AMD wanted to cut a deal with Nvidia before settling for buying ATI instead, according to former AMD employees.
AMD completed a deal to buy ATI for $5.4bn in 2006, but only after it couldn't agree on terms with Nvidia, according to former AMD employees interviewed by Forbes. One of the stumbling blocks to the deal was Nvidia's colourful CEO Jen-Hsun Huang wanting to become the CEO of the combined company, effectively ousting then AMD CEO Hector Ruiz.
AMD's purchase of ATI didn't go smoothly, and while the fabled Fusion accelerator processing units are now available, the technology was expected to tip up years ago. And while AMD's discrete graphics card business has been releasing competitive products, the CPU operation has left a lot to be desired, with last year's Llano chips failing to set the world on fire.
Ruiz stepped down from the AMD CEO role within two years of the deal and left the firm completely a year later, with AMD posting losses amounting to billions during his tenure. While this was happening, Nvidia and Huang have cleverly repositioned the firm to take on Qualcomm and Texas Instruments in the system-on-chip (SoC) market.
Nvidia's Tegra SoC had its breakthrough last year in a number of smartphones and tablets, however 2012 is expected to see Nvidia's biggest push against the SoC stalwarts with Tegra 3. The five-core Tegra 3 chip will appear in a number of smartphones and tablets at next week's Mobile World Congress, and AMD has yet to see a design win in those mobile markets.
AMD's decision to settle for ATI was not necessarily a bad one in terms of technology and intellectual property transfer, but its execution of that acquisition clearly was rather poor.