Chip Wars: Intel to Pay Nvidia $1.5 Billion

Intel agrees to pay rival chipmaker Nvidia $1.5 billion

By Scott Budman
|  Monday, Jan 10, 2011  |  Updated 2:10 PM PDT
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Chip Wars:  Intel to Pay Nvidia $1.5 Billion

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A long-running, bitter feud - call it the Silicon Valley version of the Hatfield-McCoy skirmish - has come to a head today.  Intel, the world's biggest chipmaker, agreeing to pay rival chipmaker Nvidia 1.5 billion dollars in a settlement.

The payment is part of an agreement between the two companies.  The deal includes a cross-licensing agreement and it brings a resolution to several disputes that hung over both companies, and the chip business as a whole, for years.  

At the center of the agreement is Nvidia's graphics chip technology.  It's what powers your video games, and it's been rumored that it's the crown jewel that Intel has wanted to add to its CPU technology.  Since AMD bought Nvidia's graphic chip rival ATI for big money, many have speculated that an Intel-Nvidia deal would be next.  Instead, the rivals and neighbors have just kept on fighting.

The 1.5 billion, according to the deal, will be paid by Intel over 5 years. All claims the two companies have against each other have been dismissed.  Not sure how this will affect movement in Intel (INTC) stock, but look for Nvidia (NVDA) to get a boost.

Scott's updates can be found on Twitter:  @scottbudman

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