Microsoft may be interested in buying AMD, according to a new report citing unnamed sources familiar with the matter. Microsoft has a lot to gain by acquiring AMD's APU business, given the Redmond giant's ambitions in the console gaming segment. Both the Xbox One and PlayStation 4 use AMD's Jaguar-architecture APU, and if Microsoft were to buy AMD, Sony will have to shell out a significant amount of money to Microsoft on each PlayStation sold. The vendor can side with other chip manufacturers, but that will mean designing a new APU from scratch.
Microsoft isn't the only company rumored to be mulling an acquisition of AMD. Qualcomm's name has also been suggested, with the mobile chip vendor said to be interested in AMD's server business. Qualcomm CEO Steve Mollenkopf recently stated that the vendor was looking to bolster its efforts in the server segment through a merger or acquisition, with AMD the only likely contender that Qualcomm can acquire at this stage.
Samsung was also mentioned as a vendor that would be interested in leveraging AMD's CPU and GPU IP to challenge the likes of Qualcomm and Intel. AMD's current market valuation of $2 billion is low enough that all three organizations listed above can acquire it using their cash reserves. Microsoft has $93 billion in cash, Qualcomm has over $12 billion and Samsung has $66 billion in its cash reserves. However, given the nature of AMD's licensing portfolio, there will be significant regulatory hurdles before any deal goes through.