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Analysis One of Amazon Web Services' key differentiators is its use of custom silicon, including Arm CPUs throughout its cloud infrastructure.

So it should come as no surprise that the e-commerce giant is, at least according to Reuters, in talks to become an anchor investor in the British chip designer's impending IPO.

Not long ago, Arm as an instruction set architecture (ISA) was largely relegated to low-power mobile SoCs used in smartphones, tablets, and IoT devices which prioritized efficiency and battery life over performance. It was pretty unusual to find an Arm chip powering a notebook let alone a server.

That's not to say they didn't exist. Back in 2014, Cavium prior to its acquisition by Marvell introduced the ThunderX, a 64-bit Arm server processor with 48 custom cores. At the time, Intel's most powerful chips topped out at just 18 cores, and AMD's Eypc was still years off.

While the ThunderX family was reportedly canned, another company saw potential in a super-efficient, many-cored processor that could be tuned to specific workloads. At re:Invent 2018, AWS revealed its Graviton CPU with 16 of Arm's A72 cores.

While initially developed to run Amazon's internal infrastructure, Graviton has become a mainstay of the cloud provider's platform. Now in its third generation, the company's Graviton instances can be had with up to 64 Neoverse V1 cores in both general-purpose and HPC-focused varieties.

AWS is credited by many, including several at Arm, for proving the viability and driving adoption of Arm in the datacenter. The availability of low-cost Graviton instances made developing and porting workloads to the platform an attractive prospect.

In a recent report, analysts estimated that one in five AWS cloud instances were now powered by Graviton CPUs.

The success of Amazon's Graviton processor family didn't go unnoticed for long. Ampere introduced an Arm-based server chip of its own in 2020 that boasted up to 80 cores, which it later bumped up to 128. By 2022, AWS's largest rivals, Google and Microsoft, had rolled out Arm instances based on Ampere's Altra CPU family. Earlier this year, Microsoft began hiring electrical engineers to develop custom datacenter chips of its own.

Amazon clearly set a trend. Every major cloud provider, and many minor ones, have embraced Arm processors in some capacity at this point. However, the lion's share of Arm servers still live in AWS datacenters. Bernstein Research found that a little more than half of all Arm server CPUs in the wild are owned and operated by AWS.

While Amazon is, without question, a fabless chipmaker, it can be argued that much of the chipmaker's success comes down to the cores it licenses from Arm. For both its second and third-generation Graviton CPUs, AWS licensed Arm's datacenter-focused Neoverse cores.

Introduced in 2019, these cores were designed from the ground up for datacenter applications and AWS was among the first to put them to work in Graviton2. Arm later introduced a performance optimized version of the core, and once again, AWS was among the first to deploy in Graviton3.

The cloud provider is expected to introduce Graviton4 sometime in 2025, and even if AWS follows Ampere, Apple, and others down the path of developing its own cores, Arm still gets a slice of those revenues.

Ultimately, what's good for Arm is good for AWS, and in that case, holding a rather sizable stake in the company on which you've grown increasingly dependent isn't just good insurance, it's common sense.

Amazon is far from the only chipmaker with a vested interest in Arm's future. Earlier this week it was reported that Nvidia, Apple, Samsung, and x86 giant Intel would bid for shares as soon as they hit the market.

All of these companies are long-time Arm licensees. Apple, Nvidia, and Samsung in particular are heavily invested in the Arm ecosystem. In fact, Nvidia was so invested in Arm's potential that it attempted to buy the British chip designer for $66 billion. That deal ultimately collapsed in early 2022 after the chipmaker failed to assuage regulators' concerns in multiple markets.

While Nvidia is best known for its GPUs, the company has been making Arm-based CPUs, mostly for mobile, handheld gaming, and edge applications for more than a decade. However, in 2021 the company unveiled its first datacenter CPU, called Grace based on Arm's then undisclosed Neoverse V2 cores.

It's a similar situation for Apple, which announced its divorce from Intel with the launch of its Arm-based M-series SoCs in late 2020. The iGiant finalized this split this spring with the launch of the new Apple Silicon Mac Pro.

Samsung and Intel's interests are likely more closely related to contract manufacturing. Samsung does have a line of Arm-based SoCs used in mobile applications, but the company is also the second largest foundry operator. Intel, meanwhile, is in the process of building out its foundry capacity under its Foundry Services division, with the intent of producing leading edge chips based on a variety of architectures, including Arm.

Large investments by these chipmakers in Arm's IPO essentially ensure a seat at the table once the chip designer is at the mercy of Wall Street once again.

The rest is here:
Amazon's rumored investment in Arm's IPO might be good insurance - The Register