If your arch-rival buys one of two highly competitive graphics chip companies, what else can you do but acquire the other GPU maker? That's exactly what it was yesterday claimed Intel would do: snap up Nvidia after AMD's move to acquire ATI.

The Wall Street rumour put $2.32 on Nvidia's share price and saw stock trades double in volume on average. That said, some analysts were anticipated an evening announcement of the deal, Reuters reports, but that doesn't appear to have happened. NVDA shares closed at $31.08.

Nvidia's market capitalisation is almost $11bn, making it a tough acquisition target that would cost Intel more than twice the $5.4bn AMD's paying for ATI. While AMD had no graphics technology when it announced the ATI acquistion plan in July this year, Intel does - indeed, it's already the world's biggest supplier of graphics chips.

Still, its latest effort the GMA X3000 has proved uninspiring, and the chip giant could well be looking elsewhere to revive its efforts - particularly given the growing demand for graphics chips in the mobile and consumer electronics markets, both places Intel wants to sell CPUs into. Then again, it recently renewed its alliance with UK-based graphics technology developer Imagination Technologies, pumping almost $10m into the company. ®