Birthplace of Silicon Valley? I thought HP just made printers?!

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

• The Birthplace of Silicon Valley
• Sometimes a split is the best outcome for both
• Who’s owned a HP printer?

If that’s enough to get the ink cartridges running low, read on…

AI Collision 💥

IBM takes the biscuit this week for being the oldest of the four “old timers” at 113 years. Dell is the youngest at 41 years (OK, so probably not exactly an “old timer”). Intel too at 55 years is borderline “old timer”. But when it comes to Hewlett-Packard, it’s up there with IBM. HP has been a stable part of US (and global) tech now for 86 years (as of Tuesday).

It was in 1939 when Bill Hewlett and Dave Packard famously launched the company in a Palo Alto garage in 1939.

This may not look like much, but this garage still exists. HP bought it, restored it and it’s now a historic site, recognised officially as the “Birthplace of Silicon Valley”.

The first product it made was the HP 200A, an audio oscillator. This was a nifty electronic device designed to generate audio frequencies, mainly used for testing sound equipment.

What really set the company in motion, however, was one of its earliest customers, Walt Disney.

Disney bought eight of them to fine-tune the sound systems for Fantasia. That little device kicked off HP’s rise to tech giant over the coming decades.

But HP would eventually find itself in a quandary.

It had become a global conglomerate. That was thanks, in part, to perfect timing as it launched a desktop home printer in the 1980s just as the PC revolution was kicking into overdrive.

This put office equipment in the home and saw HP rise to become the dominant printer company of the 80s, 90s and 2000s.

But come 2015, the company had become so big that it was now effectively two giant companies. On one side was the printer, PC, computer and consumer device side of things. On the other was the “enterprise” side that dealt in servers, cloud storage, networking and more business side infrastructure services.

This led to a company split into HP Inc. (HPQ) and Hewlett-Packard Enterprise (HPE). At the time of the split (November 2015) HP Inc. stock was trading at around $14 and HPE stock was trading at around $8.

Today HPE trades at $34 and HPE at $21.

To give that some perspective, in the decade from 2005 to 2015 the stock price of HP ran at a small loss. For ten years, zero return on investment. And in the ten years since, 142% and 162% respectively. That’s not blowing the doors off in terms of performance, but the push to split the companies was certainly the right move.

Since the split, HPE has continued its focus on servers, storage, networking and, more recently, AI services.

With the AI arms race in full swing, HPE isn’t sitting on its hands. The company has been forging strategic partnerships with the likes of Nvidia, adopting GPU-based servers that can handle massive AI demand.

Of note, HPE acquired Cray supercomputers in 2019 and has been implementing its technology into its server systems ever since. This is starting to look like it’s paying off. News recently came to light that HPE was providing $1 billion worth of AI-optimised server infrastructure for Elon Musk’s X.com.

The interesting part of this is that Musk looks to be diversifying his server suppliers across his companies, opting for HPE with X.com but then Dell for xAI.

As for HP Inc, it just acquired the AI Pin company we wrote about previously, Humane AI. The product is being shut down and it won’t provide support ongoing. It will also integrate the team into its AI-enabled smart printers and conference room technologies. $116 million well spent?

To be honest, it’s hard to see exactly where HP Inc. heads from here. Printing technology looks to be on the out (who really prints anymore?) and its other device technology is in fierce competition with ever slimming margins.

HPE certainly looks the better of the two “HPs” left with its work in AI servers, integration with Nvidia tech and what appears to be a more US-focused approach to US homegrown tech companies.

I don’t expect it’ll be the kind of company that ever does 1,000% in a few years. But give it another decade or two and maybe HP becomes more famous for its AI infrastructure than it ever did for those historic things we called printers.

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Busters & Busters 💰

***We ran out of stocks showing a gain week on week in our AI watchlist. So, just for today (we hope) it’s the Busters & Busters section***

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

Bust 📈

• Qualcomm (NASDAQ:QCOM) down 7%
• Micron (NASDAQ:MU) down 12%
• Tesla (NASDAQ:TSLA) down 14%

Bust 📉

• Amazon (NASDAQ:AMZN) down 6%
• Taiwan Semiconductor (NYSE:TSM) down 6%
• Meta (NASDAQ:META) down 8%

From the hive mind 🧠

• It’s hard to think that these two are in any real threat of losing their livelihood to AI. I mean, I can’t see robots on the stage anytime soon and replacing real actors. Then again, the concept of AI “stealing” ideas is fair, but then again, aren’t all ideas iterations and influence from other ideas? And who’s to say that AI doesn’t enhance the creative human mind by allowing it the time and freedom to be more creative?
• This is a strange test to do with AI to conclude it’s a window into the human mind. After all, AI is currently trained on the human mind so you would very much expect that its insight is that from within the human mind…?
• This isn’t going to change anything.

Artificial Polltelligence 🗳️

Weirdest AI image of the day

1920s Playstation ads

ChatGPT’s random quote of the day

Thanks for reading, and don’t forget to leave comments and questions below,

Sam Volkering

Editor-in-Chief

AI Collision