Three Handshakes of Yang Yuanqing | Focus Analysis

Written by Su Jianxun

On October 16, Lenovo Tech World was held in Seattle, USA. If one were to identify three key moments at Lenovo's most important annual event, they would likely be as follows:

NVIDIA founder and CEO Jensen Huang and Lenovo Group Chairman and CEO Yang Yuanqing; Picture taken by the author

- When Yang Yuanqing showcased the newly released Lenovo Neptune liquid-cooled server, Jensen Huang said: "This is really beautiful. For engineers, this is very sexy."

Intel CEO Pat Gelsinger and Lenovo Group Chairman and CEO Yang Yuanqing

- Gelsinger took out a photo of himself and Yang Yuanqing from 20 years ago and also gave Yang Yuanqing a sample of Intel's most advanced CPU product in development, Panther Lake.

AMD Chairman and CEO Lisa Su and Lenovo Group Chairman and CEO Yang Yuanqing

- Yang Yuanqing joked to Lisa Su: "This year's Nobel Prize was awarded to several scientists in the AI field. Maybe next year you will have a chance," and Lisa Su laughed and patted Yang Yuanqing on the shoulder.

In just one day, the heads of three global semiconductor giants took turns to appear on stage, and Yang Yuanqing shook hands and hugged with them. What is more unprecedented is that Intel suddenly announced a cooperation with its old rival AMD in the X86 architecture.

"Dr. Lisa Su and I have reached an agreement. We believe that now is the best time. Whether it's Lisa or me, what better stage than Lenovo's to announce this?" Gelsinger said excitedly.

"The social circle is very important." In an interview after the event, Yang Yuanqing told 36Kr and other media, "The IT industry has entered an open ecological environment, It is a relationship where you have me and I have you, you need me and I need you."

With such important guests invited, Lenovo naturally had to show off its muscles in product and technological progress, and released a package of solutions, services, and device combinations related to AI, including:

• Lenovo Hybrid AI Advantage for enterprises: It is an end-to-end AI platform based on AI storage, servers, edge computing, public/private clouds, etc., for AI deployment.

• The new generation of Lenovo Neptune liquid-cooled server: It adopts a 100% water-cooling design without any fans or specialized data center air conditioning. This system can be installed on a standard rack, using a standard power supply, and customers only need to purchase one tray at a time;

• The latest ThinkPad X1 2-in-1 Aura Edition AI PC: It integrates AI-driven functions and can be used in a hybrid working environment;

• Lenovo AI Now: A local agent that turns a PC into a personalized assistant, which can access public AI from the entrances of devices such as personal computers, tablets, and smartphones; At the same time, these devices have built-in AI models that can perform reasoning locally through natural interaction.

1. Lenovo's bet on Hybrid AI cannot be separated from Yang Yuanqing's social circle

AI is now Lenovo's absolute core strategic focus. To be more specific, Lenovo's AI strategy is called Hybrid AI (that is, "Hybrid Artificial Intelligence").

Yang Yuanqing explained the concept of Hybrid AI. In his view, enterprise basic models and private clouds will coexist with public basic models and public clouds, and the two should not be separated.

"Now this trend is more obvious. Private AI - including personal AI and enterprise AI - will coexist with public AI. They complement each other to provide enhanced results for different customer needs," Yang Yuanqing said.

To put it more simply, you can understand Hybrid AI by the difference between private and public clouds.

The AI large models we use daily, whether it's Doubao or Kimi, need to be connected to the network to retrieve cloud services; However, for many enterprise customers (such as in finance and healthcare), transmitting data over the network poses a significant security risk. If they still want to use AI large models, they need to run the data locally.

This leads to another concept that Lenovo is currently vigorously embracing: AI PC.

You can think of an AI PC as a small AI server that can run a large model. What Lenovo wants to do is to enable each AI PC to use many AI services even in an offline local environment.

For example, Lenovo's newly launched agent AI Now, you can think of it as Apple's Siri. However, Lenovo's AI Now can receive user prompts and perform reasoning locally through natural interaction even in an offline state.

Lenovo launches a personal assistant application based on PC; Picture taken by the author

Take an example of offline computing of an AI PC. For example, feeding an Lenovo earnings report PDF file to AI Now, even in an offline environment, AI Now can answer questions about Lenovo's earnings report according to your needs, or create a pie chart of revenue and profit based on the PDF file data.

