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HPE-Nvidia partnership will make AI enterprise history: CEO

Hewlett Packard Enterprise (HPE) announced a new partnership with chip giant Nvidia (NVDA) at its HPE Discover 2024 event in Las Vegas this week, where the former unveiled its "Nvidia AI Computing by HPE" portfolio of AI products. Among these new offerings is the HPE Private Cloud AI.

HPE CEO Antonio Neri joins Yahoo Finance's Josh Lipton and Yasmin Khorram

"And the core of that, we really focus on the enterprise segment of the market, because when you think about AI, there is the model builders and the hyperscalers, you have the sovereign clouds, and the enterprise," Neri says. "Obviously, we've already seen tremendous traction on the model builder side and the hyperscalers, but we focus on enterprise. And at the core of that is how we deliver a simple AI solution to consume on-premises."

Neri was joined onstage by Nvidia CEO Jensen Huang to announce this partnership at Neri's keynote address on Tuesday, June 18. Neri foresees the partnership to "accelerate that adoption" of HPE's enterprise services.

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Many consumers are still hesitant to engage with AI, which Neri assures he has greatly considered "the human focus" and concern about data security: "And so the point is that we built all of those guardrails into the offer itself. And we believe this is going to help customers feel more comfortable around this. But ultimately is the data-first approach. And we need to make sure that we protect our data."

Neri also touches upon Hewlett Packard Enterprise's AI servers and what sets them apart from the rest of the industry.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Luke Carberry Mogan.

Video transcript

H PE Discovery is underway this week in Las Vegas.

CEO Antonio near gave us, you know, at the sphere where he announced a new partnership with and video.

Antonio, thank you so much for joining us here on Yahoo Finance.

Let's get started with this new partnership with video who seem to be a the gold standard of a I right now talk about that relationship and what you both hope to accomplish with this announcement.

Well, good morning.

Thank you for having me.

I hope, uh, you don't hear a lot of noise, but we have 15,000 people behind me at the show floor.

This is a seven acres of innovation that we are displaying here in Las Vegas.

But as you said, uh, Jasmine, uh, we hosted the keynote of the sphere.

It was a remarkable combination of a story and a I and the Jensen joined me to announce the NVIDIA Computing Initiative by HP and the core of that, we really focus on the enterprise segment of the market.

Because when you think about a I, that is the model builders and the hyper scalars, you have the sovereign clouds and the enterprise obviously We already seen a tremendous traction on the model builder side and the hypersal.

But we focus on enterprise, and at the core of that is how we deliver a simple A I solution to consume on premises.

And we actually, for the first time in the history of the A, I we announced a turkey full cog engineer solution that the core is a simple experience to deploy its three clicks and 24 seconds to have an A I model deployed in your enterprise.

And that offer comes with NVIDIA silicon, NVIDIA, uh, software A I enterprise names and others plus H PE infrastructure of servers and storage plus HP software that complements that software from NVIDIA and also security built at the core so very excited.

And Jensen and I believe this is going to accelerate the adoption in enterprise to drive the generative a i industrial revolutions.

Antonio, you know, on this partnership with NVIDIA, I think a lot of investors want to know When do you think Antonio, this is gonna have a positive, meaningful impact on your financials?

I. I know it's early days and of Antonio, but what?

What can you tell investors How How are you thinking about that?

Well, Josh, it's already having an impact, because in my last earning reports, I reported that more than 15% of our orders are already related to Enterprise.

And this announcement is going to accelerate the adoption in a much easier to consume as a part of our HP Green Cloud offering.

So we expect this to accelerate that adoption, and we hope over the next 2 to 3 quarters we start seeing the benefit of this.

But remember, we already see enterprises adopting it, and we already see, uh, 15% plus already in our box.

Antonio, in your key.

Now you emphasise that A I is hard and full of risks.

We've seen plenty of that on the consumer and content side specifically with accuracy.

I'm curious.

What kind of challenges are you facing in enterprise and hardware?

Well, actually, I at the beginning of my keynote, I talked about the key ethical principles we need to guide ourselves and be the steward of those are simply as human focused safety, security, which means Ilan, security and and others.

And we build those principles Jasmine in this offer.

In fact, in this offer, You know, the provenance of the model, the governance around the data that we put together.

In fact, we built a data lake, uh, say security model in the offer itself.

And then also, we put the guard rails so the guard rails associated with the large language models come with this offer.

Uh, I actually my team and I worked on a fun thing to engage customers to.

The show floor is called Antonio Nely, but as an avatar of myself, and you can go ask questions to them about anything.

But what was amazing to me was the guard rail so that Antonio doesn't hallucinate.

And so the point the point is that we build all of those, uh, guard rails into the offer itself, and we believe this is gonna help customers feel more comfortable around this.

But ultimately, it is the data first approach, and we need to make sure that we protect our data.

Antonio, I wanna dig a little bit more into your a i servers and two questions for you.

One is the competitive landscape, Antonio, I'm interested in what you think makes your a i servers different and better than what Michael Dell is selling right now.

And two Antonio, broadly, it does look like investors have questions about the margins of A i servers.

It doesn't seem like everybody is necessarily increasing profits by selling them.

Is that your situation?

Well, thank you for the question, Josh.

Here, behind me is one of the reasons why we differentiated.

Uh, there are people probably looking at the racks right now, and that's the direct liquid cooling capability.

As you know, as we transition the road map from, uh, the current generation, which is the H 100 to Grace Hope and eventually Black of Blackwell, Ruben and Beta Blackwell would require 100% directly to cool and H. PE has hundreds of patents in that specific space, and we have been doing directly for cooling for more than two decades, more than two decades.

In fact, that system behind me is a supercomputing system.

But ultimately you also need to manufacture this.

And so we have one of the largest water cool facilities here in the US and another one in Europe.

So as we make that transition, HP will be uniquely positioned to adopt this new technology with a higher power density, and that's why it's a huge differentiation.

Second is the services capabilities.

It's not about just selling servers.

It's about deploying a generative a I solution and ultimately making sure that runs sustainably and consistently.

And that's the other reason why our profitability is solid If you go back to our our Q two results.

We we said we grew revenues in our A I servers by 18% year over year, and at the same time we deliver a solid operating profit performance of 11%.

And that's because it's not just the margins of servers.

It's the margin associated with the software and private cloud includes all the software and also the fact that obviously we do all the services and when you this to Green Lake.

Actually, we manage all that infrastructure on behalf of the customers, and therefore there is even more margins which are differ over time.

And that's why we are, I think, a very unique, uh, position for what comes next and be able to deliver solid operating profit performance