Computex 2024 Day 1 – Q & As

Third time lucky for Windows on Arm.

Qualcomm: Swinging for the fence.

• With branded shoes and a flashy t-shirt, Copilot+’s most enthusiastic fan made his Computex debut bringing all the PC makers who matter on stage to extol the virtues of their new AI PCs as well as Qualcomm’s new prowess as a PC chipmaker.
• Most of the announcements were made at the Surface event a couple of weeks ago but this was the first time we got to see what Qualcomm actually has to say.
  • First, performance and battery life: which were front and centre of every comment which is really refreshing to see.
  • From my perspective, the real story with the X series chipset is the ability to match its competition on performance but then offer double the battery life.
  • Asustek’s (see below) press conference brought this home as most of its PCs are on AMD’s AI processor (see below) where battery life was not mentioned once.
  • This makes me think that AMD (and maybe Intel) are going to be in real trouble on this metric and Qualcomm is greatly helping its proposition by hammering this message again and again.
  • This is all over its marketing campaigns including the amusing advertisement of a Mac user ordering a Copilot+ PC that was shown as the keynote closed.
  • Second, AI PCs where Copilot+ is a series of small language models (SLMs) that run in the background and allow the Windows experience to be far more intuitive than it has been before.
  • App developers can use these SLMs in their apps to enhance their functionality and there was plenty of this demonstrated both on video and in the booths.
  • This is being hailed as a rebirth of the PC and to be fair to its proponents, if it works as well as it is being demonstrated, then this should be a driver of sales.
  • The Copilot+ proposition has yet to be properly tested in the real world and it is impossible to tell just how good this is going to be and how much consumers are going to demand it.
• Crucially, Qualcomm does not need the AI PC to be a smash hit to gain share as it is leading with performance and battery life which are enough to gain a lot of share on their own in the medium term.
• The only blot on the landscape at the moment is the ongoing litigation between Arm and Qualcomm which is preventing them from co-marketing this proposition.
• This is unfortunate as I think that together, their joint message would have more impact and benefit both companies.
• Regardless of this issue, Intel and AMD still have a lot to do.

Arm: 50% in 5 years

• Arm put on a confident display and just like everyone else, it is moving to lock down the AI ecosystem but a great opportunity to maximise the impact of Windows on Arm is being missed as a result of the ongoing litigation between Arm and Qualcomm.
• Much like Jensen, Arm spelled out its history and went on to lay out its proposition to further increase its presence in computing.
• Here, Arm also has a proposition on top of power efficiency for developers that it refers to as Arm KleidiAI.
• KleidiAI is an API that plugs into all of the most popular AI frameworks that developers use so that they don’t have to worry about what configuration of Arm cores or processors are being used underneath.
• This will make it much easier for developers to create AI services for all of the device categories that use Arm further increasing its appeal.
• Alongside a new 3nm processor for laptops, smartphones and other devices, Arm stated in an interview that Arm could gain 50% market share in Windows within 5 years.
• This is precisely the kind of statement that should have been made on stage with Qualcomm because if this is even remotely accurate, there is a meaningful upside to both Qualcomm’s and Arm’s medium-term estimates.
• This leads us again to the ongoing litigation where I think that it is in both companies, interest to settle and start working together in the open once again.
• This plays directly in MediaTek’s favour as I suspect that MediaTek will address the laptop market with Arm designs where it is likely to fare particularly well in China.
• Arm now has pretty good support for its valuation at around $100 meaning that as its estimates rise over the next couple of years, the share price will have space to go up.
• I think there are alternatives that offer better financial value for investors but Arm’s trajectory looks fairly secure for the short to medium term.

AMD / Asus: Not a peep about battery life.

• AMD joined Intel in launching a competitor to the X Elite but when it came to launching devices, Asus was strangely silent when it came to mentioning just how much battery life these devices would have.
• AMD’s new chip is the Ryzen AI 300 series of which the Ryzen AI 9 HX370 will be used in a number of Asus’s new laptops.
• This has 12 CPU cores, 16 GPU cores and a 50 TOPS NPU which matches the specification required to run Copilot+.
• Copilot+ is a run time that includes a number of small language models (SLMs) each of which is capable of performing a certain function like graphics enhancement, generation or the Recall function.
• This means that these SLMs need to run in the background to provide a good user experience raising the question of just how much power they will consume.
• AMD, Intel and the OEMs have yet to offer a straight answer to this question and with Copilot+ for x86 not yet available from Microsoft, Qualcomm is likely to have this market to itself for a few months.
• The real test will come when laptops are available from all three companies and real tests can be run to compare how much power each of them consumes when running Copilot+ in the background.
• Given the unwillingness of AMD and Asus to discuss this issue, I suspect that Arm is going to come out ahead and assuming that the software works as well as promised, the stage is set for the status quo in PC processors to be disrupted.