Intel and Nvidia's Secret War


Is the CPU more important or the GPU? Up until now, that’s mostly been a topic suitable for Usenet arguments. But this fall, consumers shopping for uber-rigs may actually be forced to pick a side when Intel’s next-generation Nehalem CPU will likely ship without SLI support.

Although Intel and Nvidia won’t comment on whether SLI would be offered in Intel’s Tylersburg chipset for Nehalem or through a new Nehalem-ready nForce chipset, a half-dozen PC builders told Maximum PC that this dream configuration is definitely not going to happen when the chip launches.

“(this situation) really hurts us,” said one vendor, who asked to remain anonymous. “If someone wants a Nehalem with two SLI cards, we can’t do it. It kind of sucks for system integrators.”

The bad news, PC vendors say, is that faced with such a conundrum, consumers may simply decide to buy nothing while the issue gets hashed out. Unfortunately, it’s not clear when a compromise will happen or even if it will happen. It’s even more difficult to find someone to blame. With both companies tossing quotable stink grenades at each other every other week, many OEMs believe it’s not just “coopetition” any more but World War III – with OEMs and enthusiasts caught in the crossfire.

SLI was originally developed and marketed on an Intel chipset. Many were skeptical of its potential for success but it hit a vein with gamers who had to have everything and was also a hit with the “buy one, get one later” crowd. And although many believe SLI will work fine on Intel’s current X48 chipset, Nvidia has never supported Intel desktop chipsets with SLI. Nvidia has always attributed this incompatibility to “validation” issues but most observers believe it’s more of a business decision to help sell nForce SLI chipsets. For the last few years, enthusiasts who wanted to pair SLI and Intel CPUs could only do so by buying [Nvidia designed] nForce SLI-based boards. That won’t work with Nehalem as the new chip and its LGA1366 socket is incompatible with existing LGA775 motherboards.

When asked about SLI for Nehalem, Intel spokesman Daniel Snyder said: “Tylersburg (the chipset for Nehalem) will work mechanically and electrically with multiple-graphics-card solutions.” He added that AMD plans to fully support the Tylersburg chipset with CrossFire and other vendors could as well – if they wanted to.

Nvidia spokesman Brian Burke would not comment on any upcoming SLI chipsets for Nehalem but he appeared to nix any ideas of SLI running on an Intel chipset as a solution.

“SLI is not just plugging in two boards; that’s not what SLI is. Crossfire may be that but we view SLI as the experience and the brand, we want to protect our brand with an ecosystem that works,” Burke said. He said how the GPUs interact with the chipset is also a very important part of the equation, so Nvidia’s plans are to continue to support SLI through an nForce chipset. “We do have full licensing in our licensing agreement (to build for Nehalem),” Burke said. “We don’t have a product for Nehalem. Right now.”

That license is in dispute, though. When pressed about Nvidia’s licensing claim, Intel told Maximum PC: “there is a disagreement between Intel and Nvidia as to the scope of Nvidia’s license from Intel to make chipsets compatible with Intel microprocessors.”

Snyder said Intel was trying to resolve the disagreement privately and amicably with Nvidia and the company said it hoped that it would not impact other areas of the companies’ working relationship.

Though light on details, Snyder did concede that “We are not seeking any SLI concession from Nvidia, in exchange for granting any Nehalem license rights to Nvidia.”

In other words, don’t hold your breath for a Nehalem nForce chipset.

That could be bad news for Nvidia, which sees the Intel domain as a tremendous growth opportunity. According to a recent earnings report, Nvidia’s MCP chipset group accounted for roughly 17 percent of Nvidia’s revenue in the last fiscal year. With the 710 million racked up by the MCP group, that makes it number two behind the GPU group at Nvidia.

So, what would happen if there was a catastrophic loss of business for Intel chipsets?

“The impact of losing the Intel chipset business would be modest,” said Dean McCarron, principal analyst with Mercury Research. Intel core-logic chipsets account for just one percent of the Intel chipset market. And despite AMD buying ATI and its broad stable of chipsets, Nvidia continues to be number one. Mercury Research numbers put Nvidia at about 60 percent of the chipset market for AMD CPUs. That market share actually grew slightly by one percent even after the AMD / ATI buy out. McCarron said Nvidia’s share of the AMD pie is unlikely to change in the immediate future as all the indicators out of AMD say that it is more interested in selling CPUs than chipsets right now. The way Nvidia sees it, McCarron said, is the smaller the percentage it has now only gives it a bigger chance for growth.

However, there is no question that an inability to build a Nehalem chipset, combined with AMD getting serious about pushing ATI chipsets, would hurt Nvidia’s bottom line.

With Nvidia refusing to lay out its plans and Intel keeping its lips mum, it’s no wonder speculation is running high among consumers and OEMs. Is Intel withholding a Nehalem license to squeeze Nvidia into giving up an SLI license on Intel chipsets? Is Nvidia facing some technical hurdles with Nehalem? Is Nvidia intentionally dragging its feet on offering an SLI chipset for Nehalem in order to put a dent in what would be Intel’s crowning achievement this year?