However, whether it is public AI or private AI, for a device integrator like Lenovo, it is obviously impossible to achieve the goal of Hybrid AI by itself.

"No one can do everything. There must be strategic partners and a social circle; Therefore, those who make chips, operating systems, and software should be connected. So we are very excited. We are a general integrator and it is easier for us to make friends." Yang Yuanqing told 36Kr and other media.

In cooperation with Intel, Lenovo launched the Aura version PC with Core chips; In cooperation with AMD, Lenovo will be able to obtain the supply of its latest MI325X processor released in the first quarter of next year; With NVIDIA, Yang Yuanqing and Jensen Huang jointly released the world's coolest GB200 liquid-cooled AI server.

Yang Yuanqing and Jensen Huang jointly launched the sixth-generation Neptune liquid-cooling system; Picture provided by Lenovo

This is also the reason why Gelsinger, Lisa Su, and Jensen Huang took turns to appear at Lenovo Tech World. In the AI era, Lenovo wants to sell products to individual consumers, enterprise CIOs, and data center customers, and it cannot be separated from Yang Yuanqing's star-studded social circle.

2. What does the next generation of AI hardware look like?

The revenue from smart device represented by PC is the foundation of Lenovo's performance. In its first fiscal quarter of the 2024/25 fiscal year, Lenovo's revenue reached 15.447 billion US dollars, and the IDG (Intelligent Device Group) still dominated, contributing nearly 74% of the revenue (11.422 billion US dollars).

There is no doubt that AI PC is the focus of IDG's exploration, and its business growth trend has also surprised Luca Rossi, Executive Vice President of Lenovo Group and President of the Intelligent Device Business Group.

"In the PC field, our performance is better than all our competitors. The market share has reached 24%, which is our highest market share ever." When talking about the market performance of AI PC, Luca expressed a satisfied attitude to 36Kr and other media.

The AI PC matrix displayed by Luca Rossi; Picture provided by Lenovo

Although the growth is fast, from the perspective of the overall shipment proportion, AI PC accounts for less than 20% of Lenovo's total PC product shipments. However, in the interview, many Lenovo executives, including Yang Yuanqing and Luca, all mentioned that The current product form of AI PC is definitely not the most ideal hardware form in the AI era.

In the Lenovo Tech World exhibition area, 36Kr also experienced many concept products that Lenovo is still developing.

This PC product without a keyboard is called AI Buddy, and the smiling face screen below is based on the Xiaoxin Mini Pocket Host that Lenovo has already launched.

The R & D staff added a voice interaction screen to the top cover of the host. Just by saying "Help me search for the weather/stock price/air ticket price", AI Buddy can display the search results on the PC screen.

Lenovo's AI Buddy on display; Picture taken by the author

There is also a wearable product shaped like a ring called Lenovo 3D Track Point. Just put it on your finger, and by rubbing, dragging, rotating, snapping your fingers and other actions, you can switch the screen between 2D and 3D, and also perform design operations such as cutout and modeling.

Lenovo's conceptual product Lenovo 3D Track Point; Picture taken by the author

Removing the keyboard and mouse is Lenovo's definition of the next generation of AI hardware products. The interaction method of the keyboard and mouse is essentially the connection of text symbols. With the continuous upgrade of AI technology in speech and vision recognition technologies, the multimodal interaction method is becoming a new direction worth exploring.

"For devices, the best use cases and applications of generative AI are those that will be invented in the future - we are at the beginning of a new stage of PCs and devices." Luca told 36Kr and other media.

Centered on the existing AI PC form, Yang Yuanqing gave five product definitions in 2023, namely:

• First, it can run a personal large model that has been compressed and performance-optimized;

• Second, it has stronger computing power and can support heterogeneous computing including CPU, GPU, and NPU;

• Third, it has a larger storage capacity that can accommodate more data throughout an individual's life cycle and form a personal knowledge base to provide fuel for the learning, training, reasoning, and optimization of the personal large model;

• Fourth, it has a smoother natural language interaction and can even complete interactions through voice and gestures;

• Fifth, it has more reliable security and privacy protection.

But this is far from the end. In the interview after the Lenovo Tech World, Yang Yuanqing emphasized with a sense of urgency that in the future, the operating system and model will be integrated, and new leaders will emerge.

"We must be prepared for this. At least, we cannot be left behind as losers. We must strive to reach the top and become guides and leaders." He said.