Published: Tue, March 12, 2019
Business | By Eloise Houston

Nvidia nears deal to acquire Mellanox Technologies

Nvidia nears deal to acquire Mellanox Technologies

Mellanox is based in both the United States and Israel where it makes high-speed network connecting servers, with a market cap at the end of trading on Friday of around $5.9 billion.

Nvidia beat out industry giants Microsoft and Intel for Mellanox.

Starting off the week bright and early, NVIDIA this morning announced that they're acquiring datacenter networking and interconnect Mellanox.

Nvidia gets more revenue diversification and data center sales.

The game plan for Nvidia is to use Mellanox to optimize data center workloads across compute, networking and storage.

The move could bolster Nvidia against its chief rival in the data centre business, Intel.

Mellanox is not a name we normally see much here at AnandTech, as it's often a company in the background of bigger projects.

The acquisition is a win for the New York-based activist investor Starboard Value LP, which owns a 5.8 percent stake and had reached a deal with Mellanox past year over the composition of its board.

Nvidia's purchase of Mellanox for $6.9 billion will translate into a broader data center play for beyond the graphics and high performance computing markets. Intel declined to comment on whether the company had bid for Mellanox, while Xilinx did not immediately respond to a request for comment.

Analysts believe Intel would have faced even greater challenges as it and Mellanox were dominant suppliers of InfiniBand technology, a networking standard commonly used in supercomputers. Mellanox was arguably well positioned to take advantage of this growth before being acquired, and those benefits will flow to Nvidia now.

Nvidia, once known as a provider of gaming chips, now also provides chips to speed up artificial intelligence tasks such as teaching servers to recognise images.

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

Add it up and Nvidia with Mellanox can better optimize systems. So it has to be distributed on multiple computers and the high performance connectivity to allow these computers to work together is becoming more and more important.

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