Rumor: AMD and Microsoft may be discussing an acquisition deal

Many people forget that Microsoft actually opened a chip design division almost a decade ago, mainly because it didn’t really produce anything of note. Despite creating a few homemade components, Microsoft continued to rely on AMD and NVIDIA to power its devices for the most part. The company’s chip ambitions aren’t dead, however, as a report has come out which claims that the company is looking to revive its chip design operations through an acquisition of AMD. 

Microsoft is allegedly in talks with semiconductor developer and manufacturer AMD for a possible acquisition. According to KitGuru, the talks started a few months back. Acquiring AMD makes some sense – Microsoft puts out all kinds of hardware, from the Xbox One to tablets and phones, that could benefit from having direct access to a cheaper CPU and GPU source. The acquisition could also lead to increased synergy between the two that gives AMD’s chips a leg up over Intel and NVIDIA’s continued dominance of their respective industries. The most interesting aspect of this is that AMD supplies chips not only for the Xbox One but for the PlayStation 4 as well, meaning that a portion of every PlayStation 4 sale would end up in Microsoft’s pockets – a situation Sony would most certainly be displeased with but ultimately unable to do anything about until the next generation of consoles. This is in addition to the savings they pull in on each Xbox One they sell. How easy would it be for Microsoft to make the acquisition, if AMD were amenable to it? Well, Microsoft has about $95 billion in cash, and AMD is valued at about $1.81 billion. It’s not insignificant, but it’s well within range.