Oracle eyes chipmaker acquisition, possibly AMD

— 5:04 PM on September 28, 2010

Could Oracle end up purchasing AMD? Nothing's been announced, but Oracle certainly seems to be putting the option on the table. According to Bloomberg, Oracle CEO Larry Ellison stated last week, "You're going to see us buying chip companies." The CEO went on to reveal his intention to, in Bloomberg's words, "follow the approach of Apple Inc. CEO Steve Jobs by owning more of the intellectual property that underpins computer chips."

While Ellison didn't name any potential acquisition targets, Oracle's focus on enterprise solutions doesn't leave too many choices. Bloomberg reckons candidates include IBM's chip division, which still produces Power chips; Nvidia, which has made headway in the enterprise market with its GPU computing efforts; and of course, AMD, whose Opteron chips are already available inside Oracle's Sun servers.

Ellison certainly has no qualms about being an industry sugar daddy. Bloomberg says Oracle has bought out more than 65 firms since 2005, and it still has almost $24 billion in cash. Just eight months ago, Oracle completed its acquisition of Sun.

I don't know how good a match AMD would be for Oracle, though. The chipmaker has a very tiny slice of the server and workstation CPU market (about 6.5%, by IDC's count), but it commands a healthy 27% of the desktop CPU market and, let's not forget, half of the discrete graphics market. Purchasing AMD for its server business would be a bit like casting Jessica Alba as a voice talent in an Avatar sequel. Of course, if you were James Cameron, who could stop you?

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