intel is back. >> and back on "squawk alley." good morning it is 8:00 a.m. at intel headquarters and 11:00 on wall street and "squawk alley" is live ♪ ♪ ♪ don't recognize him ♪ ♪ got a voice like sugar ♪

♪ sugar in your tea ♪ >> good wednesday morning. welcome to "squawk alley." i'm deirdre bosa with jon fortt and julia boorstin intel ceo pat gelsinger joins us in just a minute first, we're taking a look at stocks this hour the nasdaq largely under performing with the chip sector all in the red except intel with flirted with an all-time high earlier but now off the levels giving the dow a small boost as new ceo pat gelsinger announces intel is back. jon? >> here he is with us, intel ceo, sounds funny to say, pat gelsinger in his first broadcast interview since taking the job pat, i have been looking forward to this for months, talking to you live on the record about intel's plans. you laid them out yesterday. quite a presentation wall street investors rightly skeptical.

we see the stock doing some head fakes here two main ideas you address that i want to start off with this foundry push, intel making chips to the customers' recipe, not necessarily intel's. $100 billion total addressable market you say in four years system on a package, which may be addresses some of these process technology issues. let's start with the foundry push talk to me about costs and how you get there to this opportunity? because for a new business like this that you're standing up, separating it out, might help it happen like it hasn't in the past, but the costs arise before the revenue and profitability, right? >> well, first, jon, let me say, great to be with you, julia, deirdre. fabulous to be back on the show and always a pleasure to be chatting with you all and have the opportunity to speak to the "squawk" audience. with respect to our idm 2.0 strategy we laid out, what we saw was in terms -- i like to

reference my mentor and long-time influence andy grove -- we were at an inflection point and had to make a decision with regard to being that foundry, you know, for ourselves, but also for the industry i'll say there's a handful of things that have changed in the current environment. one is, it's a different market. as you said $100 billion foundry market by 2025 and there really are very few companies that can step into that with leading process technology there's also extraordinary interest on the part of u.s. and european countries and governments for a more balanced supply chain again, we're one of the few companies that can step into that we've also come at this and said we're going to do it the right way and we've had some steps in the past where we as i say didn't take them as seriously as we needed to we are now serious about being a major foundry supplier for the industry a separate business unit, separate pnl, separate capacity we're putting in place to

satisfy those. we're also bringing the best of intel, leading process, unquestioned leadership in packaging, our 3d packaging technique, and making all of our intellectual property available including our x 86 cores for the fountry customers. this is a powerful statement of our seriousness in this market and the customer and industry response to yesterday's announcement very profound some 20 plus major companies said yes, we're interested in this capability. >> a lot of people might not quite get how much of a not invented here mindset, at least people think of intel as having. the idea of you making x 86 cores available in foundry, the idea of you taking your most recent designs and having them manufactured by others in the near term, seems very different, but back to this total adjustable market in 2025.

by 2025, will intel have scaled the foundry business to the point it can compete head to head with tsmc or anybody else for that matter for the most lucrative deals? >> simple answer is absolutely we are, you know, putting fabs in the ground, that was part of the announcement yesterday with our two new arizona fabs that we're putting in place we're also announcing that we'll expect our next sites in the u.s. and in europe to be announced within the next year we're definitely leaning into this with the capital investments required we're also open for business today. we already do a bit of foundry business and that's accelerating immediately. we're also engaging with these customers, you know, these big potentials i have e-mails with several of them already this morning of their interest and the next steps that we're going to take with them, and to be delivering foundry capabilities in '24, '25 you have to back up and say oh, i need to be doing those designs

starting pretty soon because it's a couple years until the designs are done, the first test waivers come out we're going to start in this journey but also announced we're going to with tsmc and global foundries and leveraging them as we have a model with the industry and we see it really as a need for semiconductors is a rising tide in the industry and we're one of the few that can step into that but we're also excited that tsmc and samsung and global foundries and umc are stepping up as well because the world needs more semiconductors. >> there are boom/bust cycles. don't you risk exposure to a supply glut down the line, you know, despite the need for government to have, you know, onshore capacity are we going to end up with too much supply and low prices and

