Those Years When I Was Forced to Top the Forbes List

Chapter 366 Above Heaven is President Chen

Two hours later, Chen Xuebing led the way out of Warren's office, walking quickly, with the entire team following behind in silence.

People only started speaking after they left the building.

“Two hundred million US dollars to buy just one ARMv7, and they also want 51% of the equity. We don’t have enough funds, and they want us to pledge all our equity to ensure the technology is kept secret. These conditions are outrageous,” Lu Xiaochun said.

“This is just their offer.” Goto Miki was relatively calm. “We still have room for negotiation, but their demand for 51% equity does not give us the autonomy we need. This acquisition would then become a financial investment, which is far from what you envisioned.”

“This is the key point.” Chen Xuebing wagged his finger at her: “Tell me your opinion.”

After a moment of contemplation, Goto Miki said, "If you really have the full support of the social security fund and Central Huijin, you should ask the government to introduce a mandatory technology transfer policy to put pressure on them, classify chip architecture as a specially restricted technology, and require China to hold 51% of the shares. If they want to enter the Chinese market, they will have to give way."

Upon hearing this, Chen Xuebing could only shake his head and smile: "Are Japanese laws really that flexible? You can change them whenever you want?"

“No, this is not a law, it is a policy,” Miki Goto corrected. “The Catalogue for the Guidance of Foreign Investment Industries is a list, and chip architecture is only a very small category. It is actually only targeting ARM. Modifications are temporary and targeted. They can be modified because of a specific investment, which is common in many countries.”

Chen Xuebing shook his head again.

"This method won't work. Not to mention private enterprises, even state-owned enterprises in China don't receive this treatment."

Chen Xuebing has already decided to walk this path on his own. He can wave the flag to scare others, but if one day he really needs the country's help, then the time will come.

As for the current situation, the semiconductor industry is somewhat cooled down in terms of national policy due to Chen Jin's case. To gain support from the top, everyone needs to feel the tangible benefits.

Training technical personnel is also a major issue. He has been discussing this with Lin Bin these past few days, wondering what to do if Lin Bin readily agrees.

If we bring ARMv7 back to China and try to localize it, let alone research and upgrade it, we won't even have a technical team to digest the ARM architecture.

Chip design tools are not widely used in China, and upgrading them is extremely difficult.

Are we supposed to buy it with a lot of bravado, only to have them send people to help us? Wouldn't that make us a laughingstock?

He was momentarily at a loss.

Lin Bin, standing nearby, also considered this and frowned: "Why don't we start by fighting for this 51% stake and force them to lower their price to our target price? They're calculating value with us, right? They haven't even factored in the control that comes with this 2% stake. Let's negotiate that 2% first. If they want it, they'll have to lower the price. And with control, it'll be easier for them to persuade the British government. They can even get them to send people to China to establish a joint R&D company with us, since they'll be in charge of that company. They'll definitely have to send people, and we can even learn from them. Right now, we need to maintain stability in the rear. If we get ARMv7, we can stay stable for a few more years. I know you can't accept not having autonomy."

Chen Xuebing's thoughts gradually cleared.

"Okay, let's talk about it like this for now."

"Huh??" Lin Bin looked at Chen Xuebing with some surprise.

He thought Chen Xuebing would definitely not accept it, and he was going to try to persuade him with all his heart.

"You agreed?" Lin Bin asked again to confirm.

Goto Miki immediately shook her head and said, "Chairman, this is very risky. This is not a physical enterprise. All the technology is very easy to transfer. If we don't have autonomy, we can't control the ownership of the subsequent research results. If we wait until ARMv8 is developed, they will think they can sell it themselves and won't license it to the joint venture. They will then send the technical documents generated in China back to the UK, hide or destroy the Chinese documents, and we won't be able to send anyone to intervene in the independent upgrade research of ARMv7. They just need to wear the company down. All that money is spent on a single profit. Moreover, the money invested in research and development during this period is all consumed by the Chinese company. Without 51%, half of the equity of this company is not worth 10 billion RMB at all."

Chen Xuebing looked at Goto Miki and grinned, "You're even more radical than me. But, I'm saying we should talk like this. You guys are the ones who talk. Whether we sign or not is up to me."

Lin Bin was a little confused: "What do you mean?"

Chen Xuebing smiled and said, "We know the significance of 51% and 49%, and so do they. We'll hold onto 51% first and then negotiate other conditions with them. We want the localization of ARMv7 technology, talent, collaborative R&D, and the equity price reduced to 10 billion. If they agree to our conditions, we can make concessions on the leading role and the R&D investment ratio of the joint venture. Let them think that we want to learn the technology, using the market to exchange for foreign technology factories. After the foreigners leave, we'll imitate them by following the factory's trail. Isn't that what we Chinese have always done? Let them look down on us, think that there's a bargain to be had, and meet all our conditions. We'll also concede to 49%, and I'll handle the rest."

