Is Nvidia (NVDA) A Buyer For AMD (AMD)?

I found this on the news wire today, and even though its an old post the theory is quite interesting.
Mubadala Development Co, the investment arm of the Abu Dhabi government, put $622 million into AMD (AMD) last week to buy 8.1% of the company at $12.70 a share. The market did not like the deal. The stock traded at $12.64 and moved down more after hours. Wall St. understands that all AMD has done is buy a little time. The chip company has $5.1 billion in long term debt and had an operating loss of $226 million in the last quarter. Larger rival Intel (INTC) its pressuring AMD sales and margins.
There has been a lot of speculation around what each of the "big three" companies is planning to do.  On the AMD side they already acquired ATI which is a big supplier of Crossfire graphic solutions for Intel.  Of course Intel is rumored to have their own dual graphic solution on the market around Christmas which is likely only to run on Intel chipsets, thus negating CrossFire all together.

Then there is nVidia, hands down the graphics leader with an excellent chipset platform for both Intel and AMD.  nVidia also has SLI technology that runs on their chipsets.  So what would nVidia gain from buying AMD? The way I see it, nothing.  nVidia would likely take out the ATI CrossFire solution and consume the AMD processor line.  In doing so they would lose Intel support and thus the strongest performance platform around (Intel Core processor + nVidia SLI). 

So what would be to gain?  Not much, actually I'd classify a move like this to be somewhere between chopped bread and the HP+Compaq merger.  (ya pretty dumb)

Related Web URL: http://www.247wallst.com/2007/11/is-nvidia-nvda.ht...