Intel charged of monopolistic practices: on account of both MPU and graphics

[Hard Ball]

Intel has been formally accused by the US federal government (in addition to actions by Japanese and Korean government, European Trade Commission, and AG office of NY) of being a monopoly; on accounts of both its general purpose microprocessor, mostly in reference to its allegedly unfair practices toward AMD; as well as in its graphics/chipset business, in its alleged practices toward NV.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aMQOAaZZyGPk&pos=2
http://online.wsj.com/article/BT-CO-20091216-709759.html
http://www.forbes.com/feeds/ap/2009...rials-us-chip-makers-sector-snap_7217423.html

So it's very possible that nVidia would be getting that DMI license after all, if not voluntarily, then as a part of some coerced settlement from the Feds.

 

[Hard Ball]

And note how it comes shortly after this expansion of inquiry by the FTC:

http://www.informationweek.com/news/hardware/processors/showArticle.jhtml?articleID=222000757

Nvidia is battling Intel in a Delaware court over whether Nvidia's current license covers the new communications technology used in Intel's latest processors based on the Nehalem microarchitecture. The technology, known by the acronym DMI, is implemented directly in the processor; Intel plans to use it in future chips.

The dispute is important because Nvidia needs access to the technology to integrate its graphics processors with Intel CPUs. Nvidia in October suspended development of chipsets for Intel processors that use DMI until the dispute is settled in court.

And this comes despite the settlement with AMD. So it's pretty clear what was the final straw for the FTC.

 

[yh125d]

I don't see how it could really do much to change the chipset side of things, NV has already made the decision to drop out of chipset manuf completely right?

 

[Hard Ball]

I don't see how it could really do much to change the chipset side of things, NV has already made the decision to drop out of chipset manuf completely right?

They temporarily halted development of chipsets pending legal resolution.

Most of the time when companies halt product development waiting for legal action, it would just be blowing smoke, since the legal action most likely won't resolve favorably. But this time for NV, it is clearly not the case; they have a distinct chance, if not high probability of winning the case, or receive what they need in a settlement through FTC.

I would not be surprised if NV gets DMI license out of a quick settlement; or possibly even an QPI license, although that's slightly less useful for integrated graphics.

 

[Wreckage]

Intel will pay off NVIDIA (like they did AMD), with a chunk of money and a x86 license. NVIDIA will use the money and the license to then buy AMD.

You heard it here first!

 

[OCGuy]

AMD is already taking the hush-money on this.

 

[Acanthus]

AMD is already taking the hush-money on this.

Hush money wont stop the govt agencies that are investigating.

 

[tviceman]

Intel will pay off NVIDIA (like they did AMD), with a chunk of money and a x86 license. NVIDIA will use the money and the license to then buy AMD.

You heard it here first!

This would be great if it came true and sometime back I thought this was inevitable for Nvidia, but who knows. It would be great having a third party CPU come to the market, but I just think there would be too much R&D and risk involved for nvidia to design an x86 cpu architecture.

 

[nonameo]

This would be great if it came true and sometime back I thought this was inevitable for Nvidia, but who knows. It would be great having a third party CPU come to the market, but I just think there would be too much R&D and risk involved for nvidia to design an x86 cpu architecture.

Also, with all of the trouble that intel had with making a graphics card, I would like to assume nvidia would have trouble building an x86 cpu as well. If they did get a license, I think it would be a really long time before we saw anything from them.

 

[yh125d]

Intel will pay off NVIDIA (like they did AMD), with a chunk of money and a x86 license. NVIDIA will use the money and the license to then buy AMD.

You heard it here first!

Wouldn't NV not have to have an x86 license then if they bought AMD?

 

[Hard Ball]

Wouldn't NV not have to have an x86 license then if they bought AMD?

Actually Not at all; Nvidia would NOT have an x86 license just buying AMD, they would need to renegotiate one with Intel. Here:

http://contracts.corporate.findlaw.com/agreements/amd/intel.license.2001.01.01.html

This Patent License Agreement ("Agreement") is entered into as of
January 1, 2001 ("Effective Date") by and between Advanced Micro
Devices, Inc., a Delaware corporation, having an office at One AMD
Place, Sunnyvale, CA ("AMD") and Intel Corporation, a Delaware
corporation, having an office at 2200 Mission College Blvd., Santa
Clara, California 95052, U.S.A. ("Intel").
... ...

