7 ms·

is this state slowing technological advancement or actually state protecting it?

no_time 5y ago
advancement for the sake of advancement is not something to celebrate. I can't imagine a situation where more consolidation in this space is something beneficial for anyone except the company doing the acquisition.
- tester756 5y ago
  that's good point, naive of me.
dogma1138 5y ago
Probably a mixture of both, I think NVIDIA had a chance to push ARM to new heights it would also have forced them to be far more open. Longer term the market might be in a better position with a public ARM. I think a lot of the concerns around NVIDIA were driven by hyperbolic statements and memes. ARM is a good example of a monumental success and relative failure as in their cores and their architecture is in everything but they never have been able to capitalize on their success at the same scale at least as far as it goes for converting it into revenue which sits only at around $2B per year. NVIDIA on the other hand has mastered capitalizing on every success no matter how small it is. Overall as acquisitions go on paper it was a good match. It would’ve given ARM access to a lot of capital, engineering resources and a driven management with a strategic vision. NVIDIA would’ve gotten the ability to set the path for one of the most commonly used CPU architecture and being able to offer a completely vertically integrated solution to both enterprise and end consumers. Arguably NVIDIA could achieve the latter on its own too at least by licensing ARM I do think it’s a shame that they don’t have an x86 license too. ARM on the other hand would need to undergo a massive change to get into the position they arguably deserve to be in.
- trasz 5y ago
  >they never have been able to capitalize on their success As in, they failed to destroy the company for short term gains, like companies usually do.
  - dogma1138 5y ago
    SoftBank arguably ruined them, they went from an operating margin of around 50% when they were public to 10% under SoftBank. Considering where ARM designs and architecture are today their revenue and profits are pitiful and it does hold them back considerably. ARM justifiably so should’ve been one of the largest companies in the world by now.
    - czzr 5y ago
      No, it shouldn’t. ARM is ARM precisely because it doesn’t charge a huge amount - if it did, it would not be as widely used.
      - dogma1138 5y ago
        There are many ways to have better operating margins and higher revenue conversion than just charging more.
      - foobiekr 5y ago
        Correct. Arm was much more expensive for a time which is what kept Tensiluca and MIPS going.
    - syshum 5y ago
      I think you have an oversized understanding of what ARM does, and what value it brings to companies using an ARM chip It is not intel, it is making the chip or even really designing the chip, though they do have reference designs... ARM is ARM exactly because companies can take the instruction set and design their own chips around it for their own needs, they are not holding out for the next AMD or intel design.. That however means the individual companies take on more of the design costs, and risk if the design is a failure. No Arm should not be one of the largest companies in the world right now, not even close.
- justinclift 5y ago
  > ... revenue which sits only at around $2B per year. Err... plenty of places would be happy to have $2B revenue per year. ;)
  - paulmd 5y ago
