As Intel faces anti-trust challenges in New York and Europe, it has agreed to pay Advanced Micro Devices $1.25 billion and enter into a joint five-year cross licensing agreement.

The move ends all outstanding legal disputes between the two companies.

"AMD and Intel obtain patent rights from a new 5-year cross license agreement, Intel and AMD will give up any claims of breach from the previous license agreement, and Intel will pay AMD $1.25 billion. Intel has also agreed to abide by a set of business practice provisions. As a result, AMD will drop all pending litigation including the case in U.S. District Court in Delaware and two cases pending in Japan. AMD will also withdraw all of its regulatory complaints worldwide."

The money will be a welcome boost for AMD which has struggled to keep up with Intel.

It also sets free Global Foundries, the fab spin-off company from AMD. There was concern that Global Foundries would lack the legal right to produce X86 compatible chips.