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Havok develops physics processing APIs for GPUs which accelerate physics interactions in games.

AMD had been involved in earlier talks with the company, but any potential deal was derailed when Intel stepped in to purchase the company. The situation was made even bleaker for AMD when Havok's principal competitor, Ageia, was snapped up by Nvidia, leaving AMD all dressed up with nowhere to go.

However, it seems Intel and AMD have been able to put their animosity aside and resume talks, presenting a brand new challenge for mutual rival Nvidia - which has recently been locked in a war of words with Intel as its Larrabee platform draws closer.

AMD says it is hoping to accelerate Havok Physics on both its CPUs and GPUs: "Havok Physics scales extremely well across the entire family of AMD processors, including quad-core products. The two companies will also investigate the use of AMD's massively parallel ATI Radeon GPUs to manage appropriate aspects of physical world simulation in the future."