News for Nerds

This broke over the 24th of July holiday (well, it's only a holiday in Utah - we celebrate the pioneers who settled Utah on that day by getting off work, hiking, barbequeing and shopping), but in news that I care about, microprocessor company AMD is merging with graphics chip company ATI. Why does this matter? A brief history of computer parts for those who care to read it:
For the past decade or so there have been 2 options in graphics companies and 2 options in processor companies. ATI and nVidia have made graphics cards, with each company taking turns leading the other (I will try not to lapse into my techno-jargon here, so I won't spit out a list of graphics card numbers). These companies have competed fiercely competed, giving us the same graphics power on a $300 card in your computer as a $1 million supercomputer had a decade ago. It's been great for the consumer and great for people's World of Warcraft habits. The same type of situation has happened with AMD and Intel. Intel has continued to be the market leader, but AMD has made processors that have clobbered Intel at times and vice-versa. It's led to lower prices and incredibly faster processors for everybody.
So why am I a little wary of this? It's because of the situation that it puts nVidia and Intel in. Currently nVidia and ATI make graphics cards for everybody, ATI makes motherboard chipsets for Intel, and nVidia makes chipsets for AMD. The problem comes with the new competitive landscape. If nVidia makes chipsets for AMD processors, they are helping to popularize the AMD Athlon processor. If they do that, they're now helping AMD/ATI compete against them in graphics cards. That's money that will go straight to the competition and make them even tougher for nVidia to fight against. By the same token, if Intel allows ATI to make motherboard chipsets for their Core processors, then they are helping AMD increase their bottom line to fund their processor war against Intel. AMD says that they don't think that's the case, but I don't see how it couldn't be. Graphics cards will continue to work on computers powered by either company, but the only possible reaction that Intel and nVidia will have to this is to get in bed together. This may not be a full-fledged merger, but I can definitely see nVidia stopping production of their nForce chipsets for AMD and ramping up production for Intel. I could also see a merger as nVidia tries to get into Intel's deep pockets to keep competing. In the end, this may not be a win for the consumer as the two camps get more entrenched. We may even see a polarization where you will only be able to get a total AMD/ATI or Intel/nVidia solution, which wouldn't allow people to customize as well as we have been able to. It's too bad too, because I've been an Intel and ATI fanboy for quite some time now. Well, such is life I suppose.