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Just curious if anyone else had the thought, “Amazon is in the chip business?” and then subsequently wondered if the regulatory agencies should step in and forc

Just curious if anyone else had the thought, “Amazon is in the chip business?” and then subsequently wondered if the regulatory agencies should step in and force Amazon to start spinning their sub-entities off into independent companies. I mean, I’ve thought that about Walmart for years. Kinda weird…Amazon making chips.

TaylorAlexander 3y ago
I am sympathetic to this thinking but also Google and Apple make chips too, it would be perhaps hard to make a claim for why Amazon should be split without splitting Google and Apple too, but I think Apple in particular has such a good case for making their own chips that Amazon could prob use this as a defense of their own efforts. This is perhaps more a symptom of the lower cost of entry for chip fab today than we have had in the past.
- anigbrowl 3y ago
  I would like to see both Google and Amazon broken up. Apple I'm not sure about, they are huge and have a lot of verticals, but when you get down it they sell personal computing devices above all else and so have a stronger defense for arguing that their custom hardware is the core product. They do have a walled garden, which is a Bad Thing, but OTOH you can use their gear perfectly well without ever creating an Apple ID, and likewise you can use the whole internet perfectly well without ever purchasing an Apple device. In contrast, I have difficulty wrapping my head around the sheer scope of Google's and Amazon's enterprises, they're like entire tribes of 800lb gorillas.
  - deleted 3y ago
    [deleted]
  - andromeduck 3y ago
    Google has been building their own hardware since they started - first racks & servers then networks/data center then boarfs, semi custom cokponents and then components. Mandating that SW/Services companies be forbidden from silicon is every bit as absurd as prevention hardware manufacturers from toching software. The playing field for software is incredibly level these days - everyone uses the same IP vendors, design services & contract fabs. If you want smaller companies, reform it'll be much easier to get rid of tax pyramiding that favours mega corps.
    - anigbrowl 3y ago
      Mandating that SW/Services companies be forbidden from silicon I'm not arguing that at all. Just that they shouldn't cross so many markets at once.
giantrobot 3y ago
Why in the world would Amazon need to spin out their chip design group? They are building things they use to run their business. There's plenty of potential anti-trust issues with Amazon. Having their own chip designs to use in their data centers is nowhere on that list.
- rescbr 3y ago
  They should spin-off the whole of AWS, not specifically the chip group.
  - johnvanommen 3y ago
    The only reason Amazon is profitable is because of AWS.
    - pinkgolem 3y ago
      Is that not exactly the problem where amazon takes profits from AWS & uses them to agressivly drive other retailers out of the online shopping business?
      - throwaway2990 3y ago
        No.
candiddevmike 3y ago
They acquired a company that does this, Annapurna Labs
reissbaker 3y ago
I don't think vertical integration should be made illegal, and "Amazon Web Services offer exclusive Amazon-designed chips" doesn't to me seem like an abuse of monopoly power any more than "Apple iPhones use exclusive Apple-designed chips" does. What is the abuse of power that forcibly splitting apart the company would solve?
- wmf 3y ago
  I'd be worried if they had some wonder-chip with no competition that they rented out at exploitative prices but that's not really the situation.
  - reissbaker 3y ago
    Yeah, there's plenty of competition in the chip market — Apple, Intel, AMD, Samsung, and Qualcomm all are in the CPU business, and Amazon entering it as well seems like increased competition and a win for customers. And AWS is facing heavy competition from Azure now that MS has the exclusive OpenAI deal, so I'm not too worried about consolidation there either.
- bob1029 3y ago
  Vertical integration can take us to dark places, but it can also provide incredible product experiences. I think with Apple, Amazon, Microsoft and Google, you have a good competitive landscape to work with right now. All of these players already making their own chips. ~4 solid verticals that are somewhat compatible and highly competitive with each other in large, mostly-overlapping regions. Honestly, things feel pretty OK to me when you factor it all in. If it was just Microsoft or Apple doing the vertical chip thing and they were going absolutely hockey stick over it, then perhaps. But there are several competent players doing this now.
  - notjoemama 3y ago
    Thanks for the perspective. I guess where I’m coming from is Google was a web search company. They’ve expanded into mobile and that also means their own mobile OS. They also got into browsers. Similar could be said about Apple. To me it’s less about vertical integration and more about expansion. Walmart used to be grocery. Then they added retail. Neat experience at the time as a consumer, but it killed local retail and has gut punched other national retail. Since then they’ve added auto service and pharmacy. At what point does someone come in and say, ok giant corporation, you’ve proven you’re so large you can enter into most if not all markets and decimate your competitors but it’s not a long term net benefit because we’re consolidating everything under too few umbrellas. Maybe I’m wrong to think that and I do recognize the benefits of scale. I’m just not convinced a civilization is thinking long term enough when I keep seeing small businesses go under and medium businesses get acquired (aka: bought up). It seems like this is a meaningful part contributing to the disparity in wealth.

