Thanks so much for joining us here. Delighted to be welcoming Salesforce to the conference. Very fortunate to have Bill Patterson here, Executive Vice President and GM of Customer 360 Applications. Bill, thanks for joining us. Thank you for having me. Thank you very much. Great to have you here. I've got some questions we'll kind of go through, and look forward to the discussion. Wonderful! Awesome. Thank you. Bill, why don't we just start with your, you know, a little bit background on yourself and your role at Salesforce? Okay. so, hello, everybody. Thank you for having, me here today. I'm Bill Patterson. I'm the Executive Vice President and General Manager of our CRM Applications at Salesforce. I'm responsible for some of our largest, cloud businesses. Mm-hmm ... our Sales Cloud, our Service Cloud, our emerging businesses, like our field service offering, our commerce businesses. Mm-hmm. Really, I've been at the organization now six years. Prior to that, we had a shared background, that we spent time at Microsoft. That's right. We just learned. Yeah ... a moment ago. Absolutely. Yeah. Yeah. Great. Well, awesome. Well, why don't we just start with the concept of Customer 360? Could you perhaps illustrate how the platform enables that with Salesforce? Yeah. Give us an idea of the platform underlying all the different clouds and applications, whether it's Service Cloud, Sales Cloud, you know, and Marketing Cloud, Tableau, Slack. I mean, there's a lot of offerings here. What are the kind of underpinnings, if you will, that enable that 360 view? Yeah. First off, in sort of the raw sense or most primitive sense. Yeah ... what Customer 360 is, the world's most sort of popular customer relationship management platform. It really provides line of business computing for sales teams to drive growth. Mm-hmm ... service teams to drive retention and sort of, drive customer satisfaction. Mm-hmm. Marketing teams to really drive and amplify the brand of your offerings, commerce teams to drive digital transactions. Those are really the four big sort of application workloads that we run. Mm-hmm. Across those applications, it's built on a platform that really is a cloud-based, declarative software technology that allows the solution to be adapted to different sizes of business, styles of business, industries of business. Mm-hmm ... you know, for use across our organization. Mm-hmm. Customer 360 also encompasses some of our technologies, like our integration with MuleSoft. Mm-hmm ... our Slack technologies for collaboration and engagement and productivity. Mm-hmm ... as well, as our Tableau technologies for, you know, driving analytics and intelligence for enterprises at large. Great. maybe some examples of you know, customer who has really embraced Customer 360, maybe a use case, if you will. Yeah. A cohort of a customer that, or a customer or two, that have been with Salesforce for a longer period of time and really embraced that 360 and the technology, what does that footprint look like? How are they generating ROI? What makes Salesforce unique is really the diversity of the customers that sort of run on this platform to power their operations and their business. You know, I think everything from, you know, big companies and small companies are, you know, really use this technology at scale to run their operation. I'll give you three examples. Companies that are sort of in the physical business, like Siemens, use our technology. Mm-hmm ... driving, not only kind of frontline sales operations, working with their selling partners, their distributors, their suppliers, kind of keeping everyone on the same page. They also use our technology for service to maintain all of their buildings, their building management software, you know, kind of connected through their offerings. Mm-hmm. An organization like Siemens is very much, you know, kind of in the physical domain. Mm-hmm. That's kind of one example. A company like DocuSign uses our technology also to, you know, not only drive online service and support, they use us for helping to sort of configure and optimize their solutions when they're actually selling to customers. Mm-hmm. They're a good company that's sort of in the digital domain. Yes. You think about a company like Marriott, who kind of operates in the experiential domain. Mm-hmm. They're another organization, runs our technology for, you know, powering all their guest relations, guest services, et cetera. I think, again, what makes Salesforce very unique is, it's not dominated by one industry. It's not dominated by one company size. It's not dominated by sort of one geography. We're incredibly global. We are incredibly diverse in terms of the customers that we sort of operate with. Mm-hmm ... and have the elasticity to sort of scale and stretch to different styles of business based on sort of their needs. Wonderful. Well, that's great to hear. When we think about the Salesforce stack and Customer 360, I think of the big three: Sales, Service, and Marketing. Mm-hmm. That those three really need to be integrated. You know, you, then you have these other kind of horizontal categories like, you know, Slack for communications and Tableau for visualization. You know, how well integrated are the big three, if you will? Is the work, is the heavy lifting done there such that you really have that single source of the truth on a common data platform? Are these other ones, you know... There's incremental effort to integrate these. I mentioned those two, but, you know, Commerce Cloud as well. Right. Well, first off, sales and service were organically built inside of Salesforce. Sure based on our platform that we, you know, kind of underpin that technology with. We acquired Marketing Cloud, I think, in around 2016, with the acquisition of a company called ExactTarget. One of the things that we've been doing since that time, is really embedding that technology, you know, really into the core of how sales and service operate. Because what we really find is that sales teams and marketing teams, turns out they actually want to be on the same page. Right. have the same kind of level of data. Sure. Our technology platform that we've created, which now we call our Data Cloud, underpins all of those technologies. Yeah ... and allows the data to seamlessly run and feed all the departments that run on the Salesforce platform in that clear and consistent manner. Mm-hmm. That's ultimately what has led to that product, which we call Customer 360. Mm-hmm. Single source of truth. Mm-hmm ... to utilize in every line of business that kind of offers that information through. Wonderful. Thank you. Then maybe, some perspective on R&D. What are the key investment priorities? I imagine one of them is going to start with an AI. Well, first off, I'll start with data, actually. Yeah ... because data is the foundation and it's the lifeblood of what turns into great AI, kind of innovation. Mm-hmm. Our innovation strategy is pretty much threefold. First off, it's about Mm-hmm ... and unlocking data in a clear and consistent manner, so it really works across an organization. Mm-hmm. Even intra-organization, so you can share that with your trading partners, et cetera. Yeah. AI is sort of the next horizon. I think once you ground that data specifically with the customer data, the customer intelligence, the business policy, the business brand, you know, tone of voice. Yeah ... the unlocking the specialness of what makes up the CRM data structures, applied with great technology, like generative technology, really makes it special and powerful. Yeah. Lastly, it's still, you know, we have a lot of room to run in the CRM category. As we kind of think about how to help businesses, either save money or drive growth or sort of resuscitate their business in this post-pandemic era, there's a lot of innovation going in the CRM domain, that's also really about helping companies to sort of thrive in today's macroeconomic environment. Great. Why don't we shift to AI, while we're on the topic of R&D priorities? You know, how does Salesforce think about the AI opportunity? What is the company doing to build AI into- Yeah ... into the offering? I know there's already some available today, but just would love to get your perspective on kind of the state of the stack with AI and where it's heading. Yeah, generative AI is really the most profound opportunity of our lifetime, I think, around sort of enterprise software, around business services, et cetera. We, like many, are really accelerating kind of our innovation efforts around the AI domain. Mm-hmm. What I'll tell you is we do things a little bit differently at Salesforce than maybe some other technology companies do. Mm-hmm. First off, you know, one of our core company sort of, values is running a trusted operation, you know, for our. Mm-hmm and our policies around a company's data. Mm-hmm. Customer information is really the lifeblood of an organization. Mm-hmm. One of the things we really set out before we even wrote