ATi has Stream for its GPGPU, but for physics processing has pushed for open source as others have stated. But, ATi has used 3rd party Havok... but Havok works on nVidia too... So ATi might not have their own "baby," but they have the ability to use 3rd party produced products.

Havok, ATI Demonstrate First Element of Physics Processing: Cloth Simulation - X-bit labs

Interesting to note that Havok is a wholly owned subsidiary of Intel... So it has BIG pockets behind it...

(Off topic : You know that Larrabee is still being R&D'ed, right? It was canned for consumer release. Interesting how AMD Fusion will pan out in comparison to Larrabee...)

Also, this: http://www.tomshardware.com/news/AMD...sics,5646.html