Intel and Nvidia announced Monday that the two companies have entered into a new cross-licensing agreement. This agreement effectively ends the legal battle the two chipmakers have been engaged in since 2009.
The world's biggest micro-chip maker Intel has agreed to pay its smaller rival Nvidia $1.5 billion in a six-year, to use its technology. Likewise, Nvidia will get to license some of Intel’s patents. Intel is the dominant market player supplying micro-processors for 80% of the world's personal computers.
The original legal dispute between Nvidia and Intel centered on Nvidia’s ability to create Intel-compatible chipsets for Intel’s Nehalem and Core series CPUs. Nvidia claimed that its 2004 licensing agreement with Intel permitted it to create Nehalem and other Core successor chipsets (much as it had successfully developed chipsets for the Core 2 Duo microprocessors). Intel disagreed and sued Nvidia in February 2009. Nvidia then counter-sued.
Although Nvidia countersued, the company still wound up exiting the chipset business in October 2009.
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The fact that microprocessor giant Intel and graphics chip maker Nvidia are able to come to this agreement is incredible, especially considering the last 24 months of bad blood between the companies.
The agreement is the largest licensing deal in Nvidia's history and comes at a time when the Santa Clara maker of graphics processing chips is moving forward with its ARM-based processors for desktops and supercomputers.
However, under the terms of the deal, Nvidia will not have the right to use Intel's main technology, its processors built on the the x86 design for PC's.
With Intel continuing to integrate graphics into its microprocessors, Nvidia's share of the desktop business was declining, so making a bet on an ARM-based product today is probably better than making a bet on an (Intel) x86 product.
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