AMD: Going For The Gold In Tinseltown

It's taking a run at Intel's supremacy in chips as studios gear up for online movies

Charlie Boswell, a 51-year-old former songwriter with shaggy hair, may just be the biggest schmoozer in Hollywood these days. He takes A-list honchos to fancy dinners and makes a concerted effort to be hip in every way. One of his more novel moves: He buys Spy Kids and Sin City director Robert Rodriguez a new guitar after every movie Rodriguez finishes, and sometimes even heads to his Dripping Springs (Tex.) ranch to strum along with him. But Boswell isn't looking for a chance to get one of his songs into a movie or to snag a role. He just wants to sell computer chips to Hollywood.

That's because, as head of the digital media and entertainment unit at Advanced Micro Devices Inc. (AMD ), the No. 2 maker of microprocessing chips, Boswell is on a mission to unseat leading chipmaker Intel Corp. (INTC ) as the longtime preferred supplier to Tinseltown. That someone pushing the latest computer chips has garnered such clout speaks volumes about where Hollywood is now putting its priorities. Today chips power the servers and work stations that help conjure up the scenes of alien attacks in War of the Worlds and generate those elastic moves of Mrs. Incredible. These kinds of computer-generated effects are now the industry's lifeblood. Eight of this year's top 10 box office hits are special-effects-laden or animated projects. And with studios at last willing to move forward with online delivery, chipmakers will play an even greater role. The increasingly heated rivalry between AMD and Intel is beginning to split Hollywood's power brokers into two fiercely loyal chip camps.


It may be that Hollywood's contracts with the chipmakers are paltry compared with other lines of business for the Silicon Valley powerhouses, but the glitz and publicity surrounding the movies give them a huge showcase for their goods. When DreamWorks (DWA ) and Hewlett-Packard (HPQ ) signed on with AMD, DreamWorks CEO Jeffrey Katzenberg appeared at a broadcasters' convention to pitch AMD by showing 15 minutes of DreamWorks' then-unfinished animated film, Madagascar. Intel brought along Robert Redford to a consumer electronics show in January. His Sundance Film Festival is sponsored by Intel and used Intel chips to wirelessly deliver films, such as this year's documentary RIZE, through WiMax technology. "Getting a Hollywood studio is better than buying a TV commercial," says Shane Rau, a research manager for technology consultancy IDC (IDC ). "They're trendsetters for popular culture."

Intel still dominates in Hollywood, supplying such major studios as Warner Bros. (TWX ), Walt Disney (DIS ), Pixar (PIXR ), and Sony's (SNE ) Imageworks special effects unit -- though "AMD has got a win or two here and there," admits Kevin M. Corbett, vice-president of Intel's Digital Home Group. The chip leader has been ensconced in the dream factories since 1994 and two years later teamed with talent agency CAA to line up studios. It worked with Avid Technology Inc. (AVID ), a leading film editing company, and has provided the computing power for slews of blockbusters, including Spider-Man and Terminator 3. Director Peter Jackson's WETA facility in New Zealand used IBM (IBM ) servers with Intel Pentium 4 Xeon chips to make his next film, King Kong, as well as the Lord of the Rings series.

So what will AMD need to do to catch Intel? For one, it has to come up with a compelling scheme that helps studios grapple with the coming era of digital movie downloads. Company officials say they will unveil such a plan later this year with Microsoft Corp. (MSFT ) Together the two tech companies are working on digital rights protections that will be encoded into Windows Media software for playing high definition movies on AMD-based machines. For its part, Intel is working with five companies to back an Internet copy-protection scheme that will put studios more at ease. And with $12 billion in cash, Intel isn't shy about doling out the money. It recently decided to fund a download service started by actor Morgan Freeman and to invest in a Korean company that is developing a payment system for content on cell phones.


Boswell, on the other hand, makes his pitch personally, one dinner at a time. He wined and dined Titanic director James Cameron for months and pressed Rodriguez to plug AMD to Cameron as well, says Rodriguez. Boswell persuaded George Lucas' Industrial Light & Magic to switch from Intel to AMD. Those chips fired up servers that made Yoda spring into battle in Lucas' Star Wars Episode III: Revenge of the Sith, released in May. Boswell's spiel: AMD's 64-bit Opteron chip is as much as 40% faster than Intel's Xeon chip. Using AMD chips saved Lucas $10 million or more by allowing him to see complex scenes in hours instead of days, says Star Wars producer Rick McCallum. Plus, says McCallum, "Charlie is a great guy to go out and drink with and tell stories with." On Aug. 1, AMD announced it was supplying the army of servers used by ILM's new Letterman Digital Arts Center in San Francisco.

There's no summer respite in this battle, either. Intel in June invited studio executives to a CEO powwow in Beijing, where they saw presentations by several tech companies, partnered with Intel, that distribute digital films and TV shows. Meanwhile, AMD's Boswell was heading back home to Los Angeles after attending the Star Wars premiere in London. Jet lag is just one price executives have to pay in the war for the hearts and hardware of Hollywood.

By Ronald Grover in Los Angeles and Cliff Edwards in San Mateo, Calif.

    Before it's here, it's on the Bloomberg Terminal.