Those Years When I Was Forced to Top the Forbes List

Chapter 367 The Pearl Harbor Plan

"Mr. Chen, you guys are secretly developing so much technology, can't you even include me?"

Jack Ma didn't think Chen Xuebing was bragging. Take ARM's investment for example; it's a real, tangible fact right before our eyes.

In addition, there was that Kirin phone that seemed to fall from the sky.

Chen Xuebing said that he had actually discovered a UFO and was studying it, and Ma Yun also thought that there was some truth to it.

People call him ET. Even aliens can't compare to him. Isn't he just a complete alien technology?
Jack Ma was eager to bring him along, but Chen Xuebing saw through his intentions and grinned.

"Old Ma, your servers are already doing well enough to handle x86. ARM entering the server market is just some of my ideas. Lightweight features are one thing, but achieving that is a long way off. You want to enter ARM, I'm afraid it's not for the technology, but to ride the smartphone wave? You've seen a way to make money?"

The most distinctive feature of the ARM architecture is that it has only about 100 basic instructions. It uses the most basic actions to combine and complete complex instructions. For example, other architectures might have the instruction "lie down", but the ARM instruction would be "bend knees" + "squat" + "get on all fours" + "flat on the ground". If necessary, "head control" can even be added, such as slightly tucking the chin and looking at the ground.

Using basic instructions, countless complex instructions can be created.

Compared to the thousands of complex instructions in x86, the ARM-developed Reduced Instruction Set Computing (RISC) offers superior energy efficiency, greater flexibility, and applicability to a wider range of fields.

The downside is that it requires more memory accesses.

More compilers (core components of the development kit) need to be developed to integrate some complex actions, achieving the same simplification effect as simply typing "jump" to combine several simple actions together.

However, memory is becoming increasingly cheaper, and compiler technology is becoming more and more sophisticated.

Chen Xuebing's optimism about ARM is based on the increasing maturity of the two conditions mentioned above, as well as ARM's proactive expansion.

ARM leveraged its own characteristics to clearly define the three major instruction sets, M/A/R, when the ARMv7 architecture was released a few years ago.

The M series is compatible with industrial PLCs and sensors.

A series compatible mobile phones.

The R series is used in automotive electronic control units, robotic arms, etc.

Diverse applications require a corresponding set of control instructions, and ARM is currently refining instructions for different fields.

However, there are no server-related instruction sets or public kernels yet.

When Chen Xuebing discussed this topic with Jack Ma the day before yesterday, he thought, "It's possible."

Even if they were to do it, it would probably take a very long time to surpass x86, the leader in the server field. ARM would have to start from the basics of addition, subtraction, bit operations, shifting, loading, and storing, while x86 can now build countless advanced instructions and its software ecosystem is far ahead.

Jack Ma didn't need to get so worked up and insist on following along relentlessly.

His desire to join in was simply because he saw the promising future of ARM in the smartphone market and thought he could make a fortune in this untapped market.

To be honest, Jack Ma is not very good at investing in known areas, but he is very accurate in judging the future of ambiguous areas.

In e-commerce, payment, big data, and even AI, he is at the forefront of the domestic field, and his deployment capabilities are very strong, far superior to Li Yanhong, who always gets up early but arrives late.

"To be honest with you, we're about to expand our overseas presence on a large scale, and we need some international companies with technical backgrounds to support us. I do have a positive outlook on this company's profitability. Anyway, Boss Sun has agreed. So, just tell me if I'll join or not!"

"Oh"

Chen Xuebing couldn't say anything more. Masayoshi Son is also a major shareholder of Alibaba and will definitely support Jack Ma.

Actually, he's fine with whatever amount he takes now, and he doesn't even want to pay a single penny.

He has no money.

His plan was to discuss technical support with ARM's management while simultaneously negotiating with Masayoshi Son about taking control of the Chinese company after the acquisition.

Take advantage of the time difference and gain an advantage on both ends.

