Rival chipmakers Intel and Nvidia have agreed a six-year deal to license each other’s technology bringing an end to a two-year legal dispute between the two firms. Under the terms of the deal, Intel will pay Nvidia US$1.5 billion in licensing fees over the next five years. “This agreement ends the legal dispute between the companies, preserves patent peace and provides protections that allow for continued freedom in product design,” said Doug Melamed, Intel senior vice-president and general counsel. Although the two firms have traditionally dominated different areas of the chip business – Intel focused on microprocessors and Nvidia on graphics cards – both are now turning their attention to new areas such as smartphones and tablets where their technologies are converging. “[The deal] underscores the importance of our inventions to the future of personal computing, as well as the expanding markets for mobile and cloud computing,” confirmed Jen-Hsun Huang, Nvidia’s president and CEO (pictured).

According to a Financial Times report, this week’s deal is the latest by Intel – the world’s largest chipmaker – to make peace with rivals that have accused it of abusing its market leadership. The report notes that Intel struck a similar deal with rival chip firm AMD in November 2009; in this instance Intel agreed to pay AMD US$1.25 billion as part of a five-year cross-licensing deal in return for AMD dropping its legal complaints. It also settled a deal recently with the US Federal Trade Commission to use an open industry standard to make it easier for other chipmakers to connect their own products to its chips.