BrainChip Holdings Ltd (BRN) Earnings Call Transcript & Summary

Welcome to the BrainChip Virtual Investor Roadshow. Following the formal presentation, there will be a Q&A session for investors and analysts. Participants can ask both text and live audio questions during today's call. [Operator Instructions] The broadcast will be replaced by the audio questions interface. [Operator Instructions] I will now hand over to Sean Hehir, BrainChip CEO.

Thanks, Josh, and hello, everybody. It's good to be here. And let me begin by thanking all of our attendees and shareholders not only for attending today, but their ongoing support of BrainChip. The format for today is I've got about 20 to 25 minutes of prepared content, and then I'll open up for Q&A. The goal here is, of course, to share as much information with everybody on this call, so the more questions, the better. So, I encourage you, if you haven't submitted a question, then please think of a question, so I can answer it in the second half of this call. But before we begin with the presentation, I've got 2 important pieces of business that I want to cover first. The first one is I want to welcome to the broadcast with me the newest member of the leadership tier -- team here at BrainChip, Dr. Tony Lewis. As you all know, this company was founded with the vision and hard work of Peter Van der Made. When Peter talked to me last year about his planned retirement and I began my search, I was looking for a candidate with very specific credentials, one with the academic background not only in AI and engineering, but neuromorphic technologies. I was looking for a leader with very relevant industry experience. Additionally, I was looking for somebody with the right team orientation, somebody that had a background of bringing products to work in a maniacal customer focus, all the things we work with here at BrainChip. I could not be more pleased when I found Tony. With that, I want to welcome Tony. I'm going to ask him to answer a couple of key questions. First of all, tell us a little bit about yourself, Tony, and why you decided to join BrainChip.

Okay. Thanks for that question, Sean. Well, I think my entire career has been leading up to this position as CTO at this company. I have a PhD in brain-spired computing and robotics. And you can think of robotics as the ultimate IoT device. I've led multiple large research groups at universities and in the industry. I ran my own research company in neuromorphic and robotics, and it was funded by the U.S. government and industrial partners. I've had experience across a wide variety of industries, and this makes me more sensitive to the needs of people, not just in one particular market, but in many markets. So, I have experience in the defense space, biomedical, environmental monitoring, mobile phones, and personal computers. In particular, at Qualcomm, I was in charge of the largest research project outside of wireless in corporate R&D, and we were focused on brain-inspired computing. And this was about over 10 years ago, but [ deep learning ] at the time was just taking off. And I can see that this is going to be big and it's going be something that's really going to take the world by storm. And so I shifted the focus of this brain-inspired research group to [ deep learning ]. And right now, Qualcomm is really enjoying a lot of the benefits of [ deep learning ] on their devices. At that time, I also developed an interest in large -- in language models and modeling language. I thought this was going to really start to take off. That was around 2017 or so, and just at the invention of transformers. I moved to HP, where I was Global Head of the AI and Emerging Compute Lab in the office of the CTO. And so we were looking at AI and how -- and compute paradigms and how we can exploit them to improve our products. But interestingly, working for the CTO, it's the perfect place to get training to be a CTO. So, I got to see -- I believe I got to see a behind-the-scenes look at the longest-lasting tech company and its great management practices. And what I have noticed across my work is that I do my best work when I'm working with a close-knit team. We're working hand-in-glove. We can complete each others' sentences, and also, I have the support of the great boss. And I think that I have those things here at Brainship. And so I really think that all the necessary things are in place for me to really excel. Now, you asked me why did I join BrainChip? And let's see. It was sort of the obvious thing to do. If you look at the macro environment for artificial intelligence, we're really in the golden age of AI. We've never seen such an exposure to AI that really seems to be sticking. Now, cloud processing, I feel, is just the first act. Right now, though, it's proven to be massively expensive. It's using too much energy. It's simply not green. And if you care about green, it's either the environment or how much it costs for energy. It's not going to have a good impact. Latencies are always going to be large. You're never going to be able to handle real-time traffic. The Internet itself was never meant to handle real-time traffic. And so your only choice, if you want to act fast, you want to save energy and save money, is to move to the Edge. And that's firmly where BrainChip plays. Now, the challenge, of course, it's not a perfect market. There is some market fragmentation. And so BrainChip could be in a good place to benefit from this. So, we have highly customizable IP that can serve many different markets. And so we have one platform that can be exploited in many different ways. Also, I should mention that it's not just the macro environment. It's the particular people in BrainChip that attracted me. So I very much enjoyed talking to Peter before he retired. And I think we saw eye-to-eye on a surprisingly high number of items. That was really exciting, in particular our long-term perspective on AI. And we both agreed that brain-like computing is the future, and we need to incorporate more aspects of the brain into our computers. I met Anil and I think he took a very pragmatic approach. So, it's not just we're going to import everything we know about the brain, but we're going to import particular things that we know are going to improve how modern machines work. And then, of course, there's Sean. So he was a great salesman, who was very transparent about what BrainChip was all about, and I found that very refreshing. Now, a very important aspect that attracted me was the capital structure. Most things involving hardware take a long time, and a lot of venture capitalists just are not engineered to have patience to fund hardware startups. They have to. So, they don't make good long-term investors. But I believe the public market can be patient as we figure out this brand-new market and how we can take a leadership role in it. So that's about it. It just seemed to make a lot of sense for me to join BrainChip, and I'm pretty happy to be here.

