Microsoft and AMD have a pretty close relationship. AMD provides the hardware for the Microsoft Xbox One console and is also working with Microsoft on providing some of the hardware necessary for the Hololens headset. However apart from that, AMD isn’t doing as well as they used to.
PC makers and DIY enthusiasts are turning more towards Intel’s chipsets and even in the GPU department, NVIDIA is still widely seen as the more superior choice, so much so that according to a report from Kitguru, they claim that they have heard from their source that Microsoft could be considering acquiring AMD.
They believe that this will be a relatively easy and straightforward acquisition, given that Microsoft is sitting on a little over $90 billion in cash, while AMD’s market capitalization has been valued roughly at $1.81 billion, meaning that Microsoft can very well afford it. However we should note that affordability is one thing, but whether or not the acquisition makes sense is another.
The report claims that Microsoft is currently paying AMD $100 for every Xbox One SoC, so by acquiring AMD, they could in theory increase their margins in the long-run, assuming that they continue to use AMD’s technology for future consoles and other hardware. However with Microsoft relying on OEMs to license their software over the past couple of decades, it seems unlikely that they would suddenly shift focus and start selling chipsets as well, let alone get into the GPU business.
That being said the latter might not be such a stretch as it has been suggested that even if the acquisition is complete baloney, Microsoft might at least acquire some kind of IP for chip related designs which they could use in the future. In any case this should be taken with a very heavy dose of salt for now, but we’ll keep our eyes peeled to see if Microsoft or AMD will come forward to either confirm or refute the rumors.