The Six Five Connected with Diana Blass: On-Device AI: The Next Battleground for Chips

By Patrick Moorhead - November 15, 2023

The chip market is heating up. The new battleground? On-device intelligence, as seen in the latest innovation unveiled at the Snapdragon Summit in Maui. In this episode of The Six Five Connected with Diana Blass, Diana takes you to Hawaii, where Qualcomm announced new chips for PCs and phones, the Snapdragon X Elite and the Snapdragon 8 Gen 3, which bring AI directly on-to the device. Hear about the game-changing value from Qualcomm’s Cristiano Amon, Don McGuire and Alex Katouzian with perspective from Daniel Newman of The Futurum Group and Patrick Moorhead of Moor Insights & Strategy.

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Transcript:

Cristiano Amon: There is a new sheriff in town.

Diana Blass: The chip market just got more interesting.

Patrick Moorhead: It’s game on for Qualcomm.

Diana Blass: You’ll just have to come to Paradise to find out why.

Alex Katouzian: Every year we introduce our premium tier part for the mobile market, but this year we were actually announcing our PC solution as well.

Cristiano Amon: The Orion CPU is the new leader on mobile computing, period.

Diana Blass: Here in Hawaii, Qualcomm unveiled new chips that bring AI processing powers directly onto the device.

Cristiano Amon: If you are going to be a gen AI leader, you can’t ignore the device.

Patrick Moorhead: Bringing it heavy duty to the PC is absolutely new.

Speaker 5: This is the world’s fastest stable diffusion running ever.

Patrick Moorhead: Bringing overall generative AI to the PC and the smartphone is literally cutting edge.

Diana Blass: Chips make up a $3 trillion market. You’ll find them in phones, PCs, cars, wearables. Qualcomm plays in all those areas, but it’s best known for supplying chips to Android phones. The companies now on a mission to change that.

Don McGuire: We launched Snapdragon® X Elite, a game-changing revolutionary PC platform in a heavily competitive environment.

Daniel Newman: The opportunity for Qualcomm to take some of this market share is something that companies like AMD and Intel have to be thinking about.

Diana Blass: I’m Diana Blass and it’s time to get connected to on-device intelligence, the new battleground for chips. It might have a new question the next time you buy a phone or a PC.

Alex Katouzian: What is the AI function on this? What can it do for me?

Diana Blass: It’s no secret that generative AI has exploded in the last 18 months and for tech companies is driving an unprecedented pace of innovation. Innovation that Qualcomm says could be the answer to the smartphone and PC sales stagnation that’s come define the market.

Alex Katouzian: As the human interface to the machine changes and you can speak to it and it’ll reply, it’ll do things for you that you otherwise would’ve spent a lot of time doing, that becomes the enticing thing for people to say, “Okay, now I want this on my device.”

Diana Blass: AI on device isn’t exactly new to mobile devices. Features like voice dictation and facial recognition already leveraged the technology.

Patrick Moorhead: Today with some sort of foundational model, whether it be a large language model or something for video or something for photos and images, it takes a long time for it to generate the image. Now, part of that is based upon the processing that it does, but also typically might take seven hops to go from the device up to the cloud and it gets processed and it comes back. When you have on-device AI, the inference of the AI is actually being done on device. You don’t have to go up to the cloud to get the answer and come back. And I would say second of all is privacy. What a lot of people aren’t thinking through completely because we’re early is the most cutting edge generative AI applications on the device are going to take in real time a snapshot of everything you’re doing on all of your devices. Okay. And it could be personal texts, it could be video calls, it could be all of your emails, it’s all of your images. It’s pretty much everything. And I don’t think even consumers in Western worlds who’ve been opened up to sharing everything on social media are going to want to share this information and ship it to the cloud.

Diana Blass: But just because we say on device, it doesn’t necessarily mean that all the AI models will be processed there. Instead, Qualcomm believes that technology’s moving hybrid.

Cristiano Amon: A device and the cloud are working as one. And it’s changing not only the user experience, but even like a bold statement is changing the role of apps, especially when we think about phones in our computers, we think about an app-centric environment. But now the AI can really bridge the cloud and the apps in a way that is completely transparent to you because it’s just your copilot, your system. And that’s one of the main things we talk about this show.

Diana Blass: Qualcomm’s investments in on-device intelligence represents a broad market trend. Samsung and Google have discussed plans for gen AI on smartphones. And in PCs the race to innovate is quickly heating up. Intel and AMD power many of the chips in computers today. But could that change with the Snapdragon® X Elite?

Patrick Moorhead: We saw some tremendous benchmarking, benchmarketing.

Daniel Newman: You say benchmarketing?

Patrick Moorhead: Yeah, exactly.

Daniel Newman: I like that.

Cristiano Amon: It’s faster than any leading arm compatible competitor in a single threaded CPU performance.

Patrick Moorhead: The numbers were so big, I feel innately that this platform is going to be competitive.

Daniel Newman: Another thing that stood out to me was the overall CEO environment and the support they showed for Qualcomm and Snapdragon. When you have Mark Zuckerberg and Satya Nadella among others coming on stage and basically saying, “Look, we are investing, we are partnering, and we see this as a future.” What I see is TAM expansion

Diana Blass: And what’s that market expansion look like? Here inside the demo room you can see a variety of devices that have Qualcomm chips inside. From RayBan Meta Smart Glasses from which you can make calls, play music. The speakers are custom-built where it goes over your ear. Here you have Meta’s Quest 3 mixed reality headset. Oh, there you… Oh, I see you.

Meta Rep: This really allows us to integrate the real world into the different games that you’re playing.

Diana Blass: Are there any other things I need to see?

Meta Rep: It just depends if you want to play the game.

Diana Blass: Not really.

Meta Rep: Okay.

Diana Blass: I totally would.

Meta Rep: No worries.

Diana Blass: Tight schedule.

Meta Rep: You got things to do.

Diana Blass: And you can imagine how all these demos can get an extra boost with generative AI as they become more customized to our preferences and desires. Now, the challenge in all this?

Daniel Newman: Snapdragon in the US doesn’t necessarily have the weight that it does in other parts of the world. If you went to China, research has shown that more than four out of five consumers are familiar with Snapdragon. The company is really looking at how does it become a consumer brand on a global scale.

Diana Blass: Not so easy since you can’t exactly see the chip inside the device. CMO, Don McGuire got creative. Can you see it now?

Don McGuire: Yeah. I think more and more the battleground is being fought less and less on speeds and feeds and specs and it’s being fought on experiences. And when you talk about experiences, you need to have a brand associated with those experiences. And so we are fighting the battle or the war on every level. We’re fighting it at the product level and we’re fighting at the brand level. And I think the combination of those two give us a differentiated sustainable, competitive advantage.

Diana Blass: Now Qualcomm’s strategy appears to be working. Qualcomm reported fiscal fourth quarter earnings recently that beat expectations for sales and earnings and gave a strong forecast for the current quarter. The company says the innovation unveiled at Snapdragon Summit will be available in devices starting 2024. Next time you see me, I might be asking what is the AI power in your device? Signing off for Connected, I’m Diana Blass.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.