Intel issued the following statement in response to the query: "Intel purchased Offset Software to improve our game development knowledge-base and to further Intel's visual computing technology development expertise, helping the company offer robust products, support, and tools to customers. With the recent changes in our product roadmap, some of the resources and technologies from the acquisition are being re-applied to help support new graphics related projects. Additionally, other Offset Software team members have moved onto other external projects outside the company."
Sam McGrath, along with the other founders of Offset, have left Intel to form their own startup: Fractiv. McGrath confirmed as much to Big Download, adding that he "can't say any more than that at this stage," but he'll be spilling more "in the near future." So, has Project Offset been canceled? It seems likely given the situation, but we've asked Intel for a solid "yes" or "no" either way.