I read a post on gamasutra.com which got a source from sprong.com about speculation of ATI signing a production contract with Microsoft. According to this speculation and the source at sprong.com, they say that a "source close to NVIDIA" says that the relationship between Microsoft and Nvidia went bad and that Microsoft is having ATI make their graphics processor instead.
Now, we all know that its old news that Nintendo and ATI already have a contract going for the next Nintendo console. Yet, this news says that ATI is designing the Micosofot console graphics too.... Im finding this extremely difficult to believe, since any proper business would not try to damage an exisiting relationship with a client by working with their competitor. Since ATI and Nintendo already signed the deal for the next gen production, I really doubt that ATI would have gone into contract with Microsoft as well for the same task.
Also, the source... "a source close to Nvidia" isnt exactly selling me on the news. Now if it was a source at ATI, then I could believe it. Personally, I think the translation of all this is "Microsoft pissed off Nvidia and they're trying to stall and buy time to find a way to develop their graphics system" and that ATI has nothing to do with this at all.
Now, why did I post this? I want other people's thoughts on the matter, or any more credible news for or against this bit of information. When the news is posted on places like theregister.com and enquirer.com, it holds no weight... but for a respectable site like gamasutra.com to even mention this, it catches my attention as something that needs to be addressed and resolved with facts.