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Intel, Nvidia Make Nice for $1.5B

Coming off a strong showing at International CES , Nvidia Corp. (Nasdaq: NVDA) is ready to play nice with Intel Corp. (Nasdaq: INTC). The chipset makers settled a year-long patent infringement lawsuit Monday, with Intel agreeing to fork more than US$1.5 billion in licensing fees to Nvidia over the next five years.

Under the terms of the agreement, the companies will share all of Nvidia's patents and those Intel patents included in the companies' previous licensing agreement. That means no x86, flash memory or "certain chipsets" for Nvidia, but it can now build for Intel's latest line of Core processors.

"Our cross license with Intel reflects the substantial value of our visual and parallel computing technologies," Jen-Hsun Huang, Nvidia president and CEO, said in a statement. "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."

Why this matters
Intel and Nvidia haven't always been adversaries. Intel traditionally focuses on microprocessors and Nvidia on graphics, but they are meeting in the middle with high-end smart phones and tablets. At CES, Nvidia's dual-core Tegra 2 processor was part of nearly all the latest device launches. (See CES 2011: Top 10 Cool Things at CES, CES 2011: Acer Demos Dual-Core Tablets, CES 2011: OS Watch Goes Gadgets and Moto, AT&T Intro Atrix 4G.)

As such, it will be beneficial to both to work together to leverage their respective strengths in performance and graphics in the hottest category of devices right now. Competition in mobile devices will be fierce for both though. Qualcomm Inc. (Nasdaq: QCOM) plans to announce dual-core Snapdragon phones this year, and all three companies will continue to compete against Advanced Micro Devices Inc. (NYSE: AMD), Marvell Technology Group Ltd. (Nasdaq: MRVL) and others as well.

For more
Intel and Nvidia had been butting heads for a while now. Check out the following stories for more:



— Sarah Reedy, Senior Reporter, Light Reading Mobile

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