Microsoft might be interested in buying AMD, according to source

In a bid to revive its chip design operations, Microsoft Corp. may acquire Advanced Micro Devices, according to a source familiar with the matter. The software giant approached AMD several months ago, the source indicated. The result of the talks is unclear.

Microsoft Corp. has been selling game consoles for over ten years now and back in 2006 the firm even formed a division to design chips for its products, primarily game consoles. While this internal group has clearly developed some chips for Microsoft’s hardware, the company used chips designed by Advanced Micro Devices and Nvidia Corp. for its Xbox One consoles and Zune players, respectively. As it appears, Microsoft’s own chip design team cannot really develop competitive solutions for the company’s devices and in order to make its chip operations viable.

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AMD headquarters. Image by Wikipedia

The details about negotiations are unclear, just like Microsoft’s exact proposal to AMD. However, since Microsoft has $95.3 billion in cash, whereas AMD’s market capitalization right now is $1.81 billion, the software giant may buy AMD relatively easily. In fact, current value of AMD is three times lower than the company paid for ATI Technologies in 2006.

Analysts estimate that Microsoft pays around $100 for every Xbox One system-on-chip to AMD. Life-to-date sales of Xbox One are around are around 12.6 million units, which means that Microsoft has already paid AMD around $1.26 billion for Xbox One chips. The acquisition of AMD could save it around a billion per year on Xbox One chips alone. It the company develops appropriate chips for smartphones and tablets, Microsoft’s savings could be even higher.

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Microsoft Xbox One SoC. Image by iFixit

It is necessary to note that Microsoft does not really need AMD. The software giant needs system-on-chips to power its Xbox game consoles, Lumia smartphones, Surface tablets and possibly other hardware devices. It does not really need server processors or high-end graphics cards. However, AMD’s management will unlikely sell a part of AMD to Microsoft since its accelerated processing units (what Microsoft needs) are based on technologies developed for server microprocessors and high-end graphics cards.

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AMD Lone Star campus. Image by Bizjournals

The battle for video game console space is very strong. If Microsoft bought AMD, then Sony would be faced with a bad set of choices: put money in Microsoft’s pocket every time it sells a PlayStation, or try to create an entirely new platform by using technologies from Intel, Nvidia, ARM or Imagination Technologies.

Since game consoles is an important business for Microsoft, the company naturally wants to make sure that its technology provider does not go bankrupt or is acquired by a competitor. For example, if Samsung takes over AMD and builds-in its APUs into its TVs, it will automatically become a major player in the market of video games.

AMD and Microsoft did not comment on the news-story.

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KitGuru Says: Even though AMD is not really profitable, it has a set of technologies that could interest a lot of companies, including Samsung Electronics, Qualcomm, Xilinx, Chinese developers of microprocessors and other. Since AMD is evidently in trouble these days, it is not surprising that it is approached by other companies with acquisition proposals.

Microsoft might be interested in buying AMD, according to source, 3.6 out of 5 based on 48 ratings

  • Anshel Sag

    I wholeheartedly believe this rumor to be bogus. It would be cheaper for Microsoft to pay AMD for their semi-custom designs than actually acquire the entire company. It also assumes less risk, that is, unless they believe that it is worth taking AMD away from Sony as an option and that they are willing to take on all that risk and go into direct competition with Intel and Nvidia at the same time. I don’t see how Microsoft’s investors would be happy with such a move, or ANY of their partners.

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  • MadDoggyca

    Go for it.. MS Spends more in R&D a year then AMD total worth is, not only that, they know how to write code.. Im looking at you AMD drivers.

    Also this would be a major blow to intel, MS wouldn’t have to rely on all these millions of Intel Integrated HD graphics, and the Surface line would actually have a dedicated video card

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  • Patrick Stephens

    hope this is just a roumor, cuz as i see it intell and amd are providing compitition for eachother thus driving prices down and value up when it comes to computers but samsung/sony is what Microsoft is worried about becouse of there console/tablet/cellphone war and it sucks cuz if they do buy them up the only compitition there will be in computer processors will be from playstation……not a powerhouse in computing…..thus there wont be a compitition for sales anymore just would you like product a or b for the same company….sad

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  • Oxybelis

    Game consoles is NOT an important business for Microsoft AT ALL.