    sure, but the market wouldn't value them at $40b, is the thing. At least not without a plan to turn that $2b into a lot more sometime into the future. if you're uber, or google, deliberately running in the red to grow the business, sure, maybe you deserve a higher valuation than your revenue alone justifies. That's not where ARM is, there's huge headwinds to them attempting to monetize more heavily, even if they wanted to crank revenue it's hard to see how they get there without chasing away their customers. an underlying problem here is that SoftBank really overpaid for ARM (and then proceeded to mismanage it into the ground) and they want their money back. And sure, that's not the market's problem, but as you can see from NVIDIA or Qualcomm making plays here, there's companies for whom the asset is really worth $40b. If you artificially restrict what ARM is allowed to do - that mindset in this thread of "the purpose of ARM is to be a public utility providing IP at-cost for their customers to monetize" combined with "they shouldn't be allowed to sell to any customer that might see any synergies from a merger" - then no, it's definitely not worth $40b. Because you're not going to be able to grow that $2b and you don't have any synergies that enhance your own business. But that's the market valuation that the asset could generate in the right hards. It's kind of unfortunate for SoftBank that they've sort of sleepwalked into a de-facto nationalization of their asset. The synthesis of all of this is that they aren't going to be allowed to sell it at a market price, they are going to be forced to either continue operating it with minimal margins, or sell it to a consortium at a massive discount to the true value of the asset, so that someone else can continue operating it with minimal margins. Even an IPO would result in a significantly constrained valuation as a result of the legal strictures that are being applied - the asset very obviously cannot be sold freely at a market price, and assets are only worth what someone is willing to pay (or in this case, can get the government to approve paying/who the government will approve paying). So even if IPO'd, it will have to operate in the same fashion. Effectively, there is no scenario in which ARM isn't going to be operated as a de-facto public utility going forward. De-facto I don't see a difference between "the government takes your asset and pays you 1/4th of market rate" and "you need to sell your asset, but the government won't allow you to sell it to anyone except one specific buyer who is only willing to pay 1/4th of market rate". The fact that the asset ends up in the hands of (a trust owned by) Google/MS/Amazon rather than operated directly in the government books isn't relevant to the owner, in fact it actually kind of makes the whole thing more odious. Google/MS/Amazon are now leveraging government power to reduce their supplier costs.
- throw0101a 5y ago
  > ARM is a good example of a monumental success and relative failure as in their cores and their architecture is in everything but they never have been able to capitalize on their success at the same scale at least as far as it goes for converting it into revenue which sits only at around $2B per year. ARM got to where it is by not being too greedy. If others perceived them to be making power grab then a lot fewer people would have been willing to stake their own futures on the architecture. To mix metaphors, ARM went with a 'rising tides floats all boats' approach to grow the pie in general instead of just their own slice of it.
  - dogma1138 5y ago
    ARM has serious issues with investment their operating margins under SoftBank dropped form 50% to below 10% they can barely afford their current R&D investment. And the market now is more dependent on their reference designs and core IP than ever. ARM as a company isn’t in a good position, they need a parent that can actual drive them forward or go public and get the investment they need and honestly deserve.
    - ca01an 5y ago
      What exactly has happened to them under SoftBank that caused their margins to drop so much? I have no idea why they can't turn a decent profit, given that, as you said yourself, the market is more dependent on their reference designs and core IP than ever.
      - dogma1138 5y ago
