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Amdahl continued to agitate for a 360-compatible version of the machine. In January 1967, [[Ralph L. Palmer]] asked [[John Backus]], [[Robert Creasy]], and Harwood Kolsky to review the project and Amdahl's concept. Kolsky concluded that the 360-compatible version would be too difficult, and pointed out that the ASC was aimed at the [[CDC 6600]] market, not the 360's, so if the customer was interested in compatibility, 6600 compatibility would seem more useful. The next month, Amdahl once again argued for 360 compatibility for marketing reasons.{{sfn|Smotherman|Sussenguth|Robelen|2016|p=63}}
Amdahl's continued arguments for 360 compatibility placed him increasingly at odds with Bertram. Bertram responded by "quarantining" him and making sure that no one was allowed to talk to him. Around the same time, another ASC team member, circuit designer John Earle, was being removed from the main team due to his working style which was causing friction in the team. Bertram assigned Earle to Amdahl, apparently as a form of punishment. This backfired badly, as Amdahl was able to convince Earle that a 360-compatible version was possible, and Earle went ahead and designed it. The result was the Amdahl-Earle Computer, or AEC/360. Using many of the concepts in ASC-1 they produced a design that was slightly slower than it, but cost perhaps 75% as much to build, with only 90,000 gates instead of 270,000 (a gate requires about five transistors using the ECL logic of the era). Much of the reduction was due to the fewer and smaller registers, which accounted for half of the gates in the ASC-1. The loss of performance due to fewer registers was to be made up by a faster 8 nanosecond clock, possible due to a streamlined internal design.{{sfn|Smotherman|Sussenguth|Robelen|2016|p=63}}
In December 1967, Kolsky was sent to meet with Amdahl to get a more detailed description of the proposed design.{{sfn|Conway|2011|p=20}} Around the same time, Amdahl began calling people within IBM to tell them about the new design. As word of the concept spread around the System Development Division (SSD), the division's vice president [[Erich Bloch]] began to organize an internal review. The ASC team responded with a "frantic" redesign that reduced the number of gates from 270,000 to 200,000 with little effect on performance, which strongly suggested it was overdesigned.{{sfn|Conway|2011|p=27}}
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