Intel has pulled out of the OLPC project citing "philosophical" differences, reports the BBC.
The chip-mkaer has withdrawn both its funding and technical help from the One Laptop Per Child project that aims to put low-cost laptops in the hands of children from developing nations.
Intel only partnered with the OLPC Foundation in July 2007 and was widely expected to work on a version of the laptop with its, rather than rival AMD's, chipsets.
It was predicted that an Intel version could be launched at this year's CES show, due to kick off in Las Vegas within days.
Intel spokesman Chuck Mulloy said the company had ended its involvement because the organisation had asked it to stop backing rival low-cost laptops, such as Intel's own Classmate PC.
"OLPC had asked Intel to end our support for non-OLPC platforms, including the Classmate PC, and to focus on the OLPC platform exclusively", said Mulloy.
"At the end of the day, we decided we couldn't accommodate that request."