        My guess is that it was because their revenue relatively remained flat whilst R&D expenses inflated as they always do with more and more advanced SoCs and processors. https://www.statista.com/statistics/1132064/arm-quarterly-net-sales-worldwide/ https://www.statista.com/statistics/1132064/arm-quarterly-ne... If ARM was only about the instruction set and high level IP it wouldn’t be an issue but they develop full designs and those are the ones that get implemented by most users. Considering the exponential growth in ARM processors and SoCs in mobile devices and IOT/IOE devices since SoftBank acquired ARM it’s really a mystery tbh on how the hell they mismanaged them so badly that they didn’t managed to capitalize on an exponentially growing TAM. They kinda flatlined before that too but at least they had a steady growth rate in the years prior to the acquisition. Something went wrong somewhere.
- mschuster91 5y ago
  > Probably a mixture of both, I think NVIDIA had a chance to push ARM to new heights it would also have forced them to be far more open. No way. Even losing the most popular electronics brand (Apple) didn't sway NVIDIA from its course. > ARM on the other hand would need to undergo a massive change to get into the position they arguably deserve to be in. Intel has completely botched the last six-ish years, and Apple proved that ARM-based processors cannot just compete with Intel's offerings but outright destroy them, while still keeping backwards compatibility. All that ARM (as an architecture) needs now is Microsoft also offering ARM support and runtime emulation in Windows and a CPU vendor willing to sell decently powerful chips to vendors... and then, snap, Intel is gone.
  - OldTimeCoffee 5y ago
    > Apple proved that ARM-based processors cannot just compete with Intel's offerings but outright destroy them Your average ARM processor is a Qualcomm Snapdragon or Amazon Graviton, it's not going to win any performance awards. Even the M1 loses out to most Desktop processors once you start talking about multi-threaded performance. It's a great laptop part, proof that a BIG.little architecture is a good idea, and it's massively energy efficient, but it's not 'destroying' Intel parts on raw performance. ETA: We hear this same rhetoric every time AMD would come out with a part that was better than Intel (Athlon, Ryzen, etc). Intel isn't going anywhere, give them 4-5 years and they'll optimize and sell a part the eliminates the advantages. They've been doing exactly that for 30+ years.
    - mschuster91 5y ago
      > It's a great laptop part, proof that a BIG.little architecture is a good idea, and it's massively energy efficient, but it's not 'destroying' Intel parts on raw performance. Raw performance does not matter for 99% of the market (which is PCs for corporate drones shifting data around in Word, Excel and a data warehouse application). Your average Snapdragon is performance-constrained on mobile anyway because of cooling and power usage concerns - put that flagship CPU in a laptop or a NUC-sized case, and you will get more than enough to satisfy said corporate drones. Especially those who have some KPI target for "corporate sustainability" - claiming to have halved your IT fleet's energy consumption will net your average VP/C-level exec quite the bonus. All the market needs to do is provide the environment for that.
lonelyasacloud 5y ago
On balance, protecting. When ARM was bought by SoftBank the main argument for it being acceptable was that SoftBank were not chip manufacturers in their own right. And that because of this, ARM would have every incentive to carry on treating all of ARM's existing customers reasonably fairly under SoftBank's ownership. That's obviously not the case with Nvidia. So while, it's possible to imagine that Nvidia wouldn't (at least initially) abuse any ownership of ARM. From a societal pov, why risk allowing a situation that relies on humans behaving well on an ongoing basis not to fail? And two, given the way ARM operates i.e. all customer $$$'s are equal, why would Nvidia bother if they didn't think there was an advantage?