As for what happens next, it's either waiting for the financial crisis to fully erupt so they can take over ARM headquarters from Masayoshi Son amidst the chaos, or trying to intercept technology for ARM China and then bring down ARM headquarters.
It depends on the situation.

No matter what, you have to offer Masayoshi Son enough benefits to get him to cooperate.

At least they turn a blind eye.

"Let's talk about this first. Since we're both Chinese investors, the total Chinese investment shouldn't be too high. I estimate it shouldn't exceed 20%. First, we need to make sure we can take over. We can explore the percentage step by step later."

Chen Xuebing conceded a concession and even considered how to get Jack Ma to take the majority of the Chinese investment.

Upon hearing about the 20% cut, Jack Ma felt even more confident: "Great! We've always been the ones buying chips from foreigners, but this time, we'll make a profit off them! Are you sure you'll open-source your system?"

"Don't worry, my system is just a trigger. In a year or two at most, once the smartphone trend explodes in China, manufacturers all over the world will have to follow suit!"

Mr. Chen was quite imposing. His Kunlun was not like Android. This punch he threw carried a complete mobile internet mindset, which even forced Steve Jobs to postpone the release of the first-generation iPhone in order to deal with it.

What's lacking now is full 3G network coverage and a gradually improving basic software ecosystem.

They're all on their way.

The wave that completely changes the world's mobile phone manufacturing system will no longer take as long as the three to five years in the previous life.

Jack Ma could also foresee the terrifying impact this phone would have once it became widespread, and couldn't help but remind him: "Don't be too high-profile! Let's secure ARM first before we start the marketing campaign!"

Chen Xuebing, however, was somewhat relaxed: "You're overthinking it. ARM has more information than you think. It depends on how ARM's shareholders judge the upcoming market situation. As for how our Kirin phones sell, it won't have much of an impact. Western media view us much like we view India. No matter how much noise we make, they mostly have doubts. In the touch smartphone camp, Apple is still the one with real influence."

"Oh, right! How long is Apple's product launch event?" Jack Ma asked curiously.

He visited Jobs during his last visit to China.

This topic has generated some buzz both domestically and internationally. The Kirin launch event has made it clear that Apple is making phones.

"It's uncertain, but their production will definitely start in the second half of the year. No matter how good the press conference is, the actual product is still a long way off."

"That's good! Let's use this time to launch a surprise attack on Pearl Harbor!"

"Ha, with Masayoshi Son around, this name is quite fitting."

The next day, the hotel's old-fashioned doorbell suddenly rang.

Chen Xuebing, who was reviewing several US stock earnings reports, got up.

"Who?"

A broken Chinese voice rang out from outside the door: "A friend has come from afar."

Chen Xuebing smiled.

The moment the door opened...

Holy crap, so short.

He has been researching a lot of information about Masayoshi Son these past few days, but he hasn't looked up his height.

The person in front of me is at most 1.5 meters tall.

With a faint smile on his face, he was actually about 1.8 meters tall.

"I have long admired Mr. Chen's name."

Chen Xuebing smiled politely and shook hands: "Masayoshi, speak English."

Masayoshi Son's English name is Masayoshi Son, and he can also be referred to as Mr. Son.

My son is acting a bit strange.

"Won't you invite me in for a seat?" Masayoshi Son switched to English, which became much smoother, and his smile appeared more sincere.

The Japanese are quite good at being polite. "Please come in."

After entering the room, Chen Xuebing took out a box of tea—originally a gift for ARM's management—and brewed a cup for Masayoshi Son.

Masayoshi Son remained silent throughout. After taking a sip and praising the tea, he said, "I have always wanted to communicate with Chinese investors like you. When Chinese investors go global, they will inevitably bring new wisdom."

"No need to be polite, we'll have many more opportunities to meet. Take a look at these." Chen Xuebing handed over a stack of relatively concise documents.

This was the ARM performance growth calculation he spent several hours making. He even bought a printer specifically for it. Chen Xuebing considered this investment a secret and didn't even reveal it to his team.

