Editor’s take: We are frequently asked some version of the question “Will anyone acquire Intel?” At this point, we think it’s highly unlikely, but these are unpredictable times. Leaving aside all the main considerations — like money, strategy and regulatory approval — there are a few other hurdles. Chief among these is Intel’s license for x86.

Apparently, when Intel and AMD settled their decades-long dispute over x86, the cross-licensing agreement included portability provisions. If either company is acquired, the other has the right to cancel the license, effectively shutting down the business. When it was signed, one must think that everyone involved assumed that AMD would be acquired, but the stipulation seems to be mutual, and times change.

Editor’s note:
Guest author Jonathan Goldberg is the founder of D2D Advisory, a cross-functional consulting firm. Jonathan has developed growth strategies and alliances for companies in the mobile, networking, gaming and software industries.

So just for fun, let’s think about how that would happen. right now the most likely potential buyer of Intel is Broadcom. What would happen if they approached AMD about this license?

AMD would have a few options. Their default position would probably be to refuse and block the deal. Broadcom is a formidable competitor, and even if it doesn’t compete directly in every area, a revitalized Intel under Broadcom would be a serious threat to AMD.

That said, a failed Intel would also be a major problem for AMD, if for no other reason than the two are now tied at the hip when it comes to x86which AMD needs to stay healthy. All of this means there is room for negotiation.

What would AMD require to grant this approval? Obviously, it would take some money. However, there’s only so much Broadcom would be willing to pay before the Intel deal becomes unattractive. That probably amounts to several billion dollars. Beyond the cash, there are things AMD could ask for that could leverage much more strategically.

For starters, they could ask Broadcom for help in their fight against Nvidia. This is an area of ​​common interest between the two companies, and there are likely several ways in which both could benefit from a deeper partnership. For example, Broadcom could invest more in AMD’s Ultra Ethernet and other networking initiatives. Alternatively, Broadcom could design an entire network stack optimized for AMD’s Mi300 series of AI accelerators. Going forward, AMD could demand that Broadcom encourage its AI ASIC customers to adopt AMD-friendly network interfaces. We imagine there are plenty of new ways Broadcom could advance AMD’s interests in their combined battle against Nvidia.

Alternatively, AMD could ask Broadcom to shift business to ZT Systems. After AMD acquires ZT, it plans to sell the manufacturing side of ZT. Securing a healthy backlog of Broadcom orders would certainly make this deal more attractive.

United vs. Arm: Intel CEO Pat Gelsinger and AMD CEO Lisa Su at Lenovo Tech World 2024, where both companies announced the x86 Ecosystem Advisory Group

AMD would also like to ensure that Broadcom continues to spin off Altera, which competes with AMD’s Xilinx division. They might even push Broadcom to commit to incorporating more Xilinx products into future projects and reference platforms.

The point of these requirements is that they would cost Broadcom relatively little, potentially giving AMD significant strategic value.

While this thought experiment is only for the leg, it highlights one more hurdle for anyone interested in buying Intel. Few potential buyers could offer AMD comparable strategic benefits. For example, a private equity buyer for Intel would probably only have cash to offer, which might not be enough to include AMD. The deal is unlikely, but if it were to happen, it would shake up many corners of the industry.