At one point 25% of Intel's DC revenue were coming from AWS, but the competition from AMD and AWS switching every function / service they run to their own Graviton just means Intel are no longer required for Amazon. And Intel might as well Fab chips for them to keep them as a customer.
Another point I think Amazon is willing to partly / dual source ( I dont think Amazon is making a one way jump ) to Intel is TSMC is now constrained on leading node. It is always Apple or Nvidia. And the lead time for them to get any capacity spared is getting longer now Nvidia is also in the game.
Amazon, Google or Meta design their own chips for the most part. They have chip designers in the company but most of the work is done companies like Broadcomm.
When you're a customer big enough to be a press release and logo, and the seller is in need, you can be pretty aggressive with terms.
It'll be curious how the financials on this look. I assume with Intel breaking foundry out into a subsidiary, they'll also break out revenue, and if this is their marque first big customers, it should show up in the numbers.
I guess its more of a trading in of outstanding old favours - all those trampolines back then where expensive, which we could have known if speculative execution would have been performed, but then again that 20 % speed plus would costs us in security.
If Amazon supplies a lot of Federal or Military there might be a requirement that certain VMs run on CPUs that are made in the USA or that have very stringent supply chain controls.
Consumer desktop processor fabrication is commodified in no small part due to TSMC, along with the extremely low margins.
There's no reason for Intel to target that money pit when there are higher value options like Server processors.
The bleeding edge nodes built in Chandler have much better uses.
This is part of the longer term IDM 2.0 strategy who's endgame was always going to be a split or potentially even spinoff of Intel Foundary services from Intel Chip Design services - their goals are just too diametrically opposed and undermining each other.
Obviously, but not in the way you think. The government made billions available to US foundries, giving Intel enough monetary leeway to be competitive with Amazon’s suppliers.
Even if Microsoft does release such as thing, enterprise software lives in an ecosystem of thousands of third-party vendors that provide components that are often co-installed on the same box.
Also, products like MSSQL are licensed per CPU core, so you want the fastest possible cores, not the cheapest. Currently that's the AMD EPYC X86-compatible CPUs, which run rings around everything else.
The examples you gave are commonly available proprietary software, but it’s really the long tail of low volume software where the author will only support really specific configurations
Oracle charge per core; whilst Graviton has a lot of advantages, you can get a bit more out of a single amd64 core. SQL server doesn't even release for ARM AFAIK.
As someone who has had the dubious honor of bidding to supply Amazon, they love dual sourcing to squeeze their suppliers, or just straight up using your bid to negotiate with their preferred supplier
>they love dual sourcing to squeeze their suppliers
Yeah, it sucks working for one of their suppliers but every single major company does this: auto companies, console manufacturers, smartphone makers, white goods/appliances, etc.
If you were running such a business, you'd do it to. It's how capitalism works.
> It also said it would pause construction at its chip factory project in Germany for two years, a move Reuters had previously reported. The company plans to pause its project in Poland as well.
Just three days ago: Poland's Intel plant gets EU green light for $1.9B in state support [1].
The subsidies are contingent on Intel building a plant. Germany's finance minister is already eyeing those 11b to balance books, because it looks like they won't be needed for now.
This stuff rarely takes the form of the government writing a cheque, especially not upfront.
I wonder whether there are any "outs". DE and PL subsidized because they want fabs ASAP; if Intel can't hold up their end, why not cancel the deal and go with TSMC or Samsung instead.
ohh, the old trick of talking trash about a company in the mass media when you know an operation is in the works that will raise the stock, so you make the stock go down, you buy it, the operation is announced, you sell and profit.
I have been hearing in the last week a lot of "Intel is doomed" and I wondered why. Now I Know.
> Even adjusting for inflation, its still a massive return.
Adjusted for inflation it's 4.7x
> If thats not a win, I dont know what is.
You compared the low with the current price. Pick a random stock and pick its lowest point and compare with now - many/most handily beat the S&P 500. Think AMD at $4.
The proper comparison is to pick two random points 10-15 years apart. Don't cherry pick.
Yes, I rounded up, and yes I picked a low to make a point. But go ahead and pick a random point 10-15 years ago if you'd like and compare it to today and the returns are still very large.
It's a philosophical thing mostly. You learn to live in statistics, averages and systemic limits. Otherwise yeah you drown in regrets, sorrow and anxiety.
That said I don't advise to play the trading game.. it's kinda soulless and empty.
