Intel has reportedly finally sealed a deal with AMD to license Radeon graphics technology from the Sunnyvale based chipmaker. Intel's previous licensing deal with NVIDIA ended in March and to prevent any litigatory gaps from occurring the chip giant has reportedly already begun paying licensing revenue to AMD. An announcement of the new deal is expected to take place at both companies' Q2 earnings releases.

This development comes after rumors surrounding a graphics licensing deal with Intel and AMD had been circulating for months.

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Why Intel Licensed IP From NVIDIA To Begin With

In 2011 Intel signed a graphics licensing deal with NVIDIA which included a $1.5 billion dollar payment made over five years. The deal was never intended to allow Intel to actually make any graphics chips with NVIDIA technology, rather it merely served as a shield against patent infringement litigation.

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The purpose of the new graphics licensing agreement, just like the original, is to protect Intel from patent trolling. The deal that the company signed with NVIDIA in 2011 was actually to settle a lawsuit by the latter over claims of patent infringement.

Both AMD and NVIDIA hold a massive portfolio of patents developed over decades that have defined modern graphics architectures Due to the complexity of modern graphics chips, for Intel or any other company to attempt TO build its own it would have to navigate through a legal minefield. The only way to come out at the other end in one piece is to make a deal with either of the two big graphics players.

The million dollar question is why did Intel dump NVIDIA in favor of AMD? Well, there are a few potentially good reasons. One safe bet is that Intel's deal with AMD is more than just a litigatory shield. It's possible that AMD may actually allow Intel to leverage its patents and technologies in its graphics products. Another possible reason is that, despite the companies' strong rivalries, they actually have a long history of working together.

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Evidence of this is abundant on the CPU side where both Intel and AMD have developed many CPU industry standards over the years that they cross-license between them. They have a long-standing x86-64 cross-licensing agreement and it would make sense that Intel would want to strike a similar deal on the graphics side.