Ahead of the Curve: AMD talks about ATI

From the moment I got the call, I knew there was much more to AMD's acquisition of ATI than was being reported. My mind immediately leaped to the ramifications the acquisition would have on ATI's relationship with Intel OEMs. Intel couldn't be jazzed about having AMD inside systems that bear Intel's imprint. Then I wondered whether AMD's acquisition might result in the opening up of ATI's graphics drivers, which are now distributed only in binary form. Is ATI rival NVidia going to keep working with AMD? And how does this figure into LIVE!, AMD's push into consumer electronics and media centers?

Many of the questions I posed overlapped with open issues on the table at AMD. When I asked about Intel and its OEMs, executive Hal Speed asserted that Intel is working as hard as ever to blunt AMD's progress in the market -- servers have broken through, but AMD still faces low buy-in from desktop, notebook, and embedded OEMs. "I have no way of knowing," he said, "but I think Intel's on the phone [with OEMs] right now."

Interestingly, AMD shot me a note today that an OEM invited to show a Core 2 Duo system at Intel's launch event was uninvited because the demo machine had an ATI graphics card. It's a cinch that Intel won't be doing any more co-marketing with ATI, and I fully expect Intel to pressure OEMs not to put ATI GPUs inside systems with Intel's sticker outside. ATI stands to lose even more in chipsets, where it makes products for Intel as well as AMD CPUs. An Intel motherboard with what amounts to an AMD chipset is Intel CEO Paul Otellini's nightmare, and if I were he, I might work (within the law) to see that doesn't become a popular configuration.

Because that's the case, what's the point of keeping ATI's name? AMD's wrestling with that right now. I offered that, in my opinion, because Intel's likely to interfere with newly acquired ATI anyway, AMD should meld the two companies' images and reputations under AMD's name to strengthen both for a run at the blockade. No one is going to turn up his nose at a killer aftermarket graphics card just because it's got AMD's logo. And ATI's sales and marketing chops would bring luster (and lust) to AMD's pitch to customers.

Ah, yes. Customers. ATI is a supplier to major players in practically every technology market. AMD's lack of presence outside the desktop and server PC markets put a crimp in AMD LIVE!, the erstwhile competitor to Intel's Viiv brand for media centers, digital TVs, and consumer electronics. AMD is so far behind Intel in that mission that everyone saw its efforts there as doomed. Well, ATI is already a supplier to many of the manufacturers AMD wants to woo. And ATI's customers would benefit from solutions that integrate AMD's low-power (lower than Core 2 Duo) Athlon 64 and super duper low-power Geode CPUs. Speed says that this integration won't be done in silicon; AMD is not taking over ATI's manufacturing. But reference designs combining AMD and ATI technology, which is one of AMD's key plans, will close deals.

Lastly, and remember you heard it here, AMD is strongly considering open-sourcing at least a functional subset of ATI's graphics drivers. It's time for X Window System, OpenGL, and client virtualization for which ATI binary drivers aren't available to escape the ghetto of the 1980s-era framebuffer. And what a boon for PR. If AMD's graphics cards were the only ones with open device drivers, it might affect a buying decision or two.

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Tom Yager

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