If I think it is a good company, I'll hold on the loss and wait. Intel has done well for me, I've held it for decades, but last summer my patience ran out and I sold it.
But in all my years investing, I never get used to the downturns and have a hard time being sanguine about it.
I think that Amazon is past the point where excellent software engineering is what makes them money. What makes them money is going out for golf with some Fortune 500 exec that saw "Stats powered by AWS" on the last NFL game, and wants something like that for their company. They then buy 80 million dollars of reserved CPU hours and get tickets to the Seahawks game.
These big companies are self-sustaining no matter how unfriendly to employees they might be. Yes, it's great when you hire great engineers and they invent the next billion dollar business. That is now a rounding error for Amazon, so they won't notice it's gone if it goes. And, a lot of engineers don't really care about returning to the office if it means they're getting paid $800k a year.
So overall, with everyone's retirement plan buying Amazon stock by default (oh sorry "Target 2050 Fund" shares), I wouldn't expect one supplier change or one HR policy to make a significant difference in their stock price.
> Amazon is past the point where excellent software engineering is what makes them money.
It's worth many millions and millions of dollars to Amazon to improve server software efficiency by even 1%. I bet the software engineers that can make such optimizations are making $millions in compensation.
It's not what POWER cannot, but about what graviton can CUT OUT and SPECIALIZE in while still being able to do what AWS wants.
POWER from this perspective, does way too much. It's too much chip for AWS's needs, and a big waste of money.
That's what optimization means! You get the smallest/ simplest/cheapest thing that does exactly what you want, and ignore the big bad "do everything" chips that go for megabucks.
Then you can devote chip transistor count toward the instructions you want, and ditch all the dead weight that comes with a traditional chip like power, that tries to make a balanced general purpose cpu.
This results in a chip that isn't good for anything but the specific need, but it's super cost effective and higher performing.
It's not new, graviton that you can use yourself is on the 4th generation. And they've used it to accelerate networking and storage long before that. Most managed services already run on it as well. It's cheaper and faster.
Graviton cores are definitely not faster. The core frequencies are too low for heavy usage and I suspect that the caches are too small as well.
You can easily benchmark this by comparing the Graviton variants with the Intel specific instances.
Graviton 4 has also not been made available for EC2 and RDS instance types in most regions two years after release. My guess is that they are unable to scale production.
With the amount of money AMZN has at its disposal. I’m surprised they didn’t take the Apple route of making their own chip in house. Apple realized how bottlenecked they were with Intel, and took steps to remove that dependency.
Could have been Jassys equivalent of Beso’s AWS, but unfortunately he’s a lousy leader with no imagination beyond the quarterly results.
Apple doesn't manufacture the chips, they subcontract that out to TSMC/Samsung. In this case Intel is the contract manufacturer, not the chip designer fulfilling the same role as TSMC does for Apple.
Not really. Graviton chips just use off-the-shelf core designs from ARM. The Graviton used Cortex A72 cores, the Graviton2 Neoverse N1, Graviton3 Neoverse V1, and Graviton 4 Neoverse V2.
Apple designs their own cores and Qualcomm is starting to. Most people just grab ARM's reference designs. They're sorta in-house in that they're putting it together, but they aren't doing the design work of actually making their own cores.
> Apple designs their own cores and Qualcomm is starting to.
Qualcomm already did for many years! The Snapdragon line from 2008-2016 used custom Scorpion/Krait/Kryo cores before they went to Cortex A73 cores in the Snapdragon 835.
Qualcomm have designed their own CPU cores for some years, but their design capacity could not keep up with the Arm company, so, exactly like Samsung and NVIDIA, they have given up and they have started to use the CPU cores designed by the Arm company, already for many years.
Only now, after buying the Nuvia CPU design team, they have begun to use again their own CPU core designs, first in the laptops introduced a few months ago and then presumably also in the smartphones of next year.
While many companies have designed Arm cores, only Apple has consistently outperformed the Arm company and now Qualcomm might have a chance to do that, with a team that includes many former Apple designers.
The server Arm cores that have been demonstrated until now by the Ampere company are not impressive, being weaker than the Arm-designed cores used by Amazon or Microsoft.
At one point 25% of Intel's DC revenue were coming from AWS, but the competition from AMD and AWS switching every function / service they run to their own Graviton just means Intel are no longer required for Amazon. And Intel might as well Fab chips for them to keep them as a customer.
