Originally Posted by macemoneta
Why? Nvidia are already in the number three position in the video market, and in 1-2 years AMD/ATI will have their die-level CPU/GPU. With Intel persuing a similar course, the expectation at this point is that the GPU will simply become a standard integrated on-die component, like the floating point processor and memory management unit has.
Where does that leave Nvidia? Maybe they are just holding out at this point to have some intellectual property at the fire sale.
OK, so Nvidia are behind Intel in terms of volume of sales. Tried playing any of the latest games on an Intel GPU? Anything with a modern 3d engine just will not run on it. Intel's GPUs are only designed for use in office systems. If you check out the specs on Intel's website, you will find that most of their GPUs handle TnL on the CPU - ouch! Intel have a _long_ way to go to produce anything decent in terms of graphics performance, and they are probably not particularly interested in that market.
I must admit that I am not very familiar with ATI's GPU, having given up on them back in the Rage days - horrible drivers, often needing different drivers for different models. The merger with AMD will certainly be interesting. I see it as an attempt by AMD to attempt to catch up with Nvidia's Nforce chipsets. AMD's own chipsets have never been particularly amazing, and their sales are pretty low.
Your final line does seem to be somewhat at odds with the fact that Nvidia have just released the world's first DX10-capable GPU, and are already sampling mobile versions of this GPU. They also developed the GPUs for some of the games consoles currently on the market. Oh, and GPUs for mobile phones. Frankly, I see Nvidia as being in a pretty health position at the moment. Of course, this could all change, but probably only in the long term.
Nvidia will definitely not open-source their drivers. There is too much proprietary information within the drivers, especially now that we are moving over to such general purpose GPUs. Much of the GPU's functionality is actually in the driver, not built into the hardware (either hardwired or in BIOS). As long as a competitor can gain some advantage from deeper understanding of the workings of the GPU, the drivers will remain close-source.