Analysis: Intel-Alpha deal could hit regulatory buffers

While on the face of it unlikely, The Wall Street Journal's report pairing the two giants could well have a strong foundation. The Journal has an excellent reputation for veracity and doesn't print Silicon Valley tittle-tattle. Tellingly, neither Intel nor Digital are commenting on the story.

A combination also makes some sense.

Digital would cash in on a very probably loss-making unit, could make strong demands to guarantee production for the medium-term, and gain the resource to have another crack at making an HP-like return to the PC premier league.

For Intel, Alpha could provide a tightening of its grip on the workstation and server market and a get-out architecture if P7 'Merced' design doesn't pan out.

So far, so good.

What sticks in the craw is that even mighty Intel could be so daring as to purchase a major rival in the midst of an enquiry into monopolistic abuses. The Federal Trade Commission (FTC) in the US is openly investigating Intel business practices, following a similar enquiry four years ago. Intel knows that it is under the microscope and any hint of trying to buy up more market share will bring it even more to the fore of the regulators' attentions.

Too much to swallow even for Intel's gut? Don't bet on it...