Intel Larrabee was a casualty of Intel's legal battles

Intel announced that its initial foray into standalone graphics chips - the Larrabee Project - is delayed indefinitely. Intel cited developmental setbacks, but it's hard not to connect the dots between the demise of the Larrabee Project and Intel's ongoing legal woes.

Intel spokesman Nick Knupffer stated "Larrabee silicon and software development are behind where we hoped to be at this point in the project." He added "As a result, our first Larrabee product will not be launched as a standalone discrete graphics product."

The statement, in and of itself, may be accurate, but the question is "why?". It seems likely that the Larrabee Project is impacted by Intel's ongoing disputes, particularly the falling out with Nvidia.

Intel under legal siege

If there is one area of the technology sector where there is job security these days, its working for the legal department--especially Intel's. Intel is being challenged, sued, and investigated on a variety of fronts.

The FTC, European Commission, and the state of New York all have ongoing antitrust cases against Intel. The FTC recently discussed Intel's predatory practices with Nvidia, and is exploring whether Intel's lawsuit against its former ally is merely an attempt to stifle competition disguised as a contract dispute.

AMD, Intel's largest rival in the CPU (central processing unit) market, and one of Nvidia's biggest competitors in the graphics chip market as a result of acquiring ATI in 2006, recently reached an agreement with Intel to settle all of the pending litigation between the two. Intel agreed to pay AMD $1.25 billion and the two entered into a long-term cross-licensing agreement, but patching things up with AMD hasn't eliminated any of the other ongoing legal battles facing Intel.

Collateral damage

Intel and Nvidia originally entered into a strategic alliance in 2004, agreeing to share patents and work together. The purchase of ATI by AMD was perhaps a response to the Intel-Nvidia partnership, pairing the CPU and GPU (graphics processing unit) underdogs to do battle with the CPU and GPU leaders.

The honeymoon between Intel and Nvidia is over, though. Intel filed a lawsuit against Nvidia claiming that the 2004 agreement does not allow Nvidia to develop or manufacture chipsets--the chips that provide the brains of the motherboard and facilitate communication between the CPU and the rest of the system.