Who would buy AMD?

Advanced Micro Devices stock jumped about 10% on the rumor of a Microsoft acquisition. Then it came crashing back down.

See, the problem with AMD is not so much a financial problem but a existenisal one. While holding a x86 license and a quite capable graphics department is quite valuable, AMD is not a valueable company. Which is strange when you think about it. Here is a company which has an awesome patents portfolio (x86–64, etc), a graphics department that knows a thing or two and being one of two players in the game that may produce and design x86 chips (not counting VIA..). All of this is a absolute steal at 1,5 billion dollars. It might even be a steal for 5 or 7 billion. So, why doesnt Microsoft just scoop them up and bascially become a vertical integration God?

I will just ignore the obvious that is the part of the x86 license aggrement that needs to be renegotiated with Intel. The problem for Intel that they need AMD to exist otherwise the FTC might consider Intels position too dominant and thus force it to divide, which has happened before to AT&T in 1982. As it is right now AMD exists because it is keeping Intel fat (read lazy) and happy.

Back to Microsoft and the vertical integration part. Imagine a company that makes it own x86 processors (although in other peoples fabs), has billions of dollars to invest in R&D, owns a popular operating system and might be the Yin to Apples Yang. It shall be called Microhard.