, if you will, into the Indian ecosystem. We're starting to do work in Canada, as you know, which is another new area with a lot of universities, the same as we have in India.

There are the political issues with China, which I'm very sad about. I'm sure you are, because we've had such good experiences there. How do you think about everybody trying to create Silicon Valleys now? Of course, there's going to be more of this because of what's happening with the big tech companies. How do you think about the global aspects, and what impact does that have on Intel? We'll get to Intel here in a minute, but how do you think about the global nature of business?

Yeah, I think that at Wharton, when I started there, it was, “Think globally, act locally.” I always believed in investing where you can add value hands-on and help the company. I travel a lot. I invest a lot in Israel.

No way.

I invest quite a lot in India, like My Tree and many others.

Yeah.

The same thing with China and Taiwan. You always think about where the best talent is that you can get, and then you invest and help scale the business. I think it's very important to find the right team to back.

Nine out of 10 investments I make change their business plan because the market changes. I want to back a team that is not just one individual, but a team that can really build a world-class company with the right culture. It's nice to be a mentor and help them succeed. It's always nice to see them go public or have successful trade sales. I enjoy doing that. I still enjoy doing that.

Well, me too. It's so much fun. We've backed companies in Israel, Korea, Taiwan, and, of course, India, the United States, and Canada. It's exciting to see entrepreneurs from these different places. They bring different things, and you learn a lot of interesting stuff from them. So, I agree about that.

8. The Cadence Turnaround

Let's switch gears a little bit. I think everybody knows what a success you had at Cadence, which is a bit different from the early-stage investing. You took this company over at, gosh, I think the stock was like $3 or something silly, and then it went up 3,000%. It would be interesting to hear what made that successful. More interestingly, what did you learn in that process that's helping you today at Intel?

Yeah, in fact, history is interesting. One day, the former CEO approached me and said, “Lip-Bu, you should join the board.” I said no 10 times. But they were very persistent at Cadence, and finally I accepted being on the board.

The next thing I knew, they asked me, “Lip-Bu, can you step in as interim CEO?” I said no 12 times.

This is a slippery slope, isn't it?

For 3 months. Finally, they were very persuasive: “Just do it for 3 months.” Those 3 months became 15 years. The stock was down to $2.42, and I was just doing it for 3 months as interim CEO.

They were conducting a search for a CEO. Initially, I was part of the search committee, but I said, “I'm too busy. Focus on customers and products.” So I took myself out of the search committee. They continued the search, and one day, the chairman came to me with a smiling face. I said, “Okay, you found the CEO.” When he passed the key to me, he said, “You can keep the key.” I said, “No.”

9. Customer Obsession as a Leadership Strategy

Long story short, that was 15 years. I managed to help turn around the culture and turn around the focus on the products. I still remember a couple of meetings with customers. A customer was so mad. He said, “Not only do you have to return the money, but we don't want to use the product.” I won each one of them over, and they continued expanding as customers.

As a first-time CEO, I still remember the HR director gave me 3 books, including “The CEO for Dummies,” to read.

Looking back, not having been a CEO before was actually a benefit. At the first all-hands meeting, I made a mistake and said, “I'm the first-time CEO, so if you have any good ideas, send them to me.” I received 300 emails per day.

Per day?

I responded to every one of them. Some of them I listened to, and I had meetings with them. They said, “Well, Lip-Bu, in the past we sent the CEO an email and never heard back. You surprised me—you came out to my cubicle and talked to me.”

I learned a lot. The culture of listening carefully to what people tell you, picking up some of the good ideas and running with them, focusing on creating the best products, and delighting the customers—that's important.

I still remember one of the customers saying, “Lip-Bu, I don't know what you do with them. I just complained to you, and less than 24 hours later, people came to the office and fixed it.” That's the culture of being responsive and delighting customers. That has been my trademark: being humble and listening carefully.

For every meeting I have, I always prepare, and I take notes on customer complaints or suggestions. I follow up, and that's the best way.

And so, you're known for this, which is a great thing. Is it the same playbook at Intel?

Yes, very much so, but a little bit more complex: more people, more employees.

And then we have the product, we have a foundry business, and so you have to drive success on both sides. Again, it's the same format: change the culture of listening, be humble, learn from the customer, and get some good ideas. When you show vulnerability, people are actually willing to come and help you.

For the entrepreneurs in the crowd, it seems so obvious, but so many companies don't get this right. The customer's right. Go listen to the customer. Listen to what their needs are and try to respond to that. If you do, that's how Flextronics worked, that's how Cadence worked, and that's how Intel's working. It doesn't seem complicated, but a lot of companies get this wrong.

