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I love when companies wander beyond their core business and venture on something they are not familiar! That idea has everything to work it out just fine, don't

I love when companies wander beyond their core business and venture on something they are not familiar! That idea has everything to work it out just fine, don't worry!

elgenie 9y ago
It's a very logical extension of the project that became Open Compute, which started at Facebook back in 2009 and was announced two years later [1]. Facebook has been running its own datacenters, first in colos and now fully purpose-built, for nearly a decade and a half at this point. That hardware design done by a company isn't familiar to you doesn't mean it doesn't exist. And that's not even mentioning the now nearly four years old Oculus acquisition or the resources Facebook has been pouring into AI/ML research and applications. [1] https://www.facebook.com/notes/facebook-engineering/building-efficient-data-centers-with-the-open-compute-project/10150144039563920/ https://www.facebook.com/notes/facebook-engineering/building...
- supahfly_remix 9y ago
  To my knowledge, for Open Compute Project Facebook gave specifications to Taiwanese greybox vendors. It's up to the vendors to work out the details of the design, such as component selection and PCB design. Doing their own ASIC design is a whole other ballgame.
  - shaklee3 9y ago
    That's correct. They aren't really designing them. Also, making a chip that's as competitive as an NVIDIA card isn't something that you can just make easily. See AMD and Intel.
adventured 9y ago
Microsoft should stick to basic interpreters. Apple should only do desktop PCs. Music players, that's ridiculous. Oracle should only do databases. Google should stick to search. What do they know about operating systems? They also have no business running their own datacenters, what could they possibly know about allocating ten billion dollars in capital annually to such an operation. Amazon is a retailer. Cloud services, artificial intelligence, devices, is that a joke? Intel makes memory chips, what do they know about processors? Facebook has $41 billion in cash. They're about to start piling up $20 billion per year. Zero debt. They can do almost anything they want to within reason and not worry about the financial consequences. Their shareholders will be a lot more upset if they don't take pragmatic business risks and pursue opportunity.
- lnsru 9y ago
  $20 million for 14 nm ASIC is not expensive experiment looking at these numbers.
- shaklee3 9y ago
  Intel also has been trying to compete with Nvidia, and has completely failed. Processors have been their core competency for a long, long time.
  - jandrese 9y ago
    On AI, yes. On graphics cards? Intel graphics have basically eaten the entire bottom half of the market. nVidia doesn't even bother to make anything slower than a xx50 card because it would be slower than the integrated graphics. nVidia had to diversify to avoid being shoved into a shrinking niche market.
    - shaklee3 9y ago
      Intel has been integrating the GPU into the CPU for a while now, so that's not really a fair comparison. If you dominate the CPU market, then clearly you can slap a low-end GPU on the die and sell it cheaper than a GTX 1080.
- CamTin 9y ago
  "They can do almost anything they want to within reason and not worry about the financial consequences." No, they need to make the soundest possible investments with that money. Lots of free cash flow is not license to do "anything they want to within reason," especially for a publicly-traded company (sure, if you're talking about a private partnership and all the partners agree, go nuts, I guess). If they don't actually need it to run the business making the profits, they should return it to shareholders since, you know, that's whose money it is.
  - dingaling 9y ago
    But there's no point paying dividends to shareholders who aren't demanding them. Why would a company 'throw away' surplus cash to passive uncomplaining shareholders instead of intercepting it upstream and ploughing it back into tax-reducing activities? Like burning cash on R&D that provides opportunities for pivoting in the future. Now that is prudent and sound. Eventually shareholders might gain enough voting power to demand dividends but there's no point in piling-up taxable cash until that happens.
borplk 9y ago
Phone companies made fun of apple before they made iPhone.
- stephenr 9y ago
  Apple had history making computers - even portable ones - and consumer electronics. iPhone is just a different form factor in that sense. This is more like your local sandwich bar deciding to also farm their own pigs for the ham.
  - mattnewton 9y ago
    If selling sandwhiches brought in 40 million in revenue last year, and there is essentially a hog farmer monopoly (nvidia), and you are worried about the monopoly running out of meat, or selling it first to your competitors, or just hiking prices indefinitely, yeah it makes sense to hire some hands and get yourself a barn.

