Monday, January 10th 2011
Intel to Pay NVIDIA Technology Licensing Fees of $1.5 Billion
NVIDIA announced today that it has signed a new six-year cross-licensing agreement with Intel. For the future use of NVIDIA's technology, Intel will pay NVIDIA an aggregate of $1.5 billion in licensing fees payable in five annual installments, beginning Jan. 18, 2011. NVIDIA and Intel have also agreed to drop all outstanding legal disputes between them.
"This agreement signals a new era for NVIDIA," said Jen-Hsun Huang, NVIDIA's president and chief executive officer. "Our cross license with Intel reflects the substantial value of our visual and parallel computing technologies. 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."
Under the new agreement, Intel will have continued access to NVIDIA's full range of patents. In return, NVIDIA will receive an aggregate of $1.5 billion in licensing fees, to be paid in annual installments, and retain use of Intel's patents, consistent with its existing six-year agreement with Intel. This excludes Intel's proprietary processors, flash memory and certain chipsets for the Intel platform.
The existing agreement is to expire March 31, 2011.
Pursuant to U.S. GAAP, a portion of the proceeds will be accounted for and attributed to the settlement of prior legal claims. This amount, which NVIDIA anticipates to be less than $100 million, will be included in the company's fourth-quarter results.
The balance of the licensing fees will be accounted for on a straight-line basis over the six-year term of the agreement. Accordingly it is anticipated that this would amount annually to approximately $233 million of operating income and an increase in net income of $0.29 per diluted share, on a full year basis.
"This agreement signals a new era for NVIDIA," said Jen-Hsun Huang, NVIDIA's president and chief executive officer. "Our cross license with Intel reflects the substantial value of our visual and parallel computing technologies. 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."
Under the new agreement, Intel will have continued access to NVIDIA's full range of patents. In return, NVIDIA will receive an aggregate of $1.5 billion in licensing fees, to be paid in annual installments, and retain use of Intel's patents, consistent with its existing six-year agreement with Intel. This excludes Intel's proprietary processors, flash memory and certain chipsets for the Intel platform.
The existing agreement is to expire March 31, 2011.
Pursuant to U.S. GAAP, a portion of the proceeds will be accounted for and attributed to the settlement of prior legal claims. This amount, which NVIDIA anticipates to be less than $100 million, will be included in the company's fourth-quarter results.
The balance of the licensing fees will be accounted for on a straight-line basis over the six-year term of the agreement. Accordingly it is anticipated that this would amount annually to approximately $233 million of operating income and an increase in net income of $0.29 per diluted share, on a full year basis.
31 Comments on Intel to Pay NVIDIA Technology Licensing Fees of $1.5 Billion
not to mention their shit drivers - all nvidias old drivers are useless for their older hardware
Also they realised that Larabee was screw up, so they now learn from Nvidia's patents, to revive it. They should call their next GPU a FrankenGPU - It's aliveeeeee:roll:
btw this deal was nothing new, intel just extended their deal, and the deal have running since 2004, but i'm really curious if intel have access to nvdia patent then why they still making shity GPU ?
both parties sharing, but nothing states what each is sharing.
would be good to see nv do the mobile board chipsets with intel cpu and intel doing the desktops for nv aic and igpgpu. how good would it be to have sli power on tap when you need it but igp power draw when your not gaming.
"green" is the current focus of PC's atm, and dedicated GPU's are an easy target
Some competition from nVidia on the chipset front might mean we would stop seeing chipsets with only 16 PCI-E lanes for graphics cards, forcing x8/x8 operation with two graphics cards and no chance of 3+ graphics cards. Even back in the 775 days nVidia's lowest end chipset had x16/x16 support. That was one of the reasons I like 750i. It was as cheap as P45, provided all the same features, but provided x16/x16 graphics slots. It just didn't overclock as well as P45.I don't think Intel paid nearly as big as many believe, if they paid at all. All Intel paid out was in legal fees to keep the legal despute about the new sockets going, forcing nVidia to pretty much have to give SLi support to Intel chipsets to keep SLi a viable option. Loosing SLi support on the biggest highest performing platforms while ATi had Crossfire support would have been a killer blow to nVidia. And the licencing fees are paid by the motherboard manufactuers, not Intel.
So, nvidia will not give out their gpu design patent to Intel.But Intel does has access to nvidia software, drivers, etc...
...I see Intel will make use CUDA-compatible products...
So when one violates a contract, they can plead to the judge that the terms were different, or not exactly as written.
Personally, the part that most interests me is that although it may seem that each is limited in thier access, tehy are also given 60 days to "fix" and potential breach of the contract. This means that contract can be breached, as long as both sides agree to settle the breach and how it's ahndled within that 60 day period.
Both parties stand to benefit largely from this agreement. The only thing that's different is that for sure nVidia is not able to make chipsets for IMC-based Intel products.