If true, it might be a good thing - make the two more competitive.
I used to love Nvidia a few years back (early 2000's).. wouldn't touch AMD/ATI with a 10 foot pole. But a few years ago I got a second hand desktop that had an ATI card. It worked really well. On the game boards I noticed a lot of people started having driver problems with Nvidia drivers.
Now I have gone through 2 more ATI cards in my desktop and loved them. ( they still do work- just upgraded) They always worked great with whatever I was trying to play. So when I got my Lappy and it had AMD/ATI I wasn't worried. It plays almost anything I throw at it with a few exceptions of the latest games from last year and this year.
It seems ATI has been really solid since the AMD merger. If they get PhysX like technology that would rock.
I know they will have to build the new system from scratch, but what better person to do that than the founder of the PhysX project.. it should be easy for him cus he's probably the one guy on the planet who understands it the best.