As part of the agreement, Intel will pay its rival the hefty sum of $1.25 billion and has agreed to abide by a set of business practice provisions. For its part, AMD will drop all pending litigation worldwide. The two companies also forged a five-year cross-licensing agreement that gives them access to each other's key chip technology, while abandoning claims of breaches under previous agreements.
Besides getting a huge chunk of cash to help offset their mounting losses, this means AMD is now free to produce all of its processors in third-party fabs. The formal agreement may additionally help Intel argue that its misbehaving days are in the past, as the company is still appealing a $1.45 billion fine from European regulators and facing an antitrust case in the U.S.