Shocking everyone in the computer industry, AMD has announced that it has bought ATI, one of the two major players in the GPU market. Now a part of the processor-maker, ATI has been acquired for $5.4 billion in cash and stock to expand AMD’s market share against Intel, currently the most popular processor-producer.

Under terms of the deal, AMD will acquire all of the outstanding common shares of ATI for $4.2 billion in cash and 57 million shares of AMD common stock, based on the number of shares of ATI common stock outstanding on July 21.

AMD said it would pay $20.47 for each ATI share. That marks a 24 percent premium over ATI’s closing stock price of $16.56 on Nasdaq on Friday. The stock added another 7 percent to $17.68 in after-hours trading amid media reports of the expected deal.

What do Intel and Nvidia think about this? TechReport asked the very same question and the reactions are as expected: Nvidia is now boasting that it is the only true GPU maker in the industry and that its market share will increase; Intel, on the other hand, is very reserved with their judgment.

Now that the buyout has been done with, the rumors have started, and what better way to start one that to suggest a CPU-GPU integration? That’s being covered on Ars Technica which takes a technical look at the prospects of having a graphics card built into a processor.

Even though Wii’s showing at E3 stole the show this year, graphics on games for the console left a sour taste in gamers mouths (or eyes, whatever). All is not lost, however, as GameDaily spoke with an ATI representative who commented that the visuals shown now are just the “tip of the iceberg”.

Yes, it is known that Nintendo is taking a step backward with the Wii, whereas its competitors - Sony and Microsoft - are crunching polygons. Yes, we know the Wii will be cheaper and less powerful, but just how much of an improvement is it over the Gamecube? Industry sources have said that the Wii GPU is roughly two to three times faster than the Gamecube, but how does it compare to the Xbox 360, whose GPU was also made by ATI? “They’re different chips for different platforms and different uses. I don’t think it’s a fair comparison to put them on a chart [to analyze]. That’s not what it’s all about… I think if you focus on the capabilities that the chip will have for the average consumer, with the amazement and wow factor, I think that’s the value that we bring,” said John Swinimer, Senior PR Manager for ATI.

The man was smart enough to sidestep questions regarding Wii’s GPU details, but he does think that it’ll be “pretty cool for the average gamer.”