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  • blair houghton

    The complications with Sony in gaming consoles are both obvious and subtle. Remember how Sony got to using AMD? They competed AMD and nVidia against each other, and AMD came in the low bidder for PS4 chips. Would Microsoft ever let Sony get a good deal on PS5?

    The situation with Intel is completely multiverse. Microsoft would be competing with Intel in designs that Intel would be licensing to Microsoft. And the irony there is that it was IBM’s decision to let Microsoft and Intel have unrestricted IP rights to the PC tech that made Microsoft and Intel the kings of computing and almost killed IBM. If Microsoft somehow got the IP for both the hardware and software…(head explodes)…

    I believe this is the sort of thing that Intel is permitted to block, should AMD be acquired.

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  • Fisterbottom

    Says the guy with Sly Cooper as an avatar.

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  • Anon

    I’m inclined to belive this rumor, on the basis that AMD sold their production arm (foundries) to the Emirate of Abu Dhabi & therefore a rich middle eastern company would ultimately benefit.

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  • Arcadients

    Over 80 million people bought Xbox 360’s…keep telling yourself that.

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  • Francisco Andrés

    FUD.

    Buying AMD would give MS ZERO advantage on any market. They would just internalize costs and get into a market they’re not familiar with. Plus, I don’t think they want Intel as their only partner in crime.

    Cheers!

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  • KeplerNoMore

    You forget that AMD is the sole provider for APUs for Xbox and PS. Such a deal would force Sony to have the PS5 made with Intel/Nvidia/Qualcomm hardware, also AMD would boost its bad mobilephone/tablet sector with enough juice to take on Snapdragon/Samsung/Intel SoCs. On the bad side, this would make AMD go premium price and we know they will not be doing so well at that price range.

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  • vrm

    microsoft is more than just game consoles-

    the PC business is 250million+ units per year and with microsoft owning AMD, the entire market is game- it will be ms vs intel at the OEM auction and ms has as much clout with them as intel, if not more.

    ms has a growing cloud business and so runs huge data centers- who knows how many billions they pay intel currently – they can save on that as well.

    ms can sell server CPUs to other data centers better than AMD could. That data center market is huge. Windows server still rules the corporate data center, just as windows desktop does.

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  • KeplerNoMore

    Also over 12 mil Xb1 and 22 PS4, so yeah consoles are sooooo lame when we are dealing with hardware sales . /s

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  • vrm

    read my post above- they can benefit in the desktop and server market.

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  • KeplerNoMore

    It would still require a generation of R&D to bring AMD to a competitive level on the PC/Server business. Meanwhile Intel, Nvidia, Samsung and Qualcomm will not stand by idle.

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  • vrm

    intel won by marketing, FUD and B.S.- nothing to do with r&d. ms can out market intel and with the cash from ms, AMD will develop products that intel will NEVER catch up with, period.

    even when AMD was considered generations ahead with the opteron and 64 bit, they never got their fair share of the market. It was only the white box makers and companies like rack space. When white box makers declined or got bought ( or ‘bought’ by intel), AMD’s server fortunes declined.

    even when AMD was generations ahead, they could not get dell, ibm (now lenovo) and hp to care. That would NEVER happen to microsoft.

    ms and AMD can put a fork in intel.

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  • Landsharkk

    @oxybelis:disqus So then, can you let us know what other device Microsoft offers that is able to penetrate the living room space of consumers world-wide?

    As it stands, the Xbox is the only device Microsoft has that sits in the living-room space. In terms of marketing opportunities and service offerings, this is like more important than the invention of butter on bread.

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  • Landsharkk

    I’ve read somewhere that $100 of each Xbox One sold goes directly to AMD due to the onboard chip. If true, that means Microsoft has already paid AMD over $1 Billion USD just for Xbox One console sales to date.

    The purchase of AMD (net worth is under $2 Billion USD) would be a huge cost savings in the longterm just for Xbox alone.