Another point I think Amazon is willing to partly / dual source ( I dont think Amazon is making a one way jump ) to Intel is TSMC is now constrained on leading node. It is always Apple or Nvidia. And the lead time for them to get any capacity spared is getting longer now Nvidia is also in the game.
Amazon, Google or Meta design their own chips for the most part. They have chip designers in the company but most of the work is done companies like Broadcomm.
Intel can sell design and manufacturing.
Do you think the US government also encouraged Amazon to throw Intel Foundry a bone and give them some business?
Maybe.
"U.S. Govt pushes Nvidia and Apple to use Intel's foundries — Department of Commerce Secretary Raimondo makes appeal for US-based chip production"
https://www.tomshardware.com/tech-industry/us-govt-pushes-nv...
Just guessing but probably more something like Amazon striking a deal with Intel while they're desperate.
When you're a customer big enough to be a press release and logo, and the seller is in need, you can be pretty aggressive with terms.
It'll be curious how the financials on this look. I assume with Intel breaking foundry out into a subsidiary, they'll also break out revenue, and if this is their marque first big customers, it should show up in the numbers.
I guess its more of a trading in of outstanding old favours - all those trampolines back then where expensive, which we could have known if speculative execution would have been performed, but then again that 20 % speed plus would costs us in security.
If Amazon supplies a lot of Federal or Military there might be a requirement that certain VMs run on CPUs that are made in the USA or that have very stringent supply chain controls.
Intel's main fabs are in Arizona. Their cutting edge CPUs are already made in the USA, no need for custom chips.
>Their cutting edge CPUs
On Server ( for now ). Cutting edge laptop is no longer on Intel but TSMC.
Consumer desktop processor fabrication is commodified in no small part due to TSMC, along with the extremely low margins.
There's no reason for Intel to target that money pit when there are higher value options like Server processors.
The bleeding edge nodes built in Chandler have much better uses.
This is part of the longer term IDM 2.0 strategy who's endgame was always going to be a split or potentially even spinoff of Intel Foundary services from Intel Chip Design services - their goals are just too diametrically opposed and undermining each other.
Yes but where are Amazon’s chips made, currently?
Obviously, but not in the way you think. The government made billions available to US foundries, giving Intel enough monetary leeway to be competitive with Amazon’s suppliers.
oh dont get the idea wrong, they both works with amd and intel
knowing Amazon its not US goverment to force them but Amazon can make the 2 of them outbidding each other in more desperate times
More importantly, they heavily push ARM and are probably so desperate for NVIDIA silicon they see anything they can unload from TMSC as a win.
> to their own Graviton
For open source software loads. If you're running licensed software in the cloud you don't often get to make this choice.
Would you mind expanding on this? Why would I not be able to run Oracle or SQL server on Graviton? Than you !
There are no ARM builds of Microsoft SQL Server.
Even if Microsoft does release such as thing, enterprise software lives in an ecosystem of thousands of third-party vendors that provide components that are often co-installed on the same box.
Also, products like MSSQL are licensed per CPU core, so you want the fastest possible cores, not the cheapest. Currently that's the AMD EPYC X86-compatible CPUs, which run rings around everything else.
The examples you gave are commonly available proprietary software, but it’s really the long tail of low volume software where the author will only support really specific configurations
Oracle charge per core; whilst Graviton has a lot of advantages, you can get a bit more out of a single amd64 core. SQL server doesn't even release for ARM AFAIK.
As someone who has had the dubious honor of bidding to supply Amazon, they love dual sourcing to squeeze their suppliers, or just straight up using your bid to negotiate with their preferred supplier
Capitalism at its finest. No sarcasm.
The only problem is efficiency vs redundancy tradeoff. The organization needs to be antifragile to cope with that.
>they love dual sourcing to squeeze their suppliers
Yeah, it sucks working for one of their suppliers but every single major company does this: auto companies, console manufacturers, smartphone makers, white goods/appliances, etc.
If you were running such a business, you'd do it to. It's how capitalism works.
> It also said it would pause construction at its chip factory project in Germany for two years, a move Reuters had previously reported. The company plans to pause its project in Poland as well.
Just three days ago: Poland's Intel plant gets EU green light for $1.9B in state support [1].
Germany is subsidizing Intel with $11bn.
I'd be fuming.