low margins? >> you know, i believe that the world has a ten-year good cycle in front of it, jon. when you think about it, every industry is becoming more digital, right every aspect of education, of health care, of automotive, you know, our human existence is becoming more digital and covid was a big accelerator to that trend that was already under way. first, i believe this is a robust market for many years to come clearly there's, you know, different gaps in supply and challenges that you work through, but we're leaning into that because these capacity decisions need to be made years in advance and part of our current shortages are the decisions that the industry didn't make several years ago, so we're saying we're going to lean into that aggressively. further, you know, part of the idm 2.0 strategy as i've described it, is the balance of using our capacity for our internal feeds as well as the

industry needs so we get to have a broader set of decisions as we manage those necessary boom/bust and unique aspects of the industry cycle. we think our strategy is a superior one to anybody else in the industry and that's why i'm excited about what we announced yesterday. >> i want to move on and talk about system on package. there's been a lot of talk about intel's lost lead in process technology and, you know, everybody measures these nanometer nodes differently, so one, you know, intel's 10 nanometer is going to be different from tsmc's 10 nanometer. i'm not sure how far behind intel is but tell me about system on a package and how much ground intel can make up in the near term with a package focus versus just, you know, the process technology alone focus >> yeah. it's a great question, jon what the industry has done is we've gone from chip on boards

to system on chip and now it's system on package. intel has had a sustained leadership in packaging technology that's maybe a couple, three years ahead of anybody else in the world. and as more of the world moves to system on package, we are able to leverage that unique capacity even when we may have some process gaps in our overall portfolio. and part of the foundry strategy is leverage that aggressively and i showed off one of those chips yesterday that we have, over 40 different tiles as we call them on one silicon package. it's just an incredible feat and we're using that particular design for the high performance computing scale programs the strength in packaging is one of the things that helps us to close any gaps that we have. that said, i am out to unquestionably be back to parody and sustained leadership and we also announced the research

partnership with ibm yesterday, the two great semiconductor research firms in history, coming together to work together as never before. we're going to be back to parody and process leadership, combing that with our package and 3d technologies at the packaging level and our platform, processes, cpus, our software, all of those coming together we're on a powerful path to the future. >> where does that system on package push and strategy help you most in the near term? is it in data center and mega scale cloud, engagements with the likes of satya nadella on microsoft who you did have on that presentation yesterday as well does it help you at all in consumer >> yeah. it's applied across our product line, jon, and we'll be using it for our clients, for the mobiles, even for some of the small tablet things and these tiny things all the way up to the big exo scale but the unique

spot is uniquely in the data center projects. combing our system on package, we're also going to be able to go to satya, the big cloud vendors running millions of sockets, tens of millions of core, can we better optimize our products to meet your needs. maybe a little less of some of our things and add a few of your unique things and maybe that design is 10 or 15% more optimized for these extraordinary cloud data centers, that's a powerful strategy and that really ties together the fullness of what we announced yesterday. our designs being leadership our packaging being leadership our flexibility to design as never before, opening our fabs for the industry, taken together a compelling strategy to the future. >> customization and flexibility at intel stay with us we'll take a quick break and more with intel's new ceo? just two minutes if you're 55 and up,

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intel's ceo pat gelsinger, his first broadcast interview since taking the job i want to broaden it out and start talking more tech industry overall right now. you came from vm ware which lives in the space in the ecosystem that's all about partnership and surviving by listening to customers and being nimble in that sense you were talking about intel being flexibility and customizing things, that's not the intel i've known for the

last 10, 20 years. you can have any flavor of chip as long as it's n-86 talk to us about today's enterprise ecosystem why this change is necessary how on earth you're going to do it culture often doesn't change quickly. >> yeah. there is i think some of the things over the last eight years with vm ware, this satisfying customers, and, you know, i believe the world has changed so much and we've clearly seen semiconductors where we have design times for semiconductors at microsoft, amazon, apple. people that you would say, what are they doing designing chips clearly this need to step into that with a new strategy but the heart of intel was never my way, it was always the manufacturing, the design, the semiconductors, and as i said to my teams last night on an all-company broadcast, i said if you're not excited today, check your pulse, right.

