Sources close to the discussions have confirmed that 3DFx made an offer for S3. But it was an offer that S3 could and did refuse. Instead, earlier this week, it bound Diamond. The issue at question for 3DFx is that its next generation chip, Napalm, has some problems with features and functionality, according to the source. While Nvidia's NV10 chip is exciting, the source said, the only thing that comes close to it is the S3 GX4. It "has a smaller die size and is the only serious contender on the block". For that reason, 3DFx wanted S3. Unfortunately, it couldn't have, our source said. S3 turned down 3Dfx's offer. ®