Episode 45: HTC, Google and the Future of Mobile

**Ben Gilbert** (0:00)
Well, this is nuts. It's like leaking out as we speak.

**David Rosenthal** (0:04)
Yeah, coming at you live.

**Ben Gilbert** (0:17)
Welcome back to episode 45 of Acquired, the podcast about technology, acquisitions, and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:24)
I'm David Rosenthal.

**Ben Gilbert** (0:26)
And we are your hosts. Today, we are live covering the leaks as they come out. Well, Google is apparently about to acquire HTC, or at least a part of HTC. And David and I are hitting refresh on our browsers while recording this on the evening of Wednesday, September 20th, around 8 p.m. Pacific time. And even since we decided a few hours ago to shift course and dive into this episode instead of one that we will do next week that is less time-sensitive, there's been new information.

**David Rosenthal** (1:03)
Yeah. We're coming at you live here on Acquired.

**Ben Gilbert** (1:08)
So we decided that the way we want to structurally do this is we'll sort of state our assumptions about what we know because David and I were talking about it and we're pretty sure that we know the majority of the information that will be announced tomorrow. And so we'll sort of state what we know and then you know if we need to pop in and revise at the beginning of the episode or something, which you will have already heard if you're listening to this, then we will. So everything that you'll hear is based off of some assumptions that we'll introduce.

**David Rosenthal** (1:38)
Yeah, there's like, there's some serious time travel going on in this episode, because you guys will be listening to this in the future, obviously. We're here in the evening Pacific time on September 20th. It's already morning in Asia. And so the official news is starting to come out over in Taiwan. And of course, the leaks were coming out yesterday in Taiwan, which is still today here in Pacific time.

**Ben Gilbert** (2:07)
Yeah, and the most obvious one that's not a leak, that's a public announcement, is that HTC will not be trading tomorrow because of a large announcement that is likely to significantly impact the shareholders. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (2:26)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners, and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose-built for AI and run on wasted, stranded, or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (2:51)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO Chase Lockmiller.

**David Rosenthal** (2:57)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (3:15)
Yep. Obviously, it's a huge benefit for the environment and for customers on cost since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay Nvidia for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (3:31)
It's super cool that they can put their data centers out there in these remote locations where quote-unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure, who need to build their data centers close to major traffic hubs where the internet happens because they are doing everything in their clouds.

**Ben Gilbert** (3:48)
Yep. If you, your company, or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusocloud.com/acquired. That's crusoecloud.com/acquired, or click the link in the show notes. Now, David, before diving into these acquisition history and facts of HTC, let's throw out for the audience what we know and what we believe now.

**David Rosenthal** (4:17)
Right. So tomorrow, September 21st, it's looking like it will be announced that Google is going to acquire a large portion of the engineering team at HTC. So they are not acquiring the whole company, is the best information we have thus far. But they are paying just over a billion dollars to acquire about half of the employees, and specifically the group of hardware employees.
And I believe that's also along with the manufacturing plants and supply chain assets that worked on the Google Pixel phones that they released last fall that HTC made for them. So that is current state of play. They are acquiring about half of the people in the company. But HTC has a company itself and all of its brands and its own operations are still remaining independent.