hotroderx, buying ATI didn't cause the downfall of AMD, but rather it was Intel killing off the P4 and getting its act together with the Core2.
The problem is that Intel has vastly more money to spend on chip dev, and their fabs are a whole generation ahead of everyone else. The combination makes them unstoppable. The only solution is anti-trust legislation that forces them to spin off their fabs, or at least provide fair access & pricing to fab chips for competitors.