Great. Great. Well, welcome to BrainChip. And all of you attending this will have a chance to ask Tony and myself some questions on the end. So with that, let's advance to slides, please, Josh. Please take a moment to read our forward-looking statements. And advance again, please. So, the second piece of information or activity I wanted to cover before getting into the meat of the presentation was CES. A lot of pre-submitted questions on CES, so I thought I would address it right up front. CES was a very important event in the history of BrainChip. It is the first time we ever were there as an exhibitor. We've attended in the past with 1 or 2 people as attendees to gather intelligence and interact with people. But this time, we did it right. We made - we had a suite, a booth, manned by sales engineers, marketing. We have demos in there from ourselves and our partners. We had a large number of prospective customers come in and have intense conversations with us. We had industry analysts come in and get educated on our offering, which is really important for them to spread the word of BrainChip. And then, of course, we had very important ecosystem work that I speak a lot about with further advances. We had many ecosystem partners and -- existing and potential new ones that had conversations with us there. And then we had amazing podcasts that came out of there. If you haven't listened to them yet, I would encourage you to do so. In those podcasts, we hear thought leaders in the industry talk not only about the AI Edge but they'll also talk about BrainChip and what they think about us. So please listen to them. And on the social media front, you can see some of the views on there. It was a tremendous impact and a great event for BrainChip in bringing out our awareness out, and that's a critical part of our story, is getting the story out in these kind of events. We can talk more about it in the Q&A, but let's begin the presentation. Next slide, please. So, BrainChip, we're leading the generational shift to Edge AI, real-time AI inference [ meets ] Edge compute. The cloud is no longer the only environment for AI. But just like the cloud, the cloud needed special hardware to run AI well, and so does [ at ] the Edge. And that's exactly what BrainChip does. We create intellectual property for companies that want to create a custom piece of silicon or a chip to run AI exceptionally well for their environment. That's what we do. We augment that with some hardware offerings, which I'll talk about a little bit later, but it's that IP offering to help people build those unique pieces of silicon to support the Edge movement. A couple of things I want to share before we go into our strategy. We believe that we're the first -- we know we're the first neuromorphic company to commercialize that. We have a robust and flexible IT business model. We have a growing ecosystem of partnerships with commercial momentum, and I'll talk a lot about that later on, the commercial momentum. We have a world-class team and a world-class Board, not only the executive team, but the entire company. And I'll talk a lot about the people we have in this company as we get further into the presentation. And then, of course, we have a very strong patent portfolio, which is critical to success when you're in the IP business model. Next slide, please. So all this is begin with beliefs. And I think it's very, very critical to have those beliefs in place when you go in. Then one is what we know is true; AI will be the great next economic driver of this decade and future decades going on. Just like agriculture was, industrial was, actually, the Internet was, AI as that driver right now. And we can go -- we can spend hours just talking about that, but it's undeniable, that trend. Equally undeniable is the movement towards the Edge right now. Eith the Edge movement, it's absolutely critical. That's an undeniable trend, that workloads will happen outside the data center. That market is highly fragmented. And that, over time, like all markets, they will -- a leader will emerge. We plan to be that leader or 1 of the 2 leaders in that market. We also believe a novel approach with prevail. Doing a me-too product is never a winning strategy. We have breakthrough technology and a novel approach that I mentioned earlier with the word neuromorphic, and I'll talk about that in a bit, why that matters and why it fits so well for the Edge. Our strategy is to enable the entire Edge. When I talk about competitors here in a moment, I'll contrast it to those that really only focus on a little segment. We can do everything outside the data center. Also, when you have breakthrough technology, you really get that fine balance, which is you want the breakthrough technology that happened, but you want to have a really rich customer experience so it's easy to adopt. And I'll talk about our efforts to make things that are easy to evaluate, easy to implement, easy to emulate. And of course, in an industry where talent matters, hire the best talent. AI is all about the best talent. There's been a tremendous amount of energy personally in what the company does about hiring the best talent, and BrainChip does have the best time in this industry. I'll put it up against any company. And neuromorphic matters. That's that unique approach. The principles about neuromorphic, which really emulate the brain, that bring us the most efficient computational engine out there, and things -- the efficiency matter and performance matter, particularly outside the data center where battery life matters and you don't have network connectivity. A little bit about our execution model. I mentioned Peter on the front end and now Tony. We have a very rich research organization which drives a lot of our core technology. We marry that with a robust product management group which takes in feedback from the customer-constant interactions we have, the analyst reports that we have, the analyst interactions, the marketing, and we mirror that into a robust product management group -- or excuse me, product development plan, and we have the best engineers in the industry creating our product. Next slide, please. A very brief introduction, and I will walk through this not in a detailed level, but at a high level on the next slide. But I really want to focus your attention onto the right-hand side of this page and talk about the platform. BrainChip has a broad platform to enable the Edge and not just a small component of it. And when you read the words over there, the integrated powerful solution that allows immediate data analytics and decision-making on the device with efficiency, reduced latency, ensuring privacy, that's exactly what our platform does, that middle paragraph on the right. Next slide, please. Let me call out some key elements of that platform that our customers value. Extensive model support, people only buy or build hardware -- is to support the models to do the task of what they want to do in their end product. And it is very, very important that you support a wide variety of models. And you can see just some of those right now. BrainChip supports a very wide set of models and use cases in there. It's absolutely critical to have the ease of the software to allow you to evaluate, emulate and implement. Again, I mentioned it earlier; when you have a breakthrough technology, you don't want to make it challenging and difficult for your customers. You want to make it easy for them to take that journey with you. In our case, I think it's very important, too, to have hardware. And there are some questions that come up later in the Q&A about hardware. We absolutely have taken our chips -- our IP to silicon to prove it works. And we know it works. We have 2 working reference chips. We actually have hardware platforms where people can use and develop and try. And we now, for the first time, have commercial-grade products out there with the Edge boxes through our system integration partners. More about that Edge box and specific Edge boxes later on. And of course, all that comes down with a very flexible IT model that can address the most small -- the smallest use cases in a single node or, quite frankly, even smaller, up to 256 nodes, allow you to address the large broadness in the Edge market outside the data center. Next slide, please. So, at the simplest level, the 5 pillars of our efforts. We participate in high-growth markets, and I'll talk about those markets. We have a competitive advantage there that we plan to keep and extend. We have a robust and flexible business model, which I'll walk us through in a moment, strong leadership and culture, which is core to the success of this company. And of course, we work incredibly closely with our ecosystem partners. Next slide, please. So we could spend the entire hour just talking about markets here. But I'm going to just summarize these in 2 simple slides. You can see, on the left-hand side, a roll-up of a set of data from such credible sources as McKinsey and [ Forums ], 100 billion IoT devices, all of which need some degree of smarts and getting smarter every single year, smarter being AI inference outside the data center. $100 trillion of revenue in that AIoT market is a very large market. And then, of course, the CAGR rate is growing very quickly. And part of that is absolute numbers from new devices and part of it is workload shifting out of the data center at the same time. What I really like [ about ] this chart on the right-hand side from Gartner, if you're not familiar with Gartner, Gartner is the premier analyst for enterprise companies around the world that talks about technology trends. This is a report that they put out in '23. And in here, they have some really important elements in there. In the right-hand side, if you can't see it, it's critical enablers and productivity range in the bottom right-hand side. And you see the 2 core things about BrainChip technology-wise, neuromorphic computing and Edge AI. These critical enablers for the whole marketplace coming out. So, you've got a large addressable market, and you've got the characteristics of BrainChip on the right to talk about how well we're positioned to attack that opportunity on the left. Next slide, please. I won't walk through the numbers here, but I'm going to use this slide to just illustrate some of the use cases that makes -- that we're engaged with today. We're engaged with customers and prospects in all of these board verticals and several others as well. So, with Industrial, we're absolutely engaged with prospects around predictive maintenance and security right now, very applicable for Edge AI market. Automotive, the in-cabin experience and, of course, ECU control, Edge case uses that we're engaged with as well. The home consumer, security, lots of interest in our product for security. Health and wellness absolutely a perfect fit, particularly when devices that you wear are put in your ear and they have a very limited battery life, a very power-sensitive offering like a neuromorphic offering like Brain Chip is critical for them. So, we're engaged across all of these sectors right now. Next slide, please. So, like all new markets, the people and enterprises usually try traditional approaches that exist. And of course, there are technologies that you could run in this to run Edge applications out there. But the cloud doesn't work well. You have latency in there. You