March 1, 1999

Intel Expected to Buy Stake in Linux Firm

By THE ASSOCIATED PRESS

EW YORK -- Computer chip giant Intel Corp. is expected to be the latest company to announce its endorsement of Linux, a well-regarded version of the Unix operating system used by businesses to run computer networks and Internet sites.

In a move that could be announced as soon as today, Intel is buying a multimillion dollar stake in VA Research, a Mountain View, Calif.-based maker of business computers that run on Linux, industry sources said.

Officials at both the Santa Clara, Calif.-based Intel and VA Research declined comment.

Linux was developed in the early 1990s by a Finnish student named Linus Torvalds. The grassroots software is edging into the mainstream as users embrace its flexibility and its propensity to avoid crashing.

``We think Linux as the biggest thing since the Internet,'' said Larry Augustin, chief executive of VA Research. He declined to comment on any investments.

Last fall, Intel took a stake in Red Hat, a Durham, N.C.-based distributor of Linux software. Several major computer makers such as Hewlett Packard and IBM have begun selling machines loaded with Linux.

VA's machines are expected to be adapted to work with Intel's upcoming chip for high-end business computers, known as Merced.

While Linux is rapidly gaining acceptance as an operating system for business machines, it's still used in only a small fraction of computers and hardly appears on desktops. Microsoft officials dismiss Linux as only a minor rival.