AMD AND INTEL are teaming up to backhand Nvidia in the physics arena. They are presenting a unified front to shut out NV for the first time.
If you remember, NV bought Ageia a while ago, and Intel owns Havok. Until today, this left ATI out in the cold; they could do their own and end up with a situation where each GPU has it's own physics, or simply sit out the fray. They wisely chose to partner with Havok/Intel, and in doing so, marginalise Nvidia.
If the two sides play nice, and I have no doubt they will in the short and medium term, then that leaves the Nvidia/Ageia PhysX API as the red-headed stepchild of the industry. You have the Intel support mechanisms vs the Nvidia ones, Intel financial clout vs Nvidia. Take a guess which one will win that? Since ATI GPUs are in the two leading consoles, owning about 75+% of the installed base for which game devs target, that is a really strong incentive for developers to go Havok.
In the end, this is a political move, likely the first in a string, to cut off Nvidia's air supply. It forces developers to take sides, Intel or Nvidia, and more importantly, console vs PC. The Intel/NV battle could go either way, likely decided by checkbooks more than anything, but the console/PC decision is done and dusted. NV loses badly here and there is nothing that they can do until the next console generation in 2011 or so.
The end result is a seemingly small announcement with huge implications. It is nothing less than a boot to the teeth for Nvidia, and no one is going to cry for them. Watch closely, this will happen again and again, and the foundation will get chipped away from NV's support base each time. µ
If theres number One Short Lived Product, its' Intel System Board. Havok is NOT PhysX.
PhysX has good first reports & leads me to believe that if Nvidia followed thru on Years of CPU start up 
Threats, well just might have heck of family entertainment & full functioning computer for living room.

Media takes speed. Media takes dedicated pathways that can withstand toe typing, crash & burn testing plus forever hours into 2 year max hr machinry. Nvidia can do that. & as game cards where once made only for one specific game, now computer can be made for one specific purpose, high speed everything.FREEDOM.
As AMD saviors pulling Cork on Wondra Dra .G.line, Women woryy if thuier Teenager is Violent Enough.
Nvidia Can Fill those Gaps completely with 100% Nvidia Plus controllers, BIG Controllers that take Ultimate top Beyond Vantage, where cores cann't be counted, exactly.
Drashek
Intel and graphics!.. msg me when you stop laughing!!
I will believe it when i see it.. with some drivers that work preferably!!!!
Sorry Charlie, you are forgetting the role of Microsoft in this business.
First of all all what happens in Xbox 360 world is ruled by MS, so which API will the 360 support will depend on MS choices.

Second, in the PC arena, who says that MS does not add phisic API to a future DirectX release. Story tells us that MS fight any standard nod developed in Redmond, and so will do with phisic too.
This is great news! I'm really pleased DAMMIT are going with Havok/Intel and leaving NV out of the picture. With the inclusion of physics processing being included in RV770 (and now GT200 + delays) I was wondering where exactly ATI was going to. I, for one, will be buying 2 of the new 4870s for crossfireX in the next month or so...
...I would cry if nvidia were to suffer large losses. Who will take their place? Either AMD or Intel, it would seem. A vote in their favor is a vote in favor of giving already large corporations even stronger monopolies.

Fantastic.
.. the bigger you are the harder the fall.

nvidia's time to fall?
they been up top for way too long.

its good to see competition.
the industry is getting "hot" and its great to see that.

it was a lil stale at one point.
sometimes, nVidia teams-up with Intel, and vice versa
sometimes, Intel teams-up with AMD/ATI and vice versa...
sometimes, AMD/ATI teams-up with nVidia and... you know...

what a love triangle, really...
You will cry if any of the big players in the CPU or GPU business will leave the field. We need their competition.
You forget, the Xbox 360 and PS3 already support the PhysX API. It's actually the recommended physics middleware for these consoles. Likewise, you could argue that all Intel CPUs 'support' PhysX, just as any CPU does, though badly compared to a GPU or PhysX card.

By 'two leading consoles' you mean the Xbox 360 and the PS3? No, wait, the Playstation has an nVidia chip. You must mean... the Wii. Don't make me laugh.

And even though the 360 has a pre-R600 chip inside, it still supports and uses PhysX.

In those stakes, DAAMIT either sides with Intel, or with nVidia/Microsoft/Sony. Makes this move of supporting Havok look like an attempt to argue with any standard that nVidia supports. We saw that with MXM, ATi tried to develop their own entirely new laptop socket called AXIOM, but eventually just made MXM stuff. They're also refusing to support CUDA, even though nVidia is being uncharacteristically generous by offering it as a standard anyone can support.

Of course, if ATi did support CUDA, they'd get PhysX as well. Makes you wonder why they bother arguing.