Nvidia on ATI: "basically throwing in the towel"

by Ludwig Kietzmann { Jul 25th 2006 at 4:55PM }

It seems that graphics powerhouse Nvidia is reacting rather well to news of AMD scooping ATI off the corporate shelf and filling in coupons to the value of $5.4 billion at the checkout counter. Speaking to BusinessWeek Online, Nvidia CEO Jen-Hsun Huang described the purchase as a "gift", presumably whilst reclining in a henhouse, sipping cocktails and counting objects of some kind. He went on to say that ATI was "throwing in the towel, leaving us as the only stand-alone (graphics chip) company in the world." Of course, not being a stand-alone graphics chip company hasn't stopped Intel from competing in that market, so perhaps winning the "who can be the last stand-alone company" competition isn't all that important.

More importance can be found in the repercussions of such a large purchase. There are concerns that AMD's debt-to-capital ratio might take a turn for the worse after the company took out a $2.5 billion term loan to cover some of the purchase. Intel and Nvidia's chummy relationship may also prove to be a stumbling block should ATI's graphics chips ever be locked out of Intel machines. Still, AMD cautiously considers the potential benefits, such as major cost reductions and an entry point into the Intel-dominated laptop arena, to be worth the price and effort.

Mr. Huang's expectations may turn out to be accurate in the long run, but in an industry that was once ruled by 3dfx Interactive (remember Glide?), anything can happen.

Tags: 3dFX, AMD, ATI, CPU, GPU, Graphics cards, GraphicsCards, Intel, Jen-Hsun Huang, Jen-hsunHuang, Nvidia

Reader Comments (Page 1 of 1)

Jeffe @ Jul 25th 2006 5:09PM

Are those eyebrows painted on?

If so, they need more paint.

Ervin @ Jul 25th 2006 5:14PM

i remember the first time i got my new voodoo card and fired up quake 2. i was blown away! those wonderful bubbles off the rail gun were so sweet!

SuicideNinja @ Jul 25th 2006 5:19PM

I'm actually waiting for AMD's stock prices to dive a bit so I can make a purchase.

In the end, I see it as a positive thing. Although the elitist PC gamers would argue, I have no problem with ATI and I think combined with AMD we will see some powerful and quality products from them.

I'm more interested in what will happen with the Xbox 720 and PS4D with this change. Think we'll see AMD-powered consoles in the future?

Greg2k @ Jul 25th 2006 5:35PM

The 3DFX VooDoo 2 was simply awesome. I can't forget the first time I fired that baby up. Damn that was a shocking improvement.

vaylen @ Jul 25th 2006 5:38PM

Don't expect intelligent posts from the fanboys here unless the article somehow rips Sony, Nintendo or Microsoft... then you'll get 80 posts in an hour.

Personally I think nVidia is going to have a very lucrative future in light of this merge. And as that relates to the console world, that's good news for Sony and bad news for ATI and Microsoft.

jordan @ Jul 25th 2006 5:42PM

honestly, i don't see how this merge is bad AT ALL, the two companies put out great products, no one knows how the actual deal is, ATI may still release things for other boards etc. kinda like how Dell bought Alienware etc., since one big company bought another successful company, if they combine resources, that could also mean cheaper priced cards for ATI users, and hurt Nvidia...

student @ Jul 25th 2006 5:56PM

This could be dangerous waters as it would isolate Nvidia into an alliance with Intel. And after seeing Intel's newest processors demolish the AMD offerings, it looks like a Nvidia/Intel team could manhandle ATI/AMD.

Still, time will reveal.

bill @ Jul 25th 2006 6:02PM

Intel and Nvidia's chummy relationship? You morons, Intel hates Nvidia, and vice versa. SLI doesn't work with the newest conroe boards for that very reason, or dunno, the fact ATI and not Nvidia had a Intel chipset license?

Intel isn't chummy with anybody, but they've definitly preffered ATI in the recent past.

Now, people are assuming that might change in the future because of the ATI/AMD deal, obviously. But your qoute was reffering to currently, where anyone with an iota of knowledge of the PC market knows Intel and Nvidia are not "chummy", to say the least.

Joystiq editors, not that knowledgable. Except maybe, how great the Nintendo DS sells in teh Japan!!111. I bet you guys are real good at that, like every other stupid videogame site that are Nintendo fanboys.

