Yes, AMD did innovate and they were rewarded for that innovation with increased server sales. The industry wasn't even close to being ready to support the consumer market for 64 bit Windows at the time and there was little demand for it outside the development community.

Now you claim Intel dropped prices to compete against AMD innovation. That's exactly what competition law is designed to do and consumers were served. You have made the Intel argument.

Moreover selling at low prices is exactly how AMD has survived for the majority of the past 30 years.