have security issues in there, cost issues associated with it. You can use your digital mini service in there with CPUs, but that's not the most efficient way to do it. It's certainly going to be very power-intensive. You need to have a power outlet to have it work. You could certainly use MCUs. But of course, you're going to get performance things, something that's not built for that, which has created this demand for a whole new class just like it did in the data center for things on the Edge around neural accelerators. And these are a set of devices in there that are highly designed for that. Machine learning workloads work optimally, very power efficient and compute efficient, low latency, very small footprint. That's where BrainChip participates, in that part. Next slide, please. Let me give you a very brief overview in our short amount of time we have here. If you look at the way we -- this chart, what's important to take away from this is that no competitor other than BrainChip has all 5 of those elements in there. It's important that you certainly need to find ones that do very low power at times. You certainly can have some IT ones that are configurable like us, but they don't have both the power and the configurability. But on-chip learning, which is something our prospects value deeply, is unique to BrainChip, and that means basically the ability to do something in the field once a chip is created without going back and having to train it again; the ability to work standalone, meaning the ability to have the models run distinctly on the hardware device offloading the CPU in total. And then, of course, minimal day movement, in a design like BrainChip, we have our memory and our compute elements very close to each other. That minimal data movement, of course, helps in any latency concerns and power. These are the attributes that we planned carefully when we built our product, and these are the attributes that our customers and prospects value, and this is where we stack against the competition in these other [ neuromorphic ] accelerators. Next slide, please. Let's take a look at the neuromorphic elements of our competition. You may have heard about IBM Intel. And in this case, those products are not commercially available. They're research offerings. [ And of course ], BrainChip is a commercial venture. But more importantly is the things where we differentiate ourselves, of course, around the on-chip learning, which is distinct versus our competitors, and perhaps from a more important, practical point of view, the supporting of standard workloads. If you're selling technology to deploy in a field and do that, you want to train your new engineers or engineers on new technology. You want to make it simple. BrainChip supports standard machine learning workflows such as TensorFlow and PyTorch, which virtually the entire industry develops models on. Those are the things that make us unique against our neuromorphic competitors. Next slide, please. So, to recap on the competitive front, we think it's important, we know it's important to be -- have advantages on 2 fronts, on the product and on the company. On the product side, it's the compelling performance. It's streaming efficiency and talking about power, some unique features like on-chip learning, and to support the broad set of models that we do. At the company level, I hinted about it, and I'll talk a little bit further as we go through it, is this customer focus, the ease to evaluate BrainChip, the ease to emulate, simulate, the ease to implement, that incredible focus we have on customer satisfaction. The intense innovation cycle started by Peter carried by Tony now, that will carry us forward because we know the market will not stand still, and we will continue to invest and drive hard in our innovation cycle. Today and tomorrow's model support, the industry doesn't stand still. BrainChip is designed to support not only the models of today, but the models for tomorrow, including native spiking neural networks, which are perfect for normal -- for technology, and the industry will head there in time. And then, of course, strong IP protections, which are critical in the IP market. Those are our competitive advantages. Next slide, please. So let's take a little bit of a -- get away from the technology in the market. And let's talk a little bit about the business model. So, we have a robust and flexible IP business model that -- on the left-hand box of that slide. And for the first time in '24, you're going to see us do some things into other 2 boxes. You may have read about some of our work with the Edge boxes and system integrators, and I'll talk about that, and then something I'm calling additional packaging, some work we do with customers on demand. All these things will add to our revenue model and help us advance our technology road map. Next slide, please. So the IP business model where we put the predominant amount of our energy and resources is characterized by a business model where we charge a large upfront fee, licensing fee, for somebody who wants to build a custom chip to get access to our intellectual property to make -- to run their neural networks on there. Once those chips are made, the digital chip, we collect an annuity in the form of royalty, whether that's a percentage or a hard dollar from all chips for the life of that product. That's the way to think of this company. I think what's really important is that, from a business point of view, is that agility as well. When I talk about the competitors, back 3 slides ago, if you were to chip form factor and you get the chip factor wrong, maybe the wrong number of nodes, the wrong interfaces, whatever that happens to be, you're in trouble. BrainChip, because we're predominantly an IP company, we listen to our customers, and we can make modifications and rerelease different versions of our IP over time. That's a distinct advantage in the IP business model in very important markets that are still forming and normalizing. Next slide, please. I mentioned just a moment ago, for the first time in '24, and you can see it on our website, you're now seeing commercial-grade Edge boxes. And those boxes are being developed with our system integrated partners. To be clear, we are not going to build boxes. We will work with our system integrator partners. And those partners are seeing strong demand for those workloads. They came to request because they see the attributes of our product and say it's ideal for their Edge boxes and are working closely with us to develop those boxes and get them out to market. So, it's a wonderful opportunity for us in a lot of ways, and it can also stimulate more demand for IP as people see the workloads out there. And of course, it does provide us with an additional revenue stream and explore potential new business models. Next slide, please, what I call additional packaging. In this case, as we engage with world-class companies and thought leaders in the industry, we're often asked to do some certain things for them, but we do something further than provide our intellectual property. And we are starting to say yes to them. And what you can expect us to do is not things that are going to be radically different or far from our core charter. We want to keep our resources focused on our core neuromorphic technology. But we will build out some pieces of pre- or post-processing around our accelerator and work with these partners over time. More on that later in the year, this is a very early concept for us, but it could certainly get some traction to open up new markets for BrainChip. Next slide, please. So, I've got just a few more slides to bring this home, and I'm really looking forward to taking some questions here along with Tony in a moment. But let me bring you back to a really important point, strong leadership and culture. Look at the bottom. Look at those logos. Those are world-class companies, not only in terms of compute, but artificial intelligence, which is really, really important, big companies, small companies. That represents our leadership team. But I'm even more proud of the rest of BrainChip and all the team members I get to work with every single day around the world. 80% of our headcount is engineers, which is really -- should make a statement to all of our investors about the quality of people we have in this company. 15% of them are PhDs from leading AI research programs. We have a wonderful workforce. And more importantly, it's the culture here at BrainChip. We are maniacally focused on a couple of key things, which is our innovation culture, which is we're going to continue to do breakthrough innovation. We have a very strong teamwork here. You heard Tony talk about the value of teamwork and where he excels. That's exactly where BrainChip excels, in teamwork. And then, of course, that maniacal customer focus that I personally bring that we want to do in all of our products and all our engagements, that's the kind of workforce we have here at BrainChip. Next slide. So, you can't do this alone. And I could spend all day talking about this as well. But obviously, we have some licensees out there that we work closely with, early adopters that we continue to work with. Our partnerships, we put tremendous energy and I'm very proud of the progress we made in there. And some of you may have saw it. I'm going to call it one logo I'm looking at on the screen right now, Intel Foundry Services. Intel launched their foundry business last week. I was personally there. I was very proud when I saw the BrainChip logo up on this very important stage at a very important event. That's the power of ecosystem of partnerships, is to work closely with the leader. Intel is a great example not only for brand recognition, but for our potential licensees to feel comfortable with affordability of what we do, and it can be transportable to any foundry service in the world. And of course, our University Program, which we're very proud of as well. This is not all, but it's some of our universities that we're part of. And it provides a lot of great things for our company. Obviously, we get to use their minds of bouncs around some ideas. We had 15 interns in here last year as a result of our University Program. And of course, it's a great opportunity to screen people and then hire them into BrainChip. So, it's just a wonderful set of industry leaders we work with every single day. So next slide, please. Let's go ahead and bring this to a close and get to some questions, please. BrainChip is leading the generational shift to Edge AI. Hopefully, you've heard my comments that talk about that shift is real and that we are participating in incredibly large markets and incredibly high-growth markets. The competitive advantages we have today are very real, and we plan to keep and extend those advantages, and that's a core tenet of our strategy. The flexible and robust IP business model, I think, is very, very important in a market that's still shaping and growing right now. And of course, strong leadership and culture I just spoke of. Without the people, we -- this company would be nothing. We have the very best people and will continue to hire them. And then, of course, working as a team with all of our partners. With that, I want to bring it to a close, and I look forward to taking some questions. In idle course, I will ask Tony to join me on some of the Q&A. Josh, lead me off.

