Source: Intelligent Investor
On the afternoon of March 20, following the annual GTC conference (Eastern Time), $NVIDIA (NVDA.US)$ CEO Jensen Huang and $Cisco (CSCO.US)$ CEO Chuck Robbins were interviewed by CNBC.
Huang stated: "Since the Internet era, I have never seen any technology or initiative that can make the whole world and national leaders realize its importance like AI. The reason is simple: no country wants to outsource the opportunity to develop its own intelligence to other countries."
Robbins pointed out that the Trump administration wants the USA to maintain a leading position in this "AI arms race."
Wall Street has been concerned that the president's tariff policy may affect the import of Semiconductors relied upon by leading Technology companies. However, Robbins stated regarding the government, "Ultimately their decisions will definitely be very logical," and the government should also seek better Trade agreements.
Robbins said, "Based on my communication with the government, they want to protect our current leading advantage, and they want us to win. I believe the policies they are going to implement will ensure this is achieved."
Cisco is a company that produces network Hardware.
Before 2000, the star companies that the market favored were AOL (providing Internet access services) and Cisco (providing Hardware support).
In this year's annual reflection of Ruijin Assets, Dong Chengfei made the following statement:
"Comparing Cisco and NVIDIA, both have many similarities in Industry position and innovation ecology. Essentially, I believe the business models of both companies are virtually identical.
First, they both play the role of 'selling shovels'; second, their revenue relates to traffic, the business logic is oriented towards large B clients, and they possess Technology attributes, demonstrating deflationary models in the long run."
It's still quite interesting to see the CEOs of the two "shovel-selling" companies sitting together for an interview.
Cisco recently released a new AI factory architecture and announced a partnership with NVIDIA to jointly provide new infrastructure technologies based on AI for the enterprise market.
Jensen Huang stated that AI "redefines the entire computing technology stack, including computing, networking, storage, operating systems, and the way applications are developed." However, he also pointed out that the current enterprise-level AI infrastructure has not changed for a long time.
He has a saying, "We need to 'reboot' the global enterprise."
The following are the main points of this interview.
Host: How do you feel about collaborating on these projects? I really want to know how you are working together.
Jensen Huang: It’s fantastic to work with such friendly people like Chuck, and Cisco's strength and rich experience in the professional field are truly impressive.
The two things we are currently collaborating on are both disruptive innovations.
Firstly, as everyone knows, we have been creating AI technologies for Cloud Computing, but now we want to bring AI into the global enterprise market.
AI has redefined the entire computing stack—from computing, networking, and storage to operating systems, as well as the way applications are developed. However, today's enterprise IT infrastructure is essentially still stuck in the past.
Therefore, plans are in place to completely overhaul this infrastructure with Chuck.
This is a global infrastructure worth trillions of dollars, and it must be rebuilt. This is the first thing.
The second area of our collaboration is telecommunications, which is a field that Cisco has long been involved in, but is still quite new for NVIDIA.
It is well known that telecommunications infrastructure is essentially also a datacenter, and with the arrival of 6G and AI, these datacenters are about to undergo a complete transformation.
The two companies are jointly building a brand new technology stack.
Any one of these two areas represents a trillion-dollar opportunity.
Host: I know that Cisco recently acquired Splunk, which further enhances your strength in this area.
Chuck, what has the experience been like working with Jensen and the NVIDIA team? What benefits does this collaboration bring to Cisco and its Shareholders?
(Note: In September 2023, Cisco announced the acquisition of Splunk for $28 billion in an all-cash Trade, completing the transaction on March 18, 2024. This acquisition aims to enhance Cisco's capabilities in data analysis and security, leveraging Splunk's expertise in machine data analysis to provide more comprehensive solutions for enterprise clients.)
Working with Robbins is really exciting.
About 14 months ago, Jensen suddenly called me. At the time, I even said, "You’re the king of the world, why would you think to call me?"
So we sat down to discuss opportunities in the enterprise market and found that our technology stacks are highly complementary.
Although there is some competition in certain product areas, we reached a consensus early on.
I told him, "If we are going to collaborate, we will use our own Hardware."
Jensen's reaction at that time was very positive: "No problem, you can handle the network equipment, I have no objections at all."
The host seems to think that you all prefer cooperation rather than competition.
Robbins said, "Yes, we are all 'romantic types', not 'fighting types'."
Now we have collaborated in the area of the Internet.
Recently, one important announcement we made is that our networking equipment has been certified by his architecture at NVIDIA. I think we might be the only vendor to receive their official certification.
In addition, we have reached an agreement that if customers have demands, we will even design Ethernet switches based on their chips.
We only want to provide the products that customers truly want.
The host points out that ordinary Consumers may think AI leans more towards the consumer end, but the scale of the enterprise market is actually much larger than the consumer market, right.
Robbins confirms that it is indeed so. The enterprise market is far larger than the consumer market.
