PhysX was designed so that it can fall back on the CPU if you don't have an nVIDIA card. So yes you don't _need_ an nVIDIA card, but without one there is a lot more strain on the CPU, that and the CPU version of PhysX isn't as accurate as when it runs on the GPU.
Nobody said its magic, it just works better on with an nVIDIA card which can be extemely helpful when you don't have a PhenomII 3.6 GHz in your machine.



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