Thanks, Sean. [Operator Instructions] Our first question today comes from [ Amil Bee ], who is a private investor. [ Amil ] says, "That was a great introduction. The observation that neuromorphic/Edge computing landscape is very fragmented resonates with me. Could you please bring additional focus on this and highlight the key competitors/competing technology trends in the business from BrainChip's perspective? What carries most traction? How do customers deal with the risk of investing their capital into solutions that will not gather sufficient traction? What is the competitive threat of NVIDIA moving into the computing Edge space where BrainChip is?"

Well, that's a lot of questions wrapped into one. So let's -- I'll try to certainly get it all in there. The state of the Edge AI market is exactly what it should be, like all markets. When opportunity comes, it brings entrance. And if you remember, there's even existing solutions in there that are not -- that are I'm just going to say a poor fit for that market. And so it's exactly where it needs to be in the early part. What makes it unique for a neuromorphic company like us is that we have the attributes that the market desires, which is very low power and very high performance. And also what I mentioned around that business model, which is allowing people to be flexible in that, that's what gives us confidence in winning in this market here. And Tony made some opening comments in here, too, around hardware. Hardware is something that is a long game. And it certainly is a long business cycle that we are participating in, but the rewards are very high in the long run in here. So, we plan to be that standard as we come out of -- or one of those standards as we come out of the back end. The risk about -- I'm not going to talk about individual competitors. That wouldn't be appropriate at that particular point. But there's always risk that anybody could come in this market. My personal belief, of course, NVIDIA, we have a great degree of respect for, seems highly focused more on the data center than the Edge at this particular point. But we're highly confident that our competitive advantage in terms of neuromorphic stacks up very well.

