Chapter 587 - 420: A 500x Return on Investment? Lei Yijun’s Little Scheme

May 28th, 798 Art Center.

Before Chen Yansen could even reach the entrance of the conference hall, Lei Yijun and Li Wanqiang hurried over to greet him.

"President Chen, welcome! Thank you for coming all this way."

Lei Yijun said, his face beaming and eyes crinkling with a smile.

It couldn’t be helped. Xiaomi had offended too many of its peers, so very few competitors were willing to attend Xiaomi’s new product launch. Only Chen Yansen and Yu Chendong had shown up.

Competitors like Meizu, OPPO, and ZTE hadn’t even sent a representative. As for rabble like 360, he naturally hadn’t even sent them an invitation.

Given Chen Yansen’s status in the industry, his presence alone was a great honor. Lei Yijun’s heart warmed, filled with gratitude.

"Lao Zhou’s in for it this time. Once the Redmi 1 comes out, sales of the Qingcheng D2 will take a hit too," Chen Yansen teased.

Lei Yijun would make a profit, but he himself would never lose.

He’d earn from the manufacturing fee, he’d earn from the price difference on electronic components, and he’d earn again from Human Dao Fire. A triple win.

"360 has been kicking Xiaomi’s ass for a year. It’s about time you let me win for once, right?" Lei Yijun said with a cold smile.

Zhou Hongyi had been publicly badmouthing him time and again, and Lei Yijun had long been itching to strike back. But with the lackluster sales of the Xiaomi 1S and Xiaomi 2, he lacked the confidence to talk trash back.

Chen Yansen found it amusing.

It was clear how furious Lei Yijun was, given that Zhou Hongyi’s tirades had practically forced the Redmi 1 to launch three months early.

"I’ll add the Redmi 1 to Pinbei’s ten-billion subsidy product pool then. Since President Lei wants to win, I’ll definitely give you a boost."

Chen Yansen agreed readily.

The Redmi 1 also ran on the Aurora Future OS, so of course he was going to give it some extra support.

"Thank you, President Chen. This way, please." Lei Yijun grinned, gesturing with his hand.

’My gamble paid off!’ he thought.

As the second smartphone in the world to fully adopt the Aurora Future OS, the Redmi 1 held immense strategic value for Orange Technology.

Not only had Chen Yansen personally come to Yanjing, but he had also verbally promised to provide Xiaomi with sales resources.

’President Chen is a reliable man!’

Lei Yijun smiled faintly, reflecting inwardly.

Chen Yansen nodded and, escorted by Lei Yijun and Li Wanqiang, took a seat in the front row.

"Mr. Chen, hello. I’m Roger, Vice President of Qualcomm’s Great China Region."

A middle-aged white man seated next to him initiated the conversation.

"Hello, Roger," Chen Yansen replied.

He had only ever met Wang Xiang, the President of Qualcomm’s Great China Region. Roger was a newcomer recently transferred from the Lighthouse Country headquarters.

Zuo Hongyu might have had contact with him, but Chen Yansen wasn’t familiar with the man.

"Mr. Chen, on behalf of Qualcomm, I would like to purchase the architecture license for the Orange Z1 Instruction Set from Orange Technology," Roger said, getting straight to the point.

Half an hour ago, he had received a call from headquarters. The mission was simple: establish a cooperative relationship with Orange Technology.

Initially, he had scoffed at the head office’s decision. But when he learned that Apple’s A7 was using the Orange Z1 Instruction Set and had abandoned the ARM architecture, he was instantly floored.

Although he had heard the Orange Z1 Instruction Set mentioned before, he knew very little about its performance and had assumed it was just a rudimentary product.

But now it dawned on him. An instruction set patent that could entice both Apple and Qualcomm must be quite impressive in terms of coding efficiency and performance.

Although Qualcomm currently relied mainly on ARM architecture, and adopting a new instruction set would require a complete chip redesign at an extremely high cost, ARM’s licensing fees were too expensive.

Therefore, purchasing the Orange Z1 Instruction Set would give them another option and, at the same time, allow them to pressure ARM into lowering its licensing fees.