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  • Landsharkk

    I would guess that Yes, Microsoft would allow Sony to use AMD chips in their Playstations. However, I’d also be willing to bet Microsoft would only offer Sony the use of the off-the-shelf APU and reserve the best tech for their own Xbox console.

    Remember, it’s all about money. if MS could offer Sony a cheaper APU/chip then the competition (i.e. nVidia), then A) Sony would likely choose the cheaper chip, and B) Microsoft wants to make money.

    Sony isn’t in the position of being choosy, based on their revenue/income (of which they are losing $ Billion(s) per year.

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  • blair houghton

    It is all about the money. And Microsoft giving Sony a deal for cheap would be Microsoft (a) giving away chip-sale profits to (b) increase competitors’ game sales. Both of which cost Microsoft. It’s bad business for Microsoft, and dodgy business for Sony.

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  • mc_365

    It doesn’t quite work that way. Think of it more like this. AMD has cost involved with each processor delivered to MS so the $100 is not profit. Using fictitious numbers lets pretend that in all it cost AMD $70 to get a complete APU at their current production scale. That leaves $30 of profit. MS acquiring AMD initially would only be able to eliminate $30 of APU expense since the APU has fixed cost of $70 from manufacturing, shipping, materials, etc. This example excludes all other AMD products and customers of course, but you can see it’s a little more complex than just buy them and eliminate the cost of the APU.

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  • Gary ‘Gazza’ Keen

    Your first point is not necessarily true. the PS5 could still be made using AMD technology but they will probably have to pay a premium, much like Microsoft probably has to do to Sony since there is BluRay in the Xbox One.

    On the bigger scope of things though the next generation Xbox can and would be much cheaper since Microsoft won’t have to pay royalties to anyone to use AMD technologies in their systems, and since it’s a big part of their system that means a big price cut AND the possbility to use a far better APU chip at no unreasonable extra cost.

    Basically in terms of the consoles this is a fucking huge move for market dominance.

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  • Genotype

    AMd didn’t just come in low bidder, they came with better tech and more flexibility. The AMD APUs were better. What nvidia had to offer then was inferior technology (at worst tegra, at best a so-so GPU leaving sony and MS to look for CPU elsewhere).

    Microsoft is unlikely to buy AMD because they would be exposed to regulatory action. They make operating systems that intel processors run, that nvidia GPUs run on etc. There are too many conflicts with AMD being in these markets. Approaching AMD for improved tech makes more sense.

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  • Phillip Spearman

    This kind of makes sense but I doubt it will happen. MS are clearly trying to get more involved with the hardware side of things lately with their Surface line-up and the acquisition of Nokia’s production facilities.
    With MS’ funding, AMD might even be able to put up sterner competition to Intel and NVidia once again

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  • mc_365

    If you think Intel has 95% of Global PC Market based on Marketing, FUD, and B.S. you are not misinformed, you are delusional.

    Money doesn’t make ideas, AMD has more expertise in processor design than MS. MS buying them and having money does not make them better at designing processors. This is why they buy them from AMD in the first place.

    AMD were never “generations” ahead of Intel, they have been licensing tech from Intel since forever, think of SSE and SSE2. Yes they beat Intel to x64 or more precisely they came up with a compatible x86 64bit processor with full 32bit compatibility. Great technology without question but it was not a game changer simply because the rest of the computer was 2 years from really being ready. There was no OS support for several months so most people couldn’t use more than 4 gigs a ram anyway, further more DDR ram of 1GB was relatively expensive and 2GB sticks didn’t exist. Most PC motherboards only had 2 ram slots. By the time these other factors were starting to be addressed, Intel had EM64T in the market.

    The reason OEMs don’t go all in with AMD is simple: HEAT. AMD chips run hot at given clock speeds, Intel has always been able to get more brute power (clock speed) out of their chips at the same TDP. If you’re an OEM or an IT Professional you don’t want anything that runs hot. Heat is what breaks electronics. Think about it, do you want to have to explain to the head of the company that you were trying to save $200-$300 bucks per server when the server goes down because the CPU got fried? So what do you do in that case? You buy the best regardless of cost and if anything happens, you tell the CEO that we had some bad luck, but our tech is the best.