advancement for the sake of advancement is not something to celebrate. I can't imagine a situation where more consolidation in this space is something beneficial for anyone except the company doing the acquisition.

tester756 5y ago
that's good point, naive of me.

dogma1138 5y ago

Probably a mixture of both, I think NVIDIA had a chance to push ARM to new heights it would also have forced them to be far more open. Longer term the market might be in a better position with a public ARM. I think a lot of the concerns around NVIDIA were driven by hyperbolic statements and memes. ARM is a good example of a monumental success and relative failure as in their cores and their architecture is in everything but they never have been able to capitalize on their success at the same scale at least as far as it goes for converting it into revenue which sits only at around $2B per year. NVIDIA on the other hand has mastered capitalizing on every success no matter how small it is. Overall as acquisitions go on paper it was a good match. It would’ve given ARM access to a lot of capital, engineering resources and a driven management with a strategic vision. NVIDIA would’ve gotten the ability to set the path for one of the most commonly used CPU architecture and being able to offer a completely vertically integrated solution to both enterprise and end consumers. Arguably NVIDIA could achieve the latter on its own too at least by licensing ARM I do think it’s a shame that they don’t have an x86 license too. ARM on the other hand would need to undergo a massive change to get into the position they arguably deserve to be in.

trasz 5y ago
>they never have been able to capitalize on their success As in, they failed to destroy the company for short term gains, like companies usually do.
- dogma1138 5y ago
  SoftBank arguably ruined them, they went from an operating margin of around 50% when they were public to 10% under SoftBank. Considering where ARM designs and architecture are today their revenue and profits are pitiful and it does hold them back considerably. ARM justifiably so should’ve been one of the largest companies in the world by now.
  - czzr 5y ago
    No, it shouldn’t. ARM is ARM precisely because it doesn’t charge a huge amount - if it did, it would not be as widely used.
    - dogma1138 5y ago
      There are many ways to have better operating margins and higher revenue conversion than just charging more.
    - foobiekr 5y ago
      Correct. Arm was much more expensive for a time which is what kept Tensiluca and MIPS going.
  - syshum 5y ago
    I think you have an oversized understanding of what ARM does, and what value it brings to companies using an ARM chip It is not intel, it is making the chip or even really designing the chip, though they do have reference designs... ARM is ARM exactly because companies can take the instruction set and design their own chips around it for their own needs, they are not holding out for the next AMD or intel design.. That however means the individual companies take on more of the design costs, and risk if the design is a failure. No Arm should not be one of the largest companies in the world right now, not even close.
justinclift 5y ago
> ... revenue which sits only at around $2B per year. Err... plenty of places would be happy to have $2B revenue per year. ;)
- paulmd 5y ago
  sure, but the market wouldn't value them at $40b, is the thing. At least not without a plan to turn that $2b into a lot more sometime into the future. if you're uber, or google, deliberately running in the red to grow the business, sure, maybe you deserve a higher valuation than your revenue alone justifies. That's not where ARM is, there's huge headwinds to them attempting to monetize more heavily, even if they wanted to crank revenue it's hard to see how they get there without chasing away their customers. an underlying problem here is that SoftBank really overpaid for ARM (and then proceeded to mismanage it into the ground) and they want their money back. And sure, that's not the market's problem, but as you can see from NVIDIA or Qualcomm making plays here, there's companies for whom the asset is really worth $40b. If you artificially restrict what ARM is allowed to do - that mindset in this thread of "the purpose of ARM is to be a public utility providing IP at-cost for their customers to monetize" combined with "they shouldn't be allowed to sell to any customer that might see any synergies from a merger" - then no, it's definitely not worth $40b. Because you're not going to be able to grow that $2b and you don't have any synergies that enhance your own business. But that's the market valuation that the asset could generate in the right hards. It's kind of unfortunate for SoftBank that they've sort of sleepwalked into a de-facto nationalization of their asset. The synthesis of all of this is that they aren't going to be allowed to sell it at a market price, they are going to be forced to either continue operating it with minimal margins, or sell it to a consortium at a massive discount to the true value of the asset, so that someone else can continue operating it with minimal margins. Even an IPO would result in a significantly constrained valuation as a result of the legal strictures that are being applied - the asset very obviously cannot be sold freely at a market price, and assets are only worth what someone is willing to pay (or in this case, can get the government to approve paying/who the government will approve paying). So even if IPO'd, it will have to operate in the same fashion. Effectively, there is no scenario in which ARM isn't going to be operated as a de-facto public utility going forward. De-facto I don't see a difference between "the government takes your asset and pays you 1/4th of market rate" and "you need to sell your asset, but the government won't allow you to sell it to anyone except one specific buyer who is only willing to pay 1/4th of market rate". The fact that the asset ends up in the hands of (a trust owned by) Google/MS/Amazon rather than operated directly in the government books isn't relevant to the owner, in fact it actually kind of makes the whole thing more odious. Google/MS/Amazon are now leveraging government power to reduce their supplier costs.
