Dave Vellante and John Furrier, theCUBE Podcast Episode 29, 15 Sept 2023

On theCUBE Pod: Analysis on the Arm IPO and the AI regulation debate

Posted on

It’s been yet another busy period for theCUBE, SiliconANGLE Media’s livestreaming studio, marked by our summer events coverage, such as last week’s SAS Explore event in Las Vegas.

There have also been big developments in the tech world, including British chip design firm Arm Holdings Ltd. finally going public. It was this year’s biggest IPO, and shares for Arm were up 10% in initial trading before rocketing to close up nearly 25% on Thursday. With restricted share units, the fully diluted valuation for Arm is near $68 billion, according to Bloomberg.

“The Arm IPO [was] over the moon hyped, but … they landed their IPO,” theCUBE industry analyst John Furrier (pictured, left) said on the latest episode of theCUBE Podcast. “Everyone was expecting the IPO maybe not to work. But everyone’s now asking, ‘Are IPOs back?’ Arm’s IPO worked; a lot of people thought it was overvalued.”

Inside the Arm IPO

The Arm IPO action was interesting, according to theCUBE industry analyst Dave Vellante (right). Arm has nearly a 100% gross margin, but it’s not growing.

“It’s kind of anomalous. And ,so you know, I’ve been very positive on Arm, the whole ecosystem,” Vellante said. “I think there’s a real reason to be positive.”

When it comes to Arm’s current market cap, questions are floating around as to whether that’s overpriced. It’s important to never buy stocks at an IPO, because the market may tank and there will be a better chance to buy overhyped stocks when that happens, according to Vellante.

“You usually get screwed if you buy in the first day,” he said. “But I would say that long term, I think the story that nobody’s talking about here is the impact on Intel.”

Everyone today is talking about Arm and artificial intelligence, whether it can compete with Nvidia Corp. and about how Arm isn’t really AI. Nvidia is based on Arm, Vellante noted.

“How is Arm not participating in AI? Apple — you know, the new iPhones — it’s Arm-based. You look at the progression of the A chip, what are we at, A17 now? They’re down at 3-nanometer at TSMC,” he said. “Of course, it’s AI — AI-inferencing at the edge. Arm is going to dominate that.”

The point on Intel Corp. is that Arm is coming into the enterprise, according to Vellante. Many people may suggest that the company isn’t in enterprise at present.

“Yes, it is. It’s in the form of Nvidia. It’s in the form of AWS. Google is doing Arm-based stuff. Microsoft is doing Arm-based stuff,” Vellante said. “Arm is going to continue to grab more and more share in the enterprise because innovation happens in consumer markets, and then it seeps into the enterprise market with a better economic value, lower power, higher performance. When you combine everything, lower cost, Arm is a dominant platform.”

There remains a question as to whether or not Arm will be a dominant business due to its model, Vellante noted. But that’s a conversation for another day, as Arm changes the game and could appear poised to destroy Intel’s monopoly.

AI: A political hot potato

This week, Tesla Inc. Chief Executive Officer Elon Musk and Meta Platforms Inc. CEO Mark Zuckerberg, among other tech leaders, were at Capitol Hill for a meeting focused on AI. Many called for AI to be regulated. This is where there needs to be guardrails put in place, with the government staying out of the action, according to Furrier. He added that it has become a “political hot potato,” but government needs to stay out of the technology.

“Don’t let the big companies head fake you into thinking it needs to be regulated, because the startups will get hurt from this. Any regulation of any kind is not good for the industry,” Furrier said. “Keep an eye on it, put guardrails in place, but get the hell out of the regulation conversation.”

There is a global aspect to this conversation. That’s what needs to be thought about, with the formulation of policy and potential doctrine around AI being important considerations, according to Furrier.

“I think it’s a cybersecurity issue. I think the dots to connect is looking at these ransomware attacks, and other potential cyber warfare tactics,” he said. “AI will be just as good to help the bad guys be better at being bad. So, just like it helps humans be good at what they do, AI is definitely going to create a lot of productivity. A lot of that productivity is going to be for the evil people.”

Watch the full podcast below to find out why these industry pros were mentioned:

Scott Raynovich, founder and CTA of Futuriom
Larry Ellison, chairman of the board and CTO of Oracle
Dipti Vachani, SVP and GM of automotive and IOT line of business at Arm
Chamath Palihapitiya, CEO of Social Capital, co-host at All-In
Jason Calacanis, internet entrepreneur, co-host at All-In
Vivek Ramaswamy, U.S. presidential candidate
Keith Bradley, VP of information technology at Nature Fresh Farms
Marc Benioff, chair and CEO at Salesforce
Raejeanne Skillern, VP and CMO at AWS
Gavin Newsom, governor of California
Joe Biden, 46th president of the United States
Gary Tan, president and CEO of Y Combinator
David Floyer, CTO and co-founder of Wikibon
In Sik Rhee, general partner at Vertex Ventures
Steve Mills, retired EVP at IBM
Elon Musk, CEO of Tesla
Bill Gates, co-founder of Microsoft
Mark Zuckerberg, CEO of Meta Platforms
Clém Delangue, co-founder and CEO of Hugging Face
Satya Nadella, chairman and CEO of Microsoft
Sam Altman, CEO at OpenAI
Chuck Schumer, senior United States senator from New York
Jensen Huang, founder and CEO of Nvidia
Mr. Beast, YouTuber and entrepreneur
Sarbjeet Johal, founder and CEO of Stackpane
Rob Strechay, analyst at SiliconANGLE Media

Don’t miss out on the latest episodes of “theCUBE Pod.” Join us by subscribing to our RSS feed. You can also listen to us on Apple Podcasts or on Spotify. And for those who prefer to watch, check out our YouTube playlist. Don’t wait any longer — tune in now and be part of the conversation.

Photo: SiliconANGLE

Your vote of support is important to us and it helps us keep the content FREE.

One-click below supports our mission to provide free, deep and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *