Cristiano Amon Takes over as Qualcomm CEO: Reiterates Focus on Custom CPUs

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• mode_13h - Saturday, July 3, 2021 - link

  > Don't confuse the Arm ecosystem with Arm's customers.
  
  I don't, but if the deal drives away enough customers, it's very likely bad for the ecosystem, also.
  
  > They don't have any reason to shut it down
  
  There are other ways they could damage the market, such as by offering products competing with what a lot of ARM's customers are building, and that could scare those customers into feeling like they might end up at a disadvantage. Everyone knows how ruthlessly competitive Nvidia is.
  
  > the basic question is whether it causes a problem for free and fair competition
  
  As I said, I don't really see the case that it inherently damages competition, as long as ARM's customers have other options (which I think they do).

• Yojimbo - Saturday, July 3, 2021 - link

  It doesn't drive away customers. Customers are going to continue to use Arm like they've been and they'll switch to RISC-V in parts of the embedded space just like they've been.
  
  NVIDIA releasing more products to the market is not going to damage the market.
  
  Don't worry, companies don't need safe spaces.
  
  The bottom line is, if no one buys Arm, Arm is in trouble. If Arm is controlled by a consortium of its customers, Arm is in trouble. People forget that the money pumped into Arm by Softbank over the past 5 years was an investment by Softbank. And since Softbank wants to unload Arm for about what they paid for it it was an investment that didn't pay off. All these great cores that enabled Graviton and enabled so many companies to forgo designing their own Arm cores are a result of that investment. Perhaps everyone would like an entity like Softbank to own Arm but that's like asking for a sugar will not exist any more. Under NVIDIA, the Arm ecosystem is likely to increase more than it did under Softbank. Softbank set the stage for the Arm ecosystem to grow, but NVIDIA is going to do the yoeman's work of building the foundation for the ecosystem. NVIDIA is not going to start making smartphone SoCs. Right now Arm in the data center is controlled by Amazon, and that would be a horrible thing if it were to go that way, to be controlled by the hyperscalers. It would be like being controlled by Apple. Each cloud company creates their own locked-in ecosystem and has a domineering relationship with any small supplier.
  
  I think most people on message boards who are against the merger have an idealized view of the world and of Arm. Open source software did nothing to prevent public cloud lock in. An independent Arm will similarly do nothing in that regard. An independent Arm is unlikely to build an independent server ecosystem outside the clouds.

• Yojimbo - Friday, July 2, 2021 - link

  If you mean your post is off topic to mine and to the article, then yes, I agree. What I said is on topic to the article:
  
  "In statements to Reuters, Amon had made comments regarding the company’s future CPU roadmap, which come to further contextualise the company’s completed acquisition of NUVIA last March.
  
  "We needed to have the leading performance for a battery-powered device," Amon said. "If Arm, which we've had a relationship with for years, eventually develops a CPU that's better than what we can build ourselves, then we always have the option to license from Arm.""
  
