Business, Graphics

NVIDIA Settles with Intel for $1.5 Billion


Back in late 2009, AMD settled with Intel for 1.2 billion U.S. Dollars, ceasing the anti-trust lawsuit and turning their focus on executing the Fusion strategy. Little was known then that AMD was forced to sign the deal with Intel as they were pressured by the expiring x86 license.

Today, nVidia has officially announced that the company has signed a new cross-licensing agreement which gives Intel the right to use nVidia technologies until March 31, 2017. In order to license the technology, Intel will have to pay 1.5 billion dollars in licensing fees, paid in five annual installments of around $300 million each.

Jen-Hsun Huang, co-founder and CEO of nVidia stated that the first installment will impact the profitability of the company to the tune of $233 million, as around $78 million will be eaten by lawyers. Do note that nVidia is dropping all the legal disputes between nVidia and Intel.

The new cross-licensing agreement gives Intel access to key patents which might even resurrect Larrabee architecture, which potentially infringed around 30 patents developed by the green neighbour located at the other side of 101 freeway in Santa Clara, CA.

From nVidia side of things, Jen-Hsun Huang confirmed that nVidia has no interest in building chipsets for Intel processors, even though the company now has the right to do so. Under the terms of cross-licensing agreement, nVidia also does not have the right to build an x86 processor. Jen-Hsun commented that the company has no desire to go into the world of x86 architecture, but rather focus on their own ARM processor, codenamed "Project Denver".

In a way, this means that Intel will actually pay for development of its upcoming competitor across the board, from notebook to supercomputers – industry sources told us that in order to develop a new CPU today, you would need around one billion U.S. dollars.

nVidia?s CEO also refused to comment on what the company will do with other companies that potentially infringe nVidia?s technology, but he mentioned that they want to pro-actively go for arrangements such as the one with Sony (PlayStation 3) and Intel.