Lin Bin narrowed his eyes, staring at Chen Xuebing, but couldn't discern anything. He couldn't help but remind him again, "Now that the follow-up negotiations are complete, regaining control won't be so easy."

Chen Xuebing waved his hand: "Let's talk first. I won't show my face for the next few days. You need to show that I'm angry and don't want to give up control, so you're prioritizing the bigger picture and having me stay in the hotel and not participate in the negotiations. You need to demonstrate that the Kunlun system is very important to us, and that we have to make concessions for technological cooperation. They have Jobs' intelligence backing, and I'm heavily labeled as 'cunning' by them. If I make concessions, it will arouse their suspicion. Remember, your core stance is that Kunlun's technology is far ahead of the competition, so as long as they are willing to invest R&D talent in China and send our people to learn the technology, then all R&D expenses can be borne by the Chinese company."

Lin Bin nodded to indicate that he understood, and then guessed, "Are you planning to make them think that we are fat chickens that can only be slaughtered, and lure them to shift their R&D focus to China? What if we can't obtain the technology they produce? Even if they let us learn the technology, they certainly won't let our people access the core R&D content. Don't think that stolen things can be copied. The equity relationship is right here. Their head office won't agree. Even if we steal something, we can't use it. Chip technology is very traceable. Without authorization, no semiconductor manufacturer in the world will produce for you."

"You're already here, do you think you can just leave?" Chen Xuebing smiled mysteriously. "Let's talk first. Give me a few days, and I'll give you the results."

Back at the hotel, Chen Xuebing turned off all the lights, plunging himself into darkness. He sat in front of his laptop, searched for a person, and then stared at the screen, lost in thought for the entire day.

He was reminiscing.

Recalling the beginning and end of an acquisition deal.

He compiled fragmented information and current online data into his mind.

Around 2016-2017, Masayoshi Son acquired ARM at a significantly higher price, a deal that was finalized in 14 days; the details of the process are unclear.
Masayoshi Son started by selling video game consoles, inventing pocket translators, and building his business through software dumping. He has a strong interest in the internet, communications, and semiconductors (TMT).

Shortly after acquiring ARM, Masayoshi Son agreed to establish ARM China and agreed that the Chinese side would hold a 51% stake.

The growth bottleneck of ARM may be due to market saturation, insufficient R&D investment, or competition from RISC-V.
Masayoshi Son's later investments resulted in a series of bad investments, and his investment returns were heavily reliant on Alibaba. He relied on short meetings to assess projects and made decisions extremely quickly.

SoftBank subsequently faced cash flow problems, and Nvidia attempted to acquire ARM. Masayoshi Son wanted to sell, but the sale failed due to regulatory opposition in multiple countries around the world.

This was an acquisition that Chen Xuebing had not paid full attention to. Fortunately, the acquisition was very famous. He had been trading stocks for years and was quite sensitive to information and timing, so he could recall many details.

While summarizing this information, he made a detailed assessment of the position of each participant.

Masayoshi Son likes TMT-related companies and invests only to make money. He buys companies based on intuition and sells without hesitation when it's time to cut his losses.

He completed the acquisition of ARM in just 14 days, which shows that ARM's management had no resistance to excessive premiums, and that the UK authorities did not intervene.

Back then, ARM was already an important company; now, there's even less reason to try and stop it.

Later, Nvidia tried its best to acquire ARM, but there was a huge wave of opposition, which shows that GPU + ARM, these two things combined can seriously strangle a company.

Although he doesn't fully understand the reasons yet, ARM is the only computing architecture that can be used across mobile phones, tablets, industrial controllers (servers), and cloud servers, and it dominates the high-end market, while RISC-V can only dabble in the low-end market.

This thing is the source of the CPU; add a GPU, and you have a computer.

Upon closer reflection, this might have been one of the few opportunities he had to choke someone.

Acquiring just one branch isn't enough; we need to acquire the headquarters.

We must take advantage of the current situation, when regulations are not comprehensive.

The sooner he gets there, the better the conditions he can secure.

The only potential problem is that Masayoshi Son took over too early, which could ruin ARM.

But is this a bad thing?

If he could gain a technological advantage and then reorganize the order, putting everyone back on a level playing field, that wouldn't be a bad thing. As evening approached, having considered every possibility, a smile finally appeared on his face. He opened his notebook and typed three words:

Sun Zhengyi

—Jack Ma.

Looking at the time, it should still be noon on the first day of the Lunar New Year in China.

He picked up the phone and wished Mr. Ma a Happy New Year.

"Hey, Mr. Ma, Happy New Year!"

"have you eaten?"

"Hehe, okay, then I won't beat around the bush. I want to talk to you about something, which will take up some of your time."

"Is there anyone next to you?"

"Damn it! I'm not borrowing money from you!"

Negotiations began on the second day.

On the afternoon of the third day of the Lunar New Year, Chen Xuebing received a call back from Jack Ma.

