'From search to ask': Acer CEO on fundamental change in tech

From rapid AI development to venturing in eSports, Acer (2353.TW) is embracing many of the possibilities that new age tech has to offer. Acer CEO Jason Chen joined Yahoo Finance Executive Editor Brian Sozzi to discuss a range of topics including the wild, wild west of generative AI, sustainability practices, chips to tailor made for eSports, and more.

On the subject of AI, Chen explained the exciting paradigm shift in personal computing: "I think the biggest thing is the usage model will change from search to ask...Today, we use computers running on search engines such as Google (GOOG, GOOGL) to try to find the information we need but they will give you search results, give you a lot of information that you still have to read through and pull out what you need. In the future, the usage model is going to be, you ask the computer, the computer will do in the background all of the search and then pull out what you need and compose the kind of article or graphic that you need."

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Video transcript

BRIAN SOZZI: All right, welcome to Yahoo Finance Invest Asia. Joining us now is Acer chairman and CEO Jason Chen. Mr. Chen, great to have you here at the conference. We greatly appreciate the time. I think so many US investors and consumers know your business through the lens of gaming computers, but let's zoom out here. What is the state of your business right now on a global perspective?

JASON CHEN: Hi, Brian. It's good to see you, and hi, everyone. Yes, gaming PC is one of the important part of our business, but our business go beyond just gaming and beyond PC. In fact, we redefine our business scope from PC, from computer to computer science. From computer science, now, we push the boundary all the way to lifestyle. So we do have all kinds of different business in different areas from computer to monitor, from commercial to consumer, and then to from hardware to software, cyber security to generative AI accelerator as well.

BRIAN SOZZI: As we look into to next year, what are some of your biggest priorities in terms of driving innovation?

JASON CHEN: In this area, we keep thinking about it. What are some of the areas that we would like to target and we want to focus? And I would say that in three areas. Number one is we want to be a good role model of ESG, so environmental protections.

We are doing the best we can to use recycled material to embed that into our computer related products and home appliance as well. And second level is to make sure that we do enhance our corporate resilience and enhance other companies corporate resilience, including introducing our cyber security service together with building up multiple business engine to enhance the business resilience. The third level is to make sure that we utilize well artificial intelligence into medical and health care area.

BRIAN SOZZI: In terms of AI, we talked a lot of folks, such as yourself, in the computing industry, and the vibe is that this will fundamentally change how human beings interact with their computers. What are some of the biggest things that you see happening to the personal computer because of AI?

JASON CHEN: From personal computer view, I think the biggest thing is the use that will change from search to ask. So think about that. Today, we use computers and running on a search engine, such as Google, and try to find the information we need. But they will give you the search result, give you a lot of information that you still have to read through and pull out what you need. In the future, the usage model is going to be you ask computer. The computer will do it, in the background, all the search, and then pull out what you need, and compose the kind of article or graphic that you need.

BRIAN SOZZI: Can you get the chips that you need to support where AI is going and how fast it's going to change the computer? I think we look at companies, like NVIDIA. They can't make enough chips to supply the innovation we are seeing in this industry.

JASON CHEN: There are many companies, multiple companies that work in AI related initiatives, software, hardware. But most important, I still think, is the usage model change, and what usage do people want? So [INAUDIBLE] business is working with tens customers on building up proof of concept on particular projects and specific segments on how to utilize this generative AI technology. And then second thing, people have to decide whether that will be Cloud or be an edge. Then we will decide on which device and what kind of software will be needed. Then at the end of the tail will be what kind of chips will be needed, so it will be a value chain and supply chain change.

BRIAN SOZZI: As someone that has spent, really, their entire career in tech, Jason, what's your level of concern that Artificial Intelligence is moving too fast and there aren't proper guardrails in place?

JASON CHEN: I don't think so. I disagree with that. I think we still have a lot to do. Artificial Intelligence is there for 10 years. The most recent fundamental change is generative AI, and I'm very, very excited about what is happening now. And it can't be fast enough.

BRIAN SOZZI: Is gaming probably the most exciting area of your business? I think about what video game companies are working on. Microsoft now has-- they own Activision Blizzard. I imagine the power of the processors could really change the gaming experience, by extension, what you do at your company.

JASON CHEN: You are very right. The power of graphic, the power of CPUs, and the power of connectivity chips are very important, especially the game content itself is taken from 2D to 3D, from a first person shooting game to a strategic games. And we are even working with the fashion industry to come up with clothing and equipment the gamers will appreciate within the game.

BRIAN SOZZI: What some of your key products to the extent you can share that you're going to launch next year that you think will change the shape of your business?

JASON CHEN: I think a fundamental thing that we can tell you is we are multiple solutions, both on the hardware side, as well as on the software side. On the hardware side from server, AI based server to AI based PC computers. From the software side will be from computer science related AI based medical image diagnostic and screening tools, solutions, and then introducing generative AI to multiple sectors, both on public, as well as private enterprise.

BRIAN SOZZI: The demand for computers this year has been challenging notably in the first half of this year. Consumers certainly bought computers during the pandemic, but now, they're back to spending on various experiences, such as vacations. Has the PC business, has that bottomed in your view?

JASON CHEN: Yes, we already saw the bottom reach the bottom in about May time frame. Ever since then, the demand has come back to, I call it, the normal seasonality level. And if we compare our demand, today, the business, today, versus what we have experienced pre-pandemic 2019, now, we're actually seeing a bit better than 2019 after the cycle of COVID.

BRIAN SOZZI: I look at the computers that I use in my life, and they just don't seem equipped to handle Artificial Intelligence. Do you think there's some form of computing supercycle or an upgrade cycle coming, so that consumers can unleash the power of AI?

JASON CHEN: You are very right, because what happened is the usage model change will stimulate the market demand or the PC demand. The fundamental usage model from search to ask will change, and that will require a different level of semiconductor computing power and graphics power. And that will then generate another wave of demand. We firmly believe that, and we are excited about that.

BRIAN SOZZI: There's a lot of key or just big developments coming at leaders, such as yourself, Jason, geopolitical unrest, fears of global slowdowns. What's your biggest challenge as a leader looking into next year?

JASON CHEN: Well, uncertainty. We think the uncertainty will come from geopolitical tensions, and now, because of geopolitical tensions plus globalization benefits, then homestead economy become the mainstream. That will restructure the global supply chain that we have to get ready for.

BRIAN SOZZI: Given that uncertainty, does that change how you plan for your business? So are you more cautious in how you allocate capital or hire people?

JASON CHEN: We don't-- to start with, we don't really have our own manufacturing site. So we use the third party manufacturing. We call them ODMs or EMS, and we will have to learn more and more to sourcing, working with a local supplier other than just a global supplier at this moment.

BRIAN SOZZI: Are you still a believer in globalization?

JASON CHEN: Not as much as I did before. I think that globalization will gradually move into homestead economy, and that's an evolving process and will happen quickly.