Well, if Nvidia would buy out AMD...that would spell the end for alternative graphics solutions at hsi point and mean that there is no real competition.
Regarding the success on ATI/AMD vs Nvidia...we do not know if AMD aided ATI design after the buyout and alternatively what AMD+Nvidia could have come up with. Its a guessing game and in my opinion the fact that the market concentrates on very few players is not good in the long run, as competition keeps prices in check and fosters innovation.
I still come from the age where you had loads of different manufacturers, such as the 3dfx, S3, Nvidia, Ati, Kyro etc. which meant prices had to stay tight rather than allow huge markups if one manufacturers chip did not perform as expected.
-> Still awaiting the return of the saviour of 3d, 3dfx