I think he was talking about both companies at the time of the acquisition. AMD fail the first generation of Phenom and ATI losing war against Nvidia
Sorry, but this is a bit false. AMD did announce to buy ATI on summer 2006. nVidia had release their G80 on october/november 2006.
At that moment, ATI maybe less market part, but they had the fastest chip, way better than nVidia. The x1950XT/XTX was much more better than the 7900GTX, and that makes it also for the x1900XT/XTX.
AMD release their first Phenom a year after, like november 2007. Intel had their Core 2 duo on end of summer 2006. So if we do a time line:
AMD released their first DDR2 CPU, Windsor, end of may 2006: x2 5000+
AMD announced to buy ATI, July 2006
Intel released their Core 2 duo on July the 27th
nVidia released their G80 on November the 8th
Early in 2007, ATI was now AMD
May 2007, HD2900XT
6 months later, Phenom 9500/9600.
I don't know where AMD was in a bad situation when they announced to buy ATI before the Intel core architecture, and before the G80, so ATI was a good thing to do, since they have very fast chip, and their chipset for AMD was very very good.
They had already done a lot of thing before the complete transaction on end 2006/Begining 2007. Intel was doing their own chipset and graphics chipset. AMD needed this to continue the battle. They just sit on their ass with the X2 (should have release the AM2 version much more faster, since Intel was already on DDR2.
Well, I still think that Intel has been unfair during the P4 time, and AMD hasn't been fast enought. If the first Phenom was there at the same time of the Core 2 duo or before, it would be maybe different. With Graphics part, they went from really bad vs the G80, and they came with HD3k that wasn't that bad, then 4k where they were taking alot of market share to nVidia.
Anyway, too much talked, I voted no, since AMD and Nvidia didn'T had the same vision of the futur I think. On paper, that would have been good, since AMD had their own Fab, but I am sure the result would be the same as now, and maybe more bad, since nVidia worth more than those 5.4 billions...