this is going back to the heart of what we're good at, building advanced technology, enabling new use cases and we're going to lean into these customer relationships as never before. touch base with almost all of them you heard from satya on the announcement yesterday, they're excited about this i'm sure we're going to have a few stumbles until we get it right but you have the ceos's commitment i'm going to be leaning into these, partnering with our teams and engaging with our customers and creating the new intel, bringing many of the things of the old, but creating the new intel for the future and we are fired up. >> pat, julia boorstin here. you're talking about a major strategic shift for the company and also a cultural shift, which seems like it would be particularly hard to implement at a time when we are still in a pandemic and even as we start to move out of the pandemic in coming months, we're going to be working from a hybrid situation in terms of some people working from home, some people in the

office how are you thinking about strategically making these changes to the company at -- at time when your employees may not necessarily be in the office >> i do think that presents more of a challenge in that respect for us to work through, but i would also say, when you get ready to make a change, what things motivate you to make a change intel has been humbled and beat up a bit over the last several years by some of our missteps and the company is hungry to be back in the leadership position. it's hungry to step forward again, to be that execution machine. as i've described it sort of like a desert and the first rain, flowers pop up all over and that's the culture that i'm seeing emerge. we are ready to be back and i'm excited about the talent i met with one of my teams, our labs teams, 700 people, 500 ph.d.s we are littered with innovative, talented engineers that are ready to be, as we announced in

our theme for yesterday's announcement, unleashed and that's what we're going to do. we're going to unleash that innovation in this strategy and i think it's going to be an extraordinary moment for the company. as andy grove said an inflection point and we are taking that inflection point, maximizing it and we're going to have to do extra work in the hybrid work environment to bring back and align our teams with this new vision and we're spending a lot of time communicating with our teams and it's going very well so far >> interesting, you know, to execute this shift during this hybrid environment i have to ask how all of these changes impact your relationship with apple you called out apple saying you were targeting them and you've made a point of calling out apple numerous times since you started as ceo what's the latest there? >> well, what i would say is, our objective is to turn what might have been traditional

competitors into customers, to really embody that phrase competition. apple uses a number of intel products today they've gone a different direction largely because we didn't meet their needs, they've gone a different direction for the m-1 platform we have to build better products i've also said we want them to be a customer of foundry because they depend heavily on tsmc today and they want a second foundry. i want to be that provider to them as well as others like qualcomm that i mentioned yesterday as well and, you know, nvidia i want them to be a customer for foundry and really turn competitors into customers and partners we're going to embody competition because the world needs more semiconductors. we're one of the few companies that can step into that. we need a more balanced supply change geographically. i'm excited the response we've

seen, even though it's very early, just yesterday, has been extraordinary from customers and from countries >> hey, pat, it's deirdre, it did strike me as interesting that within one week you were throwing shade at apple but also saying that you are going to pursue their business. you know, that does raise a lot of questions about competition indication that serving and competing with customers is going to be a tricky balance with you to strike why would a company that competes with intel turn around and be willing to share their designs with you would you consider spinning off the foundry business completely if that meant that it could gain more traction and trust among those companies that you're also competing with on the other hand >> yeah. i would say, intel doesn't compete with apple the pc ecosystem competes with apple. you know, in that sense, hey, we're unleashing the ecosystem that includes microsoft, dell,

lenovo, hp, we want to bring more innovation to the ecosystem and that's the message we're sending there. it's an important business for us but, you know, i would also say, customers want more supply they want more flexibility of their choices. tsmc is a great company. they've done a fabulous job, but there's very few choices for leadership technology. yes, we're going to do our part in stepping forward in that way. with respect to structuring the foundry business, you know, we've been clear that we're going to set it up as a separate bu would i ever spin it off boy, there's so much leverage we get from, you know, our td, from our global fabrication network, packaging technologies, the i.p. blocks that we're going to share, i believe that the best business model is going to be keeping those close together, but establishing a clear separation that allows us to go to those customers very uniquely and say no, you're going to have committed supply, we're going to give you all of the leadership

