In what could be termed as a seismic shift in tech industry, Intel is being reported to have either finalized or is in advanced stages of finalizing a deal with AMD for agreeing on the licensing and supply of Radeon graphics technology for its chip in future. This news will surely drop as a bombshell on NVIDIA fans and the company in particular, who until now was the main supplier of graphics technology for Intel chips. Intel chips are found in most modern day PCs along with assortment of other digital gadgets. Pinning a deal with Intel is considered one of the best news for any tech firm. This time, it appears, AMD has pulled one over its competitor Nvidia. Intel has all but inked a graphics licensing deal with AMD. According to the reports, when Intel’s current deal with Nvidia expires, AMD will take over as the main provider of graphics technology used in Intel chips. This news is broken by HardOCP’s Editor-in-chief Kyle Bennet, who claims that deal has already been closed, which comes as a huge blow to Nvidia.
The licensing deal between AMD and Intel is signed and done for putting AMD GPU tech into Intel’s iGPU
Before this alleged deal between Intel and AMD, we have already seen a trend slowly developing over the past few months in which rumors suggested that Intel has made contacts with AMD over the graphics IP deal. And this simmering of rumors appears to have reach its final fruition with this latest, almost official, claim of a deal between Intel and AMD. As they say, AMD’s gain is Nvidia’s loss.
How This Graphics Deal Between Intel And AMD Materialized
To give you some backdrop of this story, back in 2011, as tech enthusiasts might be well aware, Intel tapped Nvidia in a landmark graphics licensing deal under the terms of which Intel agreed to pay Nivida a total sum of $5 billions over the course of ensuing 5 years. But strangely enough, Intel balked at producing chips based on Nvidia’s graphics technology. On the other other side, this new reported deal between Intel and AMD points towards a future trend where Intel chips will come with AMD’s Radeon technology slotted inside them, or in part based on AMD’s patents.
In all fairness it can be said that Intel and Nvidia’s working relationship has mostly been on rocky shores with the latter constantly reproaching and suing the former for infringing upon its copyrights. This new deal with AMD will give Intel a much needed reprieve from intractable court battles with Nvidia. Irrespective of whether Intel CPUs with AMD Radeon graphics see the light of the day or not, the new deal would surely be an end of any prospect of renewal of current contract between Intel and Nvidia. At present, approximately six percent of Nvidia profits are driven by its deal with Intel.
Why AMD Over Nvidia?
AMD Radeon technology is being termed as the most groundbreaking advancement in graphical processing. Radeon technology is futuristic in its scope, which means many other tech firms with similar business models could, knowingly or inadvertently, encroach on AMD’s patents and copyrights which might result in legal battles and court fines. In order to give itself a legal cover, Intel has decided to tap AMD over Nvidia to provide the company a bulwark against potential litigation and copyright infringement claims and accusations. Intel’s previous deal with Nvidia was also based on the same premise, as it paid Nvidia to protect itself against legal issues with Nvidia. And the money which Intel paid Nvidia back in 2011 was in part to settle a lawsuit with Nivdia over patent infringement.
AMD and Nvidia command a massive portfolio of patents related to graphics technology amassed over the previous two decades. Since most modern graphics chips required, directly or indirectly, some of the technology owned by either AMD or Nvidia in one way or the other, it becomes kind of a real conundrum for tech firms to produce graphics cards that don’t infringe upon the patents owned by AMD and Nvidia. Which leaves most tech companies with only one recourse and that’s to pen a deal with AMD and Nvidia to avoid stepping onto a potential legal battlefield.
Kevin Krewell, Forbes
With the complexity of PC graphics, it’s impossible to build a graphics processor without infringing on any number of patents from both AMD and NVIDIA, because the two companies dominate the PC graphics technology.
[…] As such, Intel lags on graphics IP and in order to build integrated graphics, Intel has no choice other than to infringe on a number of existing graphics patents. As part of the 2011 legal settlement with NVIDIA, Intel took the opportunity to sign a patent license agreement within NVIDIA to cover graphics processing. If Intel now signs a patent agreement with AMD, Intel could let the NVIDIA license agreement expire and be replaced by this new AMD agreement.
Now comes a big question as to why Intel overlooked Nvidia in favor of AMD? The answer lies in many reasons. Chief among which include better deal terms for Intel. Another reason is the past working record of Intel and AMD who have collaborated on the CPU industry standards with an agreement over x86 cross-licensing still in place, so they are no strangers to working with each other. Considering all this, it makes sense why Intel has gone with AMD instead of Nividia over the new graphics licensing deal.
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