News.blog: Nvidia rumoured to be making CPUs

Rumours flew this week, prompted by a report on the Inquirer, that Nvidia is considering a plunge into that rare club of x86 CPU companies.

The report claimed that Nvidia, which currently makes graphics chips and chipsets, recently launched a design project to develop its own CPU based on the x86 instruction set that Intel and AMD's processors also use. The thinking is that with AMD's purchase of ATI, and Intel's hints about further integration of the PC processor and graphics chip, Nvidia needs to be prepared for an era of integrated designs that would relegate its own discrete graphics chips to a smaller market.

The problem with the theory is that Nvidia doesn't have a licence to make x86 CPUs. Intel controls those patents and has cross-licensing agreements in place with only three companies: AMD, IBM and National Semiconductor. Nvidia does have a licence to Intel's front-side bus so it can build chipsets for Intel's processors, but the CPU licence is a whole other story.

Nvidia would potentially be exposing itself to legal action from any companies with x86 CPU patents if it went down such a road, but they could also try and work out a licensing agreement long before such a chip ever came to life.