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Intel to Pay Nvidia $1,500,000,000 for Licensing

Nvidia announced today that it has signed a new six-year cross-licensing agreement with Intel.

Nvidia released news today that Intel has agreed to pay the graphics maker an aggregate of $1.5 billion in licensing fees payable in five annual installments, beginning Jan. 18, 2011.

Just as big news is that Nvidia and Intel have also agreed to drop all outstanding legal disputes between them.

“This agreement signals a new era for Nvidia,” said Jen-Hsun Huang, NVIDIA’s president and chief executive officer.  “Our cross license with Intel reflects the substantial value of our visual and parallel computing technologies. It also underscores the importance of our inventions to the future of personal computing, as well as the expanding markets for mobile and cloud computing.”

Under the new agreement, Intel will have continued access to Nvidia’s full range of patents.  In return, Nvidia will receive an aggregate of $1.5 billion in licensing fees, to be paid in annual installments, and retain use of Intel’s patents, consistent with its existing six-year agreement with Intel. The existing agreement is to expire March 31, 2011.

This excludes Intel’s proprietary processors, flash memory and certain chipsets for the Intel platform.

The conference call starts soon, so we'll let you know if new details arise.