In fact, my 1 biggest competitor at Cadence said, "Finally, I found your secret." I said, "What is that?" He said, "My customers treat me as a vendor, but the same customers treat you as a partner."

Right.

That's a big difference, because sometimes, when they view you as a partner, they share their road map with you. They can also advise you on their customer feedback. In a way, when you run a big company, you can be so isolated, and I become their window. They say that, by meeting with me, they learn more about what's happening outside—my competitors, industry trends, and changes.

Right. Right.

In some way, I think that helped me a lot when I became a CEO.

10. Rebuilding Intel

That's great. We have less than 10 minutes here. I would like to ask a few things about Intel, but I'm interested in strategic things, not how much the stock's going up or going down. We all know what that's like.

One of the things that I find interesting, because of my background at Flextronics—and, of course, with you—is that we built that company on an outsourced model. You're doing a bit more vertical integration at Intel, so you're going to not only design and sell the devices, but make the devices. You don't have to do that; you wouldn't have to be the device manufacturer. So how do you think about that vertical integration, if you will?

To be candid with you, when I was approached to come and run Intel, it took me a while to comprehend that. But in the end, I decided to do it because it's a very iconic company. Secondly, it's very important for the industry. Thirdly, it's very important for the United States. So I decided, at my age, I could easily retire, but I decided this is so important. I want to step in and make an impact. I think that's just the journey I'm on.

Secondly, I think it's very important that the product, advanced packaging, and foundry tie together. You create more value for the customer, and I strongly believe that will be the case. But it's very complex, so you really need to have the best product. For example, we have a very strong franchise: the CPU.

Sure.

Compute. Over the years, I think we lost that. So I really want to focus on getting the best CPU architect to come with me, as well as the GPU architect, the system architect, and software. You need to have a full stack. Not only for the PC client, but also as they move into agentic AI, the edge, and physical AI. That will be the frontier going forward.

Then you have to work closely with the other frontier labs and also the AI labs. All the software development has to be plugged in so that you can really drive efficiency for the new product that you come up with.

The other part is that everybody is talking about scale: the server, data center, and cloud. We have a very strong presence on the server side. Over the years, we've made a lot of mistakes. Now I need to correct those mistakes and look at the next 5 or 10 years: where the requirements are coming from, how to drive performance for the full-stack application, and also the layers to make sure that it's really leapfrogging into the next market.

11. AI's Next Bottlenecks

Also, the cluster—as you know, the previous panel was talking about optical—

Right.

—and high-speed connectivity. That's where I thought, initially, multiple years ago, you and I looked at high-speed connectivity as being very important.

Right.

So I backed Credo Semiconductor. Now it's about a $50 billion market cap.

$50 billion today, yeah.

Astera Labs.

Yep.

And then I backed four guys from Instart from TI, and now it's about a $72 billion market cap, and it's growing.

These numbers are nuts.

Now photonics has become hot.

Right.

So I backed a few companies. I also backed Elara AI, which I sold to Marvell. And then DustPhotonics I just sold to Credo, and we benefited from that.

When we backed Credo and then backed DustPhotonics, Credo bought DustPhotonics—

They came together.

This is when investing is really fun.

Exactly. So I think high-speed connectivity becomes very important.

The next thing is that the CPU has become so hot. How do you do the cooling? You go from air cooling to liquid cooling, then to microfluidic cooling. The same thing applies to packaging. We're starting to look at advanced packaging. How do you drive that? We have EMIB-T, which is next-generation packaging. Now I'm moving into glass, and artificial diamond has become a very good insulator. So I'm investing in that area.

I think you just have to look at the technology, and that's the fun part of being a technology investor. Every day I learn something new. By looking at some of these brilliant startups from Stanford, MIT, and Berkeley, and spending time with different professors, I'm trying to understand what the next frontier is going to be.

This is exciting for me: supporting these small companies. It helps big companies like Cadence and now Intel. We're going to be connected with the VC community and also the startup community. That's how we don't miss some of the big waves.

In the past, Intel missed big waves like mobile, and then cloud and AI. From here on, I said, "I'm not going to miss any of the big waves." I want to be really plugged into that.

If I understood what you said, when you talk about packaging, as well as all these other extensions that you're thinking about from the universities and all that, it's a way of making your core business better because you get to fine-tune all these things. Is that right? And if you look at new technologies coming out, not as discrete businesses necessarily, but as technologies that may make your core business more valuable, is that how you see it?

Absolutely. You try to create a bigger platform. Intel, even though it's a very big platform for the PC client and server data center, doesn't stop there. You have to think about what the future looks like.