Darth Pixel @ Jul 25th 2006 6:04PM

There was too much cash in this deal.
Key people at ATI are going to check out and AMD will be left with a zombie company.
Few big mergers actually work.

My favorite sequence: Compaq buys Digital, HP buys Compaq...result: HP can't even compete with Dell and is still considered a wannabe in the PC market.

In fact, most big mergers end up creating internal wars that cripple the parent company.

I really hope it goes differently for AMD. The potential is enormous, but pulling it off is going to be hell.

Duscrom @ Jul 25th 2006 6:30PM

Yeah, Remember nVidia bought out 3DFX.... and then the project that was supposed to use that combined technology.. was... almost a failure for nVidia.

But, if i was gonna say nVidia was Chummy with anyone it'd be AMD. FOr a long time, nForce boards ONLY supported AMD chips.. and still if your into performance, you go for an nForce board if you have an AMD chip.

Now what i do ponder as interesting, is that.. with ATI apart of AMD, could that mean AMD is trying to take on intel directly, with an inhouse company developing the core logic for the AMD platform, and integrated graphics?

I read earlier that intel integrated graphics are in alot of PCs... Thatg's how this deal could be most lucritive for both parties involved. If, though ATI, AMD can make their own core logic boards and sell their own Mobos.. then you get an integrated ATI chip.. which don't suck at gaming.... ATI makes more money, AMD makes more money.. and nVidia is the only 3rd party.

arrakisman @ Jul 25th 2006 6:43PM

On a side note... I am sure that Matrox is still making chips. Although no where near in the race any more, Nvidia is not the "only" one left.

Rask @ Jul 25th 2006 6:44PM

#9 - Are you stoned?

HP may be behind Dell in the consumer arena but in the business world and server arena, HP is doing great.

As for mergers that have worked out, I'd point to Symantec/Veritas, HP/Compaq works well as well(much better than I ever anticipated when it happened).

I'm not afraid for AMD/ATI.

Shagi @ Jul 25th 2006 6:45PM

Since 3d accelerator cards will be useless in like 5 years, ATI had to make this move. Intel is already hard at work throwing away the x86 architecture for something more like the cell that sony has developed. The graphics will be integrated into the processor beacuse the processors are supposed to be better at Graphics than modern GPUs are...I think i read somewhere that one of these new processors can handle the same things as a seperate GPU only using a quarter of the power to accomplish it. Something to do with the Graphics actually being integrated into the core itself and memory access among other things.

Honestly I don't see how this could bode well for NVidia at all AMD and ATI will stay alive to compete with intel in the next 5 - 10 years...but unless NVidia expandes into a CPU company or merges with Intel...I dont see how Nvidia will be around in another 5 - 10 years.

Believe it or not the days of the stand alone video card are almost numbered. NVidia has a little more time to figure out how they are going to change, and until then we can look forward to at least 3 more new chipsets from each. But with ATI poised to take back the performance crown with its next chip, Nvidia will already be 18 months behind.

Lots of people think NVidia will be doing well besides just the president of NVidia...I just don't see how you could see it that way.

Greg @ Jul 25th 2006 6:50PM

Damn i guess in my next update i have to update my hardware plans....As a faithful AMD(3800X2) and a loyal Nvidia fan(7800GT) Im thinking that there's a possiblity that it might come out cheaper if they combine, with more power of course...

I wouldve thought that they would have joined with Nvidia because together they're a lot faster than their rivals..(execpt notebooks).

skyrous @ Jul 25th 2006 7:17PM

Work this out logically:

AMD buys ATI. so Nforce goes away correct?

As Nforce is THE only athlon chipset that has never given me crap why do I buy an AMD chip next time?

Looks like I will have to start checking out intel.

nootau @ Jul 25th 2006 9:04PM

Nforce for the AMD platform isnt going away, Nvidia makes a ton of money off of that chipset line, they'd be stupid to end it. Just like Nvidia makes chipsets for Intel, and yet Intel also has a (GPU) video card business (for those who didnt know). AMD wanted ATI for two major things.....the cellphone/PDA market (ATI was making big inroads into the cell/portables market..) and the possiblity of a GPU socket and/or GPU on die. A GPU socket opens up alot of interesting oppurtunities, such as a Physics processor (http://techreport.com/onearticle.x/8887) or sound processor (http://www.xbitlabs.com/news/video/display/20060525160449.html)

Nvidia wont abandon the AMD platform nor will AMD lock Nvidia out. That would be an unfair trade practice and AMD doesnt want to get sued.....that would be like Intel locking out both ATI and Nvidia from its platform and only using their Video GPU technology...wont happen.

