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Microsoft Corp. has an option to either acquire multimedia chip designer Nvidia Corp. or block any attempt to buy the developer of GeForce graphics chips by third parties, according to filing with Security and Exchange Commission. The possibility does not mean that Microsoft is about to acquire Nvidia or has such intentions in general.

"Under the agreement, if an individual or corporation makes an offer to purchase shares equal to or greater than 30% of the outstanding shares of our common stock, Microsoft may have first and last rights of refusal to purchase the stock," Nvidia said in the filing, dated May 27, reports InformationWeek web-site.

Redmond's purchase option automatically kicks in if a third-party offers $3.4 billion or more for the chipmaker's shares. It is unclear when the agreement was signed, but it is highly likely that the two companies inked the agreement after Nvidia became supplier of chipset for the original Xbox video game system as well as Zune personal digital media player.

Microsoft may need Nvidia in order to address the emerging market of media tablets as the company develops Tegra system-on-chip devices for such products. The chip designer would fit into Microsoft's communication market strategy that includes Skype as well as Windows 8 operating system for ARM-architecture microprocessors.

Nvidia and Microsoft did not comment on the news-story.

Tags: Nvidia, Microsoft, Tegra, Business, Geforce, Xbox

Discussion

Comments currently: 2
Discussion started: 06/06/11 04:02:13 PM
Latest comment: 06/07/11 01:37:25 AM

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1. 
Nvidia should merge with AMD, make All new products only work on AMD Systems. I think it would take about a few year for Intel to waddle away into nothing. Without Nvidia or AMD Graphics there is not much point in buying a fast cpu.

Intel needs Nvidia and AMD Graphics options to sell its systems both Workstation, Multimedia and Gaming.

It would almost be pointless for Intel to continue making high end CPU's as no one would buy one unless they were happy with Intel 3000 graphics or looking at making a rendering farm.

People overlook the value in graphics and Intel still has no competitive option of its own.
1 1 [Posted by: vid_ghost  | Date: 06/06/11 04:02:13 PM]
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2. 

This was `only` to do with the XBox way way way back in 2000 and because the new version of the XBox doesn`t use a nVidia chip i`m sure nVidia is a thing of the past to Microsoft.(while still owning their sell off rights)

Microsoft could not afford any problems with nVidia while they were the graphics chip in the original Xbox, so they made sure no one could buy nVidia.
1 0 [Posted by: efex  | Date: 06/07/11 01:37:25 AM]
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