It's hard to tell you what I think without knowing more detail, but based on what you wrote, and assuming you both signed customary IP assignments and RSPAs at incorporation, the simplest way to move on would be for the other founder to resign as an employee and director.
That would enable the company to repurchase his shares and you would own 100% of the company and the IP that belongs to the company.
Since he wants to start what is essentially a different company, he shouldn't have a problem basically walking away and leaving you with the old company.
You can sweeten the deal a little bit by allowing him to retain some small portion of his equity (like 1% to 5%) in exchange for his resignation.
There may be more details here and I'm going only off what you wrote. I'd recommend working with a lawyer if you're going to try to salvage the old company with your co-founder moving on to other things.