This Week in San Diego Tech News - October 31, 2023

Hello. Hello and happy Halloween. Friends, this is Neil Bloom, Fred Greer and special guest with us today, Angel Sag here with you with this week in San Diego tech news. I'm Neil Bloom with both fresh brewed tech tacos and tech podcast and Interlock Capital. Hey Fred.

Hey Neil.

How you doing? Good to see you. Want to give a quick intro?

Yeah. So I'm Fred Greer. I am the tech reporter here in San Diego covering San Diego's tech and science industry and happy to be back talking about all things tech and Snapdragon Summit.

Yes, we are excited to jump into that Ancho Sag here principal analyst of more insights and strategy, Mr. Qualcomm as I feel but I know he's got some so much more to to him and the breadth of the industry. Angel, why don't we have a quick background on you as well? Sure.

I'm a technology industry analyst. I happen to cover Qualcomm fairly well being a local analyst and previously a journalist. But I do also cover the the whole industry and work very closely with many of Qualcomm's competitors as well.

Okay, got it. I know we have mixed it up recently at some of Qualcomm's, you know, AI Summits and XR Summits. I know you've got some relationship with Lenovo as well. But let's jump right into the recent news which is the annual Qualcomm Snapdragon Summit. You want to give us a high level what it is and what you heard over the last week.

So Snapdragon Summit is where Qualcomm usually likes to announce its latest platforms, which are really mostly systems on chip. It's an SOC that would either be in your phone, in your PC, in your car. Most of these products are chips that go into other companies products and they are generally consumer facing. So a lot of the enterprise facing stuff that they might be doing might not be branded Snapdragon and otherwise may not actually make its way into the summit. They've turned it into a tradition of doing these in Hawaii and they've been, they've done the majority of them on Maui this year they did it slightly differently. They did it at the Marriott in Wailea instead of the Grand Wailea. I don't know what the reason for that was, but it's next door. So it's effectively the same venue in my opinion. And since this was the first year the, the Marriott was not prepared for the amount of journalists, techies and analysts and they had to upgrade the WI Fi network the week of to account for the amount of volume of data that's being consumed by people like me.

Oh, wow, Interesting. I mean also, you know, timing wise with the fires and everything is, you know, gotta imagine everything's up in the air in Maui. Was that evident around like seeing the remains of the most recent Lahaina fire?

So they have Lahaina locked down, so you can't even get close to it. But it's very clearly still on the minds of everybody there. And Qualcomm did a pretty good job of, you know, playing corporate steward and you know, having culturally relevant activities done and you know, involving people from the island in, in the process of running the event and how, how things were kind of involved. And one of the activities they actually had us do, they had us make poi. We released some butterflies, you know, to help repopulate the island, plant some plants. We even made some like amenities bags for locals who are still displaced. So they really took it seriously in terms of like trying to be good corporate stewards of, of the island, but also the island needs their money. So it was quite clear that there's this balance of striking, you know, trying to be a good steward, but also not necessarily pulling back, but also making sure that, you know, money continues to flow to the island.

Wow. Well, it's good that they incorporated that into it, that's for sure. So take us through. You know, like this is, you know, the big kind of annual coming out, you say, for Snap, for Snapdragon. And as we know, Qualcomm is in a multi year, maybe even multi decade diversification thrust. Right. Getting their product into not just handsets but everything else. So what did you see? Like give us through the, the idol lens.

