Intel and NVIDIA have announced a six-year $1.5 billion cross-licensing agreement that resolves a lengthy patent dispute between the two companies and could lead to close integration of NVIDIA GPUs with Intel’s processors.

The dispute centered on technology patented by each company and used by the other. Intel ignited the fight when it filed suit against Nvidia in February 2009, saying it had to pay for licenses to make chipsets for future Intel microprocessors. Nvidia followed with a countersuit that claimed a 2004 license with Intel covered those microprocessors.

According to the agreement, Intel will pay NVIDIA $1.5 billion over the next six years in exchange for access to NVIDIA’s patent portfolio, including technology related to GPUs and supercomputers, Ars Technica reports. In turn, NVIDIA will gain access to part of Intel’s patent portfolio, such as patents covering microprocessors and chipsets, though the deal excludes proprietary Intel x86 designs and flash memory.

This new agreement, Nvidia has stressed, does not mean the company will be returning to the Intel-compatible chipset market. Instead, Intel will have access to Nvidia patents for use on their CPUs. This means future Sandy Bridge CPUs could use GPUs that use Nvidia technology.

Likewise, future Nvidia processors used in its Tegra and other system-on-a-chip setups can utilize some of Intel’s patents. The patent dispute has adversely affected Apple, which has preferred Nvidia’s discrete graphics chips over Intel’s integrated graphics. The Cupertino, Calif., Mac maker even developed its own proprietary graphics switching solution to alternate between the NVIDIA GPU for peak performance and the integrated Intel graphics for energy saving. Apple first abandoned Intel’s chipsets for NVIDIA’s in its MacBook line in October 2008.

However, this agreement is the largest licensing deal in Nvidia’s history and comes at a time when the Santa Clara maker of graphics processing chips is moving forward with its ARM-based processors for desktops and supercomputers.

Via Apple insider