How Lenovo's CFO Is Allocating Capital During One of History's Biggest Booms

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Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway. And I'm Joe Weisenthal. So Joe, we are here in Hong Kong, still, and we're learning a lot of different things, a lot of interesting things. One of the most interesting things we heard actually came yesterday from the Baidu CFO, where we were just talking casually ahead of our interview, but he was saying that the word token has now officially been added to the Chinese Mandarin Dictionary, and that the characters that actually make up the Chinese word for token are something like word currency. I think that's so fascinating. I'm fascinated by the etymology of the word token specifically, so I was thrilled to hear that. But it is, it's like we know the word token in the monetary context. We know Chuck E. Cheese tokens, we know crypto tokens. But we also know that since the middle of the 20th century, linguists have been using token to describe more or less a word. And then obviously with LLMs, we talk about these linguistic tokens a lot. So to see that in Chinese, the formal term is a merger of these two concepts, is I find a very intellectually satisfying thing to learn about. Bringing up Chuck E. Cheese tokens is really a way to make sure everyone knows that you're a millennial. Yeah, that's right. That's right. Arcade, I should just say arcade token. That's right. Okay. I think what's really interesting about Word currency itself is it implies that it's connected to spending.
So when you think about the big companies that are spending all this money on tokens, and I guess the AI infrastructure build out more broadly, CFOs become really important, right? Totally. So the headlines by and large are about CapEx, right?
That's going to continue to be because of the data center builder. We're going to talk about that. But a lot of it is also going to be OpEx, and figuring out how to within a company allocating token permissions and caps and so forth, and I doubt anyone has figured out the final answer.
But if two different people can get different value out of using AI models, then there is no way that it makes sense for them to have the same token budgets. By the way, Tracy, can I ask you a personal question that I've never asked you before? Oh, okay. Outside of the work context, are you a Mac or a PC person?
Oh, I only have work computers at the moment. Okay. All right. Before that, but don't touch the question. Before that, definitely PC. Okay, good. Me too. In fact-
It's not a choice, is it? Sorry, I really don't like Macs. I don't either.
In particular, I am long been a fan of what used to be the IBM Thinkpad laptop with the famous red button, which is now owned by Lenovo.
That's right. You've talked about that computer before. Yes. I can say that this is categorically true. Joe likes that computer. But what's interesting about Lenovo is like, okay, it's famous for the computer with a little red button in the middle, but it's now making an AI play. Sure. I mean, everyone's making an AI play, but it's doing it from a different perspective. AI integrating into the actual computer, the hardware. Yeah. But it's also doing Cloud.
This is a really good opportunity to, I guess, take the temperature on AI, the AI build out, the AI spend from a bunch of different perspectives.
We do in fact have the perfect guest. We're going to be speaking with Winston Cheng. He is the CFO of Lenovo. So Winston, thanks so much for coming on Odd Lots. Hey, thank you Tracy and thank you, Joe. Why don't you go ahead and describe what Lenovo is and what the AI play is, and how it actually fits into the existing business. Lenovo is a global AI infrastructure company that provides pocket-to-Cloud AI infrastructure for the consumer and the enterprise. I think that's really in a nutshell.
Today, we're able to provide this to hyperscalers, which are doing a lot of the spending, are driven by training demand today, and then given our IBM x86 heritage, which we also acquired the server from IBM actually, so we actually are very strong in CPU compute as well, given that IBM was a dominant player in the x86 architecture.
From that perspective, we're well positioned for conferencing needs of the enterprise and also the hyperscalers in terms of in the cloud as well. So I think from the perspective of then, you talked about tokens, and I think from a token perspective, really today, people are on the early stage of how much I'm really paying for. I heard someone saying that there was an engineer at a particular company, which I will not mention, that apparently spent $100 million in a month on tokens.