    MS if it purchased AMD would probably void the cross licensing agreements, and be forced to pay Intel fees for all the tech Intel currently allows AMD to use for free so Intel can avoid Anti-Trust litigation. At this point the only reason there is still an AMD is so Intel can defend itself from monopoly allegations by U.S. DOJ and the European Commission.

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  • Landsharkk

    I didn’t say it would eliminate the cost of the APU. I said it would be a huge cost savings in the long-term.

    If we expect the Xbox One consoles to sell about 80 million over it’s life time (random number, only because Xbox 360 sold at least this many), even with $30 savings, that’s $2.4 Billion in savings.

    If history serves, Microsoft doesn’t generally buy a company for a quick turn around in profit, instead they look at the long-term and have shown willingness to lose profit in the short-term to obtain their long-term goal.

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  • mc_365

    You imply it would be a “Huge” savings based on the $100 figure. When the Savings would really be a fraction of that $100 figure.

    In your second example your $2.4 Billion savings is over 10 years, just based off the xbox but there are other cost, like R&D for all the other business lines that AMD is in. All the other products that AMD currently offers have cost. Even the cost of purchasing AMD there would be a substantial transaction fees involved, somewhere in the $100’s of millions. The current Debt that AMD has outstanding, will become MS debt. AMD is a loosing proposition, the company is consistently is in the RED, and MS doesn’t have the expertise in that industry to turn it around, the reality is there is very little if anything for MS to gain by purchasing them. I would be shocked.

    Intel $145 Billion company, AMD $1.8 Billion company, all other companies have discontinued their x86 processor design businesses. This didn’t happen by accident.

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  • Stewy44

    not to mention the mountains of Debt AMD has acquired

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  • mc_365

    MS makes 90% of their earnings from Office, Operating Systems (Desktops and Servers), and Azure cloud computing. Everything else is an attempt to diversify their revenue streams away from the PCs

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  • mc_365

    There would be no premium involved as market forces dictate prices. MS would have to offer the product at a competitive price else Intel, Nvida, or some PowerPC would.

    MS doesn’t pay a premium for BluRay they pay the standard licensing fee that anyone else pays.

    Owning the supplier doesn’t automatically make things cheaper, especially when the supplier is loosing money.

    In terms of the Next Console, MS would have to design the Processor, which cost money. If they only use their processor in their own console they don’t make money off the design. That would be a loosing proposition and most likely wouldn’t be allowed by Antitrust regulators, as this would basically give Intel a monopoly.

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  • Bob_Gardner

    How to become greatest with kitguru ………… ———Keep Reading

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  • David Gould

    This would be to stop samsung from putting apu’s in their tv to be totally honest. as a tv thats a console out the box would save alot of space and look alot better.

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  • Not all other companies, VIA still develops x86 processors for their systems

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  • Actually datacenters are mostly redhat/centos not windows

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  • mc_365

    There is talk of Samsung wanting to do that, but I don’t think Samsung would want to buy a dog like AMD to achieve that. They could license tech from Nvidia to incorporate in their TV’s and Phones think Nvidia shield built into TV’s. TV’s are getting thinner no one wants a fat TV with more fans in it. AAA games require too much hardware to incorporate in a TV. Arm technology is perfect for TV’s

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  • mc_365

    Yeah I know VIA still exist but they kind of only really sell embedded processors and small form factor stuff that competes in the Atom space. There main business is chipsets. Maybe they have a bit of market share in china and india, where there is high demand for cheap computers.

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  • munsingh

    Nah. No one knows VIA in India they maybe having some x86 CPUs in the embedded space.

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  • mc_365

    I think I last saw a Cyrix processor in 1998, and I didn’t know what it was when I saw it. I open the system up and pulled the cooling fan off and was like “What the Hell is this?” Cant remember if they were doing the AMD K6 thing back then and making their chips with the same pin/socket configuration as Intel?

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  • MrSec84 .

    Yep, Playstation sells based on their reputation for providing a variety of Software to a wide range of consumers within the console market, if anything MS gains by supporting that with a great processor product, at a good price, and being in a position to earn income from Sony’s likely bigger console sales through the contracts with AMD, which can only be a good thing for Microsoft.