Thanks, Sean. Our next question has come from a number of shareholders who have asked if you could provide some commentary on how Akida 2.0 differs from AKD 1000.

Sure. First of all, let me maybe rephrase that a little bit with a question because the Akida 1000 is a chip, right? When you call it Akida 2.0, we should talk about Generation 1 and Generation 2 of our IP. And I'll make some comments, and I'll maybe ask Tony to make a comment or two. So, if you heard my comments at the last AGM, when I came here and we looked at the product, it is and -- it is and it still is a very good product. It's just limited in its use case, meaning it could not hit the broad set of use cases in the industry that we need it to do in terms of to build a lot of engagement. So, with Generation 2, the simplest level in a nontechnical way, we now can address a much larger set of use cases in the industry, some of the ones I talked about when I talked about the 4 verticals, which were not possible before. The other vector where Generation 2 is different from Generation 1 is we got feedback from customers, and this is a good thing. Prospects with good companies do -- that while we are breakthrough in performance, it was too challenging to adopt at times. So we only support a 4 bit in that. Customers wanted to have 8 bits. So we now support 8 bit and 4 and 2 and 1. People wanted to make sure we had [indiscernible] support. We've added that support. They want things such as a long-range skip connections, which we did that as well. So 2 really important differences, the ability to address a broader set of use cases, that's one, and then, of course, making it more aligned and easier to consume with the rest of the industry. Tony, anything you want to add to that?

Right. So, I think that's a good summary. So, there were customer-driven requests, more support for a broader range of models, of course, higher performance per area. So, those are all great things that customers want. There's also some stuff that we did that was leading in a way. So, in particular, we have support for our technology, which is called TENNs, and that's a way of handling sequences of data. That could be audio data. It could be data from vibration sensors. It could, one day, even be data from language models. And so we're able to support that on-chip. And I believe that we're the only company that can do that. And that is -- that shows our commitment to leading the market as well as listening to our customers. So, I think this is a really exciting module that we're putting into Akida 2.0. Sean?

