The Future

Wrapping things up, as we mentioned in our introduction this puts to rest one of the final pieces of outstanding litigation for Intel. They have settled with the FTC, they have settled with AMD, and now they have settled with NVIDIA. The only outstanding item is the EU’s fine, which may take a number of additional years to resolve, and in the meantime in light of the FTC settlement it’s hard to believe that Intel will win that battle.

At the end of the day NVIDIA is receiving 1.5 billion dollars, continued rights to make C2D chipsets, and unspecified patent protection for their ARM-based Project Denver CPU. Meanwhile Intel will continue to have access to NVIDIA’s graphics patents enabling them to produce IGPs, and some additional security in the x86 market by continuing to lock NVIDIA out of it. NVIDIA seems to have gotten the better end of the deal here, but Intel certainly got something out of the deal too.

Intel Settlement & Fine Costs
European Union AMD NVIDIA
~$1.45B
$1.25B
$1.5B

It’s worth noting that on top of the explicit costs of fighting these legal battles and the implicit costs of cross-licensing, these fights have taken their toll on Intel’s finances. They’re still a highly profitable company, but between the EU fine, the AMD settlement, and now the NVIDIA settlement Intel is on the hook for roughly 4.2 billion dollars. This is roughly the company’s net income for 2009 – or in other words so long as the company is functioning well their settlement costs are only a fraction of their profits over the past decade.

At the same time just because Intel has settled their legal matters doesn’t mean it’s smooth sailing for the chip fab company that has a design addiction. Intel is facing a competitive market in a whole new direction: mobile/SoC. x86 is firmly in their hands, but ARM and future generations of Atom are set to compete in the SoC market, and at the same time NVIDIA’s ARM-based Project Denver could upset the server market in a way not seen in years. Intel has their work cut out for them, and as we’ve seen should they falter there are plenty of other companies waiting to capitalize on the opportunity. Lawsuits, fines, and inquiries may sound scary, but the biggest threat to Intel remains all the other companies that want to take down the 800lb gorilla of the silicon world.

The Settlement
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  • AmdInside - Monday, January 10, 2011 - link

    The way I see it, Intel traded top prospect rookies in exchange for a proven star. Intel gets most of the benefits now while NVIDIA may get bigger rewards in the future depending on how they play their cards (and invest their money). Reply
  • has407 - Monday, January 10, 2011 - link

    Thanks Ryan; very good synopsis.

    "Interestingly the agreement also classifies an “Intel Architecture Emulator” as being a proprietary product. At first glance this would seem to disallow NVIDIA from making an x86 emulator for any of their products, be it their GPU holdings or the newly announced Project Denver ARM CPU. . Being officially prohibited from emulating x86 could be a huge deal for Denver down the road depending on where NVIDIA goes with it."

    At second glance the agreement would also seem to disallow it:

    1.8. “Intel Architecture Emulator” shall mean software, firmware, or hardware that, through emulation, simulation or any other process, allows a computer or other device that does not contain an Intel Compatible Processor, or a processor that is not an Intel Compatible Processor, to execute binary code that is capable of being executed on an Intel Compatible Processor.

    1.12. “Intel Compatible Processor” shall mean any Processor that (a) can perform substantially the same functions as an Intel Processor by compatibly executing or otherwise processing (i) a substantial portion of the instruction set of an Intel Processor or (ii) object code versions of applications or other software targeted to run on an Intel Processor, in order to achieve substantially the same result as an Intel Processor; or (b) is substantially compatible with an Intel Processor Bus.

    An interesting constraint, but IMHO likely to be at worst a mild speed bump. In 4-5 years we'll know better: maybe Nvidia will hit that constraint (IMHO doubtful as they'll have plenty of new workloads/apps); or the current trajectory will make it irrelevant (ok, we can't run your legacy x86 apps--who cares cuz we got plenty of other new and more important ones that people want).

    In short, that constraint appears to be Intel looking to the past and attempting to protect their legacy turf, while Nvidia looks forward and their lawyers yawn and say "yeah, whatever, talk to you in six years."
    Reply
  • vol7ron - Monday, January 10, 2011 - link

    But x86 is still a superior product. Reply
  • has407 - Tuesday, January 11, 2011 - link

    OK, I'll bite...

    What does "x86 is still a superior product" mean? That the x86 ISA is superior? That processors using the X86 ISA are superior? That specific vendor implementations of x86 ISA are superior? Or what?