... ...
8.1. No Assignment. This Agreement is personal to the parties, and the
-------------
Agreement or any right or obligation hereunder is not assignable,
whether in conjunction with a change in ownership, merger,
acquisition, the sale or transfer of all, or substantially all or
any part of a party's business or assets or otherwise, either
voluntarily, by operation of law, or otherwise, without the prior
written consent of the other party, which consent may be withheld at
the sole discretion of such other party. Any such purported
assignment or transfer shall be deemed a breach of this Agreement
and shall be null and void. This Agreement shall be binding upon and
inure to the benefit of the parties and their permitted successors
and assigns.

 

[Hard Ball]

Actually Not at all; Nvidia would NOT have an x86 license just buying AMD, they would need to renegotiate one with Intel. Here:

http://contracts.corporate.findlaw.com/agreements/amd/intel.license.2001.01.01.html

I didn't mean to say that someone purchasing AMD would not have any effect on their ability to negotiate a license. If another tech firm did acquire AMD, it would be in a much better position to negotiate for a license. And Intel probably would be best served to go into a negotiated cross-licensing agreement, to avoid the label of a pure-monopoly. But NV or anyone else in that situation would still have to give substantially, probably of their own IP just to get the agreement.

But yes, this process is not automatic, without Intel consenting first.

 

[Idontcare]

Hard Ball that is the old and now out-dated contract, isn't it? They negotiated a new contract, that was part of the same settlement that resulted in the $1.25B payment to AMD. Are you sure the new contract carries the same x86 licnse transfer restrictions as the old one from 2001?

 

[nitromullet]

AMD is already taking the hush-money on this.

Hush money wont stop the govt agencies that are investigating.

Exactly why AMD took the money. A smart move IMO. Take the money, turn over evidence to the Feds, and get the same judgment at less cost.

 

[Hard Ball]

Hard Ball that is the old and now out-dated contract, isn't it? They negotiated a new contract, that was part of the same settlement that resulted in the $1.25B payment to AMD. Are you sure the new contract carries the same x86 licnse transfer restrictions as the old one from 2001?

You are right, I don't really know the details of the new contract yet.

But I assume that only Globalfoundries was added to the list of parties that could fab x86. I don't really see them changing other parts of the agreement. But who knows, they may have, and things may be different now. But even if that's the case, I'm not sure if NV or another third party would have knowledge of the details of the new agreement so soon.

 

[Keysplayr]

Wouldn't NV not have to have an x86 license then if they bought AMD?

x86 license is not transferrable through the sale of AMD to another entity AFAIK.

 

[Lonyo]

Intel will pay off NVIDIA (like they did AMD), with a chunk of money and a x86 license. NVIDIA will use the money and the license to then buy AMD.

You heard it here first!

I would wonder if they even could buy AMD given the GPU market issues.
A play for VIA on the other hand could be a double win, since part of an FTC inquiry could well force Intel to let the VIA x86 license be transferrable if it isn't currently.
Of course, the NV/VIA thing has come up in the past and never happened, but if the FTC do futz with Intel who knows?
VIA would also be significantly cheaper than AMD, and have fewer potential competition and oversight issues.
And if we end up moving to a setup where the GPU power is very important, and the CPU isn't quite as necessary, it would make even more sense, since the comparatively weak VIA CPU would be matched up with a nice beefy NV GPU.

 

[Fox5]

I would wonder if they even could buy AMD given the GPU market issues.
A play for VIA on the other hand could be a double win, since part of an FTC inquiry could well force Intel to let the VIA x86 license be transferrable if it isn't currently.
Of course, the NV/VIA thing has come up in the past and never happened, but if the FTC do futz with Intel who knows?
VIA would also be significantly cheaper than AMD, and have fewer potential competition and oversight issues.
And if we end up moving to a setup where the GPU power is very important, and the CPU isn't quite as necessary, it would make even more sense, since the comparatively weak VIA CPU would be matched up with a nice beefy NV GPU.