Our next question comes from [ Eric Yang ], who is a private investor. Hi there. Thanks for the opportunity to raise a question. Is the Akida still involved in the Mercedes EQ vehicles and the revenue estimation if the answer is yes?

I think it was [ Eric ] was his name. [ Eric ], we're not allowed to comment on any customer engagement at all. Obviously, our -- when a customer like Mercedes announces what they did, that's their choice, but we're not allowed to comment on the progress on that. And in fact, it's something that our prospects and customers greatly value, is their confidentiality. They view technology and AI as their unique competitor differentiator. So, we are not allowed to comment on the progress of any individual customer or prospect we're working with.

Another question that's come from a number of attendees today -- please can you provide some comments on what you saw at CES 2024 Conference in Las Vegas and describe some of the key themes emerging around AI at the Edge?

Yes. I'll start. And again, I'll ask Tony to join me. He was here with me, actually. So it was great. In my opening comments, I said a lot of it, which is it is unbelievable. You could not find a single booth virtually in all of CES that didn't have the words "artificial intelligence" with it. And this is why I made my opening comments that AI is proliferating across all industries globally. This was the year of AI at CES. Equally prevalent was that shift towards Edge AI. So, there were tons of use cases that even I couldn't envision. Besides the normal wearables, things like that, we saw things such as pillows. Tony and I went to a very fascinating, huge display by AARP and many smaller companies in AARP with lots of individual Edge use cases going on. So, the trend was undeniable that people want to do inference outside the data center, and that was a very clear signal. Auto companies, we went -- there was a Brazilian in autos who walked through the autos. It was fascinating, all the zone capabilities and use cases that were showing up. Tony, what would you add to that?

Yes, I think you're right on the comment about the AARP. That's an association here in the U.S., which concentrates on older people and their needs. And so what's interesting there is there's a lot of use cases for AI. If you want something that's going to be in an elder person's home, you don't want something which is essentially going to take your data and then sent to the cloud, who knows where. You want something that's going to be able to serve you, but it's going to maintain your privacy. And that's where Edge AI is going to have a really big win. We did see AI everywhere. And I think that AI has become a sexy term. And in my opinion, it's an aspiration everyone is trying to get to, but it's hard to get there. And so part of our business model is that we do a lot of handholding and we're able to help people realize their inventions. So, I think that's going to put us in a good spot when we start to create more pool for IP. But it was -- it's not a conference I would recommend going to because it's crowded with every possible consumer device known to mankind or human kind. And like Sean says, everything is AI. And maybe we're going to be able to really help people realize this in tangible ways in the future. Sean?

Our next question is from [ Jesse Chapman ], who is a private investor. What is Sean's thoughts about the surge in BrainChip's share price and what that says about our upside potential?

So [ Jesse ], I think you know me well. The energy that I focus on is the execution of this company. Obviously, none of us were happy when the stock price went down, and we are happier that it went up for sure. But my focus is entirely on the execution of this company, which is creating the very best products and running the very best sales organization and best engagements that we can possibly can. The stock will take care of itself if we do our job here. And that's where I really focus my energy on. I'm often asked the second part of that question about the value of the company, which I'm sure will come, so I might as well talk about it now -- is I believe this company has a lot more value to unlock in terms of market cap. We have a lot -- a very large addressable market. And we have a very applicable, compelling solution in here. If we do the job we're supposed to do here in terms of keeping our technology focused and selling really hard, I believe there's absolutely more opportunity here.

Our next question comes from [ Isaac Towne ], who is another private investor. The IP licenses held by MegaChips and Renesas allow end users to purchase BrainChip products without having to release announcements to the ASX. Does this mean it is unlikely we will sign additional IP agreements and thus shareholders need to wait for revenue updates to determine material progress?

No, that's simply not the case. In fact, hopefully, in my presentation, I made that a little clearer. It is the primary focus for our sales organization -- is to sign new licensees. And looking at it as a compound question, so absolutely, it is a primary focus of this organization to go sign more licensees, to give more chips and create more products from the market. There's plenty of room for licensees in this market, plenty of room for us to participate. Relative to revenue updates, of course, the right way to look at that would be through our normal filings and announcements.

Our next question comes from [ Jesse Chapman ]. In the 2022 Annual Report announced 12 months ago, it was stated that Renesas was tapping out with the Akida for IoT and Edge devices and will be available 2023. How is that coming along?

Well, similar to my comment earlier, we are simply not allowed to talk about the business of our licensees or our prospects whatsoever. It just -- it is something that our licensees and prospects not only expect but they require of us. So, I just can't comment on the progress of their work right now.

Our next question is from [ Roger Manning ], who asks, "Given BrainChip's business model is to largely sell its Akida IP, will it be necessary to prove each new version of Akida in silicon?"

I'll let Tony start with that one and I'll add to it at the end. So Tony, why don't you take that one first, please?

Yes. So I think the big question was, will this event-based paradigm yield going to be done and will it yield some benefits to customers? And I think we achieved that by taping out our earlier generation of products. And so we've already achieved that. And it's my belief that there's only marginal benefit in taping out the next generation. We've already proved the main points of it. And clearly, we don't want to start to manufacture chips on a large scale. We'd be competing with our customers, and that would really break our business model right now. So.

