Intel, Nvidia Chip-Set Dispute Goes to Court

Intel and Nvidia, which are increasingly looking like bitter rivals instead of technology partners, are now involved in a court dispute concerning the rights of Nvidia to develop chip sets for Intel's new and next-generation processors. While Nvidia claims it has the right to make these compatible chip sets, Intel counters that Nvidia does not have the right to manufacture chips sets that work with its Nehalem-based processors.

Intel and Nvidia are involved in a court battle about whether Nvidia has the right to develop and manufacture chip sets for Intel processors based on its newer "Nehalem" microarchitecture.

On Feb. 16, Intel filed a lawsuit in Delaware state court and asked a judge to determine whether graphics maker Nvidia has the right to develop chip sets for Intel processors that are based on Nehalem and offer features such as an integrated memory controller. Intel and Nvidia had signed an agreement in 2004 that allowed Nvidia to make compatible chips sets for Intel processors.

Intel claimed the 2004 agreement does not cover processors based on Nehalem or future generations of processors based on different microarchitecture designs. Nvidia countered that the agreement with Intel does allow it to continue to make chip sets for these future generation of CPUs.

The Intel and Nvidia lawsuit went unnoticed until Feb. 18, when Nvidia issued a statement defending its position. Nvidia claimed the lawsuit does not affect chip sets that are already shipping.

"We are confident that our license, as negotiated, applies," Nvidia CEO Jen-Hsun Huang wrote in a statement. "At the heart of this issue is that the CPU has run its course and the soul of the PC is shifting quickly to the GPU [graphics processing unit]. This is clearly an attempt to stifle innovation to protect a decaying CPU business."

In an e-mail, Chuck Mulloy, an Intel spokesperson, said the lawsuit has been sealed since it involves proprietary intellectual property for both companies. However, Mulloy confirmed that the lawsuit asks a judge to determine if the 2004 agreement allows Nvidia to make chip sets for Nehalem-based processors.

"Intel has been in discussions with Nvidia for more than a year attempting to resolve the matter but unfortunately we were unsuccessful," Mulloy wrote in an e-mail to eWEEK. "As a result Intel is asking the court to resolve this dispute. It is our hope that this dispute will not impact other areas of our companies' working relationship."

At the heart of the lawsuit is an increasingly bitter rivalry between Nvidia and Intel that could have a major impact on the computing industry and the way future PCs and other devices are developed.

Nvidia increasingly sees computing as defined in terms of graphics and the company has been touting its GPUs as the way to offer a better user experience. Nvidia also sees graphics as a more powerful engine for running certain types of applications, such as those found in high-performance computing, and the company has offered GPUs to suit the needs of the industry.

In addition, Nvidia is looking to enter the "netbook" and mininotebook market with a platform called Ion, which combines the Intel Atom processor with Nvidia's graphics chips and chip set. Intel helped create the netbook market with its Atom processor and a number of other companies are now looking to enter the market.

Nvidia also scored a major coup earlier in 2009 when Apple announced that its new MacBooks would use an Nvidia chip set for graphics instead of Intel's chip set.

At the same time Nvidia is looking to make inroads in the computing space, Intel is looking to expand into graphics-an area where the company has not been as successful.

That could change when Intel brings its long-awaited "Larrabee" processor to market either later in 2009 or in 2010. Here, Intel's approach to graphics differs from Nvidia's designs in that Larrabee will be based on x86 processing cores instead of graphics cores.

Intel said it believes its approach will make it easier for developers to create applications, since it is using traditional x86 architecture. In addition, Intel is also looking to launch processors later in 2009 that will combine the CPU and GPU on the same piece of silicon, which has the potential to push Nvidia's chip sets out of the PC market.

In his e-mail, Mulloy declined to address the issue of CPU versus GPU that Huang mentioned in his statement.

The lawsuit between Intel and Nvidia has been filed in the Delaware Court of Chancery. No specific hearing date has been set.