Microsoft and Nvidia Have Acquisition Pact

An anonymous reader writes "Infoweek is reporting that Microsoft has obtained the exclusive right to match any buyout offers for Nvidia. The obscure pact was uncovered in SEC documents, and apparently stems from Microsoft's licensing of Nvidia chips for the Xbox. But its real value now lies in the fact that Nvidia has become a major player in tablet chips, including chips for Windows 8 slates."

Comments

I say the oppsite

[Osgeld]

when XBOX was using nvidia chips (thats XBOX1, 360 uses an ATI system) Nvidia was a smaller company in a fairly new and fairly niche industry catering JUST to game geeks.

its not the same playing field in 2011

Re:I say the oppsite

[sortius_nod]

Yeh, that's bullshit.

Nvidia were already the premier graphics solution for professionals, they already had an established market and were making a fortune at the time selling gaming & professional chips. Microsoft did nothing other than guarantee sales of chips.

While I don't like Nvidia cards, they were already huge prior to the Xbox, so sitting there and saying they were a "niche industry" is just patently false. Unlike ATi they didn't get sold off to a processor maker. Maybe that's something to keep in mind. They didn't get a market position like that from the xbox (considering the sales numbers of xbox vs ps2), the 360 is the MS console that took off, and look who makes the chips for it.

This just seems like a typical corporate deal. It's not unusual, MS were relying on Nvidia not being sold to the competition and pricing MS out of making the Xbox. No company would be stupid enough to leave out any clauses preventing or delaying sale of a supplier to a competitor when inking such a major deal. It was major for MS, but really, Nvidia could have taken or left it.

Soo, if I wanted to bankrupt Microsoft

[mozumder]

I just go to nVidia and tell them I'm going to buy them out for $10 trillion?

Re:Soo, if I wanted to bankrupt Microsoft

[Dragonslicer]

Presumably, Nvidia's side of the agreement is that if Microsoft chooses to match an offer, Nvidia has to accept Microsoft's offer instead of whoever else made an offer.

Re:Soo, if I wanted to bankrupt Microsoft

[Local ID10T]

I just don't see the point of the pact if it doesn't really require anyone to do anything.

It requires Nvidia to give Microsoft a chance to buy them out before they sell to someone else. It is generally known as a right of first refusal.

Re:Soo, if I wanted to bankrupt Microsoft

[Anonymous Coward]

At the time Microsoft wanted to assure their supply line. If Sony bought NVidia they could decide that they no longer wished to make certain products, like the chips used in the XBox. MS basically reserved the right to buy NVidia if anyone else tried to aquire them (which would also give them the rights to the chips as well making them then able to farm out the fabrication to another company)

Re:Soo, if I wanted to bankrupt Microsoft

[Bacon Bits]

Just how many years had Nvidia's lawyers completed before they signed this kind of agreement with no less than Microsoft?

More than you, clearly.

"We agree that you will have tens of millions of sales of your product for which we will pay you, and should anyone try to buy your company, we can offer to buy you out for the same price. So if you get one offer to be bought out, you pretty much get two."

You know what happens when a company is bought out? The executives, lawyers, and owners/shareholders make a boatload of cash. This was basically win/win for nVidia (unless they had really good prospects or wanted to be bought out by another company) while assuring MS that they won't lose the source of their chips to a competitor without a chance to stop it. All this does is discourage other parties from making lowball offers. All MS would do is hold on to nVidia until they no longer needed the chips, then spin it off.

Nvidia made Nforce Pro chips for severs / workstat

[Joe_Dragon]

Nvidia made Nforce Pro chips for severs / workstations as well some good intel / amd chipsets. Also made good intel chipsets before Intel locked them out.

Re:Anti-competitive little shits

[Sprouticus]

I'd say RTFA, but this is slashdot.

This is a devensive measure by MS in case Sony or Nintendo (or some other company) decided to buy NVidia and then screw over MS in a effort to sink the XBox. Not saying it would happen, but that is the idea.

MS does not want to buy NVidia, they just want to be sure one of their few revenue streams doesnt go away.

Re:MS is not a hardware company

[Walzmyn]

-Microsoft is not a hardware company

I disagree. I have a GREAT Microsoft mouse. In fact, I consider it to be much more valuable than the several pieces of their software I had to delete off my hard drive when I originally bought my computers.

nVidia Linux driver

[MrKaos]

I'm certain Microsoft will maintain the development of the excellent proprietary drivers for Linux should they ever acquire nVidia.

Re:MS is not a hardware company

[the linux geek]

Slashdot inexplicably submitted instead of previewing. Here's the source:

http://blogs.msdn.com/b/xboxteam/archive/2006/02/17/534421.aspx

Re:Chair game.

[ColdWetDog]

M$ is acquiring / making deals with companies which are key to Linux -- related to Gnome (Novell), KDE & Qt (Nokia), Skype (ok, it was weak but could become important) and Nvidia (the _only_ hardware recognized as allowing video h/w in Linux) -- I don't whether they want to suffocate ("cut the oxygen of") Linux (actually, they probl think "Ubuntu") or they plan to get cozy to pinguins as a last resort against Apple.

It's getting me nervous.

If that's the way you think about things, you should be getting nervous. And it doesn't have anything to do with Microsoft.

Linux gaming may suffer

[Turmoyl]

This may not bode well for Linux gaming. For the 10 years I've tried them ATI cards (more specifically their drivers) have never worked well in Linux. If M$ gets a hold of Nvidia I wouldn't be at all surprised to see NVidia's support for Linux falter as well.