So they started the show with actually the new PC platform that they have. The PC platform is called Snapdragon X Elite. So this is like their top end, they're starting at the high end. And it's basically an ARM based custom core that they built with team from Anuvia that they acquired, I want to say two to three years ago for about 1.3 billion, if I'm not mistaken. And that company, that team actually had never launched a product and was purely an architecture team, but they were a bunch of former Apple engineers, so including the founder. So there was an expectation that they were going to deliver something really serious and that's why Qualcomm acquired them. And it looks like based on the Snapdragon X Elite, that they've actually been able to deliver an ARM core based solution that they've custom built that actually is faster than what Apple has to offer. It's a 12 core CPU called Orion and it's a, it basically clocks at 3.8 gigahertz up and boosts two cores up to 4.3. And this configuration that they're claiming has the ability to beat Intel, AMD and Apple. And during their presentation they obviously talked about the M2 and how they were able to beat the M2. They said that they have 50% faster peak multi thread performance than the M2 which means that they're probably faster than the M3 as well. Which is really interesting because for the longest time nobody could beat Apple at the CPU game and effectively they've done it. So we will see product with the Snapdragon X Elite next year. The one really interesting thing about the Snapdragon X Elite is it's also incredibly powerful on AI. And that was kind of like a common thread through the Entire Summit was AI performance and AI inference on local devices. And they, they have 45 tops of AI performance just on the NPU and 75 tops total performance across the entire platform. So they're looking at somewhere in the ballpark of two and a half to three times faster AI performance than the M3 has. So they're clearly indexing on AI performance, which makes sense because the new PCs coming next year and Microsoft are going to be very AI focused. So whoever has the fastest AI platform is probably going to run Windows the best next year.

Wow. Wow.

This is huge.

I mean coming right out the gate with kind of the first, at least most recent computing platform to be coming out like that. I think that says a lot. Have they, they, they, they have any legacy compute like this?

They do.

So they've actually been doing PC compute for Windows for a few years now, but they've kind of missed the mark every year in terms of peak performance. So they were always kind of compromising on performance and saying, you know, we've got great battery life but our performance is fine. They, they currently power the, the Surface Pro 9.5G, if you know that one, the, the thin and light one, that's, that's the Snapdragon 8Cx. That's the old generation of, of Snapdragons for Windows. But in addition to that, they did announce a smartphone chip that is called the Snapdragon 8 Gen 3. And during the event, multiple OEMs already committed to launching phones with them, including Honor, who basically said we're launching this tomorrow. So last week Honor announced their first phones and, and I Think Xiaomi did too. So two Chinese OEMs had already committed to it, you know, launching basically within days of its release. So they're going to have a very top tier smartphone platform. The interesting thing is they did tease that this new processor, this new CPU core, will find its way into next generation smart smartphone platform. So they're going to actually put quite, quite a competitive fight against Apple next year on the mobile side as well, not just on PC. So I think that's something that a lot of Android OEMs have really been looking for to be able to compete with Apple. But also they'll be able to beat Apple on AI because of the Qualcomm platform capabilities. Because the Snapdragon 8 gen 3 has equal AI performance. Not necessarily as good because it's not the same size chip and you know, not as cooled as well, but it's very comparable to the PC platform on AI performance. And then the other thing they announced were some like wearable chips for earbuds and they announced a new higher tier which has increased 100% increased AI capabilities as well as Bluetooth 5.4 and this new interesting technology called Xpan which switches between WI Fi and Bluetooth depending on where you are in the house. So if you walk too far away from your phone, it auto switches to WI Fi and you can keep roaming around the house.

That's pretty cool. Interesting. Anything. So this was Snapdragon Focus, which is really like their entire product line, right? Is that or how much of their product is Snapdragon?

So I would say the vast majority of what they do is Snapdragon. Now you know, all the car stuff is Snapdragon, all of the modem stuff is Snapdragon. They usually announce modems in the spring at MWC, but this Snapdragon 8 gen 3 has the X75 modem in it, which is the latest and greatest from Qualcomm. They also have WI Fi chips. Those don't actually have Snapdragon branding. Neither do any of their infrastructure chips for WI Fi. So all of the stuff they do for routers, none of that Snapdragon branded and a lot of the server stuff like their AI100 is also branded Qualcomm. So the stuff that tends to be more infrastructure and direct to business focus tends to be Qualcomm branded while consumer facing things tend to be Snapdragon.