The world is changing so fast, and you just have to be really plugged in with all these new developments and new materials. You really need to look at them so that you can develop them in-house if you can. If not, spin out some of the startups. Eventually, I can spin them in and then acquire them. I think that will create the bigger platform.

On that subject of what pieces you might think about bringing together into a company, I do have to go back 50 years or so, if I might, for the crowd here. You may or may not know that Intel, which was formed in 1968, was originally in the memory business, not the microprocessor business. And now our good friend Sanjay Perot, he's over a trillion, 1.2, I believe, today, in the memory business. So do you ever give any consideration to going back into the memory business?

Well, first of all, we are very excited about agentic AI and inference. CPU demand is huge.

Huge demand.

My day is filled with CEO calls: "I want to have more CPUs from you." So we're truly trying to supply more CPUs and make sure that we meet that demand. Secondly, there are new CPU architectures that can meet some of the requirements.

12. Looking Ahead: The Future of Computing

I think CPU and memory can be stacked together in a lot of ways. We can also try to find new architectures for memory. In some ways, there hasn't been a lot of innovation in memory. I used to say, "Don't invest in memory because it's kind of a commodity business." But now it has become different. There's a lot of new technology coming out.

One of my pet projects is looking at some of the new memory architectures. I think you just saw the news: I hired my good friend Shauki Lee. He used to run SK Hynix.

Right.

So you know something about what I'm thinking about. We're not ready to unfold it yet, but I always have something I'm thinking about: what are the short-term, mid-term, and long-term requirements?

Usually, when I take a role in a startup company, I stay on for 10 or 15 years. The same thing happened with Cadence—15 years. At Intel, when I talked to my board, I said, "I'm not the short-term guy. I'm looking at 10 or 15 years from now. How are you going to build a bigger platform? And how can that really benefit the industry?"

Right.

And that's something that's kind of fun, making some small contribution to the industry.

So, I didn't know I was going to ask this question, but it does sound like there's a little bit of Back to the Future on that one. [Laughter.] Well, look, we have to wrap up a little bit. The last thing I want to mention is just to share a little bit about all these guys that we've been friends with.

Sanjay Mehrotra was at SanDisk. I was the chairman of that company. Now he's off doing Micron. You know, Jensen Huang—we knew him when he had 30 engineers in Santa Clara, and so on. You know, Hock Tan.

Elon Musk was a friend—

Exactly.

You used to be a CEO of Tesla, right?

Right. That was for a nanosecond, yeah. But here we are, and we're all friends and competitors, and it's just this big mix. I get this question sometimes from the media: How do you feel about the fact that you're competing with these people, you're friends with them, and they're invested with you?

You compete with Nvidia, and Nvidia is an investor, and now the government is an investor. Isn't it just a wonderful thing that we have?

You know, Mike, we have been friends for 40 or 50 years now, and I always value friendship. We still stay friends, even though we are partners in multiple areas. It's always good that Sanjay Malhotra is a very dear friend of mine, along with his wife and our family.

So, all in all, I don't view them as competitors. I view the market as big enough. We just find how to create a bigger market for all of us, so that you can work with friends. If you remember this research, I'm the most connected person, especially on the technology side.

So, in some ways, it's always good to learn from friends, and some friends become very good mentors to me.

Sure.

And they turn out to be very helpful in terms of my career development. Likewise, I'm trying to extend my time with some of the younger CEOs, and I really enjoy working with some of them.

Well, I know that there are a lot of demands on your time, and you have to deal with our famous politicians and all this stuff and go on CNBC every other day or whatever it is. I can't possibly thank you enough for carving out some time to do this, my friend. This is a wonderful experience for all of us, Lip-Bu Tan.

Thanks a lot.

[applause]

Lip-Bu has been ahead of the pack for nearly 40 years. He's always believed silicon is the foundation and everything else runs on top of it. For the past 20 years, software got the valuations and the capital. He kept writing checks into chip companies anyway, and for long stretches, he was doing it nearly alone. He never changed his mind. It's the rest of the industry that has finally changed theirs. American chip companies took 53% of the global market last year, the highest US share since 1984. The man who spent years explaining to skeptical rooms why semiconductors mattered is now running the most consequential semiconductor company in America with Washington, Nvidia, and SoftBank all on the cap sheet. Being right early is lonely work. It's a lot less lonely now. Thanks for tuning in to the Tech Surge podcast from Celesta Capital. If you enjoyed this episode, feel free to share it, subscribe, or leave a review on your favorite podcast [music] platform. We'll be back every 2 weeks with more insights and discussions of all things deep tech.