[1]: https://news.ycombinator.com/item?id=41534763
The subsidies are contingent on Intel building a plant. Germany's finance minister is already eyeing those 11b to balance books, because it looks like they won't be needed for now.
This stuff rarely takes the form of the government writing a cheque, especially not upfront.
Fair point.
I wonder whether there are any "outs". DE and PL subsidized because they want fabs ASAP; if Intel can't hold up their end, why not cancel the deal and go with TSMC or Samsung instead.
CEO letter is here: https://www.intc.com/news-events/press-releases/detail/1710/...
There are a few threads on this now, so maybe they can be merged and linked to this primary source instead of news articles summarizing it.
Buying Intel at this moment still feels like catching a falling knife. Buyer beware.
Look, I'm just curious if this guy will ever make his grandma proud:
https://www.reddit.com/r/wallstreetbets/comments/1ehjuzj/i_b...
3-5 years
Least suspicious HN username
ohh, the old trick of talking trash about a company in the mass media when you know an operation is in the works that will raise the stock, so you make the stock go down, you buy it, the operation is announced, you sell and profit.
I have been hearing in the last week a lot of "Intel is doomed" and I wondered why. Now I Know.
Dang. I should’ve bought the dip.
There is no winning with stock investing.
1. if you buy it, and it goes down, dammit I shouldn't have bought it. I'm so stupid.
2. if you buy it, and it goes up, dammit I should have bought more. I'm so stupid.
It's nothing but regrets!
The SP500 is up nearly 10x from the 2009 lows. If thats not a win, I dont know what is. Even adjusting for inflation, its still a massive return.
Buying individual stocks is certainly much riskier, but index investing is still stock investing.
My salary did 20x from the 2009 lows. Even if I invested all I could in sp500 in 2009 it still wouldn't make a difference to me today.
> The SP500 is up nearly 10x from the 2009 lows.
7x, not 10x
> Even adjusting for inflation, its still a massive return.
Adjusted for inflation it's 4.7x
> If thats not a win, I dont know what is.
You compared the low with the current price. Pick a random stock and pick its lowest point and compare with now - many/most handily beat the S&P 500. Think AMD at $4.
The proper comparison is to pick two random points 10-15 years apart. Don't cherry pick.
> 7x, not 10x
5624/677 = 8.3x
Yes, I rounded up, and yes I picked a low to make a point. But go ahead and pick a random point 10-15 years ago if you'd like and compare it to today and the returns are still very large.
Where are you getting the 677 number? The min I'm seeing is 735.
Investing in and holding low-cost broad index funds like the S&P 500 is both Boglehead and Warren Buffet approved.
Trading in individual stocks is how you slay countless grandmas, please don't do it for your grandma's sake: https://www.reddit.com/r/wallstreetbets/comments/1ehjuzj/i_b...
It's a philosophical thing mostly. You learn to live in statistics, averages and systemic limits. Otherwise yeah you drown in regrets, sorrow and anxiety.
That said I don't advise to play the trading game.. it's kinda soulless and empty.
Sounds like a you problem.
1. I buy, it goes down. “Meh. Can’t win ‘em all. Might as well hold see if it comes back.”
2. I buy, it goes up. “Nice.”
You still holding AIG?
At some point all of your stocks are going to be in recovery mode if you never sell at a loss.
If I think it is a good company, I'll hold on the loss and wait. Intel has done well for me, I've held it for decades, but last summer my patience ran out and I sold it.
But in all my years investing, I never get used to the downturns and have a hard time being sanguine about it.
[flagged]
INTC is still at historic lows. Put money where your mouth is :-)
it is certainly still in the dip
Big move for Amazon
[dead]
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See also the "everyone back to the office because fuck you" discussion thread. Probably not the time to go long AMZN.
I think that Amazon is past the point where excellent software engineering is what makes them money. What makes them money is going out for golf with some Fortune 500 exec that saw "Stats powered by AWS" on the last NFL game, and wants something like that for their company. They then buy 80 million dollars of reserved CPU hours and get tickets to the Seahawks game.
These big companies are self-sustaining no matter how unfriendly to employees they might be. Yes, it's great when you hire great engineers and they invent the next billion dollar business. That is now a rounding error for Amazon, so they won't notice it's gone if it goes. And, a lot of engineers don't really care about returning to the office if it means they're getting paid $800k a year.
