Comment by DanielHB

> If industry decides they like the aarch64 isa more than x64 I doubt it would cause much trouble to the silicon team.

the problem isn't ISA so much as AMD not having a moat around its CPU revenue anymore. Yes, AMD will have ARM chips... and so will Qualcomm, and Mediatek/NVIDIA, and Marvell. AWS and Facebook and Google have already largely dumped x86 chips entirely. But they haven't dumped them for ARM chips from AMD, or Intel, or Qualcomm, they've dumped them for ones they develop themselves at rates that would be commercially unviable for AMD to compete with as a semicustom product (and those companies would not want that in the first place).

It's not about Intel vs AMD and which of the two is faster anymore. It’s about the fact that intel plus AMD is going to shrink to be a minority player in the market as ARM commoditizes a market from which Intel plus AMD extracted economic rents for decades. That free money train is coming to a stop. Absolutely there is going to be a market for AMD as a consultency business helping others integrate chips (just like semicustom today) but even that is going to be something that many others do etc, and the IP cores themselves certainly don't have to be licensed from AMD anymore, there will be many viable offerings and AMD's margins will be thinner when they provide less of the stack and design services etc. Absolutely there will be people willing to pay for the cores too, but it's going to be a lot less than the people who want something that's Good Enough to just hook up their custom accelerator thing to a CPU (just like AWS Graviton and Google TPU etc).

And while consoles are still going to have legacy support as a major inertia factor, even that is not forever, the ftc leak showed Microsoft bid the next-gen console out as a “ML super resolution upscaling” and RTGI focused ARM thing, right? Especially with how far AMD has fallen behind in software and accelerator integration etc. ARM will eventually break that moat too - especially with nvidia pushing hard on that with switch 2 as well etc. Even these ancillary services that AMD provides are largely important because of the most that x86 provides around anyone else having easy interoperation.

Margins are going to come down, and overall market will grow but AMD will command less of it, and also large customers are going to depart that market entirely and do it themselves (which AMD will also get a chunk of, but a much smaller pie etc than selling the whole CPU etc).

Again, like, the problem isn't that AMD doesn't have a Snapdragon X Elite. It isn't even about whether they're faster than Snapdragon X Elite. It's the fact that Snapdragon X Elite is going to do to client revenue what Graviton and TPU are already doing to your datacenter revenue. It's what ARM and Qualcomm and NVIDIA are going to do to your x86 and graphics SIP licensing revenue, and your semicustom integration revenue etc. Even if they are flatly not as good, they don't have to be, in order for them to collapse your x86 rents and your margin on the resulting design+integration services and products. We will come to realize we didn’t need to pay as much for these things as we did, that integration isn’t as expensive when you have five similar blocks from 5 different companies and three places that can integrate the SOC. That inefficiency is all part of the x86 rents/x86 tax too.

This isn't to say you're doooomed but like, Intel and AMD are not winners from the powerplay that Microsoft is making against x86 right now. You literally are going to be facing 3-4 more well-funded large competitors who can now offer services that are now substitutable for yours in a way that nobody appreciated would happen a year ago. Windows on ARM being a viable proposition in terms of support and emulation changes the game on the x86 rents in client/gaming markets, and companies are moving in to take advantage of that. Intel and AMD have literally nowhere to go but down on that one - they will not control the resulting market anymore, actually they already are losing control of large parts of the datacenter market due to cloud ARM offerings from hyperscale partners. Now it's client too, and foreseeable risk to consoles and semicustom etc.

All of that ancillary revenue was just gated by x86 in the final measure. Now that x86 is no longer a necessity, we’re going to see a significant increase in market efficiency, and parties that are dependent on the largesse of those rents are going to have problems. You can’t rely on graphics being a loss-leader (or low-margin-leader) to sell x86 SOCs, for example.

Even if that is the case and they can just port their designs to ARM they will still be facing much more competition, not only from Qualcomm but also from the cloud vendors in the server space (AWS, Azure, GCP).

All the cloud server hardware is getting more and more vertically integrated, why would the cloud vendors pay for AMD hardware when they can build their own?

No I did not read it, we just arrived at the same conclusions although you were a bit earlier than me to realise this. What opened my eyes was the easy of transition to the ARM-based macs. I fully agree with all your points and that has been my view since around 2021 (when I got an M1 mac).

Once dev computers are running ARM at large no one is going to bother cross-compiling their server code to x64, they will just compile to ARM which will tear through AMD server demand. In fact my own org already started migrating to AWS graviton servers.

And this bodes poorly for Nvidia as well, I bet all cloud providers are scrambling to design their own in-house alternatives to nVidia hardware. Maybe alternatives to CUDA as well to either remove the nVidia lock-in or create their own lock-ins. Although Nvidia is much better positioned to stay ahead in the space.