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I’ve seen rumours that AWS lost a lot of money developing their ARM chips. I haven’t seen a strong source confirming this, but it does pour cold water on the id

I’ve seen rumours that AWS lost a lot of money developing their ARM chips. I haven’t seen a strong source confirming this, but it does pour cold water on the idea that ARM is ready to take on x86 for general server compute, though no doubt there are niches where it can do well.

nieve 6y ago
If "lost a lot of money" means that they made a large investment that isn't paid off by just the first couple of months of the first generation there's no surprise there and their management would have been expecting it. It's pretty much impossible for their ARM chips to have paid off yet and it's a silly way to look at a long term strategy. It's a bit like a shipping company buying some new, gas-efficient trucks and being dinged because they haven't paid off their full cost in just a couple of months. Plus this gives them more leverage over Intel on top of already being one of their biggest customers. I can't criticize an approach that puts the screws to them on price competitiveness.
opencl 6y ago
The Graviton chips are just ARM reference designs with a few tiny modifications, very little R&D required. The majority of the NRE costs were probably the 7nm tapeout which is supposedly in the 10s of millions dollar range. Anandtech ran a pretty good article on the Graviton2 and its Neoverse N1 cores: https://www.anandtech.com/show/15578/cloud-clash-amazon-graviton2-arm-against-intel-and-amd https://www.anandtech.com/show/15578/cloud-clash-amazon-grav...
- baybal2 6y ago
  > 7nm tapeout which is supposedly in the 10s of millions dollar range. Yes. Cookie cutter SoCs stopped making money at around 65nm node. You need to put more on the table these days than just bare ARM cores and generic peripherals to sell a SoC. Many dotcoms that ventured into chipmaking are now quietly bailing out. Making your own chips just to undercut Intel is a stupid idea. People tried it before more times than I can count. Just remember all of RISC epopeias from nineties. Where are SPARC, PARISC, PPC, MIPS now? The fact that they use ARM instead of any other RISC core makes little difference. Internet companies are too small to make money from undercutting chipmakers, but I believe they are not that far away from that point. Maybe in 10 years or so, you will be working on a PC with Genuine Google(R) chip
  - scarface74 6y ago
    That’s not really a valid comparison. The market for chips was a lot smaller as was the volume. Who knows how many chips that Amazon and Google use for their own servers. They have to use more internally than the number of PPC chips that IBM and Motorola sold at its height. On the other hand, it wouldn’t have made sense for Apple to design their own chips for Macs, but they sell 200-250 million ARM based devices a year.
    - baybal2 6y ago
      > Who knows how many chips that Amazon and Google use for their own servers. No amount I can imagine can pay off for the tapeout on the latest node for them. All dotcoms taken together make for single digit percentage of wafer output for both Intel, or AMD. Apple doesn't make money on chips, they make money off their devices. An A13 may well not make them money, but the whole Iphone does.
      - scarface74 6y ago
        And Amazon doesn’t make money off chips. It makes money selling services that run on chips. They both sell integrated products. But, we also aren’t talking about all chips. Just server class chips. Energy cost is also a very real cost at the scale of the cloud vendors. If they can decrease the overall cost and the cost/per watt. It’s a win.
      - Spooky23 6y ago
        I doubt it. The A13 and successors are money printing machines. Apple has always been about limiting SKUs to maximize their economies of scale. The original iMac was a great example of this... although they had no market share, they had like 3 SKUs vs HP and Dell who had dozens or hundreds of different PCs. It was the biggest selling model of computer at the time, and they make money on it because of that scale. They do the same thing with the iPhone today. The SE has the same guts as the flagship SKU, which is in turn faster than any competing product. The control of the roadmap and capabilities of the CPUs is a huge competitive advantage that makes a lot of money. They save money on things they don’t control like batteries because the faster CPU uses less power, etc. Everyone else is stuck with whatever garbage Qualcomm is dishing out. Amazon is in a similar place. There remains a lot of on-premise server compute that AWS wants to conquer. You need to think about their actions today in terms of what they mean in 2030.
scarface74 6y ago
How did they “lose money”? They aren’t selling them to other vendors. The only fair way to compute a “loss” is whether they save money in the long term from using ARM vs x86.
justincormack 6y ago
The original use was as CPUs in their network devices, which meant they could sell more x86 cores as they didnt have to use some to support networking and remote storage. Probably made a lot of money selling the additional cores.
- mappu 6y ago
  This is an important angle. There is currently a serious supply limitation of Intel CPUs at volume, Amazon simply cannot get enough to meet demand.
happycube 6y ago
Cost money sure... but for all anyone knows, just showing a working ES to the right people at intel and amd knocked enough off their chip pricing to get all their money back ;) And I strongly suspect Apple's been doing the same with ARM MacBook prototypes since A8X, if not before... Speculation aside, it's pretty cool to see an ARM core competitive at this scale at the socket level.