    Business from PS5 and Next Xbox could be a unified 200million+ SOCs over the generation, definitely not worth Microsoft trying to rock the boat with some attempts to mess with pricing to the market leader, which could end up removing that business if Sony did decide to go elsewhere.
    Microsoft wouldn’t care if their next home console isn’t the best seller because they’d still be making money off of both sides of the market.

    Good business in the console space could interest Sony in tech for other products as well, like tablets, using mobile AMD Products.
    Seems pretty obvious Microsoft playing the game honorably would end up with them making an even bigger guaranteed income beyond the console business.

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  • Wakko Waru

    Hear hear! In truth, Intel did “cheat” at some point according to regulatory penalties Intel has suffered. However, none of that “cheating” forced AMD to release bad CPU design after bad CPU design.

    Intel didn’t force AMD to sell their foundry business. AMD sold their foundry business because they couldn’t survive by operating it.

    Intel didn’t force AMD to pay 3x what ATI was worth at the top of the market back then. That was AMD’s mistake. Intel didn’t force AMD to release its Bulldozer platform. That was AMD’s mistake.

    AMD sat on their thumbs when Intel was floundering with Netburst.

    Along comes Core and AMD got caught off-guard. 9 years after Core was originally announced, AMD STILL has no response. AMD has been AMD’s own worst enemy.

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  • mc_365

    To be fair they all stole or used processes and techniques that were patented by one another, I’m talking AMD, Intel, Cyrix, IBM, Texas Instruments, Motorola, etc…. Intel always gets judgements against them because they let it go to trial and not settle early in order to cause their competitors to spend a lot of money on legal fees, dragging cases out for years. The Judgement has less of an impact on Intel then the legal fees had on the competitors all those years, eating away at their R&D budgets. Then in the end they pay and sign a co licensing agreement, giving Intel every last trick the little guy has left. Intel keeps AMD around to avoid antitrust forced break up and complaints about price fixing.

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  • mc_365

    But where on the Surface would you put the big Heat Sink and 20mm Fan?

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  • mclarenfan1968

    Kitguru making up news to get traffic? Seems like it. Everyone else is citing Kitguru for this rumor. Speculation is fine but not when it’s a cheap trick to get net traffic.

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  • minhin

    Why would getting AMD just for the sake of saving money manufacturing xbox. The IP from AMD allows MS to innovate into other area. By acquiring AMD and their expertise in Software engineering is enough to make hololens like toys. Custom AMD chip that will make AI similar to SkyNet. Bwahahahaha

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  • Shahnewaz Ahmed

    Well if Microsoft can buy Minecraft for 2 billion, then it has a slight possibility.
    But still I think it’s bogus.

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  • Kreten

    Well it would also gain $30 from PS4 APU so that’s $60

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  • Kreten

    So in other words you are saying AMD doesn’t make any money? They purely give their stuff away after you factor in r&d?

    How about this, instead of paying premium for xbox, tablets and phones they actually only pay as much as it takes to manufacture?

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  • Sergiu Petrica

    You really think Microsoft would skip making profits from CPUs? Ignoring markets where you have an actual shot at is a very bad business practics. Microsoft is not known for such things.
    I actually think it’s a good idea. AMD needs to be bought out by a company with huge capital to fund R&D. As you probably know, AMD is not in a good spot right now.

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  • Kreten

    Sony didn’t invent blu-ray, sony is one of 40 companies that invested in making it. Also Sony pays Microsoft for using FAT file system in other words Sony might already be paying Microsoft more than the portion of bluray sales that goes to Sony

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  • mc_365

    I guess you didn’t see this part “This example excludes all other AMD products and customers of course”

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  • mc_365

    Products on the shelf = money spent not made.

    Generally when you have negative earnings, that means you spent more money than you made. It doesn’t matter whether its R&D or manufacturing cost, or property taxes on your office building.

    There’s a reason why AMD’s total company value is 1% of Intels.

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  • MadDoggyca

    your assuming MS would keep design of AMD hardware, I willing to be with the R&D budge that MS has, If they bought AMD you would see, Cooler running chips, Faster chips, and chips that use way less TDP then they currently have now.

