I think this article says it best:

“On paper it makes sense. AMD needs IBM’s expertise,” Cohen said. “That said, I can’t imagine IBM, having exited many parts of this (chip) business, putting in the investment that would be required to catch up with Intel.” Among other things, IBM doesn’t want to alienate Intel, a longtime chip partner.

This just isn’t the direction IBM is wanting to go. They’ve spend a decade building their business around high-margin services and software — it wouldn’t make sense to deviate from that, even if it’s a good deal.

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