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Will Microsoft Buy NVIDIA to Create Proprietary Chips for Windows 8?



As Microsoft pushes ahead to try to maintain competitiveness in the tablet game by making sure that the hardware and software are more integrated to have tighter control of the user experience, the company may be eying an acquisition of chipset-maker NVIDIA, whose dual-core Tegra 2 was believed to be the reference platform for Android Honeycomb tablets and is pursuing quad-core mobile chips with multi-core graphics for future products shipping later this year.

It was recently discovered in an SEC filing by Information Week that Microsoft has the rights to match and beat any deals by any company to buy 30% or more of NVIDIA’s shares: “Under the agreement, if an individual or corporation makes an offer to purchase shares equal to or greater than 30% of the outstanding shares of our common stock, Microsoft may have first and last rights of refusal to purchase the stock.”

If Microsoft enters the chip business, it would be competing more closely with Apple, who has entered the ARM-base chip business through acquisitions. The Cupertino, California iPhone- and iPad-maker has released an A4 for the iPhone 4 and iPad 1 tablet, and an A5 dual-core chipset for the iPad 2 tablet.

Microsoft, which had traditionally been closely tied to Intel in the desktop OS sector, is working with five partners for its Windows 8 strategy, which includes ARM newcomers like NVIDIA, Qualcomm, and Texas Instruments, along with veterans like Intel and AMD. It’s unclear how Microsoft’s larger investment in the chip business will pan out for its mobile strategy, but most likely it would work to enhance Windows 8 performance on tablets and ultraportables on ARM to try and match the features, performance, and power-saving performance of those chipsets for its OS.

In the phone space, Microsoft is closely tied to Qualcomm for its Windows Phone platform. Whether an investment in NVIDIA will disrupt Qualcomm’s partnership currently with Microsoft is also unclear as Qualcomm also integrates various connectivity options into its chipset designs, including 3G and 4G mobile broadband radios.

Microsoft had also partnered with NVIDIA for its Zune music player.

In the recent past, in reference to Texas Instruments being speculated to replace NVIDIA as provider of chips for Google’s next-generation Ice Cream Sandwich Android platform, an un-named source said that NVIDIA would allow itself to be bought out. Could the company that buys NVIDIA be Microsoft?

Via: Digital Trends


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