The Intel v Nvidia rivalry is certainly entertaining, and more likely a good thing fir the industry than the tame affair between Motorola and IBM back in the PowerPC days.

Intel recently filed a lawsuit with the Court of Chancery in the state of Delaware against Nvidia, asking the court to declare that Nvidia is not licensed to produce chipsets that are compatible with any Intel processor that has integrated memory controller functionality, such as Intel’s Nehalem processors, and that Nvidia has breached its agreement with Intel by falsely claiming that it is licensed. Jen-Hsun Huang, president and CEO of Nvidia, has exclusively sat down with Digitimes to discuss why he believes the lawsuit is groundless, and the importance of the case for the future of the industry.

If the courts rule in favor of Intel it could mean that Nvidia would not only be out of the high-end Nehalem-generation (Bloomfield) segment which utilizes Intel’s new QPI bus, which Tom Peterson, director of Technical Marketing for MCP products said in August 2008 the company had no plans to enter, it would also be officially prevented from supporting even CPUs that do not rely on QPI, including Lynnfield for mainstream/low-end desktops, Clarksfield for notebooks, and likely even Lincroft, the next-generation Atom series.

In effect the ruling could significantly reduce the scope of Nvidia’s ability to continue developing chipsets for the Intel segment, at least until a new agreement is signed.

“The disagreement is over the fact that they (Intel) don’t believe we have the right to design chipsets for CPUs with integrated memory controllers, which we do,” said Huang. “Nvidia entered into an agreement in 2004 in order to bring platform innovations to Intel CPU based systems, and in return, Intel took a license to our rich portfolio of 3D, GPU, and other computing patents.”

Huang revealed that the agreement made with Intel is “broad” and does not go as far as to name specific technologies. In fact, some of the technologies did not even exist at the time when the agreement was signed, Huang pointed out.

Nvidia has not yet produced or announced any disputable products, and therefore cannot understand why Intel has taken such hostile action, said Huang. Huang pointed out that the trigger point to the disagreement appears to have been Nvidia’s announcement of the Ion platform.

Huang stressed that Nvidia has been supporting Intel CPUs under the current agreement for several generations, and said that its current generation of chipsets, which support FSB-based CPUs including Atom, Celeron, Core 2 Duo and Core 2 Quad, are not affected by the dispute. Nvidia’s motherboard, notebook and system partners currently using these products will not be impacted by the case, Huang reiterated.

Huang said he is confident that the courts will ultimately find that the current license agreement does give Nvidia rights to produce chipsets that support Intel CPUs with integrated memory controllers. Huang added Nvidia will not back down because of the court filing and is not afraid of Intel. This case is about the future and Nvidia’s ability to continue to innovate and make a difference in the industry by creating its own products, not just those that Intel allows it to create, Huang said.

In other news, Huang also revealed that Nvidia will launch an Ion platform (Ion 2) supporting VIA Technologies’ Nano CPUs in 2009. The platform is already in development, he added.

This could extend Apple’s head start even more.

I guess it could also hurt OpenCL, though.

I am not so worried about Apple’s relationship with Intel since they’ve already told Intel where to go twice in recent history!