Intel to pay Nvidia $1.5bn for graphics technology licence

The agreement settles legal disputes that have been raging between the companies since 2009

Chip giant Intel has agreed to pay smaller rival Nvidia $1.5bn (£963m) to license its graphics technology.

The agreement settles the legal disputes that have been raging between the two companies since 2009.

The six-year cross-licensing deal gives each party extended access to the other's technology.

But Nvidia will not get access to some of Intel's proprietary technology, such as the x86 designs and Flash memory.

"Our cross-licence with Intel reflects the substantial value of our visual and parallel computing technologies," said Jen-Hsun Huang, chief executive, Nvidia.

The agreement comes at a time when Intel faces unprecedented threats to its position as the dominant chip maker.

Intel's grip on the chip market has been under threat from rocketing sales of next-generation devices such as tablet computers and smartphones, many of which are powered by non-Intel processors.

Last week, long-time ally Microsoft confirmed that the next generation of its Windows operating system would run on processors from ARM, the Cambridge-based chip maker. The partnership between Microsoft and Intel had been synonymous with the rise of the PC.

The Intel-Nvidia agreement gives both companies access to technologies they need for future chip developments.

It "provides protections that allow for continued freedom in product design," said Doug Melamed, general counsel, Intel.