Ageia’s engine has been used in over 140 games on a number of consoles including PS3, 360 and Wii, as well as on PC.
"The AGEIA team is world class, and is passionate about the same thing we are - creating the most amazing and captivating game experiences," Nvidia president and CEO Jen-Hsun Huang stated.
"By combining the teams that created the world's most pervasive GPU and physics engine brands, we can now bring GeForce-accelerated PhysX to hundreds of millions of gamers around the world."
Ageia CEO Manju Hedge added: "NVIDIA is the perfect fit for us. They have the world's best parallel computing technology and are the thought leaders in GPUs and gaming.
"We are united by a common culture based on a passion for innovating and driving the consumer experience."