    And superior to what? We have an existence proof that x86 is demonstrably inferior in billions of cases. Otherwise why don't all those billions of routers, cell phones, microwave ovens, washers, dryers, refrigerators, cars, etc. use x86 instead of Z80, MIPS, ARM, etc. and their derivatives?

    Yes, "x86 is still a superior product" in some ways and for some applications, but the area is shrinking, so be careful what ground you choose and how you choose to defend it.
    Reply
  • Tros - Tuesday, January 11, 2011 - link

    I can't tell if vol7ron is being ironic, or authentic, but this is the kind of junk I'd expect nVidia to run into for consumers.

    With retrospect, I could see the mobile-ARM market as lucrative and still booming, and the opposite of the desktop-market. Seems to me that nVidia is wagering everything, that their GPGPU + ARM architecture would beat Intel's SoC solution in terms of power-usage and parallel computation throughput.

    But vol7ron brings up a good point, that the PC-users (and gamers) really only know of x86. And it doesn't matter if there's a better architecture/SoC out there, because it doesn't run Starcraft/LabView/Fishbowl. Even with a library-blessing from Microsoft, an ARM+GPGPU system still might not be licensed to actually run what software people are locked to.

    Lord knows the developers are either slow to port across architectures (sans Apple). And nVidia is betting that somebody will take up the call for their ARM+GPGPU powerhouse. Microsoft might do it, but I've seen a lot of promising things Microsoft might do, that get axed. Apple might do it, but they've already been burned by straying from hardware too different than the norm. Linux/Android will definitely do it, but my enthusiasm for Linux distros depend on how well it runs Wine.
    Reply
  • vol7ron - Monday, January 10, 2011 - link

    The way the article is worded, it seems like NVIDIA didn't have much of a claim, but because Intel had problems with AMD, the FTC just threw them in there. Basically, it makes it seem like the FTC is the bad guy. Seriously, though, the payment to NVIDIA shouldn't be more than AMD's, but the good thing to note, is that it's not a lump sum, so the NPV isn't as high as it would be.

    As for the EU, I would say "F-them", even if it came at a cost. I'm getting sick and tired of the EU quibbles. The only reason they're stepping in is because they want a piece of the pie too. The settlement with AMD/NVIDIA should be enough.

    It might be worth mentioning that Microsoft said they're going to support non-x86 chips as well. Thinking Denver, or something ARM-based.
    Reply
  • has407 - Monday, January 10, 2011 - link

    The Intel-AMD and Intel-Nvidia disputes are completely different animals. They are completely unrelated, and involve very different laws and jurisdictions.

    Intel-AMD dispute involvea monopolistic practices and restraint of trade, which necessarily involved the FTC/EU. Intel-Nvidia dispute is a straight contact/IP dispute AFAIK.

    I don't see how that "makes it seem like the FTC is the bad guy." or how "the FTC just threw them in there" since the FTC (or EU) has no involvement in the Intel-Nvidia contretemps. Please enlighten.
    Reply
  • vol7ron - Monday, January 10, 2011 - link

    Re-read the article if you're curious about how the FTC popped in.

    It's still unclear who was in the wrong. Not saying intel is innocent, but AMD outcome didn't help.
    Reply
  • has407 - Tuesday, January 11, 2011 - link

    Ok, I get that the FTC was a lurker, and if Intel and Nvidia didn't settle, Nvidia might still goad the FTC into action to make life painful for Intel.

    What I would dispute is that the the FTC was much of a threat or substantially involved in this case, especially considering that the Nvidia-Intel spat preceded the FTC action (and was not initiated as part of an FTC complaint, although it subsequently contributed to it). The FTC effectively wemt MIA following the AMD settlement; as Ryan said "the FTC didn't get everything they wanted".

    In short, I think the FTC's actions had pretty much run their course, and their involvement (real or potential) likely had very little to do with the this Intel-Nvidia settlement. Was the FTC still a club Nvidia could weild? Maybe as an irritant to Intel, but as a substantive threat I doubt it, and this article (among others) does nothing to suggest otherwise. YMMV.
    Reply
  • vol7ron - Tuesday, January 11, 2011 - link

    Yes. I want to also say, that I was not serious about the EU comment. I'm not exactly sure what happened there and I think everyone knows EU business is important, both to intel and the global economy.

    I just re-read what was written and it seemed more sour then humorous. I hope this clarifies it was not meant to be serious.
    Reply

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