You may perhaps have heard that AMD has been cultivating some, umm, rather spooky, if not inappropriate, friends and that the government of Abu Dhabi, part of the United Arab Emirates (UAE), the old Pirate Coast, has taken an 8.1% piece of the company.

AMD gets $608 million out of it - an amount that may ease its financial problems of the moment but still leaves it in the lurch long-term.

It does after all owe $5.3 billion since it bought ATI; has only $1.5 billion in the bank after losing $1.6 billion this year; is getting no quarter from Intel, and has got trouble producing its company-saving quad chips. The arithmetic suggests it will still need more money.

Meanwhile, its stock has been down 35% - and has been setting new lows since it disclosed that Abu Dhabi was in.

AMD claims that because the Abu Dhabi money is a "non-controlling minority investment" and because Abu Dhabi won't have a board seat that the investment isn't subject to review by the Committee on Foreign Investment in the US (CFIUS), the agency that likes to poke around these kinds of things in the name of national security.

AMD is supposed to glide past any kind of serious review because it doesn't have the kind government contracts that would raise eyebrows. It is however a fundamental technology - especially since it got into server chips - and this sort of thing puts people's teeth on edge these days.

AMD has agreed to sell the interest to the Mubadala Development Corporation, the Arab operation chaired by Abu Dhabi's crown prince Sheikh Mohammed bin Zayed al Nahyan that recently took a 7.5% position in the very chi-chi private equity firm-cum-men's-club, the Carlyle Group, for $1.35 billion and bought 5% of Ferrari.

AMD however is believed to be its first direct investment in a publicly traded American firm.

Mubadala is putting $622.3 million into AMD in exchange for 49 million new shares, paying $12.70 a share, and immediately devaluating the company by roughly a little noticed 9%; AMD kicked back $14.6 million to cover Mubadala's expenses so that's where the $608 million comes from.

AMD said it would use the money for general corporate purposes and to accelerate long-term growth by investing in R&D, product innovation and manufacturing.

Of course it's believed to be trying to sell off one of its main plants to make ends meet while pressure builds on its current management to get the heck out.

Mubadala claims the situation is absolutely hunky-dory, describing AMD as a "great fit for Mubadala's investment approach - a spirited competitor and innovator led by a strong and visionary management team."

The AP tapped into data compiled by Thomson Financial and reports that the Middle East, which is now charging the West a unprecedented $100 for a barrel of oil, increased its investments in US companies fivefold in the last year from $4.5 billion last year to $25 billion this year. Mubadala, for instance, has just cut a partnership with Northrup Grumman on aerospace and aviation.

If allowed to stand, Mubadala will be AMD's third-largest stockholder.

People are already speculating that the Arab investment in AMD has something to do with Intel's strategic dependence on its Israeli operation, which has been designing its chips and has once again put Intel ahead of its little competitor.

Abu Dhabi is the world's sixth-largest oil producer and holds 10% of world's oil deposits.

Lehman Brothers figures AMD is going to be writing in red ink for the next year, returning to profitability in 4Q08.