Intel spent quite some time talking up its Larrabee graphics processor ever since it officially announced the x86-derived chip in 2008. In theory it sounded like a real threat to both Nvidia and ATI, but after facing several delays and complications, plans to market a consumer version of Larrabee were indefinitely put on hold last December.
The reason cited for the program stoppage was that the silicon and software development for the chip had not met Intel expectations and the fear was Larrabee would not be able to compete with ATI and Nvidia offerings. Now, however, the folks at TechEye have reportedly heard from a "key member" of the team at Intel that a whole product plan and roadmap is still in place for Larrabee.
Apparently there's some development being done, with many of the people originally hired for the project still hovering around waiting for Larrabee to come online again. Last we heard, Intel planned to release Larrabee sometime this year as a software development platform for both graphic and high performance computing. If the anonymous sources are indeed right, we would probably still have to wait for an improved second-gen design before a Larrabee GPU arrives. That could be a while, but we know Intel won't just drop its plans to get a piece of the discrete graphics market that easy.