Advanced Micro Devices is buying ATI Technologies for $5.4 billion, instantly making AMD a much more worthy adversary to Intel. ATI is known as an established market leader in graphics chips, along with various lines of chipsets and semiconductors for consumer devices. The deal won’t help the AMD bottom line until 2008, but Intel–and ATI rival NVIDIA–should both be nervous.

For more on the acquisition:
– see this BusinessWeek article