throw0101a 5y ago
> ARM is a good example of a monumental success and relative failure as in their cores and their architecture is in everything but they never have been able to capitalize on their success at the same scale at least as far as it goes for converting it into revenue which sits only at around $2B per year. ARM got to where it is by not being too greedy. If others perceived them to be making power grab then a lot fewer people would have been willing to stake their own futures on the architecture. To mix metaphors, ARM went with a 'rising tides floats all boats' approach to grow the pie in general instead of just their own slice of it.
- dogma1138 5y ago
  ARM has serious issues with investment their operating margins under SoftBank dropped form 50% to below 10% they can barely afford their current R&D investment. And the market now is more dependent on their reference designs and core IP than ever. ARM as a company isn’t in a good position, they need a parent that can actual drive them forward or go public and get the investment they need and honestly deserve.
  - ca01an 5y ago
    What exactly has happened to them under SoftBank that caused their margins to drop so much? I have no idea why they can't turn a decent profit, given that, as you said yourself, the market is more dependent on their reference designs and core IP than ever.
    - dogma1138 5y ago
      My guess is that it was because their revenue relatively remained flat whilst R&D expenses inflated as they always do with more and more advanced SoCs and processors. https://www.statista.com/statistics/1132064/arm-quarterly-net-sales-worldwide/ https://www.statista.com/statistics/1132064/arm-quarterly-ne... If ARM was only about the instruction set and high level IP it wouldn’t be an issue but they develop full designs and those are the ones that get implemented by most users. Considering the exponential growth in ARM processors and SoCs in mobile devices and IOT/IOE devices since SoftBank acquired ARM it’s really a mystery tbh on how the hell they mismanaged them so badly that they didn’t managed to capitalize on an exponentially growing TAM. They kinda flatlined before that too but at least they had a steady growth rate in the years prior to the acquisition. Something went wrong somewhere.
mschuster91 5y ago
> Probably a mixture of both, I think NVIDIA had a chance to push ARM to new heights it would also have forced them to be far more open. No way. Even losing the most popular electronics brand (Apple) didn't sway NVIDIA from its course. > ARM on the other hand would need to undergo a massive change to get into the position they arguably deserve to be in. Intel has completely botched the last six-ish years, and Apple proved that ARM-based processors cannot just compete with Intel's offerings but outright destroy them, while still keeping backwards compatibility. All that ARM (as an architecture) needs now is Microsoft also offering ARM support and runtime emulation in Windows and a CPU vendor willing to sell decently powerful chips to vendors... and then, snap, Intel is gone.
- OldTimeCoffee 5y ago
  > Apple proved that ARM-based processors cannot just compete with Intel's offerings but outright destroy them Your average ARM processor is a Qualcomm Snapdragon or Amazon Graviton, it's not going to win any performance awards. Even the M1 loses out to most Desktop processors once you start talking about multi-threaded performance. It's a great laptop part, proof that a BIG.little architecture is a good idea, and it's massively energy efficient, but it's not 'destroying' Intel parts on raw performance. ETA: We hear this same rhetoric every time AMD would come out with a part that was better than Intel (Athlon, Ryzen, etc). Intel isn't going anywhere, give them 4-5 years and they'll optimize and sell a part the eliminates the advantages. They've been doing exactly that for 30+ years.
  - mschuster91 5y ago
    > It's a great laptop part, proof that a BIG.little architecture is a good idea, and it's massively energy efficient, but it's not 'destroying' Intel parts on raw performance. Raw performance does not matter for 99% of the market (which is PCs for corporate drones shifting data around in Word, Excel and a data warehouse application). Your average Snapdragon is performance-constrained on mobile anyway because of cooling and power usage concerns - put that flagship CPU in a laptop or a NUC-sized case, and you will get more than enough to satisfy said corporate drones. Especially those who have some KPI target for "corporate sustainability" - claiming to have halved your IT fleet's energy consumption will net your average VP/C-level exec quite the bonus. All the market needs to do is provide the environment for that.

lonelyasacloud 5y ago

On balance, protecting. When ARM was bought by SoftBank the main argument for it being acceptable was that SoftBank were not chip manufacturers in their own right. And that because of this, ARM would have every incentive to carry on treating all of ARM's existing customers reasonably fairly under SoftBank's ownership. That's obviously not the case with Nvidia. So while, it's possible to imagine that Nvidia wouldn't (at least initially) abuse any ownership of ARM. From a societal pov, why risk allowing a situation that relies on humans behaving well on an ongoing basis not to fail? And two, given the way ARM operates i.e. all customer $$$'s are equal, why would Nvidia bother if they didn't think there was an advantage?