Earlier today, NVIDIA responded to a court filing by Intel, regarding a chipset license agreement. The agreement, made 4 years ago, was that NVIDIA would be able to use its chipsets with Intel based motherboards. In exchange for this, NVIDIA would provide Intel with graphics "innovations" such as SLI and Hybrid Power. Now, with the Core i7 range out (which feature integrated memory controllers) and details out on the future Westmere processors (which integrate more features, in particular, the graphics controller), Intel has claimed that the existing agreement no longer applies.
NVIDIA has argued that the agreement is more about the end of CPU lifecycle, as opposed to Intel's argument that because their new processors feature integrated controllers, the deal is off. Jen-Hsun Huang, CEO of NVIDIA said "At the heart of this issue is that the CPU has run its course and the soul of the PC is shifting quickly to the GPU. This is clearly an attempt to stifle innovation to protect a decaying CPU business."
NVIDIA also boasted that its ION platform is 10 times faster than Intel's GMA 945, and also gave a gentle reminder that Apple used NVIDIA's chipset in its entire range of notebooks last year, which could create some difficulties for Apple should the agreement fall apart.
Both companies have something to lose, but the question is: which one will lose the most? Intel could effectively prevent NVIDIA producing any chipsets for their Nehalem based processor range (although, regardless of what happens, the decision won't affect systems using Intel's current bus interface). However, NVIDIA's ION platform has better performance and uses less physical space than Intel's equivalent, and they also provide numerous technologies which one can only assume Intel has created alternatives for.