Intel vs. AMD Feud Ends With Whimper

AMD is still in trouble, although Intel was no longer cheering at the news. The chip giant now understood the value of competition …especially as a fading AMD put a predatory Intel in high relief. Worse, a dying company is a desperate company and AMD's growing accusations about Intel's behavior drew a ready audience in Washington, and especially in the E.U., where there is always an interest in taking down successful U.S. companies.

The result is that this year Intel has found itself pummeled from every direction. In May, European regulators slammed the company with a $1.45 billion anti-trust fine, the largest in E.U. history. Then, on Nov. 4, New York state Attorney General Andrew Cuomo filed a federal anti-trust suit against Intel.

It was becoming obvious to Intel that the lingering lawsuit with AMD was now not just a thorn in its side, but was providing support for all of the other litigation, as well. Intel needed to get that piece off the board and, within days, that's exactly what it did. (For a terrific description of the entire six-month negotiation, see this Business Week story. BW was one of the few media outlets to give the story the coverage it deserved.)

The Fallout Could Cost the Rest of Us

That $1.25 billion payment by Intel to AMD may seem like a lot of dough but I'm betting the big winner on the deal is Intel. As much as it needs operating capital, AMD even more needs good management. Otherwise, that money will get burned up quickly to no great end. Intel, meanwhile, has neutralized its chief antagonist.

With Intel humbled and AMD funded, why shouldn't the endless feud go on? Why am I suggesting that this, at last, is the end? It's because I can't help thinking that AMD's days are numbered and the money is now just going to delay the inevitable. And when the end arrives, Intel may find that without AMD, it may have to invent a new competitor.

As for the rest of us, we will be the losers.

This is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michael S. Malone is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years, beginning with the San Jose Mercury News as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, The Economist and Fortune, and for two years he was a columnist for The New York Times. He was editor of Forbes ASAP, the world's largest-circulation business-tech magazine, at the height of the dot-com boom. Malone is the author or co-author of a dozen books, notably the best-selling "Virtual Corporation." Malone has also hosted three public television interview series, and most recently co-produced the celebrated PBS miniseries on social entrepreneurs, "The New Heroes." He has been the "Silicon Insider" columnist since 2000. His new book, written with Tom Hayes, is "No Size Fits All."

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