So overall, with everyone's retirement plan buying Amazon stock by default (oh sorry "Target 2050 Fund" shares), I wouldn't expect one supplier change or one HR policy to make a significant difference in their stock price.
> Amazon is past the point where excellent software engineering is what makes them money.
It's worth many millions and millions of dollars to Amazon to improve server software efficiency by even 1%. I bet the software engineers that can make such optimizations are making $millions in compensation.
[dupe]
More discussion: https://news.ycombinator.com/item?id=41560359
It’s actually less discussion than here.
Making one's own processor design must be the new "every BigCo needs its own proprietary typeface" from yesteryear.
Are we to believe that Amazon's workload is so unique that an existing design can't fit the bill?
This is just a vanity exercise.
I think you are vastly underestimating the benefits of optimizing specifically for the existing workloads at the scale of AWS.
What can graviton do that, e.g. POWER cannot?
It's not what POWER cannot, but about what graviton can CUT OUT and SPECIALIZE in while still being able to do what AWS wants.
POWER from this perspective, does way too much. It's too much chip for AWS's needs, and a big waste of money.
That's what optimization means! You get the smallest/ simplest/cheapest thing that does exactly what you want, and ignore the big bad "do everything" chips that go for megabucks.
Then you can devote chip transistor count toward the instructions you want, and ditch all the dead weight that comes with a traditional chip like power, that tries to make a balanced general purpose cpu.
This results in a chip that isn't good for anything but the specific need, but it's super cost effective and higher performing.
Also likely far more power and heat efficient.
Power is not cost-competitive at all to mainstream x86 chips. And stopped being so quite a long time ago.
It's not vanity; the purpose is to reduce cost. "Your margin is my opportunity."
It's not new, graviton that you can use yourself is on the 4th generation. And they've used it to accelerate networking and storage long before that. Most managed services already run on it as well. It's cheaper and faster.
Graviton cores are definitely not faster. The core frequencies are too low for heavy usage and I suspect that the caches are too small as well.
You can easily benchmark this by comparing the Graviton variants with the Intel specific instances.
Graviton 4 has also not been made available for EC2 and RDS instance types in most regions two years after release. My guess is that they are unable to scale production.
Amazon has been making custom chips for a while now, this isn't a new trend for them.
Amazon is so heavily reliant on the performance of their server farms that even a 1% improvement is worth a vast amount of money.
> This is just a vanity exercise.
Lol graviton has been in production with fantastic margins for like 7 years. Me thinks maybe you don't know as much as you think you do.
With the amount of money AMZN has at its disposal. I’m surprised they didn’t take the Apple route of making their own chip in house. Apple realized how bottlenecked they were with Intel, and took steps to remove that dependency.
Could have been Jassys equivalent of Beso’s AWS, but unfortunately he’s a lousy leader with no imagination beyond the quarterly results.
Apple doesn't manufacture the chips, they subcontract that out to TSMC/Samsung. In this case Intel is the contract manufacturer, not the chip designer fulfilling the same role as TSMC does for Apple.
Isnt Graviton an in house design?
And Intel is building an "AI fabric" chip for AWS, though its not clear who designed it.
Not really. Graviton chips just use off-the-shelf core designs from ARM. The Graviton used Cortex A72 cores, the Graviton2 Neoverse N1, Graviton3 Neoverse V1, and Graviton 4 Neoverse V2.
Apple designs their own cores and Qualcomm is starting to. Most people just grab ARM's reference designs. They're sorta in-house in that they're putting it together, but they aren't doing the design work of actually making their own cores.
> Apple designs their own cores and Qualcomm is starting to.
Qualcomm already did for many years! The Snapdragon line from 2008-2016 used custom Scorpion/Krait/Kryo cores before they went to Cortex A73 cores in the Snapdragon 835.
Qualcomm have designed their own CPU cores for some years, but their design capacity could not keep up with the Arm company, so, exactly like Samsung and NVIDIA, they have given up and they have started to use the CPU cores designed by the Arm company, already for many years.
Only now, after buying the Nuvia CPU design team, they have begun to use again their own CPU core designs, first in the laptops introduced a few months ago and then presumably also in the smartphones of next year.
While many companies have designed Arm cores, only Apple has consistently outperformed the Arm company and now Qualcomm might have a chance to do that, with a team that includes many former Apple designers.
The server Arm cores that have been demonstrated until now by the Ampere company are not impressive, being weaker than the Arm-designed cores used by Amazon or Microsoft.