Whether Qualcomm would actually design a chip based on the Orange Z1 Instruction Set was, for now, unknown.

Maybe they would, maybe they wouldn’t.

"A one-time licensing fee of 3 million US Dollars, plus a 1% royalty," Chen Yansen replied without a second thought.

"Mr. Chen, I have no objection to the one-time licensing fee, but a 1% royalty is too high. ARM only charges 0.5%."

Roger said with a frown.

"If Qualcomm designs chips using the Orange Z1 Instruction Set and your annual shipments reach 50 million units, I can rebate 0.5% of the royalty."

Chen Yansen added.

The implication was that if Qualcomm was only using the Orange Z1 Instruction Set as a bargaining chip against ARM, the price was non-negotiable.

"0.6%?" Roger haggled out of habit.

"Sorry, 0.5% is my bottom line." Chen Yansen smiled amicably, but his refusal was firm.

"Excuse me, I need to step away for a few minutes," Roger said after hesitating for over ten seconds.

"Be my guest."

Chen Yansen said, unfazed.

After all, Roger had several layers of superiors above him; it was normal that he couldn’t make the final call.

After Roger left, Chen Yansen glanced around and noticed that there were very few invited competitors present. The crowd was mostly media and fans.

Just then, a commotion erupted at the entrance.

The reporters started to move forward but were stopped by the staff.

Lei Yijun was escorting a white-haired man in a leather jacket, and they were striding into the conference hall.

’Huang Renxun?’

Chen Yansen glanced over but didn’t pay it much mind.

In 2013, NVIDIA was in a lukewarm state. Despite having been in the game for over twenty years, the continuous decline of the PC business forced Huang Renxun to turn his attention to the mobile phone sector.

However, the mobile industry was already dominated by Qualcomm, MediaTek, and Samsung. NVIDIA’s Tegra processor only had a 2% market share.

Huang Renxun’s purpose in coming to Hua Country this time was crystal clear: he was here to sell!

Orange Technology was his primary target, with Xiaomi as a secondary one.

Hua Country’s mobile phone shipments exceeded 200 million last year and were expected to surpass the 300 million mark this year.

How could Huang Renxun possibly miss out on a blue ocean market with over a billion people?

So, when he found out Chen Yansen would be attending Xiaomi’s new product launch, he rushed to Yanjing immediately.

"President Chen, let me introduce you to a new friend. This is Huang Renxun, the founder of NVIDIA."

Lei Yijun said as he led Huang Renxun over.

"President Chen, hello. To be honest, I’m also a loyal user of the Orange Mobile Phone. It’s a fantastic product."

Huang Renxun said, pulling out a Yaocheng X1.

Chen Yansen couldn’t help but chuckle. The Yaocheng X1 hadn’t even entered overseas markets yet, and its application software hadn’t been fully adapted. What Huang Renxun said was no different from a bald-faced lie.

Lei Yijun was slightly taken aback and cursed inwardly: ’This phony foreigner is a real piece of work.’

’Yesterday he was calling himself a "Mi Fan," and today he’s an "Orange Fan."’

"Thank you for your support of the Orange Mobile Phone, Mr. Huang."

Chen Yansen replied lukewarmly.

At that time, Huang Renxun’s Chinese was terrible. His tone was extremely awkward, clearly the result of last-minute cramming in order to enter the Hua Country market.

It was a far cry from the eloquent speaker he would become over a decade later.

As far as Chen Yansen was concerned, CPUs and GPUs were both key development areas for Tiangong Technology. A head-on clash with NVIDIA was inevitable one day.

Hence, his attitude could hardly be described as enthusiastic.

Seeing this, Huang Renxun’s heart sank. Compared to Xiaomi, Orange Technology was the perfect customer in his mind.

But from the other party’s reaction, it seemed Chen Yansen had little interest in NVIDIA.

Chen Yansen looked up at Lei Yijun, then back at Huang Renxun, and a thought dawned on him: ’It seems Lei Yijun thinks Orange Technology is making too much profit and wants to build his own supplier ecosystem.’

"President Chen, Mr. Huang, I’ll leave you two to chat."

