Intel will pay AMD a whopping $1.25 billion (c£752m) to settle all outstanding legal disputes.
The chip giant has had a torrid time with legal complaints for more than a decade, but has finally come to a settlement that boosted its rival's shares by 22 per cent.
Chief Executive Paul Otellini denied any wrongdoing by Intel, insisting that the settlement had been made to assuage the risk of an even bigger fine being imposed by a jury.
Intel still has battles to fight with the likes of Nvidia but many at the company will be relieved that it is not longer fighting a war on multiple fronts.
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The Federal Trade Commission is currently investigating Intel's business practices, and it remains to be seen if the deal will take wind out of its sails.
"Intel got the fact that it was a major risk of a huge settlement in front of a jury," Broadpoint Amtech analyst Doug Freedman told Reuters.
"It removes the coin-flip of a jury trial."