Arabs invest $622 million in AMD

An investment company from the United Arab Emirates has taken an 8.1 percent stake in AMD. This means that the ailing chip baker is out of the financial fire for the time being.

Mubadala Development Company bought just under 425 million euros in newly issued AMD shares. The American chip manufacturer is thus giving substance to the plans unfolded this week to attract new capital more quickly than expected. AMD had informed the US stock watchdog SEC that extra power was needed to guarantee the company’s survival.

The company says it will spend the money on research, product development and improvement of manufacturing technology. Part of the proceeds would be invested in a new fab, which the company will set up in the American state of New York.

Mubadala is a local government owned investment company based in the emirate of Abu Dhabi. The Arab investors will become one of the bigger shareholders in one fell swoop, but they will have no influence on the policy, writes info world.

cnet claims that the investment is primarily intended to make the emirate less dependent on oil revenues. The Arabs have been working on an innovation program for some time, which should give their country a high-tech culture. Mubadala also has a billion-dollar stake in investment company Carlyle Group and racing car manufacturer Ferrari is also partly owned by the emirate.