a single line of code, it said was, "We are going to continue to operate on this foundation and this platform of trust-". Mm-hmm ... to really run this operation with. Mm-hmm. We've seen a lot of stumbling already in the early days of generative AI, about people using public models or publicly available consumer services, really in the wrong, inappropriate way. Mm-hmm. Sharing information with these models that now becomes, you know, part of the model, for the future. Yeah ... even if it's sensitive information, if you will. First off and foremost, it is about a platform of trust for us around how we think about AI as a foundational service across our applications. Second, the reality of most enterprises today, it's a very large and diverse landscape of technology that often makes up the way in which an organization operationalizes its customer experiences. Mm-hmm. Take customer service, for example. Oftentimes, a service organization has 20, 30, 40 different systems in use... Mm-hmm ... that manifest that customer experience or that operations like a contact center. Mm-hmm. It is not sustainable for an organization to have 30, 40 different AI strategies. Mm-hmm ... to try and kind of manifest a consistent experience for their customers. Our approach, you know, with starting with a trusted foundation, said, "Okay, first and foremost, we want to make sure that the data stays resident and secure and safe. Mm-hmm. Second, we really want to help organizations leap into this AI era by not trying to have, the all of these different diverse of landscape of models that are just flying around in the central organization. Mm-hmm. We want to make that, you know, more cogent, more coherent. Mm-hmm ... more simple- Mm-hmm ...to utilize across every center of interaction the company does. Mm-hmm. Finally, you know, I think the last horizon of sort of AI really becomes: how do you think about the application of AI, specifically in how you serve, how you sell, how you market, how you know, digitally transact... Mm-hmm ... with organizations? That's really kind of the last horizon that we're thinking about, is how do we really think about fundamental new ways to break through the marketing domain or the service domain or the selling domain. Mm-hmm ... with those areas? Three horizons of how we think about AI. Mm-hmm. I think Salesforce is taking, one, a very responsible way of bringing this forward, and two, a real focus on applying AI for the purpose of transforming customer experiences. Wonderful. There's a debate across software categories as to, you know, where is AI additive? Where could it potentially be deflationary? Mm-hmm. Would love to get your perspective when you think about the Salesforce, you know, end market. You know, what's your take on that? Yeah, I Yesterday, I was in Chicago talking with 130 service leaders of the same question. Yeah. I think what's been fascinating is for service teams, customer service is one of those domains and disciplines that I think a lot of people are forecasting, will have large amount of labor disruption associated with kind of the use of generative AI. Mm-hmm ... and generative AI practices. I was there in a meeting just like this. Mm-hmm ... talking to customer service leaders, and the question came up, like: "Okay, so, does that mean that we're going to have less people working in the service center?" The reality is that what, for software companies and for software technologies like what Salesforce offers, Mm-hmm. It means the software actually gets more valuable because we can make the users of that, the domain more productive. Mm-hmm. more, sort of, intelligent around how they drive interactions and actually drive more scale, that's there. Yeah. Yeah. I think first off and the foremost, while there may be less labor employed. Mm-hmm. The value of the software actually gets more, you know, a premium value associated with that. Mm-hmm. Second horizon of that is, I think that we still cannot keep up with the demands of what consumers are generating in terms of brand expectations for sales, marketing, service interactions. Mm-hmm. AI in an always-on kind of experience, actually gives new ways to drive growth for companies like Salesforce, because what we're going to do is build technology that's in an always running, always on manner, even when your employees are not at work. Mm-hmm. I think that gives another kind of horizon. Last, when you think about sort of, you know, kind of value creation, what companies are actually, you know, looking today to companies like Salesforce for, is help to drive growth or savings. Mm-hmm. The opportunity to use the software to participate in the growth and savings of how the sort of business revolutionizes itself, I think just becomes another growth lever for a company like Salesforce. I'd say, I think our energy is very much at an all-time high. Mm-hmm. I think there's a lot of excitement around the innovation in this category at large. Wonderful. Great. When you think about, you know, the defensive competitive mode, if you will, that Salesforce has against potential, you know, LLMs taking on more of, you know, sales and service functions, what are those in your opinion? Number one, it's the data. That's why I started there. Yes ... from an innovation kind of standpoint. you know, today if you can go out to a large language model like ChatGPT, and get a really great, compelling sort of, narrative written for you. Yes ... or a trip planned for you-. Yes ... you know, online, but what you don't get is a personalized sort of response. You don't get something tailored to you as an individual or to your needs, or to your kind of unique circumstances. First and foremost, the data that sits inside of the CRM system, not only about customer profile, customer history, but also around your policies as a business, your operational policies, your. You know, the way in which you communicate, and your brand, and your sentiment, or what you allow to happen in a regulatory environment. Mm that sits inside the CRM, you know, kind of core today. Mm-hmm. The ability to combine the CRM data structure and do it in a safe and secure way along with this generative technology, it ultimately creates this incredible flywheel of innovation. Mm-hmm ... but also a longevity of value for a platform like Salesforce to keep serving companies into the future, with a more AI-first manner of how they interact with their customers. Wonderful. Marc, on the earnings call, last week, he alluded to some AI features coming with Slack and Tableau. Mm-hmm. Would love to get, you know, some color on that, and. Yeah ... what was he referring to? Well, we do have an event next week. Sure. I'm sort of, don't steal all that thunder. Of course. that we have coming. But, you know, really, I think around Tableau specifically, the way in which what has been so beautiful about use of large language models, and I think we've been really deeply inspired by, is the way in which kind of users can interoperate with data or information. Mm-hmm ... has never been kind of more simple than it is today. Mm-hmm. We really took a lot of inspiration from what we've seen around these use of large language models, and now applying it to Tableau, are really allowing sort of, an information worker to be able to talk to data like never before. Mm-hmm. allowing the data that, you know, sits inside of a Tableau kind of visualization technology Mm-hmm to really be queried and questioned, and even ask more data. Mm-hmm ... more clarification. Mm-hmm all in that conversational language. Yeah. That's sort of on the Tableau side. Mm-hmm. Slack is another opportunity for us, and really, it's a goldmine of opportunity for enterprises. Mm ... a lot of unstructured policy or unstructured decision or unstructured resolution to common problems- Mm-hmm actually sits in the Slack platform today. Mm-hmm. When you actually think about the opportunity to utilize a Slack GPT to summarize conversations going on across your organization, or summarize, you know, kind of commonly, maybe resolutions to big problems that occurred... Mm-hmm these are really where I think, you know, we can help bring organizations forward to work faster, really with the combination of generative intelligence working alongside those platforms. Great. Lately, we're seeing Salesforce take on a much more open approach to data. Yeah. Genie was launched last year at Dreamforce, integration with AWS, SageMaker, Snowflake. Let's just bring more data into Salesforce. How significant is that in kind of your, you know, roadmap towards data and AI? Yeah, we today announced a partnership with Google on Vertex AI, you know, as a good another testament to this validation of sort of opening up our platform and our ecosystem. Yes. The reality is, as you go into the enterprise or you travel around the world, the only thing that's consistent when you work with organizations of size and scale, is they're very diverse in terms of their technology landscape. Mm-hmm. Mm-hmm. What