Interesting. Well, it plays into pretty good timing. Maybe it was on purpose that Apple came out with their own announcement right around. Did they do it the same week? Did they compete for air. Airfare around it.

So here's. Here's the theory. The theory is that they probably were going to announce this sometime in the fall already. But while we were at Qualcomm Snapdragon Summit, Apple announced that they were going to have their event on Monday. So it was clear that there was some acceleration potentially. You know, Apple doesn't just suddenly event, you know, announce events. But I do think they might have pushed it up a bit simply because they, you know, had the opportunity to compete with Qualcomm knowing what exactly when Qualcomm's event was going to be. And, yeah, it was interesting, but I think if you look at the numbers, it very much looks like Qualcomm's still going to probably be top dog next year. The problem is that chip won't be available until maybe May or June of next year. So that's really the only problem is we just have to wait for it and you can probably get the max, you know, next month.

Wow. Wow. It's crazy to see these two companies battling for so long now from IP to product talent here in San Diego, now that Apple's opening office with thousands of people in San Diego, like, this is kind of. I mean, you know, I'm happy to be on the sidelines watching. First of all, I know you're right in the middle of it, and you don't necessarily have a dog in the race either, but does it feel like a battle between these two brands still?

Oh, yeah. I mean, the truth is Qualcomm shouldn't really be competing with Apple because they don't actually sell any products to consumers. The problem is Qualcomm is the arms dealer for all of Apple's competitors. So that's why there's this, you know, 10 tumultuous fight, if you want to call it right. It's really the fact that Apple knows that if Qualcomm has a good platform, that their competitors will have a competitive solution against them. And that tends to be Samsung in a lot of scenarios. But it's not just Samsung because Apple's a global company and so is Qualcomm. So, you know, Qualcomm's finances have been heavily impacted by the China slowdown. And because of that, you know, they're just gonna pivot and try and, you know, do better in other regions until China recovers. But the reality is Apple. Apple sees Qualcomm as a competitor simply because Apple, you know, is so vertically integrated now that they. They design all their chips as much as they can. Obviously they still haven't gotten the modem things figured out. But there was a slight jab at Apple during the Qualcomm event around modem. So I thought that was slightly amusing but not necessarily surprising considering, you know, the lawsuits that the two companies have had and the fact that Qualcomm still supplies Apple modems today.

Yeah man, what a story. I continue to recommend people to listen to the acquired podcast, the Qualcomm episode. If you haven't listened to it yet, I'll put a link in the show notes Such a great history. It's probably a three hour episode on just like the history, it goes all the way back to the 30s of the first kind of wireless communications that happened. They tell a great story all the way up till present day. So I will link that here as well. But we're living it. We're living the story and how it continues to change. I don't even know if we recently talked about the Paul Jacobs news of him going to taking a CEO role of a new company. Maybe we do that in a follow up episode. But the Qualcomm saga continues. But it is San Diego's largest tech company and we're proud to be here to witness the technology that they're building. So thanks for that deep dive. Let's let's talk some some financial news recently Debut Biotech which is raising a series B biotech company but debuts. I feel like they've been one of the more public biotech companies out there. Fred. What? I'm guessing maybe you've covered them or has it all been after after your business journal days? Yeah.

Before we jump into the Debut Biotech just want to say and show you brought a good piece. If you want to check out on Forbes headline was AI dominates Qualcomm, Snapdragon, Snapdragon Summit. I really appreciate your commentary and I love that you continue to write about this battle happening with Qualcomm and others. I looked at their stock too and it's currently at $108. They you know have definitely have got a benefit of just getting the announcement out before Apple and we'll continue to track them. But yeah, jumping into some startup news. Debut Biotech is a four year old startup. We talked about them on a previous episode. Basically they create a biomanufacturing process where they're leaning into fake fragrances. So they're making bio based formulas and starting with fragrances. And they have plans to expand hair like hair care as well as like color cosmetics with that that stuff is in the pipeline as well. So they raised 40 million series B. They have over I think 50 employees here in San Diego. And so really interesting company. They have a partnership with l' Oreal and one of the first early players of leveraging biotech in the fragrance and hair care space. So super interesting stuff.