    ALSO MS as a lot of shared patents with IBM, Intel and AMD. If they bought AMD they could add all the tech from IBM and Intel into there design

    another note. If MS Bought AMD they basically would have a monopoly in the console market via hardware since both Sony and Xbox one uses AMD only. and this gen looks to be set in for a 7 -10 year life span (not inc Nintendo)

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  • I Game

    microsoft pays amd $100 per xbox one. upon purchase they could immediately cut $50 off retail

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  • cheqmat3

    Arctic island cores + Zen cores = Bada$$ APU = Better hololens hardware, surface tablets… AMD + fat budget = Dead Nvidia. AMD is currently lagging behind Intel and Nvidia because AMD’s budget for CPU and GPU is less than Nvidia’s big GPU only budget, or Intel’s gigantic CPU only budget. And somehow AMD manages to compete with both:). Intel has under its grips almost 100% of the CPU market, Nvidia on the other hand has under its control over 75% of the GPU market, if Microsoft buys AMD it would not take Microsoft a long time to break even, and turn AMD into a money printing business. In the PC market it is becoming very difficult for Intel and Nvidia to grow, however I see plenty of room for AMD to grow by just eating away Intel’s markets hares.

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  • db87

    Still mad you didn’t got the AMD Fury X for review?

    When is this total bullshit going to stop? “according to source” Well you don’t seem to be stating what source. Last weeks ‘AMD split up’ was also total bullshit…

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  • Mast3r.Vad3r

    They wont buy them…

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  • Nigger love

    AMD APU are a JOKE they are very weak solutions they are not good for a serious gamer and for pro-users.

    Stating AMD APU as something great is beyond me…
    Only poor mainstream folk that do not have the money to buy are good rig are interested for a weak-ass AMD APU…

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  • Genotype

    are you serious? All I said was that they were better that what nvidia had to offer.

    As weak as you may think they are, they can do this https://www.youtube.com/watch?v=M6qB3_phj_4
    and this

    I’m a PC gamer, but that stuff looks better than a lot of exclusive PC games. PC is stronger, but those APUs pack a punch right now and were ideal solutions.

    Some of the tech is on the PC side as well with Asynchronous compute. I think a reason why AMD won the contracts was that. They actually had ACEs while nvidia only had the capability introduced in Maxwell 2 (970 980 etc). Among other hardware features, AMD simply had the better technology for consoles. THAT IS ALL I AM SAYING. CONSOLES.

    For desktops it has a way to go, but the APUs in the consoles have better GPUs than PC APUs I think.

    You seem the type to just claim things without thinking. Like you would always say nvidia is better no matter what and that consoles suck not matter what.

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  • Jake

    Someone at my school’s dad works for AMD and said it earlier today to me so I checked to see if I could find anymore and found this! 😀 Now I have 2 sources and I believe it will happen!

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  • blzzy_gie

    Sony have been the ultimate example of how to take on risks and make huge loses over the last 10 years but the investors are still there.
    It would be a far less risk for MS.

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  • Francisco Andrés

    Those 80 Million people are like 3 or 4 Licensing deals for the Enterprise sector :)

    Cheers!

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  • Francisco Andrés

    You’re giving too much credit to AMD technologies. Take a look at what they have done with Nokia’s patent portfolio and technologies: nothing.

    If you take into account that buying AMD jeopardizes the X86 licensing deal (MS has leverage with Intel, but this is really murky water) and there are great companies providing ARM SoC tech and even Intel getting better and better at the APU game (yes, even if they don’t want to call them that, all consumer CPUs are actually APUs, sans the E models) makes eyeing AMD less attractive.

    The XBox business, although you think it’s lucrative, you have to put things in perspective from what MS makes yearly. The biggest revenue stream comes from Office and Windows licensing; Enterprise and Consumer. XBox is like a niche market inside MS in terms of %.

    Cheers!

    EDIT: Completed idea.

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  • N7Paladin

    Dude you damn well knew what he meant (GPU), but you had to go and be that guy. But I don’t think I laughed so hard in a while. I can’t stop picturing a BIG A$$ heat sink and 120mm Fan on the surface pro now. Thanks for that image:) Ha-ha, you are such a dick. LMAO

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  • Landsharkk

    It seems like you are nitpicking for the sake of argument.

