Advanced Micro Devices (AMD) shares shot up by 8.87% to USD 9.45 on Tuesday following reports that AMD inked a licensing deal with rival technology firm Intel (INTC) .

Advanced Micro is reportedly licensing its Radeon graphics processing unit for use in Intel’s next generation of CPUs, Investors Business Daily reports. Intel currently holds a license for chipmaker Nvidia’s (NVDA) technology, but that deal is set to expire in March.

Is AMD and Intel ganging up against NVIDIA who is also competing in the GPU arena. Will we get to see the revival of ATI RS600 sort of chipset which supports INTEL processors ?

Although the Intel deal has not yet been confirmed, Advanced Micro Devices did tie up an extended three-year strategic partnership with software company Mentor Graphics (MENT) on Monday which will expand their agreement to create an embedded software ecosystem.

About 92.07 million shares of Sunnyvale, Calif.-based Advanced Micro traded hands on Tuesday, well above the 30-day average volume of roughly 48.59 million.

Discuss below

By Harry