Article from Daily Tech written by Wolfgang Hansson
Havok Causes Havoc in GPU Physics
AMD says GPU physics is dead until DirectX 11
PC gamers have been looking for more than just pretty graphics when it comes to their game titles over the last few years. Not only do gamers want realistic graphics, but they want realistic physics as well.
Physics have long been a part of PC and console games to some extent. As games get more complex the mathematical calculations required for accurately rendering things on screen like smoke and explosions gets more complex as well.
GPU makers ATI and NVIDIA both know the value of physics processing and both companies put forth similar ways to tackle physics for video games. DailyTech reported in January of 2007 leaked specifications from ATI showing exactly what would be required for its asymmetric physics processing. Almost a year before those documents were leaked, DailyTech reported on NVIDIA’s Quantum physics engine.
Things in the world of video game physics heated up when Intel announced in September that it intended to buy Havok, the company whose physics software is widely used by game developers around the world. Xbit Labs reports today that AMD’s Developer Relations Chief, Richard Huddy is saying that GPU physics is dead for now.
The reason Huddy is saying GPU physics is dead is that Havok, now owned by Intel, is said to be releasing its Havok FX physics effects engine that is responsible for computing GPU physics without support. That is assuming Havok doesn’t abandon the Havok FX engine at all. DirectX 11 is projected to support physics on the GPU and it may be the release of DirectX 11 before we see GPU physics processing. This should be great new to the ears of AGEIA, who recently announced it would be developing a mobile physics processor.
Exactly how this will affect mainboards that NVIDIA already has in development remains to be seen; the replacement to the NVIDIA 680i mainboard is said to have three PCIe slots. If one of those slots was slated for use in GPU physics is unknown, however, this could be why the 680i replacement was pushed from a launch date of mid-November as was rumored to have been the scheduled launch date.
Biebs' World 
I’m hoping to milk my 6600GT at least until Guild Wars 2 comes out. What? That’s two years away!? I dunno if I can wait that long!?
AMD/ATi have a tough row to hoe in the near future. It’s pretty hard to compete with that Intel and nVidia are putting out right now. But I think in the long term, their integrated CPU/GPU design is the way to go.