Intel and AMD bury the hatchet under $1.25 billion in cash

[stefan]

Intel and AMD bury the hatchet under $1.25 billion in cash

AMD and Intel have agreed to settle all legal and patent disputes between them. Intel will pay AMD $1.25 billion and agrees to change certain unspecified business practices.
By John Timmer
Ars Technica



Intel and AMD bury the hatchet under $1.25 billion in cash

Intel and AMD are fierce competitors in the world of chipmaking, but in recent years they've taken the fight to the courtroom. AMD has sued Intel for antitrust violations (allegations that have been picked up by a number of governments), while Intel fired back by claiming that AMD had violated a licensing agreement for x86 technology. This morning, however, the two companies made a surprise announcement: they've reached an agreement that settles all legal issues between them.

The statement is short on information; both companies will flesh out the details during press/analyst calls later this morning. However, it does have a few eye-popping details, first and foremost among them a cash payment: Intel will be handing $1.25 billion over to AMD. The agreement also includes limits on Intel's business practices; these aren't specified in the statement, but undoubtedly limit the rebates and bulk buying agreements that Intel has used in the past to keep OEMs from jumping ship to AMD.

The two parties will also drop their patent dispute and commit to another five-year cross licensing agreement.

There's something in this for both parties. Intel was facing AMD suits both in the US and Japan, and AMD was filing complaints with just about any government that appeared willing to listen. This won't stop any government cases against Intel that are already in progress, and won't prevent any governments from investigating Intel on their own. But, without a major company pushing for these investigations, it's likely that Intel can start focusing on clearing out existing cases without the worry that new ones will continue to appear.

The business practices that Intel has agreed to avoid are undoubtedly the same ones that have been getting it in antitrust hot water lately, so they've probably been discontinued already. The formal agreement may help Intel argue that its misbehaving days are in the past, which can help with both settling existing cases and avoiding future ones. As for the cash, Intel has just demonstrated it can handle even larger payments (the EU hit them with a

[Ih8grvty]

There are very few things anyone could do to me, that I would not forgive for 125 billion.