What Nvidia’s $40B+ deal for ARM means


September 14, 2020

PLUS: This one-year-old note-taking startup is worth $200m.
September 14, 2020
The Hustle
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McDonald’s has been selling hip-hop artist Travis Scott’s “favorite” combo: a ¼ pounder with cheese, bacon, and lettuce, medium fries (w/ BBQ Sauce) and a Sprite. The $6 promo has been crushing. Our favorite Mickey D’s hack is a junior chicken with sweet ‘n sour sauce (instead of mayo). What’s yours?

The Big Idea

How Nvidia overtook Intel

In early July, Nvidia became America’s #1 chipmaker by market cap, surpassing its much older rival, Intel, for the first time.

Today, Nvidia is worth $300B while Intel is worth $210B. And with reports that Nvidia is set to acquire UK-based chip designer ARM from Softbank for $40B, that gap might grow even bigger.

Nvidia built its advantage by riding the right trends

Founded in 1993, the Santa Clara-based firm has seen its value increase ~22x in the past 5 years. This is largely thanks to several major  developments:

  • Demand for gaming and AI
    Nvidia began as a producer of graphics processing units (GPUs), which are now heavily used in the gaming industry, and for AI computing.
  • The transition to “fabless” chip making
    Unlike Intel, Nvidia doesn’t own any chip fabrication plants. Instead, the firm designs its chips and outsources production to specialized foundries, like the $385B Taiwan Semiconductor Manufacturing Company (TMSC).

Along with Microsoft, Intel was synonymous with the PC 

Founded in 1968, Intel came to dominate the PC market in the 1990s and early 2000s.

However, the success of Intel’s PC business hamstrung efforts to effectively compete in the lower margin (but much faster growing) smartphone chip market. With PCs on the decline, Intel’s growth has become reliant on high-end data centers

Two further blows hit in 2020:

  1. Intel’s next gen of chips has encountered major delays
  2. Apple replaced Intel chips with ARM for its new Macbook lines

Why Nvidia’s ARM deal could be huge  

ARM’s energy-efficient designs have been used to create 160B chips — and buying the firm would boost Nvidia’s position in smartphones, tablets and internet-of-things (IOT) hardware. 

However, the Wall Street Journal notes some potential deal roadblocks: 

  • British politicians didn’t love Softbank’s $32B acquisition of ARM in 2016 and may not love it this time, either
  • There are concerns the deal may negatively impact the escalating US-China chip wars

We have a more pressing question. If the deal happens, which portmanteau is better: NvARM or Armidia?

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Snippets
  • Software giant Oracle won the bid for TikTok’s U.S. operations, which also means Twitter is on fire with jokes right now. 
  • Speaking of SoftBank, it’s in talks to go private after a series of disappointing investments. 
  • A bunch of retailers are paying their employees to volunteer at the polls this November.
  • One weird side effect of those West-Coast-orange-sky photos: Our iPhone cameras are designed to wash out the color.  
  • Alexa is about to get 10x creepier: A tech prototype called Synapse wants to teach voice assistants to follow your gaze.
  • Bonus: A scorpion-shaped gaming chair has finally arrived. At $3,299, it’s either the worst or the best thing ever.
Q&A

Yes Theory: ‘The true path to creativity is to put yourself in situations that are unusual to you’

Yes Theory — founded in 2015 by Thomas Brag, Matt Dajer, and Ammar Kandil —  is the content company behind one of YouTube’s most popular channels.

With 5.8m subs and 1.8B views, it has inspired millions (including Will Smith) to “seek discomfort in their lives.”

In collaboration with Headspace, the team launched the Yes Theory podcast to further spread their inspirational message.   

We recently caught up with the guys to ask some questions: 

What’s the best book you’ve read in the past year? 

The Untethered Soul,” by Michael Singer.

What’s the best purchase under $100 you made in the past year? 

Spikeball (Editor’s note: We support this).

Who’s the most interesting person you know?

Wim Hof [a Dutch extreme athlete who holds the Guinness World record for swimming under ice]. He pioneered the Wim Hof Method, which is a combination of breath work, cold exposure, and meditation as a way to practice mental strength. He fully demonstrated to me my own capacity to push myself way past what I thought my limits were.

What’s the best piece of advice someone ever gave you? 

“The true path to creativity is to put yourself in situations that are unusual to you, that break your routine and take your mind and body outside of its comfort zone.”

That is from Peter Younkin, my college professor in entrepreneurship back at McGill University. It planted the seed for what would become Yes Theory.

(Editor’s note: Trung, a McGill alum, says: “Let’s go fam!!”).

Do you have a request for a startup? 

I think an intentionally non-politically biased, independently owned news organization, solely focused on facts that would be trusted by all major sides to report on the big events in the world without sensationalism would be great. Further, being transparent on who wrote the articles and what their beliefs are could be a way to nurture trust with the audience.

