Rumour: Intel to acquire Nvidia

Semi conductor giant Intel has had discussions with chip maker Nvidia over a possible acquisition, according to several reports.

The reports claim that with Intel's long-time chief executive Paul Otellini to retire in May 2013, the firm has been looking for a successful leader to succeed him. An ideal replacement, according to the reports, would be Jen Hsun Huang, co-founder and chief executive of Nvidia who would become head of a merged Intel-Nvidia if the deal were to go through.

The companies had talked about a possible merger in 2006, when Intel's rival AMD looked to acquire Nvidia. Nvidia, however, wanted Huang to lead the merged company and rejected both AMD and Intel's advances. This led to AMD acquiring ATI Technologies for $5.9bn (£3.6bn) in 2006.

Intel had also suggested that Nvidia could license its GeForce graphics cores and integrate them into Core-i-series Ivy Bridge and Sandy Bridge processers, but Nvidia declined on this offer too.

Sources of technology website BrightsideOfNews claim that Intel are considering one of Nvidia's requirements, should the acquisition go through, that Huang and his senior management team take over the respectable roles in the new entity, regardless of the new company's size.

But although a deal is financially feasible (Intel is worth about $90bn or £55bn more than Nvidia), industry insiders claim that such a move is unlikely to happen, citing differences in corporate culture, and the idea of Huang as chief of a merged entity as too significant of a shift in magnitude from Nvidia.