    I guess covering the entire cost of the APU over a 10 year period is not a huge savings to you? Of course the numbers we are using are all fictitious, but the point stands that there is an opportunity for substantial savings from Microsoft’s side, just for the Xbox alone.

    Also, Microsoft spent several $Billion on AMD for the R&D of the Xbox One APU, last report I read was $3 Billion. I’m sure MS is thinking it would be nice to own that technology outright instead of just investing in AMD.

    However, my comments above were specifically about Xbox, not about the other products or development on the AMD side. But if you want to talk about the other aspects of AMD, alright then.

    Let’s not forget all of the patents/etc that AMD owns that could be transferred to Microsoft. Depending on how it would play out, this could be big news for MS devices such as MS Surface and Windows Phone as well. Cheaper APU’s for all devices and patents that allow MS to compete more strongly in both of those industries with their own hardware.

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  • mtim2474

    Doesn’t Intel need AMD to avoid being a monopoly, or is ARM taking enough embedded market share to make this moot?

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  • Inoki

    Microsoft’s only solution to competition is acquisition.

    If this goes through I’m going with Intel for good.

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  • KeplerNoMore

    And yet MS tries way too much to be present in all these niche markets, even more now with Xbox app on Win10. Im not giving credit to AMD since it only provided the cheapest APU and not the best in terms of power/performance, because both MS and Sony said they went to other companies like Nvidia or Intel but due to bigger productions costs they went really cheap this gen. I know Intel has a better APU with the iGPU and will be on par with Nvidia’s 950/950ti next year which is saying a lot for a GPU that uses close to 35W to function, while its counterpart is going for 90-100W.
    All in all, AMD has lost its way due to bad managment calls and lack of software development (just look at Nvidia, they keep pumping Nvidia special tech with each generation of GPUs, either gameworks or grid or NVLink) is what killed the canadian-american giant.

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  • Common Sense

    Nooooooooooooo!!!

    And then they’ll screw everything up

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  • MangoMango

    Using the downwards exhaust and 12,000 rpm spin, Microsoft will develop the first DronePhone

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  • MangoMango

    I read somewhere (on this site, somewhere) that AMD and Intel each hold a number of patents that the other uses and that they have an agreement that allows this to continue. From what I recall, should AMD be bought over, this agreement would need renegotiating.

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  • Meow_Mix_Please

    With 2 billion pcs in the world and Microsoft having the most market share, consoles are a drop in the bucket.

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  • Francisco Andrés

    AMD won the contracts because they went in cheap. At least, that’s the “word on the street” in that regard. I do believe MS and Sony were asking too much for too little, and AMD in it’s current conditions had to accept. It was not about technicalities, but plain old business. And it fits perfectly.

    In any case, I still don’t see how MS would benefit from acquiring AMD.

    Cheers!

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  • Mac

    Are you serious? Please explain to me how you’re going to fit a high end CPU and dedicated GPU in a console and price it at <$400. Hint: You can't. You need an APU for that. Also, consoles aren't running things at 60FPS at 4k with maximum details, so it's okay to compromise on the hardware as long as it's priced correctly and can fit in a small form factor.

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  • AnonGGThrowaway

    Agree with you. Anyone purchasing AMD loses the Intel/AMD cross license agreement, thus making it impossible for Microsoft to use any Intel technologies like SSE. I don’t see this working.

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  • AnonGGThrowaway

    Considering AMD is in the red, no, they’re not making money.

    They lost $400 million net in 2014 and started Q1 2015 with a $180 million net loss http://www.bit-tech.net/news/hardware/2015/01/22/amd-fy2014-loss/1 http://www.anandtech.com/show/9172/amd-posts-q1-2015-results-180-million-net-loss

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  • some european VPS hosting providers have VIA, dont forget VIA & HTC founders are husband & wife (that is, the wife founded VIA then HTC with her husband)

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  • AJ Lee

    Hope they do buy AMD, please please put them out of their misery

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  • Brian Lovejoy

    The APU scenario, specifically in consoles, is where HBM will completely change the game.

