 From San Francisco, it's theCUBE. Covering Micron Insight 2018, brought to you by Micron. Welcome back to San Francisco Bay, everybody. We're here covering Micron Insight 2018. You're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante. I'm here with my co-host, David Floyer. Sanjay Marotra is here. He's the president and CEO of Micron. Sanjay, thanks very much for coming on theCUBE. Great to be on the show. So quite an event here. First of all, beautiful venue. Lovely venue. Got the Golden Gate that way. We got Knob Hill over there. So tell us about this event. It's not just about hardcore tech and memory. You guys are talking about AI for good healthcare, changing the world. What's behind that? Yeah, our focus is on AI technologies and how AI is really changing the world in terms of life, in terms of business, in terms of health. This is a showcase of how these technologies are in very, very early innings. They have just barely begun. And what's happened is that AI algorithms have been around for a long time, but now the compute capability and the memory and storage capability have advanced to the levels that you can really mine through a lot of data, real time, derive a lot of insights, and translate those insights into intelligence. And Micron plays a pivotal role here because our memory, our storage, is where all this data resides. Where all this data is processed. So we are very excited to bring together many industry figures, industry luminaries, thought leaders, researchers, engineers, all here today to engage in a dialogue on where technology is going, where AI is going, how it's shaping the world, and for the realization that hardware is absolutely central to this trend. And memory and storage is key. And we are very excited about what it means for the future. So a lot of thought leaders here today. Well, first of all, you guys have some hard news, which is relevant to what we're talking about. Talk about the $100 million fund and how you've deployed it. Even just today, you've made some sub-announcements. So one of the things we announced today is we are launching a $100 million fund to support, to fund startups in AI. Because we really think AI is going to transform the world. We want to be in the front row with not only the large existing players that are driving this change, but also the startups that will drive innovation. Having the front row seat with those startups through our investment fund will really help us accelerate intelligence, accelerate time to market of various AI applications. So our $100 million fund is targeted toward supporting startups that are developing AI technologies. And what I'm really excited to talk about here is that 20% of that fund will go to startups that have leadership that is represented by women or underrepresented groups, those groups that are underrepresented in tech today. This demonstrates Micron's commitment to diversity and inclusion in the technology space. Well, first of all, congratulations on that. We're big supporters of women in tech and diversity. It's something that we cover on theCUBE extensively. And now you've announced two grants just today, half a million dollars each. One with Stanford, one with Berkeley that we heard. We heard Amazon up on stage talking about Alexa AI. Microsoft was on stage. We had Nvidia on theCUBE earlier. So bringing together an ecosystem that involves academia, your partners, your customers, talk about that a little bit. So the two grants that you talked about, those are from Micron Foundation that is again supporting advancement of AI and AI research as well as teaching of AI to kids so that we can build a pipeline of strong engineers and technologists of the future. So the two grants that we have announced today are one to Stanford Precision Health and Integrated Diagnostics Center, 200,000 grant to Stanford, pioneers in AI applications to precision management of your health, very exciting field that will really truly enrich life and prolong life in the future as well as advanced detection of diseases. Second, $200,000 grant that we are giving us to Berkeley Artificial Intelligence Research Center, absolutely cutting edge that will be applicable to many industries and many walks of life. These are intended to support advancement of AI research. In addition to this advanced curiosity grant to these two institutions, later today you will hear that we'll be announcing a $100,000 grant to AI for all. And this is an institution that is encouraging women and underrepresented minorities at high school level, 9th grade to 11th grade to pursue STEM careers. So Micron is really promoting study of advanced research and supporting the pipeline. In addition to this, of course our focus today is on bringing together industry luminaries, just like you mentioned NVIDIA, Qualcomm, autonomous driving of the future, automotive partners, BMW, Vistion, really to engage in a dialogue of how AI is advancing in these various applications. We just heard a great talk from vice president at Amazon on Alexa devices, really, really exciting how those devices are truly making your life so easy and so intelligent. We heard from Microsoft corporate vice president of AI research. So you see we really are as leaders in our industry, we are really bringing together industry experts to engage in a thought-provoking and inspiring dialogue on AI so that when we leave here today, we leave with insights into what is coming next, but even more importantly, what do we all need to do to get there faster? And this is all about technology. So Sanjay and David too, Micron is one of the few companies that was here when I started in the