Yes, and to be clear, it is -- a lot of work has gone on with our ability to simulate workloads in Generation 2 as well. As Tony said, we certainly have reference chips in Generation 1. And the typical engagement, of course, that we work with IP license prospects is we allow them to run models on there and/or simulate them in our simulation tools that we have for Generation 2. So [ Roger ], I would say stay tuned. We may or may not. But right now, there's no need for us to do that.

Our next question is from [ Tony Cooper ], who asks, "What are the milestones BrainChip is aiming to achieve this year and then within 3 years?"

Yes, so we certainly have milestones within the company and the Board of Directors has approved those milestones. And as you can imagine, those milestones are across all the vectors of any particular business. We certainly expect a higher revenue trajectory and buyer bookings this year. And we certainly have milestones around development needs, around particular dates, feature, functions, things like that. There's also milestones about making things even better in this company relative to understanding our competition, our formal benchmarking programs and things like that. We don't share those outside the company. But yes, we have a set of benchmarks that we work very robustly on, the whole company is judged upon, and that the Board of Directors has approved.

Our next question comes from [ Nirav Patel ]. Is the company looking for a capital raise?

Can you repeat the question? I'm sorry. I may have misheard that, Josh.

Yes, no problem. It's from [ Nirav Patel ], who asks, is the company looking for a capital raise?

Sorry about that. I thought I heard something the opposite. As we announced earlier in this year, we signed our third [ addendum ] with LDA. We certainly will fulfill those obligations, as outlined. I think it was in early January we put those out. We have sufficient cash now. That certainly will allow us to operate fine. Having said that, we are always looking opportunistically if something is there, but we're not actively out looking for any capital raise per se, like you're saying -- asking.

Thanks, Sean. Next, we have [ Mark Clarke ], who says, "What is the likelihood of Akida technology being used in any product moving forward?"

Well, I think it's quite high. Actually, that is the entire goal, right, is the [ Akida ] product going forward.

Our next question comes from [ Simon Cilia ]. Is there a time frame around when Akida 2.0 will be tapped out? And what foundry will be used for the process? And also, are you able to provide any details about Akida 3.0, for example, time frame on when it's released and how it will differentiate between Akida 1, 1.5 and 2? Thanks again, and keep up the great work.

I think we talked about the potential for another piece of silicon just a moment ago. So, I will just not go there [ and announce since ] we already answered that question. But around Generation 3, if you will, I mentioned early in my slide deck when I talked about our product planning and our execution cycle, if you will, you can see we are always planning on this product, and we are always looking for improvements on our IP offering right there. Now, whether we call it formally Generation 3 or 2 something X -- but yes, we're in the middle of a planning cycle right now to make some changes, and we will make announcements over time.

Our next question comes from [ Miles Stojanovski ]. Sean, on Page 7, you show BrainChip silicon IP now addressing the entire Edge market. Can you identify a use case where 100-plus nodes are required?

Sure. I think, again, in the interest of sharing some airtime and give my voice a rest, let's have Tony answer that one.

Yes. So, I guess the first thing is you can never anticipate how much power can be useful in the Edge. You're always going to want things that are more intelligent, whether you're making a -- you're adding features to automobiles, you're making smarter drones. You can never get enough. Once people have an appetite for AI, they can never get enough of it. And having a very large number of nodes on a piece of silicon doesn't preclude us from sticking to the Edge model. We can also maybe one day look at data center applications where we're just concerned with [ imprints ], not with training. That's not what we do. But we would be able to offer much lower costs in terms of energy, which translates into far lower operational costs. So, there's possibility. So, I would look at the 200 nodes as an interesting possibility and which will open up exciting doors.

Our next question comes from [ Bo Hicks ]. Does MegaChips have access to the second-generation IP under the current license agreement?

Similar to other questions, I really cannot answer any specifics about the terms of an engagement with any licensee or prospect.

Our next question comes from [ Sandra Breyer ]. After the annual report, when will we stop relying on LDA for cash? We know you'll be positive, Sean. You need to be in this role. However, we want hard facts information, no more fluff and hiding. She continues, but no more hiding behind all these NDAs. There must be some info, even crumbs, that can be shared as the relationship progresses. Do you think our NDAs will come out from under the cloak of darkness?

There were some comments in there and questions. I'm looking at the questions over here, so I can make sure I get the actual question in there. Let's take the NDA question first. The NDA is a critical part of a trusted relationship in a business. So, that's not a matter of hiding under a cloak of darkness whatsoever. It's a normal course of business between 2 companies, particularly for those who view AI as a competitive weapon in their marketplace. So, it's an essential part of the way we have to do business. So, it's certainly not a hiding in a cloak of darkness. It's an essential way and, quite frankly, would put us at a disadvantage if we broke that confidence and trust that our prospects have put in front of us in there. Around LDA, I mentioned that earlier. We announced, I think, in January 2 or 3 of this year, we will fulfill those obligations as stated in our agreement. We're not going to comment on any particular future plans with them whatsoever but that we have plans to do that throughout the end of '24, which is our commitment.

