Intel’s Potential Breakup Faces a Major Hurdle: AMD’s Approval

Recent reports suggest that Broadcom is exploring the acquisition of Intel’s product business, while the U.S. government is reportedly pushing for a joint venture between Intel and TSMC to manage Intel’s chip manufacturing division. However, these ambitions could be derailed by a less obvious but significant obstacle—Intel’s cross-licensing agreements with AMD.

Intel and AMD’s Crucial Cross-Licensing Agreement

According to sources from Tom's Hardware, Intel and AMD have maintained a broad and complex cross-licensing agreement since 2009, which allows both companies to share patents while preventing lawsuits over potential infringement. This arrangement covers a wide range of innovations, including CPUs, GPUs, and other semiconductor technologies.

For instance, AMD can leverage Intel’s x86 instruction set extensions (ISEs) to produce its own processors, while Intel can incorporate some of AMD’s innovations into its own CPU designs. However, the agreement explicitly restricts either company from developing processors that directly interface with the other's platforms or motherboards.

The biggest caveat of this agreement lies in its termination conditions. If Intel were to undergo a merger, acquisition, or establish a joint venture that alters its ownership structure, the agreement would immediately terminate. This would force both companies to renegotiate licensing terms—a potentially disruptive and complex process.

Why Losing the Agreement Could Be Devastating

Many believe the agreement is primarily tied to the 1976 x86 instruction set architecture (ISA) licensing deal. However, the reality is more nuanced. The current arrangement extends beyond basic x86 ISA usage and includes critical extensions such as SSE (Streaming SIMD Extensions) and AVX (Advanced Vector Extensions)—technologies integral to modern CPU performance.

Without access to these technologies, neither AMD nor Intel could realistically compete in today’s high-performance computing market. The termination of the licensing deal could therefore cripple both companies, as it affects not only CPU production but also innovations across GPUs, DPUs, and FPGAs.

Broadcom’s Potential Acquisition Could Raise New Challenges

If Broadcom were to acquire Intel’s CPU business, AMD’s willingness to renegotiate a similar agreement remains uncertain. Traditionally, Broadcom has focused on networking and wireless solutions but has expanded into storage, cybersecurity, and infrastructure software. Recently, Broadcom has also become a significant player in custom AI processor development, collaborating with major hyperscalers and cloud service providers.

Acquiring Intel’s CPU business would position Broadcom as a direct competitor to AMD—potentially a far stronger one than Intel ever was, especially given Broadcom’s growing influence in AI infrastructure. This could make AMD reluctant to renew any cross-licensing deals, knowing that Broadcom would gain a strategic advantage across multiple technology domains.

The Bigger Picture: AMD’s Strategic Dilemma

Some industry experts suggest that AMD could leverage this situation by demanding that Broadcom develop AMD-friendly networking interfaces or other cooperative solutions to challenge NVIDIA’s dominance in the AI market. However, Broadcom’s primary goal appears to be solidifying its data center market share, where it currently lacks a robust CPU offering.

Should Broadcom acquire Intel’s data center CPU division, it would likely focus on creating AI data center platforms combining CPUs and custom ASICs—potentially sidelining AMD’s interests altogether.

In this scenario, AMD might find itself facing a tougher competitor in Broadcom than it ever did with Intel. While open industry platforms like Super Ethernet could foster collaboration, a Broadcom acquisition would likely intensify the competitive landscape, particularly in AI-driven data centers.