business and it's still around. At the time, you were just a component manufacturer doing memories and wow, to watch the diversification of Micron over the years, but also recently, I mean it's incredibly well-run company, so congratulations on the recent success. At the analyst event in New York City this year, you talked about not only that diversification and your investments in innovation, but you talked about the cyclicality of this business, the historical cyclicality of this business. You've dampened that down a little bit for a variety of reasons, that the capital requirements in this business are enormous, there's been consolidation, so how is that going? Talk about the trends in your business both in terms of diversification and your ability to make this business more predictable. So Dave, you're very right to know that Micron is 40-year-old company. We actually just turned 40, very proud of it, and really a company founded on the principles of innovation and tenacity. In fact, the company has contributed to the industry, to the world, over the course of 40 years, 40,000 patents. Just imagine there's 1,000 patents a year, three patents a day, over the course of 40 years. We are really a prolific inventor and we absolutely, through our innovations, in memory and storage, have shaped the world here. As technology advances, it really unleashes more applications and this is what has brought about the change in our industry. Today, memory is not just in your PC. Of course it is in this PC, but it is also in your data center. It is going to be the autonomous vehicles of the future. You're going to have as much memory as what you had in the server just a few years ago. It's inside your mobile phone, artificial intelligence, facial recognition is only possible because of the DRAM memory that you have in there. You have NAND flash that is in these devices, and with technology advancing, that's bringing down the price points of NAND flash, really bringing more SSDs into these notebook computers, making these notebook computers lighter, longer battery life, more powerful. And of course flash, solid state drives are also replacing hard desk drives in data centers and cloud computing. So many applications, these diverse applications really have brought greater stability in our industry. And of course technology complexity has over time moderated the supply growth and that's what we mean. That the cyclicality of our industry, yes, one or two quarters here or there you can have demand and supply mismatches, but overall when you look at the demand trends and combine them with the moderating supply trends, the long term trajectory for our industry is very healthy. In fact, we just completed a record year. Our fiscal year 18 was a record $30 billion year for us with profitability that puts us at the very top of the most companies with 50% operating margin and with 30 billion in revenue, we are actually number two largest semiconductor company in the US. In lot of opportunity ahead, given the demand drivers that are there in our industry. You've said publicly the stock is undervalued, which is, I don't know any CEO says it's overvalued, but nonetheless, the performance that you've had suggests that you very well might be right. Go ahead, David, please. Yeah, I just wanted to ask your opinion on, you are leading in this area now very, very clearly. You're growing faster than the industry, you've had a magnificent year and the whole area is growing, both the NAND and the DRAM. How are you judging how much to invest in this for the future? What's the balance between giving money back to the stockholders by buying stock back or versus investing in this, what seems to me a very, very exciting area? Do you have an AI algorithm for that? We are in a great position where we are extremely disciplined about investing in CAPEX to reduce cost of production and to deploy new technologies into production. We are very ROI focused in terms of any CAPEX investments we make. We, of course, invest in R&D. I mentioned earlier 40,000 patents over the course of 40 years that only comes through investment in R&D. Investments in R&D are essential because we are today the most comprehensive technology solutions provider in memory and storage in the world. With our DRAM, our flash, our 3D cross-point technologies, as well as future emerging technologies, we're really positioned as the only company in the world that have all of these memory and storage technologies under one company roof. So we do invest very thoughtfully and we manage our expenses very carefully but we do invest in R&D. And of course, we are committed to driving shareholder value as well. And we had announced earlier in the year $10 billion share buyback program with at least 50% of our free cash flow every quarter on an annual basis, actually. 50% of our free cash flow on an annual basis going at least 50% going toward share buyback. So we are managing the business, all aspects of it, excitedly looking forward to the opportunities at the same time, prudently, in an ROI-driven fashion, building shareholder value through investments in R&D and manufacturing. Well, of course, the great Warren Buffett, David, says that when asked if stock buybacks are a good investment, says if your stock's undervalued, it's a good investment. So obviously you believe that, Sanjay. So thanks very much for coming on theCUBE. It was great to have you. I hope we can have you back again, because we can talk to you for a long, long time. All right, keep right there, everybody. We'll be back with our next guest. We're live from San Francisco Bay, Micron Insight 2018. You're watching theCUBE.