Arm

“We also introduced our first product last March, the one you just mentioned at Hotchips, the Army GI CPU. So now we're in that soup ourselves from the standpoint of we're also having to figure out how to buy substrates and buy wafers and buy memory, et cetera.”

“So Meta was that first example. They wanted a general purpose agentic CPU. There wasn't anybody out who could give, give it to them. They came to us and said Hey, why don't we do this together? And that's how we got into it.”

“So whether it was Nvidia, Amazon, Microsoft, Google, All people who build ARM-based server chips, they were all on board, and I think the ultimate proof point was when we announced the product last March, we had Jensen, we had Ronnie Boker, we had Amin, we had…”

“We don't have a fab and we have no intention to build a fab, but we fit in that ecosystem.”

“I would say we probably have 80 to 90% of engineers today in Sidearm who use it on a daily basis.”

“We probably have the richest IP portfolio, both in terms of not only the IP, and this is the killer, the documentation, the test benches, you know, how, how you build the IP.”

“Today, whether it's NVIDIA or some of the work that Qualcomm does, most of the brains that you see in the humanoids, those are all, all running on ARM today.”

“So until something's invented that says the CPU has gone away and we're now doing it through some other mechanism, which has yet been defined or invented. The CPU is gonna be doing just fine and there's gonna be a lot of demand for it, a ton of demand, in addi…”

“And in fact, as you get to the smaller footprints, where more and more AI is going to take place, that's going to be a sweet spot for Arm, because the CPU's table stakes anyway, you have to have it to do all the things that are required in the edge device. But…”

“We flew an ARM chip on our first spacecraft. We flew three ARM GPUs on our first spacecraft. Nobody knows about that, but we did.”

“Share changed when cell phone compute emerged, and Intel and AMD who had fabs and the best architects got zero share, and it all moved to ARM.”

“I don't really expect the major hyperscalers like Amazon to switch to ARM's, you know product offering. They have their own. And same with NVIDIA. They have their own ARM CPU that they're gonna incorporate and sell.”

“This new move, they're expecting to ramp revenue. To fifteen billion dollars by 2031.”

“Because they own 90%, roughly 90% of the company. It was a full buyout in 2016. That's right. They bought the entire company for something around 25 thirty billion US USD. Buy the entire company. They still own 90% today. So their purse, their, like, SoftBank'…”

“So, 97% gross margins for just those licensing ISA contracts. This will be closer to 50%, but it is, should be offset by the huge gains in market size and revenue potential.”

“He owns 90% of Arm still in SoftBank, and Arm is trading ninety-odd billion, so he's got eighty billion of equitable equity there.”

“So, but it very easily could see him back in the news with an incremental twenty billion. He could lever this. He could take twenty-five billion against the arm position easily.”

“They announced they're taking a five billion dollar margin loan that's secured against its chip unit against ARM Holdings. They've actually taken out 18.5 billion dollars of margin loans against ARM shares.”

“NVIDIA is a customer of ours, so I'm not gonna say Jensen is my competitor today.”

“That was the genesis of starting to pivot to ARM in a very big way inside NVIDIA, because at that time, Jensen looked at what was going on with SoCs and ARM-based architecture and moved everybody on to the SoC program.”

“I hinted in the last conference call that we're looking at going a little bit further than we do today.”

“Yeah, I think so because I think they're gonna, today, they largely use repurposed automotive chips, right? Things that have functional safety compliance around ADAS, but they're not specific for actuators or specific for smaller parts of the joint. So, physic…”

“Now today the China ecosystem actually follows the global ecosystem which is good from the standpoint that every mobile phone in China, it doesn't run Google Android, but it runs a version of Android, and it leverages the app ecosystem that comes off of Androi…”

“If you shut off supply of a computing architecture into other parts of the world, what will happen? Certain parts of the world that have the capabilities, either in terms of people, technology innovation, they will find a way and they will find a way around, a…”

“Our business is not one yet where I can say I'm hiring less people because of AI. I'm certainly hiring less finance people and legal people.”

“I think ARM is a little bit screwed as well, right? Because they are, their biggest selling point was sort of like, look, we can partner with everybody that doesn't want to partner with Intel.”

“AI trade, which I'm utterly convinced would have happened in London as much as it happened anywhere else. I don't think, I think it's a, you can't prove a negative, but I think it's a falsity to say a London market wouldn't have valued that the same way.”

“In the first period of time after they listed only one percent of the investor base in Arm, which is a great British company based in Cambridge, coming out of our ecosystem, was owned by UK investors. Not one of our major pension funds had them as one of their…”

“Like, if ARM hadn't become such a viable CPU architecture platform, and Apple hadn't standardized, you know, their Apple Silicon on ARM, Probably Intel would be making all of the chips that go into your iPhone, all the leading edge chips that go into your iPho…”

“Not only TSMC, ARM, Synopsys, Cadence, and ASML all founded, Right within a couple years of each other.”