technologies unique organization, so i do think an affiliated relationship with intel will always be very important for all those leverage points that i described. >> right pat you mentioned a few times those statements of support that you received yesterday across the industry but they're just that so far, just statements of support if push came to shove and you were to turn those into orders and revenue for intel and they demanded more of a separation, is that something that you would consider a spinoff >> well, we're going to do whatever it takes to win their business and make sure that we've satisfied their requirements and that level of separation and relatedness i think will be an important topic that we discuss with those big customers and i've had some of those discussions already with a number of those ceos we're under way and we'll do what's necessary to make the strategy successful. >> and pat, now let's talk some benchmarks i don't expect you to necessarily give us numbers because i know this isn't your

analyst meeting, but i think investors will want to know just conceptually how are we going to know if you're on track? let's say end of 2021, how are we going to know if this is going according to your vision >> yeah. we're going to give indicators along the way and, you know, of customers that have committed to the foundry, so some of it will be customer counts i'll probably give metrics around how many commitments to commerce they're doing what they said they would and as you've seen from me at ceo at vm ware we want the ratio to be extraordinary for the path of the company going forward. we're going to say something and then over deliver against it in a consistent way some of those early indicators will be super important because they're also going to be ones that we want to get out there, not just to satisfy investors, but to build confidence in the customers. if customer x hears that y and z have already committed some of

their designs that's going to build xf dense on their part as well all of this is concurrent with the strategy what we need to do for customers and governments as well they're for supply change for their defense and in country supply chain all of these coming together i would emphasize, these big cloud customers, they want more flexibility. in many cases they say, boy, i love your chips, intel, but i want a little less of this, more of that, can we do that and now we get to say yes, in a bold and aggressive way to their needs as well >> yeah. just hearing about a lot of that customization need from andy jaci earlier this year at amazon as well. who is your most strategic audience you talk about intel on, you're going to be gathering the developers, the industry, the geeks, like you used to at idf, i was wondering if that was going to happen, but the financial audience is important of course. that's cnbc's audience too

but who is your most important strategic audience to buy into this and really put momentum behind the technical strategy? >> well, you know, i'm glad you're bringing up idf and we announced that we're going to have intel innovation, on event for the geeks in october, and jon, i have a special ticket just for you to join me there for it i'm looking forward to having you there with me for that event. but i've always viewed that the heart of intel is the geek and the geek at the cloud customers, the geek at the pc vendors, it's the geek at the developer who is doing those ai algorithms. our most important audience is the innovator, is the geeks, because they set the strategy for the cloud providers and the client builders, for the 5g edge, for the autonomous vehicles that's who we are about. wes over 90% of our employees are technical, filled with geeks all

over the place i love being ceo of this company because i'm a geek and i love talking to our geeks and the ultimate customer that we're out to reach is the geeks. we have to satisfy all the other audience as well, the analysts, the press audiences, the financial investors, you know, but we want it to be -- we're talking to the geeks and going to let you listen in on our conversation to me that is what we're all about. >> well, you invited me in october. i can say i'm going to plan to be there, which seems like an odd thing to say it shows, i hope, where we are coming out of this pandemic. pat gelsinger, ceo of intel, first broadcast interview with that title here on cnbc, appreciate it. >> thank you so much, jon. and your team. always love you. >> we covered a lot of ground there. more pain for gme. the reddit community under

whelmed last night price target there, $29 if that matters. shares down more than 20% this morning. a lot more "squawk alley" straig aad ayitushthe

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welcome back i'm rahel solomon. dan snyder on his way to becoming sole owner of the washington football team he's reached an agreement to buy out minority stakeholders and awaiting approach from nfl. the vaccinations in europe lagging compared to the uk the european union is moving to impose stronger controls on exports of shots and an official says since the end of january 10 million doses have gone from the

eu to the uk but no doses shis shipped in the opposite section. in myanmar, people jailed in the military coup have been released more than 600 were freed and it's a rare concession for protesters who have filled the streets for weeks. no winner in israel's election nearly 90% of the vote counted apreached prime minister netanyahu will need a broad coalition to secure another term that is our cnewbc ns update for this hour. more "squawk alley" in just a moment and a whole lot more? so what are you waiting for? world's strongest man martins licis to help you break down boxes? arrrggh! what am i gonna do to you box? let me “break it down” for you... arrgggh! you're going down! down to the recycling center! >>hey, thanks martins! yeah, you're welcome. geico. switch today and see all the ways you could save.