Masayoshi Son merely glanced at the document, and after less than five seconds, put it aside.

"I'd like to see that phone Jack mentioned. Could you tell me about it?"

"of course."

Chen Xuebing took out a Kirin and introduced it to Sun Zhengyi, even letting him try it out.

Masayoshi Son asked some questions about cost reduction and system promotion methods, and the whole process took about ten minutes.

When he heard that Chen Xuebing had already sent people to establish a data center in the United States, he nodded in satisfaction: "Let's talk about the acquisition price."

Chen Xuebing pointed to the analysis materials on the table in surprise: "Aren't you going to take a look at this? You're going to talk about acquisition right away?"

He was already familiar with Masayoshi Son's style, but he still asked the question intentionally.

If we don't ask, how can we let them properly show off their business acumen?
Successful people are often fond of teaching others; they derive satisfaction from instructing others, especially when that "other" is someone of considerable status.

Masayoshi Son's investments are sometimes frighteningly stupid; he even chased after projects like WeWork to invest in, and was even made into a movie that mocked him for "how he swindled $160 billion from investors by making empty promises." Chen Xuebing has absolutely no interest in his business acumen.

But since they're going to spend billions of dollars this time, Chen Xuebing should have shown surprise and let them continue, giving them a sense of satisfaction.

Sure enough, Masayoshi Son revealed a mysterious smile and spoke eloquently: "I often look back at the projects I've invested in. No matter how complex the calculations, it's useless. Just identify the direction of the current and follow it. No matter when you enter the current, it will always continue flowing. As long as I ensure that smartphones like Kirin are cheap enough to be distributed worldwide, the ARM ship will continue to flow downstream. Conversely, ARM is currently worth $25 billion, which may seem like a huge number today. If I fell into the trap of overthinking, my team would repeatedly tell me that it's already big enough and it will be difficult to grow further. I would hesitate and lose confidence. Who knows, it might not defy expectations and become a company worth tens or hundreds of billions? The reality is often like this. When I invested in Yahoo, no one believed that a portal website could become a company worth tens or hundreds of billions. I like companies like Yahoo and ARM that will continue to change even without my involvement, rather than companies that need to be carefully incubated like an egg to grow. I hate the word 'incubation.'"

"Oh," Chen Xuebing nodded in deep agreement: "So you value the initiative of entrepreneurs to change their businesses?"

"Yes, I need some crazy people who dare to dream and dare to realize their dreams, and who happen to be in a promising industry. I see these characteristics in ARM. Their M, A, and R series prove that they have the ambition to break out of their core business. Mr. Chen, I watched your press conference three times. I couldn't sleep all night. With people like you and Jobs driving this, ARM's mobile chip business will definitely undergo tremendous changes."

Chen Xuebing showed a look of sudden realization, trying his best to put himself in the position of a host during an interview, so that the other party could feel his affirmation.

“But ARM may have realized this as well. Over time, they will become more and more certain that it will take a lot of investment to convince them,” he guided.

Old Sun immediately broke into a proud smile.

Doesn't that hit the nail on the head?
"Relax, I'm good at persuading entrepreneurs. I'll offer them a price they can't refuse, and if they don't agree, I'll invest in their competitor, XScale."

Chen Xuebing was genuinely shocked this time.

Good heavens, XScale!

Intel couldn't sustain its ARMv5-based processor business in 06 and sold it to Marvell for $6 million. Since then, it has remained stuck at the 130nm process.

Just because it's a RISC architecture doesn't mean it's qualified to compete with ARM!
I wouldn't even dare to use it, and you actually dared to vote for it!
You really are something else.

Chen Xuebing really wanted to give him a thumbs up.

"I've heard that Intel has launched the Menlow platform, an x86 mobile alternative. I think that if you use this as a technological threat, it might attract more attention from ARM."

He offered a tactful reminder.

Although it uses a CISC architecture, it's still aiming for the most advanced 55nm process.

