140. By April 2006, Dell’s relationship with Intel reached a breaking point. As Michael Dell wrote: “Intel – we overestimated both their ability to execute and our true competitive position with them and we underestimated AMD. And we relied too much on rebates from Intel.”

141. Dell was finally ready to act, despite the pressure and incentives from Intel. In an April 29 email to other top Dell executives, Michael Dell wrote: “We have been looking at the situation for a long time, and have decided to introduce a broad range of AMD based systems into our product line to provide the choice our customers are asking for.”

142. The reaction of Craig Barrett, Intel’s Board Chairman, was unequivocal: Dell should immediately be deprived of the payments it had long enjoyed in return for its willingness not to offer AMD products, and should start paying “list prices.” Barrett told Ottelini: “[T]hey have just signaled they are only interested in being a transaction based customer. I think you
should reply in kind. Not a time for weakness on our part. Stop writing checks immediately and put them back on list prices asap.” (Emphasis added).

143. The direction Otellini gave his subordinates the next day was consistent with Barrett’s advice. Intel should make clear to Dell that if Dell offered any AMD products all of the “mcp” payments Dell received from Intel would be at risk – just as Dell had always feared: “[W]e should be [pre]pared to remove all mcp and related programs. Post haste… then we ought to enter negotiations.”

***
181. In a September 2004 reply email, a senior HP executive emphatically vetoed the plan, because without the “Intel moneys … we do not make it financially”: “You can NOT use the commercial AMD line in the channel in any country, it must be done direct. If you do and we get caught (and we will) the Intel moneys (each month) is gone (they would terminate the deal). The risk is too high. Without the money we do not make it financially.”

AMD and Intel Announce Settlement of All Antitrust and IP Disputes
SUNNYVALE/SANTA CLARA, Calif. --11/12/2009

Intel Corporation and Advanced Micro Devices (NYSE: AMD) today announced a comprehensive agreement to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross license disputes.

In a joint statement the two companies commented, "While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development."

Under terms of the agreement, AMD and Intel obtain patent rights from a new 5-year cross license agreement, Intel and AMD will give up any claims of breach from the previous license agreement, and Intel will pay AMD $1.25 billion. Intel has also agreed to abide by a set of business practice provisions. As a result, AMD will drop all pending litigation including the case in U.S. District Court in Delaware and two cases pending in Japan. AMD will also withdraw all of its regulatory complaints worldwide. The agreement will be made public in filings with the Securities and Exchange Commission.
About AMD

Advanced Micro Devices (NYSE: AMD) is an innovative technology company dedicated to collaborating with customers and technology partners to ignite the next generation of computing and graphics solutions at work, home and play. For more information, visit http://www.amd.com.
About Intel

Intel (NASDAQ: INTC), the world leader in silicon innovation, develops technologies, products and initiatives to continually advance how people work and live. Additional information about Intel is available at www.intel.com/pressroom and blogs.intel.com.