Nvidia gets $1.5b of Intel cash as firms settle IP battle

Intel and Nvidia have reached a settlement which will see Intel pay $1.5 billion to the graphics specialist in a patent cross-licensing deal.

The new six-year licensing deal grants Intel access to a wide gamut of Nvidia graphics patents which are thought to be vital to the integrated Sandy Bridge integrated CPU and GPU products recently launched. The deal also means Nvidia will have access to Intel patents.

In what has become the strategy of the main technology players in patent battles, the two firms had previously filed multiple law suits arguing for patent infringement and breaches of prior IP cross-licensing agreements. 

"We are going to build a lot more processors and they are going to integrate a lot more graphics," Huang told CNN’s Fortune. "We just thought this was a more productive way to go."

Both firms remain tense rivals, particularly given Intel’s move into integrated graphics which threatens Nvidia’s low end discreet graphics business, while Nvidia has been highly active in integrated CPU and graphics chipsets for mobile platforms with the firm’s Tegra 2. 

Nvidia also used CES as the stage to announce the firm’s intention to develop a high performance processor based on the ARM architecture for desktop computers. $1.5 billion cash as part of the deal will likely come as a welcome revenue injection to fund such development.

The level of settlement is just $100 million less than number two CPU-maker AMD’s entire fourth quarter revenue. While Intel and Nvidia have burred the hatchet, AMD faces the prospect of the arrival of a new desktop processor rival and one that has been well financed by the settlement.

AMD today announced that it would be replacing CEO Dirk Meyer in order to seek ‘superior financial return’.