Rumor: AMD tried to buy NVIDIA before buying ATI

In 2006, the PC hardware world got a big shock when PC processor maker AMD announced it was acquiring ATI, one of the "big two" in PC graphics chips. But did AMD first approach ATI's biggest rival NVIDIA with a buyout offer? That's what a new story on Forbes claims. It claims, via unnamed former AMD employees, that AMD tried to discuss such a merger deal with NVIDIA.

In the end, the deal didn't go through because NVIDIA's CEO Jen-Hsun Huang wanted to be the CEO for the combined AMD-NVIDIA. In the end, AMD wanted to get into the graphics chip business and got ATI to agree to a $5.4 billion merger in July 2006.

Since then AMD has seen its fortunes go south. While it has now fully integrated ATI's business into its own (indeed, the ATI brand was done away with in 2010), AMD has failed to make much of an inroad on Intel's market share in the PC space. It has had more success in the PC graphics card business but NVIDIA has since branched out into other markets, particularly its mobile processor division.

As the story points out, NVIDIA is currently worth $9.7 billion while AMD has gone down in value to just $5.2 billion. That's $200,000 less than what AMD acquired ATI for in 2006.

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