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…There's no computing problem that's ever been invented that doesn't utilize and can't utilize [music] the microprocessor. It is the heart of everything. All roads lead through it, around it, past it. Something has to do the [music] orchestration, arbitration, decision around where those tokens go. That's what CPUs do. Chip design can take anywhere from 24 to 36 [music] months depending on the complexity of the chip etc etc. The actual design is not the largest amount of time. The largest amount of time is in the verification, the validation, the debug. AI is really good at that. And if we were [music] to shut it off, it's like being in the 1990s. You've got internet and you're now saying, you know, only internet between the hours of two and four. >> After that, go to the library that we have down the hall. It'd be anarchy. >> The genie's out of the bottle and there's no stopping that. >> Hi listeners, welcome back to No Priors. Today Allad and I are here with Renee Hos, the CEO of ARM and SoftBank Group International. [music] We talk about the position of ARM within the chip industry. the resurgence of interest in chip innovation, [music] the challenges of the supply chain, the future of robotics, energy, his place in the softbank group, [music] and how he sees workloads changing in the future and for ARM. Renee, thanks so much for doing this with us. >> Pleasure. >> Congratulations on the chip presentation at hot chips and you know uh all of the um progress that ARM has made. I think there's an enormous amount of interest from the technology industry and the software industry in sort of better understanding the chip supply chain recently. Um for anybody who's not super familiar, can you explain ARM's position in it? And then we'll get into sort of more recent topics. >> So we have uh we have two positions in the in the chip supply chain. Our primary business is licensing IP. The CPU core that finds its way into smartphones, data centers, automobiles, you you name it. Our customers are the ones who either build the chips themselves, a Samsung who's got their own fab or the vast majority companies that take their chip designs and go to TSMC and get them get them taped out. So in that world, and this is a the cool thing about ARM, because we're so broad in terms of the markets that we serve, we kind of see everything. We have a very good sense of what's going on in automotive, data center, smartphones. So we see the supply chain situation from from all angles. We also introduced our first product last March, the one you just mentioned at Hot Ships, the Army GIC CPU. Uh 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, etc., etc. So we're we're we're up to our waste and everything on the supply side. >> Why' you make the move now? So for, you know, ARM, I believe, existed for a few decades now. The focus was always on IP, etc. So we're we're we're up to our waste and everything on the supply side. >> Why' you make the move now? So for, you know, ARM, I believe, existed for a few decades now. The focus was always on IP, which is effectively like designing the way that different chip components are put together. Then you licensed that out to other people to actually manufacture and incorporate into their designs. Why did you decide to start making some of your own CPUs? >> Yeah, it was it was an evolution from the early days of where we just supplied simply the IP components, the pieces, the the CPU IP, the GPU IP, the system IP, etc., etc. Few years ago, what we were starting to see was that product cycle times aren't slowing down. Uh chip manufacturing times are extending. uh the ability to get solutions out faster was becoming more and more important. So we moved from these individual components into what we called compute subsystems. I used when we went did the road show a few years ago I used the Lego analogy where essentially we're providing the blueprint on here's how you stitch it all together. Demand for that was was insane. Uh and what we were finding was we were and we initially people thought well people aren't going to want these subsystems because that's what a chip designer does. Why why are you providing that piece? But it saved time to market and it saved a whole lot of things in terms of cost, speed, etc., etc. The physical product was sort of the next the next leap if you will. And there are certain sets of customers that will license IP to and they've got all the capability in the world to uh to build chips based on ARM. There's a lot of companies who want to have product based on ARM. Not all of our customers build products that serve those markets. 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 uh hey why don't we do this together and uh and that's how we got into it. >> Uh how has that landed with the rest of your customer base? >> So one of the things that we were very careful about was getting making sure the ecosystem was on board with this because we do CPUIP which is really only as good as the ecosystem. The ecosystem of chip people and the ecosystem of software folks and people who build around that. So we talked to just about everybody who were customers and said you know how do you feel about this as direction we're going and surprisingly we got a lot less push back than I than I thought and the reason for that was the more software that's available in the wild whether it's proprietary andor open- source benefits the broader ecosystem and the customers themselves. So whether it was Nvidia, Amazon, Microsoft, Google, all people who build ARMbased 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 Amen, we had James Hamilton, you know, all the folks from those customers I mentioned all saying congratulations. It's a great thing. So uh it's been okay. What is the, you know, where are you in the learning…

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