Our next question comes from [ Peter Sillan ], who is after the NASDAQ listing time line.

Peter, obviously, we're -- no decision has been made about listing at all, changing at all. We are an ASX-listed company. That's how we operate. I'm neither confirming or denying any conversations would happen at all. But right now, we're an ASX-listed company, and I'm focused, as I said earlier on, running this company to create great product and sales, not really focus on listings.

Our next question is from ME5. Has BrainChip been contacted in regards to a buyout or large investment? If so, what was your response? And what are the BoD's various thoughts moving forward, i.e., sell at price, partner with a large company, list on NASDAQ, if all things did take, other thoughts? Where do you see BrainChip in 5 years, 10 years?

Sure. So there was a lot of questions in there. My obligation, if approached with any of those options, is to bring it to the Board for consideration. And I can't comment if we were or were not on that. Obviously, that's very confidential information. But of course, any offer that comes into this company, I will bring it to the Board for consideration in there. I'm looking at the question over here to decide, including any partnerships and things like that. Where do I see BrainChip in 5 or 10 years? Hopefully, my comments were clear. My focus is operating this company, building the best product, getting as many engagements and building a large ongoing operation. That's the vision. This is not something that we're thinking short-term. We're thinking about building this company on a really solid foundation for the long term.

Our next question comes from [ Lance Lupton ]. Hi, Sean. Last year, in your interview with the ASX Investor, you made a statement that BrainChip intends to be 1, 2 or 3 in leaders in the AI market. Can you say what level of confidence you have that this can still be achieved? And more importantly, what exactly gives you this confidence?

Yes, sure. So I think part of it's market dynamics and part of it's BrainChip dynamics. Again, markets start -- I think, if you look at any industry, they start when there's a large need and not near many entrants. But over time, the normal speed of any market consolidates down. What gives me confidence that we're going to be a leader in that market in the long run is all the things I just shared. There's attributes in the Edge market that we fit perfectly for. In the Edge market, you have got to do things with exceptional low power, and that's exactly what our neuromorphic-based technology does. Also, the ability to get incredibly high performance in a small footprint or area on that piece of silicon, that's exactly what we do. The ability to do some things in the field once chips are made with on-chip learning. So, we have the attributes to do that. I also believe the fact that, again, that I said earlier, that we have an IP-flexible business model serves us well in a market that's still forming and settling down. So, if you get it wrong in the chip form factors, your primary business model, you're going to miss the market. So, it's all of those things that gives me confidence that we're in this for the long run. And quite frankly, too, it's the reaction I get every single day from the analysts and ecosystem partners and prospects. I know we are in a much better position than our competition.

And just a notice that we have 2 minutes remaining. Your next question comes from [ Greg Shay ]. How many chips were/are available for the Edge box release? Any comments on how the working relationship between Anil annual and Tony is progressing? Sean mentioned that 2024 is a critical year for Brain Chip. What catalysts do the team need to achieve in '24 to allow shareholders to feel comfortable in their continued investment? There are 2 further questions, but I might just hold on those for a second.

Yes, with only 2 minutes, that's a lot, and I might have some comments. So, a couple of things. Of course, Anil and Tony, 2 great technical leaders in the company. I mentioned, when I hired Tony, one of the key things was his orientation to our teamwork. And of course, Anil is the same. So, that relationship is going very, very well. And I would expect nothing less. And of course, the 2 of them have to drive the technology of this company. Relative to chip supply I think was the question on the Edge box, we have adequate for the projections that we have this year. Of course, we have a supply arrangement if we need more, but we're totally comfortable with what we have in there. Around 2024 -- I'm looking for the question -- why do I think it's critical? I think it's absolutely critical. If you look at '23 and what we did last year was a lot of focus on that second-generation product and a lot of energy into building a large sales force that we did not have in place and ensuring our marketing message. That's a lot of things to take advantage of the market opportunity. We're now in a position to do it. And so my personal expectations and the Board's expectation is better execution on that commercial front.

Thanks, Sean. And that is the last question we have time for, so I'll hand it back to you.

Great. Thanks, Josh. So, let me bring it to a close. First of all, I want to thank all of the attendees and shareholders for not only attending today but their continued support of BrainChip. And let me bring it back with a couple of comments about this. Hopefully, you heard from the dialogue between Tony and myself about a few key things. It's undeniable that AI is proliferating across all industries globally at this time. It's also equally undeniable that there's a movement towards workloads outside the data center towards this thing we call Edge computing, Edge AI. That's an undeniable trend that is shaping and forming and growing every single day. BrainChip has the right offering for that for the reasons I talked about earlier in some of the Q&A. The attributes of the core product around our efficiency and performance and our strong design that allow us to be flexible and scalable to the very smallest to the very high end and also equally important, the ease of adoption and the valuation of our product. You put that together, these are really important things. I talked about the team. I'll put this team against any team in the industry. We have hired the best. We will continue to hire the best. We will nurture with the best. And then lastly, I would simply say the level of engagements this company is in right now are broader and deeper and more mature than they ever have in their life -- excuse me, in the history of this company. These are the factors that make me highly confident in the future of this company. Thank you so much for your time today. I look forward to talking to many of you in the near future. Have a great day.