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  • Tony

    Sony better buy Intel or Nvidia because MS will buy those companies if sony use of of those cpu as well

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  • Justin Shepherd

    just put AMD out of its misery already.

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  • 94xj

    Someone still has to make the chip. By owning AMD, the cost of the chip doesn’t just disappear. They might save 10% per chip at most but then have the cost of salaries and benefits for all AMD employees.

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  • Actually they do not compete in that space precisely because their systems are not cheap at all, quite the contrary, their main business is embedded systems for industrial solutions as they are known for reliability year after year of use which explains the pricing.

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  • mc_365

    You call it Nit Picking, I call it Analysis of Synergies and cost savings, cash flow valuation, debt analysis, and other real world business concerns.

    If Microsoft had all the Expertise you are implying, they wouldn’t need AMD, they have the money to start their own chip business.

    You talk about the $3 Billion MS reportedly paid to AMD, now think about this Why if AMD is Making $3 Billion from 1 client, the entire company is worth $1.8 Billion and they have outstanding debt of $2 Billion.

    AMD is not competitive, their tech is second rate. All the Processor companies have a Co-Licensing agreement, this is necessary so that all computers components are compatible, and all PC software is compatible within reason.

    Chip design and development takes Years of R&D and then the manufacture process has to be feasible on a large scale. The Foundries have to be reconfigured to be able to produce the product in mas. All this cost billions of dollars before any of it turns cent of profit.

    AMD exist soley so that Intel can not be accused of being a Monopoly.
    If AMD was so great at this cheap price you would think that chip makers like Texas Instruments, IBM, Transmeta, Qualcom, Samsung, Toshiba, and a bunch of other who all can afford a couple billion, would be in a bidding frenzy to get AMD.

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  • mc_365

    I think your statement is correct in some aspects, but I would disagree with the statement that AMD provided the best tech. I think they provided the most cost effective solution which was an APU instead of discrete graphics. The converse of this is that you have lower preforming GPU and Much Lower performing CPU. There is a price to be paid when you stick everything in 1 chip. The AMD solution barely gets it done, but that in MS and Sony’s estimation was good enough. The reality is that 10 years after the xbox 360 and ps3 consoles are still struggling to get 1080p 30fps and medium eye candy. The Lower Mid Range GPU of 2010 were doing that.

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  • mc_365

    They did it with the 360. Just saying if the will was there it could be done, look at steam machines, then imagine the scale of xbox or ps4 and the pricing power they have with suppliers. Don’t forget that PC has the additional cost of 2X memory pools where consoles have 1.

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  • Mark R

    HAHAHAHAHA! @Tony That was a good one, I hope you were sarcastic

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  • Graeme Willy

    Well, Microsoft has, for a long time, been intending to design its own chips, for its own devices. AMD, as a whole, would not be afloat were it not for Sony and Microsoft’s consoles. I think it would be a smart acquisition in many ways than one. For one, as mentioned in the article, it would indeed screw Sony…but not necessarily any more than it does Microsoft having to pay Sony for use of Sony’s Bluray hardware.

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  • Jack Red

    This could definitely be bad for both Sony and Nintendo, as if they wanted to integrate any amd parts into their next consoles, they’d have to pay Microsoft money to use them. Unless of course, Sony and Nintendo go for either Nvidia or Intel instead. (But wouldn’t that make porting games be tougher to do? Like how it is for porting x86 to PPC?)

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  • Tiaan Basson

    Maybe M$ wants AMD for the APU, OpenCL performance and other HSA performance, which could cause restrictions for open source developers on such technologies. The risk of data mining through hardware like for a company which is well known for restrictions, greed and currently taking information from their users is a recipe for disaster. AMD should focus on the open source community, create better drivers and create a good toolset for developers to harness HSA for projects like OpenCL, OpenCV, SDL etc. The APU’s have a lot of potential to achieve great things and if M$ gets a hold of it, then it automatically kills off many possible projects.

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  • Blue Angel

    No it won’t Microsoft will benefit great deal if they acquire AMD for instance, Xbox, Lumia phones, surface, and tablets MS, will save billions of $$$ plus Sony and Nintendo will pay Microsoft

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