Processor giant Intel (NASDAQ:INTC) has sued graphics and PC platform expert NVIDIA (NASDAQ:NVDA) over a breach of license terms. Essentially, Intel has claimed the license agreement between the companies does not extend to Intel's new Nehalem CPU technology. The company had a similar lawsuit against chipset designer Via Technologies earlier in the decade, which ultimately cost Via much of its business to equipment manufacturers. Will NVIDIA suffer the same fate? Time to delve into that question -- in the style of last summer's blockbuster The Dark Knight.
INT-GRIMY HOTEL KITCHEN-NIGHT
A contentious meeting of the major chipmakers. INTEL and NVIDIA face each other tensely at opposite ends of the table. Intel waits for the noise to subside.
NVIDIA: We had a deal, man!
Intel: We did, and we still do. But you have overstepped your boundaries, my friend.
NVIDIA sighs.
NVIDIA: Look, a chipset is a chipset and a license is a license. I'm not paying another license fee just to support a slightly different processor design.
Intel: "Slightly different?" Ha! Nehalem brings the memory controller into the processor itself. It's making your grand old memory-management parts obsolete. It's a big deal, and you'd better pay up.
Agitated CHATTER. Advanced Micro Devices (NYSE:AMD) NODS and SMILES. Dissension in the ranks.
Intel: I've been trying to settle this matter in good faith, NVIDIA. But you don't return my calls, and we're not even Facebook friends anymore. That hurts. I'm bringing in the big boys.
From the back of the room comes LAUGHTER, growing and growing. All eyes turn to:
THE DELAWARE COURT OF CHANCERY. Sweaty clown makeup obscures the AWFUL SCARS which widen its mouth into a PERMANENT, GHOULISH SMILE.
NVIDIA: We are confident that our license, as negotiated, applies! The CPU has run its course, and the soul of the PC is shifting quickly to the GPU. This is clearly an attempt to stifle innovation to protect a decaying CPU business!
Intel: Remember VIA? They were big in Intel chipsets way before you came in. Then, they wanted to keep that gravy train rolling without paying more for a Pentium 4 license. We ramped up the legal pressure, and equipment manufacturers abandoned them. Face it, we hold the power. (Snickers.)
VIA, sitting next to AMD, nods, trembling in traumatized fear.
Intel: Same story, different names. Do you really want to end up in bed with your biggest graphics rival, just to save a few bucks on chipset licenses? Better to pay up and go on your merry way, no?
NVIDIA: Forget it! My customers will back me up, and you really don't want to mess with both Dell (NASDAQ:DELL) and Apple (NASDAQ:AAPL).
At a nod from INTEL, The COURT OF CHANCERY approaches NVIDIA and pulls out a freshly sharpened pencil.
Court: Anybody want to see a magic trick? I'll make this pencil disappear.
Fade to black.
Why so serious, Fool?