  I was not talking about the regulatory situation concerning NVIDIA and Arm. I was talking about the reason Qualcomm is likely against the merger. But I will reply to what you said anyway. In fact what is going on now with the new administration is the bureaucracy flexing its muscle to show the corporations who is the boss. It's a sort of saber rattling. Not that they wouldn't think it's heroic to pull off some big breakup. It has nothing to do with innovation or consumer protection. If government regulators and politicians really were concerned about companies being too powerful in the marketplace then they wouldn't let subscribestar be attacked the way it was. They wouldn't let gab be attacked the way it was. As far as decision on M&A, it's definitely not up to regulators to choose winners or losers. A regulator should look to see if a merger causes a trust or otherwise interferes in a free market. It's not about fear, or about predicting the future. The minute they think that way is the minute there is no free market to protect. NVIDIA buying ARM in no way creates a trust. Neither does it create a company that is particularly large overall. Perhaps regulators shouldn't be allowing facebook to buy whatsapp or instagram. If NVIDIA were buying up all the AI chip startups that would be a problem. The current tech giants (Google, Facebook, Apple, Amazon) buying up all the little companies that could turn into real competition for them is a problem. For example, if Zoom didn't explode like it did because of the pandemic perhaps someone would have bought it. It had a market cap of $20 billion at the start of 2020 and not it's about $120 billion. Such a purchase would have gone through no problem. If NVIDIA down the road is acting anti-competitively towards the market then the regulators will do what they love and punish them for it, as they should. But as is now, it's just the equivalent of making the market to block such a merger, not protecting it. The deal should go through and the deal with go through. Because regulators 1) understand the situation that no real trust is being created, 2) would rather get involved in a heroic punishment that they can defend than a controversial block that gives them no glory and which they could be forced to impossibly defend themselves against in the future (suppose Arm fades away after the block the deal, and Intel, for example, takes a bigger bite of the market, there would be little way for regulators to defend themselves). There are political reasons non-US regulators might have for wanting to block the deal, but they will probably think better of them.

• mode_13h - Saturday, July 3, 2021 - link

  > In fact what is going on now with the new administration is the bureaucracy flexing
  > its muscle to show the corporations who is the boss.
  
  In the lawsuit against Facebook just thrown out by SCotUS, 48 States joined the Federal Government, filed ** last December **. So, no. The backlash against Big Tech is not something new or specific to Biden.
  
  The fact is that big platform companies have more control over our lives than ever, and the people need to have more say over that, since the market has failed to provide the necessary levers of control. That's what it boils down to, and where people of most political persuasions would agree.
  
  > If NVIDIA down the road is acting anti-competitively towards the market then
  > the regulators will do what they love and punish them for it
  
  Huh? I don't think there's anything they *can* do. I certainly can't think of any examples, in recent history. After the acquisition goes through, the only recourse is for someone to sue for damages, due to unfair practices.

• Yojimbo - Saturday, July 3, 2021 - link

  Firstly, the bureaucracy has a will of its own. Secondly, just because there was already a lawsuit says nothing about growing calls for regulation. If you pay attention to the way Biden's administration or Congressional Democrats are talking you will see that clearly. Thirdly, regulation is not in general a bad thing, it is a necessary thing. It's just that regulation can become its own reward if the system gets corrupted.
  
  Of course there's something they can do. They can break up a company, they can prevent a company from doing certain things. It happens to Microsoft. It almost happened to Qualcomm but the Trump admin stepped in and prevented it because Qualcomm was viewed being of strategic national importance. As far as for Google, Amazon, Facebook, these companies are too newly dominant and people don't understand the ways in which they are dominant. Things take time. There almost certainly will be regulation of them in the future. If you start trying to prevent the situation from occurring and guessing winning or losers you are then by necessity picking winners or losers and you no longer have a free market. Regulators can't be stock pickers. Not only that but there is nothing illegal about a monopoly. What is illegal is using a monopoly for anti-competitive practices. Now regulators will step in to prevent a monopoly from forming when the combined companies would actually create a monopoly immediately as the companies are combined. But to say "oh this company is going to be too successful and then later they will become a monopoly and then they are going to abuse that monopoly" is not, and should never be, the job of regulators.

• demian_thorne - Saturday, July 3, 2021 - link

  Question: You imply that the main benefit of the ARM acquisition by NVDA is that more money will be pumped to ARM and the products will become better.
  
  But ARM is already valued at let’s say $40B. Are you saying a company with 7000 employees and 40B valuation needs “money” to make the product better?
  
  Ok, how about this. Why don’t they do an IPO themselves? or just go ask investors for private money?
  
  And what stops their competitors or pouring themselves more money to their own products to make them better. Does INTC lack money ? Do you think the stagnation of INTC is due to lack of resources?
  
  I am sorry but I cannot really follow the reasoning of why the money that will be pumped by NVDA are the only money on the planet available for that or why just money will produce better products.
  
