00:00Tell us about this partnership, and I want you to kind of go into exactly what this means by expanding
00:06it for those who understand your world and maybe for those smart investors who don't totally understand it.
00:13Break it down for us.
00:15Thank you, Carol. Thank you, Tim. Great to be with you.
00:18Yeah, you know, our business in automotive has been on a tear over the last many years.
00:23We are going to exit F526 at a $6 billion of annualized revenue, which, you know, has grown up 8x
00:31over the last six years.
00:33The partnership with Stellantis is actually one of a kind.
00:36We've been building for the digital future of cars for a number of years, and physical AI, as you know,
00:42is coming into every single vehicle.
00:44The digital chassis that we build essentially allows an automaker to be able to modernize all of their vehicles across
00:52the board, from connectivity to the in-cabin experience to the driving experience of a vehicle.
00:57And this partnership with Antonio and Ned at Stellantis is a one of a kind.
01:02This essentially means we get to deploy, starting in model year 28, across all of their platforms, from Chrysler's to
01:11Fiat's to Dodge to the Peugeot brands, the Citroen brands, across every global footprint the Stellantis vehicles are deployed in,
01:20which is really every market outside of China, our entire fleet of products.
01:25This is a new change in the way Stellantis is developing their vehicles.
01:30It's one single architecture that gets homogenized so that you can move fast, you can become a software company, working
01:38with partners across the board to be able to bring self-driving capability, AI into every single cabin, and, of
01:46course, connected vehicles.
01:47And, you know, we've been building this for really the entire industry over the last many years, and this is
01:53what we're going to do with Stellantis.
01:54So if somebody buys a Stellantis after that model year, any vehicle across Stellantis' portfolio, as you mentioned, after that
02:01model year, will Snapdragon technology, this technology that you are talking about right now, be included in that vehicle?
02:07That's right. That's right. And we are already a supplier to them, and this is now going to happen across
02:11ADAS, cockpit, and telematics.
02:13So what does that mean for the driver experience?
02:17You know, you are starting to now see AI essentially come to the fore, especially for platforms like a car,
02:23which is a physical platform.
02:25It's your daily driver. It's something that you spend a lot of time in.
02:28And bringing AI into the in-car cabin experience essentially allows your personal space to be completely transformed.
02:35We've been preparing for this with the entire ecosystem.
02:38We've been working with this with companies like Google, with, of course, our automotive suppliers and partners.
02:45And Snapdragon cockpits are now AI ready.
02:48That means the experience that you will have in your in-car cabin experience will be no different than what
02:54you're starting to see on your smartphone.
02:55You can have a conversational experience with your car.
02:58It shops for you. It sets up your appointments.
03:01It entertains you.
03:03That experience in your car changes the entire way that consumers will engage with the vehicle.
03:09And then the same thing extends over to the driving experience.
03:13So as you are starting to see technology like FSD get deployed very broadly, this is also something that's part
03:19of the partnership that we've built with Stellantis,
03:21where we will power their self-driving stacks along with our silicon.
03:26And this essentially is a brand new type of product that starts to get deployed starting 28.
03:32Nicole, it's an expansion.
03:34So you guys were already involved, right, in terms of not only kind of the AI or experience.
03:42That sounds like it's taking it to another level.
03:44But you were already involved in kind of the mechanics, if you will, or the inner workings with Stellantis.
03:49Is that correct?
03:51We've been working with both Fiat Chrysler and Peugeot for a number of years.
03:54I think this big shift is really as the technology transforms with AI becoming such a central part of the
04:02transformation of the car,
04:03this allows us to be able to help Stellantis move into this new architecture.
04:08And to do this across the board, you know, as you know, the car industry is complex, a lot of
04:12different architectures.
04:14This is going to be a one-of-a-kind change because this is one common harmonized architecture across their
04:21entire global fleet of vehicles.
04:23So any change that is made brings that experience to every tier of vehicle deployed across any part of the
04:29world.
04:30And that is what makes this partnership very unique.
04:33Is it exclusive?
04:34I know it's an expansion of the partnership.
04:36Exclusive or are there other companies, AI or tech, that are doing similar parts?
04:43This is a partnership between Stellantis and Qualcomm on all of the silicon and all of the self-driving software
04:50capability and, of course, all the connectivity that we are building.
04:53So it is something that we are building.
04:56We are the ones that are their dedicated supplier for this next generation.
05:00Why expand it and why now?
05:02And talk to us about the financial opportunity for what it means for Qualcomm.
05:06You know, for us, we've been growing our business in automotive actually by looking at the car architecture and thinking
05:13about it in the context of what is the digital product mean for a car.