When considering the reforms mentioned by Jensen, especially the security issues brought about by AI, it becomes clear that the impact is significant.
The first phase of AI reasoning applications will require entirely new modernized infrastructure, but further still, the second phase, known as "agentic AI," will necessitate a complete restructuring of the underlying logic of the Internet to ensure safe communication between these agents, achieving the true goals and vision of autonomous AI.
Host: Are our systems currently ready for this autonomous agent AI, or do we need to completely overhaul the existing system and build an entirely new architecture?
Jensen Huang: In fact, you know that the advanced computers people are currently using to run AI are precisely the high-performance AI computing devices we are discussing, equipped with specialized chips and architectures.
However, there are currently no advanced devices worldwide specifically designed to run powerful AI.
Host: So, in a way, we need to incorporate the entire world into this trillion-dollar opportunity, which is a market worth two to three trillion, or even four trillion dollars. There's no doubt about that.
Jensen Huang: That's right, absolutely.
Robbins: This is a massive journey and we must take action. That's also why Jensen called me in the first place. To be honest, no one understands the needs of enterprise computing customers better than we do.
Jensen Huang mentioned that we need to work together to 'rebuild' Global enterprises.
Host: I really like the word you used, 'rebuild', it is very persuasive. Indeed, when you walk into these Datacenters, what you see is row after row of equipment racks.
Robins: In fact, we have believed for over a year that the opportunities in the enterprise market far exceed the achievements we have made in Cloud Computing.
Moreover, I recently heard Jensen say the same thing, we all now believe this opportunity will be even bigger.
Host: Chuck, from the perspective of leaders in the entire business sector in the USA, what do you think we can do? How is it going currently?
Robins: Currently, we are clearly in the lead. Just look at Jensen and the work we are doing in the AI sector, as well as the ecosystem we have built around the AI factory, all of these clearly indicate that we are leading.
From my communication with government officials (Jensen has also communicated with them a lot), the government is very eager to protect our leading advantage and hopes we can win.
I believe some of the policies they are about to implement will also ensure that we continue to maintain our lead.
Host: But if the government decides to impose a 25% tariff on Hardware, it could hinder Industry growth, right?
Robbins: Well, that depends on their final decision.
The government is indeed considering implementing reciprocal tariffs against those countries that treat us unfairly, which is something they can certainly do.
But at the same time, I believe they will also realize that everything done must ensure we maintain our current leadership position and ensure we can win the competition in the AI field.
Host: You are all international companies. How do you think the current level of importance placed on the USA's Technology industry is? Do people understand enough how crucial the topics we are discussing are to their lives?
Huang Renxun: This question can be answered from two aspects.
Firstly, you just mentioned internationalization. I can clearly say that since the Internet, there has never been a foundational technology like AI that has drawn such attention from countries and leaders around the world.
Why is that? Because no country is willing to outsource the enhancement of its own "intelligence capabilities". This is crucial for every country, which is why all nations are very concerned about AI.
For the general public, AI technology has almost become an important part of everyone's daily topics, and people generally understand this technology and its importance.
However, I feel that the public doesn't truly realize the profound social, economic, and industrial impacts that AI might bring.
Host: But today we are mainly discussing the industrial aspects, right?
Robins: That's right. Now everyone talks about GDP, the Federal Reserve, and the direction of the economy, but in fact, these traditional topics seem less important in the face of the changes brought by AI.
Five years ago, we thought that 5G was a very important topic, but now it seems that the changes brought by AI far exceed all the discussions back then about 5G.
In the past, whenever I went to Washington, people talked about 5G, open wireless access networks, etc., and were very concerned about these topics.
But now, no one talks about these anymore.
Host: This is really incredibly optimistic and positive. But we still have to make a value judgment, right? We either believe in this trend or we can only cling to old concepts like 'the world is flat.'
Jensen Huang: The reason everyone is so excited is that we all see the tremendous potential of AI.
Whether in the field of science, Medical Care, or purely in terms of improving economic productivity, we see this unprecedented opportunity right before us.
Of course, AI itself also brings great curiosity and a desire for exploration.
Host: The term 'curiosity' is used very well. It requires us to have more imagination, we must broaden our horizons. Right now we are still trapped by the wall of current knowledge.
At this time, we need leaders like you to step up and explain to everyone the importance of AI for our country and the entire world.
Robbins: If you look at the strongest point of our collaboration, it is that we have greatly simplified the process of businesses deploying AI applications.
When businesses begin to understand how to implement AI applications simply and securely, they can truly unleash the potential of AI.
For example, in the Medical field, business clients are in great need of our help to inform them how to use AI in a safe and reliable manner, ensuring that their employees' and customers' data do not face risks.
And this is exactly what we will achieve together.
I believe that by then, you will see the truly disruptive changes brought by AI in the fields of Medical Care and science, such as revolutionary breakthroughs in disease treatment. We must help them build the infrastructure necessary to achieve all of this.
Editor/rice
