The first proof it can't be like that is that they could have bought VIA/S3 themselves on the cheap (certainly cheaper than buying ATI).
I think VIA is worth about $3 billion, so they're cheaper but still an expensive purchase that would get AMD really nothing of value.
Well, nothing except
http://www.girlzgaminghouse.com/ this. Oh yeah, you know you wanna up your Chrome level to match Fatal1ty.
Lol, I can't believe those gamer girls are winning any tournaments with the spec sheet he puts together.
http://www.girlzgaminghouse.com/index.php?option=com_content&task=view&id=28&Itemid=29
I mean.....S3 graphics for Quake 4? I can't imagine that working out well. Eh, I guess it is just one big VIA sponsored ad, so no wonder he plugs VIA stuff whenever possible. I'm surprised he doesn't recommend a VIA Eden cpu.
Oh, back to VIA being nothing of value...
It does not have a reputation of top quality chipsets, which would make AMD's new chipsets a hard sell for many. If AMD just wanted to produce chipsets, they had their own dev team.
AMD has produced its own integrated graphics for its geode line, if they wanted DX9 integrated graphics there are cheaper ways to get it than buying a large company, like hiring the talent or buying a small company.
VIA's low power designs aren't low power for the performance they offer. AMD's Geode line was comparable in performance/power. Just VIA was the only company that tried to make a market out of it. Plus, the low power designs (and even Nano-ITX) don't sell for all that much, I doubt AMD would want to shift fab space away from their higher end cpus.
Currently, ATI is the leader for mobile AMD platforms, a market that VIA never came close to getting right.
Plus, maybe VIA didn't want to sell, they're owned by one of the largest conglomerates in Taiwan who could probably buy AMD.