This is good news for everyone. the possiblities of a GPU socket are mind boggling....from cheap upgrades, to PPU or DSP (sound) processor...etc. while still having the option for your SLI/CrossOver PCI express cards!

J.Goodwin @ Jul 25th 2006 10:10PM

Did you really expect Jen-Hsun to say anything different?

Check out "Opening the Xbox" if you want more of his snarky commentary about rival 3d graphics companies.

Waccoon @ Jul 26th 2006 6:36AM

Shagi: "Since 3d accelerator cards will be useless in like 5 years, ATI had to make this move."

Wow. I haven't heard the term "3D accelerator" in a long time.

I don't really understand this merger. CPUs and GPUs are sharing the same responsibilites at the core level these days, but the methods they go about doing it are wildly different, to say nothing about bus architecture. Cell isn't what I would call an ideal solution by any means, and I sure hope AMD isn't going in that direction, at least until vector tools become as mature as the hardware. AMD buying Ageia sounds more practical (and I'm sure that's what Ageia was counting on. I doubt that company will make it).

Then again, the high-end CPU/GPU market is little more than bragging rights. Mainstream all-in-one devices is where these companies make their money (refer to Arrakisman's comment about Matrox). By owning ATI, AMD could make some cool multifunction chips without having to worry about so much political and licensing BS (unlike MIPS or ARM, you can't exactly license an AMD/ATI core. Putting an x86 into a game console isn't fun).

Frankly, though, I think CPUs should be scalar units and GPUs should be vector units. Having a CPU company own a GPU company is a little odd. Weird things are happening.

miichael @ Jul 26th 2006 7:20AM

I think I am just unluck with nvidia cards
they are the ones i spent most time reading up on which to get and spending money on. but dont last long die under little use.
ATI has always been a rock solid reliable cards for me
my AMD CPU has survived some stuff most CPU melt at. I love me barton chip.

good merger
2 good companies

Coyote @ Jul 26th 2006 9:59AM

"should ATI's graphics chips ever be locked out of Intel machines."
I dont see this as even remotely possible, Intel cant just block out a competitor even if they have a deal with nVidia it just screams "sue me".

But I dont think AMD has anything to worry about esspecially with the new Dell deal and being offered to more people than ever before. I just hope ATI keeps their drivers up to date through all this.

J.Goodwin @ Jul 26th 2006 1:02PM

Neither Intel nor AMD has any real control over the vast majority of motherboard manufacturers. Since the motherboard marketplace is highly competitive, you're going to continue to see boards from Soyo, SiS, ... whoever, that will support whatever combination of hardware that you prefer.

It would be a much bigger deal if AMD had bought Intel's Power architecture. Then you could talk about some serious changes coming down the pipeline (particularly as Microsoft, IBM, and ATI continue to mature the multi-core CPU and integrate the GPU into it). That crew could realistically come out and offer an alternate architecture vs the Intel / clones environment that exists now.

They could make that a Windows Vista platform, provide the XNA compilers and development software to make it a realistic possibility to code for intel and power multi-core simultaneously, and build the motherboards and integrated video needed to sell a three hundred dollar PC that would actually scream.

But that isn't happening.

Ludwig Kietzmann @ Jul 26th 2006 1:22PM

Dear Bill,

Considering that nVidia has signed a cross-patent agreement with Intel, become involved with their Intel Solutions Summits and collaborated on Intel NFORCE boards, I don't think calling them friendly towards each other (that's what "chummy" means) is inaccurate. nVidia's certainly more friendly towards them than say, ATI.

There are more ways to look at this, certainly, but since you quickly fall into a pattern of hostility, I'm guessing you can't discuss them like a rational human being. As for Nintendo fanboys, well, I'd say someone throwing a fit about that in a post about PC hardware manufacturers is bit more dubious. If you don't like us reporting on the DS doing well (a fact, by the way) then please, visit Microsoft or Sony's websites. You probably won't find any of that stuff over there.