We have heard this rumor in the past but now it has been confirmed. We know that Intel needs a graphics licensing agreement in order to provide graphics for the various products that it makes, especially CPUs. Previously a graphics licensing agreement was made with Nvidia, but that has expired as of March 17th, 2017. Now Intel has made a graphics licensing agreement with AMD.
The deal has not been confirmed by either of the companies but reports claim that this is the case as Intel is without a graphics licensing agreement at this point and needs one in order to continue business. You might be wondering that a deal between Intel and AMD is very odd keeping in mind that both companies are at each others throats.
Even though this seems odd, we have seen odd things happen in the past as well. If you were wondering why Intel does not simply renew their agreement with Nvidia then the answer is that Nvidia sued Intel some time back and the settlement required Intel to pay $1.5 Billion. Now that the deal has come to an end Intel wants out. This is why the agreement has not been renewed.
Another aspect of this graphics licensing agreement with AMD is the fact that the PC market is slowly declining and Intel is looking for other business avenues. Intel is looking to get into cloud computing and artificial intelligence as a core competency. Nvidia has been making great progress in these fields and it seems that Intel would rather join with AMD in order to face Nvidia.
The graphics licensing agreement benefits both companies. AMD is the underdog and even though it has provided great competition in the shape of the new Ryzen CPUs, the company still needs to make money at the end of the day and a lot of it. This graphics licensing agreement will be a source of money for AMD.
Raja Koduri, Senior Vice President and Chief Architect, Radeon Technologies Group, has worked at Apple and worked with closely with Intel as well. There would be no surprise if he played a vital role in making the negotiations. We are still waiting for the official announcement so stay tuned for more information.