This could totally happen. Granted, nVidia is big, but trust me: Intel is bigger. This would be a big plus for the short term, as Intel could design some chipsets with better integrated graphics. This would be specially important to the mobile sector. Adding a 7300-esque card as a mandatory requirement in a new platform (reminiscent of Centrino). Think of it: Centrino 2 (or something
) platform, to ensure Core 2 Duo + nVidia graphics. Plus, if you take some time to analyze current trends, everything points to a paradigm shift in the way computers will be designed in the future. I give the current PC model one more decade, tops, before it changes radically to a design where there is more unification (i.e, CPU+GPU on a chip or PCB, maybe system memory as well). This integration would allow for lower latencies between connecting components, which in turn would provide better effectivity. The only concern would be the inherent difficulty it would present for upgrading, as well as highly increased price: such a component would require an exceedingly complex fabrication process, which translates into low yields at first. Note that I am no analyst of any kind, this is just a humble mortal's interpretation of what might happen in years to come, regardless of how unpredictable technology is.
All things considered, I believe the industry is taking altogether too long to implement some technologies that should be standard by now. It is amazing, for one, that computers don't yet ship with solid state memory to store operating systems. Prices on NAND chips have undergone sufficient increase in capacity and decrease in price for it to be instilled upon the market as a standard feature. I mean, in a market where people buy $50 keyboards and mice or $300 power supplies (not to mention $700 graphic cards and $600 CPUs), it is unfathomable that we still boot from hard disk drives. Shallow and pedantic as the widespread diffusion of a new technology might be, it is about time. This is just one of the setbacks I find anachronistic in the level to which technology has evolved so far.
I now realize I've gone way off topic. In what will probably be a feeble attempt to redeem myself from such transgression, I will now go back to the matter at hand
I don't see a merger happening. If anything, Intel will buy nVidia and operate as two platforms that share information but don't interfere with each other's R&D.
(Please excuse any grammar mistakes, as English is not my first language, as well as the fact that my post went *quite* off-topic)