nVidia's GTX 200-series launch brought with GPU-accelerated PhysX on nVidia's hardware, from the 8800-series onwards. AMD, meanwhile, just announced that it has teamed up with Havok to optimise that physics engine for its hardware. Now, as if that wasn't enough confusion, third party modders from NGOHQ say that they've managed to port PhysX to an AMD ATI Radeon HD 3870.
As no drivers are publicly available yet we obviously have to take NGOHQ's word for it that this works. In theory it's entirely possible that the CUDA SDK and drivers that allow PhysX to run on nVidia could be ported to ATI hardware, all the materials needed are publically available - even if the know-how isn't.
Speaking to nVidia, the feedback is pretty much as expected; CUDA is an open standard and anyone can adopt it if they wish to. Given the quite massive architectural difference, it seems unlikely that a port to AMD's hardware could be achieved without help from nVidia or ATI's engineers. However, it isn't entirely beyond the realm of possibility.
nVidia will, unsurprisingly, be keeping a close eye on how this plays out.
A few pinches of salt are probably a good accompaniment for these claims until we see some conclusive proof. If these modders come good, though, it can only be good news for PhysX-craving ATI owners.