it makes it very difficult is if you say, "Okay, in order to access only the Salesforce AI, you have to move all of your legacy investment over to this platform," that's just not reality for people. Mm-hmm. What we've done is really, really over the last, you know, I'd say five, 10 years, is start to open up the Salesforce platform for more diverse landscape of technology... Mm-hmm. also more deeper ecosystem partnerships. Mm-hmm ... with the likes of, you know, Amazon, Google, even Microsoft. Mm-hmm really to think about ways to kind of remix this innovation together. Again, what we want to do always is listen to our customers. Yes. Our customers have these you know, kind of unique needs, and the ability for us to sort of open up our technology so it fits into the environments that our customers have, really kind of makes it an even more enduring proposition for us. Great. Then maybe we could touch on Einstein GPT. What data are feeding that? I think there's OpenAI in there's Salesforce's own models in there. Yeah. There's third-party data sources. That's a lot that it's consuming potentially. If you could just help us understand kind of the data feeds for Einstein GPT? Yeah. Well, first off, as we looked at, kind of in building on the last question you just asked around. Yes ... a diverse technology landscape. Mm-hmm. When we approached the generative AI world, what we've realized is, there will not be a future where kind of a one-size-fits-all model is going to be perfect for everything. Yes. In fact, what we've seen now really in as sort of time has progressed, is there are great models for general purpose needs, but there's also now these industry-specific needs or vertical specific or even, you know, customer-specific models that are starting to be created. Mm-hmm to really, you know, kind of even go further acute into the value that they provide. Okay. What we built with Salesforce's Einstein GPT technology, is what we call a gateway to really access multiple models or, the model of choice for a customer to really register alongside their customer data and customer intelligence activities. Mm-hmm. The foundation of what Einstein GPT is really an open gateway for people to participate in the CRM kind of use cases. Yes ... with the models that they serve. We have great partnerships with OpenAI. Mm-hmm. We have great partnerships with Anthropic, Cohere, You.com, a whole ecosystem of providers really, that specialize in different types of models, can work with the Salesforce ecosystem. We also asked a question about our own models. We're also building our own models for really generating workflow or business process, things that really comprise the enterprise application. We can make enterprise software easier through a lot of the models that we've created. Mm-hmm. That's definitely kind of on our horizon, is to actually help companies just get more from the technology they have from us. Wonderful. Why don't we pivot to multi-cloud deals? It's a consistent- That's a great pivot, by the way. Yeah. Well- Since we went from AI, let's just go to multi-cloud. Yeah, multi-cloud. You know, it's been an ongoing driver in the business. You know, we're seeing this trend where customers are committing to more clouds. Yeah ... both new and existing customers adding more. What are some of the combinations that you're seeing resonate more? You know, sales plus service, plus marketing, the core three, or, you know, are you starting to see some of these other solutions like Commerce and Tableau and Slack coming in increasingly onto that, you know, layering on top there? Yeah, you know, I think increasingly so, organizations really care more about, you know, getting better business outcomes... Yes than they care necessarily about sort of the line of business department that enabled the outcome to happen. Mm-hmm. as a trend. Mm-hmm ... really, originating from the Customer 360 strategy, more companies that use more Salesforce software get better results. Mm-hmm. They actually can drive more cohesion around the way in which you market or sell or serve or digitally transact. Mm-hmm ... all from that one platform. It allows organizations to save time, save money, and actually work in a much more agile manner. Mm-hmm. Definitely the trend is for more organizations to combine more of these line of business sort of offerings together. You're also now starting to see with technologies like Slack and Tableau, reaching into more user communities inside of an organization by bringing the power of our data- Mm-hmm ... to more, information workers. Mm-hmm. By bringing the power of engagement into more professionals. I think that, you know, as, sort of as your question, you know, was getting at, you're going to see more multi-cloud. In fact, we're maybe even live in a future where they're not even called multi-cloud, it's just we really run more of the front office computing platform for organizations. Mm-hmm ... because they're all working now in service of customer demand, customer needs, and our technology just facilitates that opportunity to make that happen. Wonderful. Thanks for that, Bill. Why don't we go to industry clouds? Yeah. 13 of them. You, Salesforce offers an out-of-the-box solution for a number of verticals. Which ones are you seeing traction in? Where is the incremental traction from here? Yeah. Well, first off, the strategy on industry computing is all about providing a clear and opinionated set of technology. Yes that builds upon the special uniqueness of how marketing, how companies you know, market or sell or serve, or digitally transact, you know, kind of into the industries that they operate within. Mm-hmm. You know, the kind of, transactions you do in banking are very different than transactions you do in healthcare. Sure ... or in retail consumer goods, for example. Yes. Our industry technology layer is about kind of going that last mile of time to value acceleration for companies to find a purpose-built or a fit-for-purpose technology. Mm-hmm ... to really speak to their unique needs. Mm-hmm. What we experience, you know, with our industry clouds, is a higher premium, in terms of the value that we arrive at, for users who use those clouds. Yes. We see a greatly accelerated time to value. Yes ... for companies who deploy those clouds. Finally, when you think about this world of AI, we see even more acute and value-driven intelligence that we can compute because we have industry domain understanding- Mm-hmm really into the technology layer that's there. Mm-hmm. ... the question that you asked about, you know, what industries, you know, kind of we're seeing a lot of growth from. Well, in our first quarter, you saw a lot of sort of, you know, kind of, you know, vulnerability around technology and financial services. Yeah due to macro sort of environment situations. Right. You saw a lot of kind of resurgence around, the retail consumer goods kind of area. Mm-hmm. Travel and hospitality starting to invest their way back to growth. Mm-hmm. Those become the areas that we're really excited about, continuing down more of our industry strategy around. Wonderful. Automotive, another good example, this whole kind of move towards electrification. Right. A lot of companies doing that on the Salesforce platform, which is really cool. That is very cool. Maybe back to AI. I mean, just if we kind of step back a little bit and you think about the opportunity to monetize AI, philosophically, how does the company think about AI? Are these features that are embedded into the clouds, you know, the core offerings? Are these different, you know, these premium SKUs where there's added functionality here? How are you thinking about that? Yeah. When we talk about multi-cloud, we talked about the more companies that use more Salesforce software, they run better. Yes. When we talk about AI, the more AI that we can bring into the world of our users, the more productive and more sort of efficient or effective they can become in their jobs. Mm-hmm. Our strategy for monetization on AI is really still emerging, but really starts to look the following: one, we want to bring AI to every information worker in the world. That's very clear. Yes. Two, we want to use AI to drive a transformational way to engage with brands, even in a self-service manner. Right ... that maybe aren't necessarily human driven or human, you know, labor driven kind of, interactions. Mm-hmm. Finally, I think AI is going to create even new value-driving opportunities, like, you know, hey, if I can become, if I can get higher margin on these transactions that I do- Right maybe there's a participatory economic model that actually can be or arise there, sort of like our commerce business runs today. Sure. I think there are a lot of horizons of growth that AI sort of represents. Mm-hmm. We're in such early innings of what this, you know, kind of world is starting to look like. Right. I feel very confident that it starts always with the foundation of bringing