Transmeta on Thursday said that it had entered into agreement with Nvidia Corp. and granted the graphics chip developer a non-exclusive license to Transmeta’s Long Run and LongRun2 technologies and other intellectual property, which includes computing technologies, for use in connection with Nvidia products.

Under the agreement, Nvidia agrees to pay Transmeta a one-time, non-refundable license fee of $25.0 million. The agreement also includes mutual general releases of all claims by both parties. The agreement grants to Nvidia a non-exclusive and fully paid-up license to all of Transmeta’s patents and patent applications, and a non-exclusive license and transfer of certain Transmeta advanced power management and other computing technologies.

Transmeta these days primarily specializes on creation of power-saving technologies and licensing them to other companies. But several years back Transmeta developed, built and sold its own computing products: central processing units with VLIW architecture that were compatible with Intel’s x86 instruction set with the help of code-morphing software.

It is completely clear why Nvidia needs technologies that are designed to reduce power consumption of its chips, however, it is uncertain how Nvidia can take advantage of Transmeta’s computing technologies IP portfolio.

“We are very pleased to have achieved this license agreement with Nvidia,” said Les Crudele, president and chief executive of Transmeta. We believe that this agreement both illustrates the value of Transmeta's intellectual property and technologies to our industry and realizes for Transmeta stockholders an immediate return from the strategic licensure of our intellectual property rights.