At the time ATI was 1/2 AMD's market cap. Too much of their capital got tied up in the acquisition and R&D fell off.
The overall vision is still very, very compelling (integrated FP co-processing). At the time, AMD figured it could beat Intel to the punch by buying one of the best FP companies out there. Instead they both(AMD/ATI)fell behind as merging the two companies took far more time, attention and capital than was originally anticipated.
I'm not convinced. The AMD product line fell into a ravine very soon after the acquisition -- CPU design has a half a decade of lead time, so their problems predated ATi.
I think AMD success is simply better viewed as Intel stumbling. The P4/Itanium split product lines were designs defined more by marketing and ideal market segmentation than they were by engineering, and they both also had some really bad design decisions. This caused Intel to fall from their technology leadership position for ~5 years, during which AMD produced steady, if slow, improvement, eventually overtaking Intel. After Intel got it's act back together, AMD hasn't been able to catch a break.
At the time ATI was 1/2 AMD's market cap. Too much of their capital got tied up in the acquisition and R&D fell off.
The overall vision is still very, very compelling (integrated FP co-processing). At the time, AMD figured it could beat Intel to the punch by buying one of the best FP companies out there. Instead they both(AMD/ATI)fell behind as merging the two companies took far more time, attention and capital than was originally anticipated.