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robinhood filing confidentially last night to go public against the backdrop of gamestop's steep drop. with us general partner keith boy, member of the paypal and at linkedin and square, previous investments include lyft, airbnb, doordash and stripe. quite the list good morning good to see you again. >> pleasure to be with you again. >> so private market investors, they have stuck by robinhood over the last very turbulent month. how do you think that wall street will receive the company and what are public market investors looking for? >> it's hard to tell obviously the metrics, the kpis, the financials are not public, so it's impossible really to discern how well the company is doing, but i expect propelled by

a lot of stimulus checks i think a lot of americans are taking money that government has sent them over the last year and parlaying it into more money, speculative investment in bitcoin, speculative investment in stocks or equities and potentially a speculative investment in tokens these days. i think there's, you know, an unusual sort of wave propelling robinhood forward. nevertheless, i hope robinhood does extremely well in the public markets i'm an investor in a company in europe called trade republic, which has a better, bigger vision than robinhood but is providing the value that robinhood provides to americans. i'm watching with eager interests. the markets are excited because trade republic will be a bigger, broader, better version. >> if that competitor has a bigger broader version, why aren't you bringing them here to compete with robinhood at a time when its reputation has fall noon tatters

>> europe is a wonderful and interesting market in europe you can do things together, fuse together financial services in ways that the regulatory regime here doesn't allow. secondly, germans, for example, where it started don't have the notion of a 401(k) plan doesn't exist. to be able to buy into equities is like in the first ipings in europe it's an exciting opportunity right now. >> keith, julia boorstin here. we can't talk to you about reddit with also asking you about robinhood -- i'm sorry about reddit we can't ask about robinhood without asking you about reddit. you used to be on the board of red ids. you departed in 2019 i'm so curious as you look at this wave of individual investing, really taking off the role that reddit has played there, particularly in this whole gamestop saga, what do you think about that role of reddit? is it problematic and do you think that those conversations

are going to be reigned in or amplified in the future? >> i think they're going to be amplified. i served on the board of reddit for five or six years and i think the community of reddit has been powerful across all verticals from politics now to finance, sports, entertainment, so i think we're seeing the manifestation of the power of reddit in different domains and once that power is recognized there's only one way this goes which is normal people are going to have more influence, more power, fuse together in a community and the rest of the world is going to have to adjust to the power of that community. >> keith, i want to go out on a limb and ask you about e-commerce you know, are you trying to create the iac of e-commerce right now? you know, open store, rolling up a bunch of e-commerce names and if you're still can't talk about it, at least tell me what your view is on e-commerce right now working under, you know, amazon,

facebook, all these different ways of getting to the customer and what's missing in the space? >> well, i think the thing that's missing in e-commerce is serendipitous discovery. amazon is a wonderful product, wonderful experience, incredibly delightful experience if you know what you want however, a lot of merchandising has value and the reasons why retail still the vast preponderance of transactions is people discover things that they didn't immediately know from a utilitarian standpoint they needed that is something amazon is not very good at at all. in fact is poor at that's one of the reasons, for example, when i want to find new books to read i wander through traditional book stores, even though i know how to use amazon, i'm probably in the top 1% of their customers easily, when i need to find new things amazon doesn't work for me. i need to hunt through the book store.

that's true in all verticals, apparel, books, health and beauty and what we're hoping to do and aspiring to do is to bring that experience on-line through not necessarily an a.i. rollout, but a unified experience, unified customer experience stitching together a lot of small micro merchants and giving them the tools and access to information and data they don't really have, access to capital they don't really have, at the small end of the market >> yeah. that discovery function feels like the next stage in the e-commerce wars. i want to talk to you about tesla. elon musk tweeting yesterday that people can buy tesla with bitcoin. do you think this is sort of the first move this will lead to more big ticket sales using bitcoin? >> i'm skeptical about it.

