Nvidia has responded to claims by Intel that a chipset licensing agreement does not extend to future generation CPU's with "integrated" memory controllers.

"We are confident that our license, as negotiated, applies," said Nvidia CEO Jen-Hsun Huang. "At the heart of this issue is that the CPU has run its course and the soul of the PC is shifting quickly to the GPU. This is clearly an attempt to stifle innovation to protect a decaying CPU business."

Ujesh Desai, general manager of Nvidia's Geforce desktop business, reiterated to IT Examiner that the contract was "completely valid."

"The biggest question, since we signed the agreement four years ago, is why is this being brought up now? Perhaps Intel is attempting to stop Nvidia from building next generation chipsets that hook up to their CPU's," said Desai. "We believe the market should be open and that the license grants Nvidia the right to build their own chipsets."

According to Desai, cooperation between the two companies would benefit consumers in the long-run. "For example, combined with Nvidia, the Atom processor is more powerful and capable of running Vista as well as HD applications. This is good for end users," added Desai.

However, an Intel spokesman told IT Examiner that the corporation had simply filed suit against Nvidia seeking a "declaratory judgment" over rights associated with two agreements between the companies.

"The suit seeks to have the court declare that Nvidia is not licensed to produce chipsets that are compatible with any Intel processor that has integrated memory controller functionality, such as Intel's Nehalem microprocessors and that Nvidia has breached the agreement with Intel by falsely claiming that it is licensed," said the spokesperson. "Intel has been in discussions with Nvidia for more than a year attempting to resolve the matter but unfortunately we were unsuccessful. As a result Intel is asking the court to resolve this dispute. It is our hope that this dispute will not impact other areas of our companies' working relationship."

The spokesperson, who noted that the agreement was signed in 2004, emphasised that Intel had gone to extraordinary lengths to "resolve the dispute over the terms of the agreement." X