  I really hope the NVDA lawyers come up with better arguments :)
  
  Care to explain what am I missing?

• Yojimbo - Saturday, July 3, 2021 - link

  Arm is valued at $12 billion plus $28 billion of NVIDIA stock by NVIDIA. That is the amount NVIDIA is paying for the money in stock and cash. It's a bet they are making, not anyone else. That $12 billion in cash and the $28 billion in stock goes to Softbank, not to Arm. That is not cash that Arm has on hand or would otherwise have on hand for its operations. It's like the difference between a transfer fee and a player salary in soccer. If Man Utd buys Jadon Sancho for a $100 million transfer fee it's not like Jadon Sancho is getting $100 million or otherwise would have $100 million on hand if he stayed at Borussia Dortmund.
  
  Company valuation and company operations are two different things and it makes no sense to talk about dollar values from one and apply it to another. Company operations rely on credit worthiness, revenue, and expenditures. An independent Arm would have short-term financial demands placed on them. Company must display profitability in the open market or their stock will tank. If their stock tanks then investors lose money and the company management team will at best receive much less compensation and at worst be replaced.
  
  Private investors similarly want to have their investment paid off. They could be doing a million other things with their money. It's not easy to find a private investor to outbid $40 billion, anyway.
  
  Additionally, NVIDIA has the experience, expertise, and drive to expand Arm into the data center and OpenRan. It takes more than just throwing money at something to do something. It takes vision and skill, and it takes the willingness to try.
  
  NVIDIA doesn't need lawyers to come up with such arguments. That's not what regulation is about. The regulators' business is not to try to make the strongest Arm. Various UK entities might be worried about such a thing. But regardless, they already know that money doesn't come from thin air. They already know about company operations. They also know that Arm has a small revenue and a small profitability. So it's not a hard argument to make to them.

• demian_thorne - Saturday, July 3, 2021 - link

  Thank you for the lesson in finances and company valuations. I appreciate it, even though I still do not feel I need it.
  
  Why do I feel you didn’t really answer my question though? You certainly went out of your way to verbiase on details but I do not think you touched the gist... I will leave it at that....

• metafor - Friday, July 2, 2021 - link

  I was at Qualcomm back in the days during Krait development. I remember this guy. This was before Android seriously took off and the iPhone was both the gold standard and also something everyone took pot-shots at.
  
  He was touting an HTC phone that ran Windows Mobile (not Windows Phone yet) and had HTC's skin on it. It used one of the very first Snapdragons (Scorpion CPU based back then). He talked up how open it was to side-loading apps.
  
  Someone mentioned how laggy the UI was -- and it was very laggy, definitely not an optimized for touch device. At the time anything non-iPhone had a very stuttery, delayed touch UI.
  
  His answer was "who gives a shit?" in a half-joking, half-dismissive manner.

• ikjadoon - Friday, July 2, 2021 - link

  I can’t (obviously) backup your employment claims, But, Amon has 100% been dismissive of claims QC failed to innovate on our CPU performance.
  
  I mean, they ran tail between their legs to Arm Ltd for cores! The delusion!
  
  Amon in 2018: “So as the hardware has evolved we realize that for single threaded performance on the CPU, we are in a place that is good enough for all the applications that are needed, and the vectors of innovation needed to come from other areas.”
  
  https://www.anandtech.com/show/13703/talking-snapd...
  
  Foolish CEO. Really? You thought people *liked* the ancient Windows on Arm device performance? Nope. We liked WoA in spite of the terrible performance to any modern x86 laptop.
  
  You can’t fix these kinds of delusions. When / If NUVIA falters in a few years, he’ll be back to claiming, “See, nobody needs better CPUs.”
  
  A walking contradiction. NUVIA saved Qualcomm, not the other way around. Samsung, MT, NVIDIA, AMD or Intel even, could’ve bought NUVIA out. They were fine.