Super interesting. Brings up a good timing because I am right now recording live from Verity, a sustainable packaging in the beauty and home space. I'm at their office working for the day. They're a portfolio company. Just hanging out with CEO Carrie here. I'm going to go after this, go check in and see if she, she and debut have a relationship already. But glad to see a biotech, you know, getting into the consumer side. That's it's kind of where I see biotech breaking into from San Diego wise. We let's talk about another consumer play here. Dow Wine just got acquired for somewhere between 900 to a 900 million to a billion dollars. Now while they're not based in San Diego, they're Paso Robles based. They are San Diegans. So UCSD alum, two brothers, the Dow brothers, UCS dealum and longtime San Diegans have I know they have deep roots and relationships in San Diego, but seeing their wine get snatched up, I know you two have tried it, you both even Freddie, I think you're even there recently. Yeah, yeah.

Dow Winery is one of the top wineries. It's in Paso Robles. I can't believe they were acquired for 900 million. There's big money in the wine business and shale. You tried it and you know, what are your thoughts on this?

Yeah, I mean I've had it a lot just because it's, you know, pretty, pretty prevalent in a lot of places. And I was actually wedding this weekend in Phoenix and they had Dao, you know, red as one of the options. And I was like, wow, they're, they're, they've expanded beyond California, which is a good thing for a California wine which also probably is why they got acquired.

Yeah, getting swooped up by a large wine portfolio company. Maybe a, maybe some might call it a wine pe if you will. But you know, looking forward to seeing the recycle of capital, recycle of talent and knowledge go into more brands and you know, probably the reach will expand from there as well too. So congrats to George and the Dow brothers there. Let's do a viasat update. So viasat, which is a major communications company based in Carlsbad, it's got 30 plus year history of providing like private communications, including Air Force One and super high level, you know, like yachts and that kind. But then they've also started a consumer Internet business where they are competing head on with Starlink, providing both airplanes, you know, your commercial airlines, but also consumers, even Ukrainian soldiers with Internet connection. And so they had a major satellite launch this year, I think Viasat 3 launched in April, man, and it was taking, it was a long time coming. They go a very different route than Starlink. Starlink goes with the thousands of satellites that provide coverage while you know, viasat goes with one giant satellite per continent to provide coverage. So it's a multi billion dollar satellite. Had some issues unfurling its communication. I think it's communication antenna. I can't remember if it. Yeah, communication antenna that was built by a subcontractor. So ever since April, both stock and company have been, you know, in retrograde if you will, determining what's going to happen there. Fred, give us the skinny on what's going on with viasat recently.

Yeah, so viasat has had two kind of big, big news. One, they had to let go some of their employees out of their L3 Technologies base. I think it was 130something employees. And so they had that challenge also they had to fill out a lawsuit or I don't know if it was a lawsuit, maybe it was an insurance claim. 420 million on a satellite as you mentioned, that malfunction. And so if they're, they're having some troubles, I mean they had a really big deal not too long ago where they acquired a London based firm for 6.1 billion to gain access to more fleet of satellites. They compete with, you know, SpaceX, they compete with Amazon, OneWeb and others. And so you know, hopefully they can navigate these hiccups, you know, whether they have any challenges in their business model. And you know, with this latest, you know, I think 400 million claim with the satellite is, it's, it's huge. They have a lot of money in the bank but they, they still need to, you know, come back, you know, rebuttal and come back from this hiccup.

Yeah, definitely. Yeah. We're hoping the insurance claim helps them. They've got more of these satellites launching soon and they, you know, obviously need to figure out the problem before they launch another one so that it is not detrimental to the next one. Angela, I know you've been following these a little bit, you know, just from a communications space does this viasat pop up in your world from, from the Analyst world.

