Nvidia acquires networking specialist Mellanox

Nvidia acquires networking specialist Mellanox

Nvidia acquires networking specialist Mellanox

Chipmaker Nvidia on Monday announced that it has agreed to buy Mellanox, a supplier of computer-networking products, in a $6.9 billion all-cash deal.

Reports surfaced yesterday on the Israeli technology news site CTec, that Nvidia had entered the Mellanox bidding, which reportedly has included Xilinx, Broadcom, Microsoft, among rumored other companies, along with Intel. The combined company will power more than half of the world's 500 largest computers, the company said.

In the press-statement about the acquisition Nvidia's Jensen Huang talked about how excited he was to be able to combine Nvidia's and Mellanox's talents and technologies to create holistic compute/networking architectures "to form a giant datacenter-scale compute engine".

The emergence of AI and data science, as well as billions of simultaneous computer users, is fueling skyrocketing demand on the world's datacenters.

Nvidia is the leading bidder ahead of rivals including Intel, though no final decision has been made and the outcome could still change, the sources said.

Mellanox is based in Israel and the USA and the company's chips are used to power high-speed networks connecting servers.

"Intel losses market shares to Nvidia in the computing side", said Jeremie Capron, head of research at ROBO Global, which runs a robotics and AI- focused exchange-traded fund under the ticker "ROBO". The duo will also have more entries in the hyperscale data center market as well as cloud service providers.

NVIDIA says it will use the acquisition to cement its leadership in high-performance computing (HPC).

The deal is expected to close by end of 2019 and analysts do not see any regulatory hurdles.

The purchase essentially means that NVIDIA gets to add Mellanox's accelerated networking platform to its already expansive portfolio of AI, data centre, and automotive technology. The transaction will still have to win approval from regulators.

Goldman Sachs served as exclusive financial adviser to Nvidia, while Credit Suisse Group and JPMorgan Chase & Co. advised Mellanox.

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