TaylorAlexander 3y ago

I am sympathetic to this thinking but also Google and Apple make chips too, it would be perhaps hard to make a claim for why Amazon should be split without splitting Google and Apple too, but I think Apple in particular has such a good case for making their own chips that Amazon could prob use this as a defense of their own efforts. This is perhaps more a symptom of the lower cost of entry for chip fab today than we have had in the past.

anigbrowl 3y ago
I would like to see both Google and Amazon broken up. Apple I'm not sure about, they are huge and have a lot of verticals, but when you get down it they sell personal computing devices above all else and so have a stronger defense for arguing that their custom hardware is the core product. They do have a walled garden, which is a Bad Thing, but OTOH you can use their gear perfectly well without ever creating an Apple ID, and likewise you can use the whole internet perfectly well without ever purchasing an Apple device. In contrast, I have difficulty wrapping my head around the sheer scope of Google's and Amazon's enterprises, they're like entire tribes of 800lb gorillas.
- deleted 3y ago
  [deleted]
- andromeduck 3y ago
  Google has been building their own hardware since they started - first racks & servers then networks/data center then boarfs, semi custom cokponents and then components. Mandating that SW/Services companies be forbidden from silicon is every bit as absurd as prevention hardware manufacturers from toching software. The playing field for software is incredibly level these days - everyone uses the same IP vendors, design services & contract fabs. If you want smaller companies, reform it'll be much easier to get rid of tax pyramiding that favours mega corps.
  - anigbrowl 3y ago
    Mandating that SW/Services companies be forbidden from silicon I'm not arguing that at all. Just that they shouldn't cross so many markets at once.

giantrobot 3y ago

Why in the world would Amazon need to spin out their chip design group? They are building things they use to run their business. There's plenty of potential anti-trust issues with Amazon. Having their own chip designs to use in their data centers is nowhere on that list.

rescbr 3y ago
They should spin-off the whole of AWS, not specifically the chip group.
- johnvanommen 3y ago
  The only reason Amazon is profitable is because of AWS.
  - pinkgolem 3y ago
    Is that not exactly the problem where amazon takes profits from AWS & uses them to agressivly drive other retailers out of the online shopping business?
    - throwaway2990 3y ago
      No.

candiddevmike 3y ago

They acquired a company that does this, Annapurna Labs

reissbaker 3y ago

I don't think vertical integration should be made illegal, and "Amazon Web Services offer exclusive Amazon-designed chips" doesn't to me seem like an abuse of monopoly power any more than "Apple iPhones use exclusive Apple-designed chips" does. What is the abuse of power that forcibly splitting apart the company would solve?

wmf 3y ago
I'd be worried if they had some wonder-chip with no competition that they rented out at exploitative prices but that's not really the situation.
- reissbaker 3y ago
  Yeah, there's plenty of competition in the chip market — Apple, Intel, AMD, Samsung, and Qualcomm all are in the CPU business, and Amazon entering it as well seems like increased competition and a win for customers. And AWS is facing heavy competition from Azure now that MS has the exclusive OpenAI deal, so I'm not too worried about consolidation there either.
bob1029 3y ago
Vertical integration can take us to dark places, but it can also provide incredible product experiences. I think with Apple, Amazon, Microsoft and Google, you have a good competitive landscape to work with right now. All of these players already making their own chips. ~4 solid verticals that are somewhat compatible and highly competitive with each other in large, mostly-overlapping regions. Honestly, things feel pretty OK to me when you factor it all in. If it was just Microsoft or Apple doing the vertical chip thing and they were going absolutely hockey stick over it, then perhaps. But there are several competent players doing this now.
- notjoemama 3y ago
  Thanks for the perspective. I guess where I’m coming from is Google was a web search company. They’ve expanded into mobile and that also means their own mobile OS. They also got into browsers. Similar could be said about Apple. To me it’s less about vertical integration and more about expansion. Walmart used to be grocery. Then they added retail. Neat experience at the time as a consumer, but it killed local retail and has gut punched other national retail. Since then they’ve added auto service and pharmacy. At what point does someone come in and say, ok giant corporation, you’ve proven you’re so large you can enter into most if not all markets and decimate your competitors but it’s not a long term net benefit because we’re consolidating everything under too few umbrellas. Maybe I’m wrong to think that and I do recognize the benefits of scale. I’m just not convinced a civilization is thinking long term enough when I keep seeing small businesses go under and medium businesses get acquired (aka: bought up). It seems like this is a meaningful part contributing to the disparity in wealth.