AMD Invests in Struggling Transmeta

AMD said Friday that it would invest $7.5 million in Transmeta in order to support its work in developing efficiency technology for microprocessors. In turn for cash infusion, AMD would receive preferred stock in the company. The move continues Transmeta's transition away from producing chips to a licenser of chip technology that it develops.

The deal also has a indirect connection to AMD's chief rival Intel. The larger chipmaker and Transmeta are currently involved in a patent dispute over energy efficiency technology. AMD is currently fighting a antitrust lawsuit against Intel as well. AMD may be hoping that aligning itself with Transmeta could end up helping it to compete better with its rival, although the eventual decision in the patent case may impact those plans.