Yeah, they have, you know, they did acquire mrsat and there's a lot of competition in the satellite space right now because most smartphone vendors and most carriers are looking for satellite to plug holes in their Networks. And the 5G standard actually allows for satellite to be one of the component carriers of a cellular network. So that way, you know, if you have bad signal, you always have satellite connectivity. Apple signed an agreement with Iridium to essentially, you know, work with their phones without additional hardware. They did a slight modification, but essentially any kind of satellite communication you could use to get, you know, emergency services. And I actually think that, you know, if you, if you look at it, satellite, it is a growing space. It was a very difficult space in the 90s, but now when you look at it, it's definitely a growing space. And that's why I think you're seeing some consolidation and some acceleration. But yeah, I think, you know, there's, there's also a Qualcomm connection and a San Diego connection because Global Star, which actually I think is the real Apple partner, they hired former Qualcomm CEO Paul Jacobs to be their CEO. So he has that smartphone pedigree. And there's clearly a strong connection with smartphones and satellite now and that kind of global scale with those kinds of hundreds of millions of units globally, I think will change the economics of satellite communications. And to your point, I have seen a lot of vias out on planes. I've been on planes a lot in the last few months, and I've been seeing viasat as the primary supplier of connectivity for those planes.

Interesting. Well, we hope they figure out their issues, get back at it so that they can take Elon head on in their own Internet race, that regard. So super interesting. We'll keep, we will keep updating you. One of the pieces you mentioned, Fred, was the L3 piece. They sold off a business unit Focus on DoD Communications worth to L3 Focus for almost $2 billion. L3 went and took over like the physical building which they have now since closed and let go of, I think about 150 people, which you always hate to see. But it happens in consolidation world. But the DOD market in San Diego is alive and well. Recent study came out, kind of an annual study they do on the military's impact on the San Diego economy. And it is massive. $36 billion direct economic input in San Diego with over 150,000 jobs, specifically both current soldiers and civilian population that support it. People talk about, you know, the 1 in 5, number 1 in 5 jobs in San Diego are DoD military related. Compare that to the biotech world, which is 1 in 20. So significantly bigger military town still than biotech town, even though maybe the tech world we think of biotech a little bit more so but massive. And so sdmac, which is the San Diego Military Advisory Council, put out this report. We'll link to it in the, in the show notes here they, they talk about a $56 billion gross regional product related to defense spending. So that includes everything from, you know, shipbuilding work, the housing of local sailors and their families and when they retire here and to everything else from technology spend as well. So huge impact here. And let's talk about, you know, the technology as well. You know, you've got some of the largest cyber infrastructure security here in San Diego at spaywar or I think it's now called nav war. Thousands of cyber engineers based out in Point Loma over there. So really great to see that one. It's keeping up like the, the even with the economy a bit stagnating, the DoD spend continues to, continues here in San Diego. Anything Fred, on your end to share here?

No, I think, I think you covered it.

Yeah, I think things that we, you know, specific to the DoD that we should be looking for is there'll be even more ships based here coming up. So the Navy is increasing its coverage as, you know, China grows. The Navy needs to have a physical bigger, bigger presence here on the west coast or the Eastern Pacific theater as they call it, as well as technology too. So you're having some of the largest defense tech startups are in Southern California, including SHIELD AI here in San Diego and Andrew up in Irvine that will continue to have a big impact on the Navy in that regard. Let's wrap up with some events coming up. So we just had or maybe we do a roundup real quick of Santa's Startup Week last week. Awesome week. Five days every day in a different part of town. Started in Carlsbad, jumped straight to Tijuana, a night in Point Loma with Logic Boost, a day at SDSU and wrapped it all up at Qualcomm. So really, really awesome week. Different keynotes on each day. So I would say, you know, day one in Crosbad had a bit of a CPG or consumer kind of focus on on it with keynote from Joe Kudla, CEO of Yori, probably our largest CP private CPG company and at Cody Barbo, San Diego State alum and CEO of Trust and will keynoting Thursday's day at SDSU and Then gave a great panel with three other local early stage startups. Fred, what came from, what kind of struck out from you from the week.