the proof will be in the pudding. we'll have empirical evidence of what fraction of tesla buyers decide to use bitcoin to purchase their tesla the tesla demographics, somewhat artificially positively inclined to use bitcoin to purchase their tesla so when tesla reports on the percentage of customers using bitcoin that will be a barometer for the rest of the world. >> right at the same time, there's more people sitting on, you know, loads of bitcoin that are slowly accumulating, so you're skeptical, though, that some of those people will turn into a tesla purchase since there are so few things they can use with bitcoin. >> some of them. will it be 1%? maybe. 10%? no >> keith, i want to shift gears here and ask you about miami i believe you're in miami now. i know you purchased a house in miami and you're a big booster

for that start-up ecosystem. what does this mean for you as an investor? are you more excited about startups that are outside of silicon valley and how does this geographic distribution of tech innovators impact the whole start-up environment going forward? >> yeah. we're very excited about investing in ambitious founders that want to change the world whenever they are located. we found great investments in texas, southern california, one in berlin, i mentioned earlier, we've noticed over the last five years our best investments distributed around the globe and we think that trend is accelerating, not decelerating the virtue of being in miami there's a lot of new energy, a lot of joy of creation it's a very aspirational culture where people, all walks of life, all industries, encourage people to be successful the more you encourage people to be successful, the more success you get. as opposed to stigmatizing and

penalizing success which is what the bay area has done in the last five years. being in a different region allows me to think differently which is very important as an investor to see things other people would ms miss, invest in things other people are terrified of and trying to take advantage of having a miami presence some of my colleagues are starting to move to miami, the mayor and politicians and regulators have been very supportive and embraced the movement of tech and high-paying jobs and creation of new companies that are going to improve society for everybody. we're excited to have more of our colleagues need investments from ther and allows us to investment along the eastern seaboard, latin america, europe more easily. you will see everywhere. >> interesting to see how that investment in miami is supported by local government. a question since today is equal

payday, do you think that startups are more diverse outside of silicon valley and is this, you know, this spread out, the fact that we're seeing startups and entrepreneurs really spread out across the country and across the globe in the way that maybe they felt they couldn't before the pandemic, do you think that's going to drive diversity >> absolutely. miami is incredibly diverse, especially compared to silicon valley so miami has an interesting mix of immigrants from latin america, immigrants from europe, new yorkers, if you include them as diverse, lots of jewish people like myself, all together, makes a lot of refugees from cuba and other poorly run countries, you put these together and see diversity every street, every block, cuisine, real estate, there's no limits whatsoever. i think -- i've noticed the mayor, observed that miami more african-american and latin american engineers than any city

in the u.s that's an example of the diversity here there's also much more diversity of thought here it's refreshing if you go to any dinner, any event, any coffee, you cannot stereotype the topics you're as likely to run into a trump voter and biden voter, pro immigration voter as well as a restrictive immigration policy voter. people have views, different views, on the death penalty, on all topics therefore, you have to engage and actually be confident in engaging on topics and have thoughtful insights. you can't just reflexively throw names at people because everybody here has different perspectives and every time you try to stereotype somebody you're often wrong i think this is a healthy thing in society. >> i know a few bay area folks that might push back against that, but we'll leave it there, keith, and hopefully have you on again soon keith rabois

as we head to break, another bad day for viacom cbs that stock plunging 25% after announcing a stock offering on monday discovery has been under pressure as well the drop is making a dent in triple digit gains both stocks have seen just in 2120 more "squawk alley" in a moment. stay with us

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jassy announcing his replams will be adam salinski. one of the first vice presidents hired at amazon web services in 2005 and returned to the company after leaving in 2016 to become ceo of data visualization software maker tableau, acquired by salesforce by more than $15 billion. he will take the helm in the third arr quteof this year "squawk alley" is back after this stay with us

cloud computing company digital ocean is making its public debut at the nyc this morning. with us now in a cnbc exclusive is the ceo, head of the first trade. yancy, thanks for joining us congrats on the ipo. tell us what is next for your company now that it is going to be public. >> thanks for having us. just want to acknowledge this incredible milestone today you know, i want to recognize our founders and our broader digital ocean team it is a great day to celebrate all that we've accomplished today and also, you know, turn the page to the next phase of the company. we've raised a lot of capital, and we're going to put that to work to invest in our infrastructure, invest in our team, invest in community, to serve startups, software developers and small and medium-size businesses, which is just a massive market all over the world. >> yancey, by one measure there

