AppleInsider reports that a former AMD employee has come forward to reveal that Apple seriously looked at AMD Llano chips to power the MacBook Air. The alleged former employee says that Apple passed on the AMD parts because the chip had too many samples that were faulty. These Llano parts are known as the Fusion processors from AMD.
Fusion combines the CPU and GPU onto one part that could've been ideal for thin and portable notebook computers like the Air. The source goes on to claim that AMD was unable to make enough early samples that worked appropriately to get to Apple for testing in time. One source is claiming that AMD had the deal and was unable to deliver enough functional parts and therefore lost the deal.
AppleInsider cites other sources claiming AMD had tried to land a deal with Apple to get its Brazos processor into the Apple TV set-top box. Apple obviously didn't go with the AMD part, but Brazos was able to catch on for netbooks. According to an alleged former employee if Brazos hadn't succeeded, AMD would have gone out of business.