more AI into our applications. Mm-hmm. Ultimately, we want to help our companies achieve more with the software that they use from us. Absolutely. A big effort for the company is sales efficiency. Mm-hmm. From your perspective, how is that effort? Where is the focus? There's obviously go-to-market efficiencies, but there's also, you know, product efficiencies. Right. In order to enable an efficient go-to-market product, it needs to be integrated. To the extent you have visibility into kind of the go-to-market. Right ... you know, from your observation, where is the incremental effort there to drive that sales efficiency? Yeah. In, in my role as a product leader inside the organization, I have deep accountability to, you know, helping ensure that our products find the right routes to market. Yeah ... find the right sort of sales blueprints to market, as well as ensure that, you know, our products and our packaging are optimized for a sort of more lean and higher productive kind of selling force, if you will. Mm-hmm. The first and foremost, you know, kind of from my vantage point, deep focus around product prioritization, deep focus on packaging simplicity, and deep focusing on sort of pricing optimization. That's sort of horizon one that we've been thinking about around sort of our restructuring opportunities and activities. Yes. As you've kind of all seen, we also completed a relatively sizable and meaningful restructuring to our go-to-market sort of organizations. Yes ... which really was about less about sort of micro businesses and more about maximizing for the whole of the Customer 360 strategy. Mm-hmm. A lot of growth that we've seen with Salesforce over the past had come through acquisitions, had come through sort of, areas where teams were maybe operating kind of in an individualized basis. Yes. What we've done is restructure in a way to really focus on the buyers and the roles that really matter most to our future. Yeah. That allows us to become more efficient, allows us to become more agile. Mm-hmm ... allows us to actually deliver higher value for our customers, because we're focusing now on really taking Customer 360 to every industry, as opposed to necessarily maybe some of the legacy businesses that we would have acquired. Great. If you could help us understand a little bit kind of what stage you are in that effort, and is this a multi-year effort? You know, obviously, the reduction, those aren't easy. Yeah. I'm sure, where kind of are you on that journey, if you will? Yeah. first off, any restructuring of size, you know, is difficult. Of course. Thank you for sort of recognizing that. There are a lot of great people that, you know, kind of, loved their time at Salesforce. Yeah. You know, obviously, we see them on to their next horizon there. Where we are, we've completed our initial restructuring, around sort of the activities, that we have. Mm-hmm. We now are really... our energy is focused on higher performance, higher productivity, higher sort of efficiency within the organization that we've created. Yeah. That's still an ongoing process that we're working through. Yeah. I think Marc has really brought back an incredible culture of performance into Salesforce, and I think that, you know, we'll continue to optimize, especially as the new world of AI-driven CRM starts to emerge. Wonderful. Got a couple more minutes here. Maybe just to, you know, end the conversation on the core business, sales and service have been nice, steady growers. What's driving that? I mean, it's been, it's, you know, it's. I basically manage those businesses. I don't want to say me. Yeah, I'm sure it's all you. Yeah, just curious to get your perspective. Uh- I mean, normally you see the core business, you know, lagging the overall growth rate of the... In this case, that's not the true. No. You know, I think, well, first and foremost, you know, the, it turns out companies still want to drive growth. Sure. They want to drive growth more efficiently, more durably... Mm-hmm ... and also more with higher economic yield, you know, back to their shareholders. Sales Cloud, really our original cloud, has continued to outperform, you know, a lot of expectations because we now have really, you know, kind of expanded into new market categories, things like sales enablement, things like Configure, Price, Quote technologies, things like higher revenue intelligence, pricing optimization, really to help companies continue to beat that growth from around their organization. Mm-hmm. Same thing on service. You know, I think service technologies today, the reality of the service center, as I mentioned earlier, is there's way too much technology that is all bespoke in the service center, that your poor customer service agent has to deal with to try and, you know, kind of, perform a routine interaction. Mm-hmm. You know, the inventor of Alt Tab actually never spent a day working in customer service, because it just is not efficient for them to try and, you know, kind of manifest a clear and easy interaction that way. Yet, service has the same opportunity. Mm-hmm ... to keep growing by making smart adjacency expansion. Mm-hmm ... around the technology landscape that we're sort of providing to expand into higher units of productivity for customers that we serve. Mm-hmm. While, you know, kind of the, these two little engines that could keep growing, it's because customers need our help really to keep growing and thriving in this era of where they find themselves in the lifespan of our relationship. Wonderful. Bill, on that, we're going to end it. This is great discussion. Thanks for coming. Great to have you here. Yeah, thank you so much. Appreciate it. Yeah. I'm good? Thank you. Okay, thank you very much all for joining us. We put the best to the last, as we say. We wanted to dig very deep into Qualcomm's auto business. I'm very pleased to host Nakul Duggal from Qualcomm. I'm going to ask you to introduce yourself and your background and what you're doing, because I'm sure you're going to do a better job than me introducing yourself. Thank you, Tal, and thank everybody for being here. I've been with Qualcomm since 1995. Today is actually 28 years on the date. Oh! I've been doing automotive for about a decade, just over a decade. Engineering background, moved over to the business about a decade ago, I've been involved with building this business for quite some time. It really is about, you know, how do we take our technology, our platforms, our ecosystems, and address a brand-new end market, which it was many years ago, and obviously a very exciting, very compelling market from many different vantage points today. Got it. How do you define the automotive business? Just give us the high level of what are the target markets you're going after. What we started off in the business was to take technologies that we were building for the mobile business and their applicability into automotive, so wireless technologies, cockpit technology that came from Snapdragon. Over the years, we've actually moved over to become very focused on driver assistance, automated driving. We've made a few acquisitions. Today we look at ourselves really as three major areas: the central compute transition that is going on in automotive, where there is a lot of integration of compute that is getting centralized. You know, we are going from dozens of microcontroller or smaller application processor type architectures to a few larger ones. We are right in the middle of that. We've been moving that forward. Everything that is about connectivity, mostly wireless connectivity, and then really all the software that builds up the plumbing for the vehicle. That would be maybe at a high level, how we describe it, which is a pretty large part in terms of where the transition in the market is happening. You're selling various products, and we're going to talk about digital cockpit, we're going to talk about ADAS. Is there synergy between one and another, and is there synergy between all of this and smartphones? The one big advantage that we have, you know, this is what allowed us to move into the market very quickly, is that there is a lot of technology that the car is consuming today. That technology isn't necessarily available, certainly not in the traditional semiconductor players that have served automotive typically. There are only a few companies who are mostly like us, the Samsungs and the MediaTek of the world, who have similar technologies. It is really about the application of the technology as the car, as the platform, is evolving. The way we started off was, what could you reuse? Very quickly, it became obvious that the platforms are so different that you actually have to change the technology, and then you have to position it. You have to situate it inside products that are very different from smartphone products. That's kind of what's happened over the last decade or so. Obviously, there is a lot that you have to learn in terms of what the auto business