Chip maker (and Intel rival) AMD has agreed to purchase graphics guru ATI for a whopping $5.4 billion, a move that is sure to turn a few heads. While the deal still needs final approval from the shareholders of each firm, the deal is financially fair to ATI shareholders, according to its financial advisers.

ATI, soon to be known as "the ATI business division," and AMD have trailed behind Intel for leadership in the GPU and CPU markets, respectively. However, as PC Magazine points out, Intel loses its advantage in graphics department when one factors out integrated graphic chips (you know, the ones that are killing PC gaming).

While obvious questions remains, one has to wonder how ATI rival Nvidia -- who has in the past supported AMD chipsets -- will respond, or how its business will be affected by buyout.

[Thanks, bassbeast]

This article was originally published on Joystiq.