NVIDIA announced GPU virtualization on the new Kepler cards this summer at GTC.
http://www.nvidia.com/object/vgx-boards.html
http://www.gputechconf.com/page/home.html
They not only announced it, they demonstrated it live
GPU virtualization refers to technologies that allow the use of a GPU to accelerate graphics or GPGPU applications running on a virtual machine. GPU virtualization is used in various applications such as desktop virtualization,[1] cloud gaming[2] and computational science (e.g. hydrodynamics simulations).[3]
Wikipedia