needs. The software is different, the value chain is different, the reliability and quality requirements are different, the scalability, the cost sensibility. It has become now a completely dedicated roadmap, but it takes from the underlying technology roadmap that we built, and we have been influencing the company's technology roadmap over the last, you know, five, six years or so. Before we go into the technology and the product, I want to ask a question at the high level, which is: Where are we in the deployment? What are the biggest challenges in your growth, and the biggest opportunities you have in your growth? What drives your growth? Can you talk about kind of the next five years? Yeah. What needs to happen for this business to continue and grow? There are many facets about automotive that I think are not obvious when you look at it from the outside in. You know, first of all, there is today a tremendous amount of competition in this industry. Especially with electrification, what you're seeing is that the barrier to entry to build an EV has actually gone down drastically. For traditional automakers, that is a bit of a challenge as well because there are a lot of new entrants, and you have to be able to come up with what your new architecture is going to look like relative to what it used to be. Timelines in a traditional automotive setting are, you know, not very aggressive. But if you, for example, go to China, you will see that a lot of newcomers that are coming in don't really have any background in building cars, but there is a tremendous amount of infrastructure available to be able to get into the market, and they come from the tech space, they come from software. The barrier to building a software-defined vehicle product is actually reduced. It is a business that requires a tremendous amount of energy because it is not like a smartphone, where you have a very fixed amount of time within which you can launch it, and you know kind of what you're doing. It is a much more complex product, you need to be able to operate the business at scale. We have a large-sized team that is working on automotive. This is not a team that, you know, is, I mean, many years ago when we were reusing products, it was simpler. Today, we have large, dedicated teams that are working on this. That scale is actually, you can't really be in this business without operating at that scale. You need enough escape velocity. You have to be able to be very sensitive to every tier of the market, because automakers are going through this motion of insourcing a lot of the areas that they were previously dependent upon on Tier 1s. Everybody's investing heavily in building software teams. Some are better than others, faster than others. You know, you can imagine kind of what that starts to go look like. You really have to be able to service and support everyone because the volumes are unpredictable, right? The volumes are very regionally centered. What will happen in the US will not change very likely in terms of the mix. What will happen in China is highly unpredictable. You have to spread your bets very widely. When it starts to come down to the technology, it really comes down to: What is the expanse of your product portfolio? How many different ways can you actually address the customer base that exists? It is actually not straightforward to be able to manage. You know, we will launch, in the next six quarters, we will launch 150 programs. That's the scale at which the business is operating. This isn't something that you can enter in and say, "Okay, let's experiment. Yeah. You really have to do it at scale. How do you define a program? For us, a typical program would be from when the business is acquired to launching it, which is between, I would say, 18 and 30 months, depending upon the automaker. It really is to the start of production. A car is actually, you know, in a dealer's lot, they have available for sale. The complexity of the program, nowadays, there is very little reuse in terms of the program, you know, from one generation to the next. A lot changes because there's a lot of competition. Connectivity programs are, by definition, simpler, but as you go 4G, 5G, there is a lot of change. If you start to look at the cockpit space, extremely competitive because everybody wants to be able to do something slightly different there. There's a lot of energy being focused on how does the automaker bring their own brand in the middle of all of it? Mm-hmm. They also vary depending upon the region you're deploying in. As you start to move to driver assistance and automated driving, that is even more complex because it comes down to: What is the level of automation you're targeting? What is the budget available for the program? Yeah. Which part of the world you're launching in? That would probably be, you know, 18-30 months. Yeah. 36 months in some cases. The launch date, are they sensitive to economic cycle? Meaning, what we're seeing today, does it cause auto companies to push out deployment or push out kind of program dates? I think it varies depending upon the market and depending upon the automaker. I think one thing that has been an opportunity but also complexity is the transition to EV, which has been pulled in pretty much by every automaker, which forces the car architecture to now change. You have to start to move to a different car architecture, and those that are mature or those that have less complexity can embrace that much faster. Like, you know, you will see, for example, Volvo is a customer of ours, and they're launching many different types of vehicles, a lot of shared architecture between Geely, Polestar, et cetera. If you look at someone like a GM, much higher levels of complexity in terms of what all you have to go touch. This varies quite a bit depending upon the OEM. I think it also depends upon how familiar you are with software- Mm-hmm as an automaker, how much capability you have insourced, where you have dependencies, where you are in the learning cycle. You know, some are able to manage certain things very well themselves, other areas, they're dependent on other customers. Launching a car is, you know, fairly complex effort from a program perspective. We get to see what the struggles and trials and tribulations are of various automakers. Try to. Without getting into numbers, I just want to understand how this market is going to evolve over the next few years. Do you envision a J-curve kind of growth? Do you envision steady and slow growth in the industry? Is there a critical mass that you need to pass through, and then suddenly growth accelerates? How is this industry going to grow? You know, one thing that has certainly happened is, you know, after Tesla, a lot of other smaller players, especially in China, have actually moved very quickly. BYD is an exception, another larger player that has moved quickly. That is starting to get the attention of the traditional automakers in terms of the need to move to a newer architecture. Mm-hmm. The change to a newer architecture changes the silicon content in the car completely. Where you might have thought you have time, you could push these things out, actually, it's not possible anymore because if you want to have a footprint, that is competitive in a market like China, why would you think that you would not need the same thing in other parts of the world? Mm-hmm. A lot of conservatism is being looked at again, and automakers that have actually bitten the bullet and are moving forward are now trying to understand what the execution complexity is. For us, you know, we've been well prepared for this because we've been actually pushing in this direction for 5+ years. Our investments, the roadmap that we are building is all getting ready for bigger chips, more complex software, much higher levels of integration. Then it really is a question of how quickly can the industry absorb that level of complexity. Got it. I want to maybe go kind of into segment by segment and speak about your growth, and the first one is connectivity. Can you take us through the journey in connectivity? First of all, it's obvious what's the expertise you're bringing in, but can you talk to us, what is the expertise you're bringing in from smartphones? Yeah. How much adaptation do you have to make into the car environment? Yeah. Who are the competitors in the space? Let me start with the competitors. I think MediaTek is really the only viable competitor when it comes to modems. The one thing that I think has served us very well is that we started to actually do connectivity in cars back in 2002. We started working with GM, with OnStar, when they had a choice between GSM and CDMA. You know, management at that point in time, pushed very hard for them to embrace CDMA, and they did. We are now in our eleventh generation of modems at GM, and that has actually served us really well because, at the end of the day, all things being equal, automakers will choose to go with us. The reason is, that