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Ageia is a company which designed the first Physics dedicated cards. The cards contain a processor which has a sole obligation to process the physics and interation of up to thousands of object, and billions of interactions. Some accomplished effects with this are things like real-time water simulation, meanning the computer does it all at the moment, and it allows for the simulation of very large explosions and structural response. Also being done is cloth and hair simulation. Some examples of this are in the game Cell Factor, and the Unreal Engine 3 technology demos.
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