After saying this, Lei Yijun turned and walked away, preparing to continue greeting important attendees.

"President Chen, actually, NVIDIA’s Tegra 4 processor is in no way inferior to Qualcomm’s Snapdragon 800. Why not give the Tegra 4 a try in the Yaocheng X1?" Huang Renxun said tentatively.

"As far as I know, the Tegra 4 has an external baseband, which can’t compare to Qualcomm’s integrated version."

Chen Yansen was bored and decided to tease Huang Renxun a little.

Chen Yansen had no intention of long-term cooperation with either Qualcomm or NVIDIA. Once the Tiangong A100 chip was complete, the Orange Mobile Phone would gradually transition to their own in-house processors.

"The Tegra 4 has an advantage in graphics processing. It performs better in complex 3D games or video editing tasks. The Snapdragon 800 is merely more power-efficient."

Huang Renxun puffed out his chest, praising his own product.

Low power consumption meant longer battery life and fewer heat issues, which in turn supported thinner and lighter device designs.

Chen Yansen couldn’t be bothered to respond to Huang Renxun.

But the other man was exceptionally enthusiastic, pulling Chen Yansen into a conversation that ranged from phone chips to smart speakers, finally letting slip, "Amazon’s Echo smart speaker is about to launch."

"How do you know that, Mr. Huang?" Chen Yansen pressed.

Huang Renxun knew he had let it slip. He gave a dry laugh and said, "Amazon commissioned a custom AI chip from me. Mr. Chen, I’m afraid I can’t disclose any more information,"

Chen Yansen nodded in understanding.

After a year of talk, Amazon was finally bringing its Echo smart speaker to market.

In other words, the honeymoon period for the Alexa Smart Speaker was over.

From now on, regardless of how well the Echo smart speaker performed, the sales of the Alexa Smart Speaker would inevitably be affected.

"So, Mr. Huang, you want to sell the Tegra 4 to Orange Technology?" Chen Yansen then asked.

"The Orange Mobile Phone deserves a better processor," Huang Renxun said with a smile.

’What a load of bullshit!’

Chen Yansen cursed irritably in his mind.

After a moment’s thought, he asked casually, "Does NVIDIA accept investments?"

In 2013, NVIDIA’s market cap was just over 8 billion US Dollars, not even a third of Orange Technology’s valuation. Its stock price was around 13.8 US Dollars per share. Following its normal development trajectory, it would later undergo two stock splits: a 4-for-1 split and a 10-for-1 split.

The total increase would be over 500-fold!

Although Tiangong Technology’s future entry into the GPU and AI chip sectors would definitely impact NVIDIA’s market share, making it difficult to replicate the peak market cap of his previous life, reaching a market cap of several hundred billion US Dollars would still not be a problem.

Because this world wasn’t black and white. No matter how strong the future Tiangong Technology became, it couldn’t swallow the entire market.

For one, it wouldn’t be allowed. Every country and region had protectionist policies for local enterprises, and the Lighthouse Country was no exception.

For another, NVIDIA’s R&D capabilities in graphics processors and artificial intelligence computing were not weak either.

"Is this a precondition for Orange Technology purchasing NVIDIA chips?" Huang Renxun asked subconsciously, his brow furrowing slightly.

"You could see it that way," Chen Yansen said with a noncommittal shrug.

"How much does President Chen want?" Huang Renxun asked.

"How much can Mr. Huang give?" Chen Yansen retorted.

’I only hold 4.5% myself, how much can I give you?’

NVIDIA’s true major shareholders were Vanguard and BlackRock. Any private equity or strategic investment would first require a consensus with the major shareholders.

’Giving up a portion of equity just for the Hua Country market?’

"0.3% at most," Huang Renxun replied after some thought.

’If he could tie Orange Technology and NVIDIA together, he could sell at least a hundred million more chips a year.’

’0.3%?’

’Is he trying to get rid of a beggar?’

Chen Yansen sneered, instantly losing all interest. He stared straight ahead, clearly indicating he had nothing more to say.

’Wait a minute, if you’re not satisfied, you can at least bargain, can’t you?’

Huang Renxun was stunned.