Moreover, this project was later given to Nokia, and its operating system became Nokia's second smartphone system, MeeGo. Chen Xuebing even bought its only product, the N9. It was actually a very successful product with great foresight. Many later phones imitated its design. If its software ecosystem had been developed properly, MeeGo might have become the third major smart system. Unfortunately, Nokia chose the wrong path again.

This is what makes us competitive with Arm.

Masayoshi Son hesitated for a second, realizing that XScale might not work.

“Well, I also have a good relationship with Intel. I’ve owned some shares in them for a long time, and they’ve also invested in our projects.”

Chen Xuebing's expression relaxed.

That would be enough to create a sufficient threat.

Masayoshi Son coughed lightly and then asked, "How much money do you think I need to prepare to acquire ARM?"

Chen Xuebing thought for a moment and shook his head: "This needs to be judged based on ARM's market value at the time of the acquisition. I think... to reach an agreement quickly, there needs to be at least a 30% premium."

“If you think it’s 30%, then they probably think so too. So it needs to be 40% to break through their psychological defenses,” Masayoshi Son said with a smile.

Chen Xuebing clicked his tongue inwardly.

He was too embarrassed to talk about radicalism in front of Masayoshi Son.

"So, based on the current market value of 25 billion... you're planning to offer 35 billion?"

"Yes, how much can you offer?" Masayoshi Son asked in return.

At this point in the conversation, Chen Xuebing felt that Masayoshi Son was probably also under financial pressure. He thought that not contributing a single cent was probably not an option, and what kind of business would it be to call someone over to discuss investment without contributing a single penny?

Chen Xuebing said without changing his expression: "I really want to acquire it outright, but you should understand where the problem lies. We can't get a majority stake in ARM, or even 34% (the veto right). We can only cooperate with ARM through a joint venture with Chinese partners."

Masayoshi Son hesitated for a moment, then said, "I can raise $3 billion this June."

“Alright, whatever the rest, I’ll cover it.” Chen Xuebing said decisively, “If ARM has the opportunity to be sold to me in the future, I’m willing to accept a 50% premium over your acquisition price. Furthermore, we are currently discussing a joint venture in China with the management team. I guarantee that you will reap substantial benefits in the Chinese market.”

Masayoshi Son laughed: "It seems you are indeed very interested in ARM, but your guarantee should be put into a written agreement."

"Of course, but I have conditions. ARM does not currently agree to us obtaining a 51% controlling stake. I think this is not conducive to sales in the Chinese domestic market. You know... governments of any country tend to be more supportive of companies controlled by their own national enterprises. So after you take over ARM, you must ensure this."

Masayoshi Son leaned back on the sofa and chuckled softly: "So what can you bring me?"

"The sales volume of ARM architecture mobile phones in the Chinese market is 30 million, increasing by 5 million every year for five consecutive years, starting from the time you take over. The data is based on the revenue share received by ARM. We can sign a performance-based agreement."

Masayoshi Son has finally started to settle accounts.

That's five years, 200 million units.

This number is also a good standard in China.

As for the specific amount of income, he didn't want to calculate it. No one invests with the goal of how much profit they make each year; what he wanted was ARM's market value.

Only market capitalization can grow exponentially; the difference between a P/E ratio of 100 and a P/E ratio of 200 may just be a story.

The market capitalization of the TMT industry is based on product coverage as a key metric.

“Your data isn’t crazy enough. Five years, 300 million. I don’t look at the growth rate, I only look at the result. What do you think?” Masayoshi Son laughed.

“Okay.” Chen Xuebing readily agreed, then smiled and said, “But there are other conditions for this number.”

Masayoshi Son raised his hand: "Just tell me, and if I can do it, I will agree."

The negotiations between the two radicals went incredibly smoothly.

“You can definitely do it, because what I want to talk to you about next is a company that you have complete control over.”

"what?"

Vodafone Japan.

(End of this chapter)