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Here's what is known: Ben Kingsley is in negotiations to play the villain in Iron Man 3.
Here is what is not known: who Kingsley's character will be.
According to the source that broke the news, Kingsley won't be playing The Mandarin. That's the super-adversary seen in Marvel's Iron Man comic books and first hinted at in Jon Favreau's first Iron Man movie. If you recall, there was a sinister organization called "the Ten Rings" that pulled the strings behind the terrorists that kidnapped Robert Downey Jr.'s Tony Stark at the start of the film.
It's conceivable that Kingsley is playing the villain seen in Warren Ellis' "Extremis" Iron Man mini-series, someone who helps spread a plague of nanobot s. The Extremis story arc also upgraded the origin for Iron Man, making him more technologically integrated into his armor, and giving Stark more super-abilities. Whether those elements will feature in the Iron Man 3 movie storyline (written by director Shane Black and Drew Pearce) are unknown.
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