Surprise! It's AMD!

A deal between Intel and AMD for licensing graphics technology may have already been signed, according to a rumor going around. Intel will supposedly use AMD GPU technology and integrate it into its own chips, starting next year.

There’s no official confirmation of this just yet, and the original source of the rumor is only one single industry watcher, albeit quite a credible one. However, suspicions that such a deal might be in the works have been going around for a long while now, and the timing of this latest rumor seems particularly interesting. A deal between the two traditional competitors, aimed at competing with their common enemy Nvidia, might provide large mutual advantages for both companies.

In an analysis of the potential deal that the two companies may reach, Forbes’ Kevin Krewell shows how Intel may be poised to strike a deal with AMD. For years now, the largest chip-maker in the world has relied on a patent cross-licensing deal signed with Nvidia back in 2011, which allowed Intel to use graphics technology in its processors. However, that deal, which saw Intel pay Nvidia $1.5 billion, is about to expire next year, leaving Intel open to litigation if it doesn’t re-license its technology.

All the while, Nvidia has grown to be a real competitor in self-driving cars, machine-learning, and other developing fields, widely viewed as strategically important for the future. As such, Intel would likely be resistant to continue any agreement and infuse its rival with more money.

On the other hand, AMD has been struggling financially for a while now and could desperately use a cash injection to further its R&D budget and allow the company to continue to compete. A deal between the two, either a simple patent cross-licensing, or a more complex version which would see Radeon tech embedded in Intel chips, might be a huge win for AMD.

Radeon Technologies Group (RTG), a subsidiary of AMD, and the company responsible for handling Microsoft’s and Sony’s console accounts, seems like a prime candidate to handle such a deal. RTG has already proved it can handle a firewall between companies, like it does with the console-makers, so keeping Intel and AMD’s chip business separate may simply be another step on that path.

Then again, this would be a challenge on another level, and both Intel and AMD may decide that the risks are too great for such a close partnership, resolving to only do a simple cross-licensing agreement, which would see AMD get some much-needed cash, and allow Intel to protect itself from lawsuits.

In either case, we’ll have to wait for the two companies to actually confirm or deny any collaboration, which could happen at almost anytime between now and early next year.

Source: Forbes