“SoftBank will likely have to sell off a chunk of its stake in the company to fund Stargate. We think investors are largely missing this point and mistakenly view this announcement as materially incrementally good news.”

“And every data center whether it's running general purpose compute, whether it's running inference or running training, needs a base CPU to run everything, end quote. And that's our role. And whether that is going to be what we are part of today, which is GB 2…”

“Lineage of all of Apple Silicon, probably the most valuable, defensible part of Apple today in terms of technology, was Armandec to Intel to PA Semi to Apple.”

“The arm deal, which I'm closely associated with I can't claim Credit for going out and buying that company, merely the execution because I probably would have, wouldn't have seen beyond the fact that the stock is expensively valued and you got to pay a big con…”

“The orthogonal competitor Peels off a lot of the AI on the edge, and I think ARM's incredibly well positioned to do that. Clearly, NVIDIA's got ARM embedded now in a lot of their you know, in a lot of their Grace Blackwell, etc. But that to me would be one are…”

“He was insisting, he said, said to me, I've been wanting to buy that, that business for 18 years. This time I'm gonna buy it.”

“Now on Arm specifically, the thing that I would keep in mind is that those guys floated, I think about fifteen million shares. So there's about a hundred and forty-five, hundred and fifty million shares outstanding, 90% owned by them. So there's about 10 or fi…”

“If you're saying, are they all up? I would say, I will say no. I say the chance that they're all up would be very, very would be very low.”

“I'll say all three are up. I'll go two grand on this one.”

“All three IPOs within a few days have breached their issue price.”

“Instacart's float was 6.7%, and Klaviyo's float 7.6. Arms float almost hit the 10%, 9.4”

“Arm's revenue last quarter, six hundred seventy five million down two percent year over year. Up seven percent quarter over quarter. Fiscal full year, 20, 23, 2.7 billion ish, down one percent year over year.”

“And so I think this is a very tough valuation to get right. And trying to stretch to a 60 or seventy billion dollar print, I think is really tough. This is a Honestly, a 15 to twenty billion dollar company.”

“This arm thing is, you know, pretty forced. It seems it's not like there's a ton of pent up public demand to buy these arm shares.”

“It's a mid twenties billion dollar company. No more.”

“And I think that's going to have important implications, probably not for mobile or compute, But for all the other things that are getting chips built into them, cars, especially cars, home devices, internet of things, all of that is probably going to end up i…”

“Arm technologies are used in over Two hundred and thirty billion devices, with everything from sensors, to smartphones, to servers”

“In 2016, SoftBank made Arm its largest ever acquisition, with a reported price of thirty two billion dollars.”

“In fact, the only way you genuinely learn is by failing. You learn far more from your failures than you do from your successes. If you don't have a lot of failures, it means you probably not push the envelope enough.”

“At the time, I thought Windows on ARM and Windows RT when I was working on it back in the video was just a complete train wreck. But looking back 10 years later, I think there's going to be a huge promise, and we're seeing it already in terms of the value prop…”

“Strategy is not what you write down. Strategy is what you do, your behaviors.”

“So when we get together and our team was together last week in Austin, we spent one full day talking about nothing about other than a bunch of projects that we're trying to kick off that really aren't going to materialize in the marketplace until five years fr…”

“Just to back away from hybrid working versus working at home versus everyone in the office. Our policy is it's all about outputs. It's really not about I need you in the office Tuesday, Wednesday, and Friday, or we're going to be hybrid. It's really all about …”

“I'm okay. With teams trying something and failing. What I'm less okay with is the project failed. Well, why did it fail? Well, no one kind of really knew whose job it was to take something over the line. That's a problem. So you have to be really, really clear…”

“Arm is owned by SoftBank. So, Masayoshi-san, who's, I think, in the top 50 most wealthy people in the world, in the year 2000, he was the wealthiest man in the world, I think, for, he likes the joke, for about 20 nanoseconds when the SoftBank stock was higher …”

“I think we are entering a golden era for ARM, and I think the pandemic accelerated this a little bit, but the digitization of everything has really fostered immense opportunity, whether it's around phones, PCs, the cloud, Autonomous vehicles.”

“They came down, they came out with a cheaper version of it, but in reality, that's not what they should have done. They should have, you know, actually embraced a totally different business model like arm dead. We're just, they were just selling IP and enablin…”

“If you look at the largest licenses, Licensors of technology, companies like Arm, Tesra, Siva, and whatnot, they're very happy to get one to two percent royalty. We're getting on average seven to 15% royalty”

“Arm began a sort of low power chip architecture for very small devices and PDAs and so on, but it's grown to the point that it's now overtaken the x-ay six architecture that Intel are using.”

“Intel. I wouldn't bet against them.”