it's just a tremendous amount of experience. It is actually one of the businesses where the complexity is much higher than in the smartphone because you have to live with your product for a very long period of time globally. And we, I think, have done a pretty reasonable job in that, you know, yeah, you may lose a deal here or there on pricing, et cetera, but it is a business where if you don't have the scale, it's actually very difficult to be able to go support this business. We've tried many different things in this business. We have done, you know, unique features like dual SIM, dual active. You have two subscriptions in the car at the same time. We integrated V2X inside the modem because that's something we were pushing for. We have now, you know, announced the acquisition of Autotalks that is still underway. It's a space where we understand the surface area pretty well. We understand all of the various technologies, products that are required. We understand competition, we are building a platform that continues to keep, you know, getting richer and richer. For example, most recently, satellite communications, there has been a lot of interest in that, we will evolve the platform to be able to go support that. Wi-Fi was the other area that we were not as focused on six, seven years ago, we have a very broad Wi-Fi portfolio, discrete Wi-Fi products, that we now design to work together with our telematics portfolio. That also actually gets a lot of lift with the overall solution. The Wi-Fi use case in the car is quite different. GPS has become a very important use case in the car for a variety of different reasons, from precise positioning to ADAS, et cetera. That's integrated. Powerline Communications was a business that we acquired, you know, about 10 years ago, actually for the home, and back then, the team actually started to look into what the application was in the car. We now have a, you know, we have fairly decent market share for both charging station technology and the in-car technology and powerline. The connectivity business is actually, you know. There are many independent businesses. Mm-hmm. They work together. They also work independently, and they are very broadly distributed across the ecosystem, and there is a lot of history with each customer. I consider that a pretty stable and, you know, reliable franchise. How is this segment going to grow? Is it just about penetration, meaning, "Okay, I got into this car or that car at GM?" Or even once you penetrate, is there an opportunity to grow within the same platform? We've, you know, this is an area where we are kind of trying to look for expansion of the SAM itself, so we have efforts around the two-wheeler space and the three-wheeler space. When you start to go into an electrified platform, it has to be connected. You cannot have a platform that will not be connected, so that increases the SAM, and that is something that we have kicked off. We've had some early success that we will share more later this year, but from micro mobility to two-wheelers to three-wheelers, that's I think an expansion. The other area is services, which is something that we've been dabbling in and trying. We built a services platform, and we are trying to figure out what types of services make sense where. There is always obviously the complexity where you end up competing sometimes with what your customer is also trying to go do. Because we are building a platform versus selling components, we have a very good understanding as to what our customers are doing with that platform. That's where we are looking for opportunities, both before market and after market, to actually be able to, you know, remain connected to the platform we are selling over its life. Mm-hmm. Because the life of these platforms are 10- 15 years, and there is a lot of value to be extracted by a variety of different people, so that's kind of our focus in terms of. Got it. how you build services on top. Is the majority of automotive revenues today coming from connectivity? I wouldn't say a majority. Yeah. I would say, yeah, probably half and half. Got it. Now, another segment that you have is Car-to-Cloud. First of all, what is it, and what's the difference between this and connectivity? Yeah. Car-to-Cloud is a services platform. Yeah. It serves all of the hardware and the software that we deploy in the vehicle is served through the Car-to-Cloud platform. Think of Car-to-Cloud really as a services platform that has APIs that are available in the edge, that you can essentially call from the cloud. We can call them directly, we can build our own solutions, we can partner with companies who we can extend those solutions to. We support everything from fleet management solutions, OTA solutions. We are able to manage the configuration of the hardware. If you don't want to buy the, you know, the fully dimensioned platform, if you want to buy a certain portion now and you want to pay for that later, that is something that Car-to-Cloud would support. we've announced partnerships with Salesforce, for example. ...if you want to actually be able to look into what is going on, you know, bring CRM all the way down to the edge, what does that look like? It's basically a services platform that gives you a tremendous amount of visibility into the edge. Within the context of what we spoke so far, before we continue into the other parts, is there an opportunity for Qualcomm to have recurring revenues, or is it still about the old model of smartphones? "Here is a chip, put it in, it works." Or maybe there is a software piece- Yeah. that goes with it. You know, there is always an opportunity for recurring revenue. I would say the way that we think about it is, first of all, because the life of the platform is much longer than, say, a typical consumer device, we always look for, you know, over-dimensioning the platform because we know that the customer is going to need more over the life of the platform. For example, we have the ability to be able to sell you 60% of the capability today, knowing that you will come back for more. Mm-hmm. That is something that is supported, and that's part of the business model. We have the ability to add software capability on top, post the sale of the hardware. The capability is built in, but, if it is needed because some kind of regulation kicks in, or, you know, like in ADAS, this is fairly common, where you need to be able to meet with a certain level of compliance today, but over time, that compliance requirement may increase. I can push more software for you because I have additional hardware capability built in. Yes. Those are all software-based. The services and recurring revenue. For example, in the two-wheeler space, that actually, in those cases, we lead with the services model. We'll actually package the solution as an end-to-end service, where the hardware is built in as part of the service. Mm-hmm. It depends upon the specific opportunity. Every company that buys, every car manufacturer that buys connectivity from you will also buy Car-to-Cloud, or can it be unbundled? Meaning, to buy from your connectivity and buy from another software company, the ability to provision the car. It is unbundled. They have the ability to buy it, any which way. Maybe I'll be a bit specific there. The Car-to-Cloud provides a wide variety of capabilities. For example, if you want to be able to control the configuration of our hardware, you obviously have to be able to get Car-to-Cloud access. Yes. If you want to run your own OTA solution versus ours, you're free to go do that. It is highly flexible in terms of what the business model is. Mm-hmm. Which you have to be, because this isn't a space that, you know... Got it. This is a space that we are still building. The question also is, we are saying that in the future, very far future, probably, but automakers will make as much money from upselling software and services than making the car. Is Qualcomm benefiting from any upsell? You spoke about, you know, to sell various levels, but. Are you now selling the full-fledged hardware to the company with the software capabilities to the automaker? They pay full price, and then it's up to them to price it differently and upsell in the future, different software packages. How do you participate in, if at all? Yeah. Do you participate in the upsell opportunity later on? We would participate definitely, first of all, at the hardware level. Yes. If I sell you a configuration that has additional room to grow, and for you to be able to get access to that, you have to pay. Right. That would be one way to go-. Right -to participate, which we do. That is a fairly standard configuration. Got it. You know, if you want to, for example, have a standard configuration that you want to deploy across all of your vehicles, but you don't need the full performance on day one for every single SKU. Right. We can come up with an arrangement that allows you to be able to pay for when you actually go use it. Right. That