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).

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007

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