NVIDIA Overjoyed With AMD Purchase of ATI

Dennis Faas's picture

In response to its main competitor's participation in of the tech industry's biggest-ever acquisitions, NVIDIA Chief Executive Officer Jen-Hsun Huang is surpisingly positive.

In a recent interview, the CEO of ATI's long-time rival called the merger a "gift" for NVIDIA, claiming his company's position as the only stand-alone graphics card producer would ensure success in the future.

For those not following the news, processing chip producer AMD recently announced its purchase of leading graphics-card producer ATI, for a reported $5.4 billion. For AMD, it could be the gamble that gets it out of a second quarter rut.

For ATI, it could be the financial backing that squashes NVIDIA and Jen-Hsun Huang.

Huang made the comments to Dean Takahashi, the author famous for his "Opening the Xbox" and "The Xbox Uncloaked" texts. Huang's most enthusiastic comments criticized the AMD purchase of ATI on the basis that neither will benefit from the merger.

In Huang's opinion, it could hinder ATI's ability to put out quality graphics cards at the pace it has (a pace that has led it to market dominance over NVIDIA, it should be told). (Source: teamxbox.com)

The overly-joyful Huang even went so far as to remark that "ATI is basically throwing in the towel". (Source: arstechnica.com)

Huang may have a point -- for now. Upon first announcement of the purchase of ATI by AMD, the latter's stock dropped nearly 5%. The acquisition itself has shocked some stock experts, many of whom criticize the deal because it forces AMD to incur significant debt at a time when business is hardly good.

With that said, NVIDIA's CEO may just eat his words. AMD, arguably the more dominant of the processing chip manufacturers, provides ATI with enormous financial support for future projects. The argument that there is some bureaucratic fallout due to the integration of a graphics card producer into a processing chip company is certainly weak, and could prove completely wrong once ATI's refreshed product line is announced.

Undoubtedly, NVIDIA's CEO is trying to calm shareholders and anyone else stirred (and maybe even shaken) over ATI's enormous announcement. Ultimately, the test for both ATI and NVIDIA may come this fall, when the latter's wares within the Sony Playstation 3 take up arms against the ATI-supported Xbox 360. (Source: blogs.mercurynews.com)

$5.4 billion, and fifteen year old fast-food clerks could very well decide which company survives. Stay tuned.

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