allows us to be able to participate. Let me define the question a little bit different, because I'm referring more to Tesla, for example. Tesla sells you a basic software with the car, but if you want the autonomous driving, whatever, it's not autonomous, but if you want the autonomous drive, it's another $13,000. The question is: you provide the same capabilities to companies, I want to understand if the car makers put the initial hardware already fully fledged so they can upgrade the software in the future, or that they put basic hardware today, then you go to the mechanic, they upgrade the hardware so they can... How does it work from the car manufacturer, and how does it work from a Qualcomm perspective? Yeah. From where we sit, think of it like this: if we provide a product that is going to go into a premium-tier vehicle- Yes that is not fully equipped when it is sold, the hardware has to be made available by the automaker. Right. Not all of the functionality is actually needed to be sold. Right. We would essentially, at that point in time, come up with an arrangement that would say, "You are buying this kind of capability. Over a period of time, you will pay when you upgrade. Right. That's software, right? That's software. Software. That's software. The hardware, so you get paid for a certain amount of hardware, and then the rest of the capability, hardware plus software, is unlocked over time. Got it. Another way to think about the same thing is, automakers do not want to have too many platforms. They will pick one standard platform and use it across all tiers. Got it. They know already that for the lower tier, for example, you don't need all of that functionality. How do you go pay for that? There are plenty of opportunities. Got it. ... to be able to say, "The software allows me to be able to unlock more capability that allows me to be able to monetize over the life of the platform. Got it. We didn't speak yet about digital cockpit. Can you take us through it, number one, and what are the products that are involved? Again, same question as I asked you before: How did Qualcomm... Yeah ... come to this market? You know, whether, what's the strength that you brought from the other worlds into this market? Back in 2012, you know, we had, we were focusing on our connectivity business. Audi, who had been our customer, they were doing 4G with us at that point in time. They asked us to look into explore with them if we would be interested in getting into the cockpit business. Yeah. We took them up on it. Cockpit, just for those that don't know, cockpit is. Cockpit is the instrument cluster and the, you know, the screen where you have your maps. Yeah ... and your other controls. Usually today, if you think about a typical vehicle, you will have four displays. You will have the instrument cluster, you will have your infotainment system, maps, et cetera. You'll have a passenger display, and you will have an augmented reality heads-up display. Those are the four things that you might have in a mid to high-tier vehicle. Back then, they actually were using NVIDIA for... I think there was an NVIDIA graphics product that they were using for the infotainment business, and they invited us to say, "Hey, we would like to start to see what kind of technology you can bring." It was a great opportunity because it wasn't something that we knew really anything about. It was, this was back in 2013 or so. We learned how to do automotive quality, and we learned how to do automotive software. The realization was that if we made enough changes to the technology that we are developing in smartphones, the application of the platforms that we build in a car are actually very rich. Mm-hmm. If you think about our standard products that we sell today, we are driving eight displays off of one SoC. Various resolutions for various things. You know, mirrors are going away for various, you know, aerodynamic type, use cases, and they're getting converted into displays. You have all kinds of cameras inside and outside. All kinds of visualization is going on. It's all running off of the same technology foundation that we have created. There is a tremendous amount of synergy between what we are building for the smartphone space, now to a point where what we are doing in the car, especially in the cockpit, has far exceeded what we are doing in the high end of the phone. The concurrencies are extremely complex because you are actually serving three customers. You're serving the car, you are serving the real-time nature of how you are engaging with the driver. Yeah ... and you are serving an external application ecosystem that is coming in. We've been at this, you know, for now close to a decade. The one big advantage that we had was that we were able to look at our smartphone roadmap, pick the right parts, make the right changes, and make available very quickly solutions that serve the needs of every tier. Over time, we were able to influence the direction of: How do you actually design this cockpit? It is really about integration, you know, reducing the total cost of ownership, bringing more functionality to lower tiers of the vehicle, and that has made us obviously, you know, a very strong platform provider. What we also had to do, because this is not just hardware, there's a tremendous amount of software that is needed. You have to serve a wide variety of fairly fragmented software ecosystems, which we learned. We've actually invested in the software teams that are needed. We have the ecosystem partnerships, and that allows you to be able to have, you know, a set of customers that are very comfortable with the platform, the teams, the software that they have built, and then you have a lot of repeatability in terms of how you build the business. Got it. What I noticed is that some car makers make an announcement that the rear infotainment system is Qualcomm, the front is someone else. Is this market now is being defined, so we see multiple vendors in the car, et cetera, and then they're going to choose one, or we're going to live with this kind of fragmented environment for many years? That example is happening less and less. I think, at large automakers who have a very large difference between the tiers of their vehicles, you know, entry-tier vehicles that need something very basic... Yeah ... versus more advanced systems that need something more capable. We are not focused on the entry tier. Yeah. I would say that most automakers are centralizing on really one platform. Uh-huh ... that goes across most of their vehicle lines, and then if they have a second one, it is really for an entry tier that is kind of. Got it. different affordability level. Got it. You don't see as much of that anymore. Got it. Okay. Who are your competitors in digital cockpit? We have many competitors. We have Samsung, we have MediaTek is now starting to play. We have Renesas at a certain level, not so much NVIDIA anymore, we have some Chinese-. They're busy with ChatGPT. We are, yeah. ChatGPT is a good thing. We have a number of Chinese competitors. Yeah ... that are starting to show up now locally. It is a market where, you need to be able to have a lot of different assets. Yeah to be able to operate at scale. I think so far, I think we've been able to do a fairly good job in holding. On that, I'll ask you, what's your differentiation? Yeah. What do you bring to the market that the smaller Chinese don't have or the others don't have? Well, I think first of all, I think it's a lot of experience. Yeah. We've kind of taken this market in the direction that it has gone. We control the set point in terms of what the integration is. How do you do a lot of the concurrency? How do you actually define a feature set for what the next generation cockpit looks like? There is a lot of software integration you have to do. You are running safety software with an Android app side by side. You have to be able to support this globally because automakers are all, you know, developing their solutions all over the world. Yeah. You have to be able to have teams that can actually make that happen. You have to work with a large number of ecosystem partners because a cockpit is built by between, you know, 12 and 24 different software providers that come together. You have to build a roadmap that scales. One of the reasons why we built the roadmap that we did is you can't afford any more, in my mind, to have a cockpit roadmap and an ADAS roadmap separately. There's just not enough, the size of the opportunity is not big enough, you have to be able to consolidate those two. Mm-hmm. That requires you to make choices. We, you know, in this generation that we are in, we actually spun out the roadmap completely. We no longer use mobile chips. We only use the technology. Mm. These are all automotive chips that are built from the ground up just by our business. You have to be able to make those kinds of bets, and I think once you go do that, you're always going to have competition, where