Yeah. So I want to do a recap article highlighting, you know, what all the, all the great sessions that happen. I just think it was a celebration of bringing together, you know, early stage founders, but then also having some of the more established players like trust and will and viewer clothing, representing and giving back to the community. You know, LA and New York, they also have their big tech weeks where, you know, hundreds of people fly out to attend these sessions. And I think with San Diego, it was a ton of local people. We had, you know, investors, we had entrepreneurs, we had community members really just gathering and, and making new connections, which is great to see that the community is strong and continues to grow.

Yeah, I would say from, first of all, I think New York Tech Week was going on the same time, same week, and yet there are still people here who flew in for San Diego Startup Week. So, you know, while we don't, we don't bat anywhere near an LA New York RSF, we're still in the top 10 for venture capital spend, still in top 10 for talent pool and top 10 for, you know, we all are in the most expensive cities between all of us as well too. So, you know, a lot to be proud of there. But no, it was a really great week that, that we had such diversity. I would say, angel, did you make it out to any of the events or no, you were at Snapdragon, you were out in Hawaii.

I would have loved to have attended. In fact, I was asked to speak, if I recall correctly, and I had to respectfully decline, which is obviously disappointing. I have the most difficult schedule in the universe where I need to be in three places at once because all three things are relevant to me and I physically cannot be in all places at once. So I might start having to clone myself or something.

No, it's all good. I will say just what you would be impressed with is seeing kind of the world's collide of it, your world and the startup world of San Diego collide. You had just as big of a presence from big enterprise Qualcomm with Chief Commercial Officer as the keynote on Friday at Qualcomm and Lenovo Vishal having a presence there as well, talking about how, you know, what kind of innovative technologies in the XR and AI worlds they're looking at and how they both invest and acquire startups to kind of catch up as incumbents. So I think you would have, you would have fit right at home there in terms of seeing what the San Diego startup community is kind of all leaning in together and kind of the crisscross nature of that. So we'll get you there next year. This week if you're looking for something to do, we can help you get you there. Including the 0111 conference which is a CTO or technical leader focus conference put on by seven CTOs. This year interlock Capital is partnering to do a opening night together at Snapdragon Stadium. So Wednesday night, November 1st, we're doing a kind of an opening party together and then November 2nd and 3rd, CTO Conference 0111 is downtown at the Hard Rock Hotel. I know Fred, you'll be out there getting some good coverage as well.

Yeah, yeah, I'll be on the ground reporting live. I'm looking forward to it.

Awesome. Well, looking forward to seeing you there as well too. This Friday is the San Diego Founders Hike that I do monthly first. I've now moved it to first Friday of the month at 6:30am bright and early. This will be a probably a cooler hike than usual and probably last. I think time change is coming up so you know, might be the last time for a while. We see sunrise for a bit but come join us if you can. We do Tory Pines at 6:30 in the morning and it's always a good, a good little hour hike to sweat and chat with others who are building here in the tech world. Anything else on your guys calendars that we should be watching for coming up events?

I think we covered it. It's always been always a pleasure to talk about the great things happened in San Diego. And Shell, thanks for giving us the exclusive scoop on Snapdragon Summit.

Yeah, thanks a lot for having me. I think my next event will probably be mediatech's executive summit in Orange county which will be kind of very similar to what Qualcomm does where they talk about their latest chips and how those will impact the computing industry. IT industry.

Love it. All right, well we'll check in with you again soon. Love to have you on. Come join us again, Fred. It's a pleasure and hope you all have a good spooky day and a happy week. Cheers everyone. Cheers.

Thanks.