On theCUBE Pod: Pushing back on AI nonsense and more bad news lands for Intel

This week, the Wall Street Journal reported that mortgage rates have hit 7.09%, the highest figure in more than 20 years. That’s leading to conversation around the real estate market and how it’s controlled by big tech and private equity at present.

It’s all part of a tech climate that continues to evolve around the boom of artificial intelligence. That’s taking place even if a lot of the conversation around AI right now is nonsense, according to theCUBE industry analyst John Furrier (pictured, left).

“A lot of people [are] kind of chiming in with the, ‘Well, it’s not going be that big of a deal.’ You know, there’s a lot of total BS being floated around in the marketplace right now on AI,” Furrier said on the latest episode of theCUBE podcast. “I’ve got to say, it’s kind of fun at some level. But it’s the classic hype market. A lot of people come out of the woodwork and claim that they are AI gurus.”

Some people are not understanding these major market forces at present, according to Furrier, with many comparing it to the iPhone moment. But this is more like the web moment, the moment of machine learning. ChatGPT gave the space some magic in what Furrier referred to as a “Harry Potter” moment.

“That Harry Potter moment where people saw it and said, ‘Wow, it’s magic.’ And it’s over now, but the thing is, it’s changing everything,” he said. “And it will be infused in software.”

Will generative AI be a money maker?

Scientist and author Gary Marcus recently wrote a post on Substack speculating over whether generative AI could be a “dud,” specifically when it came to the revenue side of the equation. But where generative AI is going to make money is when it comes to reducing labor costs, according to theCUBE industry analyst Dave Vellante (right).

“I think we’re going to come into a productivity boom,” he said. “But again, it’s not necessarily about the revenue and the direct monetization. It’s about making organizations and people more productive. And that’s going to be trillions of dollars of economic value, in my opinion.”

On last week’s episode of theCUBE podcast, Furrier and Vellante discussed the fact that earnings from Amazon Web Services Inc. and Azure fell short on the AI side. That, specifically, was seen when it came to Microsoft Corp. and Azure. That’s because there is no revenue yet, but it is coming, according to Furrier. He referred to it as the build-out phase of the Cambrian explosion.

“It is a Cambrian explosion for developers and new kinds of applications, where the ones that innovate on that labor arbitrage that you’re talking about, or that benefit, they’re going to refactor their applications,” Furrier said. “It’s the same game, same application, just refactor. That’s where the winners are. That’s where AI will soar.”

Intel scraps Tower Semiconductor acquisition

Intel Corp. scrapped a plan to acquire specialty chipmaker Tower Semiconductor Ltd. for $5.4 billion. It was the latest bad news for Intel, which finds itself in a challenging situation moving forward. The U.S. needs Intel to succeed, according to Vellante, but the news keeps getting bad.

“The Tower Semiconductor deal would have been a good partnership for Intel, despite its cost, because it gets them closer to two nanometer. Pat [Gelsinger] has said, ‘We’re going to get to two nanometer. We’re going to leapfrog everybody and go right to two nanometer,’” Vellante said. “This is where, to your point, Intel could go bankrupt trying.”

Now, Intel will have to partner with Tower Semiconductor, but it’s better to own them, according to Vellante. It’s not a good story for Intel, despite Gelsinger’s efforts in China last month trying to get the deal to go through. Intel could also go broke trying to compete for foundry, Vellante added.

“In my opinion, what Intel should do and should have done is split off the design from the manufacturing. They should do a manufacturing deal with number two, which is Samsung,” Vellante said. “They should do a joint venture, base it in the United States, get the U.S. government to put some dough into it, reduce the reliance for the industry on TSMC. And through that joint venture, use the Samsung expertise to try to get Apple’s business.”

Watch the full podcast below to find out why these industry pros were mentioned:

Jason Calacanis, internet entrepreneur

Elon Musk, CEO of Tesla

Gary Marcus, scientist, entrepreneur, bestselling author, TED speaker and host of “Humans vs. Machines”

Zeus Kerravala, founder and principal analyst at ZK Research

Adam Selipsky, CEO of AWS

Benedict Evans, independent analyst

Pat Gelsinger, CEO of Intel

Theodor Paul Wright, aeronautical engineer and educator

Hock Tan, president and CEO of Broadcom

Andy Jassy, president and CEO of Amazon

Jessica Lessin, founder, editor-in-chief and CEO of The Information

Ali Ghodsi, co-founder and CEO of Databricks

Jeetu Patel, EVP and GM of the Security and Collaboration Business Units at Cisco Systems

Eric Savitz, associate editor at Barron’s

Rob Strechay, analyst at SiliconANGLE Media

Robert Hof, editor-in-chief at SiliconANGLE Media

Jack Welch, executive chairman of The Jack Welch Management Institute

Michael Dell, chairman and CEO of Dell Technologies

Charles Fitzgerald, consultative strategist and investor

Matt Baker, SVP for Dell Technologies corporate strategy

Don’t miss out on the latest episodes of “theCUBE Pod.” Join us by subscribing to our RSS feed. You can also listen to us on Apple Podcasts or on Spotify. And for those who prefer to watch, check out our YouTube playlist.

Photo: SiliconANGLE