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We’ve got 2 tickets to (marketing) paradise

Actually, we lied — we don’t have 2 tickets to HubSpot’s INBOUND 2020. 

We have unlimited. 

And you can get yours right here.

That free ticket scores you access to this immersive two-day bootcamp, full of content like:

Pick the brains of leaders like Bob Iger (CEO of Disney), Alicia Garza (Principal at Black Futures Lab), Sandy Carter (VP of Amazon Web Services, Sasan Goodarzi (CEO of Intuit), Chrissy Teigen and John Legend and finally develop all those skills you said you’d learn these past few months — ya know, before we all gave up and watched compilations of pandas falling out of trees while eating bamboo on YouTube instead).

Save your spot here before INBOUND 2020 goes down in September: 

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Startups

Roam Research could be the future of note-taking and knowledge management

Ever forget who the 4th Beatle is? Well, there’s an app for that.

Note-taking and productivity startups have been on a fundraising tear in  recent months. In April, Notion raised $50m ($2B valuation) and, in August, Coda pulled in $80m ($636m valuation). 

Now Roam Research has joined the pack — raising a $9m seed round at a $200m valuation, The Information reports.

Founded by Conor White-Sullivan and Joshua Brown, the 11-person note-taking startup launched only last fall.

Their secret sauce? Bi-directional linking

That lets you seamlessly connect different notes and ideas together in a network.

White-Sullivan tells The Information that this structure fits the “brain better than [files, folders, and Word documents.]”

Past Trends lecturer Nat Eliason says Roam is superior to other note-taking apps because of how easy it is to create links and pages — plus your notes aren’t all individually siloed away.

The startup is already profitable   

And many of its subscribers are power users that happily share templates and best practices on Twitter with the hashtag #RoamCult. 

The idea for Roam Research was rejected 5x by startup accelerator Y Combinator. But White-Sullivan kept grinding.

As for the 4th Beatle? **Checks Roam notes**… good ol’ George Harrison.

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Big Tech Envy

The UK really wants a trillion-dollar tech company

Take a look at the largest companies on the London Stock Exchange:

  • Unilever (consumer)
  • AstraZeneca (pharma)
  • BHP (mining)
  • Royal Dutch Shell (energy)
  • GlaxoSmithKline (pharma)

Notice the complete lack of UK Big Tech? You’re not the only one.

The UK really wants a Google or Amazon

Last week, amid talks that the UK would leave the EU in a “no-deal Brexit,” the country’s top policy adviser, Dominic Cummings, informed his staff that he is figuring out ways the UK “can build [$1T] tech companies.”

Without the trade constraints of an EU deal, the UK could aggressively provide state aid to its tech industry.

The track record of government-led tech in Europe is… not good  

Less than inspiring efforts by the EU include an attempt at creating its own search engine (Quaero) and a massive supercomputer research project (The Human Brain Project). 

Tech journalist Azeem Azhar writes that if the UK goes down the path of massive state support for tech, other nations could respond and close their markets off to foreign competition. 

The net result: “many national markets would essentially be closed, making the path to the ‘four comma club’ harder than ever.”

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TRENDS

I’m kind of a big deal

Do you find yourself at the top of an org chart? Are you a “chief officer” of something? Does your Twitter bio scream, “I’m important”?

That’s cool. We love the hustle. But if you’re a big deal, you’re also a big target. Executives hold the keys to the company and make for attractive targets for hacking groups, whether they’re looking to steal company secrets, IP, or just to cause public embarrassment. 

Recent Twitter hacks have shown us that no one is immune. That’s why we’re bringing in security expert, Matt Holland, to run us through how and why hackers do what they do, and how executives can protect themselves.

You may not have heard of Matt before, but that’s because he’s spent the last few decades silently working on top secret projects within the intelligence community. Our friend, Shane Parrish, introduced us to Matt and said that he is the guy that every three-letter agency calls up when they need help. Matt has exited stealth mode with his new company, Field Effect, and is generously educating the rest of us this Thursday at noon PST.

RSVP here → JOBS

Growth Marketer, The Hustle: Your mission, if you choose to accept it, is to make sure everyone in America knows about The Hustle.

Product Manager, Nightwatch: Can you talk the talk with both developers and designers? Your talents are needed.

VP of Enterprise Sales, Canonical: Open-source solution Ubuntu’s publishers need a fearless leader to drive outbound business development. 

Product Owner/Scrum Master, Health Union: The Technology team is looking for a Scrum professional to coach IT in Agile success.

Outside Sales Representative, MergeYourData.com: If the thrill of chasing — and closing — B2B deals is your thing, this one’s for you.

See more →
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Today’s email was brought to you by Michael Waters, Caroline Dohack, and Trung Phan.
Editing by: Zachary “Getting chippy” Crockett, Barbara Seville (Car Talk Opera Critic).

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