Intel is reportedly discussing a licensing agreement with Advanced Micro Devices, Inc. (NASDAQ:AMD)over the latter’s GPU patents, reports Bloomberg. What’s interesting is that the chip maker already has a similar agreement with Nvidia, AMD’s main rival.
Will Intel end ties with Nvidia?
Intel Corporation (NASDAQ:INTC) is already in a cross-licensing agreement with Nvidia, and the agreement was signed six years ago. The agreement allowed Intel to incorporate Nvidia’s IP into the graphic processor units it used in its CPUs. In exchange, Nvidia added revenue amounting to approximately $66 million each quarter.
The reason Intel is looking for other options at this point is that its deal with Nvidia is set to expire next year. It is possible that the chip giant is looking to save in terms of licensing fees, and for this reason it is opting for AMD.
It is expected that by June, AMD will roll out its Polaris graphics processing chip, and for this reason, Intel is seeing AMD as a ticket to boost its technological capacity. In January at the Consumer Electronics Show (CES), Polaris demonstrated roughly two-fold performance per watt of the previous line of GPUs.
AMD can help Intel on many fronts
In a recent research note, investment firm Nomura noted that AMD could regain a considerable chunk of the market share it lost earlier with help from the Polaris chip. Hence, there are possibilities that Intel is looking forward to capitalizing on AMD’s bright future prospects.
Another interesting piece of news is that AMD plans to launch the Zen CPU during the Christmas season, which, according to Nomura, could allow the company to gain a sizable share of the server market that is currently Intel’s territory. Zen could be successful in the server market, said Nomura’s analysts, with the reason being that consumers have been looking for an alternative to Intel for quite some time now. So the chip maker can possibly work out a partnership arrangement with its similar rival in this regard as well.
AMD’s stock has been doing well for some time, and just last month it surged by roughly 44%. Factors such as the upcoming product launches which have been already discussed and, more recently, the company’s growing prospects in the virtual reality space, are driving the bullish sentiment.