"It's a deal! I convinced Boss Sun! He plans to come to London to meet you! Brother, you owe me a huge favor this time!"

Chen Xuebing was overjoyed upon hearing this: "Haha, great! When you go public, I'll give you another gift! It'll be free!"

"Hiss!" Jack Ma immediately became sour: "A deal worth tens of billions, and you just dismissed me with a simple trick? I convinced him by making a long phone call to him, talking for four or five hours! I even guaranteed with my personal integrity that you could control the future smartphone market in China! He didn't even do any market research and came directly to London to talk to you!"

"When will he come?"

“He’s an impatient guy! He thought about it all night yesterday, and called me today to make sure he wanted to do it! He took your address and hung up right away! I bet he’s already on his way! You don’t need to pick him up from the airport; he knows the UK very well and will come directly to your hotel.”

"Coming directly? Damn, did you even explain things to him? He's not going to contact ARM directly, is he?"

"I could hold two strategy meetings in four or five hours! How could I not have explained it clearly? Don't worry! SoftBank just invested $120 billion in Vodafone's Japanese business last year, and they're still in debt! SoftBank doesn't have the money right now! They can't invest!"

"How much can he raise?"

"Heh, he was the world's richest man for three days after all, he has his own connections."

When Masayoshi Son made an initial investment in Yahoo, he acquired a 30% stake. After Yahoo went public, its market value once exceeded $1250 billion in 2000, and Son's net worth peaked at $700 billion, surpassing Bill Gates and making him the world's richest man for a few days. However, Yahoo's stock price fell after a few days, and the dot-com bubble in 2001 wiped out most of his assets. It took several years for the situation to recover.

In 05, Yahoo! China was sold to Alibaba, which boosted Alibaba's business. It was probably Masayoshi Son who facilitated this deal.

Masayoshi Son was one of the people who truly benefited from the first wave of the internet boom.

"Alright, since you don't want the brocade pouch, I'll remember this favor!"

Chen Xuebing had originally planned to talk to him about "Double 11," but since he didn't want it, it would be good to let JD.com develop for another two years.

To be honest, Chen Xuebing values ​​ARM's investment more than JD.com. He wants to build large-scale infrastructure, and internet infrastructure is a very important part of that. ARM is a crucial component of internet infrastructure.

Moreover, this aspect involves not the current, broad definition of the internet, but the future internet.

The Internet of Everything.

He silently calculated what benefits he should give Jack Ma.

Jack Ma chuckled mischievously and said, "You don't need to hold a grudge; I need an admission ticket! An admission ticket for this investment!"

Chen Xuebing's lips twitched: "This is a deal worth billions of dollars."

I don't mean to look down on you.

Jack Ma immediately exploded: "So what if it's a few billion? We'll raise at least $12 billion through our IPO this year! I can come up with $12 billion, how much can you come up with?"

Chen Xuebing raised his eyebrows: "Such a strong determination?"

"Sigh." Jack Ma sighed deeply and said slowly:

"To be honest with you, we lost out on Yahoo's funding round two years ago. Yahoo China took 40% of our shares and 35% of our control for over $10 billion. At the time, we were struggling because we lacked engine technology and wanted to improve our technical capabilities. However, the engine technology they brought was not advanced, and most of their core technicians left."

"You know how much pressure our database is under. We originally planned to separate the product and store search functions into the search engine and use a distributed architecture."

"Yahoo's technology wasn't good enough, so we had no choice but to bring in Oracle."

"A while ago, our technology department mentioned using x86 clusters for distributed caching, which would allow us to move popular product data to local nodes, saving at least 50% of the database load."

"The day before yesterday, I heard you talk about the lightweight nature and data future of the ARM architecture. I also spent a day discussing it with the company's technical department. We think that the characteristics of ARM can provide more possibilities for distributed node caching and local preprocessing. Do you know what local preprocessing represents?"

Chen Xuebing was somewhat surprised by Alibaba's foresight, but he just chuckled and said, "I'm a systems engineer. You're testing me with this? Our systems will not only have local preprocessing capabilities in the future, but I'm also planning to invest in a big data center, which will be rented to you big traffic users. Don't worry, I will help you with these basic tasks. And that's not all; we will also provide algorithm services and data analysis support such as user preferences."

"Damn it."

Jack Ma was shocked.

He was still thrilled that local preprocessing could save 50% of bandwidth consumption and significantly improve browsing speed.

Basic work? This is a technological revolution!

Highly efficient data processing capabilities are the technological foundation for the explosive growth of the platform's product volume!

He even considered it a trade secret and was debating whether or not to reveal it!

Suddenly I heard this?

Algorithm services? User preference analysis?
It was as if, during his ascent to heaven, he was suddenly showered with holy rain and received some kind of transformation.

When he looked up, he saw Chen Xuebing standing in heaven and urinating down below!

(End of this chapter)