05:17And to do that, you really have to be able to envision what type of technologies a car is going
05:24to deploy.
05:24AI has now become very central both for driving but now also in-car cabin experiences.
05:28You have to focus on every tier of vehicle that you have to supply to.
05:33You have to focus on the global nature of this business in that this is 90 million cars produced all
05:39over the world.
05:40Automakers are designing for a software product.
05:43We are growing our business.
05:45We've been growing at about 25% plus over the last many years.
05:48And we really see automotive as this definition of what a physical AI product looks like.
05:55And, you know, so far, it's really been going great.
05:59We are super happy with the way that the business has grown.
06:03We're going to share more of the investor that we have coming up in June.
06:06We will talk a lot about what we are doing in automotive and, of course, other areas.
06:10Well, you've done a lot of automotive for a lot of years with a lot of different partners, of course,
06:14apart from just Atlantis.
06:15You're working with Chinese EV makers as well, Toyota, Honda, BMW, Mercedes-Benz, among others.
06:21Since you have such a good view on what you are calling an embodiment of physical AI, what's a realistic
06:27timeframe for you to tell us that we as drivers will be removed completely from the equation when it comes
06:34to this technology?
06:36You know, I would say that the driver completely removed is probably much farther out because this is, at the
06:43end of the day, a safety product.
06:44But I think that the car essentially taking over for a number of scenarios where the driver is involved, but
06:53perhaps not deeply engaged, that is upon us now.
06:56And maybe let me describe it like this.
06:58I think the rate at which AI is accelerating, even I would say in the last 12 months, the capabilities
07:05of the models, what they can do, both for conversational AI, you know, the human-facing AI, but then also
07:11the machine and the physical AI.
07:12The car is probably one of these products, one of these parts of our life that is so central to
07:21where you spend time, your personal time, your time with family.
07:24It is a global product.
07:25You will start to see, I would say, in the next two years, AI entering the digital cabin and cars
07:32becoming much more intelligent in terms of the way that they are driven.
07:35This will drastically accelerate because all of the other pieces are in place.
07:40The silicon is in place.
07:43We've been building that for a number of years.
07:45We have standardized the architectures.
07:47We have made them such that they can be applied to really any tier of vehicle.
07:52We are obviously doing this globally.
07:53This is not specific to any region.
07:55So this acceleration is something that every automaker has been waiting for.
08:00And I think the Stellantis deal is a reflection of how quickly can automakers really leapfrog a legacy way of
08:08working, a legacy way of thinking, and just embrace what is bound to happen.
08:12And this deal for us was actually an indicator of how fast this is actually coming.
08:18I would expect by 28, you will start to see this get deployed across multiple parts in the Western world.
08:26Yeah, we're going to stop soon calling it a car, I think.
08:30We're going to call it, I don't know, we're going to have to come up with some other name.
08:32Because if you think about the amount of technology that are in our vehicles today, it's just pretty astounding.
08:40I mean, a lot of observers have said you have to think about Chinese EVs as smartphones with wheels.
08:44Yeah.
08:44But I don't know if we're there.
08:46It's hard for me as a New Yorker who doesn't have a new car, you know, doesn't spend any time
08:50in cars to relate.
08:51My car is in full surf driving and it's old, it's more than 10 years old, but you can literally
08:56take your hands off the wheel and it drives itself.
08:58Like the systems have been, it tells me to put my hands back on it after about 40 seconds.
09:03But it is pretty amazing, Nicole, what we're seeing.
09:07And what I'm wondering about in terms of, I was just looking at the FA page on the Bloomberg, you
09:12guys are, at least the forecast that we have, I guess, from the street and guidance, looking at over $42
09:18billion in revenue for you folks this year when you wrap up the fiscal.
09:23But I'm just thinking, I think you guys shared some numbers that in the second quarter of this year, you
09:28guys clocked $1.33 billion in automotive segment revenue.
09:32How much more could it be as a result of deals like that, that this becomes maybe a bigger part
09:38of your top line?
09:39And just forgive me, about 40, 45 seconds here.
09:43I think it's a great question.
09:44Look, I think we've been preparing for the way that this business is growing.
09:49I think this deal that you saw is an indication of the market saying, hey, we are now ready to
09:54really scale up.
09:55I would say that the car becoming a digital product, both on the self-driving side and the cabin, is
10:02going to happen across the board.
10:04And every automaker is now essentially waiting to figure out, how do they accelerate that?
10:09We've been growing 25%.
10:10I think we see similar trajectories continuing, certainly in the near future.
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