are over 140 public and private companies with a valuation of over a billion dollars that are in the cloud space how do you distinguish your services you mentioned small, medium-sized businesses, but beyond that how do you distinguish your services in this very crowded landscape? >> we were very focused from day one on making the cloud simple, easy and intuitive for software developers, small businesses, entrepreneurs who are looking to test an idea, get that idea on to the internet and build a business and, frankly, to realize their dreams so we differentiate with our simplicity in the time we've already been on this interview, you could be up and running as a digital ocean customer our documentation, we give every customer, regardless of size, a personalized support experience. so we think that providing -- making it easy and simple and giving our customers help when they need it is the way to earn

every day our developers' and entrepreneurs' hearts and minds. >> yancey, it is deidre. i wonder, you guys focus on cloud infrastructure do you guys do anything in the services space if not, do you risk falling behind in your customer's next leg of growth when they may be looking to add on more services in the cloud is there an intention to go there? what are you hearing from sort of customers that have signed on >> well, we clearly invest to make our infrastructure more secure, more reliable, more scaleable and flexible so we can support our customers' organic growth at the same time we've been launching new software services like managed kubernetes and those services enable our customers as their work flow evolves to do more on digital ocean. that's a critical part of our strategy, and we want our customers to be with us for a very long time, as many of them are, and we believe that that strategy, plus keeping it

simple, easy, intuitive and, you know, using our support model and our community model with documentation and tutorials is the way to retain and grow with our customers over time. >> yeah, john mentioned this before the break, but the big move over at aws, amazon wep services, adam selipsky returning as the new cloud buff. what do you make of the move does it worry you at all might he look to a similar model as you guys are doing? i mean the aws growth rate has moderated in recent years. still at a very high level, but if they're looking to increase that would smb sort of be a place to do so and what would it mean for you guys? >> first, i would like to say we are playing in an absolutely massive market measured by over $100 billion in annual spend just for snb in the cloud. there's a lot of room for people to operate we have seen, you know, significant growth we just crossed our ten-year

anniversary or our birthday, if you will, in recent weeks. you see that we've built a business just under 400 million with 600,000 customers all over the world. 70% of them are outside the united states, and we think our formula for keeping it simple, easy and intuitive and providing help through documentation and community, come to digital ocean as a place to learn and grow that's the formula for continuing in this next phase of the company to grow our customer opportunity, and we think staying focused on that segment of the market, which is massive, is going to be a critical success factor for us going forward. >> yancey to follow up to deidre's question about aws, they're the behemoth, it is growing faster than digital ocean. you are distinguished by your international focus, the fact that over half of your revenue comes from overseas. how important will it be to maintain that as you

increasingly come up against the behemoth that is amazon? >> well, it is very important. we are a global business, we generate 5 million visitors to our website every month because of the digital tutorials and the content we invest in our community. we are going to continue to invest in that to attract developers and startup entrepreneurs as they're trying to make breakthroughs to start their businesses that formula for success has been incredible. 5 million visitors to the website a month, 25,000 to 30,000 become paying customers every month. they come to us because it is a place for them to learn and grow, test their ideas those ideas get lift off into a real business and we can grow and scale with them with the global infrastructure that we have >> fascinating times in a crowded market congrats on the ipo. we are awaiting that first trade. yancey, that's for joining us this morning. >> you bet i appreciate you giving us some time today thank you. meantime, we are continuing to keep an eye on intel with adding the stock to its fresh

pick list just this morning saying the tide is turning outperform with a target of $85 there. more from our interview earlier with pat gsierelng next, so do stay with us

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on cnbc interview with ceo pat gelsinger, it will cost you but you can watch it in full opening on cnbc.com/pro. the shares currently down about a fraction of a percent. session low in today's trade, and that will do it for "squawk alley" the halftime report" starts now. >> thanks so much. welcome to "the halftime report." i'm scott wapner one big-name investor says more gains are ahead for stocks joining me for the hour, john najarian is here kate moore, the head of theme attic strategy for black rock's global strategy team take you to the wall and show you where it stands in the east. dow is good for 276. yields down for third straight day. there's the ten-year note yield, 164. steve weiss, is that still the most important thing we have t