Economy

Things To Know About The $6.9B Nvidia-Mellanox Acquisition

Things To Know About The $6.9B Nvidia-Mellanox Acquisition

Chipmaker Nvidia Corp is nearing a deal to acquire peer Mellanox Technologies Ltd for more than $7 billion (£5.4 billion) in cash, a person familiar with the matter said on Sunday. Nvidia reportedly outbid Intel the for the company.

"It's hard to not think Nvidia is just buying some revenue to help its case" in the data centre space, said Jason Carolan, chief innovation officer of Flexential, which operates data centres for big businesses and is a Nvidia customer. "It will probably spark questions as to whether Nvidia sees anything changing regarding the growth trajectory of their core data center business". As well as gaining significant resources from Mellanox, Nvidia's deal keeps these same resources out of the hands of direct competitors like Intel.

"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". 'Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant data centre-scale compute engine.

Mellanox makes chips and other hardware for data center servers that power cloud computing.

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NVIDIA's interest in Mellanox stemmed from its pioneering InfiniBand interconnect technology, used in many supercomputers and hyperscale datacenters. Microsoft and Xilinx, a US-based supplier of programmable logic devices, were also allegedly eying up the company. Nvidia and Mellanox aren't strangers; they have previously worked together on several products including the likes of the Nvidia DGX-2, as well as the #1 and #2 United States supercomputers - Summit and Sierra.

'We're excited to unite Nvidia's accelerated computing platform with Mellanox's world-renowned accelerated networking platform under one roof to create next-generation data centre-scale computing solutions. Waldman added that the combination of Nvidia and Mellanox was "a natural extension of our longstanding partnership".

The deal is expected to close by the end of 2019.