Obviously, the only ones with the answers aren’t talking but some think it’s just all being overblown. Jon Peddie, a principal analyst with Jon Peddie Research, said he believes that Nvidia is giving the first generation of Nehalem a pass because it doesn’t see the chipset as a big market opportunity. He said that it’s certainly not a technical issue though.

“Nvidia has the technical talent to design an interface to anything. There’s no technology obstacle for them doing an interface to Nehalem. The technology is trivial,” Peddie said. He said Nvidia is in a good position because Intel needs SLI more than Nvidia needs Nehalem right now. Peddie said bluster aside, cooler heads will prevail and the almighty dollar will win. “At the end of the day, when it comes down to making a sale or not making a sale, reason takes over,” Peddie said.

Still, there’s no denying that things are pretty ugly between Intel and Nvidia right now. More than a half a dozen vendors Maximum PC spoke to implied they felt like ping-pong balls trying to figure out their fall hardware lineups. Most declined to be identified but Rahul Sood, Chief Technology Officer with Hewlett-Packard, said it’s clear we’re in a war. He would not discuss details of Nehalem and SLI but he did say the battle does seem to lead back to SLI.

“Both Intel and Nvidia are important partners of ours. Ever since Nvidia announced that it would not support SLI or Hybrid Graphics on competing chipsets, a quiet war has ensued,” Sood said.

Some of the back and forth volleys included Intel buying Havok, which Nvidia and ATI depended on for physics. Nvidia fired back by buying hardware physics maker Ageia — a company Nvidia previously downplayed. And while Nvidia has generally been good at launching chipsets on time, it was late to release chipsets that supported Intel’s full suite of 45nm CPUs, Sood said.

“After this, a huge dust storm started when Nvidia CEO Jen-Hsun Huang openly attacked Intel's graphic’s initiative. In the meantime, Intel is claiming that its next generation graphics are going to be better than any other previous attempt, and Nvidia is saying that GPU computing is the future. The last I heard, Nvidia was buying a company that specializes in rasterization, which is somewhat telling,” Sood said. “All in all, the war is somewhat unavoidable. When you have three huge giants all fighting to play in the same sandbox, you end up with a big mess. It certainly hasn't made our jobs easier. More interesting perhaps, but not easier.”

Intel’s Snyder downplayed reports of friction. At the end of the day, both companies are constantly cooperating on platforms such as the Skulltrail platform that supports CrossFire and SLI, he said. He admitted that hackles were raised at Nvidia when a contract employee at a tradeshow said in an interview that discrete graphics would “probably not” be needed eventually, but that’s not Intel’s official position.

“We completely expect discrete high-end graphics to be around for the foreseeable future,” Snyder said. If you are into video encoding and CPU centric tasks, spend your cash on a quad-core Intel CPU, Snyder said. If you’re a hardcore gamer, by all means, spend your ducats on a faster GPU. If you’re a storage pack rat, save on the CPU and GPU and buy big hard drives, he said.

Nvidia officials also seemed to be ratcheting back the hot talk and said that to describe the situation as World War III is sensationalizing it.

“We don’t hate Intel,” said Nvidia spokesman Brian Burke. “We think Intel is a great company. They are experts in the x86 architecture and they’re the leader in CPUs.” But without missing a beat Burke added: “but they’re not experts in graphics and they’re not the leaders in graphics.”

Which is ultimately what may be the issue here. Beyond SLI, and nForce and Nehalem, Intel’s push into graphics with its Larrabee project has made the stakes much higher for Nvidia.

Nvidia also feels that it was no low-level Intel drone making the statement about discrete graphics going away – it was clearly a shot across the bow. “When they attack us and say things like discrete graphics are going away, we defend ourselves,” Burke said. “When a big company like Intel starts saying something, people are going to believe it.”

Some are. One PC vendor who spoke to Maximum PC said from what they’ve seen, Larrabee will be a very competitive GPU part and Nvidia has good cause to be concerned. And despite the brand affinity that Nvidia has with gamers now, gamers and enthusiasts flock to where the price-to-performance ratio is best. That may be Nvidia now, but it may be Intel tomorrow, the OEM said. Still, other PC vendors Maximum PC spoke to believe that Nvidia’s brand is worth as much or more than Intel right now. PC gamers may very well decide to pass up Nehalem for an older Penryn if that’s the only way they can get SLI.

Burke said Nvidia isn’t sweating bullets about graphics competition from Intel. The same was said a decade ago when Intel got into the discrete graphics market.

“(Intel has) done this before with i740. Did it have money then? Did it have manufacturing then? Did it have engineering then? Was it big bad Intel then?” Burke asked. “They were all those things back then. And we all know how that all turned out.”

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