Return Engagement
By David Kirkpatrick and Devin Leonard

(FORTUNE Magazine) - IBM's Cell Division

When IBM (Research) announced in February that it would put its Cell processor chip--the brain inside Sony's (Research) PlayStation 3--into servers for ordinary business customers, it was the first fruit of a next-generation computing project called Quasar. The servers are the leading edge of what will become a wave of Cell-type systems from Big Blue. IBM did not say publicly what it had told employees the week before: It has reorganized its hardware system division in part around this new type of computer. The new TCS group will also include the chip-manufacturing business as well as systems development work for outside customers. -- David Kirkpatrick

Hank Fights On

A year after AIG (Research) parted ways with CEO Maurice "Hank" Greenberg amid a scandal over alleged accounting improprieties, the insurer has agreed to pay $1.6 billion to settle charges leveled by New York Attorney General Eliot Spitzer and New York Insurance Department Superintendent Howard Mills ("All I Want in Life Is an Unfair Advantage," Aug. 8, 2005). The settlement doesn't cover Greenberg, who's made it clear he plans to fight tooth and nail. In a recent trade magazine interview, he argued that investigations like the one that led to Spitzer's suit undermine America's efforts to spread democratic values abroad. That may be a stretch, but it tells you something about how he sees himself--as an unjustly besmirched victim of an overzealous prosecutor with political ambitions. Expect him to dip into his multibillion-dollar fortune to paint this portrait of Spitzer in court. -- Devin Leonard Top of page