The dark satanic rumour mill has manufactured a hellish rumour that Oracle is going to buy chip maker AMD.

Oracle's CEO, Larry Ellison, said last month that he might contemplate buying a semiconductor company, but no sane person would have suggested that AMD was the outfit he was thinking of. However Reuters, not one for spinning rumours, speculated that Larry meant AMD because he wanted a chunk of intellectual property.

Of course it would turn the industry upside down. HP and IBM would have to buy X86 chips from a rival, which is pretty nasty. Still it does mean that Intel will get a rival with a hell of a lot of dosh and power behind it.

However, AMD was quick to dismiss the rumour. "AMD is not for sale, but we are happy to listen to any proposal which is in the interest to our shareholders," AMD CEO Dirk Meyer said.

So AMD is still open to proposals and it’s worth noting that Dave Orton was equally dismissive of any AMD – ATI deal just months before AMD took over the red graphics outfit.

More here.