VIA seems like a large company (man power wise) with a load of redundancies with nvidia. They both have chipset and graphics divisions for instance. It seems like nvidia buying VIA would be a perfect way to sink the company. I guess if nvidia did buy via, they'd jettison chipset and graphics develop.

 

[ronnn]

I took this as a bit of posturing before they let intel buy nvidia.

 

[novasatori]

I took this as a bit of posturing before they let intel buy nvidia.

Do you really think if Intel is accused of monopolistic practices that they would allow it to acquire NV?
:hmm:

 

[Hard Ball]

I took this as a bit of posturing before they let intel buy nvidia.

precisely the opposite; Intel's accused of being a potential monopoly at slightly over 50% of the graphics business (considerably higher if you just look at the integrated business); it's not going to fly if they buy NV and end up with 75% of overall graphics market and well over 80% of integrated.

It's actually much more likely that Intel would go the way of (old) AT&T, and some parts of being splintered off to be acquired by other tech firms. Although it is still highly unlikely scenario. The most likely course is definitely much tighter regulations on both pricing and marketing on one hand, as well as opening up standards like x86 and QPI to more companies.

Actually this was precisely what the FTC intention was, according to Intel's general counsel Doug Molamed:

Settlement talks had progressed very far but stalled when the FTC insisted on unprecedented remedies - including the restrictions on lawful price competition and enforcement of intellectual property rights set forth in the complaint

In other words, FTC wants some type of control over the price level of intel products, and the way they use bundles and other marketing techniques. They also want Intel to be restricted in which intellectual properties it can claim or enforce, and to what extent (potentially making certain Intel IP open certain companies like NV, AMD, IBM, etc).

 

[ronnn]

Money talks and they have lots. I think intel will swallow the nvidia business one way or another. I have little faith in American anti monopoly laws and even less faith in america's ability to police the global market.

 

[Hard Ball]

Money talks and they have lots. I think intel will swallow the nvidia business one way or another. I have little faith in American anti monopoly laws and even less faith in america's ability to police the global market.

This is a different administration, and a different congress; and we are living in the post 2008-credit-crisis era. I don't think you will see the same result this time around. What just took place today would never ever have happened in 2001-2006.

Then again, ronnn, you are the consumate pssimist; what can I say.

 

[Genx87]

Wonder if this played into Intels decision to can Larry. I also wonder if a decision is rendered if it could affect AMD as well. As in a decision that CPU and GPU product lines under one company represents a market place problem by having one company control the entire platform. It will be pretty tough for Nvidia to compete with AMD and Intel once their GPU on a CPU takes off. By locking Nvidia out the market place lost competition.

 

[Idontcare]

precisely the opposite; Intel's accused of being a potential monopoly at slightly over 50% of the graphics business (considerably higher if you just look at the integrated business); it's not going to fly if they buy NV and end up with 75% of overall graphics market and well over 80% of integrated.

It's actually much more likely that Intel would go the way of (old) AT&T, and some parts of being splintered off to be acquired by other tech firms. Although it is still highly unlikely scenario. The most likely course is definitely much tighter regulations on both pricing and marketing on one hand, as well as opening up standards like x86 and QPI to more companies.

Actually this was precisely what the FTC intention was, according to Intel's general counsel Doug Molamed:


In other words, FTC wants some type of control over the price level of intel products, and the way they use bundles and other marketing techniques. They also want Intel to be restricted in which intellectual properties it can claim or enforce, and to what extent (potentially making certain Intel IP open certain companies like NV, AMD, IBM, etc).

The x86 part was exactly what my line of thinking was too when I read the FTC's and Intel's statement as well.

This is exactly where I see this headed, either forcing Intel to make its x86 license more readily available and license-able or bust them up.

In terms of busting them up there are some sizable entities that could become stand alone businesses: graphics division, x86, Itanium (no reason to keep with x86 business entity), intel capital, compiler division, chipset division.

Forcing whoever ends up with the fabs to continue to fab products for the fabless business entities would not be an issue either, precedence exists back when DEC went under and Compaq bought DEC, the DOJ required both Intel and Samsung to fab the Alpha processor for a few years after the deal was complete.