Print 7 comment(s) - last by roykahn.. on Jan 12 at 8:08 AM

Intel's handing out another big cash settlement -- this time $1.5B USD to graphics chipmaker NVIDIA.

Nvidia CEO/President Jen-Hsun Huang
Settling with its two biggest competitors hasn't been easy for Intel, but it's an important step

Intel was hit in mid-2009 with a massive $1.45B USD fine by the European Union for alleged anticompetitive practices.  As it faced similar scrutiny from the U.S. Federal Trade Commission, Intel rushed to settle with AMD, one of the firms suing it in civil court and funneling evidence to FTC investigators.  In the end Intel had to pay $1.25B USD to its CPU and graphics rival to put that legal mess behind it.

Now it has paid a cool $1.5B USD [NVIDIA press release] to make sure an ongoing civil suit with NVIDIA doesn't land it in any more trouble.  The cash will be paid over a five-year period.  All pending claims will be dropped by both companies, which have engaged in numerous suits and countersuits.

The move also puts into place a cross-licensing agreement, which includes everything except "Intel's proprietary processors, flash memory and certain chipsets for the Intel platform".  The likely result of this will be Intel and NVIDIA finally setting aside their differences and merging their strongest products -- Intel's CPU cores and NVIDIA's GPU cores.  This is seen by many as a necessary move as AMD rushes to bring its own CPU/GPU system-on-a-chip offerings to market, the fruition of its 2006 acquisition of graphics chipmaker ATI.

NVIDIA President and CEO Jen-Hsun Huang, who once promised to open his "can of whoop ass" on Intel, states in his company's press release, "This agreement signals a new era for NVIDIA.  Our cross license with Intel reflects the substantial value of our visual and parallel computing technologies. It also underscores the importance of our inventions to the future of personal computing, as well as the expanding markets for mobile and cloud computing."

Doug Melamed, Intel senior vice president and general counsel adds [Intel press release], "This agreement ends the legal dispute between the companies, preserves patent peace and provides protections that allow for continued freedom in product design.  It also enables the companies to focus their efforts on innovation and the development of new, innovative products."

The move also seemed necessary, as the company needs to be on good terms with the FTC.  While it recently scored approval of a major acquisition of the world's largest antivirus software maker, McAfee, it will likely need the FTC's support on many items in the future.

Intel now appears to have a mostly clear slate.  It has settled with the EU, it has settled with the FTC, and it has settled with its two biggest rivals.  All that bodes pretty well for the world's largest CPU maker, despite the hefty size of the collective settlements (approximately $4.2B USD).

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Oh how I regret
By LordSojar on 1/10/2011 6:45:50 PM , Rating: 2
Not buying nVidia stock back in August 2010, after Fermi was failing to thrive. They've totally turned the company around thanks to Tegra's success and now this.... their stock is just going up and up and up. My guess is, the new ceiling for their stock is ~$28/share.

This is great news though, as it means AMD will be directly competing with Intel + nVidia. That sparks innovation and price wars. The consumer wins in every sense because of this.

RE: Oh how I regret
By quiksilvr on 1/10/2011 7:04:23 PM , Rating: 2
Always buy stock when its down in the tech world. nVidia and AMD have always been shifting up and down this past decade and that isn't going to stop.

RE: Oh how I regret
By roykahn on 1/12/2011 8:08:11 AM , Rating: 1
Always buy stock when its down

Dear lawd! Is that how you make money in the sharemarket? All you need to tell us now is how you're supposed to know when the stock is going to go up. I'm rubbing my hands in excited anticipation.

RE: Oh how I regret
By mead drinker on 1/11/2011 10:17:58 AM , Rating: 2
Not buying nVidia stock back in August 2010...

August?! How about December? Up almost 25% since 5 days ago. AMD is looking like a strong buy as soon as it reaches bottom once the markets digest all the departures of its board but ahead of the fusion release.

No Nvidia GPU for Intel?
By nafhan on 1/11/2011 8:16:41 AM , Rating: 2
The likely result of this will be Intel and NVIDIA finally setting aside their differences and merging their strongest products -- Intel's CPU cores and NVIDIA's GPU cores
I'm not sure about that. I think this gives Intel the ability to use/keep using technology that Nvidia has patented - not get an Nvidia designed GPU to go on the die with their CPU's. Also, I think Nvidia is claiming that Sandy Bridge is infringing on Nvidia patents already.

RE: No Nvidia GPU for Intel?
By sviola on 1/11/2011 8:39:10 AM , Rating: 2
You are correct. According to Nvidia the deal will allow Intel to continue using Nvidia's IP in their IGPs (which they already are in Sandy Bridge). This does not mean we'll see an Nvidia GPU in an Intel CPU.

Also, the deal means the Nvidia will be able to use Intel IP in their CPU designs (with the exception of x86 and flash memory IP).

AMD got the shaft.
By HrilL on 1/10/2011 6:49:04 PM , Rating: 3
I always thought the 1.25B was too low when Intel's illegal business practices made profits in great magnitudes more. When some of their pay offs to Dell were in the 100s of millions in "discounts"

Now Nvidia gets a better deal as well.

Good thing the EU doesn't like the idea of approving Intel's purchase of McAfee. I hope they don't for the case of competition.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

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