nieve 6y ago

If "lost a lot of money" means that they made a large investment that isn't paid off by just the first couple of months of the first generation there's no surprise there and their management would have been expecting it. It's pretty much impossible for their ARM chips to have paid off yet and it's a silly way to look at a long term strategy. It's a bit like a shipping company buying some new, gas-efficient trucks and being dinged because they haven't paid off their full cost in just a couple of months. Plus this gives them more leverage over Intel on top of already being one of their biggest customers. I can't criticize an approach that puts the screws to them on price competitiveness.

opencl 6y ago

The Graviton chips are just ARM reference designs with a few tiny modifications, very little R&D required. The majority of the NRE costs were probably the 7nm tapeout which is supposedly in the 10s of millions dollar range. Anandtech ran a pretty good article on the Graviton2 and its Neoverse N1 cores: https://www.anandtech.com/show/15578/cloud-clash-amazon-graviton2-arm-against-intel-and-amd https://www.anandtech.com/show/15578/cloud-clash-amazon-grav...

baybal2 6y ago
> 7nm tapeout which is supposedly in the 10s of millions dollar range. Yes. Cookie cutter SoCs stopped making money at around 65nm node. You need to put more on the table these days than just bare ARM cores and generic peripherals to sell a SoC. Many dotcoms that ventured into chipmaking are now quietly bailing out. Making your own chips just to undercut Intel is a stupid idea. People tried it before more times than I can count. Just remember all of RISC epopeias from nineties. Where are SPARC, PARISC, PPC, MIPS now? The fact that they use ARM instead of any other RISC core makes little difference. Internet companies are too small to make money from undercutting chipmakers, but I believe they are not that far away from that point. Maybe in 10 years or so, you will be working on a PC with Genuine Google(R) chip
- scarface74 6y ago
  That’s not really a valid comparison. The market for chips was a lot smaller as was the volume. Who knows how many chips that Amazon and Google use for their own servers. They have to use more internally than the number of PPC chips that IBM and Motorola sold at its height. On the other hand, it wouldn’t have made sense for Apple to design their own chips for Macs, but they sell 200-250 million ARM based devices a year.
  - baybal2 6y ago
    > Who knows how many chips that Amazon and Google use for their own servers. No amount I can imagine can pay off for the tapeout on the latest node for them. All dotcoms taken together make for single digit percentage of wafer output for both Intel, or AMD. Apple doesn't make money on chips, they make money off their devices. An A13 may well not make them money, but the whole Iphone does.
    - scarface74 6y ago
      And Amazon doesn’t make money off chips. It makes money selling services that run on chips. They both sell integrated products. But, we also aren’t talking about all chips. Just server class chips. Energy cost is also a very real cost at the scale of the cloud vendors. If they can decrease the overall cost and the cost/per watt. It’s a win.
    - Spooky23 6y ago
      I doubt it. The A13 and successors are money printing machines. Apple has always been about limiting SKUs to maximize their economies of scale. The original iMac was a great example of this... although they had no market share, they had like 3 SKUs vs HP and Dell who had dozens or hundreds of different PCs. It was the biggest selling model of computer at the time, and they make money on it because of that scale. They do the same thing with the iPhone today. The SE has the same guts as the flagship SKU, which is in turn faster than any competing product. The control of the roadmap and capabilities of the CPUs is a huge competitive advantage that makes a lot of money. They save money on things they don’t control like batteries because the faster CPU uses less power, etc. Everyone else is stuck with whatever garbage Qualcomm is dishing out. Amazon is in a similar place. There remains a lot of on-premise server compute that AWS wants to conquer. You need to think about their actions today in terms of what they mean in 2030.

scarface74 6y ago

How did they “lose money”? They aren’t selling them to other vendors. The only fair way to compute a “loss” is whether they save money in the long term from using ARM vs x86.

justincormack 6y ago

The original use was as CPUs in their network devices, which meant they could sell more x86 cores as they didnt have to use some to support networking and remote storage. Probably made a lot of money selling the additional cores.

mappu 6y ago
This is an important angle. There is currently a serious supply limitation of Intel CPUs at volume, Amazon simply cannot get enough to meet demand.

happycube 6y ago

Cost money sure... but for all anyone knows, just showing a working ES to the right people at intel and amd knocked enough off their chip pricing to get all their money back ;) And I strongly suspect Apple's been doing the same with ARM MacBook prototypes since A8X, if not before... Speculation aside, it's pretty cool to see an ARM core competitive at this scale at the socket level.