Nvidia outbids Intel to buy Mellanox for $6.9bn
Mellanox customers include HPE, IBM, Intel and Oracle
Nvidia has outbid Intel to acquire networking component and fabless chip maker Mellanox in a deal that values the company at $6.9 billion.
Mellanox designs and makes adapters, switches and chips for InfiniBand and Ethernet network devices used in more than half of the world's publicly-listed fastest computers. It counts HPE and IBM among its largest customers.
For Nvidia, the acquisition is a further shift away from the PC and PC gaming markets and towards the data centre. Part of the rationale for the deal, according to Nvidia's investor presentation [PDF], is to strengthen "Nvidia's ability to provide data centre-scale computing across the full stack - processing, networking and storage".
Microsoft and Xilinx were also reportedly interested in acquiring Mellanox.
Nvidia claims that with Mellanox onboard, it will be able to "optimise data centre-scale workloads across the entire computing, networking and storage stack to achieve higher performance, greater utilization and lower operating cost for customers", according to Nvidia.
Founder and CEO Jensen Huang added: "The emergence of AI and data science, as well as billions of simultaneous computer users, is fuelling skyrocketing demand on the world's data centres," said Jensen Huang, founder and CEO of Nvidia.
"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.
"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. I am particularly thrilled to work closely with the visionary leaders of Mellanox and their amazing people to invent the computers of tomorrow."
Eyal Waldman, the co-founder and CEO of Mellanox, added: "We share the same vision for accelerated computing as Nvidia. Combining our two companies comes as a natural extension of our long standing partnership and is a great fit given our common performance-driven cultures."
The deal is subject to the usual regulatory approvals, which could be complicated by the trade dispute between the US and China. While it's unlikely that US authorities will object, any objection from authorities in China - where Mellanox goods are either made or integrated into third-party products - could slow or bring the deal to a halt.
The AI and Machine Learning Awards are coming! In July this year, Computing will be recognising the best work in AI and machine learning across the UK. Do you have research or a project that you think deserves wider recognition? Enter the awards today - entry is free.