The chief executive officer of Intel Corp. told analysts during a meeting that the reasons why graphics chip designer Nvidia Corp. accuses the world’s largest maker of x86 central processing units (CPUs) of attempting to slowdown the evolution of graphics processing units (GPUs).

“If you don’t have a microprocessor, what else do you have to sell? The graphics subsystem for most machines will be subsumed into the microprocessor. So what Nvidia is doing is making an argument to defend the status quo,” said Paul Otellini, president and CEO if Intel, during Goldman Sachs Technology and Internet Conference 2009, reports Cnet News.com web-site.

Mr. Otellini also implied that while currently Nvidia has high-performance GeForce graphics chips and Intel does not have its own discrete graphics processors, Nvidia is able to easily sell those GPUs inside Intel-based computers. However, Intel will soon have its own code-named Larrabee standalone graphics chip, whereas Nvidia will not have its own x86-compatible microprocessor.

“You can buy [a discrete graphics card] from them or you can buy it from us,” Mr. Otellini stated.

At present the only company capable of shipping both state-of-the-art central processors and graphics processors is Advanced Micro Devices thanks to the acquisition of ATI Technologies back in 2006. AMD also plans to integrate graphics cores into its CPUs.

Once central processing units get integrated graphics cores, there will be virtually no need in third-party chipsets with integrated graphics. A substantial part of Nvidia’s business depends on chipsets for AMD and Intel processors. In the end, Nvidia will have to compete only against standalone graphics cards by ATI, graphics products group of AMD, and Intel using its GeForce GPUs.

After Intel and Nvidia could not reach an agreement under which Nvidia would get a license on Direct Media Interface (DMI) bus from Intel (which effectively bans Nvidia from making core-logic sets for Intel processors with integrated memory controller), in mid-February the chief executive of the graphics company accused Intel of trying to slowdown the evolution of graphics processing units as well as Nvidia’s chipsets so to be able to control Intel-based PC platforms itself. Jen-Hsun Huang said that, given the “broad and growing adoption of Nvidia’s platform innovations”, it is not surprising that Intel is now initiating a dispute over a contract signed four years ago. According the chief of Nvidia, technologies like Nvidia Ion (integrated core-logic for Intel Atom and other processors), SLI (multi-GPU rendering), Hybrid power (ability to switch between integrated and discrete graphics core), and CUDA (programming language for GeForce GPUs) threaten Intel’s ability to control the PC platform.

Tags: Intel, Nvidia, Geforce, Nforce, Business, x86, Core, AMD, ATI, Radeon, Larrabee