I love when companies wander beyond their core business and venture on something they are not familiar! That idea has everything to work it out just fine, don't worry!

elgenie 9y ago

It's a very logical extension of the project that became Open Compute, which started at Facebook back in 2009 and was announced two years later [1]. Facebook has been running its own datacenters, first in colos and now fully purpose-built, for nearly a decade and a half at this point. That hardware design done by a company isn't familiar to you doesn't mean it doesn't exist. And that's not even mentioning the now nearly four years old Oculus acquisition or the resources Facebook has been pouring into AI/ML research and applications. [1] https://www.facebook.com/notes/facebook-engineering/building-efficient-data-centers-with-the-open-compute-project/10150144039563920/ https://www.facebook.com/notes/facebook-engineering/building...

supahfly_remix 9y ago
To my knowledge, for Open Compute Project Facebook gave specifications to Taiwanese greybox vendors. It's up to the vendors to work out the details of the design, such as component selection and PCB design. Doing their own ASIC design is a whole other ballgame.
- shaklee3 9y ago
  That's correct. They aren't really designing them. Also, making a chip that's as competitive as an NVIDIA card isn't something that you can just make easily. See AMD and Intel.

adventured 9y ago

Microsoft should stick to basic interpreters. Apple should only do desktop PCs. Music players, that's ridiculous. Oracle should only do databases. Google should stick to search. What do they know about operating systems? They also have no business running their own datacenters, what could they possibly know about allocating ten billion dollars in capital annually to such an operation. Amazon is a retailer. Cloud services, artificial intelligence, devices, is that a joke? Intel makes memory chips, what do they know about processors? Facebook has $41 billion in cash. They're about to start piling up $20 billion per year. Zero debt. They can do almost anything they want to within reason and not worry about the financial consequences. Their shareholders will be a lot more upset if they don't take pragmatic business risks and pursue opportunity.

lnsru 9y ago
$20 million for 14 nm ASIC is not expensive experiment looking at these numbers.
shaklee3 9y ago
Intel also has been trying to compete with Nvidia, and has completely failed. Processors have been their core competency for a long, long time.
- jandrese 9y ago
  On AI, yes. On graphics cards? Intel graphics have basically eaten the entire bottom half of the market. nVidia doesn't even bother to make anything slower than a xx50 card because it would be slower than the integrated graphics. nVidia had to diversify to avoid being shoved into a shrinking niche market.
  - shaklee3 9y ago
    Intel has been integrating the GPU into the CPU for a while now, so that's not really a fair comparison. If you dominate the CPU market, then clearly you can slap a low-end GPU on the die and sell it cheaper than a GTX 1080.
CamTin 9y ago
"They can do almost anything they want to within reason and not worry about the financial consequences." No, they need to make the soundest possible investments with that money. Lots of free cash flow is not license to do "anything they want to within reason," especially for a publicly-traded company (sure, if you're talking about a private partnership and all the partners agree, go nuts, I guess). If they don't actually need it to run the business making the profits, they should return it to shareholders since, you know, that's whose money it is.
- dingaling 9y ago
  But there's no point paying dividends to shareholders who aren't demanding them. Why would a company 'throw away' surplus cash to passive uncomplaining shareholders instead of intercepting it upstream and ploughing it back into tax-reducing activities? Like burning cash on R&D that provides opportunities for pivoting in the future. Now that is prudent and sound. Eventually shareholders might gain enough voting power to demand dividends but there's no point in piling-up taxable cash until that happens.

borplk 9y ago

Phone companies made fun of apple before they made iPhone.

stephenr 9y ago
Apple had history making computers - even portable ones - and consumer electronics. iPhone is just a different form factor in that sense. This is more like your local sandwich bar deciding to also farm their own pigs for the ham.
- mattnewton 9y ago
  If selling sandwhiches brought in 40 million in revenue last year, and there is essentially a hog farmer monopoly (nvidia), and you are worried about the monopoly running out of meat, or selling it first to your competitors, or just hiking prices indefinitely, yeah it makes sense to hire some hands and get yourself a barn.