somebody's going to want to try to do something on the cheap or, you know, experiment, et cetera. These are systems that are very complex because you have to be able to keep the software updated over its life, and so you kind of need a custom... You need a partner that the automaker is going to say, "Okay, these guys have a lot of the experience, the people, the understanding. What do I need to go do when I'm making my choice... Yeah -on who, you know?" I think. It's a number of different things. It's much more than just a product. Okay. There are many other things that come into play. Got it. Okay. Before I touched on three areas so far where Qualcomm was able to bring expertise in smartphones into the automotive market. Very clear synergy between the products. The next area is something you had to make an acquisition, which is Snapdragon Ride platform, ADAS, right? Autonomous driving, et cetera, for those that don't know. Take us through the journey again of Qualcomm in the space. What did you bring in internally, and what did you acquire, and where are you today? Yeah. You know, maybe five years or so ago, it was pretty clear to us that, if we had to be relevant in the automotive space, a reuse strategy, take from mobile, use in auto, that got us to where it did, but that was not going to be good enough. If you recall, we were in the middle of the NXP acquisition back then. Yeah. The thinking was, we will acquire NXP will bring a lot of the things that we don't know about automotive, and that will kind of complete the picture. It became clear to us a year or so, you know, before we finally parted ways, that that was not going to pan out. We doubled down, and we said, "We don't need to have silicon that will work in the automotive space from a safety perspective." At that time, we had to start to think about what kind of roadmap do we need to build for ADAS? We started to do what you might normally expect. We took the right chips that made sense, and we started to make sure that they had the opportunity to play in the ADAS space. It was a very good decision because it actually won us the GM business on ADAS. We won that back in 2019, and we learned a tremendous amount because really, the ADAS use case is about taking a large number of sensors and processing them in a fixed delay budget for a variety of different use cases, whether it is, you know, real-time processing, apply AI to it, obviously, based upon the action that you have to go take. We had to figure out how we were going to go do this as a roadmap. It was pretty clear that the roadmap we would have to build for silicon would have to be a safety-ready roadmap, so that decision we took fairly early on. The question was, do we build our own stack or do we just support other people's stack? The decision we took there was, we had some assets internally that we had been building on the stack side, but nothing that we could get into production with, so we had to go acquire a team that had that experience. The path that we are now on is that it's a flexible roadmap. We can host other people's stacks. We're obviously building our own. What I like about this market is that this is headed towards a 100% attach. Every single car is going to have safety software and safety hardware. It really is going to come down to. You know, it is not that different from the cockpit in that to be able to get to where we are is going to happen in one or two years. going to take a long time. You have to be added. The more synergies you can create at the product level and the more you focus on creating software that is very tightly coupled with your hardware, we know how to do those things. We've done that for a long time. I think that makes you a very attractive bet for a customer to make. I think if you spend enough time with automakers, what you will realize is it really comes down to make versus buy decisions, where they're concerned about handing over what they might think is a very important part of their differentiation to a supplier. Very quickly, the question is: Is this expertise that they can have at scale internally? If they have to make a choice, would they trust a supplier that is going to give them the flexibility that they need to have? For us, these are all, you know, bets that we are making for the long run. I think so far, I think they're playing out well. Yeah. One of the bigger player in this space is Mobileye. I'm not an expert on Mobileye. I don't cover them, but I know they have north of 60% market share, if not more. They do have a very proprietary approach, where you have to buy the entire platform from them. Mm. Everything from soup to nuts. How do you intend to take market share from Mobileye? How are you different from their approach when it comes to modularity of the product, et cetera? Yeah. You know, in automotive, once the product goes to a 100% attach rate, the only thing that automakers focus on is the cost of ownership. Mm ... and control points. There is nothing else that they focus on. One of the big challenges that the Mobileye model has is that the system is not programmable. It is designed for Mobileye software. Yeah. That will always have, you know, it's, you know, it's a target that you can aim at because you're always going to get attention. For us, really, the starting point is very different, right? We are building heterogeneous SoCs. That has been our history. We have proprietary hardware that is highly accelerated, then we have, you know, CPUs and GPUs and DSPs that you can program on. Then we have a very broad ecosystem that can develop on our platform. The example I gave to you about the SKUs, for example. Yeah. I can sell you a platform that competes with Mobileye, and then I can open it up and charge you a little bit if you want to run a parking stack on it. If you want to do something more, I can allow you to do something more as well. For us, it really is about what are the areas that we want to differentiate on with a hardware and software solution that is ours, and allow the ecosystem to be able to go develop on top. Because the platform is highly programmable and we are going to be, you know, lack of a better word, opportunistic in terms of how we enter the market, we build platforms that are very broad. We will build certain technology areas that we want to excel in, and then over time, we will figure out which market we want to focus on. The cost of ownership question is always going to be a better equation with us because it gives the automaker a lot of choices. Got it. Mobileye has done a fantastic job. They're a great company, but I think the, kind of the, you know, the black box part of the solution does, I think, pose some challenges. Nakul, the good thing is that we have a great discussion. The bad thing is that I only covered three questions out of 35 questions I prepared, and I know I had a lot of sub-questions. I want to stop for a second to see if there is any question from the audience before I continue. We only have two minutes left, but I want to at least have the opportunity of any questions. I can ask, over time, how should we think about potential content per vehicle reduction? Kind of what have you seen in terms of changing dynamics over the past few years on that? Content per vehicle reduction. Could you elaborate that a little bit? Yeah. So we've heard about vehicles and autos moving from decentralized ECUs to more centralized ECUs. In that context, how should we think about potential content per vehicle reductions? It's obviously on the, on the semi side with... Yeah. Perhaps lower quality chips and maybe potentially older chips as well. Yeah. I don't know if I can answer it in terms of dollars and cents, because there isn't really a way to kind of normalize it. Maybe think of it like this. I think one is, you know, the example I like to use is a BMW seven series, used to have like 150 different ECUs five, six years ago. Today, it probably has more like 10. Mm. Obviously, there is a big difference in terms of what the ASPs are, but you can imagine all of the peripheral cost of carrying all of those 150 ECUs obviously starts to go away. There is certainly a system-level savings that a BMW gets benefit from. But the big, but the bigger benefit is you can take those same systems and now scale them down to a 5 series and a 3 series. The overall silicon content across the entire vehicle lineup is going up because you're able to bring functionality to lower tiers. Is the total amount of electronics content going down? I think it probably is, just because you are comparing with something that is fully equipped and perhaps not the norm, to something that now becomes the norm. I do think that the amount of electronics that is going into vehicles is just massively increasing, just because so many more cars are getting access to that capability. Great. Any other question? We only have 20 seconds left. I think we better finish it here. Thank you so much. Thank you. Really appreciate it. Thank you.