Advanced Micro Devices has agreed to buy programmable chip maker Xilinx in a $35 billion deal to diversify its product portfolio and aid its ambitions in data centres and edge computing driven by the demand for AI and Machine Learning. If the deal closes, AMD and Xilinx would broaden their product range and have a larger base of customers they could sell to together. The combination would also give it the scale and engineering skills to transform into a more formidable challenger to both Nvidia and Intel. Xilinx is the world's largest vendor of programmable chips that can be re-programmed for different functions after rolling out of production plants. These types of chips called “field programmable gate arrays” or FPGAs can be adapted and upgraded by customers to fit different workloads. Hyperscalers use Xilinx chips to add supplemental performance to server CPUs for, storage, and video, image, and other types of processing and they can also be used to optimize networking within Datacentres themselves to speed up AI and Machine Learning applications. Xilinx chips are